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Lefkowitz v. McGraw-Hill Global Educ. Holdings, LLC

United States District Court, S.D. New York

June 2, 2014


Page 345

[Copyrighted Material Omitted]

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For LESTER LEFKOWITZ, Plaintiff: Autumn Witt Boyd, LEAD ATTORNEY, PRO HAC VICE, Harmon & Seidman LLC, Chatanooga, TN; Christopher Seidman, LEAD ATTORNEY, Harmon & Seidman LLC (CO), Grand Junction, CO; MAURICE HARMON, LEAD ATTORNEY, PRO HAC VICE, HARMON & SEIDMAN LLC, NEW HOPE, PA; Adam Louis DiLeo, NYC Department of Environmental Protection, Bureau of Legal Affairs, Flushing, NY.

For McGraw-Hill Global Education Holdings, LLC, McGraw-Hill School Education Holdings, LLC, Defendants: Christopher Perry Beall, LEAD ATTORNEY, Levine, Sullivan, Koch & Schulz, LLP(NYC), New York, NY.

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KATHERINE POLK FAILLA, United States District Judge.

Plaintiff Lester Lefkowitz brings this action alleging copyright infringement and breach of contract against Defendants McGraw-Hill Global Education Holdings, LLC and McGraw-Hill School Education Holdings, LLC based on Defendants' alleged use of Plaintiff's stock photographs beyond the scope of Defendants' licenses and without Plaintiff's authorization.[1] Defendants have moved, pursuant to Federal Rule of Civil Procedure 12(c), to dismiss Plaintiff's claims for copyright infringement and breach of contract. Because Plaintiff has sufficiently alleged a claim for copyright infringement and there are insufficient facts before the Court to determine whether Plaintiff's June 2, 2014 copyright infringement claims are barred by the statute of limitations, Defendants' motion in this regard is denied. However, because Plaintiff is estopped from asserting his breach of contract claim, Defendants' motion to dismiss this claim is granted.


A. Plaintiff's Photographs and Licensing Relationships

Plaintiff Lefkowitz is an independent professional photographer residing in New

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York. (FAC ¶ 2). Plaintiff is the owner of an exclusive right under the copyright in the photographs displayed in Exhibit 1 to Plaintiff's FAC (the " Lefkowitz Images" ). ( Id. at ¶ 6, Ex. 1). The Lefkowitz Images have been registered with the United States Copyright Office. ( Id. at ¶ 7).

On or about June 23, 1997, and July 27, 2000, Plaintiff entered into agreements (the " TSM Agreements" ) with The Stock Market (" TSM" ), a stock-photograph licensing agency. (FAC ¶ 9). The TSM Agreements authorized TSM to issue limited licenses for use of the Lefkowitz Images by third parties in exchange for " reasonable license fees." ( Id.). The TSM Agreements also appointed TSM as Plaintiff's " exclusive agent ... with respect to the licensing of [his] stock images[,]" and specified that " TSM would not license any images 'on a buy-out or exclusive basis' without prior consent." ( Id. at ¶ 10, Ex. 2 ¶ 1(d), Ex. 3 ¶ 1(d)).

On March 23, 2000, the TSM Agreements were assigned to Corbis Corporation (" Corbis" ), another company that licenses the rights to photographs and other media. (FAC ¶ 11, Ex. 4). Plaintiff acceded to that assignment " with the understanding that all the terms and conditions of [his] current contract with [TSM would] remain in full force and effect." ( Id.). Under the relevant agreements, both TSM and Corbis were required to pay to Plaintiff a portion of the fees that they received for licensing Plaintiff's images. ( Id. at ¶ 30).

Plaintiff also subsequently entered into a Photographer Representation Agreement with Corbis dated February 12, 2003 (the " Representation Agreement" ), pursuant to which Corbis was authorized to grant third parties limited-use licenses for Plaintiff's photographs. (FAC ¶ 12, Ex. 5). The Representation Agreement also provided:

Corbis, in its sole discretion and without obligation to do so, shall have full and complete authority to make and settle claims or to institute proceedings in Corbis' or your name but at Corbis' expense to recover damages for Accepted Images lost or damaged by customers or other parties and for the unauthorized use of Accepted Images.... Any recovery, after payment of all costs and expenses including outside attorneys' fees, shall be treated as Revenue and you shall receive the appropriate royalty, or 100% in the case of lost/damages images. Following your notification, if Corbis declines to bring such a claim within sixty (60) days, we shall notify you, and you may bring actions in your own name at your own expense and retain all recoveries.

( Id. at Ex. 5).

B. Defendants' Alleged Use of the Lefkowitz Images

Defendants McGraw-Hill Global Education Holdings, LLC and McGraw-Hill School Education Holdings, LLC are global publishers of, among other things, educational materials, including textbooks in which Plaintiff's photographs appear. (FAC ¶ ¶ 3, 8).

Plaintiff alleges that between 1998 and 2011, TSM and Corbis sold Defendants limited licenses to use copies of the Lefkowitz Images in numerous educational publications. (FAC ¶ 15). Although Plaintiff alleges that these licenses were " expressly limited by number of copies, distribution area, image size, language, duration and/or media (print or electronic)" ( id. at ¶ 16), neither party has provided the Court with the relevant licenses for the images at issue. Instead, Plaintiff attaches

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to the FAC two standard Corbis license agreements -- dated November 19, 2011, and June 2005 (the " Corbis Agreements" ) -- that Plaintiff alleges were incorporated into the specific licensing agreements between Corbis and Defendants and thus govern the licensing arrangement. ( Id. at ¶ 32, Ex. 7). Under the Corbis Agreements, among other things:

Corbis in its sole discretion reserves the right to bill [the customer] (and [the customer] hereby agrees to pay) ten (10) times the normal license fee for any unauthorized use, in addition to any other fees, damages, or penalties Corbis may be entitled to under this agreement or applicable law.

( Id. at Ex. 7, Nov. 19, 2001 agreement (the " Ten Times Provision" )).

1. Defendants' Copyright Infringement

As relevant here, Plaintiff identifies 294 instances of alleged infringement by Defendants in Exhibit 1 to the FAC (the " Lefkowitz Chart" ). (FAC, Ex. 1).[3] The Lefkowitz Chart is a summary of information that Plaintiff derived from Plaintiff's royalty statements from TSM and Corbis. ( Id. at ¶ 15). The summary includes a copy of the image, the author and description of the image, the image identification number, the copyright registration number and date, the TSM and Corbis invoice number and date, Defendants' imprint that licensed Plaintiff's image, and for certain instances, the license limits and publication titles. ( Id. at ¶ 15, Ex. 1).

Plaintiff alleges, upon information and belief, that Defendants exceeded the permitted uses under the terms of their licenses with TSM and Corbis for the Lefkowitz Images, in publications both of which Plaintiff is aware and others " yet to be discovered." (FAC ¶ 18). Specifically, Plaintiff contends that Defendants

copied the [Lefkowitz Images] in numbers exceeding the limited print quantities in the licenses, displayed [the Lefkowitz Images] online or in digital media without permission to do so, distributed the [Lefkowitz Images] in geographic territories that were not authorized, and copied [the Lefkowitz Images] in custom, state-specific, language, or international editions without permission to do so.

( Id. at ¶ 28). As for when the infringement occurred, Plaintiff attests that the infringing conduct occurred after the invoice date for each instance on the Lefkowitz Chart. ( Id.).

Plaintiff further alleges that the royalty statements used to generate the Lefkowitz Chart did not include license terms or the specific limits on how the licensed image may be used, such as the number of copies or distribution size, and also did not usually identify the publication in which Plaintiff's photographs would appear. (FAC ¶ 26). Plaintiff maintains that Defendants have custody of this information because it is identified in Defendants' licenses with TSM and Corbis. ( Id. at ¶ 27).[4]

2. Defendants' Pattern of Infringement

The FAC also devotes an entire section to Plaintiff's allegations regarding Defendants'

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alleged pattern of infringement. In particular, Plaintiff alleges that Defendants have a general practice of infringing copyrights on the photographs they license for inclusion in their publications by exceeding the terms of the individual license agreements. (FAC ¶ 23). In support of this allegation, Plaintiff identified six lawsuits in which Defendants have been sued for copyright infringement. ( Id. at ¶ 22). Plaintiff also alleges that Defendants have admitted to violating the scope of their licenses with other photography licensors, and list five examples of such admissions. ( Id. at ΒΆ 24). ...

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