iStockphoto Offers a Legal Guarantee

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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.

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