throbber
18-2110 (L)
`Sohm v. Scholastic Inc.
`
`
`United States Court of Appeals
`For the Second Circuit
`
`
`August Term 2018
`
`Argued: June 14, 2019
`Decided: May 12, 2020
`
`Nos. 18-2110, 18-2245
`
`
`JOSEPH SOHM, VISIONS OF AMERICA, LLC,
`
`Plaintiffs-Appellants-Cross-Appellees,
`
`v.
`
`SCHOLASTIC INC.,
`
`Defendant-Appellee-Cross-Appellant.
`
`
`
`Appeal from the United States District Court
`for the Southern District of New York
`No. 16-cv-7098, J. Paul Oetken, Judge.
`
`
`Before: POOLER, CHIN, AND SULLIVAN, Circuit Judges.
`
`
`
`
`
`
`
`Joseph Sohm and Visions of America, LLC sued Scholastic Inc. for copyright
`infringement on photographs Sohm had authored. The district court (J. Paul
`Oetken, J.) granted in part and denied in part the parties’ motions for partial
`summary judgment, determining that Scholastic had infringed Sohm’s copyright
`for six of the photographs, while dismissing all other claims. We affirm in part
`and reverse in part, holding that (1) the district court properly recited the elements
`
`

`

`of a copyright infringement claim and placed the burden of proof on Sohm to
`demonstrate that Scholastic’s use of his images was outside the scope of the
`license; (2) Petrella v. Metro-Goldwyn-Mayer, Inc., 572 U.S. 663 (2014) did not
`abrogate this Circuit’s adoption of the “discovery rule” for copyright infringement
`claim accrual in Psihoyos v. John Wiley & Sons, Inc., 748 F.3d 120 (2d Cir. 2014);
`(3) the Copyright Act limits damages to the three years prior to when a copyright
`infringement action is filed; and (4) the registration of a compilation of
`photographs under 17 U.S.C. § 409 by an applicant who holds the rights to the
`component works is valid and effectively registers the underlying individual
`photos, even if the compilation does not list the individual authors of the
`individual photos.
`
`AFFIRMED IN PART, REVERSED IN PART.
`
`
`
`
`
`
`Seidman,
`(Christopher
`MAURICE HARMON
`Amanda L. Bruss, & Mariel D. Murphy, on the
`brief), Harmon Seidman & Bruss, LLC, Grand
`Junction, Colorado, for Plaintiffs-Appellants-Cross-
`Appellees Joseph Sohm & Visions of America, LLC.
`
`EDWARD H. ROSENTHAL (Nicole Bergstrom, on the
`brief), Frankfurt Kurnit Klein & Selz, P.C., New
`York, New York, for Defendant-Appellee-Cross-
`Appellant Scholastic Inc.
`
`
`RICHARD J. SULLIVAN, Circuit Judge:
`
`Plaintiffs-Appellants-Cross-Appellees
`
`Joseph Sohm and Visions of
`
`America, LLC (together, “Sohm”) bring this action against Defendant-Appellee-
`
`Cross-Appellant Scholastic Inc. for copyright infringement with respect to 89
`
`photographs authored by Sohm. The district court (Oetken, J.) granted in part and
`
`denied in part the parties’ cross motions for partial summary judgment,
`
`
`
`2
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`

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`determining that Scholastic had infringed Sohm’s copyright for six of the
`
`photographs. On appeal, Sohm contends that the district court (1) erred in finding
`
`that Scholastic’s use of Sohm’s copyrighted work sounded in breach of contract
`
`and not copyright infringement; (2) improperly shifted the burden of proof to
`
`Sohm to demonstrate that Scholastic exceeded the scope of its license; and (3)
`
`incorrectly dismissed Sohm’s claim corresponding to a certain photo. Scholastic
`
`cross appeals, arguing that the district court erred in (1) holding that the discovery
`
`rule applies for statute of limitations purposes in determining when Sohm’s claims
`
`accrued; (2) allowing damages for more than the three years prior to when the
`
`copyright infringement action was brought; and (3) finding that certain group
`
`registrations were valid under the Copyright Act for Sohm’s individual
`
`photographs. We AFFIRM IN PART and REVERSE IN PART.
`
`I. Background
`
`Sohm is a professional photographer and the author of the 89 photographs
`
`at issue in this case. Sohm v. Scholastic Inc., No. 16-cv-7098, 2018 WL 1605214, at *1
`
`(S.D.N.Y. Mar. 29, 2018). Scholastic is a publisher and distributor of children’s
`
`books. Id. Sohm entered into agreements with agencies, including The Image
`
`Works, Inc., Continuum Productions Corp. (now Corbis Corp.), and Photo
`
`
`
`3
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`

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`Researchers, Inc., to issue limited licenses to third parties on his behalf. Id. Those
`
`agencies issued limited licenses to Scholastic to use Sohm’s photographs and sent
`
`monthly royalty statements and payments to Sohm. Id. In 2004, Corbis entered
`
`into a preferred vendor agreement (“PVA”) with Scholastic that established fees
`
`for certain print-run ranges of Sohm’s photos. Id.
`
`In the 1990s, Sohm participated in Corbis’s copyright registration program.
`
`Id. Under the program, Sohm temporarily assigned his copyrights to Corbis for
`
`registration purposes, with the understanding that Corbis would reassign the
`
`copyrights to him after registration. Id. Corbis registered a number of Sohm’s
`
`photographs with the Copyright Office as part of several published group
`
`registrations in its own name. Id. at *3. None of these group registrations
`
`identified by name either Sohm or Visions of America as an author. Id.
`
`In May 2016, Sohm sued Scholastic for copyright infringement, alleging that
`
`Scholastic infringed his copyrights by using his photos in various publications in
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`numbers exceeding the print runs contemplated in the invoices governing
`
`Scholastic’s licenses. Id. at *2. In an amended complaint filed in October 2016, he
`
`alleged 117 infringing uses of 89 photographs. Id. The parties each moved for
`
`partial summary judgment as to certain uses. Id.
`
`
`
`4
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`

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`The district court granted in part and denied in part the motions. The court
`
`began by stating the elements of a copyright infringement claim, which it
`
`formulated as “(i) ownership of a valid copyright; and (ii) unauthorized copying
`
`of the copyrighted work.” Id. (quoting Jorgensen v. Epic/Sony Records, 351 F.3d 46,
`
`51 (2d Cir. 2003)). It noted that the existence of a license is treated as an affirmative
`
`defense, meaning that Scholastic had the burden to prove its existence, but stated
`
`that “[w]hen the contested issue is the scope of a license, rather than the existence
`
`of one, the copyright owner bears the burden of proving that the defendant’s
`
`copying was unauthorized under the license.” Id. (quoting Palmer/Kane LLC v.
`
`Rosen Book Works LLC, 204 F. Supp. 3d 565, 569 (S.D.N.Y. 2016)). Because Sohm’s
`
`ownership of the copyrights was undisputed, the court found that the case turned
`
`on the second element: whether Sohm could establish “unauthorized copying.”
`
`Id.
`
`The court first considered Scholastic’s motion for partial summary
`
`judgment on the grounds that (1) Sohm’s copyright registrations were invalid for
`
`certain photographs; (2) Scholastic did not exceed the relevant licenses for certain
`
`uses; and (3) Sohm had failed to meet his burden to show that Scholastic exceeded
`
`the license with respect to certain uses. Id. at *3. Scholastic challenged the validity
`
`
`
`5
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`

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`of the copyright registration based on group registration under Corbis’s name,
`
`asserting that the registrations failed to list the name of the “author” as required
`
`by 17 U.S.C. § 409(2). The court explained that there is no binding Second Circuit
`
`authority on the question of whether the registration of a compilation of
`
`photographs under § 409 by an applicant that holds the rights to the component
`
`works also effectively registers the underlying individual photos, even if the
`
`compilation does not list the individual authors of the individual photos. Id. at *3–
`
`6. The court acknowledged that Muench Photography, Inc. v. Houghton Mifflin
`
`Harcourt Publishing Co., 712 F. Supp. 2d 84 (S.D.N.Y. 2010), concluded that the plain
`
`language of the Copyright Act, which requires “the name and nationality or
`
`domicile of the author or authors” to be included in a registration, 17 U.S.C.
`
`§ 409(2), rendered this type of group registration insufficient to constitute
`
`registration of the individual images therein. Sohm, 2018 WL 1605214, at *4.
`
`However, the court noted, the Ninth Circuit reached the opposite conclusion in
`
`Alaska Stock, LLC v. Houghton Mifflin Harcourt Publishing Co., 747 F.3d 673 (9th Cir.
`
`2014). Alaska Stock held that if photographers have assigned their copyright to the
`
`stock agency and the agency registers the collection, “both the collection as a whole
`
`
`
`6
`
`

`

`and the individual images are registered,” even if only the agency’s name is listed
`
`as an author. Id. at 682.
`
`The district court adopted Alaska Stock’s reasoning, agreeing that the
`
`operative word in § 409(2) is “work,” not “author.” Sohm, 2018 WL 1605214, at *4.
`
`The name of the author of the “work” must be provided, and, in Sohm’s case, the
`
`author of the collective work – Corbis – was in fact included in the registration.
`
`The court determined that Muench improperly relied on 17 U.S.C. § 103 in rejecting
`
`this interpretation, as § 103 deals with the subject matter of copyright rather than
`
`the conceptually distinct issue of registration. Id. The court reasoned further that
`
`Alaska Stock’s interpretation was bolstered by the longstanding practice of the
`
`Copyright Office and its manuals and opinion letters, which were entitled to
`
`Skidmore1 deference – particularly in light of policy considerations such as
`
`efficiency. Id. at *5. Because registration of an unpublished collection extends to
`
`each copyrightable element therein, the court concluded that the valid group
`
`registration also registered each individual image. Id. at *5–6 (citing 37 C.F.R.
`
`§ 202.3(b)(4) (2018)).
`
`
`1 Skidmore v. Swift & Co., 323 U.S. 134 (1944).
`
`
`
`7
`
`

`

`The district court then turned to Scholastic’s claim that there was insufficient
`
`evidence of unauthorized copying. Id. at *8–9. For one group of 12 uses, the
`
`undisputed facts demonstrated that Scholastic did not exceed the print runs under
`
`the licenses. Sohm maintained that Scholastic could not prove that it did not
`
`violate the licenses’ geographic limitations, even if it did not exceed their print
`
`runs, but the court determined that Sohm, not Scholastic, bore the burden on this
`
`question because the scope, not the existence, of the licenses was in question. Id.
`
`The court therefore granted summary judgment to Scholastic as to these 12 uses.
`
`Id. at *9.
`
`For another group of 43 uses, the court found that Sohm had failed to offer
`
`any evidence that a use occurred at all and thus granted summary judgment to
`
`Scholastic as to these uses as well. Id. As part of this group, the court included a
`
`claim corresponding to Exhibit 5 to the First Amended Complaint, Row 4,
`
`concerning a photo of a steam engine in Scholastic’s publication Wheels.
`
`For the final 36 uses, Scholastic contended that Sohm had not satisfied his
`
`evidentiary burden to prove that the uses were infringing. Sohm did not dispute
`
`this assertion but attributed the shortcoming to Scholastic’s failure to provide
`
`invoices and usage information and sought to withdraw the claims without
`
`
`
`8
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`

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`prejudice. Id. The court determined that dismissal without prejudice was
`
`inappropriate, primarily due to the extent to which suit had progressed and the
`
`duplicative expense of relitigation. Consequently, the court dismissed the claims
`
`with prejudice. Id.
`
`The court next considered Sohm’s motion for partial summary judgment
`
`based on 13 uses Scholastic did not dispute exceeded the authorized print run. Id.
`
`at *10. Scholastic averred that it could not be held liable for infringement as to
`
`these uses because (1) Sohm’s claims are barred by the Copyright Act’s limitations
`
`provision; (2) Sohm’s damages should be limited to those incurred within the
`
`three years before commencement of the suit; and (3) under Scholastic’s PVAs
`
`with Corbis, the relevant print-run limitations were contractual covenants, not
`
`conditions precedent, meaning that the claims for exceeding the limitations
`
`sounded in breach of contract, which was not pleaded by Sohm, rather than
`
`copyright infringement. Id. at *10–14.
`
`Considering Scholastic’s statute of limitations claim first, the court applied
`
`the discovery rule and rejected Scholastic’s assertion that Sohm, with due
`
`diligence, should have discovered the infringing acts more than three years prior
`
`to when he brought suit. Id. at *10–11. The court concluded that Scholastic had
`
`
`
`9
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`

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`failed to identify affirmative evidence of any information that could have
`
`prompted an inquiry by Sohm. Id. at *11.
`
`Second, the court found Scholastic’s contention that damages should be
`
`limited to the three years prior to the suit irrespective of the statute of limitations
`
`unavailing. Id. The court noted that the issue has split district courts in this Circuit
`
`post Petrella v. Metro-Goldwyn-Mayer, Inc., 572 U.S. 663 (2014), but ultimately
`
`reasoned that Psihoyos v. John Wiley & Sons, Inc., 748 F.3d 120 (2d Cir. 2014),
`
`remained good law and that Petrella should not be read to establish a time limit on
`
`the recovery of damages distinct from the statute of limitations. Sohm, 2018 WL
`
`1605214, at *11.
`
`Third, the district court analyzed Scholastic’s assertion that the print-run
`
`limitations in its Corbis licenses were covenants, rather than conditions. Id. at *12–
`
`14. Applying New York law, the court found that the payment terms in Corbis’s
`
`PVAs with Scholastic did not contain sufficiently unmistakable language to give
`
`rise to a condition precedent and were therefore contractual covenants. Id. at *13.
`
`Sohm’s claims therefore sounded in breach of contract, which he had not pleaded.
`
`Accordingly, the court granted summary judgment to Scholastic on these claims.
`
`Id. at *14.
`
`
`
`10
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`

`

`The district court last considered Sohm’s claims as to images licensed by
`
`Photo Researchers and Image Works, found that Scholastic had not raised a
`
`genuine dispute of fact as to whether it had infringed those copyrights, and
`
`granted summary judgment to Sohm. Id. at *14.
`
`The parties settled the remaining claims, which were scheduled for trial, but
`
`they reserved their rights to appeal aspects of the district court’s summary
`
`judgment rulings.
`
`II. Discussion
`
`On appeal and cross-appeal, Sohm and Scholastic each raise three
`
`challenges to the district court’s summary judgment. Sohm contends that the
`
`district court erred by (1) “finding, with respect to images Scholastic obtained from
`
`Corbis, that Sohm can sue only for breach of contract and not copyright
`
`infringement” because the print-run limitations were conditions precedent, not
`
`contractual covenants, Sohm’s Br. at 15; (2) shifting the burden of proof to Sohm
`
`to demonstrate that Scholastic exceeded the scope of its license; and (3) incorrectly
`
`dismissing “Sohm’s claim corresponding to Row 4 of Exhibit 5 to the First
`
`Amended Complaint,” id. at 36–37. Scholastic maintains that the district court
`
`erred when it (1) applied the “discovery rule,” not the “injury rule,” to determine
`
`
`
`11
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`

`

`when Sohm’s claims accrued for statute of limitations purposes, Scholastic’s Br. at
`
`33–35; (2) allowed damages for more than the three years prior to when the
`
`copyright infringement suit was filed; and (3) determined that Corbis’s group
`
`registrations, which did not indicate that Sohm or Visions of America was the
`
`author of any included photographs, were valid under the Copyright Act for
`
`Sohm’s individual photographs.
`
`“We review de novo the [d]istrict [c]ourt’s partial grant and partial denial of
`
`summary judgment.” Psihoyos, 748 F.3d at 123.
`
`A. Sohm’s Arguments on Appeal
`
`1. The District Court Misconstrued Sohm’s Claims as Contract Claims Rather
`Than Copyright Infringement Claims
`
`
`
`Sohm alleged that Scholastic committed copyright infringement by
`
`exceeding the print-run limitations contained in the license documents. The
`
`district court, however, found that the license provisions were contractual
`
`covenants, and thus that his claims sounded only in breach of contract. Sohm
`
`maintains that the court “erred in its condition / covenant analysis, ignoring clear
`
`language of condition in the [license] documents.” Sohm’s Br. at 13. He contends
`
`that the district court misconstrued unmistakable language of conditions
`
`
`
`12
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`

`

`precedent, and therefore that he properly brought claims sounding in copyright
`
`infringement, not breach of contract. We agree.
`
`“Generally, ‘if the licensee’s improper conduct constitutes a breach of a
`
`covenant undertaken by the licensee and if such covenant constitutes an
`
`enforceable contractual obligation, then the licensor will have a cause of action for
`
`breach of contract,’ not copyright infringement.” Graham v. James, 144 F.3d 229,
`
`236 (2d Cir. 1998) (brackets and alteration omitted) (quoting 3 Melville B. Nimmer
`
`& David Nimmer, Nimmer on Copyright § 10.15[A]). “However, ‘if the nature of a
`
`licensee’s violation consists of a failure to satisfy a condition to the license, it
`
`follows that the rights dependent upon satisfaction of such condition have not
`
`been effectively licensed, and therefore, any use by the licensee is without
`
`authority from the licensor and may therefore, constitute an infringement of
`
`copyright.’” Id. at 237 (brackets and alteration omitted) (quoting 3 Nimmer on
`
`Copyright § 10.15[A]).
`
`Under New York law, a covenant is “a manifestation of intention to act or
`
`refrain from acting in a specified way, so made as to justify a promise in
`
`understanding that a commitment has been made.” Merritt Hill Vineyards Inc. v.
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`Windy Heights Vineyard, Inc., 61 N.Y.2d 106, 112 (1984) (citation omitted). A
`
`
`
`13
`
`

`

`condition precedent, on the other hand, is “an act or event . . . which, unless the
`
`condition is excused, must occur before a duty to perform a promise in the
`
`agreement arises.” Oppenheimer & Co. v. Oppenheim, Appel, Dixon & Co., 86 N.Y.2d
`
`685, 690 (1995) (citation omitted). “New York respects a presumption that terms
`
`of a contract are covenants rather than conditions,” Graham, 144 F.3d at 237, and
`
`“[c]onditions precedent are not readily assumed,” Bank of N.Y. Mellon Tr. Co. v.
`
`Morgan Stanley Mortg. Capital, Inc., 821 F.3d 297, 305 (2d Cir. 2016). Nevertheless,
`
`though conditions precedent must be “expressed in unmistakable language,” id.
`
`at 305 (quoting Oppenheimer, 86 N.Y.2d at 691), “specific, talismanic words are not
`
`required,” id. “[L]inguistic conventions of condition—such as ‘if,’ ‘on condition
`
`that,’ ‘provided that,’ ‘in the event that,’ and ‘subject to[]’”—can “make plain” a
`
`condition precedent. Id. at 305–06. “It is . . . for the court to decide, as a matter of
`
`law, whether a condition precedent . . . exists under the terms of a contract.”
`
`Powlus v. Chelsey Direct, LLC, No. 09-cv-10461, 2011 WL 135822, at *4 (S.D.N.Y. Jan.
`
`10, 2011).
`
`“[I]f ‘a license is limited in scope and the licensee acts outside the scope, the
`
`licensor can bring an action for copyright infringement.’” BroadVision, Inc. v. Med.
`
`
`
`14
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`

`

`Protective Co., No. 08-cv-1478, 2010 WL 5158129, at *3 (S.D.N.Y. Nov. 23, 2010)
`
`(quoting Jacobsen v. Katzer, 535 F.3d 1373, 1380 (Fed. Cir. 2008)).
`
`Here, the PVAs, invoices, and documents incorporated therein constitute
`
`the license agreements between Scholastic and Corbis. See App’x at 164 (“Along
`
`with the Corbis invoice, these terms constitute a binding agreement (‘Agreement’)
`
`between you and Corbis Corporation.”); id. at 176 (“‘Agreement’ means,
`
`collectively, the terms and conditions (i) herein, (ii) in the Invoice(s) and (iii) in the
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`Specific Content Web Page(s) applicable to the Content licensed hereunder, all of
`
`which are incorporated into this Agreement by this reference.”).
`
`These license agreements granting Scholastic the right to copy Sohm’s
`
`photos contain unmistakable language of conditions precedent, and therefore
`
`Sohm properly pleaded claims of copyright infringement. The Terms and
`
`Conditions incorporated into and attached to the 2004 PVA state that “[a]ny
`
`license granted by Corbis is conditioned upon (i) your meeting all conditions and
`
`restrictions imposed by Corbis, and (ii) Corbis’ receipt of full payment by you for
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`such use as invoiced by Corbis.” Id. at 164. The Terms further state that “[u]nless
`
`otherwise specified in a separate writing signed by Corbis, your reproduction of
`
`Images is limited to (i) internal evaluation or comps, or (ii) the specific use
`
`
`
`15
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`

`

`described in your invoice, which together with these terms shall constitute the full
`
`license granted.” Id. The Terms also explain that “[e]xcept as specified in the
`
`Corbis invoice, Images obtained from Corbis are licensed on a non-transferable,
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`one-time, non-exclusive basis, and are strictly limited to the use, medium, time
`
`period, print run, placement, size of image, territory, and any other restrictions
`
`indicated in the invoice.” Id. The invoices, in turn, specified the quantity and uses
`
`that were licensed. E.g., id. at 127. The Terms also explicitly warned that
`
`“[u]nauthorized use of these Images constitutes copyright infringement and shall
`
`entitle Corbis to exercise all rights and remedies under applicable copyright law.”
`
`Id. at 164.
`
`The Terms and Conditions incorporated into and attached to the 2008 PVA
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`contain similar language, stating that “[a]ny and all licenses granted by Corbis are
`
`conditioned upon (i) Your compliance with all provisions of this Agreement, and
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`(ii) Corbis’ receipt of full payment by You as identified in the applicable invoice.”
`
`Id. at 175. The Terms also state that “[e]xcept where specifically permitted on the
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`Invoice for the applicable Content, You may not distribute, publish, display, or
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`otherwise use in any way, the Rights Managed Content.” Id.
`
`
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`16
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`These provisions are replete with the conditional language of conditions
`
`precedent – “unless,” “conditioned upon,” “except where specifically permitted”
`
`– thereby directly refuting the conclusion that the license agreements created only
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`contractual covenants, the violation of which sounds in breach of contract. Sohm
`
`asserts that Scholastic exceeded print-run limitations contained in the invoices
`
`forming part of the license agreements, and thus he properly pleads that Scholastic
`
`has violated a restriction upon which the license is conditioned.
`
`We are not alone in reaching this conclusion. In Kashi v. McGraw-Hill Global
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`Education Holdings, No. 17-cv-1818, 2018 WL 5262733 (E.D. Pa. Oct. 23, 2018), the
`
`district court, interpreting similar license agreements to those at issue here and
`
`applying New York law, reasoned that “the language of [the PVAs], along with
`
`the invoices, create[s] a condition in unmistakable terms,” id. at *5. “[T]hus, by
`
`exceeding the uses authorized by the invoices, Defendants violated a condition of
`
`their license agreements with Corbis,” thereby entitling plaintiff to assert
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`copyright infringement claims. Id. Rejecting an interpretation of the license
`
`agreements that would render provisions mere delineations of acceptable and
`
`unacceptable behavior, the court found that such an analysis would render it
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`“virtually impossible to limit the scope of the license.” Id. at *6. Rather, the license
`
`
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`17
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`

`agreements’ language “clearly stated that authorization to use a photo was
`
`conditioned upon an invoice granting permissions and upon receipt of payment,”
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`and thus “put unauthorized use in excess of the quantities permitted by the
`
`invoices beyond the scope of the Agreements.” Id. Overuse of the photos,
`
`therefore, “implicates a condition, not a covenant, and . . . any alleged breaches
`
`sound in copyright infringement, not breach of contract.” Id. at *7.
`
`Numerous other courts have agreed when confronted with similar
`
`circumstances. See, e.g., Menzel v. Scholastic, Inc., No. 17-cv-5499, 2019 WL 6896145,
`
`at *7–9 (N.D. Cal. Dec. 18, 2019); Krist v. Pearson Educ., Inc., No. 16-cv-6178, 2019
`
`WL 6467355, at *5–8 (E.D. Pa. Dec. 2, 2019); Krist v. Scholastic, Inc., 415 F. Supp. 3d
`
`514, 533–36 (E.D. Pa. 2019); Harrington v. McGraw-Hill Glob. Educ. Holdings, LLC,
`
`No. 17-cv-2960, 2019 WL 1317752 (D. Colo. Mar. 22, 2019); Pac. Stock, Inc. v. Pearson
`
`Educ., Inc., 927 F. Supp. 2d 991 (D. Haw. 2013). In Harrington, the district court
`
`interpreted substantially identical Corbis agreements to those at issue here and
`
`agreed with the Kashi court that “the parties’ agreement expressly provided that
`
`unauthorized use of the images would constitute copyright infringement,” and
`
`that use in excess of the print-run limitations was unauthorized use. 2019 WL
`
`1317752, at *3. The court emphasized the same language in the parties’ agreements
`
`
`
`18
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`

`and rejected course of conduct evidence as insufficient to convert the case from
`
`one of copyright infringement to one of breach of contract. Id. In Pacific Stock, the
`
`court reached a similar conclusion, finding that print-run limitations in the context
`
`of a comparable PVA scheme “define the scope of the license; they are not simply
`
`covenants enforceable only through a breach of contract action.” 927 F. Supp. 2d
`
`at 998.
`
`We conclude that the language is clear on the face of the license agreements:
`
`the print-run limitations were conditions precedent, the violation of which gave
`
`rise to claims for copyright infringement. Sohm thus properly pleaded copyright
`
`infringement. Accordingly, we reverse the grant of partial summary judgment to
`
`Scholastic on this basis.
`
`2. The District Court Properly Applied the Elements of Copyright Infringement
`to Sohm’s Claims
`
`
`
`Sohm next contends that the district court (1) misstated the elements of a
`
`claim for copyright infringement and (2) misallocated to Sohm the burden of
`
`proving that Scholastic’s use fell outside the scope of the license. He first maintains
`
`that the court’s version of the elements of a prima facie case – “(i) ownership of a
`
`valid copyright; and (ii) unauthorized copying of the copyrighted work,” Sohm,
`
`2018 WL 1605214, at *2 – erroneously included the term “unauthorized.” Instead,
`
`
`
`19
`
`

`

`Sohm urges that the proper formulation of the second element is “copying of
`
`constituent elements of the work that are original.” Sohm’s Br. at 40 (quoting Feist
`
`Publ’ns, Inc. v. Rural Tel. Serv. Co., 499 U.S. 340, 361 (1991)).
`
`He further asserts that the district court’s version of the elements of a
`
`copyright infringement case as applied in a license case, as opposed to a
`
`substantial similarity case, created an “impossible burden” in light of Scholastic’s
`
`claim that “it retained no records of its original licensing.” Id. at 41. According to
`
`Sohm, it was inappropriate to place on him the burden of showing that Scholastic’s
`
`use exceeded its license because there was “no legitimate scope of license issue”
`
`where Scholastic exceeded the print runs on the face of the invoices. Id. at 42. He
`
`argues that Scholastic “ha[d] the burden of coming forward with proof that it had
`
`a license for the uses at issue.” Id. at 43.
`
`Sohm’s arguments on these points fail. The district court neither
`
`erroneously misstated the elements of a claim for copyright infringement nor
`
`improperly shifted the burden of proof to Sohm to demonstrate that Scholastic
`
`exceeded the scope of its license. We therefore affirm.
`
`“In a copyright infringement case, the plaintiff must show: (i) ownership of
`
`a valid copyright; and (ii) unauthorized copying of the copyrighted work.”
`
`
`
`20
`
`

`

`Jorgensen, 351 F.3d at 51. The existence of a license to engage in the challenged
`
`copying, however,
`
`is “an affirmative defense to a claim of copyright
`
`infringement . . . that the alleged infringer must plead and prove.” Yamashita v.
`
`Scholastic Inc., 936 F.3d 98, 104 (2d Cir. 2019); see also Bourne v. Walt Disney Co., 68
`
`F.3d 621, 630–31 (2d Cir. 1995). Nevertheless, “when the contested issue is the
`
`scope of a license, rather than the existence of one, the copyright owner bears the
`
`burden of proving that the defendant’s copying was unauthorized under the
`
`license and the license need not be pleaded as an affirmative defense.” Graham,
`
`144 F.3d at 236; see also Yamashita, 936 F.3d at 105 (“Applying these principles in
`
`the context of initial pleadings, when the existence of a license is not in question, a
`
`copyright holder must plausibly allege that the defendant exceeded the particular
`
`terms of the license.”).
`
`Here, the district court’s recitation of the elements of a copyright
`
`infringement claim was correct in both form and substance. As Graham
`
`demonstrates, in cases involving licenses, we have interpreted “unauthorized” use
`
`to mean use outside of the license. 144 F.3d at 236 (requiring copyright holder to
`
`demonstrate that “defendant’s copying was unauthorized under the license”);
`
`Bourne, 68 F.3d at 631.
`
`
`
`21
`
`

`

`In addition, the district court properly required Sohm to demonstrate use
`
`outside the scope of the license. Because Sohm pleaded in his complaint that
`
`licenses exist – a fact that Scholastic admits – Sohm bore the burden of proving
`
`that Scholastic’s copying was unauthorized, a burden he failed to satisfy. Sohm’s
`
`attempts to avoid this burden by recasting the relevant inquiry as one of the
`
`existence of a license or of the proper formulation of the elements of a copyright
`
`infringement claim are unavailing in the face of these clear principles. The district
`
`court properly framed the question as whether Scholastic had exceeded the scope
`
`of existing licenses, and therefore properly placed the burden of demonstrating
`
`unauthorized copying on Sohm. Accordingly, the court did not err in reciting the
`
`elements of a copyright infringement claim nor in requiring Sohm to demonstrate
`
`use outside the scope of the license.
`
`3. Sohm Offered Sufficient Proof of Infringement to Survive Summary
`Judgment on the Steam Engine Photo
`
`
`
`Sohm avers that the district court erroneously granted partial summary
`
`judgment to Scholastic on his claim at Row 4 of Exhibit 5 to the First Amended
`
`Complaint, concerning a photo of a steam engine in Scholastic’s publication
`
`Wheels. We agree.
`
`
`
`22
`
`

`

`Sohm proffered evidence that Scholastic obtained a limited license from The
`
`Image Works to print 40,000 copies of Sohm’s image in Wheels, but actually printed
`
`195,500 copies. Scholastic did not dispute this evidence nor include this claim in
`
`the group of claims for which it sought summary judgment on the basis that the
`
`evidence did not show infringement. Consequently, the district court’s dismissal
`
`of this claim appears to have been inadvertent. Scholastic “agrees that it did not
`
`seek dismissal of this claim under any theory agreed with by the District Court,”
`
`and thus does not oppose Sohm’s request that this dismissal be reversed.
`
`Scholastic’s Br. at 3 n.1. Accordingly, we reverse the district court’s grant of partial
`
`summary judgment to Scholastic on Sohm’s claim of copyright infringement
`
`corresponding to the image at Row 4 of Exhibit 5 to the First Amended Complaint.
`
`B. Scholastic’s Cross-Appeal
`
`As noted above, Scholastic argues in its cross-appeal that the district court
`
`erred when it (1) applied the “discovery rule,” not the “injury rule,” to determine
`
`when Sohm’s claims accrued for statute of limitations purposes, id. at 33–35; (2)
`
`allowed damages for more than the three years prior to when the copyright
`
`infringement suit was filed; and (3) determined that Corbis’s group registrations,
`
`which did not indicate that Sohm or Visions of America was the author of any
`
`
`
`23
`
`

`

`included photographs, were valid under the Copyright Act for Sohm’s individual
`
`photographs. We will address each of these contentions in turn.
`
`1. The District Court Properly Applied the Discovery Rule in Determining
`When Sohm’s Copyright Claims Accrued
`
`
`
`In Psihoyos, this Court adopted the “discovery rule” for determining when
`
`a copyright infringement claim accrues. 748 F.3d at 124–25. Scholastic
`
`nevertheless urges this Court to adopt the “injury rule” instead, maintaining that
`
`“in two recent decisions following Psihoyos, the Supreme Court cast serious doubt
`
`on the viability of the discovery rule.” Scholastic’s Br. at 34 (citing SCA Hygiene
`
`Prods. Aktiebolag v. First Quality Baby Prods., LLC, 137 S. Ct. 954 (2017); Petrella, 572
`
`U.S. 663). We disagree and decline to alter this Circuit’s precedent mandating use
`
`of the discovery rule; we therefore affirm the district court’s holding that

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