Photographs on the Internet: Circuit Courts Examine Copyright Infringement

Erickson filed the instant lawsuit, contending that Kast's infringing use of the photographs allowed him to pursue new business while avoiding licensing fees. The photographer alleged direct, vicarious, and contributory copyright infringement. He also alleged that Kast's actions were willful, making the infringement subject to enhanced damages under the Copyright Act, 17 U.S.C. Section 504c2.

Kast countered that his website developer included the copyrighted photos without him knowing they were unlicensed. Kast also testified at trial that Only Websites “published the website without his consent and ignored multiple requests to replace the infringing photos.” Finally, Kast argued that he made no money off the website and he had no direct financial benefit from not having paid a license fee on the three photographs.

The district court jury found that Kast had vicariously, contributorily, and willfully infringed Erickson's copyright. It also awarded Erickson total damages of $450,000 pursuant to the copyright statute's terms. Kast appealed to the Ninth Circuit.

It was clear that Only Websites was responsible for the infringing photographs appearing on Kast's website. The circuit court evaluated whether Kast could be held vicariously liable for Only Websites' actions. It looked to see if there was any evidence of direct financial benefit to Kast. Plaintiff had pointed to Kast's failure to pay licensing fees. The court stated in response: “Whether a vicarious infringer's avoidance of licensing fees constitutes a direct financial benefit as a matter of law is a question of first impression ….We hold that it does not.”

While Kast certainly did not pay a license fee, the court explained that Only Websites, the website designer, would have been responsible for that license fee, not Kast. The record contained no evidence that Kast paid Only Websites less for the website design because the designer failed to pay the required license fees. Similarly, there was no allegation that “Kast [was] able to offer services more cheaply or quickly because Only Websites infringed Erickson's copyright.”

The court also rejected Erickson's argument that the website designer was acting as an agent for Kast, thereby rendering Kast vicariously liable. Instead, the panel noted that Only Websites had exceeded the “scope of any agency relationship” when it decided to infringe Ericson's copyright. Therefore, the court overruled the district court's finding of vicarious liability.

Contributory Liability

The circuit court also heard arguments about the district court's jury instructions on contributory liability. The lower court had instructed the jury members to find contributory liability if they saw evidence that Kast knew about the infringement or acted in reckless disregard for the copyrights. In addition, the instruction had ordered the jury to find contributory liability if it found Kast “should have known” his actions infringed Erickson's copyright.

On appeal, Kast argued against the inclusion of the “should have known” language.

The Ninth Circuit noted “inconsistency in [Ninth Circuit] case law on the 'knowledge' element of contributory liability.” Nonetheless, the court held that “Kast has not demonstrated that the jury instructions were plainly erroneous.”

At the same time, the court took issue with the district court connecting a “should have known” standard to willfulness. The lower court had instructed the jury members that they could find Kast's actions willful if they thought he “should have known” that using the photos was copyright infringement. The Ninth Circuit explained that if a person should have known of something, he was negligent, but not necessarily willful. It opined: “We have never held merely negligent conduct to be willful, and we decline to do so now.” Erickson would only be entitled to enhanced statutory damages if Kast's contributory liability was willful. The record contained little evidence to suggest that Kast was reckless, willfully blind, or actually knew of the infringement. Therefore, the court remanded the issue of willfulness to the district court on the existing record.

Why This Case Matters

The Erickson case underscores the importance of obtaining a license to all copyrighted materials. At the same time, the case potentially insulates some website owners from some types of liability for the actions of its website designers. The Ninth Circuit ruled that avoiding license fees by itself does not create the “direct financial benefit” needed to establish vicarious copyright infringement. In addition, while it upheld the district court's finding of contributory liability, it ordered the case remanded. The district court must once again evaluate the defendant's potential willfulness, ignoring any evidence that Kast was negligent. Without a factual record to support a willfulness finding, the previous judgment for the plaintiff of $450,000 in statutory damages is now in jeopardy.

The Fourth Circuit Ruling on Fair Use

In Russell Brammer vs. Violent Hues Productions, LLC and Owner, Fernando Mico, No. 18-1763 (4^th Circuit, April 26, 2019), the plaintiff Brammer is a commercial photographer who licenses his work as stock imagery. In 2011, Brammer shot the “Adams Morgan at Night” photograph in Washington, DC. The photograph shows a busy street at night with the vehicle traffic rendered creatively as blurred red and white light trails. Brammer eventually published a copy of the photo on his website and to Flickr. He provided a copyright notice on Flickr. After publication, Brammer sold prints of the photo for $200 to $300. He also licensed it for online use twice, for $750 and $1,250.

In 2016, defendant Violent Hues found the photo on Flickr. It downloaded the photo, cropped it, and used it without permission or attribution. Defendant placed the photo on a website for a commercial film and music festival in the “Plan your Visit” section. When Brammer sent a cease and desist letter, Violent Hues took down the photo but refused to compensate Brammer for its unauthorized use. Brammer then sued Violent Hues seeking damages and attorney's fees. Violent Hues moved for summary judgement, countering with an affirmative “fair use” defense under 17 U.S.C. Section 107. The district court granted the motion. Brammer appealed the district court's grant of summary judgment.

On appeal, the circuit court discussed at length that the fair use affirmative defense exists to promote “the progress of human thought.” It then considered the four evaluative factors for fair use in light of that purpose: the primary purpose and character of the use, the nature of the work, the amount of the copyrighted material taken, and the effect on the copyright material's marketability. The Fourth Circuit reached the conclusion that Violent Hues' use of Brammer's photograph was not a fair use and “does not serve the interest of copyright law.”

The bulk of the circuit court's decision focused on the first factor, determining and weighing the primary purpose and character of Violent Hues' use of the photograph. Examining the factual record, the court determined that the use was purely commercial. In addition, Violent Hues' use was merely “informational”, and it had not transformed Brammer's photograph so as to add value to society. Instead, it had merely cropped the photograph with no transformative effect.

The court then turned to Violent Hues argument “that the first factor counts in its favor because it acted in good faith.” Previous cases have ruled that bad faith weighs against a finding of fair use. Nonetheless, the court explained that “this approach to bad faith does not necessarily lead to the conclusion that a showing of good faith weighs in favor of finding a secondary use was fair.” First, copyright infringement is a strict liability offense. Second, an affirmative use defense typically takes good faith as a “baseline rule.”

According to the circuit court, the First Circuit is alone in “deriv[ing]” a good faith rule.” In Núñez v. Caribbean Int'l News Corp., 235 F.3d 18, 23 (1st Cir. 2000), the First Circuit found a newspaper's attribution to the copyright holder relevant to the first fair use factor. On the other hand, here, in the Brammer case, the Fourth Circuit “doubt[ed] the validity of such an extension.” In addition, there was no evidence that Violent Hues had even acted with good faith as opposed to negligently. Therefore, the Fourth Circuit ruled the first factor weighed against Violent Hues.

The court easily found the second, third, and fourth factors weighed in Brammer's favor. The second factor, the nature of the work, supported a finding that Brammer held a “thick copyright” because of the photograph's creativity. The third factor, the amount of the copyrighted work used, also weighed in Brammer's favor. Violent Hues had used about half of the photo, an amount the court considered “considerable.” For the fourth factor, the court considered whether conduct like Violent Hues' could have a substantially negative effect on the photograph's marketability. Again, the court sided with Brammer, noting that Violent Hues had “duplicated the heart of the work.” The court also rejected Violent Hues' argument that its use had not hurt Brammer's marketability. It pointed out that two of Brammer's license arrangements came after Violent Hues' use. The Fourth Circuit, unlike the district court, was not swayed by the timing of these licenses. “If the mere fact of subsequent sales served to defeat a claim of market harm, then commercially successful works could hardly ever satisfy this factor.”

In the end, the Fourth Circuit found that none of the fair use evaluative factors weighed in Violent Hues' favor. The Court noted that many social media websites on the Internet are based on “participatory sharing-or copying-of content.” It “express[ed] no opinion as to whether such sharing constitutes fair use.” At the same time, Violent Hues' use of the photograph was not at all comparable to sharing with permission. Instead, Violent Hues simply took the photograph to make its website “more visually interesting.” The Court concluded there was nothing about the Internet context that would make such a taking a fair use. Violent Hues' use simply did not serve the purpose of copyright law.

Why This Case Matters

Violent Hues took Brammer's photograph from Flickr for its own commercial purposes without compensating Brammer. It is not surprising, then, that the Fourth Circuit ruled that the affirmative defense of fair use fails. The case matters, however, in its discussion of intent. Before this case, the First Circuit had previously been the only court to consider good faith in weighing the standard fair use factors. In the Brammer matter, the Fourth Circuit considered good faith and found that it could not factor into a fair use determination, even if bad faith can. Indeed, here, there was no evidence in this case of good faith.

Photographs on the Internet

Both the Ninth Circuit's Erickson and the Fourth Circuit's Brammer cases dealt with copyright infringement of photographs on the Internet. Both cases considered the defendants' intent from different angles. In Erickson, the Ninth Circuit ruled against a “should have known” negligence standard for determining if willfulness exists in applying statutory damages. In Brammer, the Fourth Circuit opined that good faith should not be a factor in determining whether a fair use defense to copyright infringement exists. Perhaps, another court would disagree with the Fourth Circuit if there were more tangible evidence of good faith and other factors mitigated in favor of a fair use defense.

In addition, the Ninth Circuit established new case law regarding vicarious copyright infringement. It ruled that the mere avoidance of license fees does not constitute the requisite “direct financial benefit” to establish this kind of liability. The case also distinguished vicarious liability from contributory liability for copyright infringement.

It is likely that both of these cases will be cited for years to come by those looking to assert their copyright rights in photographs and other material on the Internet. The Fourth Circuit reminds us that “the Internet has made copying as easy as a few clicks of a button and that much of this copying serves copyright's objectives.” Nonetheless, both of these cases reinforce the axiom just because a photograph appears on the Internet does not mean it is ripe for copying.

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Kyle-Beth Hilfer, Esq. specializes in advertising, marketing, promotions, intellectual property and new media law. A member of the Board of Editors of The Intellectual Property Strategist, she advises clients regularly on their Internet presence and advertising and marketing campaigns to ensure compliance with copyright law and other related statutes. For more information about her law practice, please visit www.kbhilferlaw.com. © Kyle-Beth Hilfer, P.C. 2019.