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Mar 19 2014

California Appeals Court Rules in Favor of Group Registration of Copyrights – Big Boon to Mass Photo Agencies

The 9th Circuit Court of Appeals issued a long-awaited decision in the case of Alaska Stock v. Houghton Mifflin that favors the “compilation” or “group” registration of digital images by large photo agencies. The decision, in its essence, states that provided the registrant owns the copyright in all of the images that make up the compilation registration, copyright registration also attaches to the individual images contained within the compilation or group- not just the whole group.

At issue was a conflict between the language of the Copyright Act and a memo issued to photo lobbying group by the US Copyright Office. Section 103(a) of the Copyright Act expressly provides that compilations are proper, lawful “subject matter of copyright[.]” 17 U.S.C. § 103(a). However, Section 103(b) provides that “[t]he copyright in a compilation … extends only to the material contributed by the author of such work, as distinguished from the preexisting material employed in the work, and does not imply any exclusive right in the preexisting material.” But In 1995, a trade association of stock agencies, Picture Agency Council of America, Inc., met with the Register of Copyright (the head of the Copyright Office), her Chief Examiner, and other Copyright Office staff, to work out how to register large catalogs of images. The Register agreed that a stock agency could register both a catalog of images and the individual photographs in the catalog in one application if the photographers temporarily transferred their copyrights to the stock agency for the purposes of registration. The trade association confirmed this with the Copyright Office in writing, and advised its member stock agencies.

copyright logoThe trial court in Alaska Stock ruled that the language of the Act was clear and could not be changed by the Copyright Office memo. The court concluded that the registrations of the compilations of photographs did not amount to the registration of the copyrights in the individual photographs. The 9th Circuit reversed that holding, finding that it would be unfair to those that relied upon the Memo stating:

We are not performing a mere verbal, abstract task when we construe the Copyright Act. We are affecting the fortunes of people, many of whose fortunes are small. The stock agencies through their trade association worked out what they should do to register images with the Register of Copyrights, the Copyright Office established a clear procedure and the stock agencies followed it. The Copyright Office has
maintained its procedure for three decades, spanning multiple administrations. The livelihoods of photographers and stock agencies have long been founded on their compliance with the Register’s reasonable interpretation of the statute. Their
reliance upon a reasonable and longstanding administrative interpretation should be honored. Denying the fruits of reliance by citizens on a longstanding administrative practice reasonably construing a statute is unjust.

Apparently lost on the Court and not even remotely mentioned in the decision or in the oral arguments which I listened to, is how this will effect the many small businesses that could now be hit with statutory damages and even larger infringement claims based on registrations of thousands and even millions of digital images at a time. Most if not all of these stock agencies require the photographers to assign the copyrights in the image to them, making the agencies the “owners” of the works. Yet because of this compilation registration, it will be very difficult if not impossible for the targets of those claims to find out if the image complained of was part of the registration being relied upon by the stock agencies. The Copyright Office Memo only required the agencies to list three names of the individual authors an no titles of the works, so that for the vast majority of the works contained in the compilation, the only identifying mark is a random catalog number. In these claim letters (sent out in the thousands weekly) the agencies usually do not provide the actual copyright registrations or show you which image applies to which catalog number.So targets of these claims will have to “trust” that the registrations the agencies are sending them are the actual registrations that apply to the images they claim.

The 9th Circuit is the latest to rule this way. The Fourth Circuit recently confronted the question and adopted the position advocated by Alaska Stock and the government in Metropolitan Regional Information Systems, Inc. v. American Home Realty Network, Inc., which addressed whether a real estate listing service had properly registered the individual photographs of properties contained within their listings by registering their listings as a database. The court here also relied on a case from the The Fifth Circuit, Szabo v. Errison that held that a musician who filed a single registration for his collection of his “Songs of 1991” succeeded in registering individual songs within the collection. The Alaska Stock court quoted from that case stating: “Szabo rejected the argument that because he had not listed titles for each of the songs, he had not registered the constituent songs, the same argument Houghton Mifflin makes here. Szabo applies the rule that ‘when one copyrights a collection, the copyright extends to each individual work in the collection even though the names of each work are not expressly listed in the copyright registration.’” But if I am accused of infringing a song by Szabo, I would easily find the registration for his album; I would readily be able to tell if he owned the copyright to the songs listed on the albums by seeing if he is listed as a the author of those works; and I would only have to scroll through a few names of songs from the CD to find the one I am accused of copying. But if Szabo were one of a hundred photographers who were part of the compilation but was NOT one of the three photographers listed, I would not be able to find the offending photograph or even tell if his photography was part of the compilation registered under this method.

The Court here distinguished Morris v. Bus. Concepts, Inc a Second Circuit case holding that the registration of a collective work, Allure magazine, did not register the copyright in a component work where it did not own the copyright to the component work and failed to list its author or title finding that here Alaska Stock did own all the copyright by virtue of its agreement with its photographers. The Second Circuit is the federal appeals court that covers New York. Some New York trial courts and trial courts in other States have gone the other way on this issue. See Muench Photography, Inc. v. Houghton Mifflin Harcourt Publ’g Co.,712 F. Supp. 2d 84, 92–94 (S.D.N.Y. 2010); Muench Photography, Inc. v. Pearson Educ., Inc., 2013 WL 6185200, at 10–13 (N.D. Cal. Nov. 19, 2013); Bean v. Houghton Mifflin Harcourt Publ’g Co., 2010 WL 3168624, at 3 (D. Ariz. Aug. 10, 2010). The Second Circuit has not addressed this issue directly, nor does it have any similar case on its docket to my knowledge. The 9th Circuit is not binding on NY Federal courts though it does carry more weight than most Circuits on copyright issues due to California being within its jurisdiction.

I would expect this decision to embolden photo agencies in their quest for infringement dollars. Folks who are targets of these claims should make sure to ask for proof that the stock agency OWNS and not merely LICENSES the images. They should also ask for proof that the catalog numbers on the registration matches up to the image(s) at issue.

To say I am very disappointed in the decision is an understatement. I think the 9th Circuit got it wrong in part because it failed to see how this would be applied in the infringement scenario. Also, why would anyone now pay for individual registration when it could register all of its works at one time through this method? While I understand the deference the Court gave to the practice outlined by the Copyright Office, that deference should not extend to a practice that is in direct contradiction with the words of the Copyright Act itself.

13 comments

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  1. Jerry Witt (@motioncity)

    It seems the 9th Circuit paid a great deal of attention to how reversing the memo created by the Copyright Office staff would effect the stock photo agencies. But they paid NO attention to the impact this would have on innocent infringers. They also clearly had no idea the lengths to which stock agencies would go to use this to squeeze thousands of dollars out of these small businesses.

    1. Oscar Michelen

      This whole issue was not addressed in the oral argument before the court. I was surprised at that when I listened to them online. The court seemingly looked at this like “What’s the big deal?”

  2. Carlos Danger

    I’m not here to litigate the case with you.

    I’m here to gloat. It would be an understatement to say I’m delighted with the case.

    If you’re upset I refer you to this line in the opinion.

    “If an aggrieved party objected to the Register’s long standing procedure regarding stock photo agency registrations, petitions to the agency, participation in rule making, and actions for violations of the Administrative Procedure Act might have afforded remedies”

    You’ll have to come up with something else in the 9th if you want to play let’s try to invalidate the registration game.

    1. Oscar Michelen

      You’re always a class act, Carlos. It is ludicrous to think that individual victims of trolling schemes would have the same pull as the Industry Association that secured a letter from the Copyright Office or the money to bring an administrative procedure act case. The folks who lost this a case are the American public who have now had a court agree that an agency can amend the clear language of a statute through policy letters. The 9th did not look at it form the angle I confront the issue on a daily basis. Nor did they look at it from the point of view that the lobbyists who got this change were not concerned with registration procedures but rather to make it easier and cheaper to circumvent the Copyright Act.

  3. Carlos Danger

    I owe you a thanks because I had a good laugh today with a lawyer friend of mine over

    ” it will be very difficult if not impossible for the targets of those claims to fins [sic] out if the image complained of was part of the registration being relied upon by the stock agencies.”

    Very very sad. Surely the purpose of copyright registration to enable you to determine who you should blow off because they didn’t timely register.

  4. Carlos Danger

    ” It is ludicrous to think that individual victims of trolling schemes would have the same pull as the Industry Association that secured a letter from the Copyright Office or the money to bring an administrative procedure act case. ”

    PS, Exactly. I was making fun.

    Carlos Danger <——- Class Act

  5. Oscar Michelen

    Carlos: If you rear-end someone’s car with your car while they are stopped at a light and you cause a small scratch, would you pay them $5,000 if they demanded it in a letter? Or would you ask them to show you the repair bill or at least an estimate? Since you rear-ended a stopped vehicle you are 100% in the wrong but that does not mean that you are forced to pay whatever the other side considers their damages to be. You still have a right to contest their damages claim and to ask for the appropriate proof. Being able to locate a work of art to make sure it is properly registered is an important facet of the registration process. I don’t suggest any one blow off any infringement claim. I only suggest that copyright holders provide proof of all the elements of their claim and not demand damages to which they are not entitled. These copyright trollers demand legal fees and statutory penalties – two elements of damage to which they are not entitled unless the work was properly registered. You seem to be of the position that if you commit a wrong or if you infringe that you lose all rights to contest damages or assess the value and validity of the claim. So, you’re welcome for the laugh, but there is nothing funny about my position; it’s a pretty basic legal premise called putting your adversary to his proof.

  6. Carlos Danger

    OM: “Being able to locate a work of art to make sure it is properly registered is an important facet of the registration process.”

    Yes, we actually had a chuckle about that too. No doubt your client would not have infringed had she known beforehand who the creator was and what the title of the work was. “name = Mr. X, “title = my lovely photo of trees.”

    In any case, you can look up works and see if they are properly registered. You can spend years going over the copyright office records and make sure all the works are properly registered. I think it would be a useful public service. But don’t forget to contact all the registrants so they can cure any defects that you might find.

    But you don’t want to “locate work to make sure it is properly registered.” You want to know the creator (not the copyright claimant or the copyright owner as the stock agency was) of each work and you want a title for each work.

    It has nothing to do with whatever the purpose of registration is (which Skadden argued is to create a public record of “what specific works of intellectual property are registered.”) And the court was scratching it’s head as am I how the name and title more specifically identifies a work then the actual work. And the Government pointed out that it didn’t want the information anyway (at least until digital came along) because it was subject to transcribing errors. But Oscar thinks it’s an “important facet of the registration process.”

    It’s important to you, I gather, so you can more easily evaluate the potential remedies available to the copyright owner. No, I don’t see anywhere in the legislative history or statute that that was the intent of building out a registration system and a Library of Congress. Do you have any case law for your proposition. Did Skadden miss this argument but you wisely caught it ?

    Anyone attempting to force Houghton Mifflin’s behavior as described in the order and that 2nd circuit case (I think I recall the same litigants in Meunch and the same lawyers too) into a copyright troll going after “innocent infringers” paradigm has really missed the mark. I know, you want courts to view every case among litigants with an eye to how it might impact your present or future clients. Bizzare. What is more likely. Skadden just forgot to bring up the impact of an adverse decision on your “innocent infringers” or Skadden though it irrelevant to the case.

    Anyhoo, I was up front. I came to gloat. Not get into copyright. You have some weird views as far as I’m concerned. Your statement to the effect that know no one will do “individual registrations” anymore. Wuh ? Who would ever register photos individually. It’s madness. Which is to say it’s $35 a pop. The whole point of is to get the amount down to $35 for the entire collection.

    You should be more upfront. You need to invalidate the registration. That is the game. You don’t really want to litigate your innocent infringer argument. It takes time and money. So anything that makes registration easier and less costly you don’t like. That I get. But whether you have an “innocent infringer” argument doesn’t have diddly to do with copyright registration.

    1. Oscar Michelen

      Thank you for your well thought-out and persuasive responbse. I thoroughly enjoy the legal argument and you make excellent points. I will end it here by saying a few things: (1) I don’t blame you for gloating – I would be gloating if it came out my way. I’m even letting you gloat on my blog because that’s how the adversarial system works. You win some you lose some. (2) You are correct that this case (and Muench) are not applicable to the small single image, innocent infringer argument which is why Skadden (in both cases)did not argue my point of view and why the court did not address it. I feel it should have been raised as an example to the court of how this reading of the Copyright Act could impact thousands of people.(3) No one is suggesting that photo warehouses or even photographers have to individually register each photo. They can register them by photographer so that the registration contains a single author and then list the titles and dates of publication of the photos and be in complete compliance with the Act which requires those three things – author name, title and date of publication for each work of art. (4) Clearly the digital age and the prevalence of digital images doesn’t fit nicely into the current scheme created by Congress for registration of works of art. My point is that the Act says what it says and it is for Congress not the Copyright Office to essentially amend its terms. (5) As a lawyer, I wll always examine the statute being applied by or against my clients and make sure that each and every element required is present when evaluating a claim or a defense. (6) Folks who want to use images are not likely to search for registrations, you are correct – they are likely to rely upon the sites they get the images from (sometimes paying for them even though the site selling them does not actually own the images or rights in the image). It’s when the robot finds the image and they receive a claim letter or lawsuit that they shoudl be able to find if the image is in fact registered so they can evaluate the merits and extent of the claim. If a party is going to seek statutory damages and legal fees, the other party ought to be able to assess on their own whether those damages are available. With this registration process that’s impossible. With my suggested process, it may still be hard, but it is much more doable.

  7. Carlos Danger

    (1) OM “I feel it should have been raised as an example to the court of how this reading of the Copyright Act could impact thousands of people”

    They did, in fact, examine how it would effect thousands of people. The ACTUAL litigants plus the other photographers in a similar boat (working with stock agency that do these bulk registrations).

    Though I would have enjoyed hearing the giant law firm on behalf of giant alleged infringer publisher arguing that you need to side with publisher against the stock agency representing the interests of individual photographers to protect theoretical future “innocent infringers.”

    (2) OM: “They can register them by photographer so that the registration contains a single author and then list the titles and dates of publication of the photos and be in complete compliance with the Act which requires those three things – author name, title and date of publication for each work of art. ”

    Again ? OK. I refer to the case. When you say “for each work of art” you are taking what the court refers to as “the superficial reading” of the statute. Quoting your sensible statement: “You win some you lose some.”

    You are aware that if you use the eCo system you can register as many unpublished photos with one application or as many published in the same year and you provide ONE TITLE for the group. You couldn’t provide titles for the “each work of art” (I assume you to mean each photos) if you wanted to. It isn’t requested. I suppose you could put it in the ZIP file that you upload but each digital photo already has a name on the file.For example, example.jpg

    And how exactly would the title for each photo help you in your quest to ascertain whether the registration of a particular photo was timely ? Does Oscar have a requirement for titles. Do they need to be descriptive of the photo ? Help me out here.

    Also, you say that you are interested in the merits of the claim. You are interested in the potential remedies. The value of the claim. Not the merits. You have no interest in litigating the merits of the so-called “innocent infringer” defense. Neither would I. It makes no sense to spend $X thousands in legal fees to persuade the court that $200 is the appropriate amount of statutory damages.

    You have a beef perhaps a good one with the fact that REAL “innocent infringers” may still have to litigate even if the court could or does award the min $200 amount. That may be a problem. The solution is not to play games with copyright registration. Picking it over to find alleged defects. It’s already too complicated and costly to register which may explain why big entities register but individual photographers almost never do. I would relax the rules further. If the CO takes your application you are good to go.

  8. Carlos Danger

    Carlos wanted to add that his questions above were not rhetorical. And that he really has no dog in the fight. He just thinks the 9th got it right.

    If you think Carlos has any interest in stock agencies per se then you didn’t hear him laughing his ass off (aka LMAO or LOL) when the AFP jury came back with maximum statutory damages against Getty/AFP.

  9. Oscar Michelen

    I never gave it much thought either way Carlos. I welcome the dialogue you bring to the issues.

  10. maureen

    I am an environmental compliance consultant in California, and am familiar with the 9th Circuit Court of Appeals, which boasts the most overturned rulings then any other circuit court, at least regarding environmental law. Based on several recent Supreme Court rulings regarding environmental law, it is clear that the appellant court got it wrong. The plain language of the law is what take precedent not the administrating agency’s reinterpretation of the plain language of the law. The notion that a regulation (permit, certification, application, etc) supersedes the law that promulgated it in the first place, when the regulation is contrary to the plain language of the law, simply because the inadequacy was not caught during the rule making process, is absolutely ludicrous. If that was the case there would be no Supreme Court cases. And the fact that any court would rely on an administrative procedure instead of the plain language of the law is disturbing to say the least. The issue of “fairness” is really irrelevant, not to mention painfully subjective. The only issue that should have been open for review by the appeals court was whether the lower court erred in its interpretation and application of the law-not whether it was fair to the plaintiffs who claimed to have followed an administrative procedure that did not follow the law. While courts can defer to an administrating agency’s interpretation of their implementing regulations, then can’t defer to the administrating agency’s reinterpretation of the plain language of the law or the intent/expectations of the lawmakers who approved the law. Unless there is some unique provision of Copyright law that relieves copyright registrants of the obligation to exercise the minimum due diligence presumed (i.e., ignorance of the law is not a defense), the plaintiffs were obligated to comply w/the law regardless of what closed-door agreements had been made w/the administrating agency. Moreover, the argument that the defendants should have addressed the inconsistencies between the administrative procedure and the plain language of the law is just as applicable to the plaintiffs. Legally the plaintiffs do not have standing to sue the defendants based on copyright infringement, because the plain language of the law does not permit it, and in fact specifically prohibits it. If the plaintiffs were harmed by following the administrative procedure-but not the law- then they can sue the administrating agency. Happens to EPA all the time, and it hasn’t slowed them down much. But I am not an attorney so I may be missing some legal nuance here or making it too simple. Hopefully this ruling will find its way to the Supreme Court sooner than later

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