Business attorneys often have to deal with frivolous lawsuits, however, copyright and patent trolls are despised by company lawyers.
A copyright troll is a party that enforces copyrights it holds in order to make money by having their attorneys file strategic litigation, in a manner considered extremely aggressive or opportunistic, and generally, without creating or licensing the works it owns for paid distribution.
In the fashion industry, particularly in fast fashion, fabrics with patterns/designs are purchased in bulk from manufacturers, and those fabrics are sold to clothing manufacturers to create clothing that is later sold to retailers.
Many individuals who purchase these fabrics in bulk to sell to clothing manufacturers rarely know the origin of the pattern, likely never know if anyone owns the copyright to the pattern, and rarely have their general counsel conduct a copyright search.
The trolls enter the fashion world by having their attorneys file to register the copyright of a design, in turn obtaining ownership of the fabric design.
The trolls will then cast a very wide net, having their attorneys send out hundreds of thousands of accusatory letters claiming copyright infringement against any party who has bought, sold, or acquired a piece of fabric that has a design that resembles the copyrighted work.
These letters are intimidating and lead individuals to be scared into hiring their own attorneys and paying tens of thousands of dollars to an individual even though they had no intent of doing anything wrong.
It is highly recommended to contact an attorney if threatened by a copyright troll to avoid paying money when there has been an innocent use.
Many times, the trolls never actually use this copyrighted work nor did they create the copyrighted work, but by owning the copyright registration they are able to claim infringement against innocent infringers and they rely on the fact that they may not know they should contact an attorney before giving money to the accusers.
Unfortunately, even though trolls often take advantage of innocent individuals the damage rewards obtained have been far from nominal.
These suits require representation from an attorney who knows how to best represent innocent infringers. A copyright owner may elect to recover actual damages, which are the actual damages suffered by him or her as a result of the infringement, and any profits of the infringer that are attributable to the infringement and are not taken into account in computing the actual damages.
The copyright owner is required to present proof only of the infringer’s gross revenue, and the infringer is required to prove his or her deductible expenses and the elements of profit attributable to factors other than the copyrighted work.
The largest awards come from statutory damages that the copyright owner may elect to recover instead of actual damages and profits.
Statutory damages for all infringements involved for any one infringer is liable for a sum of not less than $750 or no more than $30,000 as the court considers just.
If the court finds that the infringer was not aware and had no reason to believe that his or her acts constituted an infringement of copyright, the court in its discretion may reduce the award of statutory damages to a sum of not less than $200.
Even if one is an innocent infringer the burden of proving innocent intent is on the defendant’s attorney and is a heavy one.
The reduction of statutory damages for innocent infringement requires an inquiry into the defendant’s state of mind to determine whether he or she “was not aware and had no reason to believe that his or her acts constituted an infringement.”
17 U.S.C. § 504(c)(2) Luckily, many courts are aware of copyright trolls and also take into consideration the sophistication or level of understanding to prompt an inquiry into the source of the unmarked goods.
If you have received a copyright infringement letter you are welcome to reach out to us for a free consultation by a seasoned Bay Area Business Attorney. To set up an appointment call or email.
