VHT, Inc. v. Zillow Grp., Inc.
| Decision Date | 20 June 2017 |
| Docket Number | CASE NO. C15-1096JLR |
| Court | U.S. District Court — Western District of Washington |
| Parties | VHT, INC., Plaintiff, v. ZILLOW GROUP, INC., et al., Defendants. |
Before the court are two post-trial motions: Defendants Zillow Group, Inc., and Zillow, Inc.'s (collectively, "Zillow") motion for judgment notwithstanding the verdict or for a new trial (JNOV Mot. (Dkt. # 301)); and Plaintiff VHT, Inc.'s motion to amend the judgment to add a permanent injunction (Inj. Mot. (Dkt. # 300)). VHT opposes Zillow's motion , and Zillow opposes VHT's motion . The court has reviewed the parties' submissions in support of and opposition to the motions, the relevant portions of the record, and the applicable law. Considering itself fully advised,1 the court GRANTS in part and DENIES in part Zillow's motion, DENIES VHT's motion, and DIRECTS the parties to meet and confer, file a statement, and attend a status conference as detailed below.
This action arose from Zillow's use of VHT's copyrighted real estate photographs. (See Pretrial Order (Dkt. # 244) at 2:4-3:11; Ex. 600 (Dkt. # 272) ¶ 2.) VHT alleged that Zillow, which owns and hosts a real estate website and a related computer application ("app"), infringed upon 28,125 of VHT's photographs ("the VHT Photos").2 (See Pretrial Order at 2:4-3:11; Ex. 600 ¶¶ 6, 9-10; Summ. Image SS (Dkt. # 256-1); Final JIs (Dkt. # 275) at 20:2-13.) Zillow used 28,124—all but one—of the VHT Photos in conjunction with "Digs," a content area on Zillow's website geared toward home design and renovation. (See Summ. Image SS; Ex. 600 ¶ 11; Ex. 512 at Column N.)3 Zillow also used one of those 28,124 VHT Photos in an email. (1/27/17 Trial Tr. at 98:21-100:1, 112:22-25; Ex. 293; Ex. 512 at Row 17,744, Column AV.) Zillow used the final VHT Photo exclusively in a blog post. (1/27/17 Trial Tr. at 100:2-22, 112:6-21; Ex. 243; Ex.512 at Row 28,127, Column AV.) Because of the voluminous set of VHT Photos at issue, the parties tried the case by stipulating to the accuracy of an electronic spreadsheet that provided pertinent details regarding all 28,125 VHT Photos. (See Ex. 600 ¶ 12; Ex. 512; see also Ex. 600 ¶ 13; Ex. 513 ().)
VHT sued Zillow under several theories of copyright infringement. (See Pretrial Order at 2:7-15; Final JIs at 20:4-6; Verdict Form (Dkt. # 281) at 1:17-3:17.) Most straightforwardly, VHT sought to hold Zillow liable for direct copyright infringement. (Pretrial Order at 2:7-10; Final JIs at 21:2-11; Verdict Form at 1:17-2:4.) In addition, VHT sought to hold Zillow liable for direct infringements by Zillow's users under two theories of indirect copyright infringement. (See Pretrial Order at 2:11-15; Final JIs at 20:7-11, 22:2-25:6; Verdict Form at 2:5-3:7.) First, VHT contended that Zillow contributorily infringed by either materially contributing to or inducing infringement by Zillow's users. (See Pretrial Order at 2:11-13; Final JIs at 22:2-23:8; Verdict Form at 2:5-16.) Second, VHT alleged that Zillow vicariously infringed based on the direct infringement of Zillow's users. (See Pretrial Order at 2:13-15; Final JIs at 24:2-25:6; Verdict Form at 2:17-3:7.) The court held a jury trial on VHT's claims from January 23, 2017, to February 9, 2017.4
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Zillow receives millions of photos each day through feeds provided by real estate brokers, multiple listing services ("MLS"),5 and other sources. (2/2/17 Trial Tr. at 120:13-16; 2/7/17 Trial Tr. at 69:16-18, 132:25-136:6.) Each feed provider operates under an agreement with Zillow. (2/7/17 Trial Tr. at 139:2-141:7.) Those feed agreements include assurances from the feed provider to Zillow regarding the scope of the providers' permissible use of the photos, and many of the agreements purport to confer a broad license to Zillow. (Id.; see Ex. A-77 at 1.) Zillow characterizes photos from feed agreements of unlimited temporal scope as "evergreen," whereas it classifies as "deciduous" photos from feed agreements that require Zillow to cease displaying the photos after the corresponding listing is removed. (2/2/17 Trial Tr. at 70:11-16.)
Before launching Digs publicly, Zillow contracted with a company called Samasource to select a launch set of images. (1/27/17 Trial Tr. at 195:24-196:1.) Samasource provided moderators, who selected approximately 20,000 evergreen images from Zillow's database, including 870 VHT Photos, to use as a launch set for Digs. (Id. at 195:6-196:13; 2/2/17 Trial Tr. at 71:17-72:4; 2/7/17 Trial Tr. at 69:13-70:9, 94:19-95:6; Ex. 512 at Column AD.) The moderators also tagged certain elements of the room displayed in those images. (2/7/17 Trial Tr. at 80:25-81:3.) Tagging the images rendered them searchable by visitors to Digs. (Id. at 70:24-71:6.)
// When Digs launched, only the launch set of images was available, but over time, Zillow created several different ways for users to add images to Digs. (Id. at 71:7-10.) Users can upload their own images to Digs, and by January 2014, Zillow allowed users to "dig" images from home details pages ("HDPs") on Zillow's main website. (Id. at 71:11-25; 1/27/17 Trial Tr. at 211:7-213:18.) When a user digs an evergreen image, the image is accessible to any Digs user, but each deciduous image is visible only to the user that dug the image. (2/7/17 Trial Tr. at 73:16-74:1.) In addition, Zillow created a functionality called "implicit digs," in which Zillow saved to Digs images that its users selected to save but failed to finish saving. (2/2/17 Trial Tr. at 115:1-118:13.)
Zillow also tagged—and thereby made searchable—some of the evergreen images that Digs users selected. (1/27/17 Trial Tr. at 209:1-14; 2/7/17 Trial Tr. at 78:12-18, 80:9-13.) Zillow determined which images to make searchable through a moderation process. (1/27/17 Trial Tr. at 214:11-215:1.) Initially, and for the majority of the relevant time period, the moderation process included an initial automated review for blurriness or tilt and a second human review for images that passed the first, automated stage.6 (2/7/17 Trial Tr. at 78:19-79:25.) The human review sought images that were "interesting or notable" and subjectively rated the quality of each image. (Id. at 80:16-81:21.) Zillow tagged and thereby made searchable the images that the moderators selected; the other images remained non-searchable. (Id. at 80:16-24, 81:4-7.) In addition, when the moderator gave an image a "great" quality rating, a Zillow designmoderator reviewed the image and overlaid product bubbles on the "interesting products" in the image. (Id. at 81:11-82:15.) The product bubbles linked to a website where the user could purchase the product that best matched the relevant feature. (Id. at 81:22-82:4.) Neither the moderation process nor the bubbling process created any additional copies of the image. (Id. at 81:8-10, 82:8-15.)
Beginning in 2013, VHT informed Zillow multiple times—and with varying degrees of specificity, accuracy, and completeness—that Digs featured images for which VHT held the copyright.7 (1/27/17 Trial Tr. at 26:12-35:3; Ex. 51; Ex. 506; 2/2/17 Trial Tr. at 27:4-28:23; Ex. 45 at 2; 2/3/17 Trial Tr. at 61:21-64:13; Ex. A-83 at 1.) The discussions culminated in July 2014, when VHT sent Zillow a formal takedown notice and a list of purportedly infringing images. (1/27/17 Trial Tr. at 139:24-140:24; 2/3/17 Trial Tr. at 69:11-73:6; Ex. 98; see also Ex. 105; Ex. 512 at Column AF.) The list of images contained an address, a VHT identifying number, and a file name for each image. (Ex. 98 at 3-302.) Only 14 of the images on that list are at issue in this suit. (Summ. Image SS at 1.)8 Without adequate identification of an image, technical realities limited
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//Zillow's capacity to identify an image as infringing and remove the image.9 (2/2/17 Trial Tr. at 100:13-102:6, 125:23-127:3.)
The jury found that Zillow directly infringed on all 28,125 of the VHT Photos. (Verdict Form at 1:17-2:3.) The jury also found that Zillow contributorily and vicariously infringed VHT's copyrights, but because the verdict form instructed the jury not to double-count Zillow's infringements, it is not clear how many copyrights the jury found Zillow indirectly infringed. (Id. at 2:5-3:7.) After rejecting Zillow's affirmative defenses of license and fair use (id. at 3:11-4:13), the jury awarded actual damages of $2.84 per photograph, or $79,875.00 (id. at 4:15-19). The jury also awarded $8,247,300.00 in statutory damages. (Id. at 6:7-9.) Because some of the statutory and actual damages were duplicative (see id. at 4:15-6:9), VHT elected to receive statutory damages for the 19,312 VHT Photos that were eligible for statutory damages (see Summ. Image SS at 1; Ex. 512 at Column AR) and actual damages for the remaining 8,813 VHT Photos (see Summ. Image SS at 1; Ex. 512 at Column AR; Dam. Election (Dkt. # 286) at 1).
Pursuant to the jury's verdict and VHT's damages election, the court entered judgment for VHT in the amount of $8,272,328.92. (See Judgment (Dkt. # 296).) The instant motions followed.
Zillow contends that it is entitled to judgment notwithstanding the verdict with respect to the vast majority of the VHT Photos. (JNOV Mot. at 7:16-13:25.) Zillow reaches this conclusion by whittling the field of VHT Photos on which, in Zillow's estimation, VHT presented sufficient evidence of direct infringement. (See id.) Specifically, Zillow argues that the 22,109 VHT Photos that Zillow never displayed on Digs only plausibly violated the reproduction right, see 17 U.S.C. § 106(1), and VHT failed to present sufficient evidence that Zillow caused the reproduction of any undisplayed VHT Photos (JNOV Mot. at 8:5-10:11). In the alternative, Zillow contends that it...
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