IP Law Daily, COPYRIGHT—D.N.J.: Motion to dismiss lawsuit based on fair use defense denied, (Jan 5, 2026)

By Linda Panszczyk, J.D.

Defendants’ use stands to usurp the licensing market for plaintiff’s copyrighted photographs because defendants use the works for the same purpose for which they were originally intended.

In a lawsuit alleging infringing use of plaintiff's copyrighted photographs against a defendant which used the photos on its website, the defendants' motion to dismiss was denied by the federal district court for Newark, New Jersey. The court rejected the defendants' fair use defense under the U.S. Copyright Act, finding that, taken together, the four fair use factors counsel against a finding that the defendants' use of the copyrighted photographs in this case was fair (Full Package Media, LLC v. Homes of the Rich, LLC, No. 2:25-cv-00971-JKS-JSA (D.N.J. Dec. 31, 2025)).

Background. This action arises from the defendants’ allegedly infringing use of plaintiff’s copyrighted photographs on the defendants’ website. Plaintiff is a real estate media photography company headquartered in Dallas, Texas, that specializes in images of luxury homes and aerial images. Defendant Homes of the Rich LLC is a New Jersey limited liability company that owns and operates the website that used the copyrighted photographs, and defendant Kenneth Forder, a New Jersey resident, is the owner, sole employee, and registered agent of Homes of the Rich LLC.

Between 2017 and 2024, a photographer named Thomas Crosson captured the photos at issue in this case, and, in 2024, the plaintiff registered these photos with the U.S. Copyright Office. Plaintiff alleges that between March 19, 2017, and March 27, 2024, the defendants copied and posted the Copyrighted Photographs to its website, social media feeds, or both. Plaintiff alleges that the defendants are not, and have never been, licensed to use or display plaintiff’s copyrighted photographs and have never contacted plaintiff to seek permission to use plaintiff’s copyrighted photographs in connection with its website or for any other purpose.

Plaintiff contends that the defendants found the copyrighted photographs on the Internet and copied them for use on their website without contacting plaintiff to inquire about licensing the images. Plaintiff alleges that it first discovered the defendants’ allegedly infringing use of the copyrighted photographs on or about March 29, 2024, and that upon making the discovery, plaintiff sent written notice to the defendants that their use of the images was unauthorized. As of the date of the complaint, the plaintiff indicated that the parties have been unable to negotiate a reasonable license for the past infringement of plaintiff’s copyrighted photographs.

In this action, the plaintiff sought relief in the form of declarations that the defendants willfully infringed plaintiff’s copyrights in the copyrighted photographs, actual damages, and disgorgement of profits or statutory damages of $150,000, costs of suit and attorney fees, prejudgment interest, and an injunction barring the defendants from continuing their alleged infringement.

The defendants filed a motion to dismiss the lawsuit. They did not dispute that they used plaintiff’s copyrighted photographs but instead contended that the complaint should be dismissed because their use of the copyrighted photographs was fair under section 17 of the U.S. Copyright Act, 17 U.S.C. § 107. Plaintiff opposed the motion.

Fair use. The Copyright Act set forth four factors to consider when determining whether the use made of a work in any particular case is a fair use: (1) the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes; (2) the nature of the copyrighted work; (3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and (4) the effect of the use upon the potential market for, or value of, the copyrighted work.

Purpose and character of use. The main concern of the inquiry into the purpose and character of the use of copyrighted material is, “in Justice Story’s words, whether the new work merely ‘supersede[s] the objects’ of the original creation…or instead adds something new, with a further purpose or different character, altering the first with new expression, meaning, or message; it asks, in other words, whether and to what extent the new work is ‘transformative.’”

The defendants argued that their use of the copyrighted photographs transformed the works by “contextualiz[ing] the photographs as part of a broader informational purpose of educating the public about notable properties, their architectural features, and real estate trends.” The instant case differs from earlier cases cited by the defendant. First, the defendants did not use the copyrighted photographs for “an entirely different purpose than originally intended.” The defendants’ stated aim in republishing the works is to serve “a broader informational purpose of educating the public about notable properties, their architectural features, and real estate trends.” While worded differently, this purpose was exactly the same use made by plaintiff’s clients to feature, market, and ultimately sell the respective properties depicted in the copyrighted photographs. Both uses promote the features of the properties to the public. “For a use to be fair, it must be productive and must employ the quoted matter in a different manner or for a different purpose from the original.

The defendants’ use employed language that described the properties depicted in the copyrighted photographs, but such description did not create new information so much as it recapitulated the information contained in the copyrighted photographs. The information about pricing, location, and square footage that the defendants included in the allegedly infringing articles similarly presented and publicized existing information about the properties rather than adding new information or context sufficient to “transform” the copyrighted photographs for the purposes of the first fair use factor.

Second, the defendants profited from using the copyrighted photographs by generating content for their website, which in turn generated revenue to the defendants by way of advertisements and pageviews. Moreover, the defendants admitted that their use was commercial. For these reasons, the purpose and character of the defendants’ use of the Copyrighted Photographs weighed against a finding of fair use.

Nature of the works. The second fair use factor requires the court to determine if the Copyrighted Photographs are factual or fictional in nature. “The law generally recognizes a greater need to disseminate factual works than works of fiction or fantasy.”

Here, plaintiff argued that the copyrighted photographs were “not just mere snapshots of a space[,]” but rather “images which involved numerous creative choices including timing, lighting, angle, composition, and others[.]” The defendants contend that “[t]he photographs at issue are primarily factual in nature, depicting real estate properties as they actually exist[,]” and that “[w]hile photography involves creative choices” regarding the factors enumerated by plaintiff, “the photographs here primarily serve an informational purpose—to document and showcase the properties’ appearances.”

The court found that this factor counseled neither in favor of nor against a finding of fair use. The works unquestionably involved the sorts of creative decisions that are the classic hallmarks of copyrightable expression, but they were also clearly factual depictions of the properties as they exist. These diametrically opposed facts effectively neutralizde one another.

Substantiality of use. The third factor concerns whether the defendants used all or part of the works at issue, and additionally “requires courts to consider…whether the portion of the copyrighted material was ‘the heart of the copyrighted work.’” The defendants did not dispute that they used all of the copyrighted photographs without cropping or editing them, but they argued that doing so “was necessary to fulfill Defendants’ informational purpose of educating the public about the architectural and design features of the properties.” Plaintiff argued that the defendants’ use of the entirety of the copyrighted photographs served to “reinforce the principle that courts should not accord fair use protection to profiteers who do no more than add a few silly words to someone else’s song.” Because the defendants used the entirety of the copyrighted works in service of a use that ultimately was not transformative, the court found that the amount and substantiality of the use counseled against a finding of fair use.

Market effect. The final fair use factor “requires courts to consider not only the extent of market harm caused by the particular actions of the alleged infringer, but also ‘whether unrestricted and widespread conduct of the sort engaged in by the defendant…would result in a substantially adverse impact on the potential market’ for the original.” The court “must take account not only of harm to the original but also of harm to the market for derivative works.”

In their motion, the defendants argued that their “use of the [Copyrighted Photographs] does not compete with or supplant the market for Plaintiff’s photographs” because “Plaintiff is in the business of creating and licensing real estate photographs to real estate agents, brokers, and property owners for marketing properties[,]” whereas “Defendants, on the other hand, operate an informational website about luxury real estate that reports on notable properties, without offering any competing photography services.” In support of this argument, and to frame the court’s analysis, The defendants claimed that the fourth fair use factor is concerned with “whether the secondary use usurps the market of the original work.” They also noted that “[m]arket harm caused by effective criticism that suppresses demand is not cognizable.”

In plaintiff’s view, the inquiry under this factor is “whether the defendant’s version of the photo can serve as a ‘market substitute’ for the original.” Plaintiff offered that “Defendants’ position would mean that potential licensees of the [Copyrighted Photographs] will no longer be incentivized to pay a licensing fee to use [the] Copyrighted Photographs” since “they could simply copy for free the version published by Defendants to their website and social media[.]” Plaintiff then cited a string of cases in which courts around the country found that the final factor worked against a finding of fair use where the allegedly infringing party used the copyrighted material at use for largely the same purpose as originally intended. Finally, Plaintiff argued that the defendants have not met their burden of establishing through evidence that their use was fair under this factor.

The court found that the defendants’ use did stand to usurp the licensing market for plaintiff’s copyrighted photographs because the dfendants used the works for the same purpose for which they were originally intended.

Similar to the analysis regarding the first factor, the defendants’ attempts to differentiate their “educational” use from the original intended use of marketing the properties depicted in the copyrighted photographs falls flat, as the two uses are effectively one and the same. The defendants’ attempt to cast their use as “commentary” was similarly unavailing, said the court, because the cases they cite undermined their argument. For example, while an earlier case indeed sets out that “[m]arket harm caused by effective criticism that suppresses demand is not cognizable[,]” in the very next sentence, the court notes that “[i]nstead the only kind of harm cognizable is market substitution—i.e. where the new work diminishes demand for the original work by acting as a substitute for it.” The instant case was just such a scenario, and as such, the court found that the defendants' use created a negative market effect for the licensing market of the copyrighted photographs that counsels against a finding of fair use.

The Case is No. 2:25-cv-00971-JKS-JSA.

Judge: Semper, J.

Attorneys: Craig B. Sanders (Sanders Law Group) for Full Package Media LLC. Paul Stuart Haberman (Mueller Haberman Law Group) for Homes of the Rich LLC.

Companies: Full Package Media LLC; Homes of the Rich LLC

Cases: Copyright TechnologyInternet NewJerseyNews