Vermont company settles suit with 'copyright troll'

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VERNON — A copyright infringement lawsuit filed against a local business was quietly settled out of court in July.

Peggy Farabaugh, who founded Vermont Wood Studios in Vernon with her husband, Ken, told the Reformer that due to the stipulations of the agreement, she couldn't comment on the settlement.

"All we are allowed to say is that it has been amicably resolved," said Oscar Michelen, of Cuomo LLC, who represented Vermont Woods Studios.

However, Matthew Chan, of the website Extortion Letter, told the Reformer that though he was not a party or witness to the final settlement agreement, he offered his opinions to Vermont Woods Studios prior to the settlement.

"I have been an outspoken supporter of their position, but we are entirely separate parties and entities," he said. "Given Vermont Woods' desire for closure and the avoidance of any more legal entanglements, Vincent K. Tylor and Hawaiian lawyer, James Stephen Street, successfully bullied Vermont Woods into a lifetime of silence."

In mid-2012, the Farabaughs received a letter from PhotoAttorney.com demanding $9,500 for use of a photo they had found on the Internet to illustrate the sale of a dining set to a customer in Hawaii. Farabaugh noted that she thought the picture was available for reuse through a site that offers free downloads, but she later found out it was in fact copyrighted by Tylor.

"If I refused to pay ($12,000) within 10 days, they said (Tylor) might sue me for $150,000," wrote Farabaugh on her blog.

Vermont Woods Studios works with Vermont craftspeople to market and sell their furniture online and at Stonehurst, a gallery and showroom in Vernon.

Following receipt of the letter, Farabaugh contacted Adam Gafni, of Woolf Gafni & Fowler, in Los Angeles, who was at the time representing Tylor. The phone call did not go well, wrote Farabaugh.

"I asked him to drop the lawsuit. He told me to make him an offer to settle and I said I'd been advised not to settle. At that point, he accused me of extortion, said 'see you in court – have a nice day' and hung up the phone. VKT filed a $150,000 lawsuit shortly thereafter."

"It's a bullying tactic," Mitch Stoltz, of the Electronic Frontier Foundation, told the Reformer in July 2014. "Juries don't tend to award $150,000, but because the amount is so high, they can use it as a scare tactic."

Tylor eventually dropped the lawsuit in California but refiled in Hawaii, through the law firm of J. Stephen Street and Dane Anderson.

According to Extortion Letter Info, J. Stephen Street has filed a number of similar lawsuits and according to public documents, Anderson has represented Tylor in similar lawsuits in the past.

Farabaugh admitted she used a copyrighted picture on her website, but contended it was an innocent infringement for which she was willing to pay a couple of hundred dollars, but surely not in the thousands.

"Vermont Woods was rightfully outspoken and unhappy about Vincent's and Adam Gafni's legal threats, tactics, and the extortionate amount being demanded," said Chan. "After some time passed, Vincent Tylor, through his Hawaiian so-called lawyer, James Stephen Street, filed another lawsuit against Vermont Woods. Vermont Woods, once again, became vocal and outspoken about Vincent's and James Stephen Street's legal threats and aggressive tactics asking for extortionate amounts of money to settle."

Chan, who has been outspoken and highly critical of Tylor and his attorneys, advised Farabaugh to hire Michelen to represent Vermont Woods Studios in the case.

During the negotiation of the settlement agreement, noted Chan, Street "motivated" Farabaugh to delete her blog posts about her ongoing legal battle with Tylor. Chan, "as a favor to the process," also deleted one of his comments about the case from the Extortion Letter Info Discussion Forum.

"In my opinion, James Stephen Street ... tried to control, restrict and eliminate critical comments made about him online — presumably to try to keep his online reputation clean and untarnished — and punished Vermont Woods for having supporters like me that were highly critical of him and his aggressive tactics," noted Chan. "It would be unfair for me to blame Vincent Tylor because we have written about him for years and never once has he tried to restrain ELI's or its users ability to speak out freely."

While Vermont Woods Studios continued to express its belief it had done nothing intentionally wrong and was willing to settle for a small reimbursement, it also wanted a settlement that could close out the case, said Chan.

"During the negotiations stage, Vermont Woods asked my opinion regarding the terms of a proposed settlement and whether or not they should agree to them. While I was supportive of them to financially settle the matter and put it behind them, I strongly disapproved of some draconian terms being proposed. I was very outspoken that they should not agree to such draconian terms and have them removed."

Chan said out of respect for the Farabaughs and their business, he would not reveal what those draconian terms were, but he is personally and professionally offended by any agreement that restricts a party's ability to speak after settlement.

"It is acceptable for Vincent Tylor and James Stephen Street to demand Vermont Woods not disclose the terms of financial settlement. However, it is not acceptable to absolutely forbid Vermont Woods from ever writing or uttering a word about Vincent Tylor or James Stephen Street, which appears to be the case based on the deafening silence. When a party is unwilling and fearful to express a simple opinion about the other party and their lawyers, it has gone too far."

Chan said he feels obligated to helping people confront so-called "copyright trolls," but admitted sometimes it's "a thankless endeavor."

"I know what I would have done if I were in their shoes. I would not have accepted any draconian terms regarding my ability to speak publicly, even if it meant a higher risk to me."

Copyright infringement has gotten to be a hot topic around the country and the world.

The EFF's Stoltz told the Reformer in 2014 that in the previous three years, more than 200,000 people had been targeted by copyright trolls. Tylor is one of the most prominent.

"Most people who get a letter demanding $10,000 are probably going to Google the name of the person who is demanding the money," Farabaugh told the Reformer in 2014. "When they Google Vincent K. Tylor, not a lot comes up on the first page about photography."

In fact, when the Reformer Googled Tylor, about half of the results on the first page related to copyright trolling.

"I do think people are on to him and trolls in general," said Farabaugh in 2014. "It's becoming harder and harder for them to extort money."

Nonetheless, the activity continues. Recently, the Reformer received an email from Brian Taylor in Bellevue, Wash.

"Tylor is going after me and my client for the use of a Hawaii photo I too copied from a non-copyrighted free images site," Taylor wrote in the email.

Letters to Taylor and his client were authored by Adam Gafni.

"Vincent has got quite a scam going on," wrote Taylor. "I've read his 'business' is seeding his photos in free wallpaper web sites that are not copyrighted. Then after a bunch of websites start using his photos in their sites, he sends his attorney after everyone."

Taylor noted that Tylor charges an "incredulous" $1,250 per year for use of his photos, "While I can go to www.istockphoto.com or www.shutterstock.com or www.gettyimages.com and buy real professionally taken pics outright for under $10."

Even though Michelen said he had no comment on the Farabaugh settlement, in 2014 he posted on Courtroomstrategy.com that "The ability to search for and locate digital imagery through the Internet has opened up a cottage industry for "(Tylor) where he sends out cease and desist letters with large demands against alleged infringers and on occasion he then files suit against them in his home state of Hawaii."

Tylor registers his images with the Copyright Office "in an organized fashion that makes it relatively easy to find the registration for the particular image." He watermarks his images and hired J. Stephen Street to process his claims.

However, noted Michelen, Tylor demands both in his letters and through his litigation damage amounts "that I believe exceed what he would recover in a court of law." And by filing in Hawaii, Tylor and Street know they are making it hard on defendants to litigate.

Michelen acknowledged that many of Tylor's images can be found on sites that advertise free wallpaper or free images. But, noted Michelen, "Using an image from a free wallpaper site as a banner for your website which advertises your business is not 'wallpaper.'"

He also noted that he has found no proof that Tylor is "seeding" free sites with his images to entrap or ensnare people.

All this means, wrote Michelen, is people cannot just assume that because an image is labeled as "free" you can use it without a problem. "It means that chances are if you want to use a picture of a Hawaiian beach you will have to pay for it now or later. Or else you could find yourself saying 'Aloha' to a judge in the Federal Court for the District of Hawaii."

Bob Audette can be contacted at 802-254-2311, ext. 160.


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