Legal And Business Tips

Always register your copyrights?and do it promptly.

If a photograph is infringed, you cannot file an infringement claim until you have registered the work with the Library of Congress. But don't wait for infringements to happen before registering your images. You can collect substantial statutory damages ($750-30,000, under the court's discretion, which can be increased to a maximum of $150,000) for infringement if you've registered the work before the infringement or within three months of first publication. On the other hand, if you register your copyrights after the infringement, you have to prove actual damages?a difficult and costly proposition?in order to collect anything. (No wonder, then, that infringers are more likely to pay favorable settlements to avoid lawsuits when you've registered your copyright prior to their act of infringement.) So try to register your photographs immediately after a photo shoot, before submitting them to a client. It is the cheapest and easiest way to register a large number of images, since unpublished photographs may be registered as a group (using one registration form). You can scan the images on a disc to satisfy the deposit requirement. You can also register a group of published photographs under the Copyright Office's regulations for Group Registration of Photographs <www.copyright. gov>.



Have a good standard "day shoot" assignment contract ready for negotiations.

Clients are very impressed to see this type of business preparation. And a day-shoot agreement is a great way to determine, during the negotiation stage, if the client is on the same page as you are in terms of usage rights, production costs and shoot fees. Also, if your contract is well written and thorough, clients are more likely to agree to your terms?most important, the monetary terms. P.S.: It's always good to include a cancellation fee in your day-shoot agreement. Don't forget to scrutinize all client purchase orders. They have hidden clauses in the fine print, often transferring copyright. Make sure you cross out any language that contradicts your own terms.



Always carry?and use?robust model releases.

Model releases are the legal permission slips that allow photographers to license images of people for commercial purposes, so a fully released image is a more valuable image. Have a release signed by anyone who may be in a shot. Ask for a driver's license to determine the model's age, note the date of birth and write down all contact information. (Make a photocopy of the license, if possible.) If the person is under 18, make sure you have a parent or guardian sign the release. To ensure broad usage rights, the language of the release should state that the photographer has rights to use and alter the image in perpetuity in any form, media or compilation. And never tell the model the release is "just a formality" and that you won't use it for anything other than the initial use.



Avoid "work-for-hire" contracts.

Work-for-hire terms prevent the photographer from owning or using the work. This means no future economic value for the photographer. Many clients think they need to own the work, but simply by asking what their needs are, you may find they require only certain exclusive or non-exclusive rights. If you can explain that a license would satisfy the client's needs, you may be able to negotiate. If the client refuses to negotiate on rights, insist on a very high fee?or consider whether to walk away from the deal.

?Nancy Wolff, Wolff & Godin LLCIf you don't want an image that you license for one-time print use in magazines or books to wind up on the Web or in other electronic media, specify the use restriction in writing.

Unless you expressly prohibit electronic reuse of your photos published in magazine or books, these publishers may attempt to reuse them without your consent on the Internet or in digital products by claiming that their reuse is an authorized revision under the Copyright Act.



Embed your photos with your copyright notice to prevent an infringer from establishing its infringement was innocent, and to increase your chances of collecting under the Digital Millennium Copyright Act.

A claim by the infringer that it innocently infringed won't work if you have put it on notice that the copyright to the work belongs to you. The best way to give notice is to embed your copyright information on the face or back of your work. Innocent infringers may ask the jury to drastically reduce their exposure to statutory damages. But a clear notice will belie any claim of innocence.

The Digital Millennium Copyright Act (DMCA), although little known, can be a potent weapon. It protects the integrity of the information contained in your copyright notice. If your work is embedded with your copyright notice, and the infringer removes the notice to facilitate or conceal its infringement, that's a DMCA violation. You may be able to collect as much as $25,000 for each violation.



No payment, no use.

Put your clients on notice that any use of your work without first making payment is a willful infringement. Include in your paper work the following: "You may not use [describe the work] until you have paid the amount we have agreed. Any use without payment constitutes a willful infringement." If your clients ignore this warning, they do so at their peril. ?Andrew Berger, Tannenbaum Helpern Syracuse & Hirschtritt LLP





Identify and label every image you shoot so you can retrieve it?and protect it?later on.

One of the problems that come up with infringements is you can not identify which images were part of a bulk registration, and the U.S. Copyright Office is notorious for not being able to produce copies of registered images to help you. To avoid that problem, label every individual image you shoot, and create a hard copy of it for your own file. That way, if one of your images is infringed and you file a claim, you can answer a challenge from a defendant who says you can not prove that your particular image has been registered.



Always negotiate with an appearance of strength, even if you do not feel you're strong.

If you go into a negotiation with an attitude of certainty about yourself and your position, it sometimes creates doubt on the other side about what they are offering (or demanding). So when negotiating a job, give the appearance that you can afford to walk away. If you are in a dispute with someone, be polite, firm and flexible if necessary, but act as if you are in the right. For instance, when I negotiate a settlement on behalf of a client, and the other side says, "You're going to lose if this goes to court," I say, "What you are saying is that we have only a 50 percent chance of winning, but if we do win, we are going to get five times what we would if you settle this." That positive attitude can lead the other side to re-think their position to your advantage.



When negotiating a contract, do not be afraid to ask questions about language you do not understand.

Contracts can be full of convoluted language. Do not be afraid to appear ignorant by asking what something means. I can not tell you the number of times I have asked, and the other side says, "I don't know." Sometimes a client's rep will say, "That's in all of our contracts." Do not accept that. That does not mean it should be in the contract, and you should not sign off on anything that you do not understand. I once negotiated a movie contract with an ambiguous clause, and when I asked what it meant, the other side said, "I don't know, but it's been in every one of our contracts." When I insisted upon an explanation, they ended up taking the clause out because they didn't understand it either!



Be creative when you negotiate.

If somebody calls you for an assignment and the terms or fees do not seem to work, suggest alternatives. Suggest alternative pricing if copyright is an issue, for instance. Do not stand on formalities. The goal is to get things done. The question you should ask is, "What do you really need?" so you can get into a dialogue with the client, expand on the problem and begin to propose options.



The moment you smell trouble on a shoot, start a paper trail to protect yourself.

If you smell a problem?things are not working or a client's not happy?there will almost certainly be a problem. So begin to make sure that everything is documented: every t is crossed, every signature you need is there, even if it means interrupting the shoot. Don't wait until the next day! I had one situation where a photographer was out doing an assignment and could see that a post-production manipulation of two or three images wasn't going to work. He stopped right there and said so. The client wanted the images anyway, so the photographer insisted the client authorize the shoot?including the anticipated problems?in writing. Later on, when there was a problem, the photographer had the paperwork to show that it was anticipated and signed off on, so it did not become the photographer's fault.

?Joel Hecker, Russo & BurkeConsult your CPA and financial advisor before December 31 to find out what you can do to reduce your 2005 tax bill.

Most income tax filers consult with their tax accountants and financial advisors shortly before the April 15th filing deadline. As a result, they sometimes miss opportunities to reduce income tax liability and harvest capital losses. The reason? Most tax-reducing transactions must be made before December 31.



To reduce your income tax bill, establish a retirement plan and contribute to it.

Tax-deductible retirement plan contributions reduce your tax bill. For example, if you are in a 30 percent tax bracket and you contribute $7,500 to a SEP-IRA account, you will defer $2,250 in taxes and accelerate your retirement savings. IRAs, SIMPLE IRAs, 401k, defined benefit pension plans and profit-sharing plans also provide tax-deduction advantages. Consult a financial advisor (before Decem- ber 31!) for details.



Make sure you have sufficient cash flow to run your business before making any retirement plan contributions.

If you run short of cash and have to withdraw money from your retirement plan before you reach the age of 59.5, you have to pay penalties and taxes on the money you withdraw. So it doesn't make sense to contribute to your retirement plan before you are sure you have enough cash flow to cover the essentials, such as your income taxes, short-term debt (e.g., credit card debt), or new equipment and marketing for your business. Consult with a CPA to weigh the short-term cash-flow requirements of your business against the benefits of diverting available cash to retirement savings and tax deductions.



If your cash flow allows for it, take advantage of available federal tax deductions for new equipment.

Normally, capital expenditures must be depreciated over a number of years, so tax deductions for new equipment trickle in slowly. But current tax law allows business owners to deduct up to $102,000 for equipment and property purchases. Of course, when you are considering whether to purchase or rent equipment, you should weigh the potential tax deduction benefits against a potential drain on cash accounts from a purchase. You should also consider renting if the technology will become obsolete.



Reduce capital gains for 2005 by taking year-end losses.

You can offset capital gains taxes in 2005 by taking losses in the same year. One strategy for offsetting gains is to sell losing stocks by December 31. You cannot deduct losses from such a sale if you buy a substantially identical stock or security within 30 days before or after the sale. You should always visit your investment advisor in the fourth quarter to review your portfolio's gains and losses.



Review and update your insurance during the 4th quarter of the year.

If your income, net worth, lifestyle or health has changed, you should review your health, disability, life, auto and liability insurance coverage. Fourth quarter is typically an opportune time to upgrade and apply for insurance because some insurance companies offer more favorable underwriting at year-end to achieve year-end financial targets.



If you are considering disability insurance to protect your family, get it now (while you're healthy enough to get it at all).

Many photographers are concerned about developing eye and back injuries that could make them unable to support their families. The best disability insurance policies will replace your income in case you become disabled and a physician says you cannot work as a photographer. But you have to be healthy?and your income taxes have to show a net profit?before you can get the insurance in the first place. And most carriers will not fully underwrite applicants who visit psychologists and chiropractors.



Review and upgrade your estate plan at least every three years.

Every estate plan, including a current will, living will, health-care power of attorney and durable power of attorney should be reviewed at least every three years. I'm assuming that you would want to avoid a situation similar to that of Terri Schiavo, who did not leave a written directive regarding her health care, causing her family to be in conflict about her wishes.

?Aaron Schindler, Managing Director

Wealth Advisory Group LLC



Amortize your property faster (and reduce your tax bill) with a cost-segregation study.

If you own your studio and you are amortizing it for tax purposes over 39 years, you may be losing a lot of money. IRS rules require you to amortize only the bricks, toilet plumbing and fixed lighting over 39 years. Everything else?such as carpets, interior walls and plumbing other than the toilets?can be amortized over 5, 7 or 15 years. So you could be able to write off 30 to 40 percent of the cost of your studio in the current tax year with a cost-segregation study (and you can deduct the cost of the study, too). The studies should be done by qualified engineers or architects; ask your CPA for a referral (and if they give you a blank look, consider hiring a new CPA).



Shelter your profits from taxes with a Defined Benefit Pension plan.

Photographers in high profit positions can defer hundreds of thousands of dollars into Defined Benefit Pension plans and possibly set up sub trusts to hold life insurance policies for the owners. These measures can make the life insurance both tax deductible and possibly estate tax free all while deferring upwards of 90 percent of the allocation of the pension deduction to the owners. This is all allowable through recent tax law changes to encourage both individuals and businesses to contribute to retirement accounts.



Take advantage of state investment tax credits for photo equipment purchases.

Photography equipment is considered investment tax credit property for state tax purposes in many states, and gives rise to an investment tax credit available to photographers on the purchase of their equipment (in New York, the credit is 4 percent; other states have varying rates). There is also a production exemption from sales tax on the purchase of this equipment.



Report foreign withholding taxes on stock sales to reduce your federal income-tax liability.

Many photographers receive "net checks" from their stock houses on foreign income, not realizing that they are walking away from tremendous tax savings. By receiving a statement that shows the "gross royalty" and the amount of tax withheld, the foreign withholding can significantly mitigate the federal tax burden for the photographer. Unfortunately, many photographers unknowingly pass this credit on to their stock houses, who unscrupulously fail to mention this benefit. ?Lou Biscotti and Jeffrey Cohen,

Biscotti, Toback & Company, P.C.