IP Law Daily, COPYRIGHT—D.S.C.: Jury to decide whether photographer misused copyrights to profit from litigation, (Jul 13, 2022)

By George Basharis, J.D.

Genuine issues of fact existed regarding copyright misuse and other equitable defenses presented by real estate brokers accused of infringement.

Real estate brokers who used copyrighted aerial photographs of a marina in a listing for a boat slip could not convince a federal court in South Carolina to dismiss claims of copyright infringement by the photographer, who allegedly made the majority of his income from copyright litigation rather than selling photographs. Rejecting the brokers’ motion for summary judgment on a number of defenses, including equitable estoppel, copyright misuse, unclean hands, and fair use, the court determined that a jury would decide why the photographer copyrighted his work and whether he was more focused on the business of litigation than licensing or selling his photographs (Oppenheimer v. Scarafile, July 12, 2022, Gergel, R.).

In 2013, the photographer took aerial photographs of the Charleston, South Carolina coastline that he later registered in a collection of photos. After the collection was registered, the photographer made the photographs available for sale or licensing through his website. The photos on the website contained copyright management information in the form of a visible watermark and a notice of copyright embedded in the metadata.

In 2016, real estate brokers in the Charleston area uploaded two of the photographs in the collection to an online broker database and used the photos in a listing for a boat slip. The boat slip sold in 2017. In 2019, the photographer learned that his photographs were used in the listing and demanded that they no longer be used by the brokers. The brokers removed the listing from the database but because the database was syndicated for use by many brokerages, not all listings containing the photos were removed. The photographer sued the brokers, asserting copyright infringement, violation of the Digital Millennium Copyright Act (DMCA), and other claims. The brokers asserted numerous affirmative defenses, including equitable estoppel, copyright misuse, and unclean hands. They moved for summary judgment on their defenses and also on the photographer’s DMCA claim. They further contended that the photographer’s copyright registration constituted a single work as a matter of law. The photographer moved for summary judgment on his direct copyright infringement claim.

Equitable estoppel. The brokers did not have the photographer’s express consent to use the copyrighted photos but they argued that the photographer induced them to use the photographs by making the images easy to find, download, and share online. They claimed that the photographer knew that copyright notices alone do not deter infringement and that he should have employed more explicit warnings. The photographer explained that making the photos easy to find were part of his marketing strategy. The court rejected the brokers’ argument, noting that it was undisputed that the copyright notice was affixed on the photographs at the time of the alleged infringement and finding the photographer’s actions did not otherwise establish equitable estoppel.

Copyright misuse. The brokers’ copyright misuse defense was based on the fact that the photographer derived most his income from prosecuting copyright infringement claims rather than selling photographs. The brokers insisted that the photographer made his photographs easy to find on the internet for the purpose of inducing copyright infringement and generating litigation income. The court noted that although the photographer could be considered an excessive filer of copyright infringement suits, the evidence also established that he was a legitimate professional photographer who sold his photographs to third parties. Consequently, the court said that a jury should decide whether the photographer was more focused on the business of litigation.

Group registration. The photographer claimed the brokers infringed upon two of his registered works and sought damages for each registered image. The brokers argued the registration constituted only a single work and the photographer was entitled to only one damage award. The argument was based on a note on the face of the registration certificate that stated that the work was registered as an unpublished collection rather than a published group. However, according to the court, the difference between group registration and unpublished collection registration would not be enough to find that the registration constituted a single work because the method of registration was not dispositive of the work’s status as a compilation. Consequently, the court would allow a jury to decide whether the photographer issued the work together or separately and whether the photos in the copyrighted collection had independent value.

Unclean hands. The brokers maintained that the photographer’s copyright infringement claims should be barred because he intentionally excluded from his complaint a note from the Copyright Office stating that the photographs were being registered as an unpublished collection. The brokers argued the photographer dishonestly concealed the note by placing a yellow sticky note over the statement. The court found that misrepresenting the scope of the copyright could constitute unclean hands, a genuine dispute existed as to the concealment of the Copyright Office note. The court also noted that commonplace disputes over credibility did not warrant the application of the unclean hands defense at the summary judgment stage of the litigation.

DMCA. The photographer claimed the brokers violated the DMCA by removing or obscuring the copyright notices and metadata from his registered photographs. However, the DMCA requires that the alleged infringer act intentionally and knowingly. The court found that the evidence did not support claims that the brokers intentionally removed the copyright notices. The notices and metadata appeared to have been removed or cropped by other parties or automatically by the listing database. Consequently, the court concluded the photographer would not be able to establish scienter and granted summary judgment in favor of the brokers on the DMCA claim.

Infringement. The court also found no issue of fact regarding the photographer’s direct infringement claim. There was no dispute that the photographer owned a valid copyright in the photos and that the brokers copied the photos and used them in real estate listing. However, the brokers had valid affirmative defenses, for example fair use or that copying was authorized by the photographer’s conduct, and the court refused to grant summary judgment.

Fair use. Three of the four factors used to establish fair use favored the photographer: the photographs were commercial in nature and required artistic expression and creativity, and the brokers copied the entirety of the copyrighted works in their real estate listing. However, the photographer failed to establish undisputed facts to support his claim that the brokers’ secondary use of the copyrighted photographs usurped the potential market or value of the images. The photographer argued that his income was derived from licensing his photographs, but the brokers responded by maintaining that the majority of the photographer’s income was derived from copyright infringement litigation. Moreover, the photographer failed to establish the value of the photos or expected profit.

Consequently, summary judgment on the brokers’ fair use defense was not appropriate. Similarly, summary judgment was not appropriate on the brokers’ copyright misuse, estoppel, and unclean hands affirmative defenses. Summary judgment further was not appropriate on the brokers’ claim that the photographer failed to mitigate damages by refusing to implement more rigorous measures to prevent or dissuade unauthorized copying.

The court did grant summary judgment on the brokers’ implied license defense, finding that none of the relevant facts demonstrated the existence of any relationship between the parties. The court also granted summary judgment for affirmative defenses for which the brokers failed to provide any evidence or legal argument in support, including statute of limitations, waiver, lack of standing, and abandonment.

The Case is No. 2:19-cv-03590-RMG.

Attorneys: Dana Andrew Lejune (LeJune Law Firm) for David Oppenheimer. Jeremy Michal Stipkala (Stipkala and Klosowski LLC) for Michael C. Scarafile.

Cases: Copyright TechnologyInternet SouthCarolinaNews GCNNews