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
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 joins in amicus brief in VHT v Zillow, supporting VHT’s award of statutory damages based on number of infringed images under a database group registration of photographs
On Monday December 18, 2017, DMLA joined NPPA, ASMP and GAG in submitting an amicus brief before the Ninth Circuit Court of Appeals in support of VHT, a real estate photography company against Zillow, an online real estate platform on the narrow issue of the proper calculation of statutory damages based on multiple infringed images registered using a database registration consisting predominantly of photographs. The appeal by Zillow argues, among other issues, that the district court erred in awarding statutory damages to VHT based on each image infringed having independent economic value, despite being registered under a single database registration of photographs, which Zillow argues should only entitle VHT to one award of statutory damages regardless of the massive number of images infringed. The relevant question in the Zillow case hinges on what a court considers a “work” under Section 504(c)(1) of the Copyright Act, each separate image filed within the application, or the database as a whole, which would be one work.
The amicus brief supports the view that the independent value test applied by the lower court, and previously adopted by the Ninth Circuit is the correct one. The amicus brief describes the historical background of the various group registration procedures designed by the U.S. Copyright Office, to ease the administrative burden of registration of photographs which has unique challenges given the amount of images a photographer can create in a day. In particular, the database registration of photographs was developed with input from DMLA and its members (formerly PACA) to protect images distributed through online platforms, which formerly were distributed via published print catalogs. The amici argue that the form of registration should have no impact on whether the independent works covered by the registration should be considered a single work, entitled to a single statutory damage or multiple works entitled to damages for each work infringed. The outcome of the Ninth Circuit’s ruling could have a major impact on the ability of image libraries and their contributing photographers to recover appropriate damages from infringers who use more than one of their photographs without permission, based on group registration, particularly those in the Ninth’s Circuit’s jurisdiction which includes California, Oregon, Washington state, Idaho, Montana, Nevada, Arizona, Alaska and Hawaii.
The brief, which you can find here, was filed by NPPA’s Deputy General Counsel, Alicia Calzada, with support from DMLA’s attorneys Nancy Wolff and Marissa Lewis of Cowan, DeBaets , Abrahams and Sheppard LLP. An amicus brief on another important issue in the case—secondary liability—was filed in support of VHT by the Copyright Alliance (link: http://copyrightalliance.org/wp-content/uploads/2017/12/Copyright-Alliance-VHT-v-Zillow-Amicus-Brief.pdf ), where DMLA is a member.
In two recent jury trials, both Grant Heilman Photography Inc. (Grant Heilman) and Panoramic Images were awarded copyright damages against textbook publishers resulting from the publication of images outside of the scope of the license terms.
Grant Heilman brought a copyright infringement action in Federal Court, Eastern District of Pennsylvania against the McGraw-Hill Companies. This trial was a bellwether trial, meaning that the trial was limited to a representative sample of the many images that were alleged to be used outside the scope of the license, to give the parties a feel of how a jury would decide the issues on the other images. The jury was asked to determine a number of issues and all were answered in Grant Heilman’s favor. One issued involved the validity of Grant Heilman’s copyright registrations in some of the images that were being contested by the publisher. The jury did not agree that the publisher had presented evidence that the copyright registrations were invalid, upholding Grant Heilman’s registration practices.
In this sample infringement case, the copyright registrations were not filed before the infringing use, consequently Grant Heilman was limited to seeking actual damages, including profits and could not elect statutory damages. Nonetheless Grant Heilman was awarded a total of $127, 087, which included profits and actual damages.
Importantly, the jury rejected the publisher’s theory that Grant Heilman should have known about “storm warnings” (general knowledge of excessive use of images by textbook publishers) or should have been on notice that the publisher was not complying with its license agreements prior to 2009. This is significant because if the publisher was successful in claiming that Graham Heilman should’ve known of “storm warnings”, then the statute of limitations may have reduced the number of years that damages could be awarded. Because the jury found in Grant Heilman’s favor, it was not precluded from bringing claims for infringements prior to April 18, 2009. Presumably, the parties will either have a trial or settle the remaining claims that were not tried in this bellwether trial.
Panoramic Images brought a similar action against John Wiley & Sons, Inc. in Federal District Court of the Northern District of Illinois. This trial involved damages for six images in excessive of license terms. As in the Grant Heilman case, there was an issue as to whether Panoramic should have known that the publisher was not complying with its license agreements before it filed its claim, which would have limited the amount of years Panoramic could recover damages. The jury did not find that Panoramic should have known that its licenses were not complied with and did not cut off damages before December 17, 2009. In this instance, 5 of the 6 pictures were registered before the infringement, permitting the jury to award statutory damages.
The jury found that Wiley’s infringement of the 5 photographs was willful and for 4 of the images the jury awarded damages of $62,500 each, for a total of $250,000.
For one cover image, the excess use was substantial, and the jury awarded the maximum statutory damages of $150,000. For another individual image that Panoramic Images had not registere3d before the use, the jury awarded actual damages of $500 and profits of $3000. In total the jury award for all six images was $403,500.
Both Grant Heilman and Panoramic Images were represented by the firm of Harmon & Seidman.