In a rare moment of cooperation between the various stock photo agencies, Getty Images, Corbis and Shutterstock have combined their efforts to build a site they hope will educate users about licensing images and the legal complexities of doing so.

The site, stockphotorights.com, highlights the some of the legal dangers that come from licensing photos for your site beyond copyright including privacy issues (model releases) trademark issues and infringement of designs.

The site’s solution to these potential problems is to license images from stock agencies that provide indemnification, or legal protection against claims of infringement over use of their images. This is something that some of the major microstock photo agencies have been doing since late last year.

To be clear, these issues do happen. The Virgin Mobile case, which saw the company use a CC-licensed image of a girl in an ad campaign only to be hit with a privacy claim by the parents of the girl in the image, is an excellent illustration of the problem.

However, they can also be avoided in other ways, such as not using images that contain pictures of recognizable people or trademarked logos not protected under fair use. However, those options are not discussed in the video, in large part because this site, though informational, is aimed at encouraging users to choose commercially licensed stock photography.

Still, the site is a good overview of some of the issues that do arise when licensing images for your site and it is well worth taking the three minutes to watch the video and think about how these problems could impact you.

On that note, I’ve embedded a copy of the video below.

In addition to the video, the site also has a blog with updates on image licensing issues, a list of photography agencies and links to other, related sites, a good list, even if PT is not on it.

In short, if you deal with image licensing at all, you will probably want to watch the video and bookmark this site for future reference. It is almost certainly something you will want to come back to.

In late October, stock photo agency Shutterstock, announced that it would provide its customers with legal indemnification for all works purchased through their service. This means that, should a photo purchased be fradulent and the purchaser is sued or threatened, iStock photo will cover up to $10,000 in damages and legal fees.

This follows about a month after iStockPhoto, which is owned by Getty Images, announced its plan to offer a similar indemnification service.

Obviously this is becoming a trend in the microstock community as companies begin to offer nervous buyers a guarantee that the images they are purchasing are legitimate and backing up that guarantee with money. Though, as I pointed out in my previous post, the money might not be enough to cover some lawsuits, it would be enough for most cases, especially if the matter were resolved quickly.

But all of this begs a question, why is this microstock industry suddenly taking up the banner of indemnification? I decided to pose the question directly to Shutterstock and see what they had to say.

Peace of Mind

In my earlier article on iStockPhoto, I hypothesized that the current legal climate surrounding stock photography, has made buyers uneasy about purchasing even from established stock photo agencies. The issue comes in part from unscrupulous agencies that do not adequate vet work and aggressive legal action, in particular from Getty images, against those who use their images with a proper license.

Shutterstock, however, seemed to downplay that. Saying that they had been looking into providing protection for “some time” and that it was aimed more at providing customers peace of mind than addressing any specific concern. According to their representative, the addition of the indemnification is also part of a larger shift in the stock photography community, including the shift to royalty-free licensing and greater use on the Web, both of which have had sharp impacts on the terms of use and customer needs.

According to Shutterstock, issues with their images are “exceedingly rare” and the most common issue involves a customer using an image in a way that is not compliant with their terms of service. For that reason, they recommend that users always read the terms of use closely when buying images and always attempt to buy from a reputable agency. To keep other kinds of infringement to a minimum, Shutterstock has a stringent review policy for new artists and requires both a legally-binding contract from the artist as well as model releases on all recognizable people, to prevent privacy issues from arising as well.

But as much sense as it makes that these legal changes are coming from larger changes in the industry, the fact that both iStockPhoto and Shutterstock saw fit to offer similar plans so close together, the biggest difference being that iStockPhoto offers $10,000 per file where Shutterstock is $10,000 per user, still raises eyebrows.

A Different Theory

Lee Torrens, who writes for the site Microstock Diaries, a blog for photographers selling their work on stock photo sites, has a different theory. According to Torrens, the move is likely a strike at Vivozoom, a stock photography agency that opened earlier this year, was the first to offer such indemnifications to its buyers, up to $25,000 per case. Vivozoom was built from the ground up to fill what it saw was a need in the industry.

Now the two largest players have fallen suit and offered their own indemnification plans, possibly a sign that Vivozoom struck a nerve with the industry.

Torrens also predicts that, most likely, we will see other photo agencies, including smaller ones, offer similar plans now that both iStockPhoto and Shutterstock have done so.

It will be interesting to see what is the case.

My Thoughts

In the past year alone, one stock photography agency has opened up with the specific benefit of offering indemnifcation and the two leaders have followed suit with their own, albeit smaller, plans. This is definitely a sign that something has changed in the industry and that indemnification is a feature that is ringing with customers of stock photos. Whether it is larger forced in the industry or customers are becoming wary about buying pictures on the Web, something clearly has changed in the past two years or so.

This ramp up in indemnification comes right after technology to detect matching images has really matured on the Web. Where, previously, a customer who bought a bad image from a stock photo agency would never be any the wiser, today, with the use services such as Tineye and Picscout, stock photo agencies and even amateur photogrpahers know when their work is being reused without permission and that means the scammed buyer now finds themselves on the receiving end of a cease and desist or, in the case of Getty, a demand for a multi-thousand dollar settlement.

If people are nervous about buying stock photos, especially from microstock sites, it is certainly understandable. While the risk of buying a bad image is low, as it always has been when dealing with reputable sites, the risk of getting “caught” when buying a bad image is not nearly as low as it was a few years ago.

A combination of unscrupulous sites, new detection technology and aggressive enforcement has made the climate very tense for buyers. Buyers want assurances that the agency will stand behind the images they sell and indemnification is the easiest way to provide that.

Bottom Line

In the end, the advice Shutterstock gave is easily the best you can get. Buy from reputable sites, read the terms of use and follow them. If you do that, the odds of you having an issue with a purchased stock image is very, very slim, with or without indemnification.

That being said, indemnification is always better to have than to not have. If you can get it and it is free, it’s always better to have the assurance than not. That being said, once again, make sure to read the requirements of the indemnification closely and learn what your responsibilities are in the event you are threatened. Most require you to notify the company within X number of days of receiving a threat and to turn your case over to them.

All in all, the critical thing is to be smart about your stock photo purchases and to not treat Google as a stock photo library or make purchases without checking out the company. A stock photo purchase can give you a great deal of a headache if you don’t do it properly and its worthwhile to be smart about where and how you buy.

In a press release issued earlier this week, stock photo site iStockphoto offered its customers free insurance against any legal dispute arising from photos used “in accordance with the iStock license”.

The free insurance, which is provided on all content purchased through the site automatically, offers to pay up to $10,000 to cover legal fees and damages should a dispute arise. An extension of that guarantee, which expands the coverage to $250,000, costs 100 credits, or about $140.

Though other stock photo agencies offer similar guarantees in their contracts, iStockphoto has become, according the release, the first micropayment service to offer such a guarantee.

The press release also takes a slight dig at Creative Commons saying that iStockphoto ” iStock offers a much safer and suitable alternative when using multimedia,” since there is no formal inspection of CC-licensed works.

While that is true and, without a doubt this new guarantee will sway many of the risk-averse to iStockphoto, it is worth noting that the guarantee is far from perfect and may not be enough to cover even the most basic copyright disputes.

When $10,000 is Not Enough

Though $10,000 seems like a lot of money, and indeed is, in the copyright world it is generally barely enough to get a lawsuit started. Typically, opening settlement offers for copyright infringement have been in the multi-thousand dollar range. The RIAA settlements, for example, averaged around $3,000 where Getty Images, iStockphoto’s parent, demands approximately $1,000 per image infringed in just its opening letter.

The most $10,000 would likely cover in any copyright case is a quick settlement. If the case drags on for any length of time, the costs along can be many times that.

To make matters worse, the damage range on an innocent infringement is as high as $30,000 (Note: This is in cases where innocent infringement is neither proved nor disproved), meaning, at least theoretically, the damages on a lone infringement could be three times higher than the protection amount, even before considering legal fees. It could be even worse if multiple (accidental) infringements are involved.

The paid-for guarantee, obviously, provides much better protection and would almost certainly cover any damages and fees, even in the worst-case scenario, for a single infringement or even multiple infringements in most cases.

However, it is also worth noting that neither guarantee provides any protection or payment in the event of a takedown notice, which is the most common remedy for copyright infringement on the Web, even though such notices can create real costs for the person they are filed against.

Though this guarantee is a strong first step, it is clear that the free one alone is not enough to be trusted to cover every legal scenario. If you are truly worried about indemnity, the paid plan is a better deal but there may be other legal insurance programs that are better and cheaper.

A Side Note

The move to indemnify customers against legal action is an interesting one for iStockphoto. iStockphoto is owned by the well-known stock photo agency Getty Images. Getty, however, has a long-standing and controversial history of sending out legal threats and demanding at least a thousand dollars per infringement for use of their photos.

Many of those threatened, including several I have talked to, believed they had purchased the images legally from other stock photo sites or stock template sites.

In a large part, it is Getty’s own actions that have made many distrustful of the stock photo/template business and created this fear of being sued or hit up for a multi-thousand dollar settlement deman. Because of this, many have expressly refused to buy from Getty or any of its subsidiaries.

Clearly though, iStockphoto is sensing some of the fear in the marketplace, especially for less-expensive stock images, and feels the need to counteract it in some way. This, along with its reassurances that they “rigorously” check every incoming piece of media, is an attempt to counteract that uncertainty as well as battle back against Creative Commons and other freely-available pieces of media.

Bottom Line

Though not perfect, iStockPhoto’s legal guarantee is a major step in the right direction and will go to great lengths to placate those who are nervous about the current legal climate when it comes to stock images. However, much of that current legal climate was created by iStockphoto’s parent company, Getty images, with their extremely aggressive enforcement.

Though I would not rely on this indemnity promise to take care of any legal challenge that might arise from the use of a stock photo, at least not the free guarantee, it can cover most cases if they are settled quickly.

Still, the best protection is to buy from reputable sources and do your own checks to make sure the image is authentic. No legal guarantee can or will protect you from a takedown notice, which can be very disruptive to your site, and no they can’t protect you from the hassle of being sued or threatened, just the financial damages.

The main benefit is that now iStockphoto is sharing it at least some of the risk, that means they are putting their money behind their work and that should not be taken lightly.

But what if the image you want is not available under Creative Commons and, instead is something that has to be licensed? How do you use the image without paying high licensing fees or dealing with uncertainty about the license?

GumGum may have the answer.

Its new photo licensing service makes it easy to find images that may be relevant to your content and license them, either for a token rate or free using an advertising model.

This system could be a boon for stock photographers and anyone who wants to use images on their blog as it makes it easy for photographers and licensers to get together and make exchanges, all the while going to great lengths to protect the original work.

For photographers, it may be the most fair system available, even if Webmasters might not like how some elements of the service work.

How it Works

The GumGum process starts with a photographer uploading a group of images to the site and providing information about them, including what the image is and the CPM that they wish to charge for it.

Once the image is processed, the user comes to the site later, performs a related search and gets a collection of potential candidates.

The list is often quite long, even for fairly obscure terms, but seems to focus heavily on celebrity-related images. This is likely due to issues with selling pictures of non-celebrity individuals.

Once you find the image you want, you click the image and then are taken to a page that offers you the chance to license the work. You are given two options, the first is to license it with a CPM method, which means you pay a small amount per 1000 times the image is displayed, or a advertising-based model that lets you use it for free, but with an ad overlay.

Once you have made your selection, you then provide the URL of the site it will be appearing on and select the size that you need, choosing from small, medium, large or a custom size.

Once you click the “Purchase” button, you are given access, not to the image itself, but to HTML code that enables you to embed it into your site. It not only prevents you from being able to put the image on other sites without purchasing, but prevents your visitors from simply right clicking the image and taking it for themselves.

Though this DRM is questionable at best, it undoubtedly will make many photographers very happy.

The end result is that the image will appear on your site exactly as shown at the end of this article. Obviously, I am not profiting from the advertising in this work nor do I have any control over the content, it is for demonstration purposes only.

Why It is Different

GumGum is certainly not the only microstock service on the Web. However, it combines several elements to make it an interesting, and at least somewhat unique, service.

1. CPM Licensing: Though many will protect using CPM versus flat-rate licensing, it is actually more fair to the photographer and to many sites. Smaller sites, those needing only a few thousand impressions, will spend far less money and larger ones, which can usually afford to spend more, will pay the photographer more. It also creates a stream of revenue for the photographer over time rather than just a one-time fee.
2. Advertising Model: Sites that can not afford the CPM fee can select the free advertising model where small ads are run at the bottom of the image. This gives “free” bloggers access to images that previously would have been closed off to them.
3. Flash/JavaScript Embedding: The use of Flash and/or JavaScript to embed the image not only prevents the actual image from changing hands and offers GumGum a means to track the images, but it makes it very easy for novice Webmasters to drop the image in, without worrying about resizing the image or formatting it.

For Photographers, GumGum likely seems like a very appealing option. In addition to the above elements, GumGum also does not take a percentage of the licensing revenues. Rather, it charges a very small “shipping and handling” fee above your CPM rate (Ex: Making a .20 CPM image cost .207846425 to the end user) and earns their money from that. For advertising model licenses, GumGum does not make any revenue promises, but says it pays the full revenue for the advertisement less a flat fee.

GumGum also provides all of the image hosting, something that benefits Webmasters who are looking to offload their images, and handles all of the transactions the same as any other microstock site.

Potential Issues

The GumGum system, however, does raise some concerns and has some limitations that have to be weighed.

1. Unpredictable Pricing: A .20 CPM sounds good when you’re only pulling in 2000 page views per post. However, if the article gets Dugg or otherwise goes viral, it could easily generate hundreds of thousands of pageviews. There is almost no way to predict this and your only defense is to quickly convert your license to Ad-supported in the event of a spike.
2. Limited Selection: Though GumGum has a large number of images, almost all of them are celebrity related. Though this makes sense for legal reasons, there are almost no shots of objects or landscapes, something you would expect in a robust stock photo catalogue.
3. Free Alternatives Exist: As I mentioned in my previous article, there is a wealth of CC-licensed works that are available for use by bloggers for free and without advertising. That collection is both more robust and is expanding rapidly. Though there does not seem to be much overlap between GumGum and the traditional CC fair, many bloggers will find all that they need for free.
4. Awkward Insertion: Though the embedding is far easier than downloading the image, resizing it and reuploading it, it doesn’t allow much flexibility. I struggled to get the word wrap right on the image and that is why I had to paste the sample below under its own heading.
5. Ad Block Vulnerability: I did a quick test and AdBlockPlus is able to block the ads, at least in the JavaScript version. While this is true of most ads, it does mean that the CPM for the photographer will be lower than expected when dealing with those who license the ad-based version.

Beyond those issues, many bloggers will be uncomfortable with either displaying ads on the site, especially those they do not profit from, and it remains to be seen how many will pay to “rent” an image based upon the number of views. Considering that sites such as iStockPhoto offer images for sale at such low rates.

Considering that GumGum does not even transfer the image itself, just access to it, it seems likely that many bloggers will want to stay away.

Conclusions

GumGum is a very interesting idea but the target market, bloggers and Webmasters needing very low-priced images for their site, is already very well served.

Photographers will likely take a great interest in the site as it enables them to reach that market while both protecting their work and obtaining a steady stream of income. Bloggers, however, aren’t likely to find that much interesting.

Though there are obvious exceptions to that rule, such as gossip bloggers and those that deal heavily with celebrity news, most are likely going to be served adequately by the Creative Commons community and can find what they need on sites such as Flickr or by using the PhotoDropper plugin.

In the end, the success of GumGum is going to hinge solely on the quality of the photographs it offers. If it can better serve bloggers than the existing system, it has a bright future ahead of it. However, that is going to be an uphill battle.

Sample Image

The best result when you search for “Pirate”.

Video Introduction to GumGum

Though she did not put the blame on iStockPhoto directly, she did note that this is a problem that is becoming “increasingly annoying” for those who use the Internet to showcase their work.

iStockPhoto has not responded as of this writing and there is no way of knowing if the images are still on line at this timeArticle Update: iStockPhoto has responded below and confirms that the images have been removed. Guðleifsdóttir has said that she has contacted a copyright attorney about this and is working “tackle this problem in the best way possible.”

Unfortunately, this seems to be a problem that is, as of right now, unresolved and is likely affecting many other photographers on the Web. Worst of all, there is a great deal of legal uncertainty as to how and if resolution can be obtained.

Legal Uncertainty

Unfortunately, due to the nature of the case, there is no simple way to resolve it.

Guðleifsdóttir is from Iceland, iStockPhoto is based in Alberta, Canada and the person who uploaded in the infringing images is, most likely, in another country altogether.

Since iStockPhoto is located in Canada, it isn’t bound by the DMCA. There is no notice and takedown provision in Canadian law as of this writing. Furthermore, since iStockPhoto profits directly from each infringement, they would likely not be eligible for protection under the DMCA, even if they were an American company.

iStockPhoto does offer a “Notice and Procedure for Making Claims of Infringement” on their site that closely resembles the DMCA. However, it requires a postal letter be sent directly to their president. Given the geography of the situation, that could take a week or to arrive and even longer to be acted upon.

Article Update: iStockPhoto in a comment below stated that the images involved have been removed and a physical letter. I am seeking clarification as to how to bring these issues to their attention without the use of a physical letter.

Finding and targeting the person who uploaded the images could prove difficult as one would first need to get the account information from iStockPhoto and then target the individual or company in their home country. That could easily wind up costing more than any potential damages that could be claimed.

If iStockPhoto is not cooperative in this matter, this situation could be almost impossible to resolve and regular photographers, without the legal resources to go after the company and any infringers, could be left with little recourse against abuse on the site.

Some Good News

The good news is that those I’ve spoken with that have worked with iStockPhoto have reported that they do handle cases swiftly and fairly. Though the requirement of a mailed letter slows down resolution times, they do respond and handle such matters when they are discovered.

Though iStockPhoto doesn’t seem to have much motivation to work with artists, not doing so would not only harm the infringed parties, but their own customers.

Furthermore, if they knowingly sell photos they do not have the rights to offer, they could held liable for other damages by both the artists that were ripped off and the companies that bought the bad images.

All in all, even though iStockPhoto might have the legal high ground right now, they could lose it quickly if they acted in bad faith and all signs point to them responding quickly and effectively to this case. However, the details of what that resolution will include, especially as it pertains to the money earned on the infringing images, remains unclear.

Conclusions

As a company that sell photographs, not merely hosts them, iStockPhoto has a greater responsibility than other sites. It is not merely enough to take down infringing photos when notified via postal mail, they owe it to their customers and to the photographers that legitimately sell their works over the site to try and keep infringing works from being made available in the first place.

To that end, image matching technology is rapidly entering the mainstream and could save the company a great deal of headaches.

Even if the technology isn’t perfect, if it prevents even a small percentage of infringing images from being uploaded, those are images they don’t have to clean up after the fact.

For artists and photographers, it makes image watermarking an even more appealing option, where practical, and highlights the importance of using low-resolution images when posting to the Web.

It isn’t much, but it can prevent your work from being an appealing target for those who wish to make a quick buck.

For more information, see my previous article entitled “The Secret Site of Stock Photography“