FOR PUBLICATION
`
`UNITED STATES COURT OF APPEALS
`FOR THE NINTH CIRCUIT
`
`
`ERICKSON PRODUCTIONS, INC.;
`JIM ERICKSON,
`Plaintiffs-Appellees,
`
`
`
`
`
`v.
`
`No. 15-16801
`
`D.C. No.
`5:13-cv-05472-HRL
`
`
`OPINION
`
`
`
`KRAIG RUDINGER KAST,
`Defendant-Appellant.
`
`
`
`
`Appeal from the United States District Court
`for the Northern District of California
`Howard R. Lloyd, Magistrate Judge, Presiding
`
`Argued and Submitted March 25, 2019
`San Francisco, California
`
`Filed April 16, 2019
`
`Before: Sidney R. Thomas, Chief Judge, and Michael Daly
`Hawkins and M. Margaret McKeown, Circuit Judges.
`
`Opinion by Judge Hawkins
`
`
`
`
`

`

`2
`
`
`
`
`
`
`ERICKSON PRODUCTIONS V. KAST
`
`SUMMARY*
`
`Copyright
`
`The panel affirmed in part and reversed in part the
`district court’s
`judgment finding
`that
`the defendant
`vicariously
`and
`contributorily
`infringed
`plaintiffs’
`copyrighted images by displaying them on his website and
`did so willfully.
`
`Defendant hired a website developer to redevelop the
`website of his business. Three photos, taken by plaintiffs
`and licensed to Wells Fargo Private Bank through plaintiff’s
`company, were incorporated into defendant’s website.
`
`The panel vacated the jury’s vicarious liability verdict,
`which found that defendant vicariously infringed plaintiff’s
`copyright through his employment of the website developer,
`the direct infringer. The panel held that to prevail on a
`vicarious liability claim, the plaintiff must prove that the
`defendant has (1) the right and ability to supervise the
`infringing conduct and (2) a direct financial interest in the
`infringing activity. The panel held that plaintiffs presented
`no evidence that could constitute a direct financial benefit as
`a matter of law. Specifically, the website developer’s
`avoidance of licensing fees for the photos did not confer a
`direct financial benefit on defendant.
`
`The panel affirmed the jury’s contributory liability
`verdict and therefore affirmed the judgment. A party
`engages in contributory copyright infringement when it
`
`* This summary constitutes no part of the opinion of the court. It
`has been prepared by court staff for the convenience of the reader.
`
`

`

`3
`
`ERICKSON PRODUCTIONS V. KAST
`
`
`
`(1) has knowledge of another’s infringement and (2) either
`(a) materially contributes to or (b) induces that infringement.
`Reviewing for plain error, the panel held that the district
`court did not plainly err in instructing the jury that
`“knowledge”
`for contributory
`infringement purposes
`includes having a “reason to know” of the infringement.
`
`The panel vacated the jury’s willfulness finding and
`remanded for a determination of whether defendant’s
`infringement was willful on the existing record. A finding
`of willfulness requires a showing of recklessness, willful
`blindness, or actual knowledge, and merely negligent
`conduct is not willful. The panel held that the district court
`therefore erred when it instructed the jury that it could find
`that defendant’s infringement was willful if he “should have
`known” that his acts infringed plaintiffs’ copyright.
`
`
`
`COUNSEL
`
`
`Christopher J. Cariello (argued), Margaret Wheeler-
`Frothingham, and Paul M. Fakler, Orrick Herrington &
`Sutcliffe LLP, New York, New York, for Defendant-
`Appellant.
`
`Kevin P. McCulloch (argued) and Nathaniel A. Kleinman,
`New York, New York, for Plaintiffs-Appellees.
`
`
`
`
`
`
`

`

`4
`
`
`ERICKSON PRODUCTIONS V. KAST
`
`OPINION
`
`HAWKINS, Senior Circuit Judge:
`
`Defendant-Appellant Kraig Kast (“Kast”) appeals a jury
`verdict finding that he vicariously and contributorily
`infringed Plaintiffs-Appellees Erickson Productions, Inc.
`and Jim Erickson’s (collectively, “Erickson”) copyrighted
`images by displaying them on his website and did so
`willfully. We vacate the jury’s vicarious liability verdict but
`affirm its contributory liability verdict, so we uphold the
`judgment against Kast. We vacate the jury’s willfulness
`finding and remand for a determination of whether Kast’s
`infringement was willful on the existing record.
`
`This opinion addresses Kast’s appeal of the judgment
`against him, Case No. 15-16801. The panel will address
`Kast’s related appeal of the district court’s amendment of the
`judgment against him, Case No. 17-17157, in a separate
`memorandum disposition.
`
`FACTS AND PROCEEDINGS BELOW
`
`I. Factual Background
`
`Kast is a California resident who owns and operates
`various business entities and websites. One such business is
`Atherton Trust, a real estate wealth management company.
`In 2010, an opportunity arose for Atherton Trust to be
`appointed by the State of California to manage the estates of
`disabled persons. Kast thought a revamped website would
`enhance Atherton Trust’s prospects; so, he hired a website
`developer, Only Websites, to redevelop the site. Among
`other things, Kast “agree[d] to provide content and other
`material . . . throughout the development process.” Kast’s
`
`

`

`ERICKSON PRODUCTIONS V. KAST
`
`
`
`approval would be required on all work, “including the
`design, development and finalization of the website.”
`
`5
`
`a
`completed
`facilitate development, Kast
`To
`questionnaire outlining his goals for the revamped website.
`Kast identified Wells Fargo Private Bank (“Wells Fargo”) as
`one of Atherton Trust’s competitors and highlighted certain
`features of Wells Fargo’s website he found appealing. Kast
`also stated in emails that he wanted to mimic Wells Fargo’s
`website. Further, Kast noted that he “need[ed] to choose
`photos from options” provided by Only Websites.
`
`Kast closely managed the development process. For
`instance, after reviewing an early draft of the developmental
`website, Kast stated that he “like[d] what [Only Websites
`did] with the home page layout.” On the other hand, Kast
`wanted the logo “to be warmer like” Wells Fargo’s and the
`photos “to be more casual like” Wells Fargo’s. Likewise,
`Kast later requested that Only Websites move the placement
`of Atherton Trust’s logo and company name.
`
`Eventually, three photos from Wells Fargo’s website—
`which were taken by Jim Erickson and licensed to Wells
`Fargo through his company, Erickson Productions, Inc.—
`were incorporated into Atherton Trust’s developmental
`website.1 Neither Atherton Trust, Kast, nor Only Websites
`licensed the photos. Erickson discovered the infringement
`via Picscout, a “software that tracks imagery online” by
`running nightly internet-wide searches. In July 2011,
`Erickson demanded that Atherton Trust “cease and desist
`infringing its copyright” and pay damages. Kast promptly
`
`1 Neither the record nor the trial transcript reveals whether Kast
`directed Only Websites to include the photos or whether Only Websites
`did so unilaterally.
`
`

`

`ERICKSON PRODUCTIONS V. KAST
`
`6
`
`directed Only Websites to remove the photos, which was
`done the next morning, but refused to pay.
`
`II. Procedural Background
`
`a. The trial and the jury’s verdict against Kast
`
`Erickson filed suit in the Central District of California,
`alleging direct, vicarious, and contributory copyright
`infringement.2 Erickson contended that the infringement
`was willful, and therefore subject to enhanced damages
`under 17 U.S.C. § 504(c)(2).
`
`The case was transferred to the Northern District of
`California, where it proceeded to trial by consent before a
`magistrate judge.
`
`Two divergent narratives emerged at trial. Erickson
`portrayed Kast
`as
`an
`opportunistic,
`cost-cutting
`businessperson who rushed completion of Atherton Trust’s
`developmental website in an effort to generate additional
`income
`through
`state-appointed estate management.
`Erickson’s counsel elicited testimony from Kast at trial that
`he first became aware that the photos in question were on
`Atherton Trust’s website in January 2011, and the photos
`remained there until Kast received the July 2011 demand
`letter. Erickson claimed that including the unlicensed photos
`not only allowed Kast to continue pursuing the business
`
`
`2 Erickson initially sued Kast in the Southern District of New York,
`but his complaint was dismissed for lack of personal jurisdiction. See
`Erickson Prods., Inc. v. Atherton Trust, No. 12 Civ. 1693 (PGG), 2013
`WL 1163346 (S.D.N.Y. March 20, 2013). Erickson obtained a default
`judgment against Only Websites. Order of Default, Erickson Prods.,
`No. 1:12-cv-01693-PGG-KNF (S.D.N.Y. Nov. 28, 2012).
`
`

`

`ERICKSON PRODUCTIONS V. KAST
`
`
`
`opportunity he so desired, but also avoided the required
`developmental licensing fee.
`
`7
`
`Kast painted a different picture. He agreed “the Atherton
`Trust website included unauthorized copies of [Erickson’s]
`photos that were copied from” Wells Fargo’s website. But,
`according to Kast, Only Websites copied the photos without
`his consent. Kast also pointed to a provision in his contract
`with Only Websites, which stated that “Client [Kast] is
`responsible for obtaining copyright releases and licenses on
`all photographs it sends to Provider. Limit of 2 photographs
`provided by Provider for every page except the home page.”
`Kast testified he understood this provision to mean that
`“[a]nything that I sent to them had to be licensed,” but that
`“if they provided the photos, [they] had to provide licensed
`photos.” Similarly, Kast asserted that had he known he
`needed to license photos for the developmental site, he
`would have done just that; in fact, he later and on his own
`licensed two stock photos for the site’s “live” version.
`Separately, Kast argued he lacked control over Only
`Websites: Only Websites published the website without his
`consent and ignored multiple requests to replace the
`infringing photos. Finally, Kast contended that he did not
`reap a financial benefit from the infringing photos because
`“[h]e made no money off the website” and “avoid[ing] a
`license fee” is not a direct financial benefit.
`
`At the charging conference, the parties wrangled over the
`wording of the willfulness jury instruction. Erickson sought
`an instruction that Kast acted willfully if he knew he
`infringed Erickson’s copyrights, acted with reckless
`disregard for Erickson’s copyrights, or “should have known”
`his actions infringed Erickson’s copyrights. Kast objected
`to the “should have known” prong, arguing that it set the
`standard “much lower than recklessness.” The district court
`
`

`

`ERICKSON PRODUCTIONS V. KAST
`
`8
`
`agreed with Erickson and included the “should have known”
`prong.
`
`The jury found by special verdict that Kast vicariously
`and contributorily (but not directly) infringed Erickson’s
`copyright on each of the photos and did so willfully.
`Pursuant to 17 U.S.C. § 504(c)(2), the jury awarded
`Erickson $150,000 in damages per photograph, for total
`damages of $450,000.
`
`b. The instant appeal
`
`Kast timely appealed the district court’s judgment
`against him. Kast initially briefed his case without the
`assistance of counsel. We appointed pro bono counsel to
`assist Kast with two of the issues he raised in his opening
`brief: (1) whether the avoidance of licensing fees constitutes
`a direct financial benefit for purposes of imposing vicarious
`copyright liability; and (2) whether a “should have known”
`willfulness instruction is proper under 17 U.S.C. § 504(c).
`The parties submitted supplemental briefing on these issues,
`the former an issue of first impression in this circuit. We
`now consider whether to affirm (1) the jury’s vicarious
`liability verdict, (2) the jury’s contributory liability verdict,
`and (3) the jury’s willfulness finding. We also address
`(4) some additional evidentiary and procedural matters.
`
`STANDARDS OF REVIEW
`
`“We review the district court’s denial of a motion for
`directed verdict de novo.” Allstate Ins. Co. v. Herron,
`634 F.3d 1101, 1109 (9th Cir. 2011). Legal questions are
`reviewed de novo so long as they are “raise[d] . . . at some
`point before the judge submitted the case to the jury[.]”
`F.B.T. Prods., LLC v. Aftermath Records, 621 F.3d 958,
`962–63 (9th Cir. 2010).
`
`

`

`
`
`
`ERICKSON PRODUCTIONS V. KAST
`
`9
`
`Jury instructions “must fairly and adequately cover the
`issues presented, must correctly state the law, and must not
`be misleading.” Gantt v. City of Los Angeles, 717 F.3d 702,
`706 (9th Cir. 2013) (quotation marks and citation omitted).
`If a jury instruction is incorrect, reversal is appropriate
`“unless the error is more probably than not harmless.”
`Chuman v. Wright, 76 F.3d 292, 294 (9th Cir. 1996). If a
`party fails to object to a jury instruction in the district court,
`it can still be reviewed on appeal for plain error. See Hoard
`v. Hartman, 904 F.3d 780, 786 (9th Cir. 2018). “We may
`exercise our discretion to correct a district court on plain
`error review when the following factors are met: (1) the
`district court erred; (2) the error was obvious or plain; (3) the
`error affected substantial rights; and (4) the error seriously
`impaired the fairness, integrity, or public reputation of
`judicial proceedings.” Id. at 787 (quotation marks and
`citation omitted).
`
`“We review the district court’s rulings concerning
`discovery and evidentiary issues for an abuse of discretion
`and reverse only if the district court’s ruling more likely than
`not affected the verdict.” Kulas v. Flores, 255 F.3d 780, 783
`(9th Cir. 2001) (citations omitted).
`
`DISCUSSION
`
`I. The Vicarious Liability Verdict
`
`infringed
`that Kast vicariously
`found
`jury
`The
`Erickson’s copyright through his employment of Only
`Websites, the direct infringer. “To prevail on a vicarious
`liability claim, [plaintiff] must prove [defendant] has (1) the
`right and ability to supervise the infringing conduct and (2) a
`direct financial interest in the infringing activity.” VHT, Inc.
`v. Zillow Group, Inc., 918 F.3d 723, 745 (9th Cir. 2019)
`
`

`

`ERICKSON PRODUCTIONS V. KAST
`
`10
`
`(citing Perfect 10, Inc. v. Giganews, Inc., 847 F.3d 657, 673
`(9th Cir. 2017) (internal quotation marks omitted).
`
`Kast argues the judge erred in denying his motion for a
`directed verdict on vicarious liability because Erickson
`presented no evidence that could constitute a direct financial
`benefit as a matter of law.3 We agree and vacate the jury’s
`vicarious liability verdict.
`
`“The essential aspect of the ‘direct financial benefit’
`inquiry is whether there is a causal relationship between the
`infringing activity and any financial benefit a defendant
`reaps . . . .” Ellison v. Robertson, 357 F.3d 1072, 1079 (9th
`Cir. 2004). Erickson claims Kast received three “direct
`financial benefits” from Only Websites’ infringement:
`(1) the photographs drew customers to purchase his services;
`(2) he avoided paying licensing fees to Erickson; and (3) he
`was able to “rush” the launch of his website. Each one fails.
`
`
`3 Kast also argues that the jury’s vicarious liability verdict was not
`supported by sufficient evidence. Kast failed to renew his motion for a
`directed verdict in the trial court, so his sufficiency of the evidence
`argument is forfeited. See Nitco Holding Corp. v. Boujikian, 491 F.3d
`1086, 1089 (9th Cir. 2007) (“[A] post-verdict motion under Rule 50(b)
`is an absolute prerequisite to any appeal based on insufficiency of the
`evidence.”) (citing Unitherm Food Sys., Inc. v. Swift-Eckrich, Inc.,
`546 U.S. 394 (2006)). Insofar as Kast’s arguments address whether
`certain alleged benefits were “direct financial benefits” as a matter of
`law, rather than whether the evidence established that Kast received
`those benefits, they are unaffected by this rule. See Cochran v. City of
`Los Angeles, 222 F.3d 1195, 1200 (9th Cir. 2000) (failure to renew post-
`verdict a motion for judgment as a matter of law made at the close of
`evidence does not prevent our review of an “issue [that] does not concern
`the sufficiency of the evidence presented to the jury.”).
`
`

`

`
`
`
`ERICKSON PRODUCTIONS V. KAST
`
`11
`
`a. Enhanced attractiveness of Kast’s website
`
`A website owner can receive a direct financial benefit
`from the presence of infringing material on his or her
`website, but only “where the availability of infringing
`material acts as a draw for customers.” Ellison, 357 F.3d
`at 1078 (internal quotation marks and citation omitted). If
`the infringing material is “just an added benefit,” rather than
`a draw, it does not confer a direct financial benefit on the
`website owner. See id. at 1078–79.
`
`Erickson claims the photographs enhanced the general
`attractiveness of Kast’s website to customers, and thereby
`“drew” visitors to purchase his services. Erickson argues
`that, because the whole purpose of the website was to
`advertise Kast’s wealth management company, Kast had a
`direct financial interest in everything on the website that
`enhanced its appeal to potential customers. However, a
`financial benefit is not “direct” unless there is a “causal
`relationship between the infringing activity and [the]
`financial benefit.” Ellison, 357 F.3d at 1079. Erickson does
`not contend that anyone visited Kast’s website in order to
`view his photographs or purchased his services because they
`saw the photographs. The parties agree that no one visited
`the website or purchased anything after doing so. If Kast
`had a direct financial interest in every piece of content on
`this website that arguably made the website marginally more
`attractive or presentable, then the requirement of a causal
`link would be erased. Erickson does not argue the
`photographs were anything more, at best, than an “added
`benefit” to visitors of Kast’s website, so the infringement did
`not confer a direct financial benefit on Kast as a matter of
`law. See id.
`
`

`

`12
`
`
`ERICKSON PRODUCTIONS V. KAST
`
`b. Avoidance of licensing fees
`
`Erickson claims “Kast enjoyed a direct [financial]
`benefit from the illegal copying of Erickson’s works by
`avoiding the license fees he would have otherwise been
`required to pay[.]”
` Whether a vicarious infringer’s
`avoidance of licensing fees constitutes a direct financial
`benefit as a matter of law is a question of first impression in
`this circuit. No other circuit appears to have addressed it,
`either.4 We hold that it does not.
`
`As an initial matter, Erickson’s avoidance of fees claim
`cannot be premised on any unlicensed use by Kast of
`Erickson’s copyrighted photographs. That would result in
`direct liability, a theory the jury rejected. See A&M Records,
`Inc. v. Napster, Inc., 239 F.3d 1004, 1013 (9th Cir. 2001)
`(“[Direct] infringers violate at least one exclusive right
`granted to copyright holders under 17 U.S.C. § 106.”).
`Additionally, to the extent Erickson suggests Kast owed
`licensing fees as a result of his vicarious infringement, his
`argument is plainly circular.
`
`Instead, Erickson’s argument must be that Kast received
`a direct financial benefit when Only Websites avoided
`Erickson’s licensing fee. Only Websites surely owed
`
`4 There is no consensus among district courts on this issue. Compare
`Oppenheimer v. Allvoices, Inc., No. C 14-00499 LB, 2014 WL 2604033,
`at *9 (N.D. Cal. June 10, 2014); Klein & Heuchan, Inc. v. CoStar Realty
`Info., Inc., No. 8:08-cv-1227-T-30EAJ, 2009 WL 10670735, at *3 (M.D.
`Fla. Nov. 25, 2009)) with Vander Music v. Azteca Int’l Corp., No. 2:08-
`cv-08184-JHN-RCx, 2011 WL 13177301, at *7 (C.D. Cal. Jan. 21, 2011)
`(Nguyen, J.); Thomson v. HMC Grp., No. CV 13-03273 DMG (VBKx),
`2014 WL 12589313, at *4 (C.D. Cal. July 25, 2014); Broadvision Inc. v.
`Gen. Elec. Co., No. 08 Civ. 1478(WHP), 2009 WL 1392059, at *4
`(S.D.N.Y. May 5, 2009); F. E. L. Publ’ns, Ltd. v. Nat’l Conference of
`Catholic Bishops, 466 F. Supp. 1034, 1042 (N.D. Ill. 1978).
`
`

`

`13
`
`ERICKSON PRODUCTIONS V. KAST
`
`
`
`Erickson a licensing fee, and saved money by failing to pay
`it, but the direct infringer’s avoidance of fees alone cannot
`satisfy the requirement of a direct financial benefit to the
`vicarious infringer. Otherwise, the requirement of a direct
`financial benefit would be rendered meaningless, since—at
`least where, as here, licenses are for sale—a direct infringer
`necessarily saves money by failing to obtain a license. See
`Worldwide Church of God v. Phila. Church of God, Inc.,
`227 F.3d 1110, 1114 (9th Cir. 2000) (“The existence of a
`license creates an affirmative defense to a claim of copyright
`infringement.”).
`
`Nor did Kast receive any other direct financial benefit as
`a result of Only Websites’ failure to pay. In some
`circumstances, a direct infringer’s avoidance of fees may
`prove financially advantageous to a vicarious infringer. For
`instance, Kast would have benefitted if Only Websites
`turned its lower costs from fee avoidance into lower prices
`for its website design services. See In re Aimster Copyright
`Litig., 334 F.3d 643, 654 (7th Cir. 2003). But this benefit
`would not be “direct,” since it would reach Kast only
`incidentally, via Only Websites’ intervening decision to cut
`prices. See id. (noting in dicta that a dance hall operator
`benefitted only indirectly from an orchestra’s avoidance of
`licensing fees). In any event, Erickson never claimed that
`Only Websites and Kast were able to offer services more
`cheaply or quickly because Only Websites infringed
`Erickson’s copyright.
`
`that Only Websites
`theory
`Erickson’s alternative
`avoided the licensing fee in its capacity as Kast’s agent, such
`that Kast himself is liable for its failure to pay, is also
`unpersuasive. Kast employed Only Websites to develop the
`website, but the latter’s decision to infringe Erickson’s
`copyright would have exceeded the scope of any agency
`
`

`

`ERICKSON PRODUCTIONS V. KAST
`
`14
`
`relationship that may have existed between them. See
`Restatement (Third) of Agency § 2.02 cmt. h (illegal or
`tortious acts exceed the scope of an agency relationship).
`
`Thus, Only Websites’ avoidance of licensing fees did not
`confer a direct financial benefit on Kast as a matter of law.5
`
`c. The “rush” completion of the website
`
`Finally, Erickson contends Kast received a direct
`financial benefit because the photographs enabled Kast to
`“rush” the launch of his website. Indeed, Kast conceded that
`he “rushed” the site out before it was finished in order to seek
`appointment to manage certain estates. But Kast received no
`money, clients, business inquiries, or website visitors by
`rushing
`the website’s completion before
`removing
`Erickson’s photos. Erickson never explained how using the
`photos allowed Kast to launch the website more quickly, or
`how the rushed launch enabled him to realize any profits at
`all. Thus, the alleged rush conferred no financial benefit on
`Kast at all and fails as a matter of law. See Ellison, 357 F.3d
`at 1079.
`
`II. The Contributory Liability Verdict
`
`The jury also found that Kast contributorily infringed
`Erickson’s copyright. A party engages in contributory
`
`5 We find the parties’ attempts to fit Kast’s alleged avoidance of
`licensing fees into Ellison’s “draw” inquiry unmoving. The “draw”
`inquiry assumes that the financial benefit in question is an increase in
`potential customers on the vicarious infringer’s website or in his place
`of business. By contrast, the supposed benefit of avoiding a licensing
`fee does not depend on how many people visit the website or buy
`anything when they are there.
`
`
`
`

`

`15
`
`ERICKSON PRODUCTIONS V. KAST
`
`
`
`copyright infringement when it “(1) has knowledge of
`another’s
`infringement and (2) either (a) materially
`contributes to or (b) induces that infringement.” VHT,
`918 F.3d at 745 (citing Perfect 10, Inc. v. Visa Int’l Serv.,
`Ass’n, 494 F.3d 788, 795 (9th Cir. 2007)). On appeal, Kast
`challenges the jury instructions on the contributory liability
`claim.6 We find his argument unpersuasive and affirm the
`contributory liability verdict.
`
`Kast claims the trial judge erred by instructing the jury
`that “knowledge” for contributory infringement purposes
`includes having a “reason to know” of the infringement.
`According to Kast, only “actual knowledge” or “willful
`blindness” are sufficient.
`
`Preliminarily, we note that Kast raised this issue for the
`first time in his supplemental opening brief, with the
`assistance of pro bono counsel. This argument exceeds the
`scope of the issues pro bono counsel was instructed to brief
`and argue. Kast himself did not object to this element of the
`jury instructions, so we ordinarily would not address it. See
`Galvan v. Alaska Dep’t of Corr., 397 F.3d 1198, 1204 (9th
`Cir. 2005) (“Courts generally do not decide issues not raised
`by the parties.”).
`
`However, even if we were to reach this issue, we would
`still uphold the contributory liability verdict. Kast did not
`raise this objection at trial, so it is reviewed for plain error.7
`
`6 Kast also claims insufficient evidence supports the contributory
`liability verdict. As with all his other sufficiency of the evidence
`challenges, this argument is waived. See Nitco, 491 F.3d at 1089.
`
`7 Erickson’s claim that Kast waived even plain error review of this
`jury instruction is incorrect. Erickson is right that both parties stipulated
`to the relevant instruction. However, merely submitting an erroneous
`
`
`

`

`ERICKSON PRODUCTIONS V. KAST
`
`16
`
`“[I]n the civil context . . . plain errors should ‘encompass
`only those errors that reach the pinnacle of fault envisioned
`by [the plain error standard].’” C.B. v. City of Sonora,
`769 F.3d 1005, 1018 (9th Cir. 2014) (quoting Hemmings v.
`Tidyman’s Inc., 285 F.3d 1174, 1193 (9th Cir. 2002)
`(internal alterations omitted)).
`
`Here, even if the “should have known” instruction was
`erroneous, the error was not plain. Inconsistency in our case
`law on the “knowledge” element of contributory liability
`precludes a finding of plain error. For instance, in Luvdarts,
`LLC v. AT & T Mobility, LLC, 710 F.3d 1068, 1072–73 (9th
`Cir. 2013), we held that “actual knowledge of specific acts
`of infringement” and “[w]illful blindness of specific facts”
`are the only two mental states that satisfy the “knowledge”
`element of contributory infringement. Id. But in Louis
`Vuitton Malletier, S.A. v. Akanoc Solutions, Inc., 658 F.3d
`936, 943 (9th Cir. 2011), we cited with approval a “know or
`have reason to know” instruction for contributory liability.
`Id. (citing Napster, 239 F.3d at 1020). Neither case is close
`to Kast’s on the facts.8 While Luvdarts was decided after
`Louis Vuitton, it did not explicitly overrule it. And both
`cases were decided several years after Metro-Goldwyn-
`Mayer Studios, Inc. v. Grokster, Ltd., 545 U.S. 913 (2005),
`the case in which Kast claims the Supreme Court settled the
`
`instruction does not waive a later challenge, so long as there is no
`evidence that the appellant considered and rejected a correct instruction
`“for some tactical or other reason.” See United States v. Perez, 116 F.3d
`840, 845–46 (9th Cir. 1997); see also Crowley v. Epicept Corp., 883 F.3d
`739, 748 (9th Cir. 2018). Here, there is no such evidence.
`
`8 In Luvdarts, the alleged contributory infringer was a wireless
`carrier whose network was used to send infringing multimedia content,
`see 710 F.3d at 1070, while in Louis Vuitton, it was a company that
`hosted websites that sold infringing goods, see 658 F.3d at 940.
`
`

`

`ERICKSON PRODUCTIONS V. KAST
`
`
`
`matter in favor of an “actual knowledge” requirement.
`Without resolving the apparent tension between Luvdarts
`and Louis Vuitton, we hold that Kast has not demonstrated
`that the jury instructions were plainly erroneous.
`
`17
`
`Nor are we persuaded by Kast’s other arguments against
`the contributory liability jury instructions. Kast challenges
`the instruction requiring the jury to find that “Only Websites
`did not have permission to copy or publish copies of
`[Erickson’s] Photos and
`thus
`infringed
`[Erickson’s]
`copyrights by doing so[.]” He insists this instruction
`“ask[ed] the jury to make a finding not in evidence.” Kast
`failed to object to this instruction below, and, in any case, he
`is wrong on the merits. The parties stipulated that Only
`Websites designed the infringing website, which “included
`unauthorized copies of [Erickson’s] Photos” copied from
`Wells Fargo’s website. And Erickson elicited unrefuted
`testimony that neither Only Websites nor Kast had
`permission to use the photos. Thus, these facts were in
`evidence.
`
`III. The Willfulness Finding
`
`The jury also found Kast’s vicarious and contributory
`infringement were willful. Kast claims the district court
`erred when it instructed the jury that it could find that Kast’s
`infringement was willful if Kast “should have known that
`[his] acts infringed plaintiffs’ copyright.” We agree and
`remand the issue of willfulness to the district court on the
`existing record.
`
`a. Whether the willfulness instruction was erroneous
`
`The jury’s willfulness finding is relevant to its award of
`statutory damages. Absent a finding of willfulness, the jury
`may award statutory damages “in a sum of not less than $750
`
`

`

`ERICKSON PRODUCTIONS V. KAST
`
`18
`
`or more than $30,000” per work infringed. 17 U.S.C.
`§ 504(c)(1). However, if the copyright owner proves that the
`infringement was “willful,” the court may increase the
`statutory damage award to $150,000 per work infringed. Id.
`§ 504(c)(2).
`
`jury:
`the
`instructed
`judge
`the
`trial,
`At Kast’s
`“Infringement is considered willful when . . . (1) the
`defendant knew
`that
`those acts
`infringed plaintiffs’
`copyrights; or, (2) the defendant should have known that
`those acts infringed plaintiffs’ copyright; or, (3) the
`defendant engaged
`in conduct
`that was reckless or
`demonstrated a reckless disregard for plaintiffs’ copyrights.”
`The jury found that Kast’s contributory and vicarious
`infringement was willful and awarded Erickson $450,000 in
`statutory damages. Had the jury not made this finding,
`Erickson’s statutory damages could not have exceeded
`$90,000.
`
`“A determination of willfulness requires an assessment
`of a defendant’s state of mind.” Friedman v. Live Nation
`Merch., Inc., 833 F.3d 1180, 1186 (9th Cir. 2016). “[T]o
`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.” Unicolors, Inc. v. Urban
`Outfitters, Inc., 853 F.3d 980, 991 (9th Cir. 2017) (quoting
`Wash. Shoe Co. v. A-Z Sporting Goods, Inc., 704 F.3d 668,
`674 (9th Cir. 2012)) (alteration in original).
`
`A “should have known” instruction does not fit within
`this framework because it is a negligence standard. To say
`that a defendant “should have known” of a risk, but did not
`know of it, is to say that he or she was “negligent” as to that
`risk. See Global-Tech Appliances, Inc. v. SEB S.A., 563 U.S.
`
`

`

`19
`
`ERICKSON PRODUCTIONS V. KAST
`
`
`
`754, 770 (2011); see also BMG Rights Mgmt. (US) LCC v.
`Cox Commc’ns, Inc., 881 F.3d 293, 310 (4th Cir. 2018)
`(“The
`formulation
`‘should have known’
`reflects
`negligence”); Swinton v. Potomac Corp., 270 F.3d 794, 803
`(9th Cir. 2001) (noting that “should have known” is a
`negligence standard).
`
`Negligence is a less culpable mental state than actual
`knowledge, willful blindness, or recklessness, the three
`mental states that properly support a finding of willfulness.
`See Global-Tech Appliances, 563 U.S. at 770; Unicolors,
`853 F.3d at 992. “[A] willfully blind defendant is one who
`takes deliberate actions to avoid confirming a high
`probability of wrongdoing and who can almost be said to
`have actually known the critical facts. By contrast, a
`reckless defendant is one who merely knows of a substantial
`and unjustified risk of such wrongdoing, and a negligent
`defendant is one who should have known o