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.
Discovery Rule Prevails
No civil action shall be maintained under the provisions of this title unless it is commenced within three years after the claim accrued.
When does a claim accrue? In this case, the infringements occurred between 2005 and 2009. Psihoyos discovered the infringements in November 2010 and filed suit for copyright infringement against Wiley in March 2011.
Wiley argued that Psihoyos’ copyright infringement claims were barred by the statute of limitations. Wiley argued that the three year statute of limitations starts running when the infringement occurs (the injury rule), not from the time the copyright owner discovers, or should have discovered, the infringement (the discovery rule). The Second Circuit rejected Wiley’s argument, ruling that both the text of the Copyright Act and policy considerations favor the discovery rule.
Use of the discovery rule comports with the text, structure, legislative history and underlying policies of the Copyright Act. We conclude that copyright infringement claims do not accrue until actual or constructive discovery of the relevant infringement and that the Act’s statute of limitations did not bar any of Psihoyos’s infringement claims.
(Opinion pdf page 10).
Copyright Registration Required Prior to Filing Suit
Section 411(a) of the Copyright Act states 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.
In this case, Psihoyos did not file for copyright registration on some of the infringing photos until after he filed his complaint. During the discovery process, the parties found that Psihoyos made a mistake in his complaint regarding which of similar photos Wiley had infringed. Some of the works that Wiley actually infringed were not registered with the Copyright Office. Psihoyos did not move to amend his complaint or submit copyright registration applications for the photos that were actually infringed, but not registered, until after discovery closed and until after Wiley filed a motion for summary judgment. The district court denied Psihoyos’ motion to amend his complaint on the basis that allowing the amendment would require more discovery and would be prejudicial to Wiley.
The district court ruled that merely filing for registration does not satisfy the §411(a) registration requirement. Psihoyos argued on appeal that submitting the registration applications to the Copyright Office is sufficient.
As both parties acknowledge, the Federal Courts of Appeals are divided over whether a pending application satisfies § 411(a)’s requirement of copyright registration as a precondition to instituting an infringement action. We need not resolve the dispute or otherwise embroil ourselves in this circuit split because, even assuming arguendo that a pending application constitutes a ‘registration’ under § 411(a), Psihoyos had not even filed the applications for registration of the relevant works prior to instituting the action claiming infringement of the copyright in these works, as required by the plain terms of the statute. Instead, Psihoyos submitted the applications after discovery had closed and Wiley had filed its summary judgment brief. Accordingly, he failed to satisfy the preconditions to suit under § 411(a).
(Opinion pdf page 11-12).
The Second Circuit agreed with the district court that allowing Psihoyos to amend his complaint after discovery closed and after Wiley filed its motion for summary judgment would result in new discovery, significant expense and delay and prejudice to Wiley. The Second Circuit thought it significant that the district court notified Psihoyos early in the litigation that Psihoyos must provide registration numbers matching the photos the complaint alleged were infringed.
Statutory Damages to Psihoyos Upheld
The jury found that Wiley willfully infringed the copyrights in two of Psihoyos’ photos. It awarded statutory damages to Psihoyos of $100,000 for one photo and $30,000 for the other photo.
Wiley did not challenge the willful infringement findings and admitted that the jury awards were not against the evidence presented to the jury or the jury instructions. Wiley challenged the award of statutory damages to Psihoyos on the basis that “the jury’s award bears no rational relationship to the plaintiff’s actual loss and is an epitome of a run‐away award.” (Opinion pdf page 15).
We have held that district courts employing their wide discretion in setting the amount of statutory damages should consider:
- the infringer’s state of mind;
- the expenses saved, and profits earned, by the infringer;
- the revenue lost by the copyright holder;
- the deterrent effect on the infringer and third parties;
- the infringer’s cooperation in providing evidence concerning the value of the infringing material; and
- the conduct and attitude of the parties.
Although revenue lost is one factor to consider, we have not held that there must be a direct correlation between statutory damages and actual damages. To suggest otherwise is to ignore the various other factors a court may consider and the purposes of statutory damages in the willful infringement context.
(Opinion pdf page 15).
The Second Circuit upheld the district court’s denial of Wiley’s motion for a new trial or remittitur (reduction of the jury award).
This case is Psihoyos v. John Wiley & Sons, Inc., No. 12-4874-cv-(L), Second Circuit Court of Appeals.