Case 2:20-cv-00831-KM-MAH Document 57 Filed 07/06/22 Page 1 of 11 PageID: 422
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`UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF NEW JERSEY
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`Plaintiff,
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`Defendant.
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` Civ. No. 20-00831-KM-MAH
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` OPINION
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`LINES+ANGLES, INC.,
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`ADAGIO TEAS, INC.,
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`MCNULTY, U.S.D.J.:
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`v.
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`The plaintiff, Lines+Angles, Inc. (formerly Stockfood America, Inc.),
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`alleges that the defendant, Adagio Teas, Inc. (“Adagio”), infringed its copyright
`in a photographic image of a pumpkin pie by displaying that image on its
`website. Lines+Angles seeks summary judgment as to the two essential
`elements of a copyright infringement claim (ownership of a valid copyright and
`infringement by defendant), and also as to whether Adagio’s alleged
`infringement was willful. Adagio opposes each aspect of the motion. For the
`reasons stated herein, the motion of Lines+Angles will be granted as to
`ownership and infringement, but denied as to willfulness, which poses issues
`of fact.
`I. Background1
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`For purposes of this motion, I consider the parties’ statements of material facts,
`1
`as well as the deposition testimony and documentary evidence. Facts not contested
`are assumed to be true.
`Certain record items will be cited as follows:
`PSMF = Plaintiff Lines+Angles’s statement of material facts (DE 48-2)
`DRSMF = Defendant Adagio’s responsive statement of material facts (DE 51-11)
`Pl. Br. = Plaintiff Lines+Angles’s brief in support of summary judgment (DE 48-
`1)
`Opp. = Defendant Adagio’s brief in opposition to summary judgment (DE 51).
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`Defendant Adagio is an online retailer of tea and tea accessories. (PSMF ¶
`6). Plaintiff Lines+Angles is a photographic agency which maintains a database
`of stock food images, videos, and other features that it licenses to third parties.
`(Id. ¶ 1). At the time that the infringement occurred, Lines+Angles was known
`as Stockfood America, Inc., which was then a wholly owned subsidiary of
`StockFood GmbH, a Germany corporation.2 (Id.)
`Stockfood America acts as a licensing agent for photographers. The
`image at issue in this case, a photograph of a pumpkin pie, was taken by Paul
`Poplis Photography and registered with the United States Copyright Office,
`Registration Number VA 1-652-306, on March 13, 2008. (Id. ¶ 5.) It is
`undisputed that Poplis granted an exclusive license to Stockfood America on
`July 31, 2009, though Adagio disputes the degree to which Stockfood America
`was an exclusive licensee at the time of the alleged infringement. (DE 50-2, Ex.
`B; DSMF ¶ 1–3.) In the Spring of 2020, plaintiff discovered that the copyrighted
`work at issue was being used without permission on Adagio’s website. (PSMF ¶
`9, 11–12.) It appears that the photograph was uploaded to Adagio’s website by
`a non-party to this case, who used the picture to illustrate their custom
`“Perfect Pumpkin Pie Chai” tea blend. (PSMF ¶ 10, DE 49-1 at 5.) Although
`anyone can create their own tea blend and upload related information to
`defendant’s website, the blender is required to affirm that that they have the
`necessary rights to upload the image. (DE 51-1, ¶ 12, 14.)
`In a prior opinion between these two parties, I held that Stockfood
`America, as an exclusive licensee, had standing to sue for infringement even if
`the photographer retained copyright to the photographs. See Stockfood Am.,
`Inc. v. Adagio Teas, Inc., 475 F. Supp. 3d 394, 411 (D.N.J. 2020). Here,
`however, there is an additional complication. In 2010, Stockfood GmbH signed
`an agreement with Getty Images that granted Getty a “world-wide exclusive
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`GmbH is an acronym of Gesellschaft mit beschränkter Haftung, a type of
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`German corporate form similar to an LLC. Throughout this opinion, I refer to the
`plaintiff as Stockfood America when discussing the infringement, because that was the
`company’s name when the infringement occurred.
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`license to distribute” Stockfood GmbH’s images (the “Getty Agreement”). (DE
`51-10, Ex. D., § 2.1.) It was Stockfood America, rather than Stockfood GmbH,
`that executed the agreement with Poplis to become the exclusive licensee of the
`image at issue in this case. Nevertheless, plaintiff has produced evidence
`showing that Getty licensed the image dozens of times. (DE 51-9, Ex. C.) The
`Getty Agreement includes a section related to unauthorized use of the images,
`which gives Getty the authority the first right to sue with respect to the
`unauthorized use, but states “Should Getty Images or its delegates decline to
`pursue such unauthorized use in the first instance, [Stockfood GmbH] shall be
`entitled to pursue such claims on its own behalf…. Nothing in this Section 2.7
`shall prevent [Stockfood GmbH] from pursuing any unauthorized use claims
`where Getty Images discontinues the pursuit of any unauthorized use prior to
`reaching a settlement with an infringer.” (DE 51-10, § 2.7.)
`Stockfood America filed the complaint in this case on January 24, 2020,
`asserting copyright infringement pursuant to 17 U.S.C. §§ 106(1), and 501. (DE
`1.) The parties failed to reach a settlement. (DE 33, 34.) In November 2020,
`Shannon Day purchased Stockfood America, changing its name to
`Lines+Angles, Inc. and a motion to substitute parties was granted in January
`2022. (DE 47.) On January 14, 2022, Lines+Angles filed a motion for summary
`judgment on liability. (DE 48). Adagio filed a brief in opposition (DE 51) and
`Lines+Angles filed a reply (DE 53). Oral argument was held on June 28, 2022.
`(DE 56.)
`Legal Standard
`II.
`Federal Rule of Civil Procedure 56(a) provides that summary judgment
`should be granted “if the movant shows that there is no genuine dispute as to
`any material fact and the movant is entitled to judgment as a matter of law.”
`Fed. R. Civ. P. 56(a); see also Anderson v. Liberty Lobby, Inc., 477 U.S. 242,
`248 (1986); Kreschollek v. S. Stevedoring Co., 223 F.3d 202, 204 (3d Cir. 2000).
`In deciding a motion for summary judgment, a court must construe all facts
`and inferences in the light most favorable to the nonmoving party. See Boyle v.
`Cty. of Allegheny Pa., 139 F.3d 386, 393 (3d Cir. 1998). The moving party bears
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`the burden of establishing that no genuine issue of material fact remains. See
`Celotex Corp. v. Catrett, 477 U.S. 317, 322–23 (1986). “[W]ith respect to an
`issue on which the nonmoving party bears the burden of proof . . . the burden
`on the moving party may be discharged by ‘showing’—that is, pointing out to
`the district court—that there is an absence of evidence to support the
`nonmoving party’s case.” Celotex, 477 U.S. at 325.
`Once the moving party has met the threshold burden, the non-moving
`party “must do more than simply show that there is some metaphysical doubt
`as to material facts.” Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475
`U.S. 574, 586 (1986). The opposing party must present actual evidence that
`creates a genuine issue as to a material fact for trial. Anderson, 477 U.S. at
`248; see also Fed. R. Civ. P. 56(c) (setting forth types of evidence on which the
`nonmoving party must rely to support its assertion that genuine issues of
`material fact exist). In deciding a motion for summary judgment, the court’s
`role is not to evaluate and decide the truth of the matter, but to determine
`whether there is a genuine issue for trial. Anderson, 477 U.S. at 249.
`Credibility determinations are the province of the fact finder. Big Apple BMW,
`Inc. v. BMW of N. Am., Inc., 974 F.2d 1358, 1363 (3d Cir. 1992).
`III. Discussion
`Plaintiff’s motion for partial summary judgment requires a decision on
`three issues. First, I must determine if Stockfood America owned the copyright
`in the image and thus had standing to sue. Second, I must decide if Adagio
`infringed Stockfood America’s copyright. And third, I must determine if that
`infringement was willful. I may grant summary judgment on any of these
`elements only if I find that there is no dispute of material fact as to that
`particular element. I find that Stockfood America is an exclusive licensee with
`standing to sue and that Adagio infringed the copyright, and therefore GRANT
`summary judgement on those first two elements. I find, however, that disputed
`issues of material fact require me to DENY summary judgment as to
`willfulness.
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`a. Ownership and Standing
`The Copyright Act of 1976 provides that “[t]he legal or beneficial owner of
`an exclusive right under a copyright is entitled, . . . to institute an action for
`any infringement of that particular right committed while he or she is the
`owner of it.” 17 U.S.C. § 501. The Act enumerates six activities, including
`reproduction, transfer, and public display of the copyrighted work, that the
`copyright owner has the exclusive right “to do” and “to authorize.” 17 U.S.C. §
`106.3 “Anyone who violates any of the exclusive rights of the copyright owner,
`that is, anyone who trespasses into [the owner’s] exclusive domain by using or
`authorizing the use of the copyrighted work . . . is an infringer of the
`copyright.” Sony Corp. of Am. v. Universal City Studios, Inc., 464 U.S. 417, 433,
`(1984) (quotation and citation omitted).
`A claim for copyright infringement involves two “essential elements:
`ownership of copyright, and copying by the defendant.” Dam Things from
`Denmark, a/k/a Troll Company ApS v. Russ Berrie & Company, Inc., 290 F.3d
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`3
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` Subject to sections 107 through 122, the owner of copyright under this title
`has the exclusive rights to do and to authorize any of the following:
`(1) to reproduce the copyrighted work in copies or phonorecords;
`(2) to prepare derivative works based upon the copyrighted work;
`(3) to distribute copies or phonorecords of the copyrighted work to the
`public by sale or other transfer of ownership, or by rental, lease, or
`lending;
`(4) in the case of literary, musical, dramatic, and choreographic works,
`pantomimes, and motion pictures and other audiovisual works, to
`perform the copyrighted work publicly;
`(5) in the case of literary, musical, dramatic, and choreographic works,
`pantomimes, and pictorial, graphic, or sculptural works, including
`the individual images of a motion picture or other audiovisual work,
`to display the copyrighted work publicly; and
`(6) in the case of sound recordings, to perform the copyrighted work
`publicly by means of a digital audio transmission.
`17 U.S.C. § 106.
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`548, 561 (3d Cir. 2002) (citing Whelan Assocs., Inc. v. Jaslow Dental Lab., Inc.,
`797 F.2d 1222, 1231 (3d Cir. 1986)); see also Winstead v. Jackson, 509 Fed.
`App’x 139, 143 (3d Cir. 2013) (stating that “[t]o establish a claim of copyright
`infringement, the plaintiff must establish ownership of a valid copyright, and
`unauthorized copying of protectable elements of the plaintiff’s work.”). In
`addition, exclusive licensees are considered to have a sufficient ownership
`interest to confer standing to sue for infringement. Stockfood Am., 475 F. Supp.
`3d at 411; Eden Toys, Inc. v. Florelee Undergarment Co., 697 F.2d 27, 32 (2d
`Cir. 1982).
`The core of Adagio’s argument is that the agreement between Stockfood,
`GmbH and Getty Images undermines plaintiff’s exclusivity, rendering plaintiff a
`non-exclusive licensee without standing to sue. Essentially, Adagio argues that
`because Stockfood GmbH granted Getty an exclusive world-wide license to
`distribute the pumpkin pie image, Stockfood America must be a non-exclusive
`licensee, and that such a non-exclusive licensee lacks standing to sue. (Opp. at
`10.)
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`The issue is complicated by a certain laxity with respect to corporate
`formalities. Poplis granted an exclusive license to Stockfood America, not
`Stockfood GmbH.4 Yet it was Stockfood GmbH that entered into the Getty
`Agreement. Receiving this grant of rights from Stockfood GmbH, which
`arguably did not possess them, Getty went on to license the image to others
`dozens of times, apparently without any complaint from Stockfood America. It
`is thus difficult to determine whether Stockfood America and Stockfood GmbH
`should be treated as distinct entities or the same company at the time of the
`infringement. I find, however, that the outcome would be the same under either
`analysis: Stockfood America has enough of an interest to give it standing to
`sue.
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`Adagio does not significantly rebut the evidence that Poplis granted an exclusive
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`license to Stockfood America and that, absent the Getty agreement, Stockfood America
`would have standing as exclusive licensee to sue for infringement, which is in line with
`my prior opinion in the related matter. Stockfood Am., 475 F. Supp. 3d at 411. The
`issue is whether the Getty agreement changes that.
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`First, assume arguendo that Stockfood America and Stockfood GmbH are
`entities that successfully maintained their separate status. If so, then the
`agreement between Stockfood GmbH and Getty is of no importance. Stockfood
`GmbH simply granted to Getty rights that it did not possess. Stockfood
`America, then, would have had standing to sue Getty for licensing the pumpkin
`pie image because Stockfood America had exclusive rights to that image. It did
`not do so, but that does not change the fact that Stockfood America was the
`sole and exclusive licensee of the image. In this more straightforward scenario,
`Stockfood America is now attempting to enforce its rights as the exclusive
`licensee of the pumpkin pie image and unquestionably has standing to do so.
`Second, assume in the alternative the less straightforward scenario that
`Stockfood GmbH and Stockfood America so melded their affairs that they
`should be treated as a single entity (let’s call it “Stockfood Global”). If so, then
`Stockfood Global did, via the Getty Agreement, effectively grant Getty the right
`to distribute the pumpkin pie image. It is uncontested that Getty was able to,
`and did, license the pumpkin pie image to third parties. (DE 51-7 at 69–71.) It
`is likewise uncontested that Stockfood America had exclusive rights vis-à-vis
`Poplis. The issue, however, is whether by signing the Getty Agreement,
`Stockfood Global has given up its right (or its component entities’ right) to sue.
`I find that, according to the language of its contract with Getty, it has not. I
`therefore find that Stockfood America has standing to sue for infringement.
`This facts of this case are unlike a situation in which a photographer
`purports to grant exclusive licenses to multiple distributors, making no
`distributor the “sole and exclusive” licensee. See Stockfood, Am., 475 F. Supp
`at 410 (discussing DRK Photo v. McGraw-Hill Global Education Holdings, LLC,
`870 F.3d 978 (9th Cir. 2017)). Here, instead, we have not a hub-and-spoke
`array but a chain of licenses. Poplis contracted with Stockfood Global as his
`sole and exclusive agent, and Stockfood Global then contracted with Getty to
`distribute the images. There is no evidence in the record, by the way, that
`Poplis was even aware of the Getty Agreement. To determine the effect of the
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`Getty Agreement on Stockfood Global’s rights, we must look at the language of
`the agreement itself. Id. The Getty Agreement allows Getty to sue for
`infringement, but in cases where Getty has chosen not to pursue legal action, it
`clearly and unambiguously reserves to Stockfood [Global, in this scenario] the
`right to sue for infringement.5 (DE 51-10, § 2.7.) Here there is no indication
`that Getty has taken any action against Adagio, and thus, according to the
`terms of the Getty Agreement, the right to do so reverts to Stockfood [Global].
`In addition, the Getty Agreement allows only one or the other (Getty, or
`Stockfood, but not both) to bring suit for infringement. In short, I find that
`Stockfood Global, holding an exclusive license from Poplis, may enter into
`agreements to distribute Poplis’s photographs without automatically losing its
`ability to sue for infringement.
`The Stockfood GmbH issue, while knotty, is a detour. Whether Stockfood
`GmbH and Stockfood are treated as the same entity or separate entities, the
`result is the same. Under either theory, Stockfood America has standing to sue
`Adagio for infringement as the exclusive licensee of the pumpkin pie image.
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`b. Infringement
`Having established that it has standing to bring a suit for infringement,
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`Lines+Angles (as Stockfood America’s successor) seeks summary judgment as
`to whether Adagio infringed its copyrights. Adagio does not dispute that the
`pumpkin pie image was posted to its website, but argues briefly that it has
`raised a genuine factual dispute as to the interest, if any, that was conveyed by
`the contract between Poplis and Stockfood America. (Opp. at 12–13.) This
`argument, however, is foreclosed by the reasoning of my opinion in the prior
`case between these parties, and by my analysis of the contract between Poplis
`and Stockfood America. I have found that Stockfood America was the exclusive
`licensee of Poplis’s image and thus that if Adagio copied the image without
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`I also find that this agreement is not one that provides Getty or Stockfood with
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`a “bare right to sue,” which is impermissible under the Copyright Act. See John Wiley
`& Sons, Inc. v. DRK Photo, 882 F.3d 394, 404 (2d Cir. 2018). Rather Stockfood America
`retains a variety of rights including the right to sue if Getty chooses not to.
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`permission it infringed Stockfood America’s copyright. I find that by allowing
`the image to be posted to its website, Adagio infringed plaintiff’s copyrights.
`Accordingly, I grant summary judgment in favor of Stockfood as
`infringement.
`c. Willfulness
`Having established infringement, Stockfood also seeks summary
`judgment on the issue of whether Adagio’s infringing conduct was willful. (Pl.
`Br. at 10–14.) This determination potentially affects the amount of damages
`Stockfood could recover. See 17 U.S.C. § 504(c)(2).
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`Stockfood cites several precedents from the Second Circuit holding that
`willfulness can be established at the summary judgment stage. (Pl. Br. at 10.)
`Adagio does not dispute that as an abstract proposition. Rather, it focuses on
`the evidence for Stockfood America’s contentions, arguing that Stockfood has
`not established the lack of a genuine issue of material fact as to Adagio’s
`willfulness. (Opp. at 13–18.)
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`“In a case where the copyright owner sustains the burden of proving, and
`the court finds, that infringement was committed willfully, the court in its
`discretion may increase the award of statutory damages to a sum of not more
`than $150,000.” 17 U.S.C. § 504(c)(2). The statute does not define willfulness,
`nor has the Third Circuit established a comprehensive test. The Second
`Circuit, however, has adopted the following standard:
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`To prove ‘willfulness’ under the Copyright Act, the plaintiff must show (1)
`that the defendant was actually aware of the infringing activity, or (2)
`that the defendant's actions were the result of ‘reckless disregard’ for, or
`‘willful blindness’ to, the copyright holder's rights. Willfulness may be
`proven on summary judgment, so long as the court draws all reasonable
`inferences in the defendant's favor.
`Jose Luis Pelaez, Inc. v. McGraw-Hill Global Educ. Holdings LLC, 399 F. Supp.
`3d 120, 146 (S.D.N.Y. 2019) (citing, inter alia, Island Software & Computer
`Serv., Inc. v. Microsoft Corp., 413 F.3d 257, 263 (2d Cir. 2005)). Both parties
`cite the Second Circuit standard, and I adopt it arguendo.
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`Stockfood America argues that the evidence shows both “reckless
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`disregard” for and “willful blindness” to its rights. It points to the previous case
`between these parties as evidence that Adagio is a repeat offender and that its
`infringement can be regarded as willful. (Pl. Br. at 12.) In addition, Stockfood
`America argues that Adagio is knowledgeable about copyright law, which
`bolsters the conclusion that any infringement was willful. (Id. at 13.)
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`Adagio counters that it was unaware that a third party uploaded a
`copyrighted image to its website. (Opp. at 14.) This situation is different from
`that of the prior case, which involved images that Adagio itself had used on its
`website. Stockfood, Am., 475 F. Supp. at 399–400. Adagio claims that it would
`have immediately taken down the image if it had ever been informed by
`Stockfood America that the image infringed its copyright, and that it did take
`the image down as soon as this lawsuit was filed. (Opp. at 16–17.) In addition,
`Adagio has a policy that requires its employees to check on images that its
`customers upload – even though it requires the uploader to affirm that he or
`she has the rights to the image – to double check whether the image is subject
`to copyright. (Id. at 14-15.) That policy, says Adagio, also tends to blunt any
`inference of willfulness.
`I find that Lines+Angles has not pointed to significant direct evidence
`that Adagio’s conduct was actually willful. Rather, it points to some indirect or
`collateral evidence from which, it claims, one could infer recklessness. Largely,
`however, it attempts to bootstrap my finding of infringement in the prior case
`into a finding of willfulness in this case. At the summary judgment stage, I
`must draw reasonable inferences in the non-movant’s favor. Here, Adagio has
`put forth some evidence, such as its policy of examining uploaded images and
`its immediate removal of the infringing image upon the filing of this lawsuit,
`that its infringement was not willful. There is enough of a clash in the proofs
`here to raise a genuine dispute of material fact. Accordingly, summary
`judgment is denied as to the issue of willfulness.
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`IV. Conclusion
`For the reasons set forth above, the motion of Lines+Angles for summary
`judgment (DE 48) is GRANTED as to liability (ownership and infringement), but
`DENIED as to whether Adagio’s conduct was willful.
`Dated: July 5, 2022
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`/s/ Kevin McNulty
`____________________________________
` HON. KEVIN MCNULTY, U.S.D.J.
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