Copyright Aid

Hi and i hope you can help us with a situation that we are in.
We instructed a freelancer from a freelance site to create a website for us. We saw a site in a different market that we liked the look of and asked for the site to be cloned and adapted to our needs. So the site design is cloned and the content is new and original. Images are ours that were paid for.
Without us knowing the job was actually posted on external sites by the freelance site that the job was originally posted to. The company found out and is now wanting to sue us and claim compensation. We conducted no business during the time the site was live and do not do any kind of internet marketing on the site or any online advertising. They have a copy of the project that was posted on the freelance site with these details. The project was actually cancelled on that site, but work still took place outside.
We have promptly taken the site down and spoken with the original company to try and resolve any difficulties and see if something can be worked out. But it seems they would like to take legal action to recover the amount it cost them to develop the site.
It really was not our intention to have this and the company has not lost any business as a result of this and we have not gained any business. Our site never really took off, i think we only ever had about 15 people come on the site in the time it was up and no business was conducted. We are really worried about what to do now and how to proceed, the other guys are an extremely strong (in terms of finance and man power) where as we are a an extremely small entity, looking to make a living. We probably could not even afford legal fees. It's the first time we have done anything like this and usually we create original sites, but in this instance it was something that seemed the quicker option. What are our options and best way to proceed.

I think that quite a lot depends on the extent to which the design of the original site was copied - or cloned as you put it.
The first thing a claimant has to do is prove that infringement has occured.
Whilst computer programs can be copyright, it is much less certain whether snippets of HTML and other scripting can be protected, because they merely form the scaffolding on which a site is constructed. It seems perfectly reasonable to me for you to say to a web developer "I want a site that looks a bit like this one", as a way of getting your intentions across. If your web developer used all the same colours, fonts, and layout as the original, I suppose this might look like infringement, but the claimant would need to prove that the developer did not arrive at those features independently by writing the code from scratch. And as the text and images - ie the content - are presumably quite different, there would seem to be no direct copying. Copying small amounts of the code from another site would not be likely to amount to infringement because there are only so many ways that HTML etc can be structured if the site is to work properly. And copying needs to be substantial for it to be infringement.

You say that the other company is seeking compensation. This is not one of the remedies which are available in infringement cases. The main ones are:
1. An injunction to stop you using the site (this is irrelevant now that you have taken down your site),

2. Damages. I assume that this is what they mean by compensation. This is based on measuring the degree to which infringement has devalued the copyright work. Clearly in this case there is no de-valuation, firstly because your site does not look exactly like the original and people would not be coming to your site instead of visiting the claimant's site, and secondly it was only seen by a very small number of people. The fact that it was put up on the internet without your knowledge or approval might lead to the defence of "unknowing infringement". If this is the case, then damages cannot be awarded against you. Damages are usually based on what would have been a reasonable fee to use the copyright work under licence.

3. Additional damages (sometimes referred to as punitive damages). These would be applicable if the infringement was flagarant and you benefitted substantially in a financial way from the infringement. This does not apply here.

4. Account of Profits. This is an altenative to damages, and is simply a balance between what you have gained financially set against what the claimant has lost by the infringement. Again this is not applicable here.

5. Other remedies. These include seizure, delivery up and destruction of infringing copies, which obviously does not apply here.

So in summary, i think this claim would fail at the first hurdle, namely that it would be hard to prove any infringement has taken place. Then, since you did not actually publish the site (the web developer did without your approval) it could be argued that you unknowingly infringed copyright and so are not liable for damages. That leaves just an injunction as a remedy, which is not strictly necessary since you have taken down the site. Taking all these factors together, I think a court would dismiss a claim as 'de minimis', that is to say, too trivial to be considered.

There may be a passing off claim against you if your "imitation" is too close to the original.

You admit to publishing the site and attempting to use it for business.