Best Business Practices for Photographers [167]
(Optional) We both agree to the nondisclosure of this agreement's terms or payment.
During the course of "official settlement talks," your correspondence will usually include a sentence such as "in an effort to pursue non-judicial avenues for a settlement of this matter, this offer is made without prejudice and made for the sole purpose of settlement." Absent that type of a sentence, correspondence about your offers could be disclosed during a trial, which could severely limit your ability to collect above and beyond the figures you cite, which is why sending an invoice for three times what you would have originally charged, or even a letter offering a retroactive license for that amount of money, could be a problem.
One other thing to be aware of: If you do go to trial, often attorneys will (at least 10 days before trial) make a Rule 68 offer of judgment, which can put you in a problematic position. Suppose you have opted to sue for $75,000 for the infringements, and those you are suing offer you $20,000 as their offer of judgment. If you reject (let lapse) the offer, it could come back to haunt you. Suppose, when all is said and done, you win the trial, but the court awards you just $15,000. Because the infringer's offer of judgment was greater than the final court award, the infringer can present their offer of judgment to the court, and then you will in all likelihood be compelled by the court to pay most of the court costs that were incurred by the infringer from the date of their offer of judgment until the end of the trial. Thus, you would likely lose much (if not all) of what you won.
During a settlement agreement, you'll want to make sure you can bite your tongue over the "we did nothing wrong" clause. That's pretty standard, and the likelihood that you'll get an admission of wrongdoing in your settlement agreement is very slim. Further, the nondisclosure clause is one to which you must adhere. Make sure that it includes "shall not further disclose," because in the course of your negotiations, you have no doubt consulted with colleagues and shared terms of the proposed agreement, and you cannot be responsible for their nondisclosure.
In just a moment, you'll see the basic outline of a settlement agreement, in which the infringement was by a preexisting client. Understand that whatever you might get from their legal department will likely not look as fair as this one, at least initially. Usually their company will want a clause that "saves and holds harmless" them, should you do something you shouldn't, but they won't initially include that same precaution for you. Further, in Term 3 of the agreement, make note of this information:
Photographer does hereby forever release and discharge infringer… from any and all claims… now known, and Photographer hereby states Photographer knows of no other disputes, claims, causes of action, … as of the date of the execution of this agreement, arising from or related to the use of the Photographs by infringer…. [bold added]
This is an important term, and one that probably won't be in their proposed agreement, because it's beneficial to you. Specifically, it protects you in the event that you only brought to their attention the one infringing use you found, and it agrees to a settlement for that infringement. Should you become aware of other infringements down the line, they are not protected.
Further, the "collectively" definition below should be your last name and their company name, not the generic terms I've used for this example, where a preexisting client had infringed.
So, without further ado, here it is:
* * *
RELEASE, SETTLEMENT AND LICENSE AGREEMENT
This "Release, Settlement and License Agreement" (the "Agreement") is effective as of the date on which this Agreement is executed by all of the parties (the "Effective Date") by and among: [infringing party and address] on behalf of itself and its subsidiaries (collectively "infringer," [your name and address], an individual, (collectively "Photographer").
WHEREAS, infringer entered into an agreement