How To Respond To PicRights Copyright Demand Letters In New Zealand

If you run a small business, it’s surprisingly easy to end up with a copyright complaint - especially if you’re managing your own website, social media, ads, or blog content.

One day you’re uploading a “nice looking” image to your website. The next, you receive a PicRights demand letter (or a similar copyright infringement demand letter) saying you owe hundreds or thousands of dollars for using a photo without permission.

Don’t panic - but don’t ignore it either. In this guide, we’ll walk you through how to respond in a calm, business-minded way, what New Zealand copyright law generally looks at, what to keep in mind if the claimant is based overseas, and how to reduce the chances of getting another PicRights demand letter in future.

What Is A PicRights Demand Letter (And Why Do Businesses Get Them)?

A copyright demand letter is usually a written notice alleging your business has used an image (or other content) without the copyright owner’s permission, and requesting that you:

• remove the content (or stop using it), and
• pay a settlement amount (often framed as a “licence fee” plus extra amounts).

These letters often relate to:

• images on your website (including old blog posts you forgot existed)
• images used in Facebook/Instagram ads
• header images in eDMs
• photos used by a contractor (web developer, marketing agency, virtual assistant)
• images uploaded to your site by a former staff member

From a small business perspective, the most frustrating part is that the demand can arrive years after the image was posted - and the amount demanded can feel totally out of proportion to the actual value of the photo.

Still, it’s important to treat a PicRights demand letter as a real legal issue, because copyright is a property right. In New Zealand, copyright is primarily governed by the Copyright Act 1994.

What Should You Do Immediately After Receiving A Copyright Demand Letter?

The first 24–72 hours matter. Your goal is to protect your position while you get the facts straight.

1) Don’t Ignore It (But Don’t Rush To Pay)

Ignoring the letter can escalate the situation, especially if follow-up notices become more formal. But paying immediately can also create problems if the claim is incorrect or overstated.

A good first response is usually: “We’re looking into this and will respond once we’ve investigated.”

2) Preserve Evidence Before You Change Anything

It’s tempting to delete the image immediately. Often, you should remove the content quickly to stop any ongoing use - but first, capture evidence so you can properly assess the situation.

Practical things to do:

• take screenshots of the webpage(s) where the image appears
• save the image file currently hosted (if accessible)
• note the URL(s), the date you first posted it (if you can), and where else it appears (ads, socials, PDFs)
• check archived versions of your site (if relevant)
• keep the demand letter, any attachments, and the envelope/email headers

This helps you (and your lawyer) understand the scale of use, the time period, and the commercial context.

3) Identify Where The Image Came From Internally

For a small business, the key question is often: how did this image end up in our marketing?

Check:

• your website CMS media library
• your marketing folders (Google Drive/Dropbox)
• Canva/Adobe/other design tools
• old emails with your web designer or marketing agency
• any stock image subscriptions you’ve had

If a contractor uploaded it, you’ll want to review your agreement and what they promised about IP and licensing. If you’re not sure whether your contracts cover this properly, it may be worth getting a Contract Review so you can understand where liability sits and what your options are.

4) Stop Further Use (Usually By Removing Or Replacing The Image)

In many cases, you’ll want to remove the image from your website and stop using it in future campaigns while you investigate.

Just be careful about wording if you reply to the demand letter - removing an image doesn’t have to mean you admit liability. It can simply be a sensible step to reduce risk while you verify the claim.

How Do You Assess Whether You’re Actually Liable Under New Zealand Copyright Law?

Copyright disputes often come down to details. Before you respond substantively to a PicRights demand letter, you’ll generally want to assess a few core issues.

1) Is The Work Copyright-Protected In The First Place?

Most photographs will be protected by copyright. In plain terms, copyright protects original works (including artistic works like photos) without needing registration.

This means the starting assumption is usually that a photo is protected unless there’s a specific reason it isn’t.

2) Who Owns The Copyright (And Can The Sender Enforce It)?

Not every sender has the legal right to demand payment.

In a typical image claim, you want to know:

• who took the photo (the creator is often the first owner - but first ownership can change depending on whether the photo was taken by an employee in the course of their job, or under a commissioning/contract arrangement)
• whether the copyright has been assigned to someone else
• whether the sender is acting as an agent and has authority to enforce or settle

It’s reasonable to request evidence of ownership or authority (politely and professionally).

3) Did You Have A Licence Or Permission?

This is the practical heart of most cases. You might have a licence if:

• you bought it from a stock image provider (and your subscription covered that use)
• your web designer/agency sourced it under a valid licence
• the photographer gave you written permission (even via email)
• the image was created for you under a contract that assigns IP (or otherwise grants you the rights you need)

If you think you had permission, gather the proof (invoices, subscription records, emails, project files). If a contractor sourced it, check whether your agreement deals with IP ownership and licensing - if not, consider putting proper protections in place going forward, like an IP Assignment where appropriate.

4) Are Any Exceptions Likely To Apply (For Example, Fair Dealing)?

New Zealand law has limited “fair dealing” exceptions (for example, criticism, review, news reporting, and research/private study). These exceptions are narrower than what many people assume (and they’re not the same as the US concept of “fair use”).

For most businesses using an image to promote products or services, a fair dealing exception is often unlikely to apply - but it depends on the context, so it’s worth checking carefully rather than guessing.

5) Does “Innocent Infringement” Help?

Some businesses used an image genuinely believing they had the right to use it - for example, because it was labelled “free” online or because a contractor uploaded it without checking.

That may be relevant to the amount of damages a court would award (and how settlement negotiations should be approached), but it doesn’t automatically make the problem disappear.

This is where tailored advice matters. If you want help assessing liability and settlement risk, speaking with an Intellectual Property Lawyer early can save a lot of time (and cost) compared with trying to negotiate “blind”.

How To Respond To A Copyright Demand Letter Without Making Things Worse

Responding well is about staying professional, keeping your options open, and pushing the other side to substantiate what they’re claiming.

Here’s a practical approach many small businesses take.

1) Keep Your Reply Short, Factual, And Non-Emotional

Even if the letter feels aggressive, your response should read like a calm business email.

Avoid:

• accusing them of being scammers (even if you’re suspicious)
• admitting you “stole” the photo
• guessing facts you haven’t verified
• long explanations that create inconsistencies later

Instead, aim for: “Thanks for your email. We take IP seriously. We’re investigating and will respond once we’ve reviewed our records.”

2) Ask For Specific Information (And Evidence)

It’s usually reasonable to ask for:

• identification of the specific image(s) and where they say it appeared
• dates of alleged use (or how they calculated the usage period)
• proof of copyright ownership or authority to act
• a breakdown of the amount demanded (what is it based on?)
• details of how they say the claim is enforceable against your New Zealand business (for example, who the rights holder is, where they’re based, and what legal basis they rely on)

This isn’t about being difficult - it’s about making sure you’re negotiating (or disputing) on a proper factual foundation.

3) Remove The Image (But Avoid “Admitting Liability” Language)

If you’ve removed the image, you can say something like:

• “We have removed the image from our website while we investigate this matter.”

That communicates you’re taking it seriously, without conceding infringement.

4) Be Careful With Settlement Offers

Many demand letters propose a settlement amount that includes:

• a retroactive “licence fee”
• additional “enforcement” or “administration” amounts
• sometimes extra claims like deterrence or legal costs

Whether that amount is reasonable depends on factors like the nature of the image, how long it was used, how prominent it was, whether it was used commercially, and whether you had any licence arguments.

In practice, settlement negotiations often involve:

• requesting a lower amount supported by market licensing rates
• limiting settlement to documented periods of use
• confirming the settlement includes a full release (so the matter is actually closed)

If you’re going to agree to pay something, make sure it’s documented properly (including confidentiality if that matters to you, and a release of claims). A settlement should ideally be in writing and clear - commonly structured as a Deed of Settlement or similar agreement, depending on the circumstances.

5) Don’t Overlook Your Own Supply Chain (Designers, Agencies, Platforms)

If a marketing agency, web developer, or contractor supplied the image, you may have rights against them - but it depends on your agreement, what they promised, and what they actually did.

This is also why it’s so important to tighten your “marketing legals” from day one. If you run an online business, having solid website terms can help set expectations around content you publish and third-party material, including your Website Terms and Conditions and a suitable Disclaimer (for example, around third-party content and external links, where relevant).

When Should You Get A Lawyer Involved (And What Can They Actually Do)?

For many small business owners, the hardest part is uncertainty: you don’t want to overreact, but you also don’t want to create bigger liability by responding the wrong way.

It’s usually worth getting legal help if:

• the demand amount is significant (relative to your business size)
• they’re threatening court action or using formal legal language
• you believe you had a licence and want to push back
• multiple images are involved (or multiple websites/brands you operate)
• the image was used in paid advertising or product packaging (higher risk)
• the sender is based overseas and you want advice on practical enforceability and next steps in New Zealand
• you want a proper settlement document so the claim can’t be revived later

A lawyer can help you:

• assess whether the claim is likely enforceable in New Zealand (including who the rights holder is and what evidence supports the claim)
• prepare a response that avoids admissions and protects your negotiating position
• request evidence in the right way
• negotiate settlement (including reducing inflated amounts)
• document the settlement properly so it’s final

If you’re already dealing with a PicRights demand letter, you may also want broader support to tighten your IP practices. Depending on what you do, that could include a tailored Copyright Consult.

How To Prevent Future Copyright Claims In Your Marketing And Website Content

Once you’ve handled the immediate issue, it’s worth putting some simple systems in place. For small businesses, this is one of those “a little admin now saves a big headache later” situations.

1) Use A Clear Image Sourcing Process (Even If You’re Small)

Create a basic internal rule, such as:

• only use images you created, paid for, or have written permission to use
• no “Google Images” sourcing (even with good intentions)
• every image in your website library should have a “source note” (where it came from and the licence)

Even a simple spreadsheet can be enough.

2) Make Sure Contractor Agreements Cover IP Properly

If you outsource design, web development, photography, or content creation, your agreement should clearly address:

• who owns the IP in deliverables (and whether any IP is assigned to you)
• whether third-party assets will be used (like stock photos)
• who pays for licences and how proof will be provided
• what happens if a third-party claim comes in (indemnities and responsibility)

These clauses are often missing from template contracts - and that’s exactly when a business gets stuck wearing the risk.

3) Be Especially Careful With “Free” Images And Social Media Content

“Free to download” doesn’t always mean “free to use commercially”. Some licences allow personal use only, require attribution, or ban use in ads.

Also watch out for reposting images from social media. The fact someone posted a photo publicly doesn’t automatically mean you can use it on your website or in marketing.

4) Build A Simple Approval Check Before Anything Goes Live

Before a new webpage, blog post, or campaign goes live, ask:

• Do we have rights to every photo, icon, font, and graphic?
• Can we prove it quickly if challenged?
• Does the licence match our use (commercial, online ads, worldwide, duration)?

This “pre-flight check” is one of the easiest ways to reduce the risk of another PicRights demand letter.

Key Takeaways

• A PicRights demand letter is a serious issue for small businesses, but you don’t need to panic - you do need to respond strategically.
• Before you delete anything, preserve evidence (screenshots, URLs, dates, and records of where the image came from).
• Assess the fundamentals under New Zealand copyright law: whether the image is protected, who likely owns it (including whether an employment or commissioning arrangement affects ownership), whether you had a licence, and whether any exceptions are realistically available.
• Respond in a short, factual way, request evidence and a breakdown of the demand, and avoid language that admits infringement.
• If the claimant is overseas, get clarity on who the rights holder is and the basis they rely on to pursue the claim against a New Zealand business.
• If you negotiate a settlement, make sure it includes a clear release so the claim is actually final and can’t be re-opened later.
• To prevent future claims, tighten your image sourcing process and make sure contractor agreements properly cover IP, licences, and responsibility for third-party assets.

If you’d like help responding to a copyright demand letter or tightening your IP protections, you can reach us at 0800 002 184 or team@sprintlaw.co.nz for a free, no-obligations chat.