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Are you in Huge trouble? I do not believe so.
What I would do is stop using the images ASAP and generate your own.
Under the Copyright
Act, "Only the owner of copyright in a work has the right to prepare, or to authorize someone else to create, a new version of that work."
The use of preexisting contemporary images implicates three sections of the Copyright Act:
• the exclusive right to reproduce a work,
• the exclusive right to prepare derivative works
• the exclusive right to display a work publicly.
You can't do any of the above for a work protected by copyright. Modifying a copyrighted work is called a "derivative work" and such is typically not allowed by anyone but the copyright owner. There are exceptions but none seem useful here.
So changing the image a little does no help you.
Notice is not required to have a valid copyright.
To establish infringement, the copyright owner must prove:
(1) ownership of a valid copyright, and
(2) copying of constituent elements of the work that are original.
Sounds like (2) may be easy to prove but not sure about (1). They have to be able to prove (1).
If you get passed (1) the next step is to calculate damages.
First question, was the copyright registered? The answer has a large impact on damages. The two types of "damages" are statutory damages and actual damages.
Registered works get greater protection called Statutory Damages (and attorney fees), unregistered works do not (i.e. only actual damages).
Statutory damages: as low as $200 per infringement (innocent infringers - like you) to as high as $150,000 per violation for willfully infringing.
Such is why you need to stop using the image if you are still using the image as such use could now be said to be willful.
Actual damages become much more difficult to prove.
So I would consider:
(1) stop using the photograph ASAP;
(2) contacting the photograph owner and requesting the copyright registration number for the photograph;
(3) in the alternative, if he has no registration number, ask him to please prove ownership in the copyright; and
(4) asking owner what he/she wants to make the issue go away.
If the owner can prove he/she is owner of the picture but has not registered the copyright, just stop using the image. Unlikely they can justify a legal suit for the amount of damages your action might have caused.
If owner has registration of copyright, such is a more difficult question. You are likely an "innocent infringer" so I could see damages being as low as $200.
Hopefully the owner will be reasonable.
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