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`Amanda L. Bruss (SBN 246249)
`Harmon Seidman & Bruss, LLC
`8728 East 54th Place
`Denver, CO 80238
`(415) 271-5754
`amanda@harmonseidman.com
`
`Christopher Seidman (SBN 98884)
`Harmon Seidman & Bruss, LLC
`101 South Third Street, Suite 265
`Grand Junction, Colorado 81501
`(970) 245-9075
`chris@harmonseidman.com
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`Attorneys for Plaintiff Peter Menzel
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`
`UNITED STATES DISTRICT COURT
`NORTHERN DISTRICT OF CALIFORNIA
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`PETER MENZEL,
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`v.
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`SCHOLASTIC, INC.,
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`Plaintiff,
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`Defendant.
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`Case No. 17-cv-5499-EMC
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`PLAINTIFF’S REPLY MEMORANDUM
`IN FURTHER SUPPORT OF
`MOTION FOR PARTIAL
`SUMMARY JUDGMENT
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`Date: November 14, 2019
`Time: 1:30 p.m.
`Courtroom: 5 – 17th Floor
`
`Honorable Edward M. Chen
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`ORAL ARGUMENT REQUESTED
`
`MENZEL REPLY MEMORANDUM OF LAW IN SUPPORT OF MOTION FOR SUMMARY JUDGMENT
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`Case 3:17-cv-05499-EMC Document 118 Filed 10/17/19 Page 2 of 20
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`TABLE OF CONTENTS
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`I.
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`INTRODUCTION .................................................................................................................................... 1
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`II. ARGUMENT .............................................................................................................................................. 1
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`A. Scholastic has not shown a dispute of fact as to its liability for the majority of the
`infringements identified in Menzel’s Claim Summary ............................................................................... 1
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`Scholastic has the burden of proof on its license defense ........................................................... 2
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` Menzel’s Claim Summary is not “riddled with errors” ................................................................ 3
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`B. Scholastic has not demonstrated material facts sufficient to avoid judgment as to its
`affirmative defenses ......................................................................................................................................... 5
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`Scholastic’s statute of limitations defense fails as a matter of law ............................................. 5
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`Scholastic ‘breach of contract’ defense is contrary to applicable law and lacks any
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`evidentiary support. .................................................................................................................................... 7
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`Scholastic has failed to show that it infringed Menzel’s photographs before they were
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`registered with the Copyright Office. .................................................................................................... 12
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`Scholastic has not shown that registration VA 1-719-226 is invalid ........................................ 12
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`C. Scholastic has not submitted any evidence reflecting a genuine dispute of material fact as to
`the willfulness of its copyright infringement ............................................................................................. 14
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`III. CONCLUSION ........................................................................................................................................ 15
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`MENZEL REPLY MEMORANDUM OF LAW IN SUPPORT OF MOTION FOR SUMMARY JUDGMENT
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`Case 3:17-cv-05499-EMC Document 118 Filed 10/17/19 Page 3 of 20
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`CASES
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`TABLE OF AUTHORITIES
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`A&M Records, Inc. v. Napster, Inc., 239 F.3d 1004 (9th Cir. 2001) ................................................................. 2
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`Alaska Stock, LLC v. Pearson Educ., Inc., 975 F. Supp. 2d 1027 (D. Alaska 2013) ................................... 8, 9
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`Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 106 S. Ct. 2505, 91 L. Ed. 2d 202 (1986) ............................. 4
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`DeliverMed Holdings, LLC v. Schaltenbrand, 734 F.3d 616 (7th Cir. 2013) .................................................... 13
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`F.T.C. v. Network Servs. Depot, Inc., 617 F.3d 1127 (9th Cir. 2010) .............................................................. 14
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`Feist Publications, Inc. v. Rural Tel. Serv. Co., 499 U.S. 340, 111 S. Ct. 1282, 113 L. Ed. 2d 358 (1991) ..... 1
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`Friedman v. Live Nation Merch., Inc., 833 F.3d 1180 (9th Cir. 2016) ............................................................. 14
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`Hillding v. McDonnell Douglas Helicopter Co., No. CIV 91-1079PHX RCB, 1992 WL 443421
`(D. Ariz. June 9, 1992), aff'd, 985 F.2d 573 (9th Cir. 1993) ............................................................................ 3
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`In re McGraw-Hill Glob. Educ. Holdings LLC, 909 F.3d 48 (3d Cir. 2018) ..................................................... 2
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`Jarvis v. K2 Inc., 486 F.3d 526 (9th Cir. 2007) ................................................................................................. 12
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`Jenkins v. Cty. of Riverside, 398 F.3d 1093 (9th Cir. 2005) ................................................................................. 5
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`L.A. Printex Indus., Inc. v. Aeropostale, Inc., 676 F.3d 841 (9th Cir. 2012) .................................................... 13
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`Lefkowitz v. McGraw-Hill Glob. Educ. Holdings, LLC, 23 F. Supp. 3d 344 (S.D.N.Y. 2014) ....................... 6
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`Louis Vuitton Malletier, S.A. v. Akanoc Sols., Inc., 658 F.3d 936 (9th Cir. 2011) ......................................... 14
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`Muench v. McGraw-Hill Global Education Holdings LLC et al. No. 12 Civ. 6595, 2019 WL 1302789
`(S.D.N.Y. Feb. 4, 2019). ............................................................................................................................... 11
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`Muhammad-Ali v. Final Call, Inc., 832 F.3d 755 (7th Cir. 2016) ...................................................................... 2
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`N. Face Apparel Corp. v. Dahan, No. 13-04821 MMM (MANX), 2014 WL 12558010
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`(C.D. Cal. Oct. 6, 2014) ................................................................................................................................ 15
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`Netbula, LLC v. BindView Dev. Corp., 516 F. Supp. 2d 1137 (N.D. Cal. 2007) ............................................ 2
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`Netbula, LLC v. Storage Tech. Corp., No. C06-07391 MJJ, 2008 WL 228036
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`(N.D. Cal. Jan. 18, 2008) ............................................................................................................................ 2, 9
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`Oracle USA, Inc. v. Rimini St., Inc., 6 F. Supp. 3d 1108 (D. Nev. 2014) ........................................................ 8
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`MENZEL REPLY MEMORANDUM OF LAW IN SUPPORT OF MOTION FOR SUMMARY JUDGMENT
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`Case 3:17-cv-05499-EMC Document 118 Filed 10/17/19 Page 4 of 20
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`Panoramic Stock Images, Ltd v. McGraw-Hill Glob. Educ. Holdings, LLC, No. 12 C 9881, 2014 WL
`6685454 (N.D. Ill. Nov. 25, 2014) ................................................................................................................ 6
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`Petrella v. Metro-Goldwyn-Mayer, Inc., 572 U.S. 663, 134 S. Ct. 1962, 188 L. Ed. 2d 979 (2014). ................ 5
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`S.E.C. v. Aqua Vie Beverage Corp., No. CV 04-414-S-EJL, 2007 WL 2025231(D. Idaho July 9, 2007) . 14
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`S.O.S., Inc. v. Payday, Inc., 886 F.2d 1081 (9th Cir. 1989) ............................................................................ 2, 8
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`Sec. & Exch. Comm'n v. Small Bus. Capital Corp., No. 5:12-CV-3237 EJD, 2013 WL 4455850
`(N.D. Cal. Aug. 16, 2013) ................................................................................................................................. 15
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`Sega Enterprises Ltd. v. MAPHIA, 948 F. Supp. 923 (N.D. Cal. 1996) ........................................................ 15
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`Sohm v. Scholastic, Inc 16 Civ. 7098, 2018 WL 1605214 (S.D.N.Y. Mar. 29, 2018). ................................... 11
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`Spinelli v. National Football League, 903 F.3d 185 (2d Cir. 2018) .................................................................... 10
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`Sportscare of America, P.C. v. Multiplan, Inc., No. 2:10–4414, 2011 WL 589955 (D.N.J. Feb. 10, 2011) .... 5
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`Stichting Pensioenfonds ABP v. Countrywide Fin. Corp., 802 F. Supp. 2d 1125 (C.D. Cal. 2011) ..................... 5
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`T.W. Elec. Serv., Inc. v. Pac. Elec. Contractors Ass'n, 809 F.2d 626 (9th Cir. 1987) ......................................... 1
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`Ticketmaster L.L.C. v. Prestige Entm't W., Inc., 315 F. Supp. 3d 1147 (C.D. Cal. 2018). ............................. 10
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`UMG Recordings, Inc. v. Glob. Eagle Entm’t, Inc., No. CV143466MMMJPRX, 2015 WL 12752881
`(C.D. Cal. Aug. 27, 2015) .................................................................................................................................... 6
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`United States v. Miller, 771 F.2d 1219 (9th Cir. 1985) ....................................................................................... 4
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`William A. Graham Co. v. Haughey, 568 F.3d 425 (C.A.3 2009) ...................................................................... 6
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`
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`STATUTES
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`17 U.S.C. § 411(b) ....................................................................................................................................... 12, 13
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`Fed.R.Civ.P. 56(e)) ............................................................................................................................................... 1
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`MENZEL REPLY MEMORANDUM OF LAW IN SUPPORT OF MOTION FOR SUMMARY JUDGMENT
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`Case 3:17-cv-05499-EMC Document 118 Filed 10/17/19 Page 5 of 20
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`Plaintiff Peter Menzel (“Menzel”) submits the following memorandum of law in further support
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`of his Motion for Partial Summary Judgment (Doc. 107) against Defendant Scholastic, Inc.
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`(“Scholastic”).
`I. INTRODUCTION
`As with its affirmative motion for summary judgment, Scholastic’s opposition to Menzel’s
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`motion starts with the false premise that Menzel should never have been permitted to bring suit,
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`because at the time of filing, he did not have access to the evidence of Scholastic’s infringement. But
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`this case is no longer at the pleading stage, and Scholastic could not avoid disclosing at least some of
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`its usage information in discovery. As expected, the data Scholastic produced contradicts its
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`protestations of innocence. The undisputed evidence submitted by Menzel proves that Scholastic made
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`infringing use of Menzel’s photographs (“Photographs”). The undisputed evidence also shows that
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`Scholastic, a large and sophisticated publisher, knew it needed to obtain licenses sufficient to cover all
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`of its uses of Menzel’s Photographs, but that it chose not to track its uses – virtually guaranteeing it
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`would violate Menzel’s copyrights. Because Scholastic has failed to submit evidence reflecting a dispute
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`of material fact as to its use of Menzel’s Photographs or its reckless disregard for Menzel’s rights, the
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`Court should find Scholastic liable for willful copyright infringement as a matter of law.
`II. ARGUMENT
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`A.
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`Scholastic has not shown a dispute of fact as to its liability for the majority of
`the infringements identified in Menzel’s Claim Summary.
`In support of his motion, Menzel submitted evidence sufficient to show that he owns the
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`copyrights in the Photographs, and that Scholastic copied and distributed the Photographs in ways not
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`covered by any license.1 Thus, to avoid summary judgment, Scholastic “must set forth, by affidavit or
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`as otherwise provided in Rule 56, “specific facts showing that there is a genuine issue for trial.”2 Scholastic
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`1 See Docs. 107 – 109. See also Feist Publications, Inc. v. Rural Tel. Serv. Co., 499 U.S. 340, 361, 111 S. Ct.
`1282, 1296, 113 L. Ed. 2d 358 (1991) (“To establish infringement, two elements must be proven: (1)
`ownership of a valid copyright, and (2) copying of constituent elements of the work that are original.”).
`2 T.W. Elec. Serv., Inc. v. Pac. Elec. Contractors Ass'n, 809 F.2d 626, 630 (9th Cir. 1987) (quoting
`Fed.R.Civ.P. 56(e)) (emphasis in original).
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`Case 3:17-cv-05499-EMC Document 118 Filed 10/17/19 Page 6 of 20
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`attempts to avoid liability for its infringements by first claiming that it is Menzel’s job to prove
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`Scholastic’s affirmative defense of license, and then arguing that the documents it produced in response
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`to Menzel’s discovery requests don’t say what Menzel thinks they do. Scholastic is wrong on both
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`counts.
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`Scholastic has the burden of proof on its license defense.
`As in its affirmative motion for summary judgment, Scholastic argues that, because it at one
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`point obtained limited, one-time use licenses for the Photographs, it is immune from liability for any
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`and all subsequent uses it made of those images, and that it is now Menzel’s responsibility to prove that
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`Scholastic’s further uses were unauthorized. This is simply not the law. As explained by the Ninth
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`Circuit, “Plaintiffs must satisfy two requirements to present a prima facie case of direct infringement:
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`(1) they must show ownership of the allegedly infringed material and (2) they must demonstrate that
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`the alleged infringers violate at least one exclusive right granted to copyright holders under 17 U.S.C. §
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`106.”3
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`This case, unlike those cited by Scholastic, does not involve a disagreement about the scope of
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`a license.4 Menzel’s licenses are clear on their face;5 Scholastic doesn’t argue that there is any
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`3 A&M Records, Inc. v. Napster, Inc., 239 F.3d 1004, 1013 (9th Cir. 2001), as amended (Apr. 3, 2001), aff'd
`sub nom. A&M Records, Inc. v. Napster, Inc., 284 F.3d 1091 (9th Cir. 2002), and aff'd sub nom. A&M Records,
`Inc. v. Napster, Inc., 284 F.3d 1091 (9th Cir. 2002). See also S.O.S., Inc. v. Payday, Inc., 886 F.2d 1081, 1085
`(9th Cir. 1989) (“To prevail on its claim of copyright infringement, S.O.S. must prove (1) ownership
`of copyright in the payroll programs, and (2) “copying” of protectible expression by Payday beyond
`the scope of Payday’s license.”). Scholastic’s claim that Ninth Circuit differs from the Third and
`Seventh in its requirements for a prima facie case of copyright infringement is therefore demonstrably
`incorrect. See Doc. 113 at fn. 1, attempting to distinguish In re McGraw-Hill Glob. Educ. Holdings LLC,
`909 F.3d 48 (3d Cir. 2018) and Muhammad-Ali v. Final Call, Inc., 832 F.3d 755 (7th Cir. 2016), both of
`which directly addressed the elements of a claim of copyright infringement in cases where, as here, the
`defendants raised the defense of license.
`4 See., e.g. S.O.S., Inc. v. Payday, Inc., 886 F.2d at 1088 (dispute regarding whether the contract between
`the parties permitted defendant to prepare a modified version of computer program) Netbula, LLC v.
`BindView Dev. Corp., 516 F. Supp. 2d 1137, 1153 (N.D. Cal. 2007) (dispute regarding whether alleged
`restrictions were incorporated into undisputed license); Netbula, LLC v. Storage Tech. Corp., No. C06-
`07391 MJJ, 2008 WL 228036, at *5 (N.D. Cal. Jan. 18, 2008) (dispute regarding “whether the license
`was limited in scope and whether Defendants acted outside of that scope. . .”).
`5 See Doc. 107-4.
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`MENZEL REPLY MEMORANDUM OF LAW IN SUPPORT OF MOTION FOR SUMMARY JUDGMENT
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`Case 3:17-cv-05499-EMC Document 118 Filed 10/17/19 Page 7 of 20
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`disagreement as to what the licenses permit, and what they do not. In fact, aside from the specific
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`instances addressed below and in the Bruss declaration submitted herewith, Scholastic effectively
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`concedes that it made uses of the Photographs not authorized by any license.6 Specifically, Scholastic
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`does not offer any argument or evidence disputing the fact that it made the infringing uses of Menzel’s
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`Photographs described in Rows 3 – 4, 6 – 11, 17 – 43, 46 – 48, and 53 – 59 of the Claims Summary.
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`Thus, regardless of where the burden of proof lies, the evidence shows that Scholastic infringed
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`Menzel’s copyrights, for which it should be held liable as a matter of law.
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`Menzel’s Claim Summary is not “riddled with errors.”7
`Scholastic next argues that Menzel’s motion makes only “passing reference” to his Claims
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`Summary,8 implying that Menzel should have detailed each alleged infringement in his brief. Such an
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`approach would have necessitated submission of an unnecessarily long and unwieldy memorandum.
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`Menzel’s Claims Summary succinctly summarizes the infringements for which he seeks entry of
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`judgment, and the evidence in support of each claim. Moreover because Scholastic marked all of its
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`usage data confidential, Menzel’s submission of a separate Claims Summary was necessary to avoid
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`lodging his entire dispositive motion under seal.9
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`Substantively, Scholastic’s claim that the evidence does not support Menzel’s allegations is
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`wrong, for the reasons set forth in the declaration of Amanda Bruss and attached exhibits, which have
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`again been filed under seal due to Scholastic’s disputed confidentiality designations. With a few
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`exceptions, the majority of Menzel’s allegations of infringement are fully supported by the evidentiary
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`6 See Hillding v. McDonnell Douglas Helicopter Co., No. CIV 91-1079PHX RCB, 1992 WL 443421, at *8
`(D. Ariz. June 9, 1992), aff'd, 985 F.2d 573 (9th Cir. 1993) (“Plaintiff did not address this claim in her
`response to defendant's motion, nor did she provide any evidence to support it. Under Anderson, the
`party opposing a motion for summary judgment must set forth specific facts demonstrating a genuine
`issue for trial. Anderson, 477 U.S. at 247–52, 106 S.Ct. at 2509–12. The Court therefore determines that
`plaintiff has abandoned her claim and grants defendant’s motion for summary judgment with respect
`to plaintiff's retaliation claim.”).
`7 Doc. 113 p. 5.
`8 Id.
`9 This highlights the fact that Scholastic’s motion to seal is designed to hide evidence central to the
`resolution of Menzel’s claims.
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`MENZEL REPLY MEMORANDUM OF LAW IN SUPPORT OF MOTION FOR SUMMARY JUDGMENT
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`Case 3:17-cv-05499-EMC Document 118 Filed 10/17/19 Page 8 of 20
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`record.10 For example, Scholastic does not dispute that it used Menzel’s Photographs in Claims
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`Summary Rows 2 and 52 in Read 180 rBook, Stage A, Enterprise Edition. Neither does it dispute that it
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`failed to produce any licenses authorizing those uses.11 Instead, it submits an unsubstantiated document
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`described only as “the document produced in this action as Schol-PM 000001010” which references a
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`Digital Teacher’s Edition of Read 180 (not the Enterprise Edition), and notes that someone named
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`Yvonne claims Scholastic “bought out this photo [woman selling cooked cicadas]12 in an earlier agreement.
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`Subscription [sic].”13 Scholastic provides no foundation for this document, nor has it made any attempt
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`to explain where it came from, who created it, or what it purports to represent. Neither has Scholastic
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`produced any evidence that Menzel ever issued “subscription” licenses for any of his photographs.
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`Not only is this document inadmissible hearsay,14 it is woefully insufficient to create a genuine dispute
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`of material fact.15
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`As another example, Scholastic does not dispute that it used Menzel’s Photograph [Fork in a
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`plate of worms] in Claims Summary Row 15 in Weird Science Jobs, nor does it dispute the geographic
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`distribution of that publication set forth in the Summary.16 Instead, it submits an invoice it claims
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`granted it worldwide distribution rights. But that invoice was for use of an entirely different Photograph
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`in a 2012 printing of that book.17 Scholastic has not produced any license authoring the uses made of
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`the Photograph in Claims Summary Row 15.
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`10 See Doc. 60, ¶¶ 31-41. Menzel concedes that there is a dispute of fact as to Scholastic’s uses identified
`in Rows 1, 5, 14, 16, 44, 45 and 51 of his Claims Summary, and withdraws his motion for summary
`judgment as to these rows.
`11 See Rosenthal Decl. (Doc. 113-1) ¶15.
`12 No mention is made of the Photograph in Row 52 of the Claims Summary.
`13 Doc. 113-12.
`14 See United States v. Miller, 771 F.2d 1219, 1237 (9th Cir. 1985) (“A writing is admissible under
`Fed.R.Evid. 803(6) if two foundational facts are proved: (1) the writing is made or transmitted by a
`person with knowledge at or near the time of the incident recorded, and (2) the record is kept in the
`course of regularly conducted business activity. These facts must be proved through the testimony of
`the custodian of the records or other qualified witness, though not necessarily the declarant.”).
`Scholastic has made no showing as to either element.
`15 See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 243, 106 S. Ct. 2505, 2507, 91 L. Ed. 2d 202 (1986).
`16 See Rosenthal Decl. (Doc. 113-1) ¶ 17.
`17 See Rosenthal Ex. D, Doc. 113-5; Bruss Decl. ¶ 3.
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`Finally, by referencing the information in its allegedly confidential documents in its opposition,
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`Scholastic completely undermines its position on its motion to seal. It should not be permitted to use
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`its designation as both a sword and a shield, publicly referring to its data when it suits its purposes,
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`while concealing data that reflects its infringement of Menzel’s copyrights.
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`B.
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`Scholastic has not demonstrated material facts sufficient to avoid judgment as
`to its affirmative defenses.
`Scholastic did not respond to Menzel’s request for entry of judgment on its 7th (standing), 8th
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`(good faith)18 and 9th (no injury) defenses, and has therefore waived them.19 Scholastic has also failed
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`to submit evidence reflecting disputed material facts regarding its statute of limitations, registration,
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`and contract affirmative defenses, as discussed in more detail below.
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`Scholastic’s statute of limitations defense fails as a matter of law.
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`Scholastic’s opposition repeats – verbatim – its affirmative motion in arguing that this Court
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`should decline to follow binding Ninth Circuit authority and apply the injury rule, rather than the
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`discovery rule, in determining whether Scholastic has met its burden on its statute of limitations
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`defense.20 But as discussed in Menzel’s opposition to Scholastic’s motion,21 the Supreme Court
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`expressly declined to reject the discovery rule in Petrella.22 Rather, the Court specifically noted it “ha[d]
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`not passed on the question,” and quoted 6 W. Patry, Copyright § 20:19, p. 20–28 (2013) as stating, “the
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`18 Scholastic makes only a passing reference to its claim of “good faith,” stating only that in seeking
`entry of judgment on this defense, “Plaintiff puts the cart before the horse.” Doc. 113 p. 16. Scholastic
`has made no effort to submit any evidence supporting this affirmative defense.
`19 See Stichting Pensioenfonds ABP v. Countrywide Fin. Corp., 802 F. Supp. 2d 1125, 1132 (C.D. Cal. 2011)
`(“[i]n most circumstances, failure to respond in an opposition brief to an argument put forward in an
`opening brief constitutes waiver or abandonment in regard to the uncontested issue.”) (quoting
`Sportscare of America, P.C. v. Multiplan, Inc., No. 2:10–4414, 2011 WL 589955, at *1 (D.N.J. Feb. 10,
`2011)). See also Jenkins v. Cty. of Riverside, 398 F.3d 1093, 1095 (9th Cir. 2005) (“Jenkins abandoned her
`other two claims by not raising them in opposition to the County’s motion for summary judgment.”).
`20 Compare Doc. 105 at § III. A. and Doc 113 at § III.A.1, (“the continued application of the ‘discovery
`rule’ is in serious doubt . . .”).
`21 Doc. 114 at § III. C. 1.
`22 Petrella v. Metro-Goldwyn-Mayer, Inc., 572 U.S. 663, 670, 134 S. Ct. 1962, 1969, 188 L. Ed. 2d 979 (2014).
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`Case 3:17-cv-05499-EMC Document 118 Filed 10/17/19 Page 10 of 20
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`overwhelming majority of courts use discovery accrual in copyright cases.”23
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`The Supreme Court’s language quoted by Scholastic was dicta since it had no need to address
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`application of the discovery rule in Petrella. There, the plaintiff only sought relief for infringements that
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`occurred within three years of filing suit.24 She did not dispute her awareness of defendant’s conduct
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`when it occurred, and she expressly excluded claims regarding infringements that occurred more than
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`three years before she filed her complaint.25 Thus, Petrella did not consider a case in which a plaintiff
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`did not actually or constructively discover the infringements more than three years before filing suit.
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`For this reason, numerous courts have rejected arguments, like Scholastic’s, that Petrella adopted the
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`injury rule instead of the discovery rule.26 SCA Hygiene Prods. Aktiebolag v. First Quality Baby Products,
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`LLC,27 likewise does not abrogate application of the discovery rule in copyright cases. Rather, the
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`23 See id. at 670 (“Although we have not passed on the question, nine Courts of Appeals have adopted,
`as an alternative to the incident of injury rule, a ‘discovery rule,’ which starts the limitations period
`when ‘the plaintiff discovers, or with due diligence should have discovered, the injury that forms the
`basis for the claim.’ William A. Graham Co. v. Haughey, 568 F.3d 425, 433 (C.A.3 2009) (internal quotation
`marks omitted).”).
`24 Id. at 668 (plaintiff “sought no relief for conduct occurring outside § 507(b)’s three-year limitations
`period”).
`25 Id. at 674-75 (“Petrella sought relief only for acts of infringement occurring on or after January 6,
`2006” – three years before she filed suit on January 6, 2009).
`26 See, e.g. UMG Recordings, Inc. v. Glob. Eagle Entm’t, Inc., No. CV143466MMMJPRX, 2015 WL 12752881,
`at *8 (C.D. Cal. Aug. 27, 2015) (“The [Petrella] Court acknowledged, however, and did not disapprove,
`a “discovery rule,” employed by certain circuit courts; under this rule, the limitations period commences
`when the plaintiff discovers, or with due diligence, should have discovered, the injury that forms the
`basis for the claim. The Ninth Circuit applies the discovery rule in copyright claims. For that reason,
`to mount a statute of limitations defense, defendants must show that plaintiffs failed to file suit within
`three years of the date they knew or should have known that defendants had infringed their
`copyrights.”); Oracle USA, Inc. v. Rimini St., Inc., No. 2:10-CV-00106-LRH, 2015 WL 5089779, at *6 (D.
`Nev. Aug. 27, 2015) (“The Supreme Court in Petrella expressly declined to reject the discovery rule. As
`such, the discovery rule is still controlling precedent in this action and the court shall deny defendants’
`motion as to this issue.”); Yue v. MSC Software Corp., No. 15-CV-05526-PJH, 2016 WL 3913001, at *1
`(N.D. Cal. July 20, 2016 (“The Supreme Court, however, did not directly “pass on” the issue of whether
`the discovery rule was available to a plaintiff who was not aware of an earlier infringement. Under
`these circumstances, the Ninth Circuit’s decision in Polar Bear Products remains binding precedent in this
`circuit.”). See also Panoramic Stock Images, Ltd v. McGraw-Hill Glob. Educ. Holdings, LLC, No. 12 C 9881,
`2014 WL 6685454, at *3 (N.D. Ill. Nov. 25, 2014); Lefkowitz v. McGraw-Hill Glob. Educ. Holdings, LLC,
`23 F. Supp. 3d 344, 357 (S.D.N.Y. 2014).
`27 137 S. Ct. 954, 962, 197 L. Ed. 2d 292 (2017).
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`Supreme Court reaffirmed, as it “specifically noted” in Petrella, that the Court has “‘not passed on the
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`question’ whether the Copyright Act’s statute of limitations is governed by [the discovery] rule.”28
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`Applying the discovery rule – as this Court is bound to do – Scholastic has failed to make any
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`showing that Menzel had actual or constructive notice of the infringements alleged in this case before
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`September 22, 2014. Scholastic repeats the argument made in its affirmative motion, claiming that
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`because Menzel was on notice that Scholastic copied his photographs shortly after licensing, he should
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`have brought suit then. But at that time, Menzel had no reason to suspect that Scholastic had infringed
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`the Photographs; Scholastic’s request for limited licenses led him to believe Scholastic was an honest
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`licensee.29 To avoid unnecessary repetition, Menzel incorporates here his full response to Scholastic’s
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`argument.30
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`Finally, Scholastic’s argument that Menzel’s damages should be limited to a three-year look
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`back period, regardless of when his claims accrued, is both meritless for the reasons set forth in
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`Menzel’s opposition (Doc. 114, section III. C. 4.), and misplaced. Menzel’s motion for partial summary
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`judgement addresses liability, not damages.
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`Scholastic’s breach of contract defense is contrary to applicable
`law and lacks evidentiary support.
`Scholastic’s opposition next asserts that Menzel’s claims sound in contract, not copyright, law.
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`Scholastic’s position is fundamentally incorrect; this case does not stem from “a series of small-value
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`licenses.”31 And Menzel is not alleging that Scholastic failed to pay a license or royalty fee. This case
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`arose from Scholastic’s use of Menzel’s work not covered by any license.
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`Scholastic’s claim that Menzel neglected to “identify the invoice terms at issue”32 is both
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`misleading and false. First, as noted above, Scholastic, not Menzel, alleges that it had a license for the
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`uses at issue. Menzel’s position is that after Scholastic exhausted its limited, one-time use licenses, any
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`28 Id. at 962.
`29 Doc. 107-2 ¶¶ 9 – 10.
`30 See Doc. 114, section III. C. 3.
`31 Doc. 113 at p. 9.
`32 Doc. 113 at p. 13.
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`Case 3:17-cv-05499-EMC Document 118 Filed 10/17/19 Page 12 of 20
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`further use was entirely unlicensed and infringing. To the extent Scholastic claims that the at-issue uses
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`were somehow authorized – despite the clear language of Menzel’s licenses – Scholastic has the burden
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`of proof.33 Second, not only did Menzel identify the terms of his original, one-time use licenses in his
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`SAC and Claims Summary, he produced copies of them in discovery, and included them as Exhibit B
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`to his Declaration in support of this motion.34 As demonstrated by the invoices themselves, all of the
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`licenses Menzel issued to Scholastic were specifically identified as “one-time” licenses with express and
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`specific limitations of use.35 Each “reserved” “[a]ll other rights,” and provided that rights were granted,
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`“only upon full payment of invoice.”36 These were not ongoing licensing arrangements typical of
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`royalty agreements, for which ambiguous nuances of use can sometimes be argued. Here, after the last
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`authorized copy was printed, any further copies were unlicensed and, therefore, infringing. In the
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`Ninth Circuit, “[a] licensee infringes the owner’s copyright if its use exceeds the scope of its license.”37
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`The Ninth Circuit’s a