Q: I may be facing a lawsuit. I am operating as a Sole Prop. Can I form a LLC now and be protected from a lawsuit?

A: You need to speak with an "Intellectual property" attorney about this. You don't have a civil litigation yet. The amount they are requesting is exorbitant considering the photo is purchased for $250.00. Suggest you offer to purchase the photo in exchange for a "General Release" of all claims against you.

Definately get an attorney's opinion after a consultation.

THESE OPINIONS ARE BASED ONLY ON THE INFORMATION PROVIDED IN THE QUESTION, NO INDEPENDENT INVESTIGATION HAS BEEN DONE. DO NOT RELY ON FREE LEGAL ADVICE PROVIDED IN A PUBLIC FORUM, EVEN MINE. CONSULT AN ATTORNEY OF YOUR CHOOSING IN YOUR AREA FOR A COMPLETE EVALUATION.

A: There are several parts to your question:

1. Forming an LLC before the lawsuit will not protect you, as it is a separate legal entity formed after the event in question. As a sole proprietor you would be personally responsible for the infringement.

2. As there may be other facts involved, purchasing the license after the facts would probably not have an effect into your current liability.

3. Federal law provides the copyright owner with the option of receiving a judgment for damages for either (1) the copyright owner’s actual damages and any additional profits of the infringer that are attributable to the infringement (there are more details involved in the calculation of this amount), or (2) statutory damages as set forth by federal law.

Under federal law, once a lawsuit is filed and prior to final judgment, the copyright owner may elect to recover, instead of the actual damages and profits mentioned above, an award of statutory damages, in a sum of not less than $750 or more than $30,000 at the court's discretion. If the copyright owner proves that the infringement was committed willfully, the court has the discretion to increase the award of statutory damages to a sum of not more than $150,000. If the infringer proves to the satisfaction of the court that he was not aware and had no reason to believe that his acts constituted an infringement of copyright, the court also has the discretion to reduce the award of statutory damages to a sum of not less than $200.

You must also be aware that in a copyright civil case, even if the court only awards $200 in damages to the copyright owner, the court may award the copyright owner attorney's fees and costs, which could actually exceed the damages award. As an example, this means the court could award $200 in damages and $15,000 in attorney's fees and costs,

I would recommend that you contact an attorney that can look into the specifics of your case and analyze the facts with you in detail, so that a fair offer can be made to the copyright owner to make him whole, avoiding costly litigation.

My response provides only general information and is not intended to provide you with specific legal advice, nor create an attorney-client relationship. You should not use or rely on this information without first consulting with your own lawyer and discussing your specific facts and available options in detail.