Suing someone for copyright infringement? Know the risks.

If someone has done you dirty as a business owner, it is normal to feel angry, even violated. This is especially true if someone has stolen your ideas and violated your copyrights. But if you let that anger lead you into an unnecessary lawsuit, you may get stuck with the bill.
Today we are talking about what happens when a copyright lawsuit backfires. Here is what copyright plaintiffs need to know:
Case study: when someone copies your ideas
In a recent lawsuit, a mixed media artist sued an art studio for both copyright and trademark infringement. According to the court, the art studio had been selling art kits to teach students about different artists and their techniques. Each kit had the relevant artist’s biography and a sample of the artist’s work. To go with the kits, the art studio provided zoom art classes to educate students about the artists and their techniques. At the time of the lawsuit, the art studio had sold six kits associated with this particular artist, for a total of $240. The artist sued, seeking up to $900,000 in damages.
The court ruled in favor of the art studio, finding it not liable for trademark or copyright infringement. In addition, because the court found the artist’s claims to be unreasonable, the court ordered the artist to pay the art studio’s legal fees - an amount equal to over $102,000.
Is your lawyer too aggressive?
When you are feeling angry and violated, it can feel really affirming to have someone tell you that you can, and should, sue. It can be especially exciting if they are promising you a huge financial payout at the end of the lawsuit.
To be clear: I am all for people bringing legitimate lawsuits when their legal rights have been violated. But the question is: what is a legitimate lawsuit?
Copyright lawsuits are uniquely risky. Under 17 U.S.C. § 505, if you lose a copyright lawsuit the other person can ask the court to make you reimburse them for legal fees and court costs. Depending on the lawsuit, this amount could be anywhere from $100,000 for a smaller lawsuit to millions for complex, multi-year cases. A court is more likely to order you to pay the other side’s legal fees and costs if your legal strategy is found to be unreasonable or frivolous.
Warning signs
In most cases, your attorney will be the one deciding legal strategy. How can you know whether their strategy is reasonable? Here are some warning signs to watch out for in a copyright lawsuit:
Is it fair use?
The general rule is that no one can use someone else’s copyrighted work without permission (and usually payment). The exception to this rule is fair use, which is aimed at preserving First Amendment freedom of expression. Fair use sometimes (but not always) applies when use of a copyrighted work is within the context of criticism, commentary, news reporting, educational instruction, scholarship, or research.
In our case study, the art studio used the works educationally - to demonstrate a specific style of art. Lessons on the artist and artistic techniques accompanied the kits and the kits were used to provide young students with instructions on how to create their own artist works. These considerations (among others) led the court to conclude that the art studio’s actions were protected by fair use.
Before bringing a copyright claim, it is crucial to consider whether the person you are about to sue has made fair use of your work. If it’s a close call, you may find more success settling outside of court.
Refusing to settle
The court also took issue with the fact that this lawsuit could have been settled out of court. As soon as the art studio learned about the lawsuit, they removed all art kits from their website, which meant that the infringing activity stopped immediately. In addition, the art studio had been willing to compensate the artist far beyond the $240 in earnings, but the artist refused to settle.
There is a lot to be said about having one’s day in court and I don’t think refusing to settle is necessarily a bad thing. But if a refusal to settle is coupled with other actions that tend to make the lawsuit look frivolous, this move could backfire badly.
Disproportionate money claims
In my opinion, the real sticking point for the court was the fact that the artist sought damages of up to $900,000 even though the art studio only made $240 on the allegedly infringing art kits. Truth be told, I think this was the biggest thing that rubbed the court the wrong way. The takeaway here for copyright plaintiffs is that if you are asking for money damages that completely dwarf the actual financial harm to your business, there needs to be a legally sound reason for doing that. If not, you might find yourself on the receiving end of a “pay up” court order.
Takeaways
Sometimes clients think that an aggressive legal strategy is the only way or that a “pitbull” lawyer is most likely to help them get what they want. When it comes to copyright lawsuits, the truth is more nuanced than that. Bringing a copyright lawsuit comes with the risk of paying the other side’s legal fees if you lose.
Copyright plaintiffs need to have a realistic understanding of their likelihood of success. They also need to understand whether there are viable alternatives (like settlement) and whether their legal demands are realistic and reasonable under the circumstances.
Thanks for reading the Bevel Law Blog! While this information is hopefully helpful to you, nothing in this blog is intended to be legal advice. Always consult a lawyer before making any legal decisions based on topics in this blog.
Ready to secure your intellectual property? Book a call today at bevellaw.com/call.
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