Case 5:12-cv-02061-MMB Document 126 Filed 06/26/14 Page 1 of 23
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF PENNSYLVANIA
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`
`:
`GRANT HEILMAN PHOTOGRAPHY, INC.
`:
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` Plaintiff, :
`v.
`:
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`
`:
`THE MCGRAW-HILL COMPANIES, INC., and
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`JOHN DOES PRINTERS 1-10,
`:
`
`
`:
`
` Defendants :
`
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`CIVIL ACTION
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`NO. 12-2061
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`Baylson, J.
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`
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`MEMORANDUM RE: MOTION FOR PARTIAL SUMMARY JUDGMENT
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`June 26, 2014
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`Prior to a bellwether trial of copyright infringement claims brought by a stock
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`photography agency against a publishing company, Plaintiff moves for partial summary
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`judgment on its infringement claims and several of the Defendants’ affirmative defenses.
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`On April 18, 2012 Plaintiff filed a complaint for 2,395 instances of copyright
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`infringement. On August 31, 2012, Defendants moved for summary judgment based on the
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`statute of limitations (ECF 12), which this Court denied (ECF 28). Defendants then moved to
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`bifurcate the litigation into two stages, first to consider the statute of limitations, and a second
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`stage to determine liability and damages (ECF 29). This Court then ordered a bifurcated trial
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`based on twenty-four invoices selected by Plaintiff and six invoices selected by Defendants (ECF
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`36). Plaintiff filed a motion for partial summary judgment on April 28, 2014, which is presently
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`before the Court (ECF 104). Plaintiff seek summary judgment on claims of copyright
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`infringement for the use of 57 images and on the following affirmative defenses Defendants
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`asserted in their Answer: statute of limitations; lack of standing; copyright registrations are
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`invalid or unenforceable; claims are barred by licensing or consent; claims are barred by
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`1
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`Case 5:12-cv-02061-MMB Document 126 Filed 06/26/14 Page 2 of 23
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`acquiescence, novation or satisfaction;1 claims are barred by laches, estoppel or unclean hands;2
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`and failure to mitigate3 (ECF 104).
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`On June 11, 2014, this Court heard oral argument on the motion for summary judgment.
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`(ECF 121). Plaintiff subsequently submitted a letter brief on June 16, 2014 arguing that courts
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`can disregard testimony on the parties’ course of dealing when it contradicts the express terms of
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`an unambiguous contract. Defendants submitted a letter brief on June 17, 2014 responding to the
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`cases Plaintiff submitted, and noting they could find no cases where the Third Circuit held the
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`course of dealing altered the terms of a copyright license.
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`I.
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`FACTUAL BACKGROUND
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`A. Undisputed Facts
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`
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`Plaintiff is a company that licenses stock image photographs. Defendants are McGraw
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`Hill Companies and associated corporate entities that produce textbooks. Plaintiff alleges 2,395
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`instances of copyright infringement against Defendants, based on 594 invoices (ECF 1).
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`Plaintiff contends it granted limited licenses clearly defining the use permissions granted, and
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`that Defendants exceeded the use granted for each of the images alleged.
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`Plaintiff issued Defendants thousands of licenses to use its photographs in publications
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`between 1995 and 2011. In 2003, the parties entered into a Preferred Vendor Agreement (PVA),
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`which established pricing for each kind of licensing. Pl’s Ex. H. The agreement is a single page,
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`comprised of a chart with pricing based on the size of the image and the number of copies. Pl’s
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`Ex. H. The terms specify that the base rate includes only the English language, distribution in
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`the United States and 15% of World distribution, and gratis ancillaries provided to teachers. Pl’s
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`1 Defendants withdrew this affirmative defense in their responsive brief. Def’s Resp. Br. at 4.
`2 Defendants have withdrawn this defense in light of the recent Supreme Court ruling in Petrella v. Metro-Goldwyn-
`Mayer, Inc., 12-1315, 2014 WL 2011574 (U.S. May 19, 2014). Def’s Sur-reply Br. at 3 (ECF 112).
`3 Defendants did not respond to Plaintiff’s motion seeking summary judgment on this defense, stating Plaintiff “has
`moved for summary judgment solely on liability.” Def’s Resp. Br. at 4.
`2
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`Case 5:12-cv-02061-MMB Document 126 Filed 06/26/14 Page 3 of 23
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`Ex. H. The PVA specified the additional fees for additional languages, World distribution, re-
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`licensing for new editions, and limits the total number of prints to 500,000. Pl’s Ex. H.
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`Each invoice for the images specified the number of copies, geographic distribution,
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`language, duration or number of editions, and media the images could be used. Pl’s Ex. E. Term
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`and Conditions were printed on the back of each invoice. Salient language includes the
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`following:
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`Upon submission of and payment of an invoice for GHP, a license only is granted
`to use the images for the use specified on the invoice and for no other purpose,
`unless such images are purchased outright. Such use is granted for the United
`States only, and only for a one-year period, unless otherwise specified. . . . If
`Recipient desires to re-use an image or extend previous usage, then Recipient
`must request and pay for additional rights prior to publication. You agree not to
`make, authorize or permit any use of an image . . . except as authorized by the
`invoice. In the event you utilize an image for any use other than that indicated on
`the invoice, including but not limited to the number of uses, the publication
`utilized, or the size of reproductions, GHP agrees to forego its right to sue for
`copyright infringement if you pay, as liquidated damages, a sum equal to ten (10)
`times the maximum price we would have charged for such use. . . If you fail to
`make such payment in ten (10) days, we shall have the right to sue for copyright
`infringement and breach of contract.
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`Pl’s Ex. E.
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`
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`The record reflects four instances where Defendants do not dispute that they used the
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`images beyond the terms of the invoices. The first instance in the record began with a letter
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`dated April 8, 1999 from an attorney for the Picture Agency Council of America (PACA), Nancy
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`Wolff. Def’s Ex. 18. Wolff wrote to the director of the Glencoe division of McGraw Hill that
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`in licensing images for the 2000 edition4 of a biology text, members of the trade association
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`discovered that no license was granted for any of the images in the 1998 edition of the text.
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`Def’s Ex. 18. Wolff explained that use beyond what was specified in invoices required
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`additional fees, and unauthorized use violated the copyright:
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`4 Textbook publishers commonly date the text edition a year or two later than the actual publication date.
`3
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`Case 5:12-cv-02061-MMB Document 126 Filed 06/26/14 Page 4 of 23
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`As you know, most stock agencies operate under the same industry norms and
`practices. Photographs are licensed for a particular usage. All other rights are
`reserved to the owner. If additional usage or rights are necessary, further
`permission must be sought and granted. In reviewing certain representative
`licensing agreements for the 1995 Edition, the agencies clearly stated that the
`rights were limited to “One Time North American Reproduction English
`Language Rights, One Edition.” The terms of most PACA members’ invoice also
`provide that usage is limited to the rights granted on the invoice, and any use
`outside of the terms of the agreement constitutes copyright infringement.
`Unauthorized use entitles the agencies to receive a multiple of the fee it would
`have received had the use been with permission.
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`In response to this letter, Defendants wrote to Plaintiff on September 27, 1999
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`acknowledging they had “published a copyright update of this text in 1998 for which we did not
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`obtain photo permission at that time” and enclosed a check for the image fee. Def’s Ex. 20.
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`Plaintiff returned a copy of the letter writing “Not Acceptable” on the signature line. Def’s Ex.
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`20. Plaintiff eventually submitted an invoice that stated: “This invoice reflects a retroactive
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`license fee for re-use of images without legal permission from Grant Heilman Photography.”
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`Def’s Ex. 22.
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`Second, in 2006 Defendants wrote to Plaintiff, “Enclosed please find payment under our
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`photo license agreement for usage in a print run larger than originally anticipated.” Def’s Ex. 26.
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`Plaintiff wrote in response, “We are in receipt of the McGraw-Hill Companies check for
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`payment for usage of imagery from our library where McGraw-Hill Companies has exceeded the
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`terms of our original licensing agreements.” Def’s Ex. 29. Plaintiff accepted the check, but also
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`submitted invoices for new licenses for the additional use, explaining that permissions for print
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`runs beyond the original invoice are routinely treated as pick up fees for new licenses:
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`We are in receipt of the McGraw-Hill Companies check for payment for usage of
`imagery from our library where McGraw-Hill companies has exceeded the terms
`of our original licensing agreement . . . For the more than twenty years since I
`have been a part of Grant Heilman Photography, when publisher’s [sic] books
`exceed their original printing quantities, the new licenses have been and currently
`are treated as pick up fees for new licenses. . . . [T]here is still a balance due to
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`Case 5:12-cv-02061-MMB Document 126 Filed 06/26/14 Page 5 of 23
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`bring our original licenses up to current rights and distribution you are requesting
`. . . [T]o extend the printing quantities . . . the original license will be specified in
`the body of rights of the invoice and at the top of the invoice in the line for P.O.
`number.
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`Def’s Ex. 29. The accompanying invoices stated they were an “extension of right to” a the
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`original invoice number. Def’s Ex. 30.
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`The third incident was in 2008 when Plaintiff discovered Defendants printed an image
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`without obtaining a license when the Defendants sought to relicense the image for a new edition.
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`Def’s Ex. 32. Plaintiff sent Defendants an invoice for “[r]etroactive license fee for [an] image
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`published and distributed without permission.” Def’s Ex. 34. The invoice billed $795 for the
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`image. Def’s Ex. 34. This appears to be three times the $265 price indicated in the PVA pricing
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`chart. Pl’s Ex. H.
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`Finally, in 2011 Plaintiff discovered Defendants had already published a text for which
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`they sought permissions. Plaintiff again wrote the use exceeded the license terms:
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`We have learned that this textbook has been published an[d] available for
`purchase since January 21, 2011. Our terms and conditions states that
`reproduction rights are granted only by creation and payment of our invoice prior
`to publication. Therefore, since this image is being used without the proper
`licensing, we reserve the right to charge a 10 times retroactive fee for this image.
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`Def’s Ex. 48. Plaintiff then sent Defendants an invoice which states “licensing fee reflects a ten
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`(10) times licensors terms and conditions definition.” Pl’s Ex. G. This refers to the “Terms As
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`To Use” printed on the back of each GHPI invoice imposing a penalty of ten times the price for
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`unauthorized use of copyrighted material.
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`Plaintiff produced evidence from Defendants’ records showing Defendants used their
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`images in more copies than were authorized under the terms of the invoices. Pl’s Exs. 1-18.
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`Finally, Plaintiff produced copies of U.S. Trademark Registration certificates for each of the
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`images. Pl’s Ex. D. Plaintiff also produced copies of assignment agreements from each of the
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`Case 5:12-cv-02061-MMB Document 126 Filed 06/26/14 Page 6 of 23
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`photographers who created the images that Plaintiff licensed. Pl’s Ex. C. These agreements
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`granted Plaintiff the “sole and exclusive agent and representative with respect to the sale, license,
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`and lease of all Photographer’s photographs accepted into the files of [GPHI].” Pls’ Ex. C. B.
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`Disputed Facts
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`Defendants dispute that the terms of the invoices constitute licenses. Defendants contend
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`that the licenses are instead comprised of “all the relevant communications and documents
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`concerning the parties’ transaction for that particular photo” including the pricing agreement
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`invoices, all written, electronic and oral communications, “and the parties’ understanding as
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`exhibited by their decades-long course of dealing.” Def’s Response to Pl’s Statement of
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`Undisputed Facts ¶8. Defendants further posit that the invoices did not limit the use of the
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`images, but instead merely reflected Defendants’ estimates of their anticipated use at the time.
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`Behnke Dep. 26:1-28:7 (testifying as the corporate designee for Defendants that “when we have
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`the photos, we decide what products to use them in and then we report back to the rights owners
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`to request the invoice for that use”). Defendants point to testimony that when the actual use
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`exceeded the anticipated use, Defendants paid a new invoice for the additional use of the images.
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`Behnke Dep. 36:3-6 (testifying that Defendants’ understanding was that they had unlimited
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`permission to use the images, but had to pay for that use according to the price points in the
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`PVA); Norton Dep. 26:8-23 (“We had permission to use [the image] when Grant Heilman gave
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`us the image. We – if we went over the 250, we would need to request for additional units.”);
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`Def’s Ex. 31.
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`Defendants produced an expert report prepared by GHPI President Sonia Wasco for a
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`different litigation between Michael Bergt and Houghton Mifflin in 2008. Def’s Ex. 31. In the
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`report Wasco explained the industry practice of licensing when use exceeded the original license:
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`Case 5:12-cv-02061-MMB Document 126 Filed 06/26/14 Page 7 of 23
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`We had an understanding with publishers to open negotiations for additional fees
`should the licensing rights they required exceed the terms of our vendor
`agreements. Using these criteria for establishing new licenses, each time the
`image user printed a new quantity, they should have come back to the licensor
`and requested rights for that specific quantity. . . . [But] in cases where
`unauthorized printing occurs and is discovered by the licensor, a common
`industry practice would be to access [sic] a 3 times multiplier to the original
`licensing fee for a new license to include the additional quantity.
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`Def’s Ex. 31. Wasco further explained that it was customary to grant a 50% discount for new
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`quantities of the same edition of a text when permission was sought in advance, but “[i]f
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`permission was not requested in advance of printing, then no discount fees are offered.” Def’s
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`Ex. 31.
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`Plaintiff responded that the course of dealing contradicts Defendants’ assertion that the
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`invoices were not licenses. Plaintiff contends that the same incidents Defendants point to in
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`support of their argument for implied licenses show the invoices did in fact set the terms of use,
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`and each instance of use beyond the terms of the invoice was acknowledged as use without
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`permission. In addition, Plaintiff points to testimony by Defendants’ corporate designee witness
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`Lange who agreed that Defendants did not have permission to print 60,000 copies of an image
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`when the invoice limited the print run to 40,000 copies. Lange Dep. 124:8-19 (agreeing “that
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`would be beyond the scope of the license granted. . . .”); see also Simmons Dep. 40:2-14
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`(testifying as a corporate designee that Defendants are not permitted to publish an image in a
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`German language edition of a text where the invoice specifies English and Spanish).
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`Finally, Plaintiff produced numerous requests for permissions to use images beyond the
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`scope of the use defined in the original invoices. Pl’s Ex. 11. For example, in July 2004
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`Defendants wrote an email to Plaintiff requesting “permission to reuse the following images” in
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`a new edition of a science textbook. Pl’s Ex. 11. Similarly, in November of 2006 Defendants
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`sent an email to Plaintiff requested permission to reuse images for digital content and an
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`Case 5:12-cv-02061-MMB Document 126 Filed 06/26/14 Page 8 of 23
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`additional language than was specified in the original invoice. Pl’s Ex. 11 (the email requested,
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`“Please state the use information on the invoice.” (some capitalization omitted)). Each of these
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`requests sought permission for use prior to the publication of the image. Pl’s Ex. 11.
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`Since the terms of the contract present mixed questions of fact and law, this issue is
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`further discussed in the legal analysis.
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`II.
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`ANALYSIS
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`A. Standing
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`Under the Copyright Act, “[t]he legal or beneficial owner of an exclusive right under a
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`copyright is entitled, . . . to institute an action for any infringement of that particular right
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`committed while he or she is the owner of it.” 17 U.S.C. § 501. The Copyright Act defines the
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`“exclusive rights” that grant standing to sue:
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`[T]he owner of copyright under this title has the exclusive rights to do and to
`authorize any of the following:
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`(1) to reproduce the copyrighted work in copies or phonorecords;
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`(2) to prepare derivative works based upon the copyrighted work;
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`(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;
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`(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;
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`(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
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`(6) in the case of sound recordings, to perform the copyrighted work publicly by
`means of a digital audio transmission.
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`17 U.S.C. § 106.
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`Case 5:12-cv-02061-MMB Document 126 Filed 06/26/14 Page 9 of 23
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`Plaintiff has produced copies of agreements with each of the photographers who created
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`the works at issue. There are three sets of agreements. The first appear to be the original
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`agreements with the photographers, dated in the early 1990s, which convey to GPHI the “sole
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`and exclusive agent and representative with respect to the sale, license, and lease of all
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`Photographer’s photographs accepted into the files of [GPHI].” Pls’ Ex. C. The agreement also
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`conveyed to GHPI the “right to arrange for the alteration or distortion of any photograph” and
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`“[a]t its sole discretion . . . to make and use duplicate transparencies, or black and white
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`conversion negatives, from Photographer’s original color transparencies.” Pl’s Ex. C. GPHI was
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`also permitted to use any of the images “until the published work is exhausted, whether the
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`Photographer’s contract has expired or not.” Pl’s Ex. C. Under the agreement the
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`“[p]hotographer shall not . . . sell, license, lease or otherwise use for any purpose whatsoever,
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`any photograph placed in the Inc. files, or any similar or duplicate photograph.” Pl’s Ex. C.
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`The second set of agreements, executed in the early 2000s, are riders to the original
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`agreements, amending some of the compensation terms. Pl’s Ex. C. The final set of exhibits are
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`agreements conveying rights “for the purposes of litigation.” Pl’s Ex. A. These agreements
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`were executed between 2008 and 2011. Pl’s Ex. A.
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`Defendants are correct that the last set of agreements do not grant GHPI exclusive rights
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`to distribute or exploit the images in question. See Minden Pictures, Inc. v. Pearson Educ., Inc.,
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`929 F. Supp. 2d 962, 968 (N.D. Cal. 2013) (holding copyright assignments do not support
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`standing under the Copyright Act under Ninth Circuit caselaw). Defendants cite to Righthaven
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`LLC v. Hoehn where the Ninth Circuit held the stock photography agency did not have standing
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`because in the photographer assignment agreements “all it was really assigned was a bare right to
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`sue for infringement.” 716 F.3d 1166, 1169 (9th Cir. 2013) (affirming summary judgment for the
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`Case 5:12-cv-02061-MMB Document 126 Filed 06/26/14 Page 10 of 23
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`defendants). The contracts in Righthaven did not grant exclusive rights under the Copyright Act,
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`because the agreements imposed significant limits on the plaintiff’s use of the works, and
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`conveyed no right to “reproduce the works, distribute them, or exploit any other exclusive right
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`under the Copyright Act.” Id. at 1170. In contrast, the photographer “retained ‘the unfettered
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`and exclusive ability’ to exploit the copyrights.” Id. at 1170.
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`Here the initial agreements and supplementary riders with the photographers did grant
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`GHPI the exclusive right to sell, license, use, distribute, alter, and duplicate the images. Pl’s Ex.
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`C. Cf. Minden Pictures, 929 F. Supp. 2d at 967 (excluding the agency agreements as a
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`discovery\, and only considering the copyright assignment agreements).
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`The agreements conveyed the first three rights enumerated in the Copyright Act: the right
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`to reproduce, prepare derivative works, and to distribute the copyrighted work. 17 U.S.C. § 106.
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`The last three rights only apply to performance works, and are not relevant to this consideration.
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`Id. Thus, Plaintiff has produced evidence it has sufficient ownership interest in the images at
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`issue to have standing to bring claims for copyright infringement.
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` B. Copyright Infringement
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`To establish copyright infringement, the plaintiff must show (1) ownership of a valid
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`copyright and (2) the defendant’s unauthorized copying of protected elements of the copyrighted
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`material. Feist Publ’ns, Inc. v. Rural Tel. Serv. Co., 499 U.S. 340, 361 (1991).
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`1. Ownership of a Valid Copyright
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`“Certificates of registration issued by the U.S. Copyright Office constitute prima facie
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`evidence of the validity and ownership of the material.” Ford Motor Co. v. Summit Motor
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`Products, Inc., 930 F.2d 277, 290-91 (3d Cir. 1991). Plaintiff produced copies of the certificate
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`of registration for each of the 57 images that are presently at issue. Pl’s Ex. D.
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`2. Unauthorized Use of Copyrighted Material
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`The parties do not dispute that the Plaintiff’s evidence showed Defendants used their
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`copyrighted images in more publications than were specified on the GHPI invoices. Defendants
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`contend the parties’ course of dealing demonstrates that they had an implied license for their use
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`of the images.
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`Although a license can be a defense to a claim for copyright infringement, “the licensor
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`can still bring suit for copyright infringement if the licensee’s use goes beyond the scope of the
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`nonexclusive license.” MacLean Associates, Inc. v. Wm. M. Mercer-Meidinger-Hansen, Inc.,
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`952 F.2d 769, 779 (3d Cir. 1991) (reversing a directed verdict for the defendant because the
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`record did support a finding of a broad nonexclusive license or implied license). “A licensee
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`infringes the owner’s copyright if its use exceeds the scope of its license. The critical question is
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`not the existence but the scope of the license.” S.O.S., Inc. v. Payday, Inc., 886 F.2d 1081, 1087-
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`88 (9th Cir. 1989) (citing Gilliam v. American Broadcasting Cos., 538 F.2d 14, 20 (2d Cir.
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`1976)). The parties dispute whether the GPHI invoices alone established the terms of the
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`licenses, or whether through the course of conduct Defendants had an implied license to use the
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`images beyond the limitations stipulated in each invoice.5
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`The Third Circuit has not articulated a standard for determining when a course of dealing
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`may give rise to an implied license. Marino v. Usher, No. 11-6811, 2014 WL 2142118, at *7
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`(E.D. Pa. May 21, 2014) (citing MacLean, 952 F.2d at 778–79 (holding delivery of a copy of the
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`5 Judge Gardner of this Court has considered the scope of identical GHPI licenses in another case where GHPI
`sought a preliminary injunction against publisher John Wiley & Sons. Grant Heilman Photography, Inc. v. John
`Wiley & Sons, Inc., 864 F. Supp. 2d 316, 320 (E.D. Pa. 2012). In John Wiley & Sons GHPI contended that the
`defendant purchased very limited rights to use the plaintiff’s photographs at a low price with the intention of using
`the images much more extensively. Id. at 320. The defendant did not dispute that the “[i]nvoices sent to Wiley by
`Heilman Photography contained the license limitations for the images included in the invoice.” Id. at 321.
`Accordingly, Judge Gardner held GPHI was likely to succeed on the merits because the evidence showed the
`defendant used the images beyond the scope specified in the invoices. Id. at 328 (denying the preliminary injunction
`because the plaintiff failed to demonstrate immediate and irreparable harm).
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`Case 5:12-cv-02061-MMB Document 126 Filed 06/26/14 Page 12 of 23
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`work is only one factor to find an implied license, but not articulating any of the other factors)).
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`In an unpublished opinion the Third Circuit applied the following factors from the D.C. Circuit
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`test: “(1) a person (the licensee) requests the creation of a work, (2) the creator (the licensor)
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`makes the particular work and delivers it to the licensee who requested it, and (3) the licensor
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`intends that the licensee-requestor copy and distribute his work.” Nat’l Ass’n For Stock Car
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`Auto Racing, Inc. v. Scharle, 184 F. App’x 270, 275 (3d Cir. 2006) (quoting Atkins v. Fischer,
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`331 F.3d 988, 991–92 (D.C. Cir. 2003) (affirming summary judgment for the defendant,
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`NASCAR, where the undisputed facts showed the plaintiff granted an implied license because
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`the plaintiff was asked to create a image for a NASCAR trophy, he understood the scope of the
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`trophy’s use and knew the he would not be credited for his work, and he delivered the image to
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`NASCAR)). The alleged infringer bears the burden of establishing an implied license as an
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`affirmative defense. Scharle, 184 F. App’x 270, 275 (3d Cir. 2006) (citing Atkins, 331 F.3d at
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`992).
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`In Atkins v. Fischer the D.C. Circuit reversed a grant of summary judgment for the
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`plaintiff on her copyright infringement claims because the scope of the implied license was in
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`dispute. 331 F.3d at 991. The plaintiff executed a written agreement to create a packaging
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`design for the defendant’s beer. Id. at 990. The contract specified two stages of the project: the
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`first for color illustrations and the second for a final logo and camera-ready art. Id. The
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`plaintiff produced the illustrations, but never reached the second phase of the project because the
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`defendant said he was unhappy with her work. Id. Yet, the defendant used the plaintiff’s
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`designs on his beer labels. Id. The district court held the plaintiff granted an implied license,
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`and granted summary judgment to the defendant. Id. at 992. The D.C. Circuit reversed because
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`there was a genuine dispute whether the plaintiff intended the defendant to use her work. Id. at
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`Case 5:12-cv-02061-MMB Document 126 Filed 06/26/14 Page 13 of 23
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`933. The evidence showed that the illustrations were not to be the final design, and the parties’
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`correspondence was vague on the issue. Id. Moreover, it was unclear that the agreement granted
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`an implied license to use the illustrations for commercial production without further
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`compensating the plaintiff, because the fees for the second stage of the project were substantially
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`higher. Id. (“Arguably, Atkins’ acceptance of the relatively small payment of $2000 for the use
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`of her copyright designs supports a finding that the intent of the parties was that only a limited
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`license be conveyed.”). Accordingly there was a genuine issue of fact regarding the plaintiff’s
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`intent, precluding summary judgment. Id. at 993.
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`In a recent opinion issued by this Court, Judge Diamond applied the Atkins factors to find
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`a plaintiff did grant the defendants an implied license to use song lyrics. Marino, 2014 WL
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`2142118, at *7 (granting the defendants summary judgment on the plaintiff’s copyright
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`infringement claims). The plaintiff testified that he understood the defendant’s intended use of
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`the song and agreed to permit the defendants to use his song in an upcoming album. Id. (noting
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`the plaintiff testified he was excited about the prospect of Usher recording his song). The
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`plaintiff’s conduct demonstrated that he delivered the song to defendants with the intent that they
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`use and distribute the work: the plaintiff converted the digital files of the song to facilitate the
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`defendant’s use of the files, made numerous revisions to the song, celebrated the album’s release,
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`and never challenged the defendants’ use of his song. Id. These facts demonstrated the plaintiff
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`granted an implied license to the defendants to “use and exploit” the song. Id.
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`Several district courts across the country have considered whether textbook publishers
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`had acquired an implied license to use the images beyond the terms stipulated in the licensor’s
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`invoice.
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`Case 5:12-cv-02061-MMB Document 126 Filed 06/26/14 Page 14 of 23
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`In Bean v. Pearson Educ., Inc. the District Court of Arizona rejected the defendant’s
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`argument that the plaintiff granted an implied licensed by routinely granting extensions to
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`publish more copies than the original license permitted. 949 F. Supp. 2d 941, 947 (D. Ariz.
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`2013) (granting the plaintiff’s motion for summary judgment on its copyright infringement
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`claims). The court found there was no evidence that the publisher could use the images without
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`first requesting and obtaining an extension of the license. Id. at 946. Accordingly, there was no
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`meeting of the minds that the publisher could use the images beyond the limits set in invoices
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`and later remit payment. Id. (“From this testimony it is evident that neither party believed that
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`Pearson had an implied license to exceed the scope of the license terms. Plaintiff did not deliver
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`their photos to Pearson with the intent that Pearson would print them in excess of the limits that
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`had been agreed to in the licenses.”).
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`In Wood v. Houghton Mifflin Harcourt Pub. Co., the District Court of Colorado similarly
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`found the terms of use printed on invoices were licenses that limited the scope of use. 589 F.
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`Supp. 2d 1230, 1239 (D. Colo. 2008) (granting summary judgment to the plaintiff on copyright
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`infringement claims for a number of the images in dispute). The defendants contended that the
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`print run limitation stated in the invoices was merely boilerplate language and that under general
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`industry standards payment of an invoice specifying a print run of 40,000 enabled a publisher to
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`print millions of copies without obtaining additional permission or paying additional fees. Id. at
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`1241-42. But the only evidence of this industry standard was the testimony of defendants’
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`corporate designee, which the court rejected because he was not qualified to testify as an expert.
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`Id. at 1241-42 (noting the testimony was “patently self-serving”).
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`In Psihoyos v. Pearson Educ., Inc., the Southern District of New York denied a plaintiff’s
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`motion for summary judgment because the defendants submitted evidence the plaintiff intended
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`Case 5:12-cv-02061-MMB Document 126 Filed 06/26/14 Page 15 of 23
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`for the publisher to use the images and subsequently remit payment. 855 F. Supp. 2d 103, 106-7
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`(S.D.N.Y. 2012) (denying the plaintiff’s motion for summary judgment on copyright
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`infringement claims). The evidence showed the publisher routinely waited until the time of
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`publication, or even after publication, to obtain the licenses. Id. at 208 (“Defendants have
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`submitted numerous invoices from Getty showing a “start date” of a license (i.e., the date on
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`which the permitted use begins) that is weeks, months, or even over a year earlier than the date
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`of the invoice itself.”). The court found that the defendants’ failure to prepay the required
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`license fee did not negate the implied license because it was a breach of a contract covenant, not
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`a breach of the license conditions. Id. at 21