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Louis Psihoyos and James P. Reed , Company v. Pearson Education

February 29, 2012

LOUIS PSIHOYOS AND JAMES P. REED , COMPANY,
PLAINTIFFS,
v.
PEARSON EDUCATION, INC.; R.R. DONNELLEY & SONS COMPANY; COURIER CORPORATION; AND FAILSAFE MEDIA
DEFENDANTS.



The opinion of the court was delivered by: J. Paul Oetken, District Judge:

MEMORANDUM AND ORDER

Plaintiffs Louis Psihoyos and James P. Reed bring this action for copyright infringement against Defendants Pearson Education, Inc. ("Pearson") and R.R. Donnelley & Sons Company, Courier Corporation, and Failsafe Media Company (collectively, the "Printer Defendants"). Plaintiffs allege that Pearson published, and the Printer Defendants printed, books containing unauthorized copies of images to which Plaintiffs hold the copyright.

Plaintiffs move, pursuant to Rule 56 of the Federal Rules of Civil Procedure ("Rule 56"), for summary judgment on their copyright infringement claims against Defendants, and for summary judgment that, as a matter of law, the infringements committed by Defendants were "willful" for purposes of 17 U.S.C. § 504(c)(2). (Dkt. No. 73.)

For the reasons that follow, Plaintiffs' motion for summary judgment on copyright infringement is denied in part and granted in part, and Plaintiffs' motion for summary judgment as to willfulness is denied.

I. Background

A. Factual Background

Unless otherwise noted, the following facts are undisputed and are derived from the parties' Local Civil Rule 56.1 statements, affidavits, and other submissions. The Court construes all evidence in the light most favorable to the non-moving party and draws all inferences in the non-moving party's favor. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250, 255 (1986).

1.The Parties

Plaintiffs Louis Psihoyos and James P. Reed are professional photographers who make their livings, in part, by licensing their photographs to third parties.

Defendant Pearson is a publishing company specializing in educational publications. The Printer Defendants are printing companies that published the allegedly infringing publications at issue in the case.

2.Works at Issue

Plaintiffs claim that Defendants infringed their copyrights in the following four works, each of which was created by one of the two Plaintiffs. "Tyrannosaurus Being Cleaned" ("Tyrannosaurus") is a photograph taken by Mr. Psihoyos. Mr. Psihoyos registered the copyright in the photograph under registration number VA 1-747-473 in November 2010. (Declaration of Daniel A. Nelson in Support of Plaintiffs' Motion for Partial Summary Judgment ("Nelson Dec.") Exs. 21-22.) "One Hundred Monkeys Type Shakespeare" ("Monkeys") is an image depicting several monkeys in various poses around computer terminals in what appears to be a library reading room. The image is a digital composite of photographs taken by Mr. Psihoyos. Mr. Psihoyos registered the copyright in this image under registration VA 888-300 in December 1997. (Nelson Dec. Exs. 15-17.) "Vintage Sketch of an Iguanodon" ("Iguanodon") is a photograph taken by Mr. Psihoyos. Mr. Psihoyos registered the copyright in this photograph under registration number TX 4-083-613 in August 1995. (Nelson Dec. Exs. 18-20.) "Storm Researchers in Action" ("Storm") is a photograph taken by Mr. Reed. Mr. Reed registered the copyright in this photograph under registration number TX 6-912-618 in November 2007. (Nelson Dec. Exs. 23-24.)

3.Relationship Among the Parties

Plaintiffs licensed their photographs through stock photography agencies, including Visions of Tomorrow, Inc. d/b/a Science Faction ("Science Faction"). Science Faction licensed these images directly, and also, at times, licensed its catalogue through sub-agents, including Getty Images ("Getty"). At all times relevant to this case, until December 12, 2008, the four photographs at issue were represented by both Science Faction and Getty (collectively, the "Agencies"). (Defendants' Statement of Additional Material Facts Pursuant to Local Rule 56.1 ("Defs. 56.1 Stmt.") ¶ 79.)

Pearson includes many photographs and images in its publications. It typically licenses those images from agencies such as Getty and Science Faction.

In broad terms, the relationship between Pearson and the Agencies was as follows: Pearson obtained access to view images offered by the Agencies, in order to determine which images were appropriate for their various publications. Pearson would decide which images it wanted to use for a given publication, and would then negotiate licenses to use those images. Pearson and the relevant agency would then enter into non-exclusive license agreements under which permission was granted for a specified use of each image in exchange for payment of an agreed-upon fee.

The relationship and course of conduct among the parties was governed, in part, by a series of different agreements.

a. License Agreements

In order to obtain permission to publish an image represented by an agency, Pearson would enter into a license agreement with the agency for that image. The record contains examples of the license agreements used by Getty and Science Faction. These agreements- which appear to be form agreements that were attached to the invoices sent by the Agencies to Pearson-govern Pearson's usage of the particular images.*fn1 The Getty Images Editorial Rights Managed and Rights-Ready Image and Footage License Agreement ("Getty License Agreement") grants "a non-exclusive, non-sublicensable and non-assignable right to use and Reproduce the Licensed Material . . . solely to the extent explicitly stated in th[e] Agreement." (Nelson Dec. Ex. 43, Getty License Agreement ¶ 2.1.) The agreement also provides that "[n]o ownership or copyright in any Licensed Material shall pass to Licensee by the issuance of the license contained in this Agreement. Except as expressly stated in this Agreement, Getty Images grants Licensee no right or license, express or implied, to the Licensed Material." (Id. ¶ 3.1.) The agreement further provides that

[a]ny use of Licensed Material in a manner not expressly authorized by this Agreement or in breach of a term of this Agreement constitutes copyright infringement, entitling Getty Images to exercise all rights and remedies available to it under copyright laws around the world. Licensee shall be responsible for any damages resulting from any such copyright infringement, including any claims by a third party. (Id. ¶ 10.1.) Finally, the Getty License Agreement states:

No action of either party, other than express written waiver, may be construed as a waiver of any provisions of this Agreement. A delay on the part of either party in the exercise of its rights or remedies will not operate as a waiver of such rights or remedies, and a single or partial exercise by either party of any such rights or remedies will not preclude other or further exercise of that right or remedy. A waiver of a right or remedy on any one occasion will not be construed as a bar to or waiver of rights or remedies on any other occasion. (Id. ¶ 10.7.)*fn2

b. Image Storage Agreements

One way in which Pearson was able to view the Agencies' images to make selections for its publications was by placing portions of the Agencies' catalogue on an internal database called the Pearson Asset Library ("PAL"). This process was governed by separate contracts with the Agencies. In June 2005, Getty and Pearson entered into Getty's Image Storage Agreement. (Nelson Dec. Ex. 3, Getty Images' Image Storage Agreement ("ISA").)

Under that agreement, Getty agreed to "deliver to Pearson, for inclusion in the [PAL], digital copies of images . . . pursuant to Pearson's research requests or special requests made periodically by Pearson." (Id. at 1.) Getty granted to Pearson a non-exclusive license to view the images, and to reproduce the images "in order to store the Images, on the PAL for the purpose of aiding Pearson in its image licensing decisions." (Id.)

The parties carefully limited the rights granted by the Image Storage Agreement:

Pearson acknowledges that no actual image reproduction rights, outside of inclusion on the PAL, are granted by this Agreement. Any other use of the Images requires Pearson and Getty Images to enter into a separate license agreement, requiring the payment of license fees to Getty Images by Pearson in exchange for Pearson's right to reproduce and use the Images. Getty Images retains and reserves all rights, title, and interest in and to the Images, except as specifically provided herein. There are no implied licenses to any of the Images.

(Id.)

The agreement further provided that "[d]uring the Term [of the agreement], Getty Images may notify Pearson that it no longer has the right to view an Image or Images for any reason. In that event, Pearson will remove such Image from the PAL." (Id.) The agreement included a warranty by Getty that "it has the full right and authority to enter into and perform this Agreement, including, but not limited to, the right and authority to grant all rights and licenses granted in this Agreement." (Id. at 2.)

Of the four images at issue in this case, the record only confirms that one of them- "Storm"-was included in the PAL. (Defs. 56.1 Stmt. ¶ 119.) The record is not clear on whether the other three images were also included in the PAL. Two of the images- "Tyrannosaurus" and "Iguanodon"-were included in publications issued by Pearson's "Curriculum Group," which did not use the PAL, but this does not mean that the images were not also at one time included in the PAL. (Id. ¶ 118.)

c. Preferred Vendor Agreements

The relationship between Pearson and the Agencies was further governed by what the parties refer to as Preferred Vendor Agreements. These agreements, intended to streamline the licensing process, provided set prices for the licensing of images represented by the particular agency. Under the agreements, the prices were determined by the size and location within the publication of the particular image, as well as the size of the print run and the duration of the usage. (See Nelson Dec. Ex. 31, Preferred Vendor Discount Price Agreement ("PVA").)

The Preferred Vendor Agreements did not grant any actual usage rights to the images. Under the Preferred Vendor Agreement with Getty, the parties agreed that the agreement would serve as an addendum to the License Agreements, and "[e]xcept as specifically provided for [t]herein, th[e Preferred Vendor Agreement] does not broaden the scope of the License Agreement(s)." (Id. at 1.) The parties to the Preferred Vendor Agreement agreed that "individual licenses will be granted by Licensor to Licensee subject to the terms and conditions of the License Agreement(s)." (Id.)*fn3

d. Course of Conduct

The actual operation of these agreements and the licensing process is sharply disputed by the parties, and indeed, forms the core of the parties' disagreement.

Defendants contend that under the Preferred Vendor Agreements, since the price of each license was determined by the size and location within the publication of the images, and that since final decisions about such matters were not made until very late in the production process, a practice developed whereby Defendants would not formally seek a license for the use until, or even after, publication of the work. (See Declaration of Elisabeth Brenzel ("Brenzel Dec.") ¶ 4.) In support of this contention, Defendants have submitted numerous invoices from Getty showing a "start date" of a license (i.e., the date on which the permitted use begins) that is weeks, months, or even over a year earlier than the date of the invoice itself. (See Declaration of Ezra D. Church in Support of Memorandum in Opposition to Plaintiffs' Motion for Summary Judgment and Request Under Rule 56(D) ("Church Dec.") Ex. G.) Defendants submit only two such examples from Science Faction. (See Church Dec. Ex. H.) Defendants contend that representatives of Getty were aware of and approved this practice. (See Brenzel Dec. ¶¶ 7-8 ("Getty were [sic] informed, during regular meetings that took place with Getty's representatives, and never objected to, the practice of receiving billing requests and finalizing permission documents after publication. I personally attended meetings with representatives of Getty where the practice of finalizing billing for permission after publication was discussed."); Church Dec. Ex. C, Transcript of Deposition of Pearson Education, Inc. 30(b)(6), Karen Sanatar ("Sanatar Dep.") at 138:13-139:14.)

In addition to arguing that the relevant contracts speak for themselves, Plaintiffs submit numerous examples of invoices from Science Faction as to which the start date is at, or after, the invoice date. (See Nelson Dec. Exs. 50-74.) Many of those invoices contain additional restrictive language, such as "All other rights are reserved. Additional usages require advancewritten permission and payment." (Ex. 70.) Plaintiffs also submit testimony from representatives of Pearson that Pearson's policy and practice were not to engage in retroactive licensing. (See Nelson Dec. Ex. 26, Transcript of Deposition of Pearson Education, Inc. 30(b)(6), David Jolliffe ("Joliffe Dep.") at 28:20-29:20; Nelson Dec. Ex. 29, Transcript of Deposition of Julie Orr, Vol. I ("Orr. Dep.") at 67:3-68:13.)

As will be discussed further below, there is insufficient evidence in the record to resolve these factual disputes as a matter of law.

4. The Publications at Issue

The specific circumstances giving rise to the instant action are not in dispute. Pearson obtained all four of the images at issue from Getty some time prior to December 2008. (Plaintiffs' Statement of Material Facts Pursuant to Local Rule 56.1 ("Pls. 56.1 Stmt.") ¶ 3.) On December 12, 2008, the sub-agency agreement between Getty and Science Faction ended. (Defs. 56.1 Stmt. ¶ 91.) After that time, Getty was no longer in a position to offer licenses for images that it had previously sub-licensed from Science Faction. The parties do not dispute that Pearson was not notified of this fact at that time. Pearson later sought to obtain licenses from Getty to use the four images at issue in this case in four different publications. Each time, Getty advised Pearson that Getty no longer represented the image in question, and that Pearson would need to communicate directly with Science Faction to obtain a license. All four publications were published at least several months before Pearson reached out to either of the Agencies to obtain a license.

Pearson included the "Tyrannosaurus" image in a publication entitled Intervention Student Reader, Sidewalks Student Reader 4.2, published in early May 2009. (Pls. 56.1 Stmt. ¶ 9.) Pearson did not seek a license from Science Faction for that image until December 18, 2009. On December 22, 2009 Science Faction requested that Pearson identify the publication date. On January 5, 2010, Pearson informed Science Faction that the publication date was May 1, 2009. Science Faction did not send Pearson an invoice or grant Pearson a license to use this image. (Id. ¶ 16.)

Pearson included the "Storm" image in a publication entitled Conceptual Integrated Science Explorations, published on December 26, 2008. (Id. ¶ 22.) The image was included in various ancillary products associated with the title, including an Annotated Instructor's Edition and electronic versions of the book. The image was also included in the second and third printings of the publication in June 2009 and January 2010. On December 1, 2009 Pearson emailed Getty to obtain permission to use several images in the publication, including the "Storm" image. On January 29, 2010, Getty informed Pearson by email that it no longer had the rights to license the "Storm" image because it was part of the Science Faction collection. On February 25, 2010, Pearson emailed Science Faction directly to seek a license. Science Faction requested the date of publication, and Pearson responded that the book was published on "1/2/09." (Id. ¶ 30.) Science Faction did not send Pearson an invoice or grant Pearson a license to use this image. (Id. ¶ 31.)

Pearson included the "Iguanodon" image in a publication entitled Concept Literacy Reader Grade 5, Week 3, Unit 3, "Picturing the Past," published on or about August 28, 2009. (Id. ¶ 34.) The image was also included with various ancillary products associated with this title, published at the same time. On November 24, 2009, Pearson sent an email to Science Faction requesting an invoice and license to publish this image. That request contained a "Work Order" that stated that Pearson was "working on a program entitled Reading," but did not disclose that the publication at issue had already been published. (Nelson Dec. Ex. 11.) On February 1, 2010, Science Faction emailed Pearson to ask the publication date of the book, and the next day, Pearson replied via email that the publication date was "7/24/09." (Nelson Dec. Ex. 12.) Science Faction did not send Pearson an invoice or grant Pearson a license to use this image. (Pls. 56.1 Stmt. ¶ 41.)

Pearson included the "Monkeys" image in a publication entitled Perspectives on Argument, published October 31, 2008. (Pls. 56.1 Stmt. ¶¶ 45-46.) Between April 2009 and September 2009, Pearson issued several different prints of different versions of this title. On January 15, 2010, Pearson emailed Science Faction to seek permission to use the image. On January 20, 2010, in response to Science Faction's question, Pearson sent Science Faction an email stating, "This title was actually published in November of 2008. We initially contacted Getty Images to license this image. However, they have only contacted us 2 weeks ago to inform us that they were never able to license this image and that we would need to contact Science Faction directly." (Nelson Dec. Ex. 13.)

On August 26, 2010, after this litigation had been initiated, Pearson sent Science Faction an email regarding the "Monkeys" image, stating that Pearson "ha[d] not received a response to [its] original permission request sent on December of 2009." (Nelson Dec. Ex. 14.) When asked the publication date, Pearson responded, "The publication is a 2009 copyright and the date was November 15, 2008. Throughout the last year, Pearson has gone through a re-organization and now we are trying to clear up any outstanding invoices or permissions." (Id.) Science Faction did not send Pearson an invoice or grant Pearson a license to use this image.

B. Procedural History

Plaintiffs initiated this action against Pearson on August 5, 2010. Initially, the case was before the Honorable Jed S. Rakoff, United States District Judge.

On September 29, 2010, Pearson moved to dismiss the complaint for failure to state a claim for copyright infringement, arguing that the complaint did not provide any information about the copyright registrations for the works at issue.

On November 2, 2010, the Court held an initial conference in the case. On November 3, 2010, the Court issued a case management plan that allowed amendment of the complaint without leave of court until January 19, 2011. (Dkt. No. 14.)

At the November 2 conference, the Court also heard argument on the motion to dismiss and asked Plaintiffs to submit to Pearson by November 9, 2010 copyright registration numbers for the four images at issue in the complaint. On a conference call held November 8, 2010, Plaintiffs stated that they would not provide this information absent a court order. Accordingly, on November 10, 2010, the Court issued an order to provide the registration numbers to Pearson on pain of contempt. (Dkt. No. 15.) On November 22, 2010, the Court denied Plaintiffs' motion to reconsider the November 10 Order and ordered that Plaintiffs provide the registration numbers by November 24, 2010. (Dkt. No. 20.)

On November 24, 2010, Plaintiffs submitted a letter to the Court and to Pearson purporting to contain the registration numbers associated with the four works at issue.

Accordingly, the Court dismissed Pearson's motion to dismiss as moot on November 30, 2010. (Dkt. No. 21.)

On November 29, 2010, the parties convened a joint conference call to the Court to request the Court's intervention in a discovery dispute between the parties. Specifically, Pearson objected to producing documents relating to all photographs of Plaintiffs that appear in Pearson's publications, seeking to limit discovery to documents relating to the four images at issue in the case. The Court agreed that Plaintiffs' request was "grossly overbroad," noting that parties have "no entitlement to discovery to develop new claims or defenses that are not already identified in the pleadings." (Dkt. No. 22 at 2 (quoting Fed. ...


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