IP Law Daily, COPYRIGHT—M.D. Fla.: Photo licensing company that lacked standing to sue must pay defendant’s attorney fees, (Feb 3, 2025)

By Linda Panszczyk, J.D.

The plaintiff's agreement with the photographer did not transfer an exclusive copyright interest in the photos to the plaintiff.

In a copyright case involving the alleged unauthorized use of photographs, the federal district court in Tampa overruled plaintiff Eclipse’s objections and adopted the U.S. Magistrate's Report and Recommendation granting defendant The Sports Mall, LLC’s motion for an attorney fee award. The district court agreed with the Magistrate Judge that, in the light of the Copyright Act’s settled interpretation regarding its prerequisites to standing and the straightforward language of the Agreement and Amendment in this case, Eclipse’s position in bringing this action was not reasonable. Here, even if Eclipse’s statutory damages request may have been justified, motivation is only one factor to consider under Fogerty and a finding of bad faith is not a precondition to the award of fees. Eclipse had not shown that the Magistrate Judge failed to properly balance the Fogerty factors. Technical or not, the statutory standing defense in this case was objectively reasonable and an award of attorney fees encourages defendants to raise similar defenses in future cases (Eclipse Sportswire v. Sports Mall, LLC, No. 8:22-cv-01433-KKM-NHA (M.D. Fla. Jan. 30, 2025)).

Background. Eclipse, a company that provides editorial photographic coverage for sporting events all over the world with a focus on horse racing, equestrian events, and golf, represents a photographer named Alex Evers. An agreement between Eclipse and Evers memorialized Evers’s decision to appoint Eclipse a perpetual non-exclusive worldwide wire service representation with respect to the commercial sale and licensing of photographic images. This jointly held copyright interest specifically allows Eclipse the right to unilaterally pursue copyright violations including the decision to accept a settlement offer or to pursue litigation. This jointly held copyright interest expressly allows Evers a right to grant limited licenses for use or sale of images without the express consent of Eclipse, whose licensed use or sale is not in competition with the ongoing business of Eclipse.

Here, the case involved four photos Evers took, which he registered with the Register of Copyrights, and none of which he took while employed by Eclipse. Eclipse provided these photos to other entities for redistribution.

Sports Mall, an online store that sells authentic sports memorabilia and sport collectibles, offered for sale autographed posters and prints that allegedly depicted these photos. As a result, Eclipse sued Sports Mall, asserting a single count of copyright infringement. Both parties moved for summary judgment. Sports Mall argued that Eclipse lacked standing under the Copyright Act to assert a cause of action for copyright infringement. The district court granted Sports Mall's motion for summary judgment and dismissed the action with prejudice.

After judgment was entered in favor of Sports Mall, Sports Mall moved for attorney fees.

The Magistrate Judge recommended granting the motion, concluding that Sports Mall was the prevailing party and determining that Eclipse’s position in bringing this action was not reasonable. The Magistrate Judge also reasoned that awarding Sports Mall attorney fees will further the purposes of the Copyright Act by encouraging plaintiffs to assess standing prior to filing suit and by deterring plaintiffs who lack standing from proceeding with litigation. The Magistrate Judge also cited “other considerations, including the factors approved by Fogerty, such as motivation and frivolity.

Standing. According to the court, a plaintiff must hold an exclusive right to have standing to sue for infringement under the Copyright Act. and Eclipse’s agreement with Evers did not transfer an exclusive copyright interest in the Evers photos to Eclipse. The fact that the agreement assigned Eclipse the right to sue for copyright infringement, said the court, "was not sufficient to vest Eclipse with a right under the Copyright Act because it was unaccompanied by a transfer of an exclusive copyright right."

Eclipse argued that it believed in good faith that it had statutory standing based on the language of the amendment to its agreement with Evers—which provides that Evers agrees to “jointly hold the copyright of submitted images” with Eclipse—and language of the original agreement, which Eclipse believed conveyed exclusive licensing rights with respect to photographs created under the agreement. As the order granting summary judgment explained, the plain language of the Photographer’s Agreement and the Agreement Amendment belies Eclipse’s arguments.

As a result, the district court agreed with the Magistrate Judge that, in the light of the Copyright Act’s settled interpretation regarding its prerequisites to standing and the straightforward language of the Agreement and Amendment, Eclipse’s position in bringing this action was not reasonable.

Other Fogerty factors. Eclipse next objected to the Magistrate Judge’s consideration of the other Fogerty factors—frivolousness, motivation, and the need to advance considerations of compensation and deterrence.

Eclipse argued at length that its positions on the merits and statutory damages were not frivolous. According to the court, even if Eclipse was right, these arguments did not undermine the Magistrate Judge’s conclusion that Eclipse “took a factually unreasonable position on standing.” Without statutory standing, a plaintiff cannot prevail even with the strongest merits case.

Eclipse argued that there is no record evidence demonstrating an improper motivation. The Magistrate Judge did not find, for example, that Eclipse took inconsistent positions, engaged in discovery misconduct, otherwise did anything in this lawsuit other than pursue its claims, or made “outlandish demands. Instead, the Magistrate Judge pointed to the fact that Eclipse demanded $600,000, the maximum statutory damages available under the Copyright Act, for the alleged infringement of four photographs which it licenses for $2,000 to $4,000 and then prolonged the litigation for more than a year, requiring Sports Mall to expend fees to defend itself, including on the merits of the case, through summary judgment.

According to the court, Eclipse was correct that the Magistrate Judge did not enumerate any improper litigation conduct in the Report and Recommendation. At the same time, Eclipse failed to explain why its request for statutory damages is irrelevant to the analysis as to motivation, especially in the light of cases suggesting that statutory damages “should bear some relationship to the actual damages suffered” and “are not intended to provide a plaintiff with a windfall recovery.

In any case, said the court, even if Eclipse’s statutory damages request may have been justified, motivation is only one factor to consider, and a finding of bad faith is not a precondition to the award of fees. Eclipse had not shown that the Magistrate Judge failed to properly balance the Fogerty factors.

As for considerations of compensation and deterrence, Eclipse argued that awarding attorney fees would encourage Sports Mall to continue in its infringing conduct and discourage other copyright holders from presenting legitimate claims against Sports Mall. However, the court disagreed. An award in this case will help in encouraging “useful copyright litigation” by prompting plaintiffs to scrutinize their statutory standing before bringing an action.

Contrary to Eclipse’s assertions, awarding fees in this case will therefore not discourage copyright holders from pursuing legitimate infringement claims against Sports Mall. Indeed, Evers the photographer pursued an infringement action against Sports Mall. For these reasons, the district court agreed with the Magistrate Judge that awarding fees will serve interests of compensation and deterrence.

Level of success. Eclipse’s final objection was that an award of attorney fees was not warranted because “there has been no substantive holding as to non-infringement here.” However, the district court was not convinced. Technical or not, the statutory standing defense in this case was objectively reasonable and an award of attorney fees encourages defendants to raise similar defenses in future cases.

As a result, the plaintiff Eclipse's objections were overruled, and the Magistrate Judge's Report and Recommendations was adopted. The defendant's motion for attorney fees was granted.

The Case is No. 8:22-cv-01433-KKM-NHA.

Judge: Mizelle, K.

Attorneys: Daniel DeSouza (DeSouza Law, PA) for Eclipse Sportswire. John Todd Timmerman (Shumaker, Loop & Kendrick, LLP) for The Sports Mall, LLC.

Companies: Eclipse Sportswire; The Sports Mall, LLC

Cases: Copyright FloridaNews