Not picture perfect

In 2009, Robert Hammond of Atlanta, Ga.-based Hammond Residential Management Company, was confronted with an attorney's demand of $5,000 for licensing fees and damages to a photographer of whom he'd never heard.

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It turns out that an online image he liked, downloaded and integrated into his new marketing campaign was a copyrighted, fully-staged photo by one very famous photographer out of New York City.

Petrified and embarrassed, he worked with his web developer to settle the claim.

“Here our company was just getting started,” said Hammond. “And then this. I hadn’t any experience with stock imaging, nor could I even make out if this was a real claim or not.”

Today, Hammond Residential manages a portfolio of 10,000 units, while remaining clear, even today, on how to best avoid such potential hidden liability. “It’s a painful memory. Still, I appreciate the support from my provider for educating me on this issue. It’s actually applicable to other areas of technology management,” he says. “As I continued to garner professional insight, I still find the experience beneficial, albeit costly.”

Unfortunately, there remain other unsuspecting apartments operators attempting to cast their best image online, who are then startled by a subpoena. How do property owners protect themselves from real and scripted intellectual property (IP) litigation?

Photography is one thing, software license and patent infringement is another. Here are simple business insights and practices that go a long way in protecting a company’s interests and bank account.

Chances are strong, collectively, that we’ve already committed plenty of copyright infringement in which an image is copied and used, or that someone’s proprietary process was encroached.

The good news is that only a fraction of these comes with the threat for a licensing fee payment, as well as damages. The bad news comes when you are the chosen few and the piper comes calling.

With regard to photography, video, artwork for the use of other imaging, the average executive is likely unaware of copyright laws and the ramifications for illegal, albeit unintentional, use of another party’s image. Simple rule of thumb, if it’s not yours and you did not pay someone else to create or lease its use, you may pay later. Copyright infringement remains an outstanding liability forever, especially if the image was used online. It’s also important to maintain records of payments and agreements of said images at least for the period of use.

If a member of your team uses a photograph registered with the U.S. Copyright Office in an unauthorized manner, they have, in effect committed an infringement and are liable for damages. Therefore, the owner of the photograph is entitled to either actual or statutory damages, whichever he chooses to pursue.

Statutory damages, even for unintentional usages, start at $750 per infringement and can range up to $30,000 per infringement.

Since 1995, Getty Images, one of the world’s largest databases of licensed imagery and online footage, has been providing news and entertainment companies with premium digital content. In addition, many other online suppliers offer competitive imaging services with varied user agreements including royalty-free and rights-managed material. Thanks to the indexing spiders in wide use on the Internet, much of this imaging will make its way into the Google Images database, and unfortunately, some unsuspecting business person will be tempted to copy and paste this material into their personal or professional online presence.

User beware if tempted to capture such images: since 1989, federal law eliminated the legal need for a copyright notice to accompany a protected image. It’s better to err on the side of caution by using a subscription-based image service when seeking to improve your company’s online presence.

Still, there are caveats even when attempting to stay above-board. Vet the user agreement supplied by the content subscription service. Many don’t allow for third party distribution so work completed by a professional web developer can put your organization in a dispute with an image provider. Simple clarification with legal counsel is an easy and preventative measure that can save time and money in the future.

Nadeen Green, senior counsel at For Rent Media Solutions, regularly encounters instances in which she must guide team members and clients through the maze of licensing realities.

“There is a marketable difference in the use of images with regard to people and news. The use of images in commercial speech or advertising is completely different,” she says. The difference lies in the elevated client exposure for commercial gain. When there exists no clear path of approved use on an image or footage, it creates a clear and justified reason for non-inclusion.

Stock photography rights is one area that has made the enforcement radar and collection; technology patents are another.

A landmark settlement by the District Attorney of New York recently ended a suit against MPHJ Technology Licensing, a Delaware company and noted patent troll. The firm was barred from continuing to apply deceptive tactics in an effort to collect fees for patent licenses.

Prior to said, this company was involved in litigation in Vermont, Nebraska and with a similar settlement in Minnesota. Also called a patent assertion entity (PAE), these firms are known for unscrupulous collection tactics for inactive patents from unwitting small to mid-size companies.

In both cases, whether regarding images or code, the “infringer” is offered a settlement value that is much less expensive than the legal engagement. Hoping to avoid a confrontation, the company might opt for a quick summation, mitigate future liability and pay the fine.

One doesn’t have to look outside our own industry for instances in which unwitting small and mid-size companies were fleeced by an effort to capture awards for unauthorized use of patented products owned by suspect attorneys and shell technology companies.

In 2008, Darby Development of Charleston, S.C., spent time and energy sparring with Brad P. Warsh, Inc., the owner of the Warsh Plan. Based in New York City, Warsh owns the process patent for the “system or method for administration of awards programs,” for an apartment, office or industrial property.

Victoria Cowart, vice president of property management, and 2013 National Apartment Association (NAA) board member, shares her frustration with this organization’s ownership, who was awarded this patent in 2001.

“When I researched the patent description, frankly, I did not even believe the process was worthy of a patent,” she says. “Even if I did use a computer to track our resident rewards program, I know for a fact I would be hard pressed to not find instances within our industry affirming prior use. This, by its own right, is justification for patent retraction.”

Working with her corporate attorney, Cowart was able to deflect the complaint and the perpetrator moved on to his next target. Intellectual property laws are not typically committed to the memory of professionals, especially in an industry focused on real estate and governmental affairs. It is nevertheless a necessary component of professional awareness and needs to be taken seriously.

Each and every day across our industry management, executives encourage onsite teams to take charge of the content management of their online portfolio. Without careful business policies and oversight, such initiatives and campaigns can deliver financial distress.

It’s is only prudent to take responsibility for employee online activities. Be proactive when monitoring community communications. Subscribe to an imaging service for complimentary content to go alongside the written material being presented in resident portals, bulletin boards and property event notices. It is a good idea to visit with suppliers who are SaaS (Software as a Service) in which you use their platform to manage your own content.

If there is an infringement, they are fully in their right to defer the legal complaint to your supplier under “Safe Harbor,” part of the Digital Millennium Copyright Act (DMCA). Signed into law in 1998, President Bill Clinton extended copyright protection to digital forms, while limiting the liability of online service providers from copyright infringement by their clients.