The Portland Metro Photographic News

I met Scott Nielson at a PMPA meeting and was quickly taken by his desire to help photographers, and his ability to speak in down-to-earth terms.  Scott has volunteered to lend his expertise and insights to the readers of the Portland Metro Photographic News.

Scott E. Nielson, J.D. is an attorney in Vancouver, Washington licensed in Washington and Oregon.  He has been helping small business owners and artists across the country for nearly twenty years to build and protect their careers and livelihoods.   

Scott also welcomes email comments and questions you may have about the topics he discusses in this column.   Visit Scott's column often and stay on top of the legal issues that concern every photographer.

OFFICE: 812F NE 81st Avenue, #147, Vancouver, WA, 98665, 360-921-504, email: nielsonlaw@me.com

Photo credit: Randy Yuranek & RJ Studios, McMinnville, OR

Note: Unlike other PMPN articles that become outdated with time and eventually deleted, all stories appearing in this Photo Law section will be retained as an on-line resource for PMPN Members.  Become a PMPN member today.

In Part Three of this "Photo Business" series, I will take a look at the money part of starting your business.  Pay attention to these simple issues, and your business and your life will be smoother and more enjoyable.  Ignore them, and you'll set yourself up for very unhappy meetings with bankers, the IRS, and your family.

1.  Checking and Accounting

It's vital that you treat your business as an entity separate from your personal life.  Too many people discover that running their business from their personal checking account is a plan filled with danger.  Several of my past clients learned to their dismay (before they met me) that this first issue is the most important.  Luckily, I was able to show them that it's very easy to set up.  

You must have a separate business account.  Visit your local friendly bank - you'll probably find that they offer free accounts for new businesses.  If they don't - ask!   It takes little time to open a new account with many options that your new business needs.  

You must keep separate financial books.  In many ways, your new business checking account will automatically do this for you.  Be sure you pay all business expenses from this account and that you deposit all your business income to this account.  In this simple way, you will have the detailed track of expenses and income that government agencies and financial institutions require.  

2.  Taxes

You probably will need to complete separate tax returns, or at least do separate calculations for your tax returns.  Most people - talented artists like yourself - find this mindset difficult to learn.  It's boring!  But it's essential for your business's health.  You will need to consider and register with not only the IRS, but with state and local taxing authorities as well.  If you will do business in more than one state or city, it's very important that you consider the tax consequences before you commit to that next photo shoot.  Your knowledgeable lawyer will be able to handle this for you in short order.

3.  Start-up Money

How will you get your business started financially?  Do you have a fat bank account to keep you going until the cash flow generated by your work can support the business?  Or have you found a way to finance your start-up?  It's an historical fact that many more business fail in the first year than succeed.  The primary reason for those failures is that the businesses didn't have enough up-front cash (savings or loans) to keep the new business on life-support until it could breathe on its own. Your lawyer can be of great help in this most important area.  Many lawyers who have experience in business start-ups will help you find financing.  Despite the current bad economic news, there are still many people and companies who are always looking to invest in new businesses which show promise.    

In addition, you can find advice from the U. S. Small Business Administration.  The SBA is one of the few government agencies that actually is helpful!  So visit their website often.

* Scott E. Nielson, J.D. is an attorney in Vancouver, Washington licensed in Washington and Oregon.  He has been helping small business owners and artists across the country for twenty years to build and protect their careers and livelihoods. 

In the last column, we looked at various questions to ask when you want to start your own business.  This time, let's look at more detail on the question:  What kind of business should I start?  I think it's helpful to revisit this:

It's important to think ahead to decide how to structure your business.  Too many people think: "Well, I'll hang out a sign and maybe advertise. Lots of people already know me, so I'm ready."  With the help of a lawyer experienced in artists' businesses, you will want to explore a few basic questions.  Who will be the owner or owners of the business?  Will I make it a sole proprietorship or a partnership?  Should I investigate making it a corporation or a Limited Liability Company?  
    
1.  Who will be the owner?  This may seem a silly question, but it's very fundamental.  You may think it's obvious that you - the artist - will be the owner.  But not so fast!  

Do you have a spouse?  Do you have a registered partner (under Oregon and/or Washington law)?  If so, that spouse or partner has a very definite ownership right in any business you start.  If it makes sense in your relationship, you can separate the ownership rights - talk to your knowledgeable lawyer about this.

Sometimes the financial aspects of starting your business can have ownership ramifications.  Say, for example, that a relative will loan you the money for your business.  Often, that person might require an ownership interest in your business to ensure that he or she will be paid back for the money.  This is a common arrangement, so discuss it with your lawyer.
    
If you're lucky enough in this financial environment to get approved for a bank's loan program of some sort, you'll probably need to sign loan documents that give the bank a security interest in your property.  If you can't make payments on the loan, those documents will empower the bank to take away your cameras, studio equipment or even your house if you've pledged them to secure the loan.  NEVER sign such documents until you've talked with your lawyer!

2.  Will I make it a sole proprietorship or a partnership?  By default, your business will be an extension of you.  This means that your profit or loss on the business will be reported on your tax returns as part of your life, as a sole proprietorship.  If your business is an addition to your financial life - meaning you have a "regular" job in addition to your business (very common), your business will be reported as income or loss on your regular tax return.  

But maybe this doesn't make sense for you.  Maybe you have a partner (domestic or business) who has his or her own business and tax consequences.  This means that your business and tax situation just got twice as complicated.  Over the years, I've seen too many people who have discovered this truth only after they got a notice from the Internal Revenue Service.  Wouldn't it make much more sense to talk to your lawyer before you set up your business so it was clear from the beginning?

3. Should I investigate making it a corporation or a Limited Liability Company?  Some people have found that making their business a corporation or LLC makes sense in their lives.  Here's the basic difference between a "normal" business and a corporation or LLC:  In a Sole Proprietorship or Partnership, everything is shared.  The profit is shared; the loss is shared; the liabilities are shared.  The real world intrudes here in liabilities - any liabilities are included in your personal life.

To illustrate this point, let me describe a "bride-zilla" situation I've seen myself.  You get hired to shoot the wedding of two very nice people.  You listened to your smart lawyer and you have them sign an Artist's Agreement that outlines what is to be shot, when it is to be shot, and where it is to be shot.  You shoot the wedding just as you thought the Agreement said.  The bride and groom go on their honeymoon, and you get the proofs ready.

When the couple arrives at your studio to see the pictures, you're in for an unpleasant surprise.  The bride is not happy with any of your photos.  In her mind, all of the pictures make her look fat and make her relatives look stupid.  "You've ruined my life!" she yells as she storms out with new hubby in close retreat.  The next thing you know, you're being served with a summons to a lawsuit for breach of contract and "emotional distress" - and it's worth hundreds of thousands of dollars.  After all, you've totally ruined her life - or so she'll say in a hail of tears at the deposition.

In this situation, all of your life is up for grabs:  Your bank account, your house, your equipment - everything you own.  If you're smart, you've arranged your business as a corporation or LLC.  In either case, your liability to Bride-zilla is limited to your business.  Your personal life is safe.  

As you can see, the question of What Kind of Business can get complicated in short order.  Please talk to your smart lawyer soon - before you finalize your new business.  Be smart yourself and be successful!

* Scott E. Nielson, J.D. is an attorney in Vancouver, Washington licensed in Washington and Oregon.  He has been helping small business owners and artists across the country for nearly twenty years to build and protect their careers and livelihoods.  © 2009.  All rights reserved: Scott E. Nielson, J.D.

One of the most interesting and exciting parts of my practice is to help artists be successful in setting up and running their businesses.  Make no mistake about it; how to design your business and how to operate your business are the most important decisions you will make.  

We already know you're a talented artist - but who wants to be a starving artist?  In my experience, few people want to suffer for their art - at least for very long.  You've suffered enough to get to the point where you can strike out on your own to make a living as a photographer.  Now is the time for the world to reward you for your talent!  Your business will support you financially if you'll only pay attention to a few serious ideas:

1.  What kind of business?  

It's important to think ahead to decide how to structure your business.  Too many people think: "Well, I'll hang out a sign and maybe advertise. Lots of people already know me, so I'm ready."  With the help of a lawyer experienced in artists' businesses, you will want to explore a few basic questions.  Who will be the owner or owners of the business?  Will I make it a sole proprietorship or a partnership?  Should I investigate making it a corporation or a Limited Liability Company?  
    
There are several advantages and disadvantages to every answer to each of these questions.  In future articles, we'll look at each in detail.  For now, it's sufficient to understand simply that these questions - and others - need to be discussed with your lawyer in detail.  Your future success depends on it!

2.  What kind of finances?

It's vital that you treat your business as an entity separate from your personal life.  Too many people discover that running their business from their personal checking account is a plan filled with danger.  

You must have a separate business account.  You must keep separate financial books.  You must keep detailed and daily track of every expense and all income.  You probably will need to complete separate tax returns, or at least separate calculations.  Most people - talented artists like yourself - find this mindset difficult to learn.  It's boring!  But it's essential for your business's health.  

How will you get your business started?  Do you have a fat bank account to keep you going until your cash flow can support the business?  Or have you found a way to finance your start-up?  It's an historical fact that many more business fail in the first year than succeed.  The primary reason for those failures is that the businesses didn't have enough up-front cash (savings or loans) to keep the new business on life-support until it could breathe on its own.  Your financial advisor and/or lawyer can be of great help in this most important area.  In addition, you can find advice from the U. S. Small Business Administration at:  www.sba.gov.

3.  What kind of people?

You've heard the phrase, "Success has many fathers but failure is an orphan."  In our context, this means that nobody succeeds alone, but it's easy to fail if you are alone.  Luckily, there are many people who want to help you be a success.  The key to your success is to find the right people who are compatible with your personality and talent.

Who will be your financing expert?  Who will be your banking expert?  Who will keep your financial books up to date?  Who will be your management expert?  Who will be your marketing expert?  Who will design and maintain your internet presence?  Who will be your sales expert?  

This will sound self-serving, but your best option is to find a lawyer who is experienced in all these areas.  This is not a common combination, but it is important for you.  In my nearly twenty years of practice, I've learned that artists (photographers like you) have unique ways of looking at the world and individual attitudes about how they earn their livings.  This is good - and why I enjoy working with artists.  What the right lawyer can do for you is to help you structure your business life to free you to concentrate on your photos and your art.  

Your lawyer will bring together financial people, technical experts, government/regulatory offices, and marketing and management people as your team to protect you and your photos.  In short, the right team will give you more flexibility to develop your craft and help your business to thrive.

But, the cost!  You're a starving artist just starting out, remember?  The good news is that the costs don't have to be high.  Find a lawyer who knows this area and is willing to work with you as you go along.  In a future column, I'll go into more detail about how to interview your future lawyer.  For now, understand that the right lawyer will find a way for you to get the right help.

Until next time:  Keep those questions coming - and happy shooting!

* Scott E. Nielson, J.D. is an attorney in Vancouver, Washington licensed in Washington and Oregon.  He has been helping small business owners and artists across the country for nearly twenty years to build and protect their careers and livelihoods.

In the last column, I explored a few examples of when you might need to call a lawyer.  But this leads naturally to the next question:  How do I find the right lawyer?

Ironically, we have more lawyers than ever before in history but most people don't seem to know a lawyer.  Where to begin?  Some seemingly obvious places usually aren't very helpful, with pages of Yellow Pages listings or a website search.  These will give you long lists of lawyers, but how do you know which is right for you?

As with the medical profession, most lawyers specialize as they gain experience.  The trick is to find the right lawyer with the right specialty and the right experience for you.  Luckily, there are good ways to make the right match:

• 1.  The Bar Association.  Many people find the state or local bar associations helpful in finding lawyers experienced in the specialty they need.  Search the website of your local county bar association or your state bar association.  Most have referral services that will give you names of lawyers who can help you.   Call several; a good lawyer will provide you with his or her background and experience so you can find someone appropriate for your situation.
• 2.  Internet Referrals.  There are several very good websites that can help you find the right lawyer.  You can briefly describe your situation and your location and the websites will then refer you to lawyers' profiles that describe their experience and specialties.  With this method, you can research several lawyers to decide who can help you.
• 3.  Business Associates and Friends.  This time-honored method often can be your best effort.  Chances are good that someone you know has already faced your situation or one similar to it.  If you trust your business associate or friend, you can probably trust his or her recommendation - IF he or she liked the job that lawyer did.  On the other hand, if your friend didn't like her lawyer, you might ask for the name of the "other" lawyer.   A client once found me because I had once represented the opponent of her friend!
• 4.  Specialty publications.  Here!  Magazines and specialty sites like the one you're reading now are an excellent way to find lawyers experienced in your area.  Photographers and other artists find that they have issues that are not widely experienced in business, so you'll want to find a lawyer who knows about these issues.  

* Scott E. Nielson, J.D. is an attorney in Vancouver, Washington licensed in Washington and Oregon.  He has been helping small business owners and artists across the country for nearly twenty years to build and protect their careers and livelihoods.  

Perhaps the question I'm most frequently asked is: "How do I find a good lawyer?"  Although this is a good question, there is a question that should be asked first.  That question is:  "Do I need a lawyer?"

You'll find no shortage of Internet websites that advertise:  "Avoid high legal fees and buy our forms!"  In some simple situations, buying a simple form may work for you, providing you are very familiar with the situation or transaction you face and you already know which form to buy.  I think most of us would agree that those situations are not the norm in our lives.

So here are a just a few of the most common situations where you might want a lawyer:

Starting and Operating a Business 

This is perhaps the most important event of your professional life.  You are the expert in your line of work, but too often people forget that they have to be a businessperson, too.  It only makes sense that you will want to start out correctly, and continue to build your business in the best way for you.  An experienced lawyer will explain the various forms of business entities and will help you evaluate which will work best for you and your future.  In addition, your experienced - full service - lawyer will continue to be your legal advisor as you become successful.  As I explain to many small business groups:  "Large corporations wouldn't dream of making a significant decision without running it past their legal departments.  Neither should you!"

Real Estate 

Very few realtors will recommend that you hire your own lawyer - after all, each realtor has lots of standard forms.  These forms have been written by real estate lawyers, and in most cases will get the job done, if you are experienced in real estate and if there are no complications and if there are no unusual circumstances.  That's a lot of ifs!

Disputes 

If you find yourself on the wrong side of a process server, you'll definitely need a lawyer.  The other side already has one!  But a lawyer can also avoid a lawsuit during a brewing dispute.  Settling disputes to both sides' satisfaction is as much a lawyer's profession as is courtroom work.

Contracts 

When dealing with a high-cost situation, the other party will often present you with their "standard" contract.  But the terms of any contract are open for negotiations.  I remind my clients that, unless your name is "Standard", don't automatically sign such a contract.  Modifying contracts is usually not for the lay person.  That "standard contract" was written by a lawyer sometime in the past, so changing it is usually work for your lawyer.

These are just a few situations where you may want to consult a lawyer.  You'll be surprised at the relatively inexpensive peace of mind you'll gain from even a short conversation about these - and other - issues.  Your best guide is:  "When in doubt, get a lawyer to erase the doubt."

* Scott E. Nielson, J.D. is an attorney in Vancouver, Washington licensed in Washington and Oregon.  He has been helping small business owners and artists across the country for nearly twenty years to build and protect their careers and livelihoods. 

Or: Can the cops take away my camera when I photograph them?

This column will outline the basic law that applies to when and where you can take pictures.  Pictures, for this purpose, include any film photos, digital, recordings, or videos - pretty much anything that can record a person's likeness or property for future viewing.  I suppose it could also include painting or drawing someone's likeness without their consent - but who would hold still for that long?

As you can imagine, there are several areas of the law to consider here. The first is the most basic rule of American law across the country:  You can take a picture of nearly anything, as long as that person or thing is in public.  Don't rush out to photograph the world, though; there are many exceptions to that basic rule:

1.  Commercial use of the picture.  You can't use a picture of someone for commercial purposes unless you have their consent.  Do not be lulled into a feeling of safety just because someone says, "Sure, you can take my picture."  If you anticipate selling the picture, or using it in a competition or for publication, get a signed release.  Any lawyer who specializes in artists' law will have one for you at reasonable cost.  It needn't be long or scary; it just needs to cover all the bases of how you might use the picture.  

2.  Government buildings.  Don't take any pictures of government buildings without permission.  There are many laws across the country now - federal and state - which restrict this activity and call it several variations of potential terrorism.  Don't bother arguing your First Amendment rights with an armed security guard (especially military!).  You'll get nowhere with your arguments (except detained), and you'll probably never see your camera equipment again.  This also applies to photographing the security areas at the airport.  There are a few First Amendment groups who are challenging this attitude, but they can't help you in the immediate future.

3.  Police activity.  I don't think any of us would be surprised to learn that the police do not want to be photographed.  Ever.  But unless the police have restricted access to an area (search & rescue area, crime scene investigation, etc.), you are within your rights to photograph police activity.  Practically speaking, you will have less trouble with the police if you have press credentials, but technically anyone can photograph the police as long as they are not interfering with the police activity.  Try to be discreet.
    
4.  Special cases. 

Privacy:  In some states (Oregon being one), personal privacy laws have been strengthened considerably in recent years.  For example, if you take a picture of someone who is naked, that act alone may make you liable for a lawsuit for invasion of personal privacy if the subject thought she or he was in a place that was private.  But what if the subject is on a nude beach?  This might be an open question (unless you use the pictures commercially) - let me know if it comes up in your photography!  

Children:  This is an area that I'm often asked about.  It's also an area where I tell people to be very careful.  No state or federal law I know carves out a special protection against taking photographs of children.   But there are a number of states that have passed laws against stalking or frightening children.  And most parents (some of them quite large) think they have a right to deny your photography of their children.  If you insist on taking public pictures of children when the parents object, expect to be questioned by very serious people (police).  It's been my experience that few parents will prevent you from taking pictures of their cute Johnny or Jane, especially if you tell them that it's for purely non-commercial purposes.  I've often offered to send them a copy or two as a thank-you gesture.

Celebrities:  This can be a somewhat tricky area.  We've all seen stories in the news about movie stars suing magazines over unauthorized photos or videos.  Basically, the law says that anyone who deliberately puts himself/herself in the public eye (movie stars, politicians, etc.) have chosen to give up a large part of his/her privacy.  So they are subject to a lower standard for having their pictures taken and published, even if it's for commercial reasons.  Think paparazzi.  But this lowered standard is not absolute.  For example, there is no public right to take pictures of the celebrity's children and publish them.  Nor do you necessarily have the right to publish nude pictures of a politician taken with a monster zoom lens from a mile away.  There are many other examples and you (unlike some famous publications) should use common sense and decency in this area to avoid a possible lawsuit.

Today's free legal advice:  The best solution to any question in this area is to politely ask people if you may take pictures.  This is always the best approach.  If the answer is no, then in most cases my advice is to either give up the picture or negotiate for a yes.  Many times people are hesitant because they don't understand the purpose of your photography.  If you explain why you want the picture, most times you'll get a yes.  And don't forget the signed release if the pictures are destined for commercial use or publication.
    
Disclaimer:  There are many variations on the general rules I've outlined here.  If you have any particular situations with which you deal on a regular basis, please call me for an appointment.  

As ever, keep those comments and questions coming.  Email me.

Until next time:  Happy shooting!

- Scott

Scott E. Nielson, J.D. is an attorney in Vancouver, Washington licensed in Washington and Oregon.  He has been helping small business owners and artists across the country for nearly twenty years to build and protect their careers and livelihoods.   

As Tom Hubbard (our friendly editor) has so well pointed out, most photographers are misinformed when it comes to the legal aspects of photography.  But it's not your fault!  The body of laws that together make up the general area of "photography law" is not consistent and is very location-specific.  

It's my intent to explain one specific aspect of photography law in each of many future articles published here.  I invite your comments!  Our open discussions here will hopefully enlighten all our fellow photographers.  Of course, I can't answer your specific questions on-line, but anyone with particular problems or business ideas are always welcome to contact me at:  NielsonLaw@me.com.

Likewise, if anyone has any general questions that you'd like to see answered on this forum, please do call or email me.  

So let's get started...

Many of my past and present artist clients have asked me:  "When do I actually own my image or artistic work?"  It would seem to be a simple matter to say that you own what you produce.  And technically, you'd be right.  Common sense might suggest that you have control of your images just because you produced them.  But this is not the end of the story:

Do I own my image?

The simple answer is:  "Yes!"  The United States Copyright Act says so.  And most state laws also agree, if they say anything at all on the question.  Once you press the shutter button on your digital camera, the image is legally yours, and it is - by federal law - automatically copyrighted.  "Great!" you say - if you own it, then nobody can use it without your consent.  Well, not so fast.

The Act also says that some people can use your beautiful image without getting your permission:  "Criticism, comment, news reporting, teaching (including multiple copies for classroom use), scholarship, or research, is not an infringement" of your copyright.  But even these exemptions do not include making commercial use of your image, even if it's done together with any of the exempted areas.  

Clear?  Of course not.  That's why you need a good lawyer who has experience in this area.  But do not panic - the basic rule, regardless of exemptions, is that no one can make any money from your image unless you allow them to do so.  Even a school can't use your image in a textbook for sale unless it gets a license from you.

That's a relief!  But how do you keep someone from using your image?  After all - you display your images on the Internet just like every other photographer.  We all know the Internet is at once a blessing and a bane to any photographer who uses it (and you must use it) to make a business survive.   There are simple ways to protect your hard work from the download demons.  I'll discuss the legal methods.  There are many technological website safeguards as well.  

Prove it.

You must be able to prove to the world that you own your image.  No one will take your word for it when an argument over ownership comes up a year or two from now.  But we can brand your image just as surely as my grandfather branded his cattle on the open range to show his ownership.  And you have modern technology on your side.  

According to federal law, all you must do to "brand" your image is to say so.  Whether you use Photoshop, iPhoto or any other software, you can electronically watermark or label every image you make.  Simply adding "© Copyright 2009.  All Rights Reserved, Scott E. Nielson Photography, LLC" will do the trick.  Be sure to reserve the rights to your business name; this will give you clear protections into the future.

That's it!  Simple, but important.  

Register it.

Next, it's important that you register any images that you think might be commercially valuable.  Even though we all like to bad-mouth the federal government, in this highly technological area, the feds do keep up.  It's important for you to keep up, as well.  If you should have to hire me to sue somebody someday for copyright infringement, you must have registered your copyright with the U.S. government to have all your legal rights in the lawsuit.  More good news:  When you register your images' copyright, you're gaining international copyright protection, also.

Happily for you, you can easily and cheaply register your images at:  https://eco.copyright.gov/eService_enu/start.swe

One misconception is that you have to pay the $35.00 fee for each picture.  Not true.  Now that the U.S. Copyright Office has gone entirely on-line, you can upload hundreds of images at once for the single fee.  When you do this, you can make the images very small in size to save bandwidth and upload size.  Just make sure that each image is recognizable on-screen.  

That's all that's required.  Again: Simple, but important.

Enforce it.

If you've done all these simple steps, the Copyright Act gives you a clear shot at the court house, if necessary, to get an injunction, damages and attorneys fees from anyone who infringes on your copyright.  

Say, for example, someone gets your award-winning photo of Mount Hood and starts selling greeting cards with that picture printed on the front.  The Act will enable you to get a court order not only to force the infringer to stop selling the cards, but the court could also order him to destroy any other cards, to pay you every penny he made selling the cards, and to make him pay your attorney fees and court costs for the entire sad case.   

The Government provides powerful protection for you IF you follow the few basic steps I've outlined here.  You work hard to learn photography.  You've spent years honing your craft.  You are entitled to protection for your artistry.  Don't let someone steal your images - your property.

To comment on this article, please feel free to send me an email at PMPN.

Until next time:  Happy Shooting!

- Scott

Next time:  "When and where can I take pictures?  Or:  Can the cops take away my camera when I photograph them?"

© 2009.  All rights reserved: Scott E. Nielson, J.D.