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It’s Tricky! Statutory Damage Awards and the Copyright Act

Source: Grill IP patents news

Run DMC-infringement-statutory-awardsPhotographers will welcome a ruling by the Ninth Circuit, which found that companies can’t ignore their copyright and focus only on receiving permission from the people depicted in a picture. The case focused on images taken by Glen Friedman of the hip-hop trio Run DMC; some of the pictures had been used by Live Nation Merchandise, a division of the concert organizer Live Nation. The company had sought Run DMC’s permission to use the images, but failed to ensure to secure approval and a license from the photographer. The ruling in Friedman v. Live Nation Merchandise, Inc. reversed a ruling by a lower court, which had dismissed the case. The court’s ruling focused on the appropriate level of statutory damages to the plaintiff.

Background

    Friedman took a series of photographs of Run DMC in the ‘80s that were eventually published. He granted Sony Music license to reproduce select images for use as computer wallpapers. Sony was allowed to alter the images according to the license, the only one Friedman issued with such a provision. Music merchandising company Live Nation reproduces images of artists on various products, entering into agreements with the artists prior to business. Ultimate approval and sale of the merchandise rests with the artist who’s image the Live Nation products bear. Although artists should not sign off on any images for which they lack rights for, Live Nation forms lack any reference to this condition or any additional usage restrictions. The defendant developed a “Style Guide” for Run DMC, consisting of images of the group on t-shirts and calendars. While Live Nation received permission from Run DMC, they failed to get the green light from Friedman before reproducing his pictures.

    In turn, the plaintiff filed a complaint of copyright infringement, calling for the removal of copyright management information (CMI). Friedman moved for summary judgment on his claim. Following Live Motion’s stipulation of liability, the district court granted Friedman’s request. Live Motion then moved for summary judgment on the CMI claim and the extent to which their actions were willful. Upon review, the court determined that Friedman provided no evidence of the infringement being deliberate nor that the defendant removed CMI from the photographs. Friedman then issued a revised statement of damages, with the court deciding that the plaintiff was permitted one statutory damages award per infringed work.

The Issue with Awards

    On appeal, the district court’s summary judgment to Live Nation was reversed by the Circuit panel, which argued that there were triable issues, as documents clearly showed that the merchandizer on purpose ignored the photographer’s copyright. The panel cited email exchanges between employees of Live Nation, who expressed concerns over the use of Friedman’s images and the absence of copyright references in Live Nation’s documents. In sum, a jury could reasonably conclude that such actions constituted “recklessness or willful blindness.”

    The panel held that the CMI claim excludes distributing works where the party is aware of CMI’s removal, in addition to the prohibition of an intentional CMI removal. Friedman’s evidence illustrated a “striking similarity” between the images used by Live Nation and his original pictures. According to the panel, which cited Baxter v. CMA Inc. (1987), such a similarly gives credence to a permissible inference of copying. In essence, any reasonable jury could determine that Live Nation was aware of the CMI removal, since the removal constituted the only material difference between the plaintiff’s photos and those used on merchandise.

    The district court’s ruling on statutory damages was affirmed by the panel, but on separate grounds. Referencing the Copyright Act, the recovery of statutory damages awards by a copyright owner rather than actual damages “for all infringements involved in the action, with respect to any one work, for which any two or more infringers are liable jointly and severally.”

    According to the Circuit’s decision in Columbia Pictures Television v. Krypton Broadcasting of Birmingham, Inc. (1997), the amount of statutory awards is contingent on: the number of infringed works and the number of individual infringers. Friedman showed that Live Nation sold merchandise with his images to 104 retailers, thus reasoning that he was entitled to 104 awards. The district court rejected this interpretation, holding that a mass marketing operation does not appear in case law on such awards, and is thus inapplicable in this instance. The panel rejected the “mass-marketing” exception, regarding Columbia as an inappropriate comparison, since the downstream infringers in the 1997 case were defendants in the action, and were found liable with the direct infringer. Friedman did not list the 104 downstream infringers as defendants in the action, thus making the Copyright Act provision authorizing individual awards for each instance of infringement inapplicable in this case, since all parties were not jointly and severely liable in the current action.

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