IP Law Daily, COPYRIGHT—S.D.N.Y.: Suit against Observer over photos of mansion bought by Beyonce and Jay-Z goes forward, (Jul 12, 2021)

By Brian Craig, J.D.

The court rejected the fair use defense asserted by the media outlet in reporting celebrity news.

The federal district court in Manhattan has concluded that a copyright infringement suit brought by a photographer against defendants that own and operate the Observer website, over photos of a mansion in East Hampton purchased by celebrity couple Beyonce Knowles-Carter and Jay-Z, can proceed. In denying a motion to dismiss, the court rejected the fair use defense asserted by the owners and operators of the media website observer.com in reporting on celebrity news where the photographs were originally used to market the mansion to potential buyers. The court concluded that the fair use factors concerning the purpose and character of the use, the amount and substantiality of the portion used, and the effect on the market all weigh against fair use. The court also concluded that the photographer sufficiently alleged violations of the Digital Millennium Copyright Act for distribution of false copyright management information (Wood v. Observer Holdings, LLC, July 8, 2021, Stanton, L.).

Regan Wood is a professional photographer who provides residential retail and interior design photography services to clients through her sole proprietorship, Regan Wood Photography. A real estate broker engaged the photographer’s services for the creation of 33 photographs of a large estate in East Hampton, New York, known as the "Pond House." The photographer registered the photos with the U.S. Copyright Office. The photographer licensed the photographs to the real estate broker for the sole purpose of marketing the mansion to potential buyers of the estate. Before licensing the photographs to the real estate broker, the photographer embedded her Copyright Management Information ("CMI") in the photographs’ metadata, including a copyright notice. The Pond House was then sold to celebrity couple Beyonce Knowles-Carter and Jay-Z. After the sale of the mansion, the Observer website published photos of the mansion in a news article. The photographer filed suit alleging direct copyright and violations of the Digital Millennium Copyright Act ("DCMA") against Defendants Observer Holdings, LLC; ACB Associates, L.P. ("ACB"); The New York Observer, LLC; and Observer Media Digital, LLC ("OMD"). The complaint alleges that the defendants operate and publish the digital media publication Observer, located at observer.com, previously known as The New York Observer. Defendants Observer Holdings, LLC and The New York Observer, LLC moved to dismiss for failure to state a claim. Defendants ACB and OMD also moved to dismiss arguing that they are improper defendants.

Fair use. The court first denied the motion to dismiss based on Observer’s alleged fair use of the photographs. In analyzing fair use, the court considers the following factors: (1) purpose and character of the use; (2) nature of the copyrighted work; (3) amount and substantiality of the portion used; and (4) effect of use on potential market. The court concluded that the first factor as to the purpose and character of the use favors the photographer. The photographs are used in the news article as illustrative aids for precisely the same reason they were created and are therefore not transformative. The court rejected the defendants’ argument that the use is transformative because they took photographs that were only intended to be used to market the mansion to potential buyers and transformed them into reporting on celebrity news. Furthermore, the court found that the Observer’s news website is conducted to some degree for profit.

Next, the court concluded that the second factor concerning the nature of the copyrighted work slightly favors the defendants. To some degree the photographs constitute creative works as the staged photoshoot may have required the photographer to carefully arrange the subject and incorporate creative and aesthetic choices, but the photographs were published only to prospective buyers on the real estate broker’s publicly accessible website.

The court found that the third factor as to the amount of the portion used weighs against a finding of fair use. The complaint alleges that the defendants copied each individual photograph in its entirety and there was no justification for such copying because the media outlet could have run the story without the photos or used photos of the mansion that are in the public domain.

The court also determined that the fourth factor on the effect of use on the potential market weighs in the photographer’s favor. The burden is on defendants to prove there is no market usurpation. The defendants’ use of the photographs was arguably commercial and wholly duplicative. Weighing the relevant factors, the court denied the motion to dismiss based on the fair use defense.

False CMI. Next, the court concluded that the photographer sufficiently alleges violations of the Digital Millennium Copyright Act for distribution of false copyright management information ("CMI"). To state a claim under Section 1202(a) of the DMCA, a plaintiff must allege that the defendant both knew that the CMI was false and provided or distributed the false CMI with the intent to induce, enable, facilitate, or conceal infringement. Here, the court found that the photographer sufficiently alleges that the information in the metadata embedded in the photographs listing her as the "Creator" of the work and providing a "copyright notice" to "Regan Wood Photography" constitutes CMI. The boilerplate terms and conditions accessed through a webpage on a separate website operated by the defendants were not "conveyed in connection with copies" of the work, as required by the DMCA.

Improper defendants. Finally, the court concluded that the complaint plausibly asserts claims against defendants ACB and OMD. The court found that the photographer’s allegations plausibly suggest that ACB and OMD are involved with Observer’s corporate structure and that all of the named defendants have worked in concert to infringe the photographer’s copyright interests. Therefore, the court denied the motion to dismiss.

The case is No. 1:20-cv-07878-LLS.

Attorneys: Tatsuya Adachi (Leichtman Law PLLC) for Regan Wood d/b/a Regan Wood Photography. Robert David Garson (Garson, Segal, Steinmetz LLP) for Observer Holdings, LLC; ACB Associates, L.P. and New York Observer, LLC.

Companies: Regan Wood Photography; Observer Holdings, LLC; ACB Associates, L.P.; The New York Observer, LLC; Observer Media Digital, LLC

Cases: Copyright TechnologyInternet NewYorkNews GCNNews