Stockfood Am., Inc. v. Adagio Teas, Inc.

• Decision Date: 31 July 2020
• Docket Number: Civ. No. 2:18-cv-16678-KM-MAH
• Citation: 475 F.Supp.3d 394
• Parties: STOCKFOOD AMERICA, INC., Plaintiff, v. ADAGIO TEAS, INC., Defendant.
• Court: U.S. District Court — District of New Jersey

475 F.Supp.3d 394

STOCKFOOD AMERICA, INC., Plaintiff,

v.ADAGIO TEAS, INC., Defendant.

Civ. No. 2:18-cv-16678-KM-MAH

United States District Court, D. New Jersey.

Signed July 31, 2020

Robert Terry Parker, Rath, Young and Pignatelli, P.C., Boston, MA, for Plaintiff.

James Michael Smedley, Ellenoff Grossman & Schole LLP, New York, NY, Nicholas Pellegrino, Genova Burns LLC, Newark, NJ, for Defendant.

MCNULTY, U.S.D.J.:

The plaintiff, Stockfood America, Inc. ("Stockfood") alleges that the defendant, Adagio Teas, Inc. ("Adagio") infringed its copyrights in two photographic images by posting the images to its website. Stockfood seeks summary judgment as to the two essential elements of a copyright infringement claim (ownership of a valid copyright and infringement by defendant), and also as to whether Adagio's alleged infringement was willful. Adagio opposes each aspect of the motion. For the reasons stated herein, Stockfood's motion will be granted as to ownership and infringement, but denied as to willfulness, which poses issues of fact.

I. Background¹

Defendant Adagio operates a website that provides news and other content related to tea. (PSMF ¶ 5).² Plaintiff Stockfood is a photographic agency which maintains a database of stock food images, videos, and other features that it licenses to third parties. (PSMF ¶ 1).

A. Agency Agreement and Addendum

As relevant here, Stockfood acts as a licensing agent for multiple photographers. Stockfood obtains the images that are its stock in trade from photographers, with whom it enters into standard agreements, entitled "Photographer's Image–Exclusive Agency Agreement" (the "Agency Agreement"). I here summarize one of two relevant agreements, the one between Stockfood (as "Agency") and Pete Eising (as "Photographer"). (DE 20-2 at 1–9).³ It begins with a statement of purpose:

The Photographer is in the business of creating Photographs. The Agency is in the business of licensing Photographs. The Photographer and the Agency have determined that it is in their mutual interest to enter into this Agreement in order to appoint the Agency to represent the Photographer for the licensing of the Photographer's Photographs upon such reasonable terms and conditions that the Agency can arrange and in accordance with, as set forth in this document.

(Agency Agreement, DE 20-2 at 1).

The next section specifies the categories of authority that are granted to the Agency. The most pertinent categories are these:

1. GRANT OF AUTHORITY :

(a) Appointment: The Photographer hereby appoints the Agency, and the Agency hereby accepts such appointment, as the Photographer's exclusive agent worldwide with respect to licensing the Photographs submitted to the Agency by the Photographer....

(c) Restriction on Competition: The Photographer shall be entitled to engage in assignment photography for his own account, but Photographer agrees, as a material condition of this agreement, not to sell or license any Photographs directly to any clients introduced either to the Photographer, or to his Photographs, by the Agency....

(d) Discretion As to Prices: The Photographer grants the Agency the right to determine, in its complete and sole discretion, the terms, conditions and pricing of Photographs licensed to its clients, except in the event of an outright purchase, in which case the Agency agrees to consult with the Photographer prior to completing such transaction.

(e) Discretion As to Lawsuits : The Agency shall have the sole authority to determine if, and when, any legal action shall be pursued in regard to the Photographs, whether for copyright infringement, loss, damage or any other reason, and shall have complete discretion regarding its choice of attorney. Settlements shall be not subject to the Photographer's prior approval. After deduction of legal expenses, all funds recovered shall be divided in the same manner as set forth in Paragraph 6.

(Id. § 1).

Stockfood obligates itself to use best efforts to exploit the photographs by licensing them and collecting licensing fees:

5. OBLIGATIONS OF AGENCY:

(a) Licensing: [Agency] shall use its best efforts to license the Photographer's Photographs and to charge and receive reasonable fees for such licensing. Agency will use its best efforts to collect all fees charged for licensing the Photographer's Photographs, including the retention of an attorney for collection, if it deems it appropriate.

(Id. § 5).

Additional miscellaneous provisions are as follows:

• Stockfood and the photographer agree to split the net licensing fees 50-50. (Id. § 6(a)).

• Stockfood will have the status of independent contractor. (Id. § 11).

• The agreement is governed by the law of the State of Maine. (Id. § 12(d)).

Each Agency Agreement has the following Addendum, reproduced here in full:

Stockfood Contract Copyright Addendum

As a photographer, under current U.S. law you own the copyright to your photographs from the moment you create them. Though registration is not required for copyright protection it is a prerequisite before United States authors can bring an action for infringement in federal court. If your photographs are not registered prior to an act of infringement, you are only entitled to seek actual damages, and cannot ask the court for statutory damages or attorney's fees. This is significant as actual damages may be limited to a license fee where statutory damages, while discretionary with the court, range from $750 to $30,000 and can be increased if the infringement is considered willful, up to a maximum of $150,000.

If you have not already registered your photographs with the copyright office, StockFood can include these photographs as part of the registration of its database of photographs if you agree in writing to assign copyright to StockFood. This is solely for the purposes of registration. StockFood must have your permission in writing in order to proceed. The copyright will be assigned back upon termination or upon request. This will permit StockFood to enforce your rights in court, and seek statutory damages and attorney's fees. You will not lose any rights. The U.S. Copyright Office, together with the Picture Archive Agency of America (PACA) evolved this strategy to make the registration of photographs easier for stock photography libraries.

Please acknowledge your acceptance by signing below:

In order to protect photographs offered for license by StockFood, if Photographer has not previously registered photographs selected by StockFood, Photographer assigns the copyright to StockFood in all accepted Photographs, solely for the purposes of copyright registration. Such registration shall be reassigned to Photographer upon request or termination of the Agreement. This assignment applies to all previously submitted and all Photographs to be submitted under the Agency Agreement.

(signed)

Pete A. Eising

Photographer

(Agency Agreement (addendum), DE 20-2 at 9 (italics in original)).

B. This Dispute

This litigation concerns two photographs that were allegedly displayed on Adagio's website. Stockfood says it owns the copyright to these images, referred to as image 00133615 and image 00645460 (the "Images"). (PSMF ¶ 2). The Images are allegedly registered with the United States Copyright Office ("USCO") under Registration Numbers VA 1-341-953 and VA 1-652-320.⁴ (PSMF ¶ 3; DE 1-2). Stockfood further claims that the Images are original works as to which it has rights of authorship. (PSMF ¶ 3). Adagio disputes that Stockfood created the Images, and disputes that Stockfood holds a valid copyright to them. (DRSMF ¶ 3). According to Adagio, Stockfood's agreements with its photographers do not grant Stockfood an ownership interest or exclusive license to any photographs, including the Images. (Id. ).

In the spring of 2018, Stockfood contacted Adagio regarding what it perceived to be the unauthorized use of the Images on one of Adagio's websites. (PSMF ¶ 7). The initial infringement had occurred ten years before, in 2008.⁵ (DRSMF ¶ 9). Stockfood claims that it did not grant Adagio permission to use the Images. (PSMF ¶ 9). While Adagio does not affirmatively claim that it was granted permission, it suggests that it would routinely seek such permission. (DRSMF ¶ 9). Its policy, says Adagio, has always been to use only licensed images on its websites. Although Adagio no longer has records dating back to 2008, it has provided records showing that it has followed this policy in other instances. (DRSMF ¶ 9).

Stockfood notified Adagio of this perceived infringement and attempted to charge Adagio licensing fees for the Images. (PSMF ¶12). Adagio claims that it then immediately removed the Images from its website and tried to pay the fees, but was unable to do so because it received multiple conflicting requests. (DRSMF ¶ 12).

On November 30, 2018, Stockfood filed a complaint in this Court against Adagio, asserting copyright infringement pursuant to 17 U.S.C. § 101, et seq. (DE 1). On December 13, 2019, it filed the current motion for partial summary judgment on the issues of liability and willfulness. (DE 19). Adagio responded on January 6, 2020 (DE 20). Stockfood replied on January 14, 2020. (DE 24).

For the reasons below, that motion for summary judgment is granted in part and denied in part.

II. Legal Standard

Federal Rule of Civil Procedure 56(a) provides that summary judgment should be granted "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a) ; see also Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986) ; Kreschollek v. S. Stevedoring Co. , 223 F.3d 202, 204 (3d Cir. 2000). In deciding a motion for summary judgment, a court must construe all facts and inferences in the light most favorable to the nonmoving party. See Boyle v. Cty. of Allegheny Pa. , 139 F.3d 386, 393 (3d Cir. 1998). The moving party bears the burden of establishing that no genuine issue of material...