Andrew Leonard photographs stem cells using an electron microscope. Due to the technical skill required, he is one of just a handful of such photographers. Leonard pays a scientific research institution to use its electron microscope. He obtains cell samples from doctors, scientists and researchers. Leonard takes the images in black and white, then uses his artistic judgment to add color to the images.
Stemtech uses distributors to sell the nutritional supplements it formulates. Stemtech distributors sign a contract and must comply with Stemtech’s policies and procedures manual. Leonard licensed two of his stem cell images to Stemtech for limited use. Stemtech failed to pay Leonard the agreed upon licensing fee and exceeded the scope of the license by using the images without a license in its promotional materials. Further, Stemtech allowed some of its distributors to use Leonard’s images on their websites. After Stemtech and its distributors refused to pay Leonard for the unauthorized use of his images, Leonard sued Stemtech and its distributors for copyright infringement. The jury awarded Leonard a $1.6 million verdict against Stemtech on Leonard’s direct, vicarious and contributory infringement claims. The issues on appeal to the Third Circuit were whether the district court should have granted Stemtech’s motion for a new trial on contributory and vicarious liability and damages and whether Leonard should have received prejudgment interest and infringer’s profits.