Straus v. Dvc Worldwide, Inc.
| Decision Date | 23 March 2007 |
| Docket Number | Civil Action No. H-04-4625. |
| Citation | 484 F.Supp.2d 620 |
| Parties | Robert D. STRAUS, Jr., Plaintiff, v. DVC WORLDWIDE, INC., d/b/a DVC, and Smithkline Beecham Corp., d/b/a Glaxosmithkline, Defendants. |
| Court | U.S. District Court — Southern District of Texas |
Randy J. McClanahan, Philip Blake Berry, McClanahan & Clearman, Houston, TX, for Plaintiff.
Julian Clark Martin, Kelly Hart & Hallman, Houston, TX, for Defendants.
This case involves a 1989 photograph of the well-known golfer, Arnold Palmer. The plaintiff, Robert Straus, Jr., a professional photographer, took the picture and copyrighted it. He sues DVC Worldwide, Inc. ("DVC") and Glaxosmithkline ("GSK"), alleging that they infringed the copyright by using the photograph — or images substantially similar to it — in a smoking-cessation campaign in 2001 and 2002, beyond the license Straus had agreed to.
GSK sells smoking-cessation products, including NICORETTE and NICODERM. In 2001, GSK hired DVC as the promotional marketing agency for the 2002 campaign. In the fall of 2001, GSK entered into an agreement with Arnold Palmer for him to serve as the campaign spokesperson. Straus alleges that DVC and GSK improperly used the copyrighted 1989 photograph he took of Arnold Palmer. Straus makes four allegations of infringement:
1. GSK used a modified 1995 photograph of Palmer taken by a different photographer in some marketing materials. Straus alleges that this photograph, as modified, is substantially similar to, and infringes, his copyrighted 1989 photograph.
2. GSK and Straus entered into a license agreement for GSK to use the 1989 photograph of Arnold Palmer in advertising materials for its smoking-cessation products. The license agreement expired in February 2002. Straus alleges that advertising materials using the photograph remained in one drugstore in Houston for one month after the license agreement expired.
3. GSK used a computer-generated version of Straus's 1989 photograph in a television advertisement aired in late December 2001 and January 2002 (and once in March 2002), outside the license agreement with Straus.
4. DVC had a website on which it posted some of its advertising materials to show potential clients examples of its work. DVC posted one advertisement that included Straus's 1989 photograph of Arnold Palmer.
The defendants have filed a number of motions for partial summary judgment, addressing each of the four alleged infringements and Straus's damages claims. Straus has moved for partial summary judgment on two affirmative defenses. Both sides also seek to exclude certain evidence from the record. The following motions, responses, and replies are addressed in this memorandum and opinion:
• The defendants seek partial summary judgment on Straus's claim that the modified 1995 photograph of Arnold Palmer is an infringing derivative work of Straus's copyrighted 1989 photograph. (Docket Entry No. 25). Straus has responded, (Docket Entry No. 29), the defendants have replied, (Docket Entry No. 30), Straus has surreplied, (Docket Entry No. 33), and the defendants have responded to Straus's surreply, (Docket Entry No. 45). The defendants' motion for partial summary judgment is granted.
• The defendants move to strike the report of Straus's expert, Jane Kinne. (Docket Entry No. 30). Straus has responded, (Docket Entry No. 31), and the defendants have replied, (Docket Entry No. 32). The defendants' motion to strike is denied.
• Straus moves to exclude the testimony of the defendants' damages expert, Karyl M. Van Tassel, and of the attorneys' fees experts. (Docket Entry No. 34). The defendants have responded, (Docket Entry No. 47). The plaintiffs motion to exclude is denied.
• Straus moves to compel the production of various categories of documents, (Docket Entry No. 35), and the defendants have responded, (Docket Entry No. 46). This motion is denied as moot.
• GSK seeks summary judgment on Straus's claim for indirect profits damages. (Docket Entry No. 36). Straus has responded, (Docket Entry No. 49), and GSK has replied, (Docket Entry No. 54). The motion is granted.
• DVC seeks partial summary judgment as to Straus's claim that DVC infringed his 1989 copyrighted photograph of Palmer by including an advertisement using this photograph in the materials displayed on the company's website. (Docket Entry No. 37). Straus has responded, (Docket Entry No. 49), and DVC has replied, (Docket Entry No. 57). DVC's motion for partial summary judgment is denied.
• The defendants seek partial summary judgment as to Straus's claim that he may recover actual damages multiplied by ten. (Docket Entry No. 38). Straus has responded, (Docket Entry No. 49), and the defendants have replied, (Docket Entry No. 53). The defendants' motion is granted.
• The defendants seek partial summary judgment dismissing Straus's claims of infringement based on the advertisements that were left in the Houston drugstore in March 2002 and the "snippet" used in the television advertisement shown from late December 2001 to early 2002, on the basis of the de minimis doctrine. (Docket Entry No. 39). Straus has responded, (Docket Entry No. 49), and the defendants have replied, (Docket Entry No. 52). The motion is granted.
• DVC seeks partial summary judgment dismissing Straus's claim for indirect profits damages. (Docket Entry No. 40). Straus has responded, (Docket Entry No. 49), and DVC has replied (Docket Entry No. 56). DVC's motion is granted.
• Straus moves for partial summary judgment dismissing the defendants' affirmative defenses of laches and equitable estoppel. (Docket Entry No. 41). The defendants have responded. (Docket Entry No. 48). The motion is denied as moot.
These rulings are based on a careful review of the motions; the responses, replies, and surreplies; the pleadings; the parties' submissions; and the applicable law. The reasons for these decisions are set out in detail below. A status conference is set for April 12, 2007, at 9:00 a.m., to set a schedule to resolve the remaining claim.
Robert Straus, Jr. is a photographer. In 1989, Straus took a series of photographs of Arnold Palmer, a professional golfer. On January 2, 1997, Straus registered one of these photographs with the Register of Copyrights as an unpublished work. (Docket Entry No. 29, Ex. A-10). On June 30, 1999, Straus again registered the 1989 photograph, this time as a published work, based on its inclusion in the book, Arnold Palmer: A Personal Journey. (Docket Entry No. 29, Ex. A-11). Over time, Straus agreed to several licenses for the use of his 1989 photograph of Palmer. Straus has licensed its use on magazine covers, in books, on posters, in advertisements, and in artists' renderings of Palmer. (Docket Entry No. 29, Exs. 1-A-10).
The 1989 Straus photograph is a portrait of Palmer seated outside, wearing a dark, long-sleeved rugby shirt with a white collar and placket (the material below the collar which holds its front buttons in place). A black-and-white copy of Straus's copyrighted 1989 photograph is attached as Appendix A to this memorandum and opinion.
In late 2001, GSK and Arnold Palmer entered into an agreement to have Palmer serve as the spokesperson for GSK's smoking-cessation program and products. GSK's marketing agent, Catalyst Marketing, had little time to prepare the advertising materials scheduled for release in November 2001. (Docket Entry No. 25, Ex. O, ¶ 3). On September 28, 2001, Catalyst Marketing and Straus entered into a licensing agreement for the use of Straus's 1989 photograph of Palmer in GSK's advertisements for its smoking-cessation products during November and December 2001 and January 2002. The agreement stated that for a $17,566.26 fee, Straus licensed the use of the 1989 photograph for 20,000 in-store displays during the month of January 2002; 25,000 "shelftalks" during November and December 2001; and 25,000 "shelftakes" during those same months.1 (Docket Entry No. 29, Ex. A-12). The agreement stated that Straus's work was not to be considered "work for hire" and that Straus reserved all other rights in the photograph. (Id.).
Shortly after the GSK advertising campaign began, GSK began using DVC as its marketing agent rather than Catalyst Marketing. (Docket Entry No. 25, Ex. O, ¶ 4). DVC recommended that GSK use a more recent picture of Arnold Palmer in its advertisements. While searching for a more recent photograph, DVC negotiated an extension of Straus's licensing agreement. The extension provided for GSK's use of Straus's 1989 photograph for 25,000 shelftalks and 25,000 shelftakes for January and February 2002, for a $9,000 fee. (Docket Entry No. 29, Ex. A-14).
On December 19, 2001, DVC informed Straus that it had obtained other photographs of Palmer and would not extend the license agreement. (Docket Entry No. 29, Ex. A-15). According to an internal DVC email, Straus's proposed estimate for the continued use of his 1989 copyrighted photograph was higher than DVC found acceptable. (Docket Entry No. 29, Ex. B-5).
In 2001, DVC obtained permission to use a photograph of Palmer taken in 1995 by a photographer named Marc Hauser in the GSK advertising campaign. Arnold Palmer Enterprises owned the copyright to this photograph and permitted its full use by DVC and GSK in marketing the smoking-cessation materials and products. Hauser's 1995 photograph is a portrait of Palmer, seated indoors, wearing a bright blue, short-sleeved golf shirt with a small umbrella-shaped lapel pin on his left collar. A black-and-white reprint of Hauser's 1995 photograph appears at Appendix B.
GSK's corporate representative, Steve Kapur, stated in his declaration that GSK used Hauser's 1995 photograph in marketing materials but quickly realized it required...
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