What do I do if I am being threatened with case escalation over a photo? Posted on April 08, 2011

I was wondering if someone can provide any advice, as my company is receiving threatening letters about a photo that was on my website. Here are the pertinent facts: 1. The website is owned by my corporation, and is a very new business - only about a year old. I was referred by my business coach to a website where I could find photos for my site. 3. The website offering the photos said they were free to use for any purpose as long as I was not creating a commercial product featuring the photos (derivative work) to sell (which I am not - my site is on health products, and all photos are purely decorative). 4. A couple of months later, I received a letter from an image licensing company (Company X), stating that a photo on my site was in violation of copyright law. (Note that the letter was addressed to my website address, NOT my corporate name - there is no business entity created in my website name.) 5. I immediately removed the image in question from my website. Several months later, I received another letter, saying that I owed Company X something like $1,200 for using their picture, even if it was not on my website anymore. (Or I could pay them $1,200 for a license to use the picture.) I just received another letter titled "Notification of Case Escalation" and saying it my "last chance" to pay the settlement. My question is, what should I do here? First of all, they are not actually threatening to sue my corporation, but a name that does not even exist. Secondly, I removed the photo immediately upon notification of the violation and never received any compensation from (or during) its use. Thirdly, I try to be pretty cognizant of copyright law, and I did believe in good faith that it was okay to use the photo - should the person who was offering the image for download and "free usage rights" on the photo download website be the one who is penalized? My corporation has no holdings.

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