IP Law Daily, COPYRIGHT—D. Or.: Unauthorized use of “made for hire” artwork might not constitute copyright infringement, (Dec 8, 2014)

By Mark Engstrom, J.D.

A seller of greeting cards and stationery (Carol Wilson Fine Arts) proved that the paintings of a pro se defendant constituted “made for hire” artwork under the Copyright Act, but it failed to prove that the use of those works on the defendant’s website constituted copyright infringement, the federal district court in Eugene, Oregon, has ruled (Carol Wilson Fine Arts, Inc. v. Qian, December 3, 2014, Aiken, A.). Summary judgment was awarded to the greeting card company on its claim for a declaratory judgment of ownership, but summary judgment was denied on its claim for copyright infringement. The defendant’s cross motion for summary judgment was denied.

Background

Carol Wilson Fine Arts designed, marketed, and sold greeting cards and stationery products that incorporated the original paintings and illustrations of in-house artists and independent contractors. In 1992, the plaintiff hired defendant Zifeen Qian as an “Artist,” and Qian signed a written employment agreement. In 2013, the plaintiff terminated Qian’s employment and the parties executed a severance agreement.

Over his 21 years of employment with Carol Wilson Fine Arts, Qian created original artwork that was used in the plaintiff’s stationery and greeting card products. The artwork included 21 floral watercolor paintings (the “disputed paintings” or the “paintings at issue”). The plaintiff registered 16 of those paintings with the U.S. Copyright Office. After his employment with the plaintiff ceased, Qian began to display the paintings on his personal website.

The plaintiff sued Qian for copyright infringement and a declaration of ownership. The plaintiff sought four remedies: (1) a declaration that the paintings at issue were “made for hire” under the Copyright Act; (2) an injunction that permanently enjoined the future infringement of the paintings at issue; (3) statutory damages of $750—at a minimum—per copyrighted work; and (4) the impoundment of the infringing copies. The plaintiff sought summary judgment on both of its claims. The defendant filed a cross motion for summary judgment on the ground that he owned the copyrights to the paintings at issue.

Declaratory Judgment Claim

The plaintiff sought a declaration that it was the sole owner of the copyrights in the disputed paintings. The court noted that an employee’s conduct fell within the scope of employment if, in the absence of an agreement to the contrary, the conduct at issue: (1) involved the type of work that the employee was hired to perform; (2) occurred substantially within the authorized “time and space” limits of defendant’s employment; and (3) was performed, at least in part, to serve the employer.

Type of work. The uncontroverted evidence showed that the defendant was hired to create original artwork for use in the plaintiff’s stationery and greeting cards. Significantly, the employment and severance agreements both defined the plaintiff as the “Employer” and the defendant as the “Employee.”

Although the employment contract did not define the defendant’s job title or specific duties, it did stipulate that the employee would perform the work that was desired by the employer in a “workmanlike manner,” and would “at all times” provide services to the employer under the employer’s “control and direction.”

In addition, the plaintiff’s president and co-founder had testified that the defendant was “employed by [the plaintiff] as a professional artist for the purpose of creating original paintings that could be used in [the plaintiff’s] products.”

Time and space limits. According to the court, the defendant had created the paintings at issue within the authorized “time and space limits” of his employment. Significantly, the plaintiff had supplied the defendant with: (1) an on-site office, which contained a computer, a desk, and a drafting table; (2) tools such as brushes, paint, and art paper; and (3) incidental materials, including flat files and other storage, color corrected lighting, production equipment, bookshelves, props, reference materials, and “books to inspire new ideas.”

In addition, the defendant was not permitted to work from home and was required to maintain regular office hours that matched the company’s business hours. In exchange, the defendant received an hourly rate for his services, occasional yearly bonuses and retirement contributions, health insurance benefits, and paid vacation and sick leave.

Purpose of the paintings. The court found that the paintings at issue were created to serve plaintiff’s business: generating aesthetically-pleasing paper products that featured original artwork. For that reason, the plaintiff had asserted “control and direction” over the defendant’s designs and artistic creations. Significantly, the defendant’s supervisors had been active in the review and management of his work so his original art could be used in the plaintiff’s products.

Although the defendant made conclusory assertions about his ownership of the paintings and the types of tasks that he was hired to perform, he failed to provide any evidence—or cite to any precedent—that supported those assertions. Moreover, no written agreement governed those matters. Consequently, the defendant failed to raise a genuine issue of material fact regarding the “made for hire” status of the paintings at issue.

According to the court, the undisputed record established that the plaintiff owned copyrights in the paintings at issue because the paintings were created by defendant: (1) during work hours; (2) on the plaintiff’s premises and at the plaintiff’s expense; (3) under the plaintiff’s direction and control; and (4) while the defendant was being paid an hourly wage.

Decision. Because all three “scope of employment” elements were satisfied, the court granted the plaintiff’s motion for a declaratory judgment of ownership. The defendant’s cross motion was denied.

Copyright Infringement Claim

The court concluded that the record evidence was insufficient to make a summary judgment determination regarding the plaintiff’s claim for copyright infringement. Although the defendant had posted the paintings on his website, he was not selling them over the Internet or making them available for commercial purposes. The plaintiff did not cite (and the court was not aware of) any Ninth Circuit precedent that established that the display of images in that manner was a violation of the copyright owner’s exclusive rights under the Copyright Act.

The parties’ motions and briefs were silent concerning fair use. Nevertheless, the court observed that the Copyright Act, in certain limited circumstances, contemplated that a non-owner could use a registered work publicly, without infringement. According to the court, granting summary judgment of infringement would preclude artists—including those who produced works that were made for hire—from representing themselves as the creator of those works, even in an academic or other non-commercial context.

The court was troubled by the implications of a summary judgment ruling in this case. Given the potentially far-reaching consequences that ruling, the significance of the relief that the plaintiff was requesting, the nature of the defendant’s use of the paintings at issue, and the fact that the defendant was not represented by counsel, the court sought further argument and evidence from the parties.

Summary judgment was therefore denied, to both parties, on the plaintiff’s claim for copyright infringement. The court ordered the parties to renew their settlement negotiations with a U.S. magistrate or district court judge.

The case is No. 3:14-cv-00587-AA

Attorneys: Stephen J. Joncus (Klarquist Sparkman LLP) for Carol Wilson Fine Arts, Inc.

Companies: Carol Wilson Fine Arts, Inc.

Cases: Copyright OregonNews