WSBAOFFICE OF DISCTPLINARY COUNSEL

Felice P. CongaltonAssociate Diiector

April 10, 2013

Joseph StangaroneMichaels, Ross and Cole, Ltd.555 Waters Edge, Ste 120Lombard, IL 60148

Re: WSBA File: 13-00400Your grievance against lawyer Lauren Kingston

Dear Mr. Stangarone:

We received the enclosed information dated April 4, 2013 from counsel for Ms. Kingston'Under the Rules for Enforcement of Lawyer Conduct, we are providing the information to you

and to a Review Committee of the Disciplinary Board.

ffiryraAssociate Direct

Enclosure

cc: Leland G. Ripley (without enclosure)

Washington State Bar Association . 1325 4th Avenue, Suite 600 / Seattle, WA 98101-2539206-727-8207 / fax 206-727'8325 / emall: caa@wsba'org

Ripley Law Firm Inc., P.S.Leland G. RipleS attorneyP.O. Box 130Duvall, Washington 98019-0130

email: leland.ripley @ comcast.net

April 4,2073

Review Committee% Ms. Felice Congalton1325 4th Ave Ste 600Seattle WA 98101-2539 V' '

Dituii ' i,. i i",R-E: Joseph Stangarone's Grievance against Attorney Lauren Kingston, WSBA File No.13-00400

Dear Review Committee Members:

I represent Ms. Kingston. Please direct all further communications to me. Before

l19l:f:lg this grievance's merits,.we -u.rl stress that Ms. Kingston,s- actions to protect

her client's i as this grievant believes. Thifor its unlicensed

T::|jipJrigh1ed.i1ages.Ast|e'c9py.right.holdir,'ug.nf,@ugesiscontractuallyobligated to protecr those copyright lioldirs, rights inciudiing preventing infringement andrequiring copyright infringers to pav for tleir_gopyright infrilng.*.ntr. thi, grlu.n..

the abilitv to resolve.the Washington lawyer discipline system lacks

Ms- Kingston is an associate attorney at McCormack Intellectual property Law p.S.Before she worked for the firm, she worked for Getty Images's Copyright"Complianceoffice.

Legal Background

Copyr.ight law gives the copyright owner the exclusive rights to do and to authorize,reproduction of the copyrighted work. 17 U.S.C groO(a)(1).

Also under copyright law, anyone who violates any of the copyright owner,s exclusive

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Telephon e (+zs) 37 T -97 37Facsimile (425) 9T 4-1542

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Review Committee%Ms. Felice CongaltonApril+,zot3Page 2 of 6

rights is an infrin ger.77U.S.C. $50r(a). Copyright law imposes strict liability, meaningthat intent is not required for a finding of liability for infringement.

Under cop.yright law works, including photographs, automatically receive copyrightprotection when that particular work is created. Copyright infringement occurs whenanyone other than the copyright owner exercises any of the exclusive rights to reproduce,distribute, publicly perform, or display a copyrighted work, or to prepare derivative worksbased upon the original work.

Since a copyright protects a work when it is created, neither publication, nor registration,nor public notice is required before a particular work is protected by copyright.

A defendant's level of knowledge, or "innocence," can only be considered in a reduction ofthe amount of statutory damages. 17 U.S.C. $50+(c)(Z) and $501(cX2).t

As the copyright owner's agent, G.tty Images is contractually obligated to enforce theholders' rights against infringers. When Getty Images discovers infringement it attemptsto negotiate a resolution of the infringer's liability.

Factual Background

Getty Images discovered that Mr. Stangarone's company Michaels, Ross & Cole Ltd., anIllinois corporation had made unauthorized use of 48 images created by copyright holderswhom Getty Images represented. On February L3r2}lzrMs.Kingston sent Mr.Stangarone a letter seeking settlement of the infringement claims for $40,300. Exhibit #1.Because the screenshots attached to Exhibit #1 are black & white we have also providedthe available color copies of some of the screenshots. Exhibit #2.

Mr. Stangarone responded with his March 7,z}Izletter. Exhibit #3. He told Ms.Kingston that his company had temporarily removed the images from the companywebsite "while we investigate your claims that these images are legally represented byGetty Images and subject to copyright protection." He indicated that he found "no visiblecopyright notices nor any indication that these photos were the property of GettyImages." Therefore, before he would conduct further investigation he insisted that Ms.Kingston provide him with evidence that (1) all the photographs were Getty Images's

I In a case where the court finds that the infringer was not aware and had no reason to believe that his or her actsconstituted an infringement, the court, in its discretion. may reduce statutory damages. 17 U.S.C.SsOt(c)(Z).

Review Committee%Ms. Felice CongaltonApril4, 2013Page 3 of6

property, and (2) that each photograph was covered by a registered copyright. Ms.Kingston has never claimed that her client owned the images, and, as previouslydiscussed, copyright protection attaches when a work is created.

He also contended, without specific factual support for his claim, that Getty Images "wascomplicit in making those images available to us at the time in question." He threatenedthat if litigation was filed, he would publicize his "finding" that Getty Images wascomplicit.

Finally, he offered the following terms to settle Getty Images's claims. Because he foundinternet copies of photographs "similar to those you questioned on our website and insimilar sized available for $.99 - $10.00 per photo," he offered to settle and have hiscompany pay "an average rate in that range to make the problem go away." This offer wasnot acceptable to Ms. Kingston's client.

He indicated that if Ms. Kingston could prove that the photos are both the property ofGetty Images and that they are subject to registered copyrights, his company wouldconsult their attorneys for some legal direction.

His letter ended with two demands: "Please do not contact me again in any manner overthis matter unless it is to prove your contentions or accept my offer." He stated that hethought that "the tone of [Ms. Kingston's] communications to date harassing ... ."

His second demand was: " [K]eep your bots of of mrc's website. We spend a considerableamount of time and effort to try to optimize that site for customer's, prospects, searchengines and the like and do not appreciate your programs eating at our bandwidth andcomputer cycles for your selfish and malicious purposes." His company's website isavailable to the public.

After her unsuccessful attempts to contact Mr. Stangarone by phone, onJanuary 2Or2Ol3Ms. Kingston sent Mr. a follow up letter. Exhibit gq.without enclosures). Ms.

as theexclusive licensor of the images.

She pointed out that: ((To establish a claim of copyright infringement, Getty Images onlyneeds to show that you used, copied or displayed the images without authorization."

Review Committee%Ms. Felice CongaltonApril +, zotlPage 4 of 6

On March 4,2013,Mr. Stangarone replied and claimed that the list Ms. Kingstonprovided proved that: " fN]one of these photos are the property of Getty Images." Exhibit#).

First he sought " independent verification that the imagecopyright has been filed with the U.S. Copyright office." Second, he demanded: "A copyof any and all documents between Getty and the photographer transferring copyright andassigning allrights in the image to Getty." Finally, he demanded: "A complete saleshistory, including any changes in License Type, over the years dating back to at least2002. Please include license details including image size, duration of use, etc."

He gave his opinion that unless Ms. Kingston provided him with the proof he demanded:"I cannot consider your claim anything but an attempt at extortion.t)

Under the heading: "Repercussions" he stated: "Ms. Kingston, your failure to heed myrequests) leave me no choice but to file complaints with ... Washington State BarAssociation [he listed additional entities but they are irrelevant to this grievance]...."

Finally he repeated his claim that he considered Ms. Kingston's "unsubstantiated claims aform of harassment ...." He also complained about Getty Images's review of hiscompany's public website.

Grievance Response

The same day that he responded to Ms. Kingston, Mr. Stangarone filed a WSBAgrievance. His grievance generally repeats his claims about lack of proof of copyrightprotection and alleged harassment. On March 8,2}I3,Associate Director Congaltonreplied to his grievance and told him: "We reviewed your grievance and it appears thatyour primary concern is an attempt by a lawyer to collect for a website's use of an image."She continued: "[I]t appears that strict liability applies to infringement claims, althoughan innocent infringement may reduce the amount of damages. While there areprofessional limit upon what lawyers may do, the available information does not indicatethat these limits were exceeded.tt

On March 14,2073 the WSBA received his protest of the dismissal. His protest is basedupon his view, taken from Wikipedia, that" Extortion (also called blackmail*, shakedown,zutwrestingand exaction) is a criminal ffinse of unlawfulfu obtainingmnneJ) prnpe,tJL 0r

Review Committee%Ms. Felice CongaltonApril +, zottPage 5 of6

seraices frorn a persun) entitJ or institutio'n, through coercion." (original emphasis). Since Mr.Stangarone claims that a litigation threat and a possible payment plan are " (both forms ofcoercion)." Based upon this analysis, he incorrectly alleges that Ms. Kingston hadcommitted the crime of extortion and incorrectly concludes that she violated RPC 8.4(b)and S.a(c). His reading of this definition ignores the essential concept of "unlawfullyobtaining."

Since he ignores this core element of the definition, his characterization of Ms. Kingston'sconduct is incorrect. Extortion is: "the act or practice of obtaining something orcompelling some action by illegal means as by force or coercion." BLAcKts re,wDIcrIoNARy, p.664. (9th ed. 2077). "Illegal" means forbidden by law, unlawful. Id. at814. Thus the coercive act must itself be illegal. Writing letters seeking to settle a civilclaim is not illegal.

Criminal coercion is: "Coercion intended to restrict another's freedom of action by (t)threatening to commit a criminal act against that person; (2) threatening to accuse thatperson of committing a crimel (3) threatening to expose a secret that would either subjectthe victim to hatred, contempt or ridicule or would impair the victim's credit or goodwill;or (a) taking or withholding official action or causing an official to take or withholdaction." Id. at 294. These definitions, prove that Ms. Kingston's letters are not illegalcoercion.

Most importantly, Washington law states that civil claim settlement demand letters arenot extortion. Extortion means "knowingly to obtain or attempt to obtain by threatproperty or services of the owner...." RCW 9A.56.110. Second degree extortion occurs ifan actor commits extortion by means of a wrongful threat as defined in RCW 9A.04.110(2S)(d) through (i). RCW 9A.56.130(1). None of these subsections make a civil claimsettlement demand letter a ttwrongful" threat.2

Recently the Washington Court of Appeals affirmed an accomplice's extortion conviction.The court stated: "Demand for payment in satisfaction of a legal claim is not wrongfulconduct." State u. Strong,l67 Wn.App.206,218,272P.3d287 (2012). "If a prospectiveplaintiffthreatening litigation has or reasonably believes he or she has a claim of right, orthreatens litigation with a nexus to a plausible claim of right, the threat falls outside the

2 First degree extortion is committed when the threat is to (1) cause bodily injury to the person threatened or anyother person or, (2) cause damage to property of a person other than the actor or, (3) subject the person threatened orany other person to physical confinement or restraint. RCW 9.56.120 and RCW 9A.04.110(28Xa)-(c)

Review Committee% Ms. Felice CongaltonApril +, zotsPage 6 of6

scope of the extortion statute." Id,. at 279. See also, State a. Pauling,l49 Wn.2d381, 391,69 P.3d 337, cert. denied,54O U.S. 986 (2003)[crime of extortion only involves threats thatare inherently wrongful as lacking any nexus to a claim of right].

Ms. Kingston never violated the RPC. We respectfully request that the ReviewCommittee affirm Ms. Congalton's dismissalof this grievance.

Enclosures as indicated

Cc: Client

Exhibits

1. Ms. Kingston's February 73,z}Lzletter

2. Available color screenshots

3. Mr. Stangarone's March Lr2OT2letter

4. Ms. Kingston's January 20, 2073 letter (without enclosures)

5. Mr. Stangarone's March 412013letter

mEcorrnackHS

o.206-3U1-u8tt8 / f .206.381.1988'.t norney@lt'lcCo rmackl rgal.com

Lauren A. KingstonAttomey at Law

Direct Dial: 206-330-01 08

February 13,2012

Via Federal ExPress

Mr. Joseph StangaroneMichaels, Ross & Cole, Ltd.555 Waters Edge, Suite 120Lombard,IL 60148

Phone: 630.916.0662Fax: 630.916.0663E-mail : sales@mrc-productivity.com

RE: GeW Images v. Michaels, Ross, & Cole Ltd.Case No.943860Reference No. 6109850Demand Amount: $40.300.00

Dear Mr. Stangarone:

INTRODUCTION

McCormack Intellectual Property, P.S. has been retained as legal counsel for GettyImages to pursue copyright infringement claims against Michaels, Ross, & Cole, Ltd. GettyImages considers the subject of copyright protection of the utmost importance and has an activeprogam utilizing a range of measures to deal with the issue. Getty Images is committed toenforcement of copyright laws to enswe that both Getty Images and the photographers andfilmmakers it represents are compensated for their work.

This letter serves as notice that vour website:

www. mrc-productivity.com

displayed copies of images represented by Getty Images. You have copied and used these imageswithout a valid license. I have attached a report showing proof of the images appearing on yourwebsite without authorization. You must immediately cease and desist use of these images.

Intallectnal PrWsffBusinerr Lrr ru(r17 l-ee StreetSeattlc. WA 98109 USA

tXrllBlT " 4,i

Page 2

Getty Images is currently interested in reaching an amicable conclusion to this case. Dueto the extensive use, we have been hired to help enforce all claims.

Your actions as described constitute a violation of the rights of our client in variousrespects. To avoid any further misunderstanding, I have taken the time to explain as clearly as Ican:

1. What your company has done to receive this letter;2. Why your company's actions are illegal; and3. How the matter might be resolved.

If you wish to avoid further escalation and resolve this matter immediately, settlementinstructions are attached. By executing the settlement agreement and tendering payment for theunauthorized use, we can end the matter immediately.

YOUR COMPANY HAS COMMITTED COPYRIGHT INFRINGEMENT

To establish a claim of copyright infringement, Getty Images only needs to show that youused, copied or displayed the images without authorization. Getty Images does not need to provethat you acted knowingly or intentionally.

I have attached a report with screen shots showing that your company has committedcopyright infringement by copying and displaying the images at issue on your website. Thismeans that your company, its offtcers, and other individuals involved in the infringement areliable for damages. As explained below, even if a third party built your website, your companyand others remain liable for copyright infringement damages.

YOUR COMPANY IS LIABLE FOR COPYRIGHT INFRINGEMENTEVEN IF OTIIERS ARE ALSO LIABLE

Your company is liable for the copyright infringement noted above. In civil legal actions,if a wrong is committed, damages may be awarded. Simply owning the website containing thecopyrighted images creates liability for the company.

Two or more people can be liable for the same act or acts of copyright infringement. This iscalled 'Joint liability." I{.Parties have joint liability, then they are eait tiabte up to the fullamount of the relevant obligation. Accordingly, one, or the other, or both, infringers can be suedfor the full amount- Here are some examples *h.t" two or more people had some form ofjointliability.

president was personally and jointly liable for copyrigirt infringement occurring whencorp oration p ublished cD-RoM disk containing copyrighted photographs.

Page 3

parties. Owner of website, infringed copyrights by distributing copyrightedphotogaphs, even if website operator did not know that the photographs had been

. uploaded onto website'

posted by Thircl Parties. Operators of website that contained unauthorized

copyrighted images vicariously liable for copyright infringement.

Said another way, yotir company is a direct infringer because the images appear on the

company website. Thii makes the company liable. If the company hired a web designer and that

designei put up the images, that person or company would also be a direct infringer. In most

,ur.i prrronal liability also extends to the people running your company based on contributory

and vicarious liability, as illustrated above.

DAMAGES IN COPYRIGHT INFRINGEMENT CASES

Darnages authorized by the copyright statute can be up to $150,000.00 per irnage. Inaddition, a copyright owner may be entitled to recover all attorneys' fees and costs.

YOUR COOPERATION WITH THIS INVESTIGATION WILL HELPAVOID LITIGATION

Your cooperation with this investigation will help to avoid litigation. In order to amicablyresolve this matter, we need you to provide the following information:

L A written undertaking that your company has ceased to use the images identifiedin the attached documentation.

2. The date on which the images were pl4ged on your website and to what extentyour site was accessed since the time the images were placed there.

3. What other ways were the images used, e.g., for brochures, print advertising, etc.and the distribution of such use.

4. An explanation of how you obtained our client's images. Please provide evidenceof this (purchase receipts, delivery receipts, etc.).

The identity and correspondence address of any and all other parties that mightbear liability for the unauthorized use of the images.

Signed and sworn Declaration that the above is true.

If it is not possible for you to provide all of the requested information, you must at leastprovide the facts of which you have knowledge. In addition, you must also explain in a justifiedand comprehensible manner why it is not possible for you to provide further information. Afterwe receive the above information, we will then be able to discuss possible resolution of this

5 .

6.

Page 4

matter. Please note, removal of the images alone will not resolve this matter.

If you would like to resolve this matter irnmediately in lieu of providing the aboveinformation, you will need to: (1) remit payment in accordance with the payment instructionsenclosed; and (2) return a signed copy of the enclosed Instructions for Immediate Settlement.

CONCLI]SION

You received this letter because you have committed copyright infringement of theimages specifically noted. This matter will not go away without further action on yow part. Iurge you to carefully consider my client's settlement offer. Failure to respond could result in thefiling of a lawsuit against you without further notice.

Please contactmy office within 21 days of the date of this letterto discuss resolution. .[look forward to hearing from you.

Sincerely,

\,o@ qLauren A. Kingstona t to rne.v@ Mc C or ma ckL e qa L co m

Enclosures

l. Instructions for Immediate Settlement2. Settlement and Release Agreement3. Proof of Images copied and Disprayed without permission

INSTRUCTIONS FOR IMMEDIATE SETTLEMENT

THIS OFFER EXPIRES THREE WEEKS AFTER THE DATE OF TI{IS LETTER

In order to immediately settle this matter, you will need to take the following actions:

I, SigN ANd dAtE thE ENclosed SETTLEMENT AND RELEASE AGREEMENT. Thesigned paperwork can be faxed back to my office at206-38I-1988 or mailed to theaddress noted in Section 4 below.

2. Make payment in the amount of $40,300 (includes $1,000 in attomeys' fees) toMcCormack Intellectual Properly PS in care of Getty l.mages. Payment can bemade by wire transfer, credit card authorization or via check as per the instructionsbelow.

3. Once the signed SETTLEMENT AND RELEASE AGREEMENT is received andthe funds verified, we will send you a counter signed release. The matter will beclosed.

4. Paymentinstructions:

Check Instructions

checks should be made payable to, "McCormack Intellecfual property pS IoLTA', andmailed to the address below:

McCormack Intellectual Property pSAttn: Getty Images Settlements617 Lee StreetSeattle, WA 98109

Wire Instructions

Bank Kev private BankMailcode: WA-3 t -01 -0289I 101 Pacific Ave 2"d FloorTacoma, WA 98402

Account Name: McCormack Intellectual property pS IOLTA

RoutingNumber: 125000574

Page2

Account Number: 472611012791

Credit Card Instructions

Please provide the following:

. Name On Card

. Credit Card Number

. Expiration Dater Card Coder Billing Address

Authorizing Signature Date

SETTLEMENT AND RELEASE AGREEMENT

This Settlement and Release Agreement (the "Agreement"), dated February 13, 2012, is between Michaels,Ross, & Cole Ltd., aq Illinois corporation (referred to hereafter as "Company"), and Geffy Images (US), hrc. ("Getty

Images"), a New York corporation,

l. The parties wish to resolve their dispute with respect to tle Conrpany's use of images designated by GetfyImages as image numbers 200418489-00\ 10179341 200021593-001; 10158134; 10197701: 10159080;200 I 17025-001; 200026954-001; 200141758-A02; 200115742-001; 2001 1 3937-001; 200A22761-001;10026030; 200120516-001; 10191831; 200123188-001: 10197222: 10196373; lO1287l l ; 200506594-001;ab20569;200016303-001, 200019735-001; 10170278; 10187391; 20o019597-001; 10049372; 10a49932;200020242-001; 10194757 200023121-004 10125757', 200127190-002; l0l50ll3; 200126509-001;10196029; 200066422-0A\ 200134303-001; 200214325-003; 200398302-001; 200399997-001; 6442'00 I 068: 101 403 I 8; 829453-001; 1 0 I 86 1 04; 2001 9995 I -001 ; I 0 I 691 85; 200068841 -001 ; 10 I 67106;10159078; 200462368-001; 6566-000080c; & 200129860-001 (hereinafter, the "Images"). The parties agreethat pal.rnent of the amount noted below and execution of this Agreement serve solely as a settlernent betweenthe parties, and is not intended and does not constitute an admission of copyright infringement or otherwrongdoing by the Company, nor approval by Getty Images for the use of the Images.

2. Getty Images represents and warrants that it owns, or represents the photographers who own, the copyrights inthe Images, and that it has all necessary rights and authority to enter into this Agreement on behalf of itself andits photographers.

3. The Company represents and warrants that it has all necessary rights and authority to enter into this Agreement.The Company also represents and warrants that it will make no further use of the hnages without first obtainingthe requisite license; that it will destroy all remaining inventory that ir,corporates the Images or copies thereof;and that it has not provided the Images to, or in any other way encouraged the use of the Images by, any otherentity or individual, including, but not limited to, its customers, clients, end-users and affiliated entities orindividuals.

4. The Company will remit to Getty Lnages the sum of $40,300 (Forty Thousand Three Hundred Dollars) whichincludes $1,000.00 in attorney's fees. Payment shall be made to McCormack Intellectual Property PS on behalfof Getty Images within three weeks of the date of this agreement. Said paynent shall constitute a conditionprecedent to the release granted in Paragraph 5 below, such that said release shall not take effect unless arduntil such payment has been made in full.

5. In consideration for payment of the surn noted in Paragraph 4 above, Getty Images, on behalf of itself and itsphotographers, shall expressly release and discharge the Company from any and all claims for copyrightinfringement in connection with the Company's use of the Images to date on its website www.mrc-productivity.com (the "Released Use"). Tlie parties expressly agree that this release is not and shall not beinterpreted as a license for any ongoing or fuhrre use by the Company of intellectual property owned by CettyImages and/or its photographers. Getty lmages reserves its rights under law to bring legal action for use oftheImages in any manner other than the Released Use, for any unauthorized use of images other than the Lnages,and for any infringement occuring after the date of this Agreement.

6. It is the intention of both parties that this Agreement is binding on their principals, successors, agents, assignsand representatives.

7. This agreernent may be signed in counterparts. Fax signahrres shall be binding in addition to original signatures.Jurisdiction and venue for all disputes arising under this agreelnent shall be in Seattle, Washington.

initial Initial

8. This Agreement shall be kept in confidence by the parttes'

MICHAELS, ROSS, & COLE LTD'

Title:

Date:

GETTY TMAGES (US)' rNC.

By:

March ,1,2fi'12

Ms. Lauren A. Kingsronl"fcConriack617 Lee Stre-etSeattle, WA 98i09

Re: Yonr Letter of February 13,2()12

Dear Ms. Kingston:

US off ice 555 Water.s.Edge, Sulte 120"1-ombard, 1160148 Tet 630.916.0662 Fax 630,916.0663UK Office Argyle House, 1 oee Road, Richmond, Surrey, Twg'zJN Tet.ozo 8322 7720

We ltave tenlporarily removed the phot0 irnilges referpncecl irr ..vour iotter of iielrruary il, 2012 ft''r. 'urwelrsite rvhile we' investi$iate your eiaims that there iviagssrare legally reprosented by Getg, Images andsubj ect to cclpyriglrt protection,

1l acr{cn OtriND INFO Rnta FIoN'iinrc is a sottware co$'pany that prgclrtces, sells;:ar:il supports soJlwaro products to larger businesses aroundthe worf{, As,stipfi r',:e takc copyright protscJion ver5. seriously:. We,would never knowingly violateitnotiter cofi pa ny or ind iv,idual' s copyri ght.

\l|/trIP.T'WE NDED:ln 'investigating the photo irnages that you asked ts to.renlove, we"fbund no visible copyright notices, norany indication that these photos were.the properly of;6etg,"[mage,s. So, before We oan go any fprthel, weneed you to,provide us udth evidence than

1. Each of tire.pho,tos'in question islhe prcperty crf Getly llnages, arrd2. Each of the:photos in.question is covered Lr1,a registererl oopyright.

HOW THIS COUI.D IIAVE HAI'PENE[,.We are still investigating ho*' these irrragos becams a pa.rt,qf sr.Lr monthly inten.ret published custornernewsletters from 2005 till ApLil of 2007. Our policy with that newslengr was ro use only froe publicdomain photos or irrexpensively licensed pfrotos,

So far, ,it is begirrning to look like your: clierri. O'eiry, lmagr:s, was oomplicit in making those imagesavailable tO u$ 4.t thO-tilne in guestit:n. Il'l need T o,go ll.:r,ough the tirne, fi,,errble, and ef,fort to prove that ina court of law, I will cena.inly wanr to publir:ize thosg firidings.

WH.AT WE ARE WILT,IN(; TO DO:if you take a mqment ts loqli s:t the screerr shotl' \,ou.seut of or,rr cusionrer newsletters, you will See thattihe images aE rather small and low qualitir. Iire;, are there not-ss a Ii:orrs of an;l article, but simply to a$dcolqr and break up the wqr:cls;

michaels, rctss and cole l td.

555 Waters EdgeSuite '120

Lombard, ' lL 60148

www, mrc-p roductivltyt eomwww.mrcuk,com

*,Hi*IBIT"3

Page2 of2

In 6 quick'internet s-barch, I find stock photos qimilar to thoseyou quesfioned on our wsb site and,insimilar sizg:availabl,e for $.99 - $ 10.00 per phOto, We wjll be happy to pay an average rate in that.rangeto rnake tbiS prablgrngo .a1v4y; FleaSeunderstand thst I do not think that we are guilty of anything here,but that settlpme. nt,might be a better use of thiq companyls resources than to confinue investigatingsomething that happened 5 -7 vears ago.

Ifyou are happy withit.

this settleinen-t;,please send me:the appropriate paperworl< and we can take care of

IF YOITCHOOSE NOT TO ACCEPT TEI,S OFFERWhat,l do not understand is'how you can ask fbr fl number that is 3 orders of,magnitude lagger tha4.rhegoing,rate for similar photos. And then to tos.F in lpgel feeg ,in your first,communication as well.

To surn up, it i$ not cleqr.to us that tf e ipages are p-r{per:ty of Getty lrnageF or that they are subject tocopy:1igh1. Ifyouoanpxoveth4tthe'imagese!thetimeofus,e,wsrepropertyo,fGetrylrnagqsandsubj.eclto registered copyffghts; the4 we will need to conSult our attornsys for somg legal direction.

Lqstly, I will ask'two things of you:

l. Fie'asp,do nol sonta0t rne dgain in arqy, n1-enner oyer this matter unless ,it is to prove yourcOnteftions o,r'accgptmy offer, I oonsiderthe tone,of your corr,rmunioations to date harassing and,l wgntno 1ofths1rp&rt of that, and

2. Fleasekeep:your'bots,off of.nucls web,site, We spond a,considerable amount of ti:ne 4nd effg4to :try to optimizr that site for customers, prospects, search engines,, and the like and do notappreciate your programs eathrg at our bandwidtla and cornputer cyoles for your selfish andmalic;ious purposes.

Sincerely,

,#mPresidelrt

cc: Greg Golla - Merchant and Goqld

January 30,2013Via Federal Express

Michaels, Ross & Cole, Ltd.attn: Joseph Stangarone555 Waters Edge, Suite 120Lornbard IL 60148

mEcormacklntallaciuat property LawEustness Law pr

617 Lee StreetSeaule,.i l7A gg10g usAp.20 6 - 445 -01 9 4 / f .20 6.381. 1 9 88Llga t O tvtc Co rm a c tLega t,'Iimothy

B. McCormackAttotney at Law

RE: COPYRIGTIT INFRINGEMENT CLAIMGetty_Images v. Michaels, Ross & Cole, Ltd.Case No. 943960Demand Amount: $4g,710.00Website: htp ://www.mrc_productivity. com

Dear Mr. Stangarone:

As you know from prior correspondence, Mccormack Intellectual properfy, p.s. hasbeen retained as legal counsel for Gettv i1us.r

t"p*;;;;;ryight infringemenf ctaims againstyorlr company' Further to our last exchange of iommunicatiois, r";d;J-;, p-roor of GettyImages' rights as the exclusive licensor of the-imaget;l;;;;.

To establish a claim of copyright infringement, Getty Images only needs to show that yourued,copied,or displayed the images ivithout authorization. -Michaels,

Ross & cole, Ltd. hasalready received screenshots. of the imagery as proof of infringement. Getty Images does notneed to prove that you.actedftnowingl/oi intentionaily. riris means that your company, itsofficers, and other individuals invoheJin the infringern.nt u.. Huble for damages.

As you rnay be aware, there have been several recent de_cisions regarding copynghtinfringement that have.generated publicity. In each oecision, irre infringer was required to pay asubstantial amount of damages roi inrringrng on copyrighted materiar.

copyright infringement is a very serious matter. Getty Images remains willing to settlethis claim amicably, if possible. eccoidingly, Getty mrug.r it willing to extend the $48,710.00settlement offer for an additional 21 days. Fo, ao additi6nal {9", .ny client may be willing tooffer a payment plan if necessary. Getty Loug.r may also be willing io .onria., iol inolviduatcircumstances in negotiating the settlement amount. This offer ir" -"0" *iti"i,i prejudice toGetly Images' rights and remedies under copyright law, all of which are expressly reserved.May I also suggest that you review the company businesi insurance for possible coverage as an"advertising injury."

HXi{lBlT " '-|',

mEcormackInttllssual Propsrty LawBusines l"aw pi

Thank you for Your anticipated cooperation in resolving this matter. I look forward tohearing from you promptly- Please contact me to discuss this matter further. My direct line is:206-330-01 08.

Sincerely,

Lauren A. KingstonAttorney at LawL aur en@.Mc C orm a ckl e pa l. co m206-330-0108

Enclosures

michaels, ross and cole: ttd.

fularch 4, 20.l 3

Ms. Lauren A. KingstonMcCormack51,7 Lee Str.eetSeattle, WA 98109

U5 Off icc 555 Watenrfdgs, Suite 120 Lombard, lL 60148 Tel 630,9i6.066?UK Office Argyle House, 1 Dee Road, Richmond, Surrey, TW9 ZJN

555 Waters EdgeSuite 120Lornbard, lL 60148

Fax 610,916.0663 www.mrc.productivi ty.comTel 020 83ZZ 7720

Re: Yo-ur Letter of January 30,2013

peai vs. Kingston:

I have receivecl your letler of January 3Oth. While I appreciate the fact that you have slightly toned downyour threatening r'hetoric;.1 find myrself qrrite oorrfused by your definitjorr of prp66f. While I have askedyou to provide proofthat the photos in questiotr aro the propgrty of Getty images, you have done jr.lst theopposite. You have provided me rvitJr a list of photos inpluding the narne of the actual photographer orcompany that owns each ima$e, 'l'his is proof that none of these photos are the property of Gotty images.

Proof:You can hai'dly expect nre to take your clairn,seriously with only that, Since you slgn your letters wi[hthe title ':Attomey at l-aw", I would expect that yort can differeutiate pr:oof from claim. Just to makecerlain that there,are no. misunderstandings in any Future correspondence hetween us, let me spell outwhat I might consider proof of your allegations, ,For each 'irnage

in question, I wilI require:,

1. fndependent verification that the image copyright has been filed with the U.S. copyriglrt office,2. A copy of any and all d,ocuments between Cetty and the:photographer fransferring copyr:ight and

ossigning al1 rights in the irrrage to Gefty;3. A complete sales history, including any changos irr License TyDe, over the years dating back to at

least 2002. Please include Iicense details including image size, duration of use, etc.

Without the proof I have requested, I carrnot consider yrur clainr anytlring but an attempt at extortion.

Settlement withdrartal:I did not notice any mentiotr in your lettor of my settlemen! offer (made in my letter to you of lvtarch lst,2012). I wilI presumc this means thnt you and your,client Bre not interested in that seftlemeut. I herebylvithdraw that offor,

Ilarassment:In my last lette_r, I asked two things of you:

t . Please do not contact me again in any manner over this matter unless it is to prove yourcontentions or accept my offer.Please keep your bots off of nrrc'.s web site.

txl-ilBiT::_

Page2 ofZ

you lgnored the lirst .r€quest, oalling me,at my offtce. a numbor of tirnes and then selding your letter

datedlanuary 30, 2013'w'hiclr was neit}er an attcmpt to prove your contentions or tQ accept rny offer'

your client,s bots c-onlinue tO trespass on our networlc de,Epite tho digitel measurqs we lave taken to warR

them.offand despite rny :gfitten {equest.to aease suih beha.v.ior in my last letter to lzou-

Repcrcussions;HAsl fin'gSton, your failurgto lree.d. rny'tequosts,leave file no ahgice but to file oomplaints w.ith the

Ampi.,iean Bar Association, the Wqqhington State Bar Assoaia--tion, and the Kirrg County Bar Assgoiation,

as well as the Washington State Attorney.Generalns,OfFtoe; the Better Business Bu,reau, and the Seatrtle

Chamber of'Cornmerce.

OnCe again, I will ask trryo things of yop'

l. Pilqxe do rrot,contaot,me:trgain in 4ny manner concerning this matter un'less it is to prove youf

cql:ltol,rtions orwithdrawYorrr o-!Aim. I have'delineated abqvp.ntat Qon$titutes proof. I c.onside-r

yoqr unsubstantiated olai"nqs,a form. of halassment, which mqst stop inunecliat€ly.

Z. .Fleas.e keep yotrr,oliont's bote offoflmrc,'s'network. By cireumventing the tneasLlres'ws have put

in plage,tg prevent their access to orrnetwork, they are committlng digital ffgspass. Their

band.width and CFU' oycle usage of oW nehngrk is out antl out theft.

Your failure to heed tl'1ese requeqt will result in flrther action on ,my part'

Sincerely,

kkcc: Logal file

Fresident