`
`12-8715.141-JCD
`
` July 21, 2014
`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE NORTHERN DISTRICT OF ILLINOIS
`EASTERN DIVISION
`
`MICHAEL BEASLEY, )
`
` )
`Plaintiff,
` )
` )
` ) No. 12 C 8715
` )
`JOHN WILEY & SONS, INC., )
` )
` )
`
` Defendant.
`
`v.
`
`MEMORANDUM OPINION
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`Before the court are several motions. For the reasons
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`explained below, plaintiff’s motion for summary judgment of
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`liability on Count I is granted; defendant’s motion for summary
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`judgment on Counts II and III is entered and continued; and
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`plaintiff’s motion to challenge defendant’s confidentiality
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`designations is denied as moot.
`
`BACKGROUND
`
`Plaintiff, Michael Beasley, is a professional photographer who
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`licenses his images to various publishers, including defendant John
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`Wiley & Sons, Inc. (“Wiley”). Beasley’s licensing agent for the
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`relevant photos was Odyssey Productions, Inc. (“Odyssey”), a stock
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`photography licensing agency, which is not a party to this action.
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`The facts are largely undisputed. In July 2005, Matthew
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`Kiernan, a Wiley representative, sent Odyssey an e-mail on behalf
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`of Richard Fox, a senior photo editor at Wiley. The e-mail
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`explained that Wiley sought to license a number of photographic
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`images of locations in Chicago for a new Wiley travel guidebook
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`titled “Frommer’s Chicago Day by Day.” (Pl.’s Reply, Ex. 1, Decl.
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`of Jennifer Johnson, Ex. B.) During the next few months, Odyssey
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`and Wiley exchanged e-mails regarding particular photos that Wiley
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`needed. (Decl. of Christopher P. Beall, Ex. B.) In December 2005,
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`Odyssey and Wiley communicated further about the photos and
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`negotiated the terms of the copyright license. On December 19,
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`2005, Odyssey issued a $7,500.00 invoice (the “Invoice”) to Wiley
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`for a nonexclusive license to use 31 of Beasley’s photos (along
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`with 5 photos created by other photographers) in Wiley’s guidebook.
`
`Under the heading “Usage Rights Granted,” the Invoice states:
`
`One time nonexclusive print rights, John Wiley & Sons
`Inc, Frommer’s “Chicago Day by Day” 1st Edition, English
`language only, up to 46,000 total press run, published
`May 2006, World rights (defined as: USA plus 10% English
`language countries), six years. No electronic rights.
`
`(Decl. of Michael Beasley, Ex. A, Invoice.) Wiley paid the invoice
`
`in January 2006.
`
`In May 2006, Wiley published the first edition of Frommer’s
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`Chicago Day by Day (“Chicago Day by Day”) in a printed-book format
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`that contained 29 of Beasley’s photos. From May 2007 through July
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`2011, Wiley offered a electronic version of the book on Amazon.com;
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`another electronic version of the book was offered through other
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`vendors until July 2011. In May 2009, Wiley published a second
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`edition of Chicago Day by Day, which contained 27 of Beasley’s
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`
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`photos. An electronic version of the second edition was also
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`offered beginning in May 2009.
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`It is undisputed that Wiley printed 75,938 copies of Chicago
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`Day by Day (total, across the two editions). Wiley maintains that
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`although it printed this many copies, it actually distributed fewer
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`copies--just over 55,000, and that it distributed less than 46,000
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`copies of the first edition. It is undisputed that Wiley
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`distributed 42 electronic copies of the first edition and 16
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`electronic copies of the second edition.
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`Wiley had never sought to renew the license or to obtain
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`permission to use Beasley’s photos beyond the scope of the license.
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`On October 31, 2012, Beasley filed this action. He alleges that
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`Wiley’s use of his photographs exceeded the terms of the limited
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`license. The complaint contains three counts. Count I alleges
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`that Wiley infringed Beasley’s copyrights in the photos. Count II
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`alleges common-law fraud in that when Wiley obtained the license,
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`it “intentionally misrepresented the format in which the
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`[p]hotographs would be reproduced, intending that Odyssey would
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`rely upon that misrepresentation to its detriment by charging a
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`lower fee and to Wiley’s gain by paying less than it would have
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`paid if it had been honest.” (Compl. ¶ 11.) In Count III,
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`plaintiff alleges that Wiley violated the Digital Millennium
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`Copyright Act (the “DMCA”), 17 U.S.C. § 1202 et seq., by
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`intentionally removing copyright-management information from
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`
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`Beasley’s photos in order to “induce, enable, facilitate or conceal
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`its copyright infringements.” (Compl. ¶ 32.) Beasley seeks an
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`order permanently enjoining defendant from further infringement,
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`the impoundment of all copies of his photos in Wiley’s possession,
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`either actual or statutory damages, an award of attorney’s fees and
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`costs in relation to the DMCA claim, and punitive damages.
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`Beasley moves for summary judgment of liability on Count I,
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`1
`the copyright infringement claim. Wiley moves for summary
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`judgment on Counts II and III, the fraud and DMCA claims. Also
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`pending is Beasley’s motion to provisionally file certain documents
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`Wiley designated as confidential; Beasley challenges Wiley’s
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`designation.
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`DISCUSSION
`
`A. Plaintiff’s Motion for Summary Judgment on Count I
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`“The court shall grant summary judgment if the movant shows
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`that there is no genuine dispute as to any material fact and the
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`movant is entitled to judgment as a matter of law.” Fed. R. Civ.
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`P. 56(a). In considering such a motion, the court construes the
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`evidence and all inferences that reasonably can be drawn therefrom
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`in the light most favorable to the nonmoving party. See Pitasi v.
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`Gartner Group, Inc., 184 F.3d 709, 714 (7th Cir. 1999). “The court
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`need consider only the cited materials, but it may consider other
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`1/
`
` Plaintiff has requested oral argument on this motion. After reviewing
`the briefs, we do not believe that oral argument will materially add to our
`understanding of the issues. The request is denied.
`
`
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`materials in the record.” Fed. R. Civ. P. 56(c)(3). “Summary
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`judgment should be denied if the dispute is ‘genuine’: ‘if the
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`evidence is such that a reasonable jury could return a verdict for
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`the nonmoving party.’” Talanda v. KFC Nat’l Mgmt. Co., 140 F.3d
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`1090, 1095 (7th Cir. 1998) (quoting Anderson v. Liberty Lobby,
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`Inc., 477 U.S. 242, 248 (1986)). The court will enter summary
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`judgment against a party who does not “come forward with evidence
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`that would reasonably permit the finder of fact to find in [its]
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`favor on a material question.” McGrath v. Gillis, 44 F.3d 567, 569
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`(7th Cir. 1995).
`
` Count I is a claim for copyright infringement. The Copyright
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`Act grants copyright owners certain exclusive rights in their
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`copyrighted works, including the exclusive rights to reproduce and
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`distribute copies of the work. 17 U.S.C. § 106(1), (3). A
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`plaintiff claiming copyright infringement must establish two
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`elements: “(1) ownership of a valid copyright, and (2) copying of
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`constituent elements of the work that are original.” Janky v. Lake
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`County Convention & Visitors Bureau, 576 F.3d 356, 361 (7th Cir.
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`2009) (quoting Feist Publ’ns, Inc. v. Rural Tel. Serv. Co., 499
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`U.S. 340, 361 (1991)). “Where the plaintiff has granted the
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`defendant a license, to establish the second element, the plaintiff
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`must demonstrate that the license was limited in scope and that the
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`scope of the license has been exceeded.” Bergt v. McDougal
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`Littell, 661 F. Supp. 2d 916, 921 (N.D. Ill. 2009); see also
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`
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`ITOFCA, Inc. v. MegaTrans Logistics, Inc., 322 F.3d 928, 940 (7th
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`Cir. 2003) (Ripple, J., concurring) (“A licensee infringes the
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`owner’s copyright if its use exceeds the scope of its license.”).
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`1.
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`Scope of the Copyright License
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`The first element that Beasley must establish, ownership of
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`valid copyrights in the photographs at issue, is undisputed.
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`(Def.’s Resp. to Pl.’s Rule 56.1 Statement, ¶¶ 6-7.) It is also
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`undisputed that Wiley had a nonexclusive license to use the photos.
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`Wiley submits, however, that the scope of the license is at issue.
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`Beasley contends that the terms of the license agreement are set
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`out solely in the Invoice that Odyssey sent to Wiley and Wiley
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`paid. Wiley argues that the Invoice is “ambiguous” with respect to
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`its right to print a second edition of Chicago Day by Day
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`incorporating Beasley’s photos and that “there is simply no single
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`document signed by both Odyssey . . . and Wiley that governs the
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`scope of Wiley’s authorized use of the photos.” (Def.’s Mem. in
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`Opp’n to Pl.’s Mot. at 8, 5.) According to Wiley, where, as here,
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`the parties operated as though they had reached a license
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`agreement, the terms of that agreement “may be construed from the
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`letters and writings between the parties.” (Def.’s Mem. in Opp’n
`
`to Pl.’s Mot. at 5 (internal quotation marks and brackets
`
`omitted).)
`
` “Normal rules of contract construction are generally applied
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`in construing copyright agreements.” Kennedy v. Nat’l Juvenile
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`
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`-7-
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`Det. Ass’n, 187 F.3d 690, 694 (7th Cir. 1999). “As a general rule,
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`a contract need not be contained in a single writing; it may be
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`collected from several different writings which do not conflict
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`with each other and which, when connected, show the parties,
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`subject matter, terms, and consideration. Generally, a contract is
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`operative as such from the time when there is a meeting of the
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`minds . . . .” O’Brien v. Kawazoye, 327 N.E.2d 236, 240-41 (Ill.
`
`App. Ct. 1975) (citation omitted). 2
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`The invoice that Odyssey sent to Wiley, and which Wiley
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`subsequently paid with evidently no further discussion about the
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`terms of the license, states in pertinent part as follows:
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`Invoice # 765174 Invoice Date: December 19 2005
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`Project Title: Chicago Day by Day 1
`
`License Start Date: Dec 19, 2005
`
`License End Date: Dec 19, 2011
`
`Length of Run: 6 years
`
`Maximum Circulation/Press Run: 46,000
`
`Territory: World
`
`Usage Rights Granted
`
`One time nonexclusive print rights, John Wiley & Sons
`Inc, Frommer’s “Chicago Day by Day” 1st Edition, English
`language only, up to 46,000 total press run, published
`May 2006, World rights (defined as: USA plus 10% English
`language countries), six years. No electronic rights.
`
`Base price, -25% special quantity discount
`
`2/
`
` Wiley contends that Illinois’s rules of contract interpretation apply
`to the parties’ license agreement. Beasley does not argue otherwise. We will
`apply Illinois law. See Bergt v. McDougal Littell, No. 06 C 4645, 2006 WL
`3782919, at *2 n.1 (N.D. Ill. Dec. 21, 2006) (applying the law of the state in
`which the federal court sits where neither party raised a conflict of law issue).
`
`
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`-8-
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`(Beasley Decl., Ex. A, Invoice.) The Invoice went on to list the
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`specific licensed images. 3
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`Wiley relies on a December 19, 2005 series of e-mails between
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`it and Odyssey that occurred just prior to Odyssey’s issuing the
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`Invoice. Richard Fox of Wiley e-mailed Jerry Philip of Odyssey,
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`using the subject line “Frommer’s Chicago Day by Day 1st Edition--
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`Photo Usage Negotiations” and stating in relevant part as follows:
`
`Hello Jerry,
`
`Could you do me a small favor and forward this excel file
`to Robert Frerck? He was anxious to get the usage fees
`invoiced, and I too am sensitive to this issue, so I
`expedited what I could.
`
`Robert--
`
`Please review the attached excel file. We are using 37
`images, as far as I know. . . . I need the prices to be:
`1/4 Page = $200
`1/2 Page = $250
`Full Page = $300
`
`3/
`
` At the top of the first page, the Invoice lists Wiley’s name and address
`and states in small print: “The non-exclusive reproduction rights granted by the
`payment of this invoice by the Client/Licensee named above are limited to the
`specific usage, placements and duration as noted below, and are subject to the
`TERMS AND CONDITIONS set forth on the subsequent pages of this Agreement. This
`Agreement constitutes the sole and exclusive agreement between Odyssey
`Productions and the Client/Licensee and shall prevail over any additional or
`contrary terms and conditions in Licensee’s forms, including purchase orders,
`confirmations, checks, etc., all of which are hereby rejected. Odyssey
`Productions is only willing to do business with Client/Licensee on the terms of
`this Agreement.” (Beasley Decl., Ex. A, Invoice.)
`Beasley does not rely on this language or even mention it in his briefs.
`(It is specifically mentioned in Beasley’s Declaration, filed in support of his
`motion.) Wiley also fails to address it. Perhaps this is because it is language
`typical of a Uniform Commercial Code Article 2 “battle of forms,” and Article 2
`applies only to sales of goods. It is doubtful that Article 2 applies to the
`copyright licensing agreement here because title did not pass to a moveable
`“thing.” See Lukwinski v. Stone Container Corp., 726 N.E.2d 665, 668-69 (Ill.
`App. Ct. 2000). Therefore, we will follow the parties’ lead and refrain from
`engaging in an Article 2-type contract analysis.
`
`
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`I see we have 35 pictures @ 1/4 page, and 2 @ 1/2 Page.
`The total for the invoice would come to $7,500.
`Please confirm this, and then send me an invoice.
`PLEASE include all the info from this excel file on the
`invoice (title: Frommer’s Chicago Day by Day 1st Edition,
`Print Run info, Pub Date, and your Federal ID #-Or Social
`Security # if you are not incorporated.)
`
`Also, you can make it one invoice of $7500 for all the
`pictures. I’d prefer that for my accounts payable dept.
`Send to the address below, to my attention. FYI: No
`purchase order # necessary from me, for interior usage.
`. . .
`
`(Second Decl. of Christopher P. Beall, Ex. A.) The first page of
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`the “excel file” (a spreadsheet) that was attached to Fox’s e-mail
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`listed information for the 37 images under several columns: “BOOK,”
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`“FIG #,” “SOURCE,” “ID#,” “PHOTOGRAPHER,” “DESCRIPTION,” “USAGE,”
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`“SIZE,” “STATUS,” “FEE,” “DISTRIBUTION,” “PRINT RUN,” and “PUB.
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`DATE.” Under the heading “BOOK,” each entry stated “CHICAGO DBD”;
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`under the heading “PRINT RUN,” each entry stated “46,000 (2
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`Editions Total).” (Second Beall Decl., Ex. B.)
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`At his deposition, Philip testified that he was unable to open
`
`and view the spreadsheet file that was attached to Fox’s e-mail and
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`therefore did not see the attachment’s reference to “2 Editions
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`total.” (Johnson Decl., Ex. D, Tr. of Dep. of Jerry Philip, at 47-
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`48, 56.) In preparing the Invoice to send to Wiley, Philip relied
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`on the e-mail and phone discussions he had had with Wiley
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`representatives, which all involved discussion of licensing rights
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`for a first edition, with no mention of a second edition. (Philip
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`Dep. at 49, 54, 56, 64-65.)
`
`
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`Philip’s response to Fox’s e-mail was as follows:
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`-10-
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`Hello Richard,
`
`Robert was negotiating under the impression that the
`pricing you and he discussed regarding Frommer’s Chicago
`project was for United States distribution, English
`language only.
`The Special Discount Price he offered was based on a
`premise of a USA (only) distribution.
`
`Odyssey’s website posts its Standard Rates for World
`Rights as being:
`Odyssey’s World Rights (one edition, one language) are
`calculated as Current Base Rate + 100%.
`
`Robert agreed to reduce the base rate for USA to ¼ page
`use to 200, and for ½ page to 250.
`
`A note I have from Matthew Kiernan would seem to indicate
`that the possible distribution could be “World” . . . not
`just the USA.
`Should I adjust the prices quoted below to reflect world
`distribution?
`
`Cordially,
`Jerry Philip
`
`(Second Beall Decl., Ex. A.)
`
`Fox responded:
`
`Hi Jerry,
`
`I am pasting the original e-mail my assistant Matthew had
`sent your office. I have never said “North American”
`rights, nor did Matthew.
`
`[pasted e-mail]
`
`We are actually going for Limited World rights---less
`than 10% going abroad to English Language Countries.
`The rest of the distribution would be in US and Canada.
`
`That can be written into the invoice as well. As for
`pricing, as I mentioned over the phone the rates I wrote
`below are what I need to go with.
`
`
`
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`$7500 total is a reasonable compromise in my opinion, per
`bulk usage. This is what I had said to Robert last week
`as well.
`
`I am not prepared to change the fee schedule, so please
`keep it as I spelled out originally.
`
`1/4 page +[sic] $200
`1/2 Page = $250
`Full Page = $300
`
`Thanks again.
`
`Richard
`
`(Second Beall Decl., Ex. A.) The Invoice that Philip prepared and
`
`then sent to Wiley reflected this requested “world rights”
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`definition and pricing.
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`Neither Beasley nor Wiley discusses which of Odyssey’s and
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`Wiley’s communications constituted an offer or an acceptance, or at
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`exactly which point the license agreement was formed. We believe
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`that it is not necessary to discuss these details, because the only
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`question raised by Wiley about the scope of the license is whether
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`it permitted Wiley to print editions subsequent to the first.
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`Wiley asserts that because the Invoice does not include any
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`language specifically prohibiting the publishing of editions
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`subsequent to the first, it is “ambiguous with respect to whether
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`a second edition” of Chicago Day by Day that incorporated Beasley’s
`
`photos was authorized. (Def.’s Mem. in Opp’n to Pl.’s Mot. at 8.)
`
`This argument is unpersuasive. The Invoice refers to a “Project
`
`Title” of “Chicago Day by Day 1.” More importantly, under the
`
`heading “Usage Rights Granted,” it states “[o]ne time nonexclusive
`
`
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`-12-
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`print rights . . . Frommer’s ‘Chicago Day by Day’ 1st Edition.”
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`There is nothing ambiguous about this language. It granted Wiley
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`“one time” rights to print a “1st Edition” of the book. Moreover,
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`copyright licenses are “assumed to prohibit any use not
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`authorized.” S.O.S., Inc. v. Payday, Inc., 886 F.2d 1081, 1088
`
`(9th Cir. 1989); see also Gilliam v. Am. Broad. Cos., 538 F.2d 14,
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`21 (2d Cir. 1976) (concluding that copyright licensee was not
`
`entitled to use licensed material in ways “not specifically
`
`empowered” by the terms of the license).
`
`Even if the Invoice were somehow ambiguous on the issue of the
`
`number of editions that were authorized, the e-mail discussions
`
`between Odyssey and Wiley point to a single interpretation: that
`
`the licensed use was for only one edition. Wiley has submitted no
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`evidence that contradicts Philip’s testimony that Wiley
`
`representatives never made a request for two editions during their
`
`discussions. Wiley’s contention that it “express[ly] request[ed]”
`
`two editions, Def.’s Mem. in Opp’n to Pl.’s Mot. at 9, is simply
`
`wrong. The reference to “2 Editions Total” in the spreadsheet
`
`attached to Fox’s initial December 19 e-mail to Philip was not an
`
`“express request.” Furthermore, even if that reference could be
`
`construed as a “request,” it was contradicted by Fox’s words in the
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`body of that e-mail: Fox used the subject line “Frommer’s Chicago
`
`Day by Day 1st Edition,” and he also explicitly instructed Odyssey
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`to include the title “Frommer’s Chicago Day by Day 1st Edition” on
`
`
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`-13-
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`the invoice. When Philip responded that the pricing was for United
`
`States distribution only and explained the pricing for “World
`
`Rights” for “one edition,” Fox then disputed the geographical
`
`limitation but did not object to the “one edition” statement or
`
`4
`respond that he wanted two editions. And there was no objection
`
`from Wiley when it received the Invoice referring to a “Project
`
`Title” of “Chicago Day by Day 1” and granting usage rights for
`
`“Frommer’s ‘Chicago Day by Day’ 1st Edition.” Wiley paid the
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`Invoice and then used the photos.
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`Wiley has failed to produce any evidence that there was not a
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`meeting of the minds between Odyssey and Wiley that the scope of
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`the copyright license would be for one edition only, and it
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`accordingly fails to create an issue of fact as to the scope of the
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`license. It is undisputed that Wiley printed two editions;
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`therefore, it exceeded the scope of the license. There is also no
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`dispute that Wiley exceeded the scope of the license by
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`distributing electronic editions of the book.
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`2.
`
`Defendant’s “De Minimis” Argument
`
`Wiley contends that “genuine issues of material fact remain as
`
`to the quantity and scope of Wiley’s alleged overruns.” (Def.’s
`
`Mem. in Opp’n to Pl.’s Mot. at 9.) It does not dispute that it
`
`printed 75,938 copies of Chicago Day by Day (total, across the two
`
`4/
`
` Fox also continued to use the “Frommer’s Chicago Day by Day 1st
`Edition” subject line in the e-mail string without modifying it.
`
`
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`-14-
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`editions), but maintains that it actually distributed just over
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`55,000 copies. Wiley argues that the number of copies that were
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`printed but not distributed are not “germane,” and it characterizes
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`the distribution overrun of approximately 9,000 copies as “de
`
`minimis” and “not sufficiently substantial to warrant a finding of
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`liability.” Wiley also refers to its its distribution of 58
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`electronic copies of the book as “trifling.” (Def.’s Mem. in Opp’n
`
`to Pl.’s Mot. at 10.)
`
`Wiley displays a rather nonchalant attitude about copyright
`
`infringement. As Beasley correctly points out, his exclusive
`
`rights include both reproduction and distribution rights. Wiley
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`reproduced and distributed thousands more copies of the book than
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`the license permitted. It ignored the “no electronic rights”
`
`provision. Those are not de minimis infringements, or, in Wiley’s
`
`words, “inconsequential deviations.” (Def.’s Mem. in Opp’n to
`
`Pl.’s Mot. at 11.) The three decisions cited by Wiley in support
`
`of its argument are completely inapposite. See Ringgold v. Black
`
`Entm’t Television, Inc., 126 F.3d 70 (2d Cir. 1997) (holding that
`
`defendant’s use of plaintiff’s poster of an artistic work as a set
`
`decoration for a television program was not de minimis); Leviton
`
`Mfg. Co. v. Fireman’s Fund Ins. Co., 226 F. App’x 671 (9th Cir.
`
`2007) (affirming district court’s determination that a building
`
`contractor was not liable for breach of contract where it had
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`substantially performed its obligations); Pacini v. Regopoulos, 665
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`
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`Case: 1:12-cv-08715 Document #: 61 Filed: 07/21/14 Page 15 of 21 PageID #:815
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`-15-
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`N.E.2d 493 (Ill. App. Ct. 1996) (applying de minimis doctrine to
`
`hold that a 94.9953 percent occupancy rate was essentially a 95
`
`percent occupancy rate, thus relieving sellers of their obligations
`
`on a shopping-center occupancy guarantee). The “de minimis”
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`argument is rejected.
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`3.
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`Statute of Limitations
`
`Defendant also asserts that genuine factual issues remain as
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`to its statute of limitations defense. It submits that Beasley
`
`“was or should have been aware of his copyright infringement claims
`
`when Wiley made its worldwide publication of the allegedly
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`infringing e-book versions (and second edition)” of Chicago Day by
`
`Day--“all of which occurred well before the limitations period of
`
`three years prior to October 31, 2012,” the date the complaint was
`
`filed. (Def.’s Mem. in Opp’n to Pl.’s Mot. at 11.) An electronic
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`version of the book was issued as early as 2007, and the second
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`edition of the book was published in May 2009.
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`Under 17 U.S.C. § 507(b), no action for copyright infringement
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`“shall be maintained . . . unless it is commenced within three
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`years after the claim accrued.” Wiley contends that an
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`infringement claim for unauthorized publication accrues upon that
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`publication, citing two district court decisions from outside this
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`circuit that applied this “injury rule.” It fails to cite the law
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`of this circuit, which uses the “discovery rule” of accrual. In
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`the Seventh Circuit, “the copyright statute of limitations starts
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`
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`to run when the plaintiff learns, or should as a reasonable person
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`have learned, that the defendant was violating his rights.” Gaiman
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`v. McFarlane, 360 F.3d 644, 653 (7th Cir. 2004) (citing Taylor v.
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`Meirick, 712 F.2d 1112, 1117 (7th Cir. 1983)). 5
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`Beasley testified at his deposition that he did not learn of
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`any possible infringement by Wiley until November 2011, eleven
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`months prior to filing suit, when Robert Frerck of Odyssey told him
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`that in the course of doing Internet research, he had come across
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`a “prepublication notice” for a printing of the second edition of
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`Chicago Day by Day. (Johnson Decl., Ex. E, Tr. of Dep. of Michael
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`Beasley at 73-74, 78.) The salient question, then, is whether
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`Beasley reasonably should have discovered Wiley’s infringement
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`prior to that date, considering that electronic books had been
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`issued in 2007 and the second edition had been published in May
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`2009. Wiley points to a single piece of evidence particular to
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`this case in an attempt to create a genuine issue: Beasley’s
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`5/
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` The parties have submitted supplemental briefs regarding the Supreme
`Court’s decision in Petrella v. Metro-Goldwyn-Mayer, Inc., 134 S. Ct. 1962 (May
`19, 2014). In Petrella, the Court held that the equitable defense of laches
`cannot be applied to bar a copyright infringement claim that is brought within
`the Copyright Act’s three-year limitations period. In her prefatory remarks,
`Justice Ginsburg, writing for the Court, stated that “[a] copyright claim . . .
`arises or ‘accrue[s]’ when an infringing act occurs,” and then dropped a footnote
`stating: “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,’” quoting William A. Graham Co. v. Haughey, 568 F.3d 425, 433 (3d Cir.
`2009), as well as a copyright treatise. 134 S. Ct. at 1969 & n.4. Wiley
`suggests that the Supreme Court therefore views the “injury rule” as the correct
`rule of accrual. That remains to be seen because the Court expressly declined
`to reach the question. In any event, and until the Supreme Court holds
`otherwise, this Circuit applies the discovery rule.
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`
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`testimony regarding his conversation with Frerck. According to
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`Wiley, “Beasley could not recall when this particular conversation
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`took place.” (Def.’s Mem. in Opp’n to Pl.’s Mot. at 13.) But
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`Beasley testified that the conversation took place in November
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`2011. Wiley makes much of the fact that Beasley stated that he and
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`Frerck discussed a prepublication notice indicating that a second
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`edition was “going to be published” (emphasis Wiley’s), but there
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`is nothing strange about that. It is not at all unusual that an
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`Internet search conducted in 2011 would generate an “old”
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`prepublication notice. It does not follow that the conversation
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`between Beasley and Frerck must have occurred before May 2009, and
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`in any event there is no evidence contradicting Beasley’s testimony
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`that the conversation occurred in November 2011.
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`Wiley also contends that Beasley was on “constructive notice”
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`that his images “may have been infringed” in light of the fact that
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`national media “have been reporting changes in the stock
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`photography business models and potential violations by textbook
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`publishers for years.” (Def.’s Mem. in Opp’n to Pl.’s Mot. at 13-
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`14.) It submits that Beasley’s “failure to investigate years
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`before the complaint” is “inexcusable” and “tantamount to sticking
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`his head in the sand.” (Def.’s Mem. in Opp’n to Pl.’s Mot. at
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`14.) We disagree. News reports and articles about “potential
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`violations” by textbook publishers in general would not provide
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`Beasley with any inkling that Wiley in particular was infringing
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`
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`his copyrights. Wiley cites inapposite case law and, again, case
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`law from outside this circuit. It fails to acknowledge Seventh
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`Circuit law indicating that copyright holders have no general duty
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`to troll for infringements. See Taylor, 712 F.2d at 1118 (“[W]e
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`doubt that every time the sales of a publication dip, the publisher
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`must, to preserve his right to sue for copyright infringement,
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`examine all of his competitors’ publications to make sure none is
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`infringing any of his copyrights.”); Gaiman, 360 F.3d at 654
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`(“[U]nless there is a duty of authors to read the copyright pages
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`of works containing their copyrighted materials--and there is not--
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`. . . the notice can affect the accrual of the cause of action only
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`if the victim reads it.”); see also William A. Graham Co. v.
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`Haughey, 568 F.3d 425, 438-39 (3d Cir. 2009) (rejecting “the
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`proposition that a copyright owner has a duty to investigate
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`infringement ‘in the offing’” and stating that a copyright owner
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`“does not have a duty to ferret out potential acts of infringement
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`before they occur”).
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`Wiley has submitted no evidence to create a genuine issue of
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`material fact as to whether Beasley should have discovered Wiley’s
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`infringement at an earlier time.
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`Plaintiff’s motion for summary judgment of liability for
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`copyright infringement will be granted.
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`
`
`
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`B.
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`Defendant’s Motion for Summary Judgment on Counts II and III
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`Wiley moves for summary judgment on Counts II and III,
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`plaintiff’s claims for, respectively, common-law fraud and
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`violation of the Digital Millennium Copyright Act. In response to
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`Wiley’s motion, Beasley states that he “does not oppose” Wiley’s
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`motion and “[i]nstead . . . asks that he be granted leave to
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`withdraw” Counts II and III by way of an amended complaint that
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`omits those claims. (Pl.’s Resp. to Def’s Mot. for Partial Summ.
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`J. at 2.) Wiley opposes this request, arguing that we should
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`simply enter judgment because it would be unduly prejudiced if
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`plaintiff were permitted to withdraw the claims. Wiley points out
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`that it “expended significant resources to fully brief and submit
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`its motion for summary judgment, which was direct[ed] solely to the
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`DMCA and fraud claims.” (Def.’s Reply at 3.) It also notes that
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`a judgment in its favor on the DMCA claim would potentially entitle
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`it to recover attorneys’ fees. See 17 U.S.C. § 1203(a), (b)(5)
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`(“In an action brought [for violation of 17 U.S.C. § 1201 or 1202],
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`the court in its discretion may award reasonable attorney’s fees to
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`the prevailing party.”).
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`Any withdrawal or dismissal of Counts II and III will be with
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`prejudice. We have no view as to whether fees should be awarded,
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`but Wiley is entitled to request them. Therefore, we will not
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`allow plaintiff to withdraw or dismiss Count III without
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`considering whether the defendant is entitled to a fee award on
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`
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`Case: 1:12-cv-08715 Document #: 61 Filed: 07/21/14 Page 20 of 21 PageID #:820
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`that claim. The case will be set for a status hearing on July 30,
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`2014 at 11:00 a.m. to discuss how the parties wish to proceed on
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`-20-
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`this issue.
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`
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`C.
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`Plaintiff’s Motion to Challenge
`Defendant’s Confidentiality Designations
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`In support of his summary judgment motion, plaintiff filed
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`data reports Wiley produced in the course of discovery. The
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`reports show the print totals and revenues for Chicago Day by Day,
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`along with a summary chart prepared by plaintiff that shows print
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`totals. (Decl. of Alex Rice Kerr, Exs. 1-4.) Wiley designated
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`those materials as confidential. Plaintiff has moved to
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`provisionally file these exhibits to his motion and for leave to
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`file the unredacted version of his motion, and he challenges
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`Wiley’s “confidential” designations and contends that the exhibits
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`should be publicly filed. In response, Wiley withdraws its
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`confidentiality designations for each of these exhibits and a