When you have to clear copyright to merchandise

Glen Friedman is a well-known photographer whose work focuses on figures from several American subcultures, including skateboarders, punk rock musicians, and hip hop artists. His photography has been in gallery exhibitions and on record covers and has been published widely.

During the 1980s, Friedman took a series of photographs of the hip hop group Run-DMC. Several of Friedman’s photographs of the group appeared in a book collecting his work. In 2005, Friedman granted a license to Sony Music to reproduce some of his Run-DMC photographs, accompanied by information indicating that Friedman owned the copyrights, on a website. Fans could download the images to use as computer “wallpapers.” Sony’s license permitted it to alter the images in some respects – for example, by adding a green tint, a Run-DMC logo, or a sparkle effect – and was the only license in which Friedman authorized such alterations to his photographs.

Live Nation is a music merchandising company involved in the design, manufacture, and sale of apparel and other products featuring images and logos of various popular music artists. In developing products, Live Nation typically enters into written merchandising agreements with music artists in which the artists retain final approval authority on the design, development, distribution and sale of merchandise bearing the artists’ marks and likeness.

In practice, Live Nation submits “Product Approval Forms” to artists asking them to sign off on the development of products displaying specific images. Those forms supplied by Live Nation include no reference to copyrights or other usage restrictions. Live Nation maintains that artists are “not supposed to” provide approval if they do not have the rights to the proposed photographs.

Live Nation also produced “Style Guides” – essentially, collections of available images of particular artists – to inform suppliers about images they could contract to use on merchandise. Live Nation’s Run-DMC Style Guide included a number of Friedman’s images. Live Nation sought and obtained approval from Run-DMC for a 2008 Wall Calendar that included four of Friedman’s images, and later, for three t-shirt designs, that included Friedman images previously featured in the Run-DMC Guide.

After he became aware of Live Nation’s use of his photographs, Friedman filed a complaint asserting claims for relief for (1) copyright infringement and (2) removal of copyright management information (“CMI”). After the close of discovery, Friedman moved for summary judgment on the copyright infringement issue. In response, Live Nation stipulated to liability for infringement, and the district court entered partial summary judgment in Friedman’s favor.

Live Nation then moved for partial summary judgment on Friedman’s CMI claim, and, to the extent Friedman claimed Live Nation’s infringement was “committed willfully”, on the copyright infringement claim. Relying largely on Friedman’s discovery default, Live Nation argued that Friedman had produced no evidence whatsoever indicating that Live Nation had willfully infringed his copyrights or had knowingly removed CMI from any of the images.

The district court granted Live Nation’s motion for partial summary judgment. On the CMI claim, the court found that “Friedman has offered no evidence suggesting that Live Nation Merchandise actually removed CMI from any of his Run-DMC photographs, much less that it did so knowingly or intentionally.” As to Friedman’s claim of wilful infringement, the court concluded that “the burden of proof here rests on Friedman, and it is not clear that he has offered any evidence that would create an issue of fact for a jury.”

The district ruled that Friedman was “entitled to only one statutory damages award per infringed work.” Even if Friedman’s calculation of 104 “downstream infringers” were correct, the court held, this case “involves photographs in a mass-marketing campaign.” On appeal, Friedman challenged the district court’s grant of summary judgment to Live Nation on his wilful infringement and CMI violation claims. He also challenged the district court’s order limiting his recovery to one statutory damages award per infringed work.

Live Nation’s Product Approval Forms said nothing whatsoever about establishing or reporting on who holds the rights to the images whose use is proposed. The forms only included fields indicating the manufacturer of the proposed product, the artist represented, and the suggested price, along with space for unspecified “comments” by Live Nation and the artist. From the face of the documents, one could conclude that they are directed at design decisions, not the rights to the photographs. Nor do the specific forms signed by Run-DMC indicate in any way that the group was clearing the legal right to use the photographs, on their own behalf or anyone else’s.

In a declaration in support of Live Nation’s summary judgment motion, one of its employees explained that when artists did not own the rights to photographs, “they were not supposed to, and should not, provide their written approval … to develop merchandise using those photographs.” But the employee did not say how or when Run-DMC was apprised of this duty.

Given an approval process that never explicitly asked about copyrights at all, a jury could reasonably conclude that Live Nation’s reliance on the artists who were the subjects of the photographs at issue to clear photographic rights, rather than on the photographers who took them – based only on a purported industry practice never reflected in any document – amounted to recklessness or willful disregard, and thus willfulness.

Live Nation submitted evidence showing that it knew it needed to take special care with respect to Friedman’s images. The appellate court concluded that, drawing all inferences in Friedman’s favor, the evidence in the record gave rise to a triable issue of fact as to Live Nation’s willfulness, and the court reversed the district court’s grant of summary judgment.

Some of the photographs used in Live Nation’s calendar included alterations, such as tint effects and added logos, that Friedman had authorized only for the Sony website. Photos that appeared in the Style Guide appeared to have been scanned from Friedman’s book, as they contained captions and other layout features that appeared in that source alone. The images on Live Nation’s products did not include copyright information that had been present on the earlier versions.

The fact that the photographs used by Live Nation were exact copies of the images precisely as they appeared on Sony’s website and in Friedman’s book gives rise to the compelling inference that Live Nation’s photographs were directly copied from those sources. Because the only material difference in the Live Nation versions was that the CMI was missing, it was necessarily the case that the CMI had been removed on the copied version.

A reasonable jury could certainly conclude that Live Nation had knowledge that photographs are often copyrighted. Live Nation has never offered any explanation of how it came to possess the images. The appellate court reversed the district court’s decision granting summary judgment to Live Nation on Friedman’s CMI claim.

A plaintiff seeking separate damages awards on the basis of downstream infringement must join the alleged downstream infringers in the action and prove their liability for infringement. Because Friedman did not join any of his alleged downstream infringers as defendants in this case, the district court correctly held that he was limited to one award per work infringed by Live Nation. The appellate court affirmed the district court’s statutory damages ruling.