Copyright infringement doesn’t violate the Lanham Act

Masck v. Sports Illustrated, No. 13-10226 (E.D. Mich. Mar. 10, 2014)

Previous discussion, in which I got exercised about the court’s misapplication of Dastar, herein corrected.  Masck took an “iconic” photo of defendant Desmond Howard, running for a touchdown during a Wolverine game, wherein he made the “Heisman” pose.  Masck alleged that he was the only photographer who got a good shot of that.  Sports Illustrated ran the photo in 1991, with a proper credit and payment, but didn’t return the negative.  Masck didn’t register until August 31, 2011.  At some point between 1992 and 1998, the slide ended up with Allsport, a photo agency to which Masck was a contributor, but Masck alleged he never gave it the photo.  Getty, which acquired Allsport in 1998, says that given the passage of time all the documents explaining how Allsport got the photo have been lost.

Getty informed Masck of its takeover and returned about 2500 photos.  Getty also asked Masck to tell it as soon as possible if he believed Allsport had any more of his images.  Masck never responded, but argued that the collection never should have included a copy of the photo at issue.  In 2005, Getty uploaded the Heisman photo to its digital asset management system without

crediting Masck, and then sold licenses of the photo to customers until September 2011.

Masck discovered several infringing uses of the photo, including a photo for sale in June 2010, and a full-page Nissan ad using the photo in Sports Illustrated in 2010, 2011, and 2012.  Champions Press used the photo in a book about Howard, and Howard’s website also had a copy of the photo.  Defendant Fathead produced a life-size adhesive photo, and several reproductions were for sale on Amazon.  Marck asked Amazon to stop selling unauthorized reproductions in September 2012, but Amazon continued to permit photo sales, and Walmart offered copies in stores and online.

Masck sued everyone.  This opinion finally kicked out the Lanham Act claims.  Dastarsays “origin of goods” means tangible goods, not communicative products. Before, the court was unready to conclude that the photo was an intangible item.  But on summary judgment, the court found that Masck was not arguing that the defendants misled the public as to the origin of tangible goods; instead he argued that they failed to credit him.  This time, the court recognized that even wholesale copying wasn’t actionable under the Lanham Act, following Dastar.  Belated whew.

This opinion also addressed laches.  Defendants argued that Masck should’ve been aware of Getty’s public posting of the photo on its website in 2005, since he knew about Getty and had received Getty’s letter, as well as royalties from Getty.  Defendants argued that this was unreasonable and that they were prejudiced by the delay, since relevant documents about Allsport’s possession of the photo have been lost.  Though they argued that he should have registered earlier, he relied on his lawyer’s (bad) advice that he didn’t need to.  Masck also alleged that he notified all infringers he discovered, but that most of the infringements occurred in 2010 or later.  He also argued that willfulness precluded laches. The court found that the issue was not appropriate for summary judgment.

Walmart’s vicarious/contributory liability: Masck didn’t claim direct infringement, but rather than Walmart allowed third parties to sell identical or substantially similar copies.  Defendants argued that a third party nondefendant, Pro Team, used Walmart’s retailer program to sell goods on Walmart’s website, and that Walmart didn’t deliver goods or take responsibility for fulfilling orders.  Previously, the court dismissed vicarious liability claims against Amazon because Masck didn’t allege that Amazon could verify the copyright status of every third-party piece of merchandise; Walmart argued that it was the same, and also that it was protected by the DMCA.

But the court found a “crucial difference”: Walmart also operates physical stores and controlled what was sold there.  (Shouldn’t the claims relating to online sales still be dismissed?)  Plus, Masck maintained that he sent notices to Walmart.  Thus, summary judgment was inappropriate. (Unfortunately, the court doesn’t discuss whether the notices were DMCA-compliant.)

Statutory damages: defendants noted that Masck needed to register before the infringement began to get statutory damages, and contended that their infringements began before he registered. Also, they challenged Masck’s evidence supporting an award of actual damages or profits, arguing that he never propounded timely discovery requests.  Masck also argued that Getty was responsible for all the damages because it provided the photo to all the other defendants. 

Masck sought a share of profits on Nissan’s vehicle sales, an argument that one would not expect to go well, but here too the court proves very willing to give him the benefit of the doubt.  Because Nissan was a “rational economic actor,” and paid $3 million to run the ads, plus $1 million to sponsor the “Heisman house tour,” with the infringing photo at the “heart” of the campaign, the court seemed to endorse (or at least leave open for later) Masck’s argument that the photo was worth over $5 million.  Also, Masck submitted the “average breakdown of Nissan car sales from the year the ads ran.”  Masck apparently suggested that he’d elect statutory damages for “each violation” by several of the defendants.  Willful violations were “likely only in the case of Amazon and Champions Press” (not entirely clear whether this was the court’s conclusion).  The court found a question of material fact existed as to what constituted the dates of infringement and whether or not the evidence Masck provided was enough to support awarding damages.
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