IP Law Daily, COPYRIGHT—W.D. Wash.: Zillow liable for statutory damages for each image in database, (May 12, 2020)

By Brian Craig, J.D.

The court refused to dismiss the suit outright for failure to meet pre-suit registration requirements and concluded that a real estate photography company is entitled to statutory damages for each image in a registered database.

After five years of litigation between real estate photography company VHT, Inc. and Zillow Group, Inc. over photos appearing on Zillow’s website, the federal district court in Seattle has denied Zillow’s motion to dismiss the suit and held that Zillow is liable for statutory damages for each image in a database. After a jury found that real estate website operator Zillow infringed copyrighted real estate photographs, a partial reversal by the Ninth Circuit, and a U.S. Supreme Court decision in a related case on registration requirements, the district court on remand refused to outright dismiss the suit based VHT’s failure to register the images before filing suit. Furthermore, the court held that the real estate photography company is entitled to statutory damages for each individual photo in a database because the database of photos does not constitute a compilation (VHT, Inc. v. Zillow Group, Inc., May 8, 2020, Robart, J.).

VHT, a real estate photography company that commissions photographs from professional photographers, brought a copyright infringement action against real estate website operator Zillow. A jury found that Zillow directly infringed 28,125 copyrighted real estate photographs and awarded $8.27 million in damages. The district court reduced the total damages award to approximately $4 million. The parties cross-appealed and the Ninth Circuit reversed, in part, and remanded to the district court to consider whether Zillow’s "Digs" photos were part of a compilation—which would be subject to a single statutory damages award—or were individual photos, allowing VHT to obtain a separate damages award for each image.

On March 4, 2019, 11 days before the Ninth Circuit issued its opinion, the U.S. Supreme Court decidedFourth Estate Public Benefit Corp. v. Wall-Street.com, LLC, 139 S. Ct. 881 (2019). Fourth Estate addressed the interpretation of the registration requirement under 17 U.S.C. § 411(a), which states that "no civil action for infringement of the copyright in any United States work shall be instituted until preregistration or registration of the copyright claim has been made." The U.S. Supreme Court resolved a circuit split and held that "registration … has been made" within the meaning of 17 U.S.C. § 411(a) not when an application for registration is filed, but when the Register has registered a copyright after examining a properly filed application. Fourth Estate overturned the prior settled law in the Ninth Circuit.

On remand in the district court, Zillow filed a motion for judgment on the pleadings based on Fourth Estate, or in the alternative, for partial summary judgment. Zillow argued that Fourth Estate requires dismissal of VHT’s claims for failure to meet the registration requirement. VHT filed a cross-motion for partial summary judgment on statutory damages.

Registration requirement. The court first denied Zillow’s motion for partial summary judgment on the registration requirement issue for compilations and held that the law of the case doctrine provides that VHT complied with, or is excused from, compliance with the registration requirements. VHT amended its complaint and thereafter registered the photos with the Copyright Office. VHT has already obtained registrations for the images at issue, and dismissal would not require VHT to interact with the Copyright Office whatsoever in order to refile its claims. The court recognized that the purposes behind the registration requirement would not be served by vacating the final judgment and dismissing this case in its entirety.

Furthermore, the court denied Zillow’s motion for partial summary judgment on the registration requirement issue because the case has already advanced significantly. Dismissal at this point would result in a massive waste of judicial resources. The parties have litigated this case for five years through dispositive motions, trial, post-trial motions, an appeal, and now a remand. Accordingly, the court denied Zillow’s motion for partial summary judgment.

Statutory damages. Next, the court granted VHT’s motion for partial summary judgment on statutory damages, holding that VHT’s database of photos does not constitute a "compilation" under 17 U.S.C. § 101. Zillow argued that VHT’s images are a "compilation" because they are part of VHT’s master photo database and because the Copyright Office determined that VHT’s database is a compilation. VHT responded that the question is not whether it stores its photos in a database, but rather whether its photos "used on Digs" are part of a compilation. In other words, VHT argued that the question is whether the "works infringed" make up a compilation or not.

The court agreed with VHT and held that because the images are stored in a database and the photography company registers the database as well as its individual images, the images are not considered a compilation. Even though the fact that VHT group-registers its images as "compilations" weighs in favor of a "compilation" finding, this factor is not controlling. The court concluded that the group registrations were outweighed by the form in which VHT issues its images. Additionally, to the extent the images’ independent economic value remains a factor to consider in the "compilation" analysis, the court concluded, based on the jury’s finding, that this factor weighs against finding a "compilation." Therefore, the court granted VHT’s motion for partial summary judgment on the statutory damages issue.

The court ordered the parties to submit a joint statement and a proposed amended judgment.

This case is No. 2:15-cv-01096-JLR.

Attorneys: Marcia Beth Paul (Davis Wright Tremaine LLP) for VHT, Inc. Edgar Guy Sargent (Susman Godfrey LLP) for Zillow Group, Inc.

Companies: VHT, Inc.; Zillow Group, Inc.

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