Tag Archives: Copyright

Real estate brokerage may be liable for its agent’s copyright infringement

Case underscores reason why companies using independent contractors should consider negotiating provisions that require those independent contractors to indemnify the company in the event of third party intellectual property claims.

Plaintiff’s claims

Plaintiff photographer sued a real estate brokerage firm and the firm’s independent agent who published on her brokerage-branded website one of plaintiff’s photos without authorization. Plaintiff asserted a direct infringement claim against the agent, and a vicarious infringement claim against the brokerage. Defendant brokerage firm moved to dismiss for failure to state a claim. The court denied the motion.

vicarious copyright liability

Elements of vicarious copyright infringement

To state a claim for vicarious copyright infringement, in addition to stating a claim for direct infringement by the agent, the plaintiff had to successfully plead that the brokerage (1) had a direct financial interest in the appearance of the infringing photo on its agent’s website, and (2) had the right and ability to supervise the infringing activity.

The court’s decision

On the first element of vicarious copyright infringement, the court found that plaintiff adequately alleged that defendant brokerage had a direct financial interest in defendant agent’s use of the photo on her website. Defendant agent was defendant brokerage’s sponsored agent, and it was plausible that her use of the photo to enhance the appeal of her website provided both defendant agent and defendant brokerage with a direct financial benefit in the form of increased business.

As for the second element – right and ability to supervise – the court found that plaintiff’s undisputed allegation that defendant agent was a licensed real estate agent under defendant brokerage’s sponsorship, coupled with defendant brokerage’s statutory obligation to supervise defendant agent’s actions, were sufficient to state a plausible claim that defendant brokerage had the right and ability to supervise defendant agent’s infringing activity.

The parties disputed the level of supervision and control that defendant brokerage had, and the “right and ability” to exercise control over defendant agent’s activity on her website.

Plaintiff asserted that the website was one published by the defendant brokerage, while the defendant brokerage disclaimed all responsibility for the website. Yet regardless of which party actually exercised direct control over the website, the fact remained – in the court’s view – that defendant agent carried out the alleged copyright infringement on the website under the auspices of defendant brokerage’s sponsorship, and defendant brokerage had a statutory obligation to supervise her conduct as a sponsored agent.

Moreover, although defendant agent could hypothetically continue her alleged infringement in a different setting were defendant brokerage to terminate her sponsorship, the undisputed fact that defendant brokerage could have terminated her sponsorship lent further support to the inference that defendant brokerage had the right and ability to supervise defendant agent’s infringing acts.

Stross v. PR Advisors, LLC, 2019 WL 5697225 (N.D. Tex. October 31, 2019)

Does a plaintiff claiming unlawful removal of copyright management information have to own a registered copyright?

Plaintiff sued defendants for violation of the provisions of the Digital Millennium Copyright Act (“DMCA”) that prohibit one from intentionally removing or altering any copyright management information (“CMI”) with the knowledge, or having reasonable grounds to know, that it will induce, enable, facilitate, or conceal a copyright infringement (17 U.S.C. § 1202(b)).

Defendants moved to dismiss, asserting that the court should reject plaintiff’s DMCA cause of action for failure to state a claim for which relief may be granted because copyright registration, which plaintiff admits it lacks, was a prerequisite for bringing suit under this provision of the DMCA.

The court denied the motion. It held that copyright registration was not a prerequisite to this sort of action.

Defendants had argued that the provisions of 17 U.S.C. § 411(a) required registration. That section provides that “no civil action for infringement of the copyright in any United States work shall be instituted until preregistration or registration of the copyright claim has been made in accordance with this title.” Defendants argued that this requirement applied to DMCA actions and tried to justify their position by asserting that (1) a plain reading of Section 1202(b) of the DMCA establishes that a claim brought thereunder constitutes a civil action for infringement, (2) the provisions of Title 17 of the United States Code, including 17 U.S.C. § 411(a), apply to the DMCA despite its silence as to those provisions, and (3) precedent shows that the registration requirement applies to the DMCA. The court rejected these arguments.

First, a plain reading of the DMCA did not establish that it is subject to the registration requirement found in 17 U.S.C. § 411(a). Such requirement pertains to “civil action[s] for infringement of the copyright.” However, a DMCA action under Section 1202(b) is not an action for infringement, but rather for the improper removal or alteration of CMI. Second, the court held that Section 411(a) need not apply to the DMCA merely because other provisions of Title 17 do. Finally, the case law defendants cited, including the recent Supreme Court case of Fourth Estate v. Wall-Street.com, did not indicate that registration is required for DMCA actions.

Diamondback Industries, Inv. v. Repeat Precision, LLC, 2019 WL 5842756 (N.D.Tex., November 7, 2019)

See also:

Suit under DMCA for concealing copyright management information failed because plaintiff did not properly allege defendants’ intent

About the Author: Evan Brown is a Chicago technology and intellectual property attorney. Call Evan at (630) 362-7237, send email to ebrown [at] internetcases.com, or follow him on Twitter @internetcases. Read Evan’s other blog, UDRP Tracker, for information about domain name disputes.

Employee’s unauthorized conduct was not a DMCA prohibited circumvention

Plaintiff sued its former employee and alleged, among other things, that defendant violated the anticircumvention provisions of the Digital Millennium Copyright Act  (17 USC 1201). While defendant was still an employee, she used her username and password to access and download copyrighted material stored on plaintiff’s server after she had already accepted an employment offer from a competitor.

Defendant moved to dismiss the anticircumvention claim. The court granted the motion to dismiss.

The court’s holding centered on what the DMCA means by “circumvent a technological measure”. The statute requires that for there to be circumvention, one must “descramble a scrambled work . . . decrypt an encrypted work, or otherwise . . . avoid, bypass, remove, deactivate, or impair a technological measure, without the authority of the copyright owner.”

In this case, the court followed the line of reasoning in prior cases, including Egilman v. Keller & Heckman LLP  to hold that defendant did not circumvent any measures because she validly accessed the system using her username and password.

The court found that even if the use that defendant made of that access was not something that plaintiff would have authorized her to do, i.e. copy the materials at issue, defendant’s alleged abuse of her logon privileges did not rise to the level of descrambling, decrypting, or otherwise avoiding, bypassing, removing, deactivating, or impairing anything.

R. Christopher Goodwin & Assoc., Inc. v. Search, Inc., 2019 WL 5576834 (E.D. Louisiana October 29, 2019)

About the Author: Evan Brown is a Chicago technology and intellectual property attorney. Call Evan at (630) 362-7237, send email to ebrown [at] internetcases.com, or follow him on Twitter @internetcases. Read Evan’s other blog, UDRP Tracker, for information about domain name disputes.

Court denies porn company’s request to unmask anonymous copyright infringers

Serial copyright plaintiff Strike 3 Holdings filed a number of copyright complaints against defendants – known only by their IP addresses – for copyright infringement. Since plaintiff needed to know the identities of the defendants to move forward, it asked the court for leave to seek expedited discovery. In a consolidated matter – addressing a number of complaints – the court denied the motion.

The main reason for denying the motion was that, in the court’s view, as pleaded, plaintiff’s complaints were futile – they did not meet the standard for a motion to dismiss under Rule 12(b)(6).

Further, even if plaintiff had pled a cognizable copyright infringement claim, the court would still have denied the requests for expedited discovery. Good cause for the expedited discovery did not exist because:

  • plaintiff based its complaints on unequivocal affirmative representations of alleged facts that it did not know to be true
  • plaintiff’s subpoenas were misleading and created too great of an opportunity for misidentification of the unknown defendants
  • the linchpin of plaintiff’s good cause argument, that expedited discovery was the only way to stop infringement of its works, was wrong – plaintiff could have sent takedown notices under the Digital Millennium Copyright Act
  • plaintiff had other available means to stop infringement besides suing individual subscribers in thousands of John Doe complaints
  • the deterrent effect of plaintiff’s lawsuits was questionable
  • substantial prejudice may have inured to subscribers who were misidentified; and
  • plaintiff underestimated the substantial interest subscribers had in the constitutionally protected privacy of their subscription information.

On balance, therefore, the court found that the overall administration of justice and the prejudice to subscriber defendants outweighed plaintiff’s interest in expedited discovery.

Strike 3 Holdings, LLC v. Does, 2019 WL 5446239 (D.N.J. October 24, 2019)

Web design feature killed express license argument in copyright case

Plaintiff sued defendant for copyright infringement over unlicensed use of plaintiff’s musical works in advertisements that defendant created and uploaded to YouTube. Defendant argued that the language and structure of plaintiff’s website – from which the works were downloaded – resulted in an express license or at least an implied license to use the musical works for commercial purposes. The court rejected these arguments and awarded summary judgment to plaintiff. 

No express license

The basis for defendant’s argument that plaintiff’s website gave rise to an express license is not clear. In any event, plaintiff argued that a browsewrap agreement in place on the website established that the works could not be used for commercial purposes without the payment of a license fee. Citing to the well-known browsewrap case of Specht v. Netscape, 306 F.3d 17 (2d Cir. 2002), defendant argued that it did not have notice of the terms and conditions of the browsewrap agreement.

The court distinguished this case from Specht. In this case, plaintiff’s home page contained – similar to the case of Major v. McCallister, 302 S.W.3d 227 (Mo. Ct. App. 2009) – “immediately visible” hyperlinks that referenced terms of use and licensing information. A user did not have to scroll to find these links. So the terms and conditions of the browsewrap agreement were enforceable. Since the browsewrap agreement contained provisions requiring a license for commercial use, no reasonable jury could find that plaintiff had granted defendant an express license to use the musical works for commercial purposes free of charge. 

No implied license

Defendant argued in the alternative that plaintiff had granted defendant an implied license to use the musical works, based on (1) plaintiff’s company name “Freeplay,” and (2) the absence of any conspicuous warning that the works were not available for commercial use. 

The court found these arguments to be “easily disposed of.” Citing to I.A.E., Inc. v. Shaver, 74 F.3d 768 (7th Cir. 1996), the court noted that an implied license exists only when: 

  • a person (the licensee) requests the creation of a work,
  • the creator (the licensor) makes that particular work and delivers it to the licensee who requested it, and 
  • the licensor intends that the licensee-requestor copy and distribute his work.

The court found that defendant failed to prove any of these elements. Defendant never asked plaintiff to create any works. Nor did plaintiff make any works at defendant’s request to be used in defendant’s YouTube videos. Moreover, given plaintiff’s paid license requirements for business use of the copyrighted works available on its website, it could not be said that plaintiff intended that defendant download and distribute those works free of charge. Accordingly, the court found that no implied license existed.

Freeplay Music, LLC v. Dave Arbogast Buick-GMC, Inc., No. 17-42, 2019 WL 4647305 (S.D. Ohio, September 24, 2019)

About the Author: Evan Brown is a Chicago technology and intellectual property attorney. Call Evan at (630) 362-7237, send email to ebrown [at] internetcases.com, or follow him on Twitter @internetcases. Read Evan’s other blog, UDRP Tracker, for information about domain name disputes.

Plaintiff had no duty to “scour” the internet for infringements – statute of limitations did not bar copyright claim made 7 years after infringement

Plaintiff freelance photojournalist sued defendant website publisher for copyright infringement over photos plaintiff took of a luxury maximum security prison in Norway in 2010. Defendants posted the photos on its website in 2011 without permission, in connection with a widely-publicized story of a notorious mass shooter being relocated there. Plaintiff registered the copyright in his photos in 2015 and filed suit in 2018, claiming that he did not learn of the alleged infringement until 2016.

Each party filed motions for summary judgment. Plaintiff claimed that the court should enter summary judgment in his favor because he had a valid copyright to the photographs, and there was no dispute that defendant published several of them without authorization. Defendant asserted that plaintiff’s claims were time-barred by the Copyright Act’s three-year statute of limitations, because he knew, or should have known, of the infringement when interest in the photos spiked following the remand of the alleged mass murderer to the prison where the photos were taken.

Photos included in copyright registration

The court found there was no genuine issue as to any material fact concerning plaintiff’s ownership of the copyright in the photos. And defendant conceded it published the photos without authorization. Defendant had challenged whether plaintiff’s copyright registration covered the photos at issue. Plaintiff had not introduced the deposit materials, but had submitted a sworn statement saying the photos had been included in the registration. The court found the sworn statement to carry the issue – had the defendant filed a motion to compel or sought the deposit materials from the copyright office, it may have been able to show the photos were not included. But on these facts, it was clear to the court that the copyright registration covered the photos.

Statute of limitations – no duty to scour

The court denied defendant’s motion for summary judgment, finding that the copyright infringement claims were not barred by the statute of limitations. Civil actions for copyright infringement must be “commenced within three years after the claim accrued.” 17 U.S.C. § 507(b). The Second Circuit has stated that the “discovery rule” governs when the statute of limitations begins to run: an infringement claim does not ‘accrue’ until the copyright holder discovers, or with due diligence should have discovered, the infringement.

The court found that plaintiff’s knowledge about general interest in the prison following the news stories about the mass shooter being relocated there was not sufficient to constitute constructive discovery that his photographs of that prison were being infringed. Plaintiff did not have knowledge of any infringement of his work and there was no reason for him to think, or duty for him to scour the internet to find out if, anyone was using his photographs without his consent. The court cited Wu v. John Wiley & Sons, Inc., 2015 WL 5254885 (S.D.N.Y. Sept. 10, 2015) to observe that “[i]f that were the expectation, then stock photo agencies and photographers likely would spend more money monitoring their licenses than they receive from issuing licenses.”

Masi v. Moguldom Media Group, 2019 WL 3287819 (S.D.N.Y., July 22, 2019)

Photographer’s copyright claim against officer of company over photos on website moves forward

Plaintiff, a professional photographer, sued defendant company and an individual who was its “registered agent and … officer, director, manager, and/or other genre of principal” for copyright infringement over two photographs that appeared on the defendant company’s website. The infringement claims against the individual defendant included one for vicarious infringement.

The individual defendant moved to dismiss the vicarious infringement claim. The court denied the motion.

One “infringes vicariously by profiting from direct infringement while declining to exercise a right to stop or limit it.” Metro-Goldwyn-Mayer Studios Inc. v. Grokster, Ltd., 545 U.S. 913, 930 (2005). “In order to establish vicarious liability, a copyright owner must demonstrate that the entity to be held so liable: (1) possessed the right and ability to supervise the infringing activity; and (2) possessed an obvious and direct financial interest in the exploited copyrighted materials.” Nelson-Salabes, Inc. v. Morningside Dev., LLC, 284 F.3d 505, 513 (4th Cir. 2002).

In this case, plaintiff alleged that the individual defendant controlled nearly all decisions of the company and was the dominant influence in the company. In addition, plaintiff alleged that the individual defendant “had the right and ability to supervise and/or control the infringing conduct of the company, and/or stop the infringements once they began.” Finally, plaintiff alleged that the individual defendant had an obvious and direct financial interest in the infringing activities of the company since he was an officer, director, manager or other principal of/for the company. As a principal of the company, the individual defendant’s financial interests were intertwined with the company’s. Therefore, the individual defendant had a direct and obvious financial interest in the company.

So the court concluded that plaintiff had presented sufficient facts with regard to each element of the vicarious liability claim.

Oppenheimer v. Morgan, 2019 WL 2617080 (W.D.N.C., June 26, 2019)

Affirmative defense asserting that Copyright Act is unconstituational survives motion to strike

Plaintiff sued defendant search engine for copyright infringement alleging that defendant wrongfully reposted a picture plaintiff had taken. Defendant’s answer included a number of affirmative defenses. Plaintiff moved to strike the affirmative defenses. The court struck some of them but allowed at least a couple of them to survive.

Unclean hands – Defendant apparently perceived some trollish behavior on the part of the plaintiff. Defendant alleged that, in light of plaintiff’s practice of taking photographs of no actual value, for which there is no market, and seeding them on the internet for the purpose of attempting to extort revenue through litigation, that the claims for equitable relief should be barred by unclean hands. Plaintiff objected, claiming that it was scandalous to characterize plaintiff’s enforcement efforts this way. The court found, though, that the defense was adequately pled and not scandalous. “While the … defense is unfavorable to Plaintiff, it does not ‘cast a cruelly derogatory light on’ Plaintiff as necessary for the Court to conclude that the defense is scandalous.”

Unconstitutionality of portions of Copyright Act – Defendant also asserted that 17 U.S.C. §§ 102 and 410, statues dealing with copyright protections, are unconstitutional as applied to pictures based on technological advancements in photography. Plaintiff responded by pointing out that the Supreme Court since 1884 has found copyright protection for photographs to be constitutional, and argued that defendant presented no cognizable legal argument to suggest that Congress exceeded its constitutional powers by enacting the Copyright Act. Perhaps surprisingly, the court rejected plaintiff’s argument. It noted that the defense was not insufficient, redundant, immaterial, impertinent, or scandalous, but that defendant was arguing that the law, or at least the application of the law, should be changed, and defendant presented grounds for its argument.

Miller v. 4Internet, LLC, 2019 WL 1937567 (D.Nev. April 30, 2019)

Fact that others had access to defendant’s wi-fi was no reason to quash subpoena in copyright case

In a suit against John Doe defendant for copyright infringement arising from defendant’s alleged distribution of plaintiff’s movies via BitTorrent, plaintiff sent a subpoena to Comcast – defendant’s ISP – seeking defendant’s identify.

Defendant moved to quash the subpoena, contending that being the target of the civil action was an undue burden, because there was a substantial likelihood that plaintiff would be unable to establish that defendant was actually the person responsible for the alleged infringement. Defendant also included a letter from his neighbor describing how that neighbor and others had used defendant’s wireless network.

The court denied the motion to quash. It held that even though defendant may turn out to be innocent, at this stage plaintiff was merely seeking to uncover his identity. The fact that other people had access to defendant’s unsecured wi-fi was immaterial. 

Strike 3 Holdings, LLC v. Doe, 2019 WL 1865919 (N.D.Cal. April 25, 2019)

Company cannot avoid DMCA liability for false CMI by claiming it used its own name

Plaintiff sued defendant claiming defendant violated the DMCA by providing and distributing false copyright management information (“CMI”), in violation of 17 U.S.C. § 1202(a)(1)–(2). Defendant had placed its brand name and logo on and adjacent to plaintiff’s photo within defendant’s advertising material. 

The part the DMCA relevant to this case provides that “[n]o person shall knowingly and with the intent to induce, enable, facilitate, or conceal infringement — (1) provide copyright management information that is false, or (2) distribute or import for distribution copyright management information that is false.”

Section 1202(c) defines CMI as “any of the following information conveyed in connection with copies or phonorecords of a work or performances or displays of a work, including in digital form, except that such term does not include any personally identifying information about a user of a work or of a copy, phonorecord, performance, or display of a work: …” (emphasis added). It goes on to list eight types of CMI, as relevant in this case: (2) the name of, and other identifying information about, the author of the work; (3) the name of, and other identifying information about, the copyright owner of the work, including the information set forth in a notice of copyright; and (7) identifying numbers or symbols referring to such information or links to such information.

Defendant moved to dismiss, arguing that the plain language of § 1202(c) excepts from the definition of CMI “any personally identifying information about a user of a work or of a copy, phonorecord, performance, or display of a work.” It reasoned that because plaintiff’s complaint defined defendant as a “user” of the photograph (i.e., by alleging that defendant used the photograph for commercial promotion) and because personally identifiable information includes names, the name of a user of a work is not, and cannot, be CMI.

The court rejected this argument and denied the motion to dismiss. It looked to the decision of another federal court, Tiermy v. Moschino S.P.A., No. 15-CV-5900, 2016 WL 4942033 (C.D. Cal. Jan. 13, 2016) in which a defendant had made a similar argument. As that court noted, defendant’s argument fell short on a logical basis. Taking defendant’s theory to the extreme, virtually any person who took another’s work and placed their name or brand on it could be considered a “user of a work” rather than an infringer, and escape liability. The court found that was not the intent of the statute, which is to protect the integrity of CMI by prohibiting the provision of false CMI. The court held that it cannot be, and defendant provided no authority in support, that an alleged infringer can escape liability under § 1202(a) simply because the false CMI put forth is the alleged infringer’s own name.

Roth v. The Walsh Co., 2019 WL 318404 (E.D. Wis. Jan. 24, 2019)