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Etsy shop closed by US law firm

Posted: Thu Dec 30, 2021 12:08 pm
by beelzebomb
I’m new here and must say this looks like being a wonderful source of information and advice. I only wish I’d realised I’d need it sooner.
Just before Xmas my Etsy shop was suspended through a court ‘complaint’ by a US based law firm with redacted info provided. My shop replicates from scratch old music paper adverts & turns them into art prints. I set it up as a sideline when other parts of my self-employed income started to fail due to Brexit, then covid. Clearly I’ve been blissfully naïve and unaware regarding trademark/copyright laws - the more since that I’ve read, the more complex I’ve found it to be.
I’ve reached out to the firm explaining that I believed I was creating new pieces of art as they weren’t simple ‘cut-and-paste’ copies from the internet etc, they’ve replied explaining that the hidden info as to who/what I’ve infringed will become available shortly.
I don’t want to be breaking any laws or rules anywhere and simply want to run a small honest business.
I understand the laws being applied relate to USA and that Etsy is a USA organisation. I’m in the UK, so what can I expect to be a positive outcome?

Re: Etsy shop closed by US law firm

Posted: Thu Dec 30, 2021 1:25 pm
by AndyJ
Hi beezlebomb,

We really need a bit more information about the actual 'old music paper adverts', for instance when they were published and where you sourced them from. Also it would be helpful to know what added steps you have taken to turn them into art prints.

As you have already discovered, what is important here is the American version of copyright and trade mark law, since I assume that the purported copyright owner is an American company or individual. American copyright law allows for fair use of works which are otherwise protected by copyright and this usually involves testing the disputed work against four, mainly economic, criteria:
1. the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes;
2. the nature of the copyrighted work;
3. the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and
4 the effect of the use upon the potential market for or value of the copyrighted work.
Where the new use of the work is said to be transformative and operates in an entirely different domain to that which the original work inhabits, this can often be sufficient to defeat a claim of infringement. This is best illustrated by a famous case in the USA in which an artist named Richard Prince faithfully reproduced a series of Instagram pages belonging to other people and exhibited them in an art gallery (with price tags in the thousands of dollars). This was found to be transformative because the Instagram postings were deemed to be merely informative and of no real commercial value, whereas Prince's repurposing of them turned them into highly collectable artworks. Now while that case doesn't mean that you can rely on fair use to get your Etsy shop back, it may be that, if the works concerned are fairly old (so do not have a high commercial value as sheet music today), and your use of them does not effect the owner's ability to monetise the original works, then you may be able to defeat this claim. Obviously you will not wish to challenge the claim in the US courts, but if you can convince the law firm of the merits of your defence, it may just lead them to rescind the complaint to Etsy, allowing you to re-start your shop (although that would be at Etsy's discretion). Etsy are not interested in arbitrating the dispute and will only restore your account if the complaint is withdrawn.

When it comes to trade mark law, if that is relevant here, it only becomes an issue if a current registered trade mark appeared on the works you have reproduced and you were relying on the mark in the course of trade. I rather suspect you weren't relying on the trade marks and that the appeal of your art prints was based on aesthetics instead. However it is worth mentioning that there is no 'fair use' defence to a trade mark infringement claim.

Re: Etsy shop closed by US law firm

Posted: Thu Dec 30, 2021 1:53 pm
by beelzebomb
Thank you for such a detailed reply. My work is varied; a bit of a scattergun approach to see what sticks and will sell. But what I thought to be a unique idea was to find old 1970-90s music paper ads for forthcoming albums, shows, singles etc and create art pieces that replicate them, all text is recreated for example, each piece takes hours to create. These ads would originally appear for a couple of weeks then disappear forever but can be now found in old copies of music papers being sold online - mostly pixelated b/w ‘newsprint’ ads.
But I do all sorts of music/film/tv related art, just to see what will sell, so another line might be replicating album track listings as 1950s optician eye charts in a similar font to the record, or digitally drawing a still from a popular tv series, or replicating old music shop window ads for records. So I suspect it will be a trademark infringement though this is yet to be revealed to me. Nothing I do has - as far as I’m aware - ever been for sale, nor is for sale officially anywhere else. I also make it clear in each listing that I am recreating stuff, as I actually see this as a positive selling point.
Would I be right in thinking any American law firm would need to pursue a uk citizen through civil courts here though? So if I were to comply with an American out of court ruling for settlement I’m doing so out of goodwill?

Re: Etsy shop closed by US law firm

Posted: Thu Dec 30, 2021 11:58 pm
by AndyJ
Hi again,

I'm having difficulty seeing who would have any interest in removing sales of old adverts and the like. Have they actually asked you for money to settle this? If so, I think you need to treat this with the utmost caution. There are a number of dubious players out there who make false claims about works they don't have any rights to, in the hope of scaring their victims into paying up. Even if the law firm appears legitimate, this is not evidence that it isn't a trolling operation. A number of US lawyers have been barred from practising law and some have even been sent to prison for mounting operations of this sort. Google 'Prenda law' and Richard Liebowitz for example.

If the law firm approached Etsy to get your shop de-activated they wouldn't need any sort of court order, they will have just used the provisions of the Digital Millennium Copyright Act (DMCA) and Etsy's own terms of service. So unless they have provided evidence that a court is involved, I think this is most unlikely. A court would not normally issue an injunction which affects someone outside the jurisdiction unless they were satisfied that you had had prior notification of the court action and had had a chance to lodge a defence. Even if a US court had made a default judgment involving damages against you, it could only be enforced through a UK court and you would then have the opportunity to tell the UK court that you were not properly served with the original claim, and so the UK court would reject the application to enforce the judgment here.

I would be very surprised if they wanted to do any more than shut down your Etsy operation, and they won't be interested in expensive litigation.

Re: Etsy shop closed by US law firm

Posted: Sun Jan 09, 2022 8:58 pm
by Nick Cooper
beelzebomb wrote: Thu Dec 30, 2021 12:08 pm redacted info provided...

they’ve replied explaining that the hidden info as to who/what I’ve infringed will become available shortly...
So they haven't actually explained what it is you are supposed to have done that is an infringement? Have you contacted Etsy to ask what they were told? Surely it can't be everything you have been selling, so it raises the question as to why Etsy have taken such a drastic action, rather than removing specific supposedly-infringing listings.

Re: Etsy shop closed by US law firm

Posted: Mon Jan 10, 2022 10:00 am
by beelzebomb
The redacted complaint has now been revealed and it seems I used a photograph by a well known photographer as part of one of my old 1970s advert replications. The law firm is legitimate and is seemingly often used by music related artists. Court infomation was provided.
The information also lists a further 80 plus shops world-wide that are part of this complaint, ranging from AliExpress to Amazon to Ebay to Etsy. I note that only the American versions (ie, dot com) of each website is included.
In my case, the law firm has now suggested that over 100 items were sold using the image in question and that total sales amount to over 5 thousand dollars. As settlement, they are asking for this amount plus 4 thousand dollars in (presumably) damages/compensation etc and the removal of the suspension of my shop allowing me to continue selling.
Though there are some crucial points and questions regarding this:
  • The total sales figure is wildly wrong - I only have sold under 25 items of the item in question amounting to net sales of under 500 pounds
  • With cost of high quality printing the actual profit made from these items is under 200 pounds - I keep good invoicing records
  • Only 5 of these items were to the USA (so sales from the UK to the USA) - is this important?
  • As far as damages are concerned, my product is of extremely high quality and is not designed to make a 'fast buck' or con people into thinking they are buying anything other than high quality reproduction artwork made by me - I detail in the description the painstaking effort I go to to reproduce fonts etc. Plus I only choose to replicate items that have never been officially for sale anywhere else ever (this was my USP) - are these points important relating to the 'damages' claim?
  • Will the law firm suddenly throw in their costs or are these included in the alleged 'damages' figure? I believe that in the UK there should be no hidden costs allowed, but I have no idea about the USA.
A further curious turn has revealed that the photographer in question is UK based and his company is literally 20 miles from where I am. So I reached out to the company and the photographer himself has replied courteously saying that he has contacted his law people to ask them to try to settle this with me fairly.

Re: Etsy shop closed by US law firm

Posted: Tue Jan 11, 2022 10:28 am
by AndyJ
Hi beezlebomb,

It's hard to know exactly what tactics the American law firm may have in mind. Certainly if they chose to sue you in the USA they might expect the court there to order a larger amount of damages, but they would still need to produce credible evidence to support the claim that you have made $5,000 profit. You are right that under normal circumstances only net profit would be taken into account. However if the photograph had previously been registered with US Coyright Office, then they will be able to claim statutory damages*, but since that hasn't been mentioned I would guess that the image had not been registered. The up side of a bringing the case in US as far as you are concerned is that you are not subject to the jurisdiction of the court there and so they couldn't recover any damages from you without going through the UK courts. However if you were somehow able to defend yourself in the US court, perhaps via video link, then you would have a strong argument that your work was transformative (different quality and aesthetic, plus the addition of other material to create a derivative work) and hence was fair use. You originally said that these were old adverts, so it may be arguable that the photograph doesn't have the same economic value today that it did at that earlier time.

If, on the other hand they wanted to issue the claim in the UK court in the first place, their claim could only be based on the licence fee the photographer had lost or an account of profit (but not both), and no extra compenstion could be included, nor their legal costs. Do you have any idea if the photograph is available under a licence, and if so how much the licence is? This would provide you with a helpful yardstick for what is a fair amount while you are negotiating a settlement.

An account of profits would take into account all sales, irrespective of the target audience, so I don't think you can rely too much on the fact that so few sales were to US customers, although it would do no harm to mention this to the US law firm.

*Statutory damages are available as an alternative to actual damages and profits. If the copyright was registered either (a) within three months of publication or (b) before the infringement, then the claimant is eligible to seek statutory damages. Statutory damages can be awarded by the court within the range of $750 to $30,000, but this can be lowered if the infringement is deemed inadvertent. In case of "innocent infringement", the amount may be reduced to a sum not less than $200 with an effective range of $200 to $30,000 per work. "Innocent" is a technical term. In particular, if the work carries a copyright notice, the infringer cannot claim innocence.

Re: Etsy shop closed by US law firm

Posted: Tue Jan 11, 2022 7:02 pm
by Nick Cooper
Obvious Etsy is a US website, but is that enough to even give a US court jurisdiction on this matter? As the seller is based in the UK, and the production of the items and the bulk of sales happened in the UK, surely it could only be litigated here? Having a literal handful of US sales doesn't change the fact that the infringement happened here, not in the US.

Re: Etsy shop closed by US law firm

Posted: Wed Jan 12, 2022 8:54 am
by AndyJ
Hi Nick,

I'm not entirely clear about how much or even why the US court is involved at this stage. The problem with the issue of deciding jurisdiction is that it is usually a matter for the first court where the claim is filed to decide if it is the appropriate forum to hear the case. This normally means that the defendant will need to file a motion to dismiss the case on the grounds that it is not the appropriate forum, and this triggers the analysis. However, clearly Beezlebomb hasn't had that opportunity. If the law firm has just filed a claim as a preliminary step, then that is pretty foolhardy when they are just beginning the settlement negotiations.

You are right that on a sensible analysis the UK is probably the correct jurisdiction. However I suspect that doesn't suit the US law firm as obviously they would need to engage a legal team here to carry out any litigation, and as I have said so many times, in the IPEC Small Claims court, the claimant is not awarded legal costs if he wins, so that could end up costing the photographer a great deal of money for a relatively paltry amount of damages.