Copyright infringement via Permission Machine, acting on behalf of Alamy

[KateG]

Thank you so much... that is very helpful

I have first emailed Visual for a breakdown of costs and offending image.
I have gone through my site and removed the image I think I used... I realised I downloaded as a preview and not got the license...
Once I hear back I will counter-offer and see what happens

I really appreciate all the advice on here - thank you so much for taking the time to help and reply everyone. I was crying this morning on reading the emails and was really panicking - so really thank you
K

[JoolsM]

Quick update from me. I have had the same response as everyone else to my settlement efforts. I offered them £50 plus the license fee of £35.99, pointing out that they were unlikely to get more than this in court. It is very clear that Hannah does not read the email responses or maybe she just doesn't understand them as I was very clear that I knew what costs could be claimed and could not, which should have headed off the copy & paste response about filing fees etc. but it did not. I got the same response and threat of court action as everyone else, and that is where I have left it. I'll keep you updated if I hear anything more from them.

[Another victim]

I sent them a request for details on any defended case wins in court where figures such as those mentioned in their threatograms have been awarded. I haven't had a reply which is a bit strange because every other email has been replied to within 48 hours. Call me a cynic but I think if they feel they have you on the line they do seem to be much quicker at replies

[JoolsM]

This is the last correspondence I have received from Visual Rights Group. We just keep going back and forth over the same ground so I see little point in responding to this email, unless anyone has any contradictory advice.

We have provided you with the factors which we base our settlement calculation on in our previous correspondence. In a court case, we would provide a detailed breakdown of the settlement, but we are currently contacting you to agree a settlement offer. If the case is taken to court, we will specify the damages. The amount claimed in court will reflect the lost licence fee, the fact that no permission was granted, the fact that the name of the author was not present, the work necessary to make the settlement offer and the additional factors we have previously outlined.

The settlement we are requesting is lower than the costs that will arise from this case being resolved in court. This is because more parties will be involved along the process as our IP solicitors will be passed this case if we cannot come to a resolution.

If you do not wish to compensate our client for the misuse of their intellectual property, we will escalate this case to our solicitors by the end of the month.

[KateG]

Here is the reply.... they didnt provide me with details of the offending image

Sorry I posted that too soon - does anyone have a template of reply I could possible see before I respond?

_____

Dear Kate,

Thank you for your email and attention to this matter.

As for the calculation of the settlement amount. The settlement we are requesting is not a retrospective license fee, but damages outlined in the law of the Copyright, Design and Patents Act 1988, namely Section 97, part 2:

(2) The court may in an action for infringement of copyright award such damages as the justice of the case may require. So based on this article, the judge will award all reasonable damages. The damages under this law would then substantiate to the following:
• The license fee that should have been paid
• Moral damages: The creator did not approve this usage and having the image available on your platform opens up the chance for others to use the image illegally.
• © damages can be amounted from the costs of identifying and research which we incur to identify the infringement on a technical level and establish whether or not there has been a breach. Specially trained staff check whether it’s the same photo and whether a legal exception to copyright rules applies. The photographer then verifies whether a licence was granted for the photo in question.
• Costs of drawing up and sending files include the costs for drawing up files, taking any screenshots and further documenting the infringement, and for searching for the necessary address and other details. Finally, we’ll double-check the file before it is sent out.

To be augmented or multiplied
• (a) Profits made from the sales of the product for which the image was used to advertise.
• (b) Damages arising from Flagrancy.

An image sourced directly from Alamy is currently £35.99 for a website license, this is multiplied by a minimum of 5 as per the Alamy Terms and Conditions if the correct license is not sourced from them directly in the first place, which takes it to an initial settlement of £179.95. This is for when a photographer or member of the public spots one of the images we represent being used online that may not have a license (usually these are watermarked with Alamy). As Alamy have used the proprietary software of Visual Rights Group to look for these types of uses online, and the two teams of Admin staff both at Alamy and Visual Rights Group, the costs start to escalate which is why the requested settlement is higher. We then add the sum of the damages outlined above to the settlement calculation.

In a court case, we would provide a detailed breakdown of the settlement, but we are currently contacting you to agree a settlement offer. If the case is taken to court, we will specify the damages. The amount claimed in court will reflect the lost licence fee, the fact that no permission was granted, the fact that the name of the author was not present, the work necessary to make the settlement offer and the additional factors we have outlined.

Please let us know if you have any further questions.

We hope we can resolve this matter.

Kind regards,

Hannah

[Another victim]

You've been sent a speculative invoice. You've removed any offending images, and made an entirely reasonable, and realistic, offer. What do you imagine that continuing correspondence with them is going to achieve?

They are not going to drop their demands, regardless of how many times you plead with them. They're actually more likely to put their demands UP, because it sounds to them that they have a live one on the hook.

You're dealing with some minimum wage paper filler with a list of boilerplate text blocks to use. They have no legal ability. They probably aren't even employed by these chancers, they're just temps sent at a tenner an hour to send threatograms and open the cheques. When they 'pass the file on', they're just shoving your name across the desk to some similar minimum wage paper filler who'll write the same speculative junk, just using a different letterhead. A tenner says that the solicitor is trading from a rented mailbox only address and just happens to have the same directors.

So it's down to you - either pay their blackmail, or tell them that you're making no further offers so if they do not accept it they will have to 'pass the file to their solicitor' and see what the court thinks. That's my thoughts anyway

[AndyJ]

Hi Kate,
Their letter is pretty similar to the one we dissected at the top of page two of this thread. If you haven't already seen it, take a look. Really, the important thing to know is that it is full of bluster, as you might expect, which is designed to frighten you.
If the matter ever went to court, the amount of any damages the court would accept would be based on the market value of the lost licence, not an arbitrary sum determined by Alamy's Terms and Conditions which don't apply since you were not in a contractual relationship with Alamy. You would also have to pay the court fees, that is a filing fee and a hearing fee. These are determined by the value of the claim and could be around £120 in total. Next you might have to pay the claimant's loss of earnings and travel costs for attending the hearing (which is capped at £90), although it is quite possible the matter might be dealt with on a telephone conference, so the claimant's costs wouldn't arise. The claimant here being the copyright owner, which is probably the photographer. No legal costs are admissible in the Small Claims court of the IPEC. And they would need to prove that you deliberately removed the credit for the photographer in order to get any damages over his moral rights. Additional damages for flagrancy would only arise if you had failed to engage with them and had carried on the infringement after you were first informed about the image. It isn't something the court would automatically add on just because the claimant said to they should. Indeed the court would take into account that you offered to settle the matter for a reasonable amount, early in the pre-litigation stages.
So typically if it went to court you might face a cost of between £250 - £300 if you lost the case; the claimant would get just the damages (say around £30 -50), and still have to pay his legal costs which could be in the order £1000. When you look at it from that perspective, no-one in their right mind would go into court over a £30 lost fee, if they knew the claim would be robustly defended in court. Visual Rights Group get nothing out of the deal if the matter goes to court.
If you haven't already seen them read the Guidance Notes for the Small Claims Track of the IPEC.

[KateG]

Hey everyone quick update.... here is the VRG reply.....also attached their legal guidelines 2022.pdf.... did anyone else get this?!!

Thanks K
********************************************
Dear Kate,

Thank you for your email.

We appreciate your offer of £60.99 as compensation for the misuse of our clients image, however Alamy have rejected your offer as the amount is heavily disproportionate to the damages they have suffered.

We have provided you with the factors which we base our settlement calculation on in our previous correspondence. In a court case, we would provide a detailed breakdown of the settlement, but we are currently contacting you to agree a settlement offer. If the case is taken to court, we will specify the damages. The amount claimed in court will reflect the lost licence fee, the fact that no permission was granted, the fact that the name of the author was not present, the work necessary to make the settlement offer and the additional factors we have previously outlined. To Explain in more depth, our legal guidelines have been attached.

In the IPEC small claims track, our client can claim the below:
• fixed sums in relation to issuing the claim;
• court fees (including the hearing fee);
• expenses which a party or witness has reasonably incurred travelling to or from a hearing or
staying away from home for the purpose of attending the hearing;
• loss of earnings or loss of leave evidenced by a party or witness caused by attending a court
hearing, limited to £90 per day for each person (PD 27 para 7.3);
• in proceedings which include a claim for an injunction, a sum for legal advice and assistance
relating to that claim, not exceeding £260 (PD 27 para 7.2);
• such further costs as the court may decide at the conclusion of the hearing should be paid by a
party who has behaved unreasonably. A party’s rejection of an offer of settlement will not of
itself constitute unreasonable behaviour but the court may take it into consideration (CPR
27.14 (3)).

As an attempt to bring this case to a close before passing this matter into the hands of our solicitors, our client is prepared to remove the late fee and reduce the settlement by 15%. This means that the figure now stands at £297.50. Please note that this offer is valid for 14 days.

Please let us know if you have any questions and if you would like to proceed with our clients offer.

Kind regards,

Hannah

****
Guidelines:

Visual Rights Group Legal role:
Permission Machine represents several rightholders and assists them in managing their copyright.
More images are being used without a valid license and therefore more infringements of copyright are occurring. This is why authors often employ partners to assist them in pursing their rights to their copyright.
VRG has the necessary authorisation to claim damages for our clients in settlement of infringements and to bring legal action to the said infringement.
ASSESSMENT OF DAMAGES
- Damage suffered in accordance with the Enforcement Directive 2004/48/EC and the Copyright, Design and Patents Act 1988, namely Section 97, part 2.
1. Because no permission was requested by second party for the use of the photo, the first party has suffered damages.
The concrete damages should be estimated as described in the Enforcement Directive. In accordance with the Enforcement Directive, three major items can be distinguished that include the damages; at least the lost license fee and the moral damages (Article 13), the costs of detection, investigation and recovery (Recital 26) and court costs (Article 14).
Article 13 provides:
1. Member States shall ensure that, at the request of the injured party, the competent judicial authorities order the infringer who knew, or ought reasonably to have known, that he/she was committing an infringement to pay the rightholder adequate compensation to make good the damage caused to him by the infringement.
The judicial authorities that determine the damages:
(a) Take into account all appropriate aspects, such as the negative economic consequences, including loss of profit, suffered by the infringing party, the unlawful profit enjoyed by the infringer and, in appropriate cases, elements other than economic factors, including the moral damage suffered by the rightholder as a result of the violation,
or
(b) As an alternative to subparagraph (a), may in appropriate cases, fix the damages as a flat-rate amount on the basis of elements such as at least the amount of royalties or fees which would have been due if the infringer had requested permission to use the intellectual property right in question.
By moral damage can be understood, among other things, the breach of the author's exclusive right to determine where and how the photograph is used, paternity rights, the fact that images are freely used and distributed on the Internet damages the exclusivity of the clients photographs. This makes it more difficult for them to sell photographs, as its customers are less willing to pay if they cannot guarantee the exclusivity of its materials.

Economic factors may include:
-The absence of permission
-The absence of the name
-The mutilation of the photo
-Loss of exclusivity (other clients will pay less for images that are not exclusive)
The right to grant or not to grant permission to use a work is at the heart of copyright law. When this is misunderstood, an author is misunderstood in the essence of his or her rights. The distribution of photographs is an important part of our clients activity. It goes without saying that, in order to be able to exploit its photographs, they must be able to determine for themselves who uses its photographs and when, and that it will be harmed if third parties deprive it of this right of disposal by using photographs without permission.
If the photo is used without mentioning the author's name, the author misses out on name recognition, many possible assignments.
The use of the disputed images in a form other than the original, by the use of cropping or mirroring, without prior permission, is also an infringement on the right of first respondent to agree or not to agree to any deformation, mutilation or other alteration of the work, or any other violation of the work, which may harm his honor or reputation.
Detection and investigation costs and legal fees
1.The right to reimbursement of the costs of detection and investigation is explicitly laid down in Recital 26 of the Enforcement Directive on the enforcement of intellectual property rights and in Article 14 of the Enforcement Directive.
Indeed, Recital 26 states: "In order to compensate the damage resulting from an infringement by an infringer who has carried out an activity when he knew or ought reasonably to have known that it would give rise to such an infringement, the amount of compensation awarded to the right holder must take into account all the circumstances of the case, such as the loss of income suffered by the right holder or the profit unlawfully made by the infringer and, where appropriate, the moral prejudice caused to the right holder.” Alternatively, for example if the actual damage is difficult to determine, the amount of compensation may be derived from elements such as the amount of royalties or fees that would have been due if the infringer had requested permission to use the intellectual property right. The intention is not to introduce an obligation to provide for non-compensatory damages, but to allow for compensation based on an objective basis, taking into account the costs incurred by the rightholder, for example for detection and investigation.
Article 14 states that "The Member States shall ensure that, as a general rule, reasonable and appropriate legal costs and other costs incurred by the successful party shall be assumed by the losing party, unless reasons of equity prevent this".
The costs of detection and investigation shall be paid by the infringer. The detection and establishment of the infringement has required efforts and costs.

Table of estimate costs from detection and investigation by VRG:
1
The photo was uploaded in specialized software
Cost/time
Costs software detection
£4.50
Costs servers
£4.50
Costs IT team
£4.50
2
The search was started under the control of an experienced computer scientist
Costs software detection
£4.50
Costs servers
£4.50
Costs IT team
£4.50
3
The website was visited and the use of photographs reported by the system was visually confirmed. A visual check of the photo was done to validate the agreement. It is checked in the internal databases to ensure that the infringement has not been detected before.
0:15:00
4
A copyright specialist visited the website to verify the infringement. The photo on the website was analysed, compared with the source material, and it was checked whether there was actually an infringement (e.g. not correct use under a copyright exception such as the right to quote edm.)
0:15:00
5
The contact details of the website were searched, a print screen was made and saved
0:15:00
6
A check from copyright owner and/or VRG was made in databases of sales whether a license was sold
0:30:00
7
Screenshot taken of the infringement, saved, archived and processed into a document establishing the infringement with the protected photograph.
0:30:00
£112.00 per hour
1:45:00
£156.00
8
Setting up a file (creating relationships in the software, entering amounts, linking documents)
0:25:00
Costs start up file + software for file management and communication
£45.00
9
Follow-up and quality control: file control by experienced manager
1:00:00
10
Preparation of offer letter, printing, packing, franking, shipping (by mail and by post)
0:30:00
Cost letter, stamp, printing
£4.50
12
Follow-up file: read the reaction, draw up a letter of reply on copyright conditions, hand over further documents.
0:20:00
13
Follow-up dossier: drafting reminder letter
0:20:00
14
Follow-up dossier: read the reaction, draw up a reply letter, provide additional information, proposal for a possible discount.
0:20:00
£100.00 per hour 3:00:00 £300.00
3:00:00
£300.00

[AndyJ]

Hi Kate,
That response was exactly what I would have expected. The fallacy in their approach is saying "Alamy have rejected your offer as the amount is heavily disproportionate to the damages they have suffered". The actual loss to Alamy is the cost of the licence which they would have sold you. Every thing else they list falls under the heading of their costs in pursuing a claim by using a third party company (VRG) which is entirely their decision and is a normal business overhead, not a loss which can be included as damages. More to the point, such ancilliary costs are specifically inadmissible in the IPEC Small Claims Track, where the procedure is deliberately designed to streamline claims without legal costs etc. The part of the Small Claims procedure which they quote makes it abundantly clear what costs may be payable by the losing party, namely the court costs and the attendance costs of the claimant in the event that there is a hearing.

As far as I am aware there are absolutely no grounds in your case for which they can claim additional damages, which means that all the guff about section 97(2) is irrelevant to this claim, as is the nonsense about the EU Enforcement Directive. This Directive was never fully carried over into UK law, and so it is no longer applicable law here since 1 Jan 2021 when we left the EU. Just to be clear about what UK law says on this subject here's an extract from the relevant part of the UK's Intellectual Property (Enforcement, etc.) Regulations 2006 (SI 2006/1028)

Assessment of damages

3.—(1) Where in an action for infringement of an intellectual property right the defendant knew, or had reasonable grounds to know, that he engaged in infringing activity, the damages awarded to the claimant shall be appropriate to the actual prejudice he suffered as a result of the infringement.

(2) When awarding such damages—

(a) all appropriate aspects shall be taken into account, including in particular—

(i) the negative economic consequences, including any lost profits, which the claimant has suffered, and any unfair profits made by the defendant; and

(ii) elements other than economic factors, including the moral prejudice caused to the claimant by the infringement; or

(b) where appropriate, they may be awarded on the basis of the royalties or fees which would have been due had the defendant obtained a licence.

(3) This regulation does not affect the operation of any enactment or rule of law relating to remedies for the infringement of intellectual property rights except to the extent that it is inconsistent with the provisions of this regulation.

(4) In the application of this regulation to—

(a) Scotland, “claimant” includes pursuer; “defendant” includes defender; and “enactment” includes an enactment comprised in, or an instrument made under, an Act of the Scottish Parliament; and

(b) Northern Ireland, “claimant” includes plaintiff.

As you can see the Regulations contain none of the bombast which is appears in the extract from the EU Directive which VRG quoted, for the simple reason that UK civil law is generally about putting a claimant back the position he or she would have been in if the civil wrong had not occurred and the defendant had followed the correct procedure over licences etc. The UK doctrine does not include any element of deterrence or punishment which features in the EU Directive.

[Habbers]

Hi Andy

Just a quick update on this -not a peep heard from them since. I'll update the forum if I get anything else from them, but hopefully has gone away.

Cheers

Habbers

[AndyJ]

Thanks Habbers

[concernedperson]

Hi everyone.

Thanks to the moderator for all the useful information.

Just to add to the knowledge bank here.

I received the same letters, same arguments, same breakdowns, etc., from Visual Rights Group (formerly Permission Machine), claiming to represent Alamy, and I followed the same procedure in response. It's all template.

Then I thought to do some quick research via the National Archives and Companies House. This is what I learned:

1) There is no record that can be found in the National Archives online databank, either from IPEC or any other court, of Visual Rights Group / Permission Machine or Alamy ever having been a claimant. This suggests they've never taken anyone to court. (This has already been stated on this thread, I think.)

2) Visual Rights Group / Permission Machine, as of 2021, had 2 employees and a value of ca. £150k (the initial capital used to start the company was ca. £100k). The shares are all owned by one person, the Belgian man who started the company and who I assume counts as one of the employees (though possibly technically not - I'm not schooled in corporate affairs), which means Hannah, who is still the communicating person for the outfit, is likely the only person in a sad office sending out templated nonsense. It looks like in the year between 2020 and 2021, the company made a profit of ca. £50k. While that suggests there are a number of people out there paying the settlements, it also suggests this company is not the big bad threat they'd like people to believe them to be.

One more thing that I don't think has been mentioned yet.

3) There are significant contradictions in VRG's initial letter, and these belie their intentions, which are clearly frivolous. On the breakdown of fees and costs page they send, they claim paying up will get you off the hook from litigation and also provide you with a licence in perpetuity to the image in question. On another page further on, however, they say that on paying the settlement fees and costs you must take down the image and separately apply for a licence. So which is it? Although perhaps the differences between these two statements are subtle, they're obviously contradicting themselves. At the very least, they're demonstrating an utter lack of professionalism and competence (what reputable company doesn't edit its own public-facing materials for consistency, especially when making serious threats of legal action?), as well as a possible misapprehension of their own business relationship with Alamy in terms of the ability to grant a licence.

[AndyJ]

Hi concernedpeson,

Thanks for your contribution. Just a couple of points. The majority of claims of the type we hear about on these forums would go through the IPEC small claims track which, because it is the equivalent of a county court, does not routinely publish its judgments, so they won't appear on the National Archives or BAILII websites. And secondly accounts filed Companies House tend to be fairly unreliable about things like the number of employees etc and of course the accounts are always about 18 months out of date since they are filed retrospectively.

[concernedperson]

Hi Andy.

Thanks for your response and clarifications. My understanding of all this is limited, so your perspective is invaluable.

I do still think it's interesting to note the size of the company we're all dealing with here, which can't have grown so large since the figures were posted that we should think they have unlimited resources to pursue frivolous claims for the fun of it. But point taken. Thanks also especially for the insight on the posting of judgements from the small claims track.

I would like to re-emphasise that there are significant and multiple contradictions and oddities within VRG's correspondence, including in the parameters of the original settlement offer they make to the recipients of all these letters they're sending out. Noticing those contradictions gave me insight, even as a layperson, into the ridiculousness of all this, and that ratcheted down my initial fear at receiving such a letter.

So what I'm saying is if folk who receive these kinds of letters do take time to read them very closely, they're likely to see the same contradictions and faults, and thereby realise the intentions behind these letters are not honest. I'm pretty confident any judge would understand the same thing if it went that far, but I'm sure it wouldn't.

Good luck to everyone, and thanks again.

[Nick Cooper]

"Moral damages: The creator did not approve this usage and having the image available on your platform opens up the chance for others to use the image illegally."

This bit in particular is pure nonsense. An image being used supposedly illicitly has no more or less potential for it to be used illicitly by a third party than a legitimately-used images has.