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A partner and I had a marketing firm many, many years ago. He and I with some contractors as needed. Very small. We set it up as a C Corp I believe (checking with him to be sure).

We featured work that we did for various clients on our firm's website as our portfolio. Innocently on one client's portfolio page on our site, we used an image used in a print ad (formally licensed and paid for from the image provider) as a header on that page along with the print ad to accentuate the work. On another client's portfolio page we had a brochure with an image from the same provider and did the same treatment on the page. This is a little messier though because turns out our client never licensed the image as we were told.

In battling the image company (they are huge) they want us to pay $750 for each image. On the one page, they say because we're using the image to promote ourselves, we are using the image differently than the original license that was secured for the print ad. So we have to pay. (Ridiculous.) For the second image, we've got the double whammy of client not licensing it in the first place plus us using it "to promote ourselves".

We haven't done anything with our firm in many years. Nobody goes to the website except this image company looking to sue people. I'm getting legal notices from the image company to my home which we used as our company address. (Big mistake!) I responded by email from our firm email trying to get this resolved to no luck.

So the solution my partner and I believe we should do is just dissolve the company to avoid having to pay. Close the checking account that has barely been used for years, shut down the website (which we already did), etc. Honestly we should've done this long ago.

Long winded setup but...are there pitfalls with this? I don't want anything on my personal credit or record. Do we need to have a legal letter sent back to the company? Suggestions??

Sorry for staying anonymous but this image company seems to have eyes everywhere and I'd rather not make things worse.

Greatly appreciate the help of the community,

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2 Answers

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It is difficult to say, or recommend, very much that is definitive about your situation.

Regrettably, your story is not all that unusual. Please see "Copyright Infringement Twofer: Website Designer and Customer Jointly Liable".

You do not state how much money the image company is seeking in total, or where you and the company are located, so it is difficult to figure out whether the company really is likely to come after you. However, the availability of statutory damages and attorneys' fees (please see "Copyright Registration: Whether, When and Why") means that it could be attractive for a litigator to take the case on a contingency basis, which would be bad news for you.

As regards dissolution, the process is discussed in "How to Kill Your Company when that's the Only Choice". Whether dissolution would save you might depend, in large measure, whether you have an "alter ego" problem - please see "Your Business is Dead - Are You Liable for its Obligations?".

Disclaimer: This post does not constitute legal advice and does not establish an attorney-client relationship.

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You need to spend an hour with a copyright lawyer.

It's not at all ridiculous that your use might have been violating license terms. The copyright holders have the right to proscribe many uses of their pictures; that allows them (for example) to establish price levels for different types of use. There are lots of examples of "fair use" which would cannot be proscribed, but this doesn't sound like one of them. Again, I'm not a lawyer so can't claim this is sound.

Your response is likely to depend on a number of things, including what type of corporation it is, what your liability insurance looks like, whether the company has any assests, etc; it also depends on what you mean by "shutting the business down" -- declaring bankruptcy would probably suffice, but that's not free either. Just turning off the website and closing the checking account doesn't change your liability profile much; I don't think it'd be that much different from simply removing the pictures from the website from a legal perspective.

So you have two choices, really: ignore it and hope they're bluffing (a distinct possibility; court costs to claim $750 would be unlikely to be worthwhile, and you've already removed the violating images); or talk to a lawyer and figure out a refined legal strategy.

The first choice is pretty high risk. I think you really should talk to a lawyer.

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