I appreciate your perspective. Thank you. There was no indication that this image required purchase and no reason to believe that a copyright subsisted. I would not have used it had it shown a copyright in anyway. Can you offer your opinion on: Section 97 of the Copyright, Designs and Patents Act 1988 (“the Act”) there is no entitlement for the claimant to recover damages where the defendant did not know, and has no reason to believe that alternative copyright subsisted in the work?
EVERY photograph [and every other type of copyrightable work] is automatically protected by a copyright as soon as it's created. The photographer [or writer, sculptor, computer programer, etc.] need not do anything. Copyright simply exists once the work is created. Only when the copyright term expires or when the author expressly places the work in the public domain is a copyrighable work free to use by anyone. This has been the rule in the U.S. for many decades. No one can claim ignorance of this rule -- especially those who create copyrightable works for a living [like a website].
As for the Copyright, Designs and Patents Act 1988, that is an English law. Of which I cannot, and am not going to, comment. If you are in England then you need to speak with a Solicitor who specializes in copyright law. My take is that Section 97 is an "innocent infringer" provision. If it operates like its U.S. analog then the provision permits a court to reduce the statutory damages amount from the floor amount to some amount lower [in the U.S. the floor is $750 and the court can reduce that to $250 if the infringer proves that he is "innocent."].
You've given me a lot to consider. So many people are creating their own web sites these days, as I do, without any formal training or knowledge of copyright. This information should be at the top of every site that sells templates - Go Daddy, Weebly, etc. I am learning a very valuable lesson and am willing to pay for my mistake. That is an extremely hefty price to pay and one that will take quite some time for me to save up and pay off. My concern is how to pay and make sure this company no longer harasses me. In researching online it seems the people who paid continued to receive threatening letters. Is there a letter template you might suggest I use along with payment? And, is there anyway I can get the payment reduced for stupidity? I live in the U.S. and appreciate you clearing up my inquiry on Act 1988. Thank you.
It's time to speak with your own copyright attorney. Good luck.