Tag Archives: summary judgment

COURT PERMITS COPYRIGHT CLAIM TO PROCEED DESPITE REGISTRATION ERROR

Cowan DeBaets Abrahams & Sheppard, LLP by Mikaela Gross and Nancy Wolff

For many copyright owners, especially those attempting to register works of visual arts, determining whether a work is published or unpublished for registration purposes is one of the more challenging issues and an impediment to registration. The District Court of the Southern District of New York, in Archie MD, Inc. v. Elsevier, Inc., (No. 16-CV-6614 (JSR), 2017 WL 3601180 (S.D.N.Y. Aug. 20, 2017)) recently clarified the standard by which a copyright registration may be considered valid despite containing inaccurate information.

In 2005, Archie MD, Inc. entered into an Animation License Agreement (“ALA”) with the publisher Elsevier, Inc., under which Elsevier would license Archie’s library of 3-D medical animations for use in its various publications. About two weeks after entering into the ALA, and after Archie had delivered the works to Elsevier, Archie submitted a single copyright registration application for a group of unpublished works. This registration included the work at issue in this case, an animation entitled “Cell Differentiation.” The Copyright Office eventually registered the group of works on August 15, 2005.

In 2014, Archie gave Elsevier notice that it did not intend to renew the ALA, and the ALA expired on July 1, 2015. Archie subsequently file a copyright infringement action against Elsevier, alleging that after the expiration date, Elsevier continued to use hundreds previously licensed animations under the ALA and created unauthorized derivative works.

Both parties filed motions for summary judgment, and the SDNY granted defendant Elsevier’s motion as to all but two of Elsevier’s new animations, on the grounds that Elsevier’s continued use of previously licensed animations did not constitute unauthorized use under the ALA and most of the new animations by Elsevier were not substantially similar to Archie’s animations. As to the remaining claims based on the “Cell Differentiation” animation, Elsevier contended that Archie’s copyright registration in unpublished works was invalid because the work was in fact published, and as a result, the court should dismiss Archie’s claim in its entirety. The court denied Elsevier’s motion for summary judgement as to “Cell Differentiation” on the basis that although the registration for “Cell Differentiation” contained an inaccuracy (namely that the work was unpublished, when it in fact was), this was not fatal to the registration under 17 U.S.C. § 411(b)(1).

Section 411(b)(1) of the U.S. Copyright Act explains that a certificate of registration issued by the Copyright Office satisfies the registration prerequisite for filing a copyright infringement action regardless of the existence of inaccurate information in the certificate “unless— (A) the inaccurate information was included on the application for copyright registration with knowledge that it was inaccurate; and (B) the inaccuracy of the information, if known, would have caused the Register of Copyrights to refuse registration.” To determine whether Archie’s registration failed to satisfy this prerequisite, the court had to answer two questions: first, whether or not “Cell Differentiation” was published or unpublished, and second, if it was published, whether this inaccuracy on the certificate of registration was fatal to the registration’s validity.

As to the first question, the court held that “Cell Differentiation” was in fact published when Archie licensed and delivered the file to Elsevier. Reasoning that Archie’s delivery of the “Cell Differentiation” digital file pursuant to worldwide license to, among other things, distribute “Cell Differentiation” to the public, satisfies the Copyright Act’s definition of publication under 17 U.S.C. § 101 because it constitutes an “offering to distribute copies . . . to a group of persons for purposes of further distribution.” That Elsevier had not yet made any further distributions of “Cell Differentiation” at the time the copyright registration application was filed was irrelevant, because the licensing and delivery of the files was itself an offering.

Because the certificate of registration listed “Cell Differentiation” as unpublished, the court turned to the statute to answer the second question. If an applicant knew its application contained inaccurate information, and if the Register of Copyrights would have refused registration had she known of this inaccurate information, then a subsequent registration certificate is invalid for purposes of filing a copyright infringement action. 17 U.S.C. § 411(b)(2) requires that when an inaccuracy on a certification of registration is discovered, a court must ask the Register of Copyrights “whether the inaccurate information, if known, would have caused the Register of Copyrights to refuse registration.” The Register advised the court that she would have denied the application had she known of the inaccuracy in labeling “Cell Differentiation” unpublished. The key issue was whether Archie knew of the inaccuracy. Because the question of whether licensing a work constitutes publication was “an unsettled legal question at the time” Archie filed its copyright registration application in 2005, the court reasoned that Archie did not know of the inaccuracy. As a result Archi was able to proceed on its copyright claim for the work “Cell Differentiation”.

Publication remains a thorn in copyright owner’s side. While the plaintiff in this case was not considered to have knowledge that its works were published at the time of registration, those filing registrations after the later cases clarifying what is published will no longer have the benefit of this uncertainty. Because the Copyright Office would deny registration of an application with inaccurate information as to the works’ publication status, it is highly recommended that creators register works of visual art before any licensing agreements are signed or files are delivered for further distribution. Otherwise, published works, if photographs, can be registered by the photographer under a group registration of photographs application, but published and unpublished works are still required to be filed separately. Until this requirement is revised, visual artists will continue to face impediments to successful and effortless copyright registration.

 

 

 

Grant Heilman Copyright Claims against MCGraw Hill May Proceed Subject to Further Evidence

 by Nancy Wolff, PACA Counsel

Grant Heilman Photography, Inc. v. McGraw-Hill Company

Prior to a trial over 2395 alleged instances of copyright infringement against text book publisher McGraw Hill Company, Grant Heilman Photography (GHP) brought a motion for partial summary judgment for copyright infringement on 57 of the images and to seek dismissal of a number of the publisher’s affirmative defenses. On June 26th the federal Court for the Easter District Court of Pennsylvania denied the motion for partial summary judgment without prejudice and allowed GHP copyright claims on those images to proceed based on issues of fact that could be resolved with additional evidence.  Read the whole story here.

Grant Heilman Copyright Claims against MCGraw Hill May Proceed Subject to Further Evidence

 by Nancy Wolff, PACA Counsel

Grant Heilman Photography, Inc. v. McGraw-Hill Company

Prior to a trial over 2395 alleged instances of copyright infringement against text book publisher McGraw Hill Company, Grant Heilman Photography (GHP) brought a motion for partial summary judgment for copyright infringement on 57 of the images and to seek dismissal of a number of the publisher’s affirmative defenses. On June 26th the federal Court for the Easter District Court of Pennsylvania denied the motion for partial summary judgment without prejudice and allowed GHP copyright claims on those images to proceed based on issues of fact that could be resolved with additional evidence. The affirmative defenses raised various issues including whether GHP had standing in the case; if McGraw-Hill’s use of the images constituted copyright infringement; under implied licenses, and whether the statute of limitations for bringing an infringement claim had expired.

McGraw-Hill contested that GHP had standing to bring copyright infringement claims on behalf of their contributors, siting a Ninth Circuit case Righthaven v Hoehn that denied standing to sue based on an assignment of only the bare right to sue without any of the exclusive rights under copyright such as the right to  authorize reproductions, distributions and to create derivative works .     GHP contributor agreements and subsequent riders, however, granted GHP the exclusive rights to exploit the copyrighted works and provided sufficient ownership rights to convince the court that GHP had enough ownership interest in the photographs and their copyrights to bring a claim for infringement.

Second, McGraw-Hill attempted to claim that no actual copyright infringement had occurred even though its use in many instances had exceeded written license agreements.  The Court examined whether McGraw-Hill’s alleged infringements qualified as copyright infringements using a two part test: the first requiring that a work have a valid copyright registration, and second, that there has been an unauthorized use of that registered work.  GHP satisfied the first part by providing evidence of registrations for each of the photographs in question.  The second part, however, was a more complicated matter.  McGraw-Hill claimed that while it may have exceeded the original agreed upon terms, it had established implied licenses with GHP to allow for an increased use of the images through conduct, course of dealing and its interactions with GHP over the years.

The Third Circuit has not explicitly ruled on implied licenses, leaving no binding precedent upon which to base the current decision.  Similar implied licenses have, however, formed the basis for decisions in other districts’ court decisions with conflicting results.  Two district courts, one in Arizona and another in Colorado, have held that an implied license cannot be found through conduct and that permission must be requested and granted in order to use the photos in excess of the license terms.  Other district courts, including in New York and Alaska, have held that conduct can be used as the basis of an implied license.  Here, the court concluded that even if the Third Circuit were to allow an implied license to affect the terms of an agreement in this regard, McGraw-Hill’s conduct with GHP did not support an implied license to use the images beyond original invoice terms.  McGraw-Hill routinely requested permission from GHP before exceeding the use and GHP had correspondence reiterating that rights were only granted upon payment of invoice before publications and all past GHP retroactive licenses were identified as uses without permission. As a result, the court determined that McGraw-Hill had infringed on GHP’s copyrights.

Lastly, the Court examined whether the statute of limitations had run and barred GHP’s copyright infringement claim for McGraw-Hill’s use of the 57 photographs in question.  In this circuit, a copyright infringement action must either be brought within three years of the infringement having taken place, or three years of when the party infringed upon should have discovered that the infringement occurred (referred to as the “Discovery Rule”).  Importantly, the court stated that a recent Supreme Court case looking at laches under copyright (Petrella v. Metro-Goldwyn) did not overrule the Third Circuit Discovery Rule.

McGraw-Hill presented evidence which showed that GHP had knowledge of the publisher’s pattern of infringing activities dating back to 1998.  McGraw-Hill did not dispute that it had infringed on certain GHP photography copyrights, but that none of the infringements were actionable as the fell outside of the three year statute of limitations.  GHP brought forward no clear evidence of infringements within the three-year period.

Consequently the court denied the motion for summary judgment on the grounds that there remained questions of material fact regarding the statute of limitations issue and permitted GHP to provide additional evidence.  Depending on whether GHP can present any new evidence which would point to their lack of knowledge of these infringements, or if there were any other infringements from within the applicable time period, McGraw-Hill may be liable for copyright infringement and GHP may be able to recover damages for these 57 infringing uses. Remaining for trial are the other more than 2000 instances of copyright infringement.