DMLA Legal Update

by Nancy Wolff, DMLA Legal Counsel

On April 8, 2019 I participated in a Copyright Office roundtable on behalf of DMLA  regarding the Copyright Office’s preparation of a Section 512 report, which relates to immunity Internet Service Providers may be entitled to under the Digital Millennium Copyright Act if they comply with various provisions. The roundtable was intended to update the study’s record from 2017 and to review the law, especially the caselaw, that has changed in the intervening years. There were a few cases that looked at whether an ISP would lose the safe harbor immunity based on failure to adopt  a policy for repeat infringers, and further cases that have required actual notice of each URL that contains infringing material, eliminating or narrowing statutory language that includes notice based on facts or circumstances that would make one aware of the infringing activity (known as “red flag” knowledge”).

Participants were divided into four panels, three on domestic issues and one on international developments. Representatives from the Copyright Office asked direct questions on each of the four panels. The last panel on international developments  included comments the new EU directives that appear to require ISPs to take more responsibility in policing for infringements. At the end of the sessions there was an open mike.

Copyright Office representatives included Regan Smith, General Counsel, Brad Greenberg, Counsel for Policy & International Affairs, Kevin Amer, Deputy GC, Kimberley Isbell, Senior Counsel for Policy and International Affairs, and Maria Strong, Deputy Director of Policy and International Affairs.

Representatives from the content community including the Copyright Alliance, RIAA, MPAA, Authors Guild AAP, RIAA, NPPA and a few individual creators were in attendance. For the content side representatives of Google, Facebook and Etsy among others were there.  DMLA is a member of the Copyright alliance, whose staff prepared helpful summaries of the relevant cases that have been decided since the last panel

The themes discussed were similar to three years ago. The content industry saw no change in the burden of the notice and take down regime, and many were choosing to give up. The message was that cases have construed the statutory language in such a way that here is little incentive for ISP’s to cooperate in reducing infringing content. The content community was hoping that trends in the EU may spill over and help in the US.  Conversely, the IPS community believed that the statute and court cases struck the right balance.  The next step is for the Copyright Office to prepare a report to Congress. Whether Congress has an appetite to change Section 512 is another question.

20/20 Software Offers New Tools for Working with Footage

 

 

 

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Ninth Circuit Addresses Outstanding Copyright Issues in VHT, Inc v Zillow Group

The Ninth Circuit recently addressed a number of outstanding copyright issues between Zillow, the popular apartment hunting website, and VHT a provider of real estate photographers’ photos, and VHT, although it left the question of whether database registrations offer statutory damages for each image, or if all the images in one application are limited to one award of statutory damages.  Read the article here

Can Websites Design Platforms to Avoid Copyright Liability?

VHT, Inc. v. Zillow Group, Inc., No. 2:2015-cv-01096 (W.D. Wash. 2017)

By: Pranav Katti & Nancy Wolff

The Ninth Circuit recently addressed a number of outstanding copyright issues between Zillow, the popular apartment hunting website, and VHT a provider of real estate photographers’ photos, and VHT, although it left the question of whether database registrations offer statutory damages for each image, or if all the images in one application are limited to one award of statutory damages. Although Zillow properly licensed these photos from VHT, the central question was whether Zillow exceeded the scope of this license, and the calculation of damages.

The Zillow Platform: Zillow is a user-oriented site where users can search for certain photos and even save and upload images to a private “personal board”. The photos on Zillow fall within the categories of “displayed”, “not displayed”, “searchable” and “not searchable”. Zillow used VHT photos in two areas on its website, a “listing platform” and “digs”. The listing platform features photos and information about properties while digs features photos of rooms within some of those properties, artfully and aesthetically designed to facilitate home improvement and remodeling.

District Court Decision: The district court previously found that Zillow did not directly infringe the 54,257 listing platform photos, the 22,109 non-displayed photos and the 2,093 displayed but non-searchable digs photos. Zillow also escaped the claim of secondary copyright liability for the use of the photos on digs. However, Zillow’s was found to have directly infringed 3,921 displayed and searchable VHT photos on digs and the court rejected its fair use argument. The court also found that Zillow willfully infringed on 3,373 searchable photos and in assessing damages, asked the jury, which photographs allegedly infringed upon, had an independent economic value.

Ninth Circuit:  On appeal, the Ninth Circuit similarly found that Zillow did not directly infringe upon the copyrights of the 54,257 photos used on their listing platform and the 22,109 non-displayed photos and 2,093 displayed but non-searchable photos.. The reasoning behind this decision lays primarily in the type of agreements that VHT provided Zillow, the control Zillow had over these photos and Zillow designing its system to avoid copyright infringement as much as possible. Also aiding Zillow was their prompt action to address claims of infringement and VHT’s lackluster effort in providing Zillow the information needed to adequately address these claims.

Zillow’s System: VHT provided Zillow with either “evergreen” or “deciduous” rights in the photos provided. Evergreen rights allow a photo to be used without any time restriction, or in other words, a photo can remain on the site even after the property has been sold. Conversely, a deciduous right is time-limited. Zillow required VHT to designate the type of agreement underlying each provided photo, and Zillow’s system then automatically sorted the photos pursuant to these agreements and automatically treated each photo within the scope of its agreement. Zillow designed an automated “trumping” algorithm to determine which photos to display on the listing platform. This system gave preference to photos with evergreen rights in order to design a system avoiding copyright infringement. Because VHT provided the agreement designation for each provided photo, Zillow also did not exert control over these photos.

Direct liability: Zillow avoided direct liability on the 2,093 digs photos that users copied to their personal boards but were not added to Zillow’s searchable database, based on the immunity granted qualified ISP’s under the Copyright Act for user generated content.  Photos designated by Zillow as searchable requires a moderator to designate the photo for tagging. The mere possibility that Zillow had the opportunity to moderate and tag these photos was not sufficient to transform Zillow from a passive host to an active one.

Fair Use: In response to the 3,921 searchable photos which Zillow moderators personally tagged, Zillow contends that digs’ searchable function amounts to fair use as the use was “transformative”. The past two decades has been wrought with cases involving the transformative nature of search engines. Important to the determination is whether the use serves the same function as the original use, whether the entirety of the work is used and whether the new use promotes the purposes of copyright. Merely to use the label of “search engine” is not dispositive and the court must assess each case holistically.

The Ninth Circuit disagreed that Zillow’s use was transformative. First, Zillow’s use of VHT’s photos did not change their original purpose, to use the photos to artfully depict rooms within real estate properties. Digs also uses the entirety of the image and Zillow supersedes VHT’s purpose in creating the images in the first place. A copying of full works may be justified if it allows consumers to recognize the image and decide whether to search for more information, such as Google’s Google Books project in which snippets of books were provided in a searchable database, which would otherwise take an exorbitant amount of time to find. As the Second Circuit stated, if Google Books “tests the boundaries of fair use”, then Zillow certainly exceeds it.

Secondary Liability The Ninth Circuit found in favor of Zillow on secondary liability based on a “simple measures” standard of the DMCA and the inability of Zillow to police its users. A computer operator is liable for contributory liability if they can take simple measures to prevent further copyright infringement, yet the operator continue providing access to those works. Here, in order to take down large numbers of photos, Zillow required a Zillow image ID contained in the URL of the image location. Zillow posts multiple copies of its images throughout its site, so simply identifying the image does not allow them to easily find the sources of infringement. It was VHT’s burden to provide these URL’s. Additionally, VHT’s argument that Zillow had the ability to employ watermark detection technology is unavailing, because VHT rarely watermarked their photos. Zillow also lacked the practical ability to police its users infringing content. As the Ninth Circuit stated, “Once … photos were uploaded to the listing platform … ferreting out claimed infringement through use on digs was beyond hunting for a needle in a haystack.” VHT failed to provide URL’s to specific sources of infringement and did not employ watermarking technology. These factors combined with Zillow’s inability to police its users’ activity weighed in Zillow’s favor.

Damages: The Ninth Circuit took issue with the District Court’s determination of damages and remanded the case to the district court to determine whether the VHT photos used on digs were part of a compilation or if they are individual photos for purpose of statutory damages. A compilation is entitled to a single award of statutory damages and VHT was seeking damages for each individual photo, which Zillow used.

DMLA joined other photography associations and filed an amicus brief supporting VHT’s position that a determination that all the photos in a group database registration were a compilation would threaten photographers’ ability to enforce their copyrights. DMLA noted that the purpose of group registration under the Copyright Act was to alleviate the financial and administrative burdens of registering large numbers of works. Precluding individual protection of works within a group registration would discourage artists from seeking protection (a status required to file a copyright suit) if registration of a group work could obliterate any protection in infringements of individual works within that group work.

Takeaway: The Ninth Circuit’s decision highlights the protections the DMCA offers internet companies. The court looked at Zillow’s proactive measures in preventing liability, namely by ensuring that VHT controlled their photos as much as possible, setting up automated trumping systems to sort through photos, and being very proactive in response to VHT’s claims of infringement. However, the court did not require additional measures, such as watermarking. It also highlights how difficult the DMCA is on content creators, especially where many images are infringed. It was VHT burden to identify each Zillow URL and not provide merely provide copies of the images to Zillow. On April 8, 2019 the Copyright Office is holding a roundtable on the section of the DMCA relating to the notice required to be given to ISP’s by content holders, and ISP’s responses and the burdens on the parties.  A representative of DMLA will be attending.

DMLA Board Welcomes New Members

DMLA is pleased to announce two new members to its 2018-2020 Board.  Ben Sachs, will serve as a Member-at-Large on the Executive Board.  Ben is currently the SVP and General Counsel for Storyblocks, a subscription stock media service.  His video background will be an asset to the  association.

James Allsworth joins the Board as the Chair of the Ethics and Grievance Committee.  James is the Contributor Experience Manager at Alamy and has worked there since 2004.  His experience with photographers and content will be beneficial to our discussions going forward.

We still have openings on many of our committees and encourage your participation.  Please contact Cathy Aron, DMLA Executive Director, cathy@digitalmedialicensing.org,  if you are interested.

 

StockFood takes over travel photo agency Look

On April 1, 2019, StockFood GmbH will take over the German travel photo agency Look. All employees, including their long-standing customer advisors and photo editors, will join the StockFood team.

For decades, Look (lookphotos.com) has been known as the leading German travel photo agency. From the very beginning, the name “Look” has been synonymous with the group’s mission. The agency was founded in 1989 in Munich by a small group of professional travel and sports photographers. Look photographers aimed to see the world through different eyes. No journey would be too great to keep them from taking the best photos from around the world and bringing them to you. Over the course of 30 years, Look has developed into one of the most sought-after specialist providers of high-quality travel and outdoor photography. The collection is focused on professional travel photos from around the world and is comprised of about 700,000 exclusive images.

Starting in April 2019, Look will be integrated with the professional agencies that operate under the umbrella of StockFood. StockFood will be taking all employees on board and continue to run Look as an independent brand within its broad portfolio. Following a complete relaunch in April 2019, the website www.lookphotos.com will gradually be enriched with many new functions. Look’s popular place within the Picturemaxx portal will continue and be expanded.

Within the stock photo industry, StockFood is the only global market leader from Germany. The agency is represented in 18 countries by its own representatives and is originally known to be the world leader in food photography. StockFood was founded in Munich in 1979. Today, the company operates a number of other specialized premium agencies. Each of these agencies is among the leading providers in their respective sectors (home, beauty, garden, health, etc.). The concept of marketing highly specialized niche content, each with its own team of specialists and on a branded technological platform has made StockFood one of the most successful European photo agencies.

Martin Skultety, Managing Director of StockFood GmbH, says: “We are delighted to add Look as another outstanding special collection to our portfolio of niche agencies. Look represents passionate travel photography. A multitude of incredibly talented photographers continue to discover our planet from new perspectives. Look photographers are taking us along on their journeys and invite us to marvel and dream. Our goal will be to inspire many more premium image users to literally take a look and to further expand the digital marketing channels for Look photographers.”

Thomas Wild, Managing Director of Look GmbH, emphasizes: “We are handing over Look to a very renowned photo agency and trust StockFood completely on their future path. No other agency has a similar track record of successfully marketing niche photo collections. All our founders and the many long-standing photographers are looking forward to exciting developments in the coming years”.

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Seebrücke im Gegenlicht, Ahlbeck, Usedom, Mecklenburg-Vorpommern, Deutschland

United States Copyright Office Updated Draft of Compendium

The U.S. Copyright Office has released a public draft of an updated Compendium of U.S. Copyright Office Practices, Third Edition. On April 10, at 2 p.m. ET, the Office will hold a webinar to review the proposed revisions. The draft as well as the webinar can be accessed here. The updates reflect “changes to the Office’s practices and procedures, as well as recent changes in the law,” including the 2017 Star Athletica decision, the Fourth Estate case, and various rulemakings and proposals. Comments are due by May 14. More information is available here.

Two Unanimous Supreme Court Opinions Regarding the Copyright Act

It was an eventful day for copyright law on Monday, March 4, as the Supreme Court of the United States issued two unanimous opinions, both involving provisions of the Copyright Act.  The decisions were fittingly both issued on the 110th anniversary of the 1909 Copyright Act. The office of our counsel, Nancy Wolff, Cowan, DeBaets, Abrahams & Sheppard LLC,  wrote a review of these decisions and how they will impact copyright infringement cases going forward.

You can read the review of Public Benefit Corp v Wall Street.com and LLC and Rimini Street , Inc v Oracle USA, Inc. here

Supreme Court Hands Down Critical Decisions in Fourth Estate Public Benefit Corp. v. Wall-Street.com, LLCand Rimini Street, Inc. v. Oracle USA, Inc.,Resolving Circuit Splits Over Interpretation of Copyright Act Provisions

It was an eventful day for copyright law on Monday, March 4, as the Supreme Court of the United States issued two unanimous opinions, both involving provisions of the Copyright Act.  The decisions were fittingly both issued on the 110th anniversary of the 1909 Copyright Act.

In the first case, Fourth Estate Public Benefit Corp. v. Wall-Street.com, LLC,No. 17–571, the Court, in an opinion authored by Justice Ginsburg, resolved a long-standing circuit split over whether a copyright owner can sue in federal court with only a copyright application in hand, or whether a completed registration is necessary.  The Court held that “registration . . . has been made” under Section 411(a) of the Copyright Act—and thus an infringement suit may be instituted—when the Copyright Office grants or denies registration after evaluating the copyright application (coined the “registration approach”) rather than when a copyright owner merely submits the application, materials, and fee required for the registration to begin processing (the “application approach”).

In the second case, Rimini Street, Inc. v. Oracle USA, Inc., No. 17-1625, Justice Kavanaugh delivered the option for the Court, holding that Section 505 of the Copyright Act, which allows a party to recover “full costs,” does not authorize appellate courts to award litigation costs beyond the categories enumerated by Congress in the general costs statute codified at 28 U.S.C. § 1821 and § 1920.  Such “costs” are limited to fees for the clerk and marshal; transcript, copyright, and docketing fees; disbursements for printing and witnesses; and the compensation of court-appointed experts and certain special interpretation services. The Court rejected Oracle’s position that “full costs” under Section 505 included expert witness fees, electronic discovery expenses, and jury consultant fees.

Both of the Court’s determinations are instructive, as they clarify the legal landscape for copyright litigants who have been grappling with inconsistent applications of the Copyright Act for years.

The “registration approach” adopted in Fourth Estateincentivizes copyright owners—more than ever—to register works with the Copyright Office and will likely incite an uptick in registrations. While there were many benefits to registration prior to this decision, now, if a copyright owner fails to register works prior to discovering an infringement, she will have to wait an average of seven months to sue (the Copyright Office’s average processing time), and the work may continue to be infringed without recourse in the interim.  There is, of course, the option of invoking the Copyright Office’s Special Handling process, but it comes with a $800 special handling fee, which may not be an attractive or feasible alternative for some.

Furthermore, creators who have yet to register works and are running up against the three-year statute of limitations for infringement may be out of luck if they file an application and the Copyright Office does not process it in time.  The best practice for content owners is to apply for registration as soon as possible, even before infringement is anticipated or suspected.  Those who have filed lawsuits based on applications that have not yet been processed should take advantage of the Special Handling process, if possible, otherwise the claim may ultimately be dismissed as untimely.

The limitation on recoverable fees fashioned by the Rimini Street decision may also have far-reaching implications, especially for individual creators and litigants who cannot bear high litigation costs without the chance for recovery.  The ruling sounded a death knell for a copyright litigant’s ability to recover fees for expert witnesses, electronic discovery platforms, and jury consultants, which have become increasingly prevalent in copyright cases in the digital age.

For example, while music and software cases have almost always involved experts, matters involving “viral” infringements often call for specialized experts to address novel copyright issues.  In such highly technical cases, retention of a knowledgeable expert may make or break the case, making the choice of whether to hire without the option for recovery of those fees all the more difficult, especially for those unable to afford the costs.  Additionally, as the use of e-discovery platforms has become nearly ubiquitous, payment for such services has become a necessity for a litigant to maintain an equal footing with their opponent.

The Rimini Street ruling will certainly force copyright litigants to face difficult decisions in how they want to proceed with their case, especially if they are facing an opponent with deep pockets who can afford to hire numerous experts, pay for e-discovery platforms, and retain jury consultants.  Clients should discuss their financial limitations with counsel before deciding to commence a copyright action or how to defend against a copyright action, as they may have to bear the burden of certain unrecoverable costs to prevail.