Merchandising Missteps Lead to Willful Infringement and CMI Removal Claims

Music merchandising company Live Nation admitted to copyright infringement by using photographer Glen Friedman’s photographs of the hip-hop group Run-DMC on t-shirts and a calendar without Friedman’s authorization.  On appeal to the Ninth Circuit, the issues in Friedman’s lawsuit against Live Nation involved whether the evidence was sufficient to establish that Live Nation willfully infringed Friedman’s copyrights and to establish that Live Nation violated §1202(b) by knowingly removing copyright management information (CMI) from Friedman’s photos.  There was also an issue of whether the number of retailers who purchased infringing merchandise from Live Nation could be used to calculate statutory damages.

The district court granted summary judgment to Live Nation on the willful infringement and CMI issues.  The district court ruled that Friedman could recover one statutory damages award per work infringed, rejecting Friedman’s damages calculation based on the number of retailers.  The Ninth Circuit reversed the district court’s rulings on the willful infringement and CMI issues, but upheld the district court’s ruling on the statutory damages issue.

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No Copyright Infringement for Photos Registered After Suit Filed

Louis Psihoyos is a professional photographer.  John Wiley & Sons, Inc. is a textbook publisher.  Wiley discovered that it published some of Psihoyos’ photos in its textbooks without a license from Psihoyos.  Wiley requested licenses from Psihoyos after the fact.  Psihoyos sued Wiley for infringing the copyrights on eight photos.  Although Psihoyos won the case overall, some of the photos he alleged were infringed were excluded from consideration by the jury.

This case emphasizes the importance of making sure that the infringed works are registered before the complaint is filed, making sure that the infringed works identified in the complaint are the works that were actually infringed and making sure that the registration certificates provided to the court by the copyright owner are for the works that were actually infringed.

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Haiti Quake Photos Case Offers Multiple Intriguing Issues and $1.2M Jury Award

In late November 2013, a jury awarded Daniel Morel $1.2M against Agence France Presse (AFP) and Getty Images for willfully infringing photos Morel took in Haiti on January 12, 2010, immediately after the earthquake that demolished the country.  Morel, a noted photographer, swiftly contacted AFP and Getty regarding removing his photos from their websites after he found them posted there.  

AFP actually initiated the lawsuit by bringing a declaratory judgment that it did not infringe Morel’s copyrights in his Haiti earthquake photos.  This case presents a number of intriguing issues, including AFP’s and Getty’s claims that they received a license under the Twitter terms of use, AFP’s and Getty’s claims that they were third party beneficiaries of Morel’s Twitter contract, Morel’s contributory infringement and vicarious liability claims against some of the licensees, Morel’s DMCA copyright management information claim, Getty’s claim that it was protected by a DMCA safe-harbor, Morel’s willful copyright infringement claims against AFP and Getty and Morel’s Lanham Act false representation and false advertising claims.  Morel survived motions to dismiss and summary judgment motions brought by AFP and Getty on the way to his jury verdict.  This post discusses why some issues were dismissed, while others remained in the case to be decided by the jury.

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Maximum Statutory Damages for Willful Copyright Infringement a Jury Issue

Chara Curtis, Cynthia Aldrich, and Alfred Currier wrote and illustrated three children’s books, How Far to Heaven?, Fun Is a Feeling and All I See is a Part of Me.  The copyrights on the books are registered.  Illumination Arts, Inc. (IAI) published the books under a publishing contract, beginning in 1989.  IAI paid royalties until September 30, 2009.  After that IAI stopped paying regular royalties, making only one subsequent royalty payment.  The authors demanded that IAI resume paying royalties.  When IAI still failed to pay royalties, the authors terminated the publishing contracts with IAI and requested to buy the books in inventory.  IAI refused to sell the inventory books to the authors.  Prior to the authors’ contract termination, IAI made the books available to consumers in electronic form, even though it was not authorized to do so under the publishing agreements.  IAI continued to make copies of the books, sell the books and display them online after the authors terminated the publishing contract, despite the authors’ demands to cease such activities.

The authors filed a lawsuit against IAI and its successor, Illumination Arts Publishing, LLC (IAP) in federal court in the Western District of Washington.  The authors alleged breach of contract and copyright infringement and sought an injunction against IAI and IAP.  This post addresses only the copyright issues.  In the authors’ first motion for summary judgment, the district court held IAI, IAP and two of their officers directly liable for copyright infringement and for willful copyright infringement.  The district court granted the authors’ motion for a permanent injunction and ordered the defendants to return all infringing copies of the books to the authors.  The authors’ second motion for summary judgment, and the subject of the rest of this post, asked the district court to award the authors $150,000 for each work infringed, the maximum statutory damages for willful copyright infringement.  (17 U.S.C. §504(c)(1)-(2)).

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Louis Vuitton Jury Verdict Reduced When Ninth Circuit Clarifies Damages Calculation

Louis Vuitton was awarded $21,000,000 in statutory damages for willful contributory trademark infringement and $600,000 in statutory damages for willful copyright infringement by the district court against two defendants following a jury trial.  On appeal in Louis Vuitton Malletier v. Akanoc Solutions, the Ninth Circuit affirmed the district court’s rulings on liability, but disagreed with the district court’s damages calculations and vacated and remanded the judgment.

Facts.  Louis Vuitton distributes luxury merchandise displaying its trademarks and copyrighted designs.  It discovered websites it believed were selling goods that infringed its trademarks and copyrights.  The websites listed email addresses that prospective customers could contact, but the websites did not sell merchandise directly.  Louis Vuitton determined that the Internet Protocol (IP) addresses used by the websites were assigned to Managed Solutions Group, Inc., (MSG) and Akanoc Solutions, Inc., based in San Jose, California. 

MSG leased servers, bandwidth and IP addresses to Akanoc Solutions, Inc.  Akanoc ran a web hosting business with these resources.  Both companies were managed by Steven Chen.  Louis Vuitton sent MSG, Akanoc and Chen at least eighteen Notices of Infringement, describing the trademark and copyright infringements and demanding the removal of the infringing content.  Louis Vuitton received no response and sued MSG, Akanoc and Chen for contributory copyright and trademark infringement.  Louis Vuitton determined that the direct infringers were in China.  From the court’s description of the facts, the website owners were the initial contributory infringers and the defendants were a second tier of contributory infringers.  The people who used their email addresses to conduct the infringing sales were the direct infringers.

The case went to a jury trial.  The jury found in favor of Louis Vuitton, awarding $10,500,000 against each of the three defendants for statutory damages for willful contributory trademark infringement of thirteen trademarks ($31,500,000 total on trademark) and $300,000 against each defendant for statutory damages for willful copyright infringement of two copyrights ($900,000 total copyright). 

Defendants moved for judgment as a matter of law following the verdict.  The district court granted MSG’s motion.  It concluded that the evidence did not show that MSG sold domain names or operated the servers.  The district court denied Akanoc’s and Chen’s motions, awarded statutory damages against them and permanently enjoined them from participating in similar conduct.  Akanoc and Chen appealed.  Louis Vuitton cross-appealed the district court’s order granting MSG’s motion for judgment as a matter of law.

The Ninth Circuit’s opinion addressed the cross-appeal, Akanoc’s and Chen’s motion for judgment as a matter of law, jury instructions and damages.  This blog post discusses the damages calculations.

Copyright Damages Calculation.    17 U.S.C. §504(c)(1) describes statutory damages:

[T]he copyright owner may elect, at any time before final judgment is rendered, to recover, instead of actual damages and profits, an award of statutory damages for all infringements involved in the action, with respect to any one work, for which any one infringer is liable individually, or for which any two or more infringers are liable jointly and severally, in a sum of not less than $750 or more than $30,000 as the court considers just.

The statutory maximum for willful copyright infringement under 17 U.S.C. §504(c)(2) is $150,000, but the jury awarded $300,000 per defendant for willful contributory copyright infringement on two Louis Vuitton copyrights.  The district court did not think this award violated the statutory maximum, since it worked out to $150,000 per copyright per defendant.  The district court did not specify whether the defendants were separately liable or jointly and severally liable.

The Ninth Circuit stated:

[W]hen statutory damages are assessed against one defendant or a group of defendants held to be jointly and severally liable, each work infringed may form the basis of only one award, regardless of the number of separate infringements of that work.

(Opinion pdf page 15).

The Ninth Circuit pointed out that “there was no legal basis for multiplying the award by the number of defendants.”  (Opinion pdf page 16).  Copyright statutory damages maximums are calculated based on the number of protected works, not the number of defendants.  The district court’s award was $600,000 for two works, twice the $150,000 per work statutory maximum.

Trademark Damages Calculation15 U.S.C. §1117(c)(2) sets out the statutory maximum for willful trademark infringement involving counterfeit marks.

if the court finds that the use of the counterfeit mark was willful, not more than $2,000,000 per counterfeit mark per type of goods or services sold, offered for sale, or distributed, as the court considers just.

The statutory maximum changed from $1,000,000 to $2,000,000 while the case was pending and the parties agreed that the $1,000,000 maximum would apply.  The jury award of $10,500,000 per defendant was for the willful contributory infringement of thirteen marks.  The district court did not think this award violated the statutory maximum, either, as it worked out to $807,692 per trademark per defendant.

The Ninth Circuit applied the same reasoning to the trademark award as it did the copyright award, indicating that “15 U.S.C. §1117(c) entitles a plaintiff to anaward, not multiple awards.”  (Opinion pdf page 16).  The award of $10,500,000 per defendant exceeded the statutory maximum.

The Ninth Circuit determined that a new trial on the issue of damages was not necessary, as the jury intended each defendant to be liable for the same amount of damages.  The court ruled that the jury award should be enforced against Akanoc and Chen by making them jointly and severally liable for a single trademark damages award and a single copyright damages award.

This case is Louis Vuitton Malletier v. Akanoc Solutions, Inc., No. 10-15909.