Second Circuit Joins Ninth Circuit Approach to Assessing Individual Copyright Claims in Group Registrations

On May 12, the U.S. Court of Appeals for the Second Circuit issued a decision in Sohm v. Scholastic in which the appellate court reversed in part a decision handed out by the U.S. District Court for the Southern District of New York (SDNY) granting partial summary judgment to Sohm for Scholastic’s infringement of copyright to six photographs and dismissing other claims by Sohm. Among the issues decided by the Second Circuit on appeal was an issue of first impression on group registrations. The Second Circuit decision aligned with case law from the Ninth Circuit, which has held that an individual can sue for copyright infringement covering individual works within a group registration even if that individual isn’t named as an author in the group registration.

SDNY Properly Applied Alaska Stock to Corbis’ Group Registration

Sohm, a photographer, originally filed suit in the Southern District of New York in May 2016, alleging that Scholastic had infringed copyright to 89 of Sohm’s photographs by reprinting them in various publications with print runs extending past the maximum prints allowed by license. Several of the photographs constituting part of the infringement allegations against Scholastic were included in group registrations filed by the predecessor company to the stock photo firm, Corbis. Although Corbis reassigned copyright to Sohm for his works after registration, the group registration doesn’t identify Sohm as an author.

The district court awarded partial summary judgment to both parties in the case. In denying Scholastic’s motion for summary judgment that Sohm’s copyright claims were invalid as to the Corbis photos, the SDNY adopted reasoning established by the U.S. Court of Appeals for the Ninth Circuit in 2014’s Alaska Stock v. Houghton Mifflin Harcourt. The Ninth Circuit held in Alaska Stock that a photographer’s individual works within a group registration filed by a photo agency are properly registered for purposes of pursuing copyright claims, even if the individual photographer is not listed as an author. In Muench Photography v. Houghton Mifflin Harcourt (2010), the SDNY had previously concluded that the plain language of the Copyright Act as codified in 17 U.S.C. § 409(2) rendered a group registration to be insufficient for registering individual works within a group. However, the district court in Sohm found that the operative word in Section 409(2) is “work” rather than “author” and that Muench improperly relied upon 17 U.S.C. § 103 in its interpretation of Section 409(2).

Scholastic appealed based on Muench’s holding on group registrations but the Second Circuit found that the district court was right to apply the Ninth Circuit’s reasoning in Alaska Stock. The appellate court noted that it had not previously addressed the question of whether a group photo registration effectively registers the underlying individual photos when the compilation doesn’t list individual authors. Using Alaska Stock’s reasoning that “work” is the operative word of Section 409(2), the Second Circuit determined that Corbis’ group registration satisfied Section 409(2)’s requirements for obtaining a valid group registration when Corbis was listed as the author of the collective work.

Second Circuit: Petrella Controls Damage Recovery but Not Accrual of Copyright Claim

The Second Circuit did, however, agree with Scholastic that the district court improperly allowed Sohm to recover damages for copyright infringement occurring more than three years prior to the filing of his suit in district court. While the U.S. Supreme Court held to a strict interpretation of the three-year window for damages governed by 17 U.S.C. § 507(b) in its 2014 decision in Petrella v. Metro-Goldwyn-Mayer, the district court found circuit splits on the issue post-Petrella and decided that the Second Circuit’s 2014 decision in Psihoyos v. John Wiley & Sons was still good law. Psihoyos determined that damages were available for infringing acts occurring more than three years prior to filing a suit if the copyright owner discovered the infringing acts within three years of the suit, the court determining that the copyright claims accrued on the date of discovery.

Although the Second Circuit recognized the post-Petrella circuit split, the appellate court found that the Supreme Court in Petrella was clear that the statute of limitations in Section 507(b) only made relief available to plaintiffs for infringing acts occurring within three years of the suit being filed. Sohm had argued that Petrella’s language on the three-year window was dicta not essential to the court’s ruling in that case. However, the Second Circuit found that it was essential as the Supreme Court based its ruling that laches isn’t available as a copyright defense because the Copyright Act limits damages to the three-year window in Section 507(b), thereby addressing the issue of plaintiff delay in filing suit.

Despite this, the Second Circuit found that the district court was right to apply the discovery rule from Psihoyos in determining that Sohm’s copyright claim accrued from the date that the copyright holder discovered or should have discovered the infringement. On appeal, Scholastic contended that the district court should have applied an injury rule under which the claim accrues on the date of the infringing act. While the Second Circuit acknowledged that the Supreme Court’s language in both Petrella and SCA Hygiene v. First Quality Baby Products (2017) was consistent with the application of the injury rule, both cases expressly did not pass on the question of whether the Copyright Act’s statute of limitations was governed by either the injury rule or the discovery rule.

After determining that the discovery rule from Psihoyos applied under stare decisis principles, the Second Circuit found that the district court didn’t err in finding that Scholastic failed to meet its evidentiary burden to survive summary judgment on its defense that Sohm’s claims were time-barred. Scholastic had identified no affirmative evidence that would have prompted an inquiry or audit by Sohm but had rather argued that Sohm had the ability to do so during the statutory period. The Second Circuit affirmed the district court’s finding that the passage of time alone cannot establish that Sohm should have discovered the infringing acts earlier, extinguishing Scholastic’s affirmative defense under the statute of limitations.

Second Circuit Reverses on Misconstrued Contract Claims, Dismissal of Infringement Claim

Elsewhere in the Second Circuit’s decision, the appellate court agreed with Sohm on appeal that the district court misconstrued Sohm’s claims regarding print runs exceeding license limitations as contract claims rather than copyright claims. The Second Circuit found that Scholastic’s licensing agreements governing its use of Sohm’s photographs included unmistakable language creating conditions precedent, which sound in copyright law when violated, and not contractual covenants which only give rise to breach of contract claims. The Second Circuit dismissed Sohm’s argument that the district court improperly required Sohm to present evidence demonstrating Scholastic’s unauthorized use outside of the license agreement. However, the appellate court did side with Sohm in finding that the plaintiff presented sufficient evidence of infringement to survive summary judgment on an infringement claim as to a steam engine photo reproduced in Scholastic’s Wheels publication. Sohm’s evidence showed that Scholastic printed 195,500 copies of Wheels, well above its limited license to reproduce Sohm’s photograph 40,000 times.

Image Source: Deposit Photos
Image ID:11745588
Copyright:kaetana