Pinterest is turning out to be a great opportunity for small and large businesses to gain exposure and increase sales. Other blog and news sites, such as Mansurovs, are garnering additional traffic as a result of people pinning its articles to various photography boards. Many entrepreneurs are developing social networking and marketing strategies based on Pinterest. I believe that Facebook and Google+ are likely scrambling to emulate more of Pinterest’s capabilities, lest they find themselves being marginalized. Pinterest’s user base has exploded over the last few years, so it is clearly gaining momentum and has captured the latest buzz within the internet community.

Despite the positive aspects of Pinterest, however, I believe there are some real issues with its business model, specifically related to copyright violations. The idea for this article came from some recent “lively” debates between the members of the Mansurov team. Some in the group were arguing quite vociferously in favor of Pinterest’s Terms of Service that enables anyone to pin someone else’s photos to a board, without his/her permission. Some of our team believed that this was good for our site, relative to promoting our articles, tutorials, reviews, and eBooks. I happen to agree with them on this point, but have a difficult time overlooking the copyright issue.
As someone that has negotiated a few contracts that include copyright concerns, I am less than convinced than my esteemed colleagues regarding the legitimacy of Pinterest’s operations. What follows are some of the points from our discussion along with my more detailed research into Pinterest. Lest anyone start lining up to buy shares of the IPO, perhaps a little more scrutiny is in order.

1) “Pinterest Is Cool”

Anytime I hear this one in regard to some website, my ears perk up along with my guard. Pinterest is getting all manner of accolades and for some very good reasons. According to many, it is a “cool”, “hip”, “innovative” site that facilitates sharing of photos in meaningful, easy-to-manage ways. How can that be wrong? Well, before anyone gets too enamored with any service claiming to be “free”, it pays to comb over their various policies that cover such items as Terms, Acceptable Use, Copyright Notices, User Licenses, and others that fall under the heading of, “boring legal stuff people never read”. Why? Because the money eventually has to come from somewhere. If you are not paying for the service, you can bet your soon-to-arrive Nikon D800 that the path for revenue and profits is buried in the company’s Terms of Service (TOS). Pinterest’s TOS related items extend to 23 pages, with the obligatory white space. If you would bother to read them, there isn’t much “cool” about them. I will believe the hype about cool internet sites when I can someday find a site’s legal section in a few sentences. So far, I have found few. I will get into some of the details of Pinterest’s legal section in a bit.

Pinterest received $37.5 million in venture capital money. Good for Ben Silbermann! What comes along with all that money? Plenty of attention… and attorneys. It’s a funny thing about receiving venture capital money – it never comes without strings. That is not a fault of the capitalist system by the way, nor is it a criticism of Pinterest or its partners. Heck, most people have quite a few opinions regarding the food and service associated with a simple $15.99 dinner at the local Dead Lobster restaurant. Why shouldn’t people loaning an entrepreneur millions of dollars, with no assurance of receiving a return on their investment, have some opinions regarding how the money is spent and how the business is run?

Thus despite the hip, cool, novel, etc. terms being applied to Pinterest, there are some very serious “suits” somewhere behind the scenes, and they are most likely scrutinizing Pinterest’s business model, product plans, product development efforts, sales projections, and legal concerns. So while Ben plays the disheveled, with-it entrepreneur part in his faded jeans, sneakers, and shirt hanging out, there is quite a bit of seriousness behind all that venture capital money and the legal stipulations that accompany it. I say this only to remind people that, despite appearances, Pinterest is a serious business, with serious money behind it.

While we are on the subject, always take some time to read the legal sections of the various sites you use. Yes, they may be boring, but you are agreeing to those terms. You should at least know the commitments you and the website are making to one another. At Mansurovs, we don’t have to worry about such details, however, as our staff of 50 full time attorneys routinely review legal documents for us! Ok – maybe not…

2) “Pinning Photos – What’s The Big Deal?”

In a word – plenty. Why? The main issue with Pinterest is that it is both encouraging and providing a mechanism for people to violate the copyright rights of others. If you take a photo, it’s yours, along with all the legal rights the law provides. Here’s one of my photos that links back to an article on this site. Take a good look at it; it is a decent sized photo. If you click on it, you will be redirected to the article. What’s the issue? Strictly speaking, I didn’t authorize Pinterest or any of its users to “pin” a large version of my photo to the Pinterest site. I uploaded the photo to the Mansurov site, but not to Pinterest’s site. In this case, someone clicking on my photos will get back to the source of the photo, the article. This is actually one of the better uses of Pinterest – gaining attention for internet sites that you want people to visit. On many pins, however, there are no such links. People simply pin a photo without references.

What if you don’t want your photo pinned to a Pinterest board? Should others have the right to determine where they can post your photos? Absolutely not. Copyright privileges allow you to control your photos – no one else unless agreed upon you.

3) “But They Are ‘Just Photos!’”

Much to the chagrin of some, it doesn’t matter; copyright laws apply equally to photos as much as anything else. Yes, digital cameras are proliferating faster than complaints about Greta Van Susteren getting a Nikon D800 before many others, but that doesn’t translate into the dilution of our copyright laws. Does anyone really believe the Beatles put more effort into the lyrics of “She Loves You (Yeah, Yeah, Yeah)” than some put into a week long photography trek hiking through the mountains of Maine?” Hard to believe that one. And I have yet to figure out what possessed anyone to pay nearly $12 million for a painting of a bunch of Campbell Soup cans by Andy Warhol. Your photo of some nature scene may one day be just as famous and valuable. What right does anyone have to determine that your photography doesn’t warrant as much protection as the works of the Beatles or Warhol? You can bet that both the Beatles and Warhol would not have handed over their copyright without some serious financial consideration. In the case of the Beatles, Sony sold the rights to 200 of the Beatles’ songs to none other than the late Michael Jackson for nearly $48 million. Lest anyone thing copyrights do not have value…

Unfortunately, people do tend to look at photos differently, perhaps because they are so often shared on sites such as Facebook, flickr, 500px, Smug Mug, Picasa, and others. The rapid proliferation of and improvements in digital cameras, and the myriad of social media sites is likely affecting our notion of the value of a photograph as well as the rights that accompany it. But because people willingly share their photos on the internet, it doesn’t mean they have relinquished their copyright protection or agreed to let everyone else repost their pictures to other sites without their permission. You might park your car in a public parking garage, but that doesn’t give the parking garage personnel the right to take your car out for a joy ride or road trip. Neither does parking your car in a public area give someone the right to steal your car. And while most people may routinely go over the speed limit, if you are clocked at 70mph in a 65mph zone, you are speeding and have broken the law. Copyright laws are no different. “Everybody does it” is never a good excuse for breaking the law.

4) “If It’s On The Internet, It Must Be Free’”

It may be a slight exaggeration, but “free” is the paradigm of the internet. Some people do pay for some content, but the notion that everything should be made available at no charge to anyone that wants it is a constant theme. And along comes Pinterest and it offers everyone the right to distribute the content of others. Considering all these factors, it is no wonder that few stop to consider that pinning a photo that belongs to someone else might be against the law. And not to play “Conspiracy Theory”, but I do wonder if some aren’t pushing Pinterest forward to see how much they can get society to let down its guard about copyright issues and cause a shift in values associated with the respect of such concerns.

That would be ideal for Pinterest and other aggregator sites attempting to build a business model off the creativity of others. Imagine it – Pinterest builds a nice business getting paid for click-through buys, collecting demographic information that product companies and advertisers can mine for insightful consumer behavioral patterns, and perhaps provide some targeted advertising. The foundation of the business includes millions of high quality images – and not one of them paid for by Pinterest. Not exactly a winning formula for the photographers and other artists attempting to eke out a living.

5) “Pinterest Is No Different Than Flickr Or 500px”

Sorry, but it is. What’s the difference? Only you can post photos to these other sites via the upload button associated with your account. Pinterest? Anyone can repost anything – that is one of its most compelling features. And the pinned photos are not eye straining thumbnails, but rather full size image from the originating site.

From Pinterest’s site:
What is Pinterest?
Pinterest is a virtual pinboard. Pinterest allows you to organize and share all the beautiful things you find on the web. You can browse pinboards created by other people to discover new things and get inspiration from people who share your interests.

Hmmm… it certainly sounds like Pinterest is advocating that its users post the photos from others (e.g. “beautiful things”). You remember Napster, Grokster, Kazaa, and Limewire – sites that enabled people to upload music and videos that others had created, which could be downloaded by anyone with a subscription (if required)? Funny how the music and film industries, as well as the court system, took a dim view of these sites and their practices. The courts ruled that the organizations were operating sites with the sole purpose of profiting off pirated content.

Considering that Pinterest intends (and is likely now) making money from its vast collection of original content from others without their permission, one could make the case that Pinterest is little different than these music/video sites that were shuttered or had their business models changed to that of pay-per-download. As mentioned earlier, Pinterest does have some redeeming qualities for those that wish to actively participate on its boards and direct traffic to their site. But that should be their decision, not anyone else’s.

What does Pinterest claim it can do with content you have pinned? Read on:
How Pinterest and other users can use your content. Subject to any applicable account settings you select, you grant us a non-exclusive, royalty-free, transferable, sublicensable, worldwide license to use, display, reproduce, re-pin, modify (e.g., re-format), re-arrange, and distribute your User Content on Pinterest for the purposes of operating and providing the Service(s) to you and to our other Users. Nothing in these Terms shall restrict Pinterest’s rights under separate licenses to User Content. Please remember that the Pinterest Service is a public platform, and that other Users may search for, see, use, and/or re-pin any User Content that you make publicly available through the Service.

Now here’s an interesting question: Can I pin your image to Pinterest and then grant Pinterest the license rights indicated above? Nope – I don’t have that right. And neither does Pinterest. If you link your photo to Pinterest, and agree to these terms, I can understand Pinterest’s position. But the vast majority of Pinterest’s pinned photos are submitted by those who did not originate the content. I would go so far as to say that without such wanton copyright violation, there would be no Pinterest. If it did exist, it would have a much smaller user base. Does anyone think Pinterest and their investors are not aware of this?

With flickr and 500px, others may “favorite” your pictures, but they stay within the site. If someone does link to your photos, the links stay within the site, the full size image does not get copied to someone else’s server. With Pinterest, that is not the case. You can see both a thumbnail and the full size image and you do not necessarily have to navigate back to the originating site.

6) “Pin Etiquette – Pinterest Wants To Do Good!”

Perhaps, but I found some of the Pin Etiquette a bit puzzling, particularly these two items:

1. Be Respectful
Pinterest is a community of people. We know that individual tastes are personal, but please be respectful in your comments and conversations.

Shouldn’t “respect” start with the law and not violating the rights of others?

2. Be Authentic
Pinterest is an expression of who you are. We think being authentic to who you are is more important than getting lots of followers. Being authentic will make Pinterest a better place long-term.

When I think of a site based on rampant copyright violation, “authenticity” is not exactly the first word that comes to mind. Authenticity also implies that it is your work being posted, not that of someone else that you did not consult. What exactly is authentic about posting someone else’s photos? Without their permission?

7)“So Who Is Violating The Copyright Laws?”

Pinterest can only bind people to their terms of service if it is the original content owner that provides the link. No one pinning your photos has the right to negotiate away your copyright. So, when Pinterest is inviting their users to pin “beautiful things,” they are encouraging them to violate the copyright rule. When Grandma finds your once-in-a-lifetime photo of a chocolate cake (you know – the one taken on your patio deck as the sun’s golden rays struck the chocolate layers just so, and the magnolia tree in full bloom acted as a colorful backdrop), and she posts it to her Pinterest board, she has broken the law. Think about that – Pinterest is encouraging Granny to lead a life of crime. Heinous… truly heinous…

Is Pinterest innocent in this dastardly crime of violating your copyright and potentially sending Granny upstream to the Big House? It will claim they are and “pin” (pun intended of course!) the blame on Granny, despite her tears as she is led away in chains! That doesn’t seem so “cool” or “hip”, does it? What is Pinterest’s way out? Claiming protection under that 94 page monstrosity, called the Digital Millennium Copyright Act of 1998, or DMCA. The purpose of this law is to ensure that intellectual property and copyrights are respected around the globe. This incredible collection of legalese will put you to sleep faster than you can say, “pin it”. Fortunately, there is a summary of the DMCA here (only 18 pages and technically shorter than Pinterest’s Terms of Service!).

What is the importance of the DMCA? Individuals and businesses are reluctant to invest time and effort in the creative design and development process when competitors can simply copy the result of their hard work without the corresponding effort. The DMCA is an attempt to preserve the copyright protection of those engaged in any form of creative process, whether it involves artists or engineers. We are all better off when people can count on their hard work paying off, and not being hijacked by others. This is a huge source of contention between the United States and China. China is notorious for violating the USA’s (and those of other nations) copyright laws. It is estimated that 8 out of every 10 software programs implemented in China in 2010 were pirated copies, costing the USA nearly $4 billion. The cost of all copyright infringement by China alone is estimated to north of $50 billion.

Pinterest could argue that it does not violate section 1201 of the DMCA, which covers the devices or services that fall into the following categories:

1. They are primarily designed or produced to circumvent
2. They have only limited commercially significant purpose or use other than to circumvent
3. They are marketed for use in circumventing

I would argue that Pinterest doesn’t pass the sniff test for 1 or 3. “Pinning” is a cute phrase for “reposting the photos of others”, nothing more. I would say guilty as charged on these two. 2? That is a bit trickier. Skimlinks, the service that enables Pinterest to get paid if someone clicks through a pinned photo and buys something from a linked site, may some income to Pinterest. If Pinterest starts selling advertisements, that is yet another potential source of income. This could be a bit of an issue for Pinterest, if some of the businesses flocking to it to generate sales discover that Pinterest is changing its links so that Pinterest, not the originating website, is getting credit for the sale. Pinterest could also accumulate some very interesting demographics and data regarding people’s behavior, interests, likes, etc., that might be very valuable to advertisers.

Pinterest might argue that it is not charging users for the opportunity to access others’ copyrighted images, as was the case for some of the Grokster and Limewire sites. But this argument is a bit weak, since as we already discussed, the vast majority of people are posting others’ photos. Thus without the use of pirated photos, Pinterest’s appeal to both users and advertisers tanks. I suspect a good attorney might convince a jury that Pinterest meets the criteria for all three.

This section provides Pinterest with a bit of an out – the ability to manage copyright infringement claims and take action.

Section 512(c) limits the liability of service providers for infringing material on
websites (or other information repositories) hosted on their systems. It applies to
storage at the direction of a user. In order to be eligible for the limitation, the
following conditions must be met:
• The provider must not have the requisite level of knowledge of the infringing activity, as described below.
• If the provider has the right and ability to control the infringing activity, it must not receive a financial benefit directly attributable to the infringing activity.
• Upon receiving proper notification of claimed infringement, the provider must expeditiously take down or block access to the material.

Under the knowledge standard, a service provider is eligible for the limitation on liability only if it does not have actual knowledge of the infringement, is not aware of facts or circumstances from which infringing activity is apparent, or upon gaining such knowledge or awareness, responds expeditiously to take the material down or block access to it.

Pinterest might claim that they have no knowledge of each individual infringement, but are they really unaware that infringement is taking place across a wide spectrum of their user base? Good luck convincing a jury of that. As indicated earlier, they not only know, but encourage such activity. There are a few major lawsuits between content originators and those that are aggregating the content on the internet. These battles will play out over the next year or so and likely have a significant impact on companies’ business strategies and legal positions.

Pinterest is now providing a “no pin” button, which enables a meta tag to prevent someone from uploading a photo. But this must be done by the owner of the content. Why should I have to start tagging each of my photos to prevent someone from tacking them on Pinterest and violating my rights? Someone can still download a photo of mine and then upload it to some other site. In such cases, the no pin button serves no purpose.

Another issue is whether Pinterest provides a means for people to have their photos taken off of Pinterest’s site once it has been made aware of the infringement. That seems to be the case. But even this doesn’t seem to carry much weight upon even casual inspection. Pinterest clearly knows its service provides the capabilities to infringe the copyrights of others. It may not know the specific cases until it is made aware of them, but I suspect that a judge and jury might take a dim view of massive infringement occurring on a regular basis.

What’s the worst that can happen under 512(C)? Pinterest takes someone’s photo down. That is of course, unless a jury believes that violating copyright law is simply part of Pinterest’s business model and it really doesn’t have any willingness or mechanism in place to avoid the practice. Of course, if no one complains, Pinterest will continue on its merry way.
So if Pinterest can’t hide behind the DMCA, what are the implications? Big bucks… Ouch!

The US Patent Office lists statutory damages between $30,000 and $150,000 per image if you can prove that it was a willful act. Thus these damages can start accumulating rather quickly.
Some of these fees will depend on whether the photos were on file with the patent office, the timing of the registration, and the overall sequence of events. Based on a cursory examination of Pinterest advocating copyright violation, and structuring a business model around it (including that $37.5 million in funding), one might conclude that Pinterest could be in trouble, despite some of the arguments I have suggested it could make in its defense. I think if someone mounts a solid case against Pinterest, they might win.

8)“The Battle Of The Have Nots And The Have Nots”

So you have to be asking, “Gee, Bob, prognosticator that you are, why hasn’t someone sued Pinterest won?” I think it has to do with a number of factors, with one of the major ones being the relatively newness of Pinterest. Another key factor is the consideration of “Who’s Going To Sue?”:
1. It is onerous for the average photographer, to track every violation of his/her copyright. Photography in the digital age is hard enough. Playing the patent policeman isn’t something you likely warm up to at the end of a long day. There are ways to track your photos on the net, but it is time consuming, particularly if you have quite a number of them.
2. That same photographer likely doesn’t have a huge budget allocated to “legal battles”. As such, he/she isn’t going to be any more enthusiastic about getting into a legal tangle than he/she would be for fishing through Pinterest to determine the daily copyright violations. The only people enthusiastic about lawsuits are individuals that have never been part of one, and of course, lawyers.
3. The photographer whose rights have been infringed will likely complain to Pinterest, fill out its form associated with taking down copyrighted material, and be done with it. Until next time…

On the “Who Do You Sue?” side:
1. As we have seen, Pinterest has enticed Granny into a life of crime, encouraging her to post those chocolate cake photos she has pinned illegally from unsuspecting photographers. Does a photographer really want to sue Granny? Doesn’t feel right, does it? Granny likely doesn’t have much in the way of financial resources, particularly with Obamacare taking $500 billion out of Medicare. Where are you going to find a sympathetic jury that wants to convict Granny of violating the copyright associated with your chocolate cake photo? That jury doesn’t exist. So we are not taking Granny to court.
2. Pinterest. Now we are talking. It likely hasn’t spent the entire $37.5 million… yet. And they probably have some money coming in the door. The real problem with suing Pinterest goes back to the humble professional photographer that is too busy and can’t afford a protracted legal battle with the suits of Pinterest. With many photographers working harder for less, it is difficult to imagine many of the getting excited at the idea of taking on a multi-million dollar funded internet company that seems to the new poster child for innovation.

Pinterest is counting on two groups of people, both relatively short on resources and time (compared to decent sized companies), to shy away from the confrontation of a lawsuit. I suspect Pinterest believes it can stare down a photographer that doesn’t have the time, money or inclination to take it to court. In short, Pinterest is counting on more than a bit of apathy and being a daunting adversary.

Think I am off base? Consider this; do you think Pinterest will enable users to “pin” full length high definition copies of their favorite movies, and make them available for viewing by others? Why not? Clearly many are streaming high definition video across the net. It would be a bit hit, wouldn’t it? Who wouldn’t want content uploaded on the net, and available for free with one click of a pinned image? No more HBO, Cinemax, Netflix, Starz, or Video On Demand fees! The reason why you won’t see this happen anytime soon is not due to a technical challenge, but rather financial and legal concerns.

Anyone capable of creating a moderate-to-big budget film has the legal and financial resources and willingness to exhaust Pinterest’s venture capital money faster than the current Administration can add another $100 billion dollars to our national debt! Pinterest will likely not be taking on any deep-pocketed film studios anytime soon.

So Granny doesn’t have much dough, and taking her to court will only harm the photographer’s reputation. Pinterest seems too big to take on in a legal battle and the beleaguered photographer doesn’t have a lot of time to time or money for copyright battles. What’s a photographer to do?

Pinterest seems safe… for now. But I wouldn’t count on it lasting.

9)Summary

Admittedly, this is quite a bit of material to digest, and I am sure there are a variety of other angles, considerations, legal twists, etc. that I have not covered. In short:

• Pinterest is a very innovative concept that has broad appeal and some significant potential for driving traffic to various blogs and commercial sites.
• Pinterest’s Pin Etiquette bullets sound lofty, but are incongruous with the realities of how the site is being marketed and used.
• I see nothing wrong with photographers using Pinterest to promote their photography, but it should be their decision. They need to carefully consider the pros/cons.
• Unfortunately, Pinterest is on the wrong side of the copyright law, in encouraging violation within its user community, making money based on copyright violations, and operating a service that facilitates copyright violation on a grand scale.
• I suspect that the majority of Pinterest users are also in violation of the copyright law. Some are simply naive. Others that share the mindset that everything should be “free”, simply have no respect for copyright laws.
• In order to properly protect his/her copyright, photographers should consult with ASMP or other sites that provide guidance on proper copyright registration. This will ensure that in the event of an infringement, he/she is in the best legal position possible.
• While social media sites are rapidly fostering photo sharing, copyright laws still provide rights to photographers and others that originate content.
• If you really want to see how “cool” Pinterest is, check out its Terms of Service and decide how much the legalese matches the image in your mind.
• Much of Pinterest’s appeal is being fueled by the “if it’s on the net, it must be free” paradigm that gets more popular by the day.
• Sharing information on a global scale can indeed foster creativity, build sales, and spur readership, but it should be (and is according to the law) up content owner if he/she wishes to share that content with and under what circumstances – not Pinterest or anyone that signs up for a free Pinterest account.
• Wanton disrespect for the copyrights of individuals does not enhance, but rather diminishes the creative process.
• My money is on someone eventually being successful in a suit against Pinterest (assuming they continue the same business practices) and racking up a hefty settlement.
• Like the rogue music and video sharing sites that were shut down or pressured into becoming legitimate pay-per-download businesses, I believe Pinterest will eventually feel the heat of running a business that is built primarily on the unauthorized content of others that have not been compensated or consulted relative to their copyright protection.
• Some form of digital clearing house, with encryption keys and permissions associated with digital photos, and can validate the rights associated with images and enable content aggregators such as Pinterest to automatically post or restrict photos from its site, would be a step in the right direction.
• The solution above could prove a useful mechanism to safeguard the rights of photographers and those that consume various forms of media, without making the rights management process burdensome for either party.
• In the meantime, as the law takes time to catch up with the technology, if you want to use Pinterest, post your own content.
• If you do want to pin content from others, afford them the consideration and respect Pinterest advocates – ask for their permission.
• And whatever you do, make sure Granny doesn’t end up in the slammer!

Notes:
My thanks to Hanne Adam of Berlin, Germany, who was gracious enough to allow me to use one of her textured backgrounds for my Pinterest photo.
I did not use the Pinterest logo, but created one that used a similar font.