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Jul 12 2010

NY Court Deals Huge Blow to Digital Image Companies by Invalidating Registration Method

In a decision that could have far-reaching implications for the licensors of digital images, Federal Judge Loretta Preska, the Chief Judge for the Southern District of New York, declared as improper and unenforceable the standard method for registering images by digital image warehouses like Corbis and Masterfile (the biggest of them Getty Images, does not register its images with the Copyright Office).

Let me briefly explain the situation:  digital photography has allowed photographers to upload whole catalogues of images into a database and then “assign” their copyright in the images to these large digital image warehouses that then license them for use to media companies, web developers and the like. So if you’re building a website and need the perfect picture of a woman talking on the phone for your cell phone company client, you need only go to Corbis, Masterfile or Getty’s websites, type in “woman on cellphone” and get dozens of shots to choose from. Pick the resolution and use you want, pay the licensing fee and you get to download the image.  The photog and the “warehouse” split the license fee under a written agreement.

Normally, under the statute, a copyright registration must include the name of the work and the name of the author of the work.  What the warehouses have been doing is registering dozens of catalogues together under one “compilation registration” and when it comes to listing the authors, its lists the name of one photographer and then adds “and numerous others” afterwards. They have been doing that since they received an opinion letter from Nanette Petruzzeli, Chief of the Copyright Office’s Examining Division saying that this would provide copyright registration for ALL of the images included in the compilation even if the actual authors of most of the images were not named in the registration.

For nearly two years now, I have been locked in many disputes with the three major image warehouses over the value of infringement of digital images.  I have a whole website devoted to the issue., which is spreading like wildfire across the internet (the issue, not the website): www.extortionletterinfo.com.  I currently represent a total of about 500 companies in such claims against, Getty , Masterfile, and Corbis. For those that do register the images, I have been arguing that the Petruzelli letter is WRONG and conflicts with the plain reading of the Copyright Act which says to be valid, the registration must contain the name of the  actual author and that if you register it as a compilation, then you don’t get to seek damages for each individual photograph, so that if someone takes 30 images from one compilation, then it is only one infringement.  (I know this is hyper-technical for most people, but it really is important in the arena of digital imagery).

Well in the case of Muench Photography, Inc. v. Houghton Mifflin, decided May 27, 2010, Judge Preska agreed with me on this issue.  The Court outlined the issue this way:

The Court is faced with the novel question of whether the registration of an automated database–here, a compilation of photographs by different photographers–by a third-party copyright claimant that has been assigned the rights to the individual works for the purposes of copyright registration registers the individual works thereby permitting the individual photographers to sue for copyright infringement . . . A plain reading of § 409 of the Copyright Act mandates that the copyright registrations at issue here contain the names of all the authors of the work..”

The court went on to explain that while it felt bad that the fault for the mis-registering the images was that Corbis and the photographers relied on the  Petruzelli letter,  it said it had no choice because the statue was clear. It held therefore that the compilation was properly registered because Corbis was listed as the author of the compilation but that  “the individual works themselves are not registered.”

This means that there are no statutory damages for each and every infringement of the automated database, but at most just a single infringement of a part of the compilation.  This opens up the question of whether taking one  or five or ten images from a thousand image compilation is de minimus infringement and may not be enforceable or subject to significant damages.  What it does not leave open is the question of whether the Petruzelli letter was right or wrong – it clearly was wrong and is not to be relied upon.

All of the individual images in a compilation are not validly registered if the individual authors are not named on the registration. This case will undoubtedly be appealed and we will keep track of its progress.  Also, there are many pending actions filed by Corbis and Masterfile in which this case will be cited and we will wait to see how this is analyzed in cases where the author of the compilation itself its bringing the case and not the author of the individual photographs.  While the plain reading of the case states that no different outcome should result, rest assured that the image warehouses will see it differently and try to bend and twist this case to suit their purposes or limit its applicability.

Stay tuned as this new area of intellectual property law continues to get defined and clarified. Here’s the whole decision:

Meunch Decision

3 comments

  1. hans

    I hate Masterfile. I hope they rot in hell. They are dirty lawyers who are bullies. Karma won’t be pretty to those worthless pieces of human garbage.

  2. e2

    Do you have an update on whether this case was appealed and, if it was, what the result was?

    1. Oscar Michelen

      It has not been appealed. Since the decision two federal appeals courts -the 9th Circuit and the 4th Circuit – have gonein the other direction and said that this registration methoid is valid.

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