Friday, November 22, 2019
Ninth Circuit Says Finding of Intentional Infringement by Zazzle Was Reasonable
By a MetNews Staff Writer
Above are artworks created by Kerne Erickson. They are among the 35 images produced by Erickson and another artist which were the subject of copyright infringement litigation in the U.S. District Court for the Central District of California. The Ninth U.S. Circuit Court of Appeals on Wednesday held that a jury was reasonable in finding that five of the images were willfully misappropriated.
The Ninth U.S. Circuit Court of Appeals has ordered reinstatement of a $109,700 component of a jury’s $460,800 award for copyright infringement by an e-commerce vendor, rejecting a District Court judge’s view that that the plaintiff failed to adduce sufficient evidence of a willful pilfering of artwork.
The defendant is Zazzle, Inc., headquartered in Redwood City, located in California’s Bay Area. Customers can buy various items over Zazzle.com—such as coffee mugs, posters, shower curtains or tee-shirts—which will be shipped to them after being imprinted with an image designated by the purchaser from a plethora of alternatives displayed on the website.
Plaintiff Greg Young Publishing, Inc., of Santa Barbara, sued in 2016, contending that 30 images—in an amended complaint, it upped that to 35—were ones to which it held an assignment of the artist’s copyright and which it had the exclusive right to market. Yet, Zazzle offered the images for sale on imprinted items.
The works were of two of the artists Young represented: Kerne Erickson, who primarily designs retro-travel ads, and Scott Westmoreland, whose paintings are of landscapes, mostly beach-themed.
Prior to trial in the District Court for the Central District of California, Zazzle admitted its infringements. Left for decision were the matters of whether there had been willful pirating and damages.
The jury’s awards with respect to each of the infringements ranged from $200 to $66,800. Five awards exceeded $30,000, beyond the normal range for an innocent infringement.
District Court Judge Stephen V. Wilson tossed the jury’s award to the extent it was based on willful misuse. He said, in an Oct. 27, 2017 minute order:
“Absent an affirmative finding of ‘willful’ infringement, the Copyright Act limits statutory damages awards to a maximum of $30,000 per copyrighted work. To willfully infringe a copyright, the defendant must have had actual knowledge of the infringement or have acted with reckless disregard or willful blindness. Here, no reasonable jury could have found on the evidence presented at trial that Defendant Zazzle Inc…willfully infringed any copyrights.”
“Although Plaintiff argued that Zazzle could have done more to detect and avoid potential infringement, as a matter of law, Zazzle’s failure to take any of these particular steps is not a sufficient basis for a finding of willful infringement. Accordingly, the Court GRANTS Defendant’s renewed motion for judgment as a matter of law on the question of willful infringement and reduces the judgment to $30,000 for each of the five images that exceeds the statutory limit for ordinary infringement.”
Appellate Court’s Opinion
In reversing, a three-judge panel said in a memorandum opinion, filed Wednesday:
“Recklessness can constitute willful infringement, and can be established by an infringer’s knowing reliance on obviously insufficient oversight mechanisms….Zazzle never deviated from, or improved, its oversight system throughout the two-year period at issue, despite repeated notice of that policy’s ineffectiveness. Zazzle ‘knew it needed to take special care with respect to [Young’s] images,’…but never gave its content-management team a catalogue of those images provided by Young even after Young provided the catalogue.”
The opinion adds:
“Zazzle continued to sell products bearing each of the works for which the jury found willful infringement. Zazzle also relied on a user-certification process it knew produced false certifications and took no action to remove a user who had marketed more than 2,000 infringing products. A reasonable jury could find willfulness on this evidence and we therefore remand for entry of judgment consistent with the jury verdict.”
Wilson had denied attorney fees to Young based on its limited success. Wednesday’s opinion affirms that determination, but says in a footnote:
“In light of our reinstatement of the jury award—and Young’s consequent increased degree of success on the merits—our decision today is without prejudice to Young seeking reconsideration of its fee application on remand.”
Wilson awarded Zazzle costs under federal Rule 68 based on its final offer of settlement, including attorney fees—$525,000—exceeding the plaintiff’s recovery. The opinion affirms that decision but, also in a footnote, indicates:
“If the district court elects to award fees to Young, it can of course revisit the Rule 68 issue in light of Young’s ultimate recovery.”
The case is Greg Young Publishing, Inc. v. Zazzle, Inc., 18-55522.
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