John Wiley & Sons, Inc. v. Photo

• Decision Date: 21 February 2014
• Docket Number: No. 11 Civ. 5454(KPF).,11 Civ. 5454(KPF).
• Citation: 998 F.Supp.2d 262
• Court: U.S. District Court — Southern District of New York
• Parties: JOHN WILEY & SONS, INC., Plaintiff/Counter–Defendant, v. DRK PHOTO, Defendant/Counter–Plaintiff.

998 F.Supp.2d 262

JOHN WILEY & SONS, INC., Plaintiff/Counter–Defendant,

v.DRK PHOTO, Defendant/Counter–Plaintiff.

No. 11 Civ. 5454(KPF).

United States District Court, S.D. New York.

Feb. 21, 2014.

Christopher Perry Beall, Robert Penchina, Levine, Sullivan, Koch & Schulz, LLP, New York, NY, Joseph John Barker, John Wiley & Sons, Inc., Hoboken, NJ, for Plaintiff/Counter–Defendant.

Christopher Seidman, Harmon & Seidman LLC, Grand Junction, CO, Adam Louis Dileo, NYC Department of Environmental Protection, Flushing, NY, Amanda L. Bruss, Harmon & Seidman LLC, Denver, CO, Edward Hernstadt, Hernstadt Atlas, LLP, New York, NY, Maurice James Harmon, Harmon & Seidman LLC, New Hope, PA, for Defendant/Counter–Plaintiff.

OPINION AND ORDER

KATHERINE POLK FAILLA, District Judge.

On August 5, 2011, Plaintiff/Counter–Defendant John Wiley & Sons, Inc. (“Plaintiff” or “Wiley”), commenced this action against Defendant/Counter–Plaintiff DRK Photo (“Defendant” or “DRK”) under the Declaratory Judgment Act, 28 U.S.C. § 2201, seeking a declaration that Wiley had not infringed the copyrights on certain stock photographs that DRK had previously licensed to Wiley. In response, on May 31, 2012, DRK counterclaimed against Wiley for infringement under the Copyright Act of 1976, 17 U.S.C. §§ 101–810, as to a subset of these photographs.

The parties have filed cross-motions for summary judgment. For the reasons set forth in the remainder of this Opinion, Wiley's motion for summary judgment is granted in part and denied in part; DRK's motion for partial summary judgment is also granted in part and denied in part.

BACKGROUND¹

A. DRK's Stock Photography Business

DRK is a stock photography agency that licenses photographic images to publishers. (DRK 56.1 Statement ¶ 1). Daniel Krasemann has owned DRK as a sole proprietorship since 1981. (D. Krasemann Decl. ¶ 1). Rather than employ photographers, DRK executes agreements with photographers pursuant to which the photographers grant DRK the right to include certain of the photographers' works in DRK's collection of stock photographs. (DRK's Counterstatement ¶¶ 3–4). Once the photographers' images are included in DRK's collection, DRK offers to license those images to publishers, like Wiley, and other users of photographs. ( Id. at 4).

DRK employs an internal numbering system to track the images that DRK includes in its collection. (D. Krasemann Decl. ¶ 7). Using this system, DRK assigns each image an internal number when that image is received from a photographer and added into DRK's collection. ( Id.). The images are numbered sequentially from the date on which the image was received. ( Id.). This number allows DRK to identify when the image was first released into its collection, and consequently, when the image is deemed published under copyright law. ( Id.; Penchina Decl., Exh. 31 at 66).

This procedure was applied to all images at issue in this case, except for certain images received from Stephen Krasemann, a photographer and Daniel Krasemann's brother. ( See D. Krasemann Decl. ¶ 8). Although internal numbers were assigned to Stephen Krasemann's images at the time DRK received them, the images were often not simultaneously released into DRK's collection. Instead, the images were released, and thus published at later dates. ( Id.).² Consequently, according to DRK, the internal numbers assigned to Stephen Krasemann's photographs may not reliably indicate the date on which the image was released for publication. ( Id. at ¶ 9).

B. DRK's Agreements with Photographers

DRK entered into a form representation agreement (the “Representation Agreement”) with each photographer for whom DRK maintained images in its collection. (D. Krasemann Decl. ¶ 3, Exh. 1). Pursuant to the Representation Agreements for all images at issue, except those by photographers Tom Bean (“Bean”) and Peter French (“French”), DRK would serve as the photographers' “agent with [ ] respect to the sale or leasing of the photographs or transparencies which [the photographer had] delivered to [DRK] and shall deliver to [DRK] in the future.” ( Id.). In contrast, under the Bean and French Representation Agreements, DRK agreed to act as Bean's and French's “sole and exclusive agent with respect to the sale or leasing of the photographs or transparencies which [Bean or French had] delivered to [DRK] and shall deliver to [DRK] in the future.” ( Id. (emphasis added)).

The Representation Agreements also provided, in relevant part:

I understand that the best possible care will be taken of my material and agree that you assume no liability for any loss or damage to the items so delivered to you. In the event that any transparency is lost, destroyed or damaged by others, then I give you full and complete authority to make claim or bring suit for redress or compromise said claim without my permission.

I understand that there will be a 50/50 split between DRK PHOTO and myself regarding all sales made and received. Payment is to be made within ninety (90) days of receipt. DRK PHOTO shall notify me on a regular monthly basis if any sales activity occurred during that time.

I understand that the terms and compensation of the sales or leasing of my photographs or transparencies shall be solely in your discretion.

In the event of termination of this agreement DRK PHOTO retains the right to its normal commission on all sales which might arise from a user who has made duplicates of those transparencies, photographs, or other materials submitted to it during the terms of this agreement and then, after term hereof, the user wishes to utilize such duplicate materials. DRK PHOTO shall have the right to grant such usage and collect 50% of the net sale from usage. DRK PHOTO shall also retain the right to collect 50% of the net sale from all subsequent pick-ups or reprints on photos that were originally placed with the client during the term of this agreement, and then reprinted or picked-up after expiration of this agreement.

( Id.). Although DRK contends otherwise, the record before the Court conclusively establishes that all Representation Agreements, except those with Bean and French, granted DRK nonexclusive rights for the photographers' images in DRK's collection. ( See, e.g., Penchina Decl., Exh. 3, 30 at 166–67, 33 at 21).³

The Representation Agreement is not the only operative agreement between DRK and the photographers whose images are at issue here. In 2008, DRK initiated a program to register copyrights for the photographs in its collection. (Wiley 56.1 Statement ¶ 20). To that end, beginning in June 2008, DRK asked photographers to sign a form agreement, pursuant to which the photographers would grant DRK the right to assert copyright infringement claims for those photographs in its collection (the “Assignment Agreement”). ( Id. at ¶¶ 21, 24). The Assignment Agreement, entitled “Copyright Assignment, Registration, and Accrued Causes of Action Agreement,” provided:

The undersigned photographer, the sole owner of the copyrights in this undersigned's images, (the “Images”) selected by DRK PHOTO (“DRK”) and included in DRK's collection, hereby grants to DRK all copyrights and complete legal title in the Images. DRK agrees to reassign all copyrights and complete legal title back to the undersigned immediately upon completion of the registration of the Images, as evidenced by DRK's receipt of a Certificate of Registrationfrom the United States Copyright Office for such Images, and resolution of infringement claims brought by DRK relating to the Images.

The undersigned agrees and fully transfers all right, title and interest in any accrued or later accrued claims, causes of action, choses in action—which is the personal right to bring a case—or lawsuits, brought to enforce copyrights in the Images, appointing and permitting DRK to prosecute said accrued or later accrued claims, causes of action, choses in action or lawsuits, as if it were the undersigned.

Any proceeds obtained by settlement or judgment for said claims shall, after deducting all costs, expenses and attorney's fees, be divided and paid 50% for the undersigned and 50% for DRK.

( Id. at ¶ 22).⁴

The purpose of the Assignment Agreement was to allow DRK to register photographs with the United States Copyright Office “as the copyright holder by assignment” so that DRK would have—at least as DRK understood it—“legal standing with the courts to pursue would be infringers.” (Wiley 56.1 Statement ¶ 27). Indeed, when transmitting the Assignment Agreement to photographers, DRK informed them that the purpose of the agreement was for DRK to register the photographers' images in its collection with the United States Copyright Office so that DRK would be “in a much stronger position with much more leverage for settling copyright infringement claims.” (Penchina Decl., Exh. 4). In those e-mails to photographers, DRK confirmed that the Assignment Agreement was “not a permanent assignment.” ( Id.). Rather, and as provided for in the Assignment Agreement, DRK “agree[d] to reassign all copyrights and complete legal title back” to the photographers “immediately upon completion of the registration of the images, as evidenced by DRK's receipt of a Certificate of Registration from the United Stated Copyright Office for such images, and resolution of infringement claims brought by DRK relating to the images.” ( Id.). When one photographer expressed his concern in signing the agreement, based on his unwillingness to allow the copyright registration to his image to be in DRK's name, DRK “assure[d]” the photographer that there was “no rights grab going on here. We simply want to register our website/database of images so the images are protected under copyright law, and so we can pursue infringers.” ( Id. at Exh. 9). In another e-mail exchange, one photographer, upon realizing how many images that DRK had registered with the Copyright Office, e-mailed DRK to clarify: “I have not assigned copyright to any...