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Liability, Copyrights and Independent Contractors

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    #1

    Liability, Copyrights and Independent Contractors

    Many of the recent posts in these threads brought back some not-so-fond memories of my time in the publishing business. I was working as the CFO of a small publishing company, about $5 million in annual revenue. We were accused of copyright infringement and were issued a cease and desist letter by our much larger competitor whose revenues were in the several billion $ range. We responded that we were operating within the normal standards of our industry and infringed no copyright.

    Needless to say we were sued and despite having a fine set of corporate books the President and Vice-President (majority shareholders) were joined to the lawsuit. Certain independent creations that we claimed copyright on were created by a local graphic artist. She had failed to pay the royalty payments for some of the stock photos she used. We ended up paying many times the value of those photos to secure rights to them after the fact.

    In the end we counter sued and fought the other company to a draw but ended up spending several hundred thousand in legal fees. We were literally buried under the weight of their discovery requests.

    The moral of the story is to follow the rules, don’t count on your business organization for legal protection and seek competent advice.
    In other words, a democratic government is the only one in which those who vote for a tax can escape the obligation to pay it.
    Alexis de Tocqueville
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    #2
    You should also buy insurance. Liability protection under the LLC or corporate shield is no substitute for liability insurance. Had you purchased insurance prior to being sued, you could have let the insurance company handle the harassment.

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      #3
      Point well taken about the insurance

      However when a company the size of Sp***t sues you for copyright infringment no insurance company is going to back you. The fact the suit was groundless and in fact one of a series of similiar suits filed against other smaller competitors didn't matter. Liability insurance works best for personal injury, slip and fall stuff. Anyway I tried to get the owners to buy a comprehensive policy. You can lead them to water ....
      In other words, a democratic government is the only one in which those who vote for a tax can escape the obligation to pay it.
      Alexis de Tocqueville

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