Case 3:17-cv-05499-EMC Document 107 Filed 09/26/19 Page 1 of 19
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`UNITED STATES DISTRICT COURT
`NORTHERN DISTRICT OF CALIFORNIA
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`Case No. 17-cv-5499
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`PLAINTIFF PETER MENZEL’S MOTION
`FOR PARTIAL SUMMARY JUDGMENT
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`PETER MENZEL,
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`v.
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`SCHOLASTIC, INC.,
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`Plaintiff,
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`Defendant.
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`Plaintiff Peter Menzel (“Menzel”) moves for partial summary judgment against Defendant
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`Scholastic, Inc. (“Scholastic”). Menzel requests a judgment of liability against Scholastic for 59
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`instances of copyright infringement alleged in his Second Amended Complaint (“SAC”) (Doc. 59) and
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`identified in Section III.B. below. Menzel also seeks dismissal of Scholastic’s affirmative defenses,1 and
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`a finding that Scholastic’s infringements were willful.
`I.
`INTRODUCTION
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`This copyright case arises out of Scholastic’s infringing use of Menzel’s photographs
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`(“Photographs”) in its publications. Under § 106 of the Copyright Act, Menzel has the exclusive right
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`to reproduce and distribute the photographs he created.2 To succeed in his copyright infringement
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`claim, Menzel need only demonstrate ownership of copyrights in the photographs and copying by
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`Scholastic3 – neither of which is in serious dispute.
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`1 See Doc. 83 (Scholastic’s Answer to Menzel’s SAC), pp. 10-12.
`2 See 17 U.S.C.A. § 106.
`3 Feist Publications, Inc. v. Rural Tel. Serv. Co., 499 U.S. 340, 361 (1991); Folkens v. Wyland Worldwide, LLC,
`882 F.3d 768, 774 (9th Cir. 2018) (citing Feist Publications, Inc., 499 U.S. at 361); Roney v. Miller, 705 Fed.
`Appx. 670 (9th Cir. 2017) (citing Melville B. Nimmer & David Nimmer, Nimmer on Copyright § 13.01
`(rev. ed. 2017) (“Reduced to most fundamental terms, there are only two elements necessary to the
`plaintiff’s case in an infringement action: ownership of the copyright by the plaintiff and copying by
`the defendant.”); L.A. Printex Indust., Inc. v. Aeropostale, Inc., 676 F.3d 841, 846 (9th Cir. 2012) (citing Feist
`Publications, Inc., 499 U.S. at 361); Funky Films, Inc. v. Time Warner Entmt. Co., L.P., 462 F.3d 1072, 1076
`(9th Cir. 2006).
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`Case 3:17-cv-05499-EMC Document 107 Filed 09/26/19 Page 2 of 19
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`Scholastic seeks to avoid liability for its misconduct through various affirmative defenses –
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`none of which it can prove – and by arguing that this case is not an infringement case at all, but merely
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`a contract dispute. But this case is, and always was, about copyright infringement. Menzel therefore
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`requests the Court find Scholastic liable for willful copyright infringement as a matter of law. Menzel
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`also seeks entry of judgment against Scholastic on affirmative defenses for which it cannot show any
`triable factual issues.
`II.
` STATEMENT OF FACTS
`A.
`The Parties.
`Menzel is a professional photographer who makes his living by publishing books of his work,
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`and by licensing his photographic images to third parties, including book publishers like Scholastic.4
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`He owns the copyrights in the Photographs5 identified in the SAC and his concurrently-submitted
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`Claims Summary.6 Each Photograph is the subject of a valid Certificate of Copyright Registration,
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`issued by the Register of Copyrights.7
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`Scholastic is a for-profit publisher that uses third party photographs in the books and related
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`products it sells.8 Scholastic is also an adjudicated copyright infringer for engaging in the same scheme
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`it carried out here.9
`B.
`Scholastic’s pattern of infringement.
`Between 1997 and 2016, Scholastic obtained access to the Photographs by asking Menzel for
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`permission to make limited uses of particular images in specific publications.10 In response to these
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`requests, Menzel sold Scholastic one-time use licenses to reproduce and distribute his Photographs in
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`the specific publication identified on the face of each license.11 All of the licenses Menzel issued to
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`4 See Declaration of Peter Menzel (“Menzel Decl.”) ¶ 1.
`5 Id. at ¶ 2.
`6 See Declaration of Mariel Murphy (“Murphy Decl.”) Ex. 1.
`7 See Menzel Decl. ¶¶ 2-3 and Ex. A thereto.
`8 See Murphy Decl. Ex. 4 (testifying as Rule 30(b)(6) corporate designee).
`9 See Sohm v. Scholastic Inc., No. 16-CV-7098 (JPO), 2018 WL 1605214, at *15 (S.D.N.Y. Mar. 29, 2018).
`10 See Menzel Decl. ¶ 4.
`11 Menzel Decl. ¶ 4 and Exhibit B.
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`Case 3:17-cv-05499-EMC Document 107 Filed 09/26/19 Page 3 of 19
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`Scholastic (“Licenses”) were expressly limited by number of copies, distribution area, language,
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`duration, and/or media (print or electronic).12 The price of each License was dictated by the scope of
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`the permissions granted – broader rights and larger print runs commanded higher license fees.13
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`After obtaining access to the Photographs, Scholastic proceeded to infringe Menzel’s
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`copyrights by using the Photographs after exhausting the limited, one-time use Licenses it obtained, or
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`in ways never contemplated by any previous license.14 Scholastic’s practice of seeking insufficient
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`licenses saved it money, and also obscured its infringements from the photographers it cheated – had
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`Menzel run across his work in a Scholastic publication, he’d have no reason to suspect that the book
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`in his hand contained an infringing copy of his photograph.15
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`Menzel never authorized Scholastic to make any use of his Photographs that was not expressly
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`identified in a written License.16 Nor did Scholastic ever tell Menzel that it believed it could use images
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`without first requesting permission and paying for those uses.17 And, incredibly, Scholastic had no
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`system to track its uses of Menzel’s, or any other photographers’, images.18 The combination of seeking
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`limited licenses, rather than more expensive unlimited licenses, and failing to implement any
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`mechanism for keeping track of its use of these licensed works, made it inevitable that Scholastic would
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`become a chronic copyright infringer. Scholastic has failed to produce any License authorizing the
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`uses at issue in this motion.19 And, tellingly, Scholastic has never produced evidence showing it notified
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`Menzel of any later, unlicensed uses it made of the Photographs, nor ever paid him a dime for them.20
`C.
`Scholastic’s knowledge and understanding of copyright law.
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`12 See Menzel Decl. Ex. B.
`13 Id. at ¶ 6.
`14 See Murphy Decl. ¶ 28; Murphy Decl. Ex. 1.
`15 Menzel Decl. ¶ 9.
`16 Menzel Decl. ¶¶ 6 – 12.
`17 Murphy Decl. ¶ 27; Menzel Decl. ¶ 11.
`18 Murphy Decl. ¶ 29 and Exhibit 5 thereto (excerpts from May 18, 2017 deposition testimony of Jessica
`Moon, Scholastic’s Director of Visual Content Strategy and Compliance, testifying on behalf of
`Scholastic pursuant to Fed. R. Civ. Pro. 30(b)(6) in Sohm v. Scholastic, Inc., No. 1:16-cv-07098 (“2017
`Moon Dep.”)).
`19 Murphy Decl. ¶ 27.
`20 See Menzel Decl. ¶ 12; Murphy Decl. ¶ 27.
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`Case 3:17-cv-05499-EMC Document 107 Filed 09/26/19 Page 4 of 19
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`Scholastic, itself a creator of copyrighted works, knew it needed to secure permission to use
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`third-party content prior to use in its publications. For example, Scholastic employee Jessica Moon,
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`testifying on behalf of Scholastic pursuant to Rule 30(b)(6) in a parallel litigation, stated:
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`A.
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`Scholastic believes strongly in intellectual property and respecting the
`rights of others. We have an intellectual property compliance policy, and
`that – I might summarize to say it’s in our daily application to license
`every image, license every font, license every video clip. So that's sort of
`the guiding principle. Our team, we're responsible, as a partner with the
`team creating the books and magazines, to make sure that everything
`does get licensed.
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`And get licensed before uses are made?
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`Yes.21
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`Q.
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`A.
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`When asked whether Scholastic would “be obligated to go back and pay the photographer for
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`those additional prints” when Scholastic “printed more copies of an image than it had obtained licenses
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`for,”22 Ms. Moon stated: “[i]f we were aware that this was happening, we would make a reasonable
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`business effort to contact rights’ holders . . . Because Scholastic’s policy is to get permission for
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`licensing from third-parties’ rights’ holders to respect other people’s copyrights.”23 Ms. Moon also
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`confirmed that it was “necessary” to pay for a license in order to obtain rights to use third party content
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`in its publications.24
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`Ms. Moon’s testimony echoes Scholastic’s Intellectual Property Compliance Policy:
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`“Intellectual property rights are among Scholastic’s most valuable assets. Scholastic also believes in
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`21 Murphy Decl. ¶ 30 and Ex. 3 thereto. (excerpt from Deposition of Jessica Moon in Keller v. Scholastic,
`Inc. (“Keller Moon Dep.”) at 11:16-12:06 (emphasis added)).
`22 Murphy Decl. ¶ 18 and Ex. 4 thereto (August 29, 2019 Deposition transcript of Jessica Moon on
`behalf of Scholastic, Inc., pursuant to Fed. R. Civ. P. 30(b)(6)) at 80:13-17.
`23 Id. at 80:19-81:2.
`24 Id. at 82:14-83:12.
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`Case 3:17-cv-05499-EMC Document 107 Filed 09/26/19 Page 5 of 19
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`respecting the intellectual property rights of others.”25 Scholastic’s IP Compliance Policy expressly
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`provides,
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`No employee of Scholastic may reproduce a third party’s work subject to copyright
`protection, without written consent or an exception approved by the legal department
`. . .
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`If you would like to reprint works of another party, the easiest way to ensure that you
`are not violating another party’s copyright is by receiving express written permission
`from the copyright holder.26
`III. ARGUMENT
`A.
`Legal Standard.
`Pursuant to Federal Rule of Civil Procedure 56(c), the Court may grant summary judgment
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`where “the pleadings, depositions, answers to interrogatories, and admissions on file, together with the
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`affidavits, if any, show that there is no genuine issue as to any material fact and the . . . moving party is
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`entitled to judgment as a matter of law.”27 Initially, the moving party has the burden of demonstrating
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`the absence of a genuine issue of material fact.28 After the moving party meets his burden, it shifts to
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`the party opposing summary judgment, which must go beyond the pleadings and “set forth specific
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`facts showing that there is a genuine issue for trial.”29
`B.
`Scholastic infringed Menzel’s copyrights as a matter of law.
`“[A] prima facie claim of copyright infringement requires proof of two elements: ‘(1) ownership
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`of a valid copyright, and (2) copying of constituent elements of the work that are original.’”30 Showing
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`25 See Murphy Decl. ¶ 31 and Ex. 2 thereto.
`26 Id.
`27 Anderson v. Liberty Lobby Inc., 477 U.S. 242, 250 (1986); see also Fed. R. Civ. P. 56.
`28 Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986).
`29 Fed. R. Civ. P. 56(e); Anderson, 477 U.S. at 248-49.
`30 Feist Publications, Inc., 499 U.S. at 361; Folkens, 882 F.3d at 774; L.A. Printex Indust., Inc., 676 F.3d at
`846; Fodor v. Time Warner, Inc., 19 F.3d 27, 28 (9th Cir. 1994). See also 17 U.S.C. § 501(a) (“anyone who
`violates any of the exclusive rights of the copyright owner as provided by section[] 106 . . . is an infringer
`of the copyright . . .”); Rentmaster v. Nike, Inc., 883 F.3d 1111, 1116-7 (9th Cir. 2018); A&M Records, Inc.
`v. Napster, Inc., 239 F.3d 1004, 1013 (9th Cir. 2001) (“Plaintiffs must satisfy two requirements to present
`a prima facie case of direct infringement: (1) they must show ownership of the allegedly infringed
`material and (2) they must demonstrate that the alleged infringers violate at least one exclusive right
`granted to copyright holders under 17 U.S.C. § 106.”).
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`Case 3:17-cv-05499-EMC Document 107 Filed 09/26/19 Page 6 of 19
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`the copying is unauthorized “is not part of the photographers’ prima facie case.”31
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`“Rather, the burden of proving that the copying was authorized lies with the defendant.”32
`1.
`Menzel owns valid copyrights in the Photographs.
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`Menzel’s concurrently-filed Declaration and accompanying certificates of copyright registration
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`issued by the U.S. Copyright Office demonstrate that Menzel owns the copyrights in the Photographs,
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`and that they have all been duly registered.33 Because there is no disputed issue of material fact
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`regarding Menzel’s ownership of copyrights in the Photographs, Menzel satisfies the first element of
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`the two-part infringement test.
`2.
`Scholastic copied the Photographs.
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` “[I]n most [copyright infringement] cases, direct evidence of copying is not available.”34 Here,
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`however, there is no confusion about which Menzel Photographs Scholastic used, or the extent of
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`Scholastic’s use – Scholastic’s own documents establish that it printed and distributed additional copies
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`of the Photographs without securing a license to cover those additional uses, distributed the
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`Photographs in unlicensed geographic areas without requesting and securing a license to do so, and
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`used the Photographs in publication formats and titles for which no original license was ever
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`requested.35 Thus, the second prong of the two-part copyright infringement test is also satisfied.
`C.
`Scholastic cannot meet its burden of proof on any of its affirmative defenses.
`In addition to seeking a finding of liability against Scholastic for the infringements detailed in
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`the Claims Summary, Menzel also asks the Court to find that Scholastic cannot meet its burden of
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`proof on affirmative defenses for which it cannot demonstrate a dispute of material fact, several of
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`31 Muhammad-Ali v. Final Call, Inc., 832 F.3d 755, 760-61 (7th Cir. 2016) (“a plaintiff is not required to
`prove that the defendant’s copying was unauthorized in order to state a prima facie case of copyright
`infringement”).
`32 Muhammad-Ali, 832 F.3d at 760-61. See also in re McGraw-Hill Global Educ. Holdings, LLC, et al., 909
`F.3d 48, 61 (3d Cir. 2018).
`33 See Menzel Decl. ¶¶ 2-3 and Ex. A thereto.
`34 Shaw v. Lindheim, 919 F.2d 1353, 1356 (9th Cir. 1990).
`35 See Murphy Decl. ¶ 28. See also Murphy Decl. Ex. 1.
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`Case 3:17-cv-05499-EMC Document 107 Filed 09/26/19 Page 7 of 19
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`which appear to have been copied and pasted into Scholastic’s answer despite having absolutely no
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`factual support.36
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`“The plain language of Rule 56(c) mandates the entry of summary judgment, after adequate
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`time for discovery and upon motion, against a party who fails to make a showing sufficient to establish
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`the existence of an element essential to that party’s case, and on which that party will bear the burden
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`of proof at trial.”37 Because Scholastic has failed to meet its burden of proof on the affirmative defenses
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`addressed below, Menzel seeks entry of judgment for copyright infringement as a matter of law.
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`1.
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`“Failure to state a claim” is a legal argument, not an affirmative defense,
`which the Court rejected before Scholastic filed its Answer.
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`Scholastic’s first “‘affirmative defense” – failure to state a claim – is not a defense at all. As
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`explained by Judge Freeman,
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`“A defense which demonstrates that plaintiff has not met its burden of proof as to an
`element plaintiff is required to prove is not an affirmative defense.” Zivkovic v. S. Cal.
`Edison Co., 302 F.3d 1080, 1088 (9th Cir. 2002). “Such a defense is merely rebuttal
`against the evidence presented by the plaintiff.” Id. Several judges in this district have
`held that “[f]ailure to state a claim is not a proper affirmative defense but, rather, asserts
`a defect in [the plaintiff’s] prima facie case.” Barnes v. AT & T Pension Ben. Plan-
`Nonbargained Program, 718 F.Supp.2d 1167, 1174 (N.D. Cal. 2010); accord Espitia v.
`Mezzetti Financial Srvs., Inc., No. 18-CV-02480-VKD, 2019 WL 359422, at *5 (N.D. Cal.
`Jan. 29, 2019). This Court agrees. The defense of failure to state a claim is, in essence,
`an argument that the plaintiff has not met its burden of alleging the elements of its
`claims.38
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`36 For example, as Scholastic is aware, “good faith” (affirmative defense 8) is not a defense to copyright
`infringement, which is a strict liability tort. See UMG Recordings, Inc. v. Disco Azteca Distributors, Inc., 446
`F. Supp. 2d 1164, 1172 (E.D. Cal. 2006) (“A plaintiff need not demonstrate the defendant's intent to
`infringe the copyright in order to demonstrate copyright infringement.” (quoting Educ. Testing Serv. v.
`Simon, 95 F.Supp.2d 1081, 1087 (C.D.Cal.1999) (copyright infringement “is a strict liability tort”)). And
`Scholastic’s own witnesses have conceded in prior cases that when Scholastic uses photographs, it must
`pay for them, negating Scholastic’s ninth affirmative defense. Scholastic’s eleventh affirmative defense
`makes no sense – no audit right was asserted in the Second Amended Complaint – moreover this is
`not a breach of contract action, as discussed in section III.B.4, below.
`37 Celotex Corp., 477 U.S. at 317.
`38 LL B Sheet 1, LLC v. Loskutoff, 362 F. Supp. 3d 804, 818 (N.D. Cal. 2019).
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`Case 3:17-cv-05499-EMC Document 107 Filed 09/26/19 Page 8 of 19
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`Moreover, the Court expressly rejected Scholastic’s argument that Menzel’s Second Amended
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`Complaint failed to state a claim for copyright infringement when it denied Scholastic’s motion to
`dismiss before Scholastic filed its Answer.39
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`2.
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`Scholastic’s statute of limitations affirmative defense fails to raise any
`genuine issue of material fact.
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`Scholastic’s second affirmative defense alleges, “Plaintiff’s claim is barred, in whole or in part,
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`by the applicable three-year statute of limitations for a claim of copyright infringement, 17 U.S.C. §
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`507(b), and/or the three-year limitation on damages pursuant to Petrella v. Metro-Goldwyn-Mayer, Inc., 134
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`S. Ct. 1962, 1969 (2014).”40 Scholastic is wrong on both counts. The record does not support
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`Scholastic’s statute of limitations argument, and Petrella does not limit recoverable damages under the
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`Copyright Act.
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`a. Scholastic cannot meet its burden of proof on its statute of limitations
`defense, because Menzel did not have actual or constructive knowledge
`of the infringements at issue more than three years before filing suit.
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`The first step in determining whether a claimant should have learned of an injury under the
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`discovery rule requires a showing that it possessed adequate information about potential wrongdoing.
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`As explained by the Supreme Court in Merck & Co. v. Reynolds:
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`[T]he limitations period . . .begins to run once the plaintiff did discover or a reasonably
`diligent plaintiff would have “discover[ed] the facts constituting the violation”—
`whichever comes first. In determining the time at which “discovery” of those “facts”
`occurred, terms such as “inquiry notice” and “storm warnings” may be useful to the
`extent that they identify a time when the facts would have prompted a reasonably
`diligent plaintiff to begin investigating. But the limitations period does not begin
`to run until the plaintiff thereafter discovers or a reasonably diligent plaintiff
`would have discovered “the facts constituting the violation,” . . . – irrespective of
`whether the actual plaintiff undertook a reasonably diligent investigation.41
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`39 See Doc. 77 at p. 8 (“Mr. Menzel has alleged enough to make a plausible infringement claim .”).
`40 Answer (Doc. 83) at p. 10.
`41 559 U.S. 633, 653, 130 S. Ct. 1784, 1798, 176 L. Ed. 2d 582 (2010) (emphasis added). While Merck
`involved securities fraud rather than copyright infringement, the Court’s explanation of the discovery
`rule is applicable here.
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`Case 3:17-cv-05499-EMC Document 107 Filed 09/26/19 Page 9 of 19
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` Further,
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`In addition to the discovery rule, the “separate-accrual rule” in copyright law provides
`that “when a defendant commits successive violations [of the Copyright Act], the
`statute of limitations runs separately from each violation. Each time an infringing work
`is reproduced or distributed, the infringer commits a new wrong. Each wrong gives
`rise to a discrete ‘claim’ that ‘accrue[s]’ at the time the wrong occurs.”42
`Here, there are no facts to support the contention that Menzel was confronted with such
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`information until more than three years before filing this action.43 A photographer like Menzel, who
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`licensed thousands of images a year, could not realistically investigate hundreds of licensees to make
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`sure they were properly using the photographs they legitimately licensed.44 Scholastic has provided no
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`evidence to suggest otherwise.
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`Moreover, importantly, the statute of limitations runs separately from each violation. Scholastic
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`failed to provide complete usage data for nearly 53 publications at issue,45 much less show when each
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`of its infringements began and ended, rendering it impossible under the applicable standard for Menzel
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`or this Court to determine – as Scholastic urges – which claims, if any, are time-barred. Ultimately,
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`Scholastic is unable to provide any factual support for its statute of limitations affirmative defense, and
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`the Court should likewise reject it.
`b. Petrella did not abrogate application of the discovery rule in copyright
`infringement actions, nor did it limit the damages Menzel may recover
`for Scholastic’s infringements.
`As noted by the Supreme Court in Petrella v. MGM, Inc., nine Circuit Courts, including the Ninth
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`42 Free Speech Systems, LLC v. Menzel, 390 F.Supp.3d 1162, 1170 (9th Cir. 2019) (quoting Media Rights
`Techs., Inc. v. Microsoft Corp., 922 F.3d 1014, 1023 (9th Cir. 2019) and Petrella, 572 U.S. at 671).
`43 Murphy Decl. ¶ 32.
`44 See MacLean Assocs., Inc. v. Wm. M. Mercer-Meidinger-Hansen, Inc., 952 F.2d 769, 780 (3d Cir. 1991)
`(ruling that a copyright owner does not have a “never ending obligation to discover whether anyone to
`whom he ever supplied his software would copy it”). See also Frerck v. John Wiley & Sons, Inc., No.11–
`cv–2727, 2014 WL 3512991, at *6 (N.D. Ill. July 14, 2014) (“Defendant’s argument that Plaintiff could
`have discovered print overruns is belied both by the industry’s way of doing business and by
`Defendant’s own actions. Plaintiff could not feasibly ascertain Defendant’s actual uses of images unless
`Defendant itself provided that information. If Plaintiff found his photo in a licensed product, he would
`have no way of knowing whether that particular copy fell within the number of copies or other license
`parameters he granted Defendant”).
`45 See Doc. 100, p. 1 and Exs. thereto.
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`Case 3:17-cv-05499-EMC Document 107 Filed 09/26/19 Page 10 of 19
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`Circuit,46 adopt the “discovery rule” in copyright infringement cases, which “starts the limitations
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`period when ‘the plaintiff discovers, or with due diligence should have discovered, the injury that forms
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`the basis for the claim.’”47 “The purpose of the discovery rule is to ‘protect [ ] those who are ignorant
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`of their cause of action through no fault of their own.’ Ultimately, the discovery rule ‘permits delayed
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`accrual until a plaintiff knew or should have known of the wrongful conduct at issue.’”48
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`Contrary to Scholastic’s claims, Petrella did not alter the recoverable damages available for
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`timely-filed copyright claims. As numerous courts have held, Petrella “was a case about laches, and the
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`holding is limited to that issue.”49 Moreover in Petrella, the plaintiff only sought relief for infringements
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`that occurred within three years of filing suit.50 The plaintiff admitted she was aware of the defendant’s
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`conduct when it was occurring, and expressly excluded from her complaint any claims regarding
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`infringements that occurred more than three years before she filed.51 Petrella did not hold that a plaintiff
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`who sues within three years of discovering infringements may only recover damages for infringements
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`in the three-year period before filing, because the Supreme Court did not consider any question
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`concerning application of the discovery rule. An opinion is not authority on a question that merely
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`“lurks in the record” and is neither considered nor decided.52
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`46 Yue v. MSC Software Corp., 2016 WL 3913001, at *1 (N.D. Cal. July 20, 2016) (quoting Polar Bear Prods.,
`Inc. v. Timex Corp., 384 F.3d 700, 706 (9th Cir. 2004).
`47 572 U.S. 663, 671 (2014); SCA Hygiene Prods. Aktiebolag v. First Quality Baby Prods., 137 S.Ct. 954, 962
`(2017).
`48 El Pollo Loco, Inc. v. Hashim, 316 F.3d 1032, 1039 (9th Cir. 2003) (internal citations omitted).
`49 D'Pergo Custom Guitars, Inc. v. Sweetwater Sound, Inc., No. 17-CV-747-LM, 2019 WL 188696, at *3
`(D.N.H. Jan. 14, 2019) (quoting GHPI v. McGraw, 28 F. Supp. 3d at 411). See also PK Music Performance,
`Inc. v. Timberlake, No. 16-CV-1215 (VSB), 2018 WL 4759737, at *10 (S.D.N.Y. Sept. 30, 2018) (“it
`would be inconsistent with the discovery rule to apply the three-year lookback”); Design Basics, LLC v.
`Forrester Wehrle Homes, Inc., 305 F. Supp. 3d 788, 794 (N.D. Ohio 2018) (rejecting argument that the
`only “legally cognizable damages” recoverable “are those . . . incurred in the three years preceding the
`filing of this suit.”).
`50 Petrella, 572 U.S. at 668 (plaintiff “sought no relief for conduct occurring outside § 507(b)’s three-
`year limitations period”).
`51 Id. at 1971 (“Petrella sought relief only for acts of infringement occurring on or after January 6, 2006”
`– three years before she filed suit on January 6, 2009).
`52 See U.S. v. Shabani, 513 U.S. 10, 16 (1994) (“questions which ‘merely lurk in the record’ are not
`resolved, and no resolution of them may be inferred”) (quoting Ill. State Bd. of Elections v. Socialist Workers
`Party, 440 U.S. 173, 183 (1979)).
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`Case 3:17-cv-05499-EMC Document 107 Filed 09/26/19 Page 11 of 19
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`When a plaintiff brings a copyright infringement action within three years of discovery there is
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`no limitation on recoverable damages, no matter when the infringements occurred. That was the result
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`in Psihoyos v. John Wiley & Sons, Inc., which concerned textbook publisher John Wiley’s use of
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`photographs “published in various textbooks from 2005 to 2009.”53 The plaintiff sued in March 2011.54
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`Wiley moved for summary judgment, arguing “the Copyright Act’s three-year statute of limitations
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`barred many of Psihoyos’s infringement claims, which arose from infringements that occurred over
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`three years prior to suit.”55 “Wiley argue[d]” that “[b]ecause Psihoyos filed suit on March 1, 2011. . .
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`Psihoyos’s damages are limited to infringing acts occurring on or after March 1, 2008.”56 Judge Rakoff
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`disagreed: “Plaintiff discovered the alleged infringement in 2010. Accordingly, plaintiff’s claims are not
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`barred by the statute of limitations.”57 The Second Circuit affirmed, holding that the “[Copyright] Act’s
`statute of limitations did not bar any of Psihoyos’s infringement claims.”58
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`The Ninth Circuit has likewise found that a copyright owner is entitled to recover damages for
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`infringements, regardless of when they occurred, so long as the owner did not have actual or constructive
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`notice of the infringements more than three years before filing.59 In Energy Intelligence, Judge Castel
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`rejected the argument that damages are “not recoverable for any infringement that occurred more than
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`three years prior to the filing of the complaint due to a separate damages limitation laid down in
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`Petrella.”60 Judge Castel found “the dicta from Petrella did not overrule Psihoyos,” and “[i]n any event,
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`under no reasonable reading of Petrella could the opinion be interpreted to establish a time limit on the
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`recovery of damages separate and apart from the statute of limitations.”61 And, in Panoramic Stock
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`53 748 F.3d 120, 121 (2d Cir. 2014).
`54 Id.
`55 Id. at 122.
`56 Psihoyos v. John Wiley & Sons, Inc., 2011 WL 4916299, at *5 (S.D.N.Y. Oct. 14, 2011).
`57 Id. (citation omitted).
`58 748 F.3d at 125 (emphasis added).
`59 Polar Bear Prods., Inc. v. Timex Corp., 384 F.3d 700, 705-706 (9th Cir. 2004) (“We conclude that § 507(b)
`permits damages occurring outside of the three-year window, so long as the copyright owner did not
`discover – and reasonably could not have discovered – the infringement before the commencement of
`the three-year limitation period.”).
`60 2017 WL 432805, at *2.
`61 Id. See also PK Music, 2018 WL 4759737, at *9 (“Petrella cannot be read to require a three-year limitation
`on damages when applying the discovery rule.”).
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`Case 3:17-cv-05499-EMC Document 107 Filed 09/26/19 Page 12 of 19
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`Images, Ltd. v. McGraw-Hill Global Educ. Holdings, LLC, the district court found the plaintiff “did not
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`learn, and reasonably could not have learned, that McGraw-Hill infringed specific Panoramic
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`copyrights until at least October 2012.”62 That court held Panoramic could “pursue damages for all
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`infringing activity that it first became aware of in October 2012, including infringements that ended in
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`2008.”63
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`To find an infringement claim is timely because Plaintiff filed within three years of discovery –
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`but then to disallow damages because Scholastic’s infringements ended more than three years before
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`timely filing the claim – would nullify the discovery rule. Scholastic’s argument undermines the entire
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`purpose of the discovery rule: “to ensure that the injured receive recompense.”64 It is axiomatic that a
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`plaintiff with an actionable claim is entitled to relief, and under the Copyright Act, that relief includes
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`monetary damages.65 It is also a basic principle of law that “[t]here can be no right without a remedy
`to secure it.”66 That is, however, precisely the result Scholastic wants.
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`3.
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`Scholastic has not met its burden of showing it had a license for the
`uses at issue in this motion.
`In its third affirmative defense, Scholastic claims “Plaintiff’s claim is barred, in whole or in part,
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`because Scholastic had a licenses to use the photographic images at issue and did not exceed the scope
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`of the licenses.