Source: http://ca.findacase.com/research/wfrmDocViewer.aspx/xq/fac.20191218_0008449.NCA.htm/qx
Timestamp: 2020-07-12 00:48:53
Document Index: 627233123

Matched Legal Cases: ['§ 507', '§ 507', '§ 507', '§ 507', '§ 507', '§ 507', '§ 4', '§ 4', '§ 411', '§ 202']

FindACase™ | Menzel v. Scholastic, Inc.
Menzel v. Scholastic, Inc.
PETER MENZEL, Plaintiff,
SCHOLASTIC, INC., Defendant.
PUBLIC/REDACTED VERSION ORDER GRANTING IN PART DEFENDANT'S MOTION FOR SUMMARY JUDGMENT; AND GRANTING IN PART AND DENYING IN PART PLAINTIFF'S MOTION FOR PARTIAL SUMMARY JUDGMENT, Docket Nos. 105, 107
Plaintiff Peter Menzel has sued Defendant Scholastic, Inc. for copyright infringement. Currently pending before the Court are motions for summary judgment or partial summary judgment filed by both parties. Having considered the parties' briefs and accompanying submissions, as well as the oral argument of counsel, the Court hereby GRANTS in part and DENIES in part each party's motion. The Court also GRANTS the various motions to file under seal that have been filed in conjunction with the summary judgment briefing.
As an initial matter, the Court address the parties' motions to file under seal. See Docket Nos. 104, 106, 115, 119, 125 (motions). The motions have been filed because Scholastic has designated certain information as confidential - more specifically, information about its print runs. Because dispositive motions are at issue, Scholastic has the burden of showing that there are compelling reasons to prevent public disclosure. See Kamakana v. City & County of Honolulu, 447 F.3d 1172, 1178-79 (9th Cir. 2006) (stating that a "party must articulate[] compelling reasons supported by specific factual findings that outweigh the general history of access and the public policies favoring disclosure, such as the public interest in understanding the judicial process") (internal quotation marks omitted). Mr. Menzel opposes sealing.
The Court has reviewed the substantive submitted by Scholastic. Based on the declaration, there are compelling reasons to seal. See Docket No. 104-1 (Lick Decl. ¶ 4) (testifying that Scholastic keeps "its print run totals confidential because exposing this information could give competitors an advantage in planning their own publications or book lines, including in determining how many books to print or setting prices for the publications, as well as knowing the value of various publications to Scholastic"). Mr. Menzel's arguments to the contrary are not persuasive. For example, the print run information does not have to be a trade secret in order to qualify for sealing. Also, that Scholastic has stipulated to public disclosure of certain print runs in a different case does not mean that it should thereby be compelled to file all of its print run information publicly. In addition, while some of the print run information is old (e.g., from 2003), that is not true for all of the print run information and, in any event, even historical information can still be information not shared with competitors. Finally, the Court notes that knowing precise numbers for print runs is not of especial public significance. If Mr. Menzel prevails in this case -even just in part - that will be public information available to other photographers.
Accordingly, the motions to file under seal are granted. The Court now turns to the parties' motions for summary judgment.
Federal Rule of Civil Procedure 56 provides that a "court shall grant summary judgment [to a moving party] if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a). An issue of fact is genuine only if there is sufficient evidence for a reasonable jury to find for the nonmoving party. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248-49 (1986). "The mere existence of a scintilla of evidence . . . will be insufficient; there must be evidence on which the jury could reasonably find for the [nonmoving party]." Id. at 252. At the summary judgment stage, evidence must be viewed in the light most favorable to the nonmoving party and all justifiable inferences are to be drawn in the nonmovant's favor. See Id. at 255.
Where a defendant moves for summary judgment based on a claim for which the plaintiff bears the burden of proof, the defendant need only by pointing to the plaintiffs failure "to make a showing sufficient to establish the existence of an element essential to [the plaintiffs] case." Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986); see also Fontenot v. Upjohn Co., 780 F.2d 1190, 1194 (5th Cir. 1986) (stating that, "if the movant bears the burden of proof on an issue, either because he is the plaintiff or as a defendant he is asserting an affirmative defense, he must establish beyond peradventure all of the essential elements of the claim or defense to warrant judgment in his favor") (emphasis omitted).
Where a plaintiff moves for summary judgment on claims that it has brought (i.e., for which it has the burden of proof), it "must prove each element essential of the claims ... by undisputed facts." CaboDistrib. Co. v. Brady, 821 F.Supp. 601, 607 (N.D. Cal. 1992).
Where a defendant moves for summary judgment based on an affirmative defense (i.e., an issue on which it bears the burden of proof), the defendant must establish "all of the essential elements of the . . . defense to warrant judgment in [its] favor." Martin v. Alamo Cmty. College Dist, 353 F.3d 409, 412 (5th Cir. 2003) (internal quotation marks omitted; emphasis omitted); see also Clark v. Capital Credit & Collection Servs., 460 F.3d 1162, 1177 (9th Cir. 2006) (noting that a defendant bears the burden of proof at summary judgment with respect to an affirmative defense).
As an initial matter, the Court addresses the parties' dispute related to the burden of proof on Mr. Menzel's copyright claim.
According to Mr. Menzel, to prevail on his copyright claim, he need only prove (1) ownership of a valid copyright and (2) copying - nothing more. See, e.g., Feist Publ'ns, Inc. v. Rural Tel. Serv. Co., 499 U.S. 340, 361 (1991) (stating that, "[t]o establish infringement, two elements must be proven: (1) ownership of a valid copyright, and (2) copying of constituent elements of the work that are original"); Rentmeester v. Nike, Inc., 883 F.3d 1111, 1116-17 (9th Cir. 2018) (stating that "[t]o state a claim for copyright infringement, Rentmeester must plausibly allege two things: (1) that he owns a valid copyright in his photograph of Jordan, and (2) that Nike copied protected aspects of the photo's expression"). Mr. Menzel maintains that he has no obligation to prove that the copying was unauthorized - e.g., beyond the scope of a license. See, e.g., Muhammad-Ali v. Final Call, Inc., 832 F.3d 755, 760-61 (7th Cir. 2016) (stating that "a plaintiff is not required to prove that the defendant's copying was unauthorized in order to state a prima facie case of copyright infringement[;] [r]ather, the burden of proving that the copying was authorized lies with the defendant") (emphasis in original).
Scholastic takes a contrary position. According to Scholastic, Mr. Menzel admitted in his SAC that Scholastic did have licenses to use his photographs, see Hakopian v. Mukasey, 551 F.3d 843, 846 (9th Cir. 2008) (stating that "[allegations in a complaint are considered judicial admissions"); Am. Title Ins. Co. v. Lacelaw Corp., 861 F.2d 224, 227 (9th Cir. 1988) (stating that "[j]udicial admissions are formal admissions in the pleadings which have the effect of withdrawing a fact from issue and dispensing wholly with the need for proof of the fact[;] [f]actual assertions in pleadings and pretrial orders, unless amended, are considered judicial admissions conclusively binding on the party who made them"), and, therefore, Mr. Menzel has the burden of proving that any use of his photographs by Scholastic was beyond the scope of the licenses. In support, Scholastic cites MAI Systems Corp. v. Peak Computer, Inc., 991 F.2d 511 (9th Cir. 1993). There, the Ninth Circuit stated that, "[t]o prevail on a claim of copyright infringement, a plaintiff must prove ownership of a copyright and a copying of protectable expression beyond the scope of a license." Id. at 517 (internal quotation marks omitted); see also S.O.S., Inc. v. Payday, Inc., 886 F.2d 1081, 1085 (9th Cir. 1989) (noting the same); Netbula, LLC v. Bind View Dev. Corp., 516 F.Supp.2d 1137, 1151 (N.D. Cal. 2007) (stating that "'[a] copyright owner who grants a nonexclusive license to use his copyrighted material waives his right to sue the licensee for copyright infringement'" and, "[w]here the existence of a license is not in dispute, and only the scope of the license is at issue, the copyright owner bears the burden of proving that the defendant's copying was unauthorized"). Scholastic also points out that the Second Circuit has provided a rationale as to why this burden is placed on the copyright owner. Although "the possession of a license by an accused infringer traditionally has been characterized as an affirmative defense," that is because, "in most of the cases addressing the defense of license, the issue has been whether a license is held by the accused infringer." Bourne v. Walt Disney Co., 68 F.3d 621, 631 (2d Cir. 1995). "[I]n such cases, evidence of a license is readily available to the alleged licensee, [and so] it is sensible to place upon that party the burden of coming forward with evidence of a license." Id. But "in cases where only the scope of the license is at issue, the copyright owner bears the burden of proving that the defendant's copying was unauthorized" because the court essentially has before it a contract dispute and, "in an ordinary contract action, the party claiming a breach carries the burden of persuasion." Id.; cf. In re McGraw-Hill Global Educ. Holdings, LLC, 909 F.3d 48, 66 (3d Cir. 2018) (recognizing that, under Second Circuit law, when the "the scope of the license is at issue," then "unauthorized use is part of the plaintiffs prima facie case" - i.e., "where the plaintiff concedes the existence of a license, the burden may fall on the plaintiff, in the first instance, to demonstrate that the scope was exceeded"; but "[w]e have yet to consider that doctrine and have no cause to consider it today" because, in the case at hand, "[t]he licenses obtained by McGraw-Hill were not granted by the photographers directly but by Corbis as a sub-licensor" and, as the photographers "were not themselves directly privy to those licenses," they could not be "expect[ed] . . . to plead unauthorized use as part of a prima facie case") (emphasis in original and added).
Scholastic is correct. As a preliminary matter, the Court notes it has already held in the case at bar that, "because Mr. Menzel admitted in his complaint that license agreements do exist, he must include in his complaint allegations that, e.g., the licenses have been exceeded." Menzel v. Scholastic, Inc., No. 17-cv-05499-EMC, 2018 U.S. Dist. LEXIS 44833, at *8 n.l (N.D. Cal. Mar. 19, 2018) (noting that, where allegations pled in a complaint establish the existence of an affirmative defense, a court may dismiss).
In addition, the Ninth Circuit has held that where, as here, it is undisputed that there was a license agreement, "[t]o prevail on a claim of copyright infringement, a plaintiff must prove ownership of a copyright and a copying of protectable expression beyond the scope of [the] license'' MAI, 991 F.2d at 517 (internal quotation marks omitted; emphasis added); see also S.O.S., 886 F.2d at 1085 (noting the same). This Court is bound by the Ninth Circuit precedent.
At the hearing, Mr. Menzel took the position that MAI and S.O.S. are distinguishable. According to Mr. Menzel, in each case, the parties had a dispute about the scope of the license; given this circumstance, it was not unfair for the plaintiff to first bear the burden of proving what the actual scope of the license was. But contrary to what Mr. Menzel asserts, MAI did not involve a dispute about the scope of the license. Rather, the issue was whether the defendant had engaged in any "copying" under the Copyright Act. And in neither MAI nor S.O.S. did the Ninth Circuit suggest that its holding uniquely applies to a dispute about the scope of the license.
Finally, the Second Circuit case Bourne provides persuasive rationale as to why the plaintiff should have the burden of proving copying beyond the scope of a license where there is no dispute that a license exists and the only question is whether the defendant's use of copyrighted material falls within the scope of the existing license. "[W]here only the scope of the license is at issue, the copyright owner bears the burden of proving that the defendant's copying was unauthorized" as the court has essentially before it a contract dispute and, "in an ordinary contract action, the party claiming a breach carries the burden of persuasion." Bourne, 68 F.3d at 631.
The Court acknowledges the Seventh Circuit's Muhammad-Ali decision on which Mr. Menzel relies. See Muhammad-Ali, 832 F.3d at 760-61 (stating that "a plaintiff is not required to prove that the defendant's copying was unauthorized in order to state aprimafacie case of copyright infringement[;] [r]ather, the burden of proving that the copying was authorized lies with the defendant") (emphasis in original). However, as Scholastic points out, the case provides limited support as, there, "the plaintiff had not [pled] that a license had been issued and [exceeded]. Rather, the defendant contended that its distribution of lithographs depicting Louis Farrakhan had been permitted under an implied license." Def's Opp'n at 4 n.l. Moreover, the Seventh Circuit Muhammad-Ali decision makes the same point that the Second Circuit Bourne decision did - i.e., that usually a defendant has the burden of proving that a use was authorized (e.g., by a license) because it is difficult for a plaintiff to prove a negative (i.e., that the use was not authorized) and, "if there is evidence of a license, it is most likely to be in the possession of the purported licensee." Muhammad-Ali, 832 F.3d at 761 (citing Bourne). In this case, it is largely undisputed that there were licenses between Mr. Menzel and Scholastic.
Left with this predicament, Mr. Menzel argues that the instant case is distinguishable from the cases on which Scholastic relies because, here, there is no "disagreement about the scope of a license"; rather, the "licenses are clear on their face" and "Scholastic doesn't argue that there is any disagreement as to what the licenses permit, and what they do not." PL's Reply at 2-3. But Mr. Menzel misses the point. Bourne distinguished two situations: (1) where the existence of a license was in dispute and (2) where the existence of a license was not in dispute but there was a question as to whether the defendant's use had gone beyond the scope of the license. Bourne was not concerned about how clear the scope of the license was- i.e., that license terms might need to be interpreted - although admittedly some license terms did need interpretation in Bourne. Where the fact of the license is clear, the plaintiff must prove the defendant exceeded that license. Cf, e.g., S.O.S., 886 F.2d at 1088-89 ("concluding] that Payday exceeded the scope of its license" based on the "unambiguous" and "literal" language of the contract; remanding to the district court to determine "[w]hether [Payday's] acts, unshielded by any license, infringed S.O.S.'s copyright").
Accordingly, the Court holds that, to the extent that the existence of a license is not disputed, Mr. Menzel has the burden of proving of proving that Scholastic exceeded the scope of the license issued.
D. Main Affirmative Defenses
The Court addresses next the main affirmative defenses asserted by Scholastic.[1]
1. Time Bar/Damages Bar
In its second affirmative defense, Scholastic asserts that Mr. Menzel's copyright claim "is barred, in whole or in part, by the applicable three[-]year statute of limitations for a claim of copyright infringement (17 U.S.C. § 507(b)) and/or the three[-]year limitation on damages pursuant to Petrella v. Metro-Goldwyn-Mayer, Inc., 134 S.Ct. 1962, 1969 (2014)." Ans., 2d Affirm. Def (emphasis added). Because this case was filed back in September 2017, Scholastic is arguing that Mr. Menzel can sue only for infringements that took place from September 2014 and after, and, in any event, is limited to damages that were incurred for that period.
There is no dispute that the above defense is in fact an affirmative defense for which Scholastic bears the burden of proof. Both parties have moved for summary judgment on the affirmative defense.
i. Discovery Rule v. Injury Rule
Title 17 U.S.C. § 507(b) provides that "[n]o civil action shall be maintained under the provisions of this title [governing copyrights] unless it is commenced within three years after the claim accrued." 15 U.S.C. § 507(b).
In Polar Bear Products v. Timex Corp., 384 F.3d 700 (9th Cir. 2004), the Ninth Circuit explained that a copyright claim accrues "when the copyright holder 'has knowledge of a violation or is chargeable with such knowledge.'" Id. at 706. In other words, "the three-year clock begins upon discovery of the infringement." Id. Accordingly, "the statute of limitations does not prohibit recovery of damages incurred more than three years prior to the filing of suit if the copyright plaintiff was unaware of the infringement, and that lack of knowledge was reasonable under the circumstances." Id. The Ninth Circuit added that "[i]t makes little sense ... to bar damages recovery by copyright holders who have no knowledge of the infringement, particularly in a case ... in which much of the infringing material is in the control of the defendant." Id. at 706-07.
In the instant case, Mr. Menzel relies on Polar Bear's "discovery rule" to argue that his copyright claim is not time barred. More specifically, he argues that, even though many infringements took place before September 2014, he did not sue at that time because "he had no reason to believe Scholastic was infringing. It was only after he spoke with a colleague at a National Geographic convention - between 2 and 3 years ago - and retained counsel that he suspected Scholastic had been infringing his work." Pl.'s Opp'n at 14.
Scholastic recognizes Polar Bear's discovery rule but contends that it was effectively overruled by the Supreme Court's 2014 decision in Petrella.
In Petrella, the Supreme Court addressed "whether the equitable defense of laches . . . may bar relief on a copyright infringement claim brought within § 507(b)'s three-year limitations period." Petrella, 572 U.S. at 667 (emphasis added); see also Id. at 674-75 (noting that plaintiff "sought relief only for acts of infringement occurring" three years before she filed suit). The Court ultimately held that the defense may not bar relief because "courts are not at liberty to jettison Congress' judgment on the timeliness of suit." Id.
Given the specific question being addressed by Supreme Court - laches - Petrella is not on point. Scholastic argues nevertheless that there is language in Petrella indicating that the discovery rule has been supplanted by an injury rule (i.e., that a claim accrues at time of injury regardless of discovery). In particular:
• "A claim ordinarily accrues 'when [a] plaintiff has a complete and present cause of action.' In other words, the limitations period generally begins to run at the point when 'the plaintiff can file suit and obtain relief A copyright claim thus arises or 'accrue[s]' when an infringing act occurs." Id. at 670.
• "Although we have not passed on the question, nine Courts of Appeals have adopted, as an alternative to the incident of injury rule, a 'discovery rule,' which starts the limitations period when 'the plaintiff discovers, or with due diligence should have discovered, the injury that forms the basis for the claim.'" Id. at 670 n.4.
But the language from Petrella does not do away with the discovery rule. Instead, the Supreme Court recognized that it had not passed on the question of whether the discovery rule could serve as an alternative to the injury rule.[2] Absent a clear overruling by the Supreme Court, this Court remains bound by the discovery rule as established in Polar Bear. Cf. Day v. Apoliona, 496 F.3d 1027, 1031 (9th Cir. 2007) (noting that, '"[w]here intervening Supreme Court authority is clearly irreconcilable with our prior circuit authority [, ] ... a three judge panel of this court and district courts should consider themselves bound by the intervening higher authority and reject the prior opinion of this court as having been effectively overruled'"). Even the case cited by Scholastic, which states that "[s]ome language in Petrella does appear to embrace an injury-rule analysis," ultimately still applied the discovery rule. Yue v. MSC Software Corp., No. 15-cv-05526-PJH, 2016 U.S. Dist. LEXIS 94884, at *2 (N.D. Cal. July 20, 2016) (stating that, because the Supreme Court "did not directly 'pass on' the issue of whether the discovery rule was available to a plaintiff who was not aware of an earlier infringement, ... the Ninth Circuit's decision in Polar Bear Products remains binding precedent in this circuit").
ii. Application of Discovery Rule
Scholastic contends that, even if the Court does apply the discovery rule, Mr. Menzel's claims are still time barred. More specifically, Scholastic contends that, if all that Mr. Menzel has to prove for copyright infringement is (1) ownership and (2) copying (as he claims), then he "'discovered' ownership and use shortly after the invoices [i.e., licenses] were issued." Def's Mot. at 9.
This argument makes little sense. The question is not when Mr. Menzel knew or should have known that Scholastic was copying his photographs but rather when it was (allegedly) illegally copying them.
Scholastic does try to clarify the issue somewhat in its reply brief:
Plaintiff claims that he can both file suit and be granted summary judgment solely on the basis of a showing of ownership and use of his photographs (i.e., that he does not have any burden to show that the use was infringing). There is nothing confusing or wrong about holding him to this same position when it comes to determining the time of accrual of his claims for statute of limitations purposes.
Def.'s Reply at 6. But Scholastic's position is problematic given that, as discussed above, for purposes of the instant case, Mr. Menzel has to show that the copying exceeded the scope of the license.
The Court thus denies Scholastic's motion for summary judgment on the statute of limitations. Scholastic has not established the essential elements of its affirmative defense - i.e., did Mr. Menzel know or should he have known about the alleged infringements prior to September 2014?
As for Mr. Menzel's motion for summary judgment on the statute of limitations, it is granted. Mr. Menzel argued that there is no evidence to support Scholastic's argument that his copyright claims are time barred. Scholastic did not provide any such evidence of Mr. Menzel's earlier actual or constructive knowledge of the alleged infringements prior to 2014 (e.g., that information on print runs are public and that therefore Mr. Menzel should have known that a print run was exceeded on a license prior to September 2014).
b. Damages Bar
According to Scholastic, even if the Court does not construe Petrella in its favor on the statute of limitations, Petrella holds that, even if a claim is not time barred, a plaintiff is still limited to damages that were incurred within the three years prior to the plaintiffs filing suit.
There are several problems with Scholastic's position. First, Petrella is not on point because, in the case, the plaintiff never sought damages outside of the three-year period before the filing of the complaint. See Petrella, 572 U.S. at 674-75 (noting that the plaintiff filed suit on January 6, 2009, and "sought relief only for acts of infringement occurring on or after January 6, 2006").
Second, Scholastic isolates language used in Petrella from the broader context of the case. Scholastic focuses on the following language from Petrella: "As earlier observed, see supra, at 671-672 . . ., a successful plaintiff can gain retrospective relief only three years back from the time of filing suit. No recovery may be had for infringement in earlier years." Id. at 677 (emphasis added). But in pages 671-72, the Supreme Court was simply making its point that, for statute-of-limitations purposes, there is an injury rule for accrual: "[A] copyright claim . . . arises or 'accrue[s]' when an infringing act occurs." Id. at 671. Thus, the statement above from Petrella did not clearly create a damages bar independent of a time bar. The discovery rule and the ability to recover damages consistent with that rule was not at issue.
Third, because Petrella did not clearly create damages bar independent of the limitations bar, Polar Bear continues to be binding precedent on this Court, and, in Polar Bear, the Ninth Circuit made clear that a plaintiff can be awarded damages outside of the three-year period before the filing of his complaint.
In copyright litigation, the statute of limitations issue that often arises is that the plaintiff filed its copyright claim more than three years after it discovered or should have discovered infringement. Here, Timex makes a different, novel argument and asks us to rule that § 507(b) prohibits copyright plaintiffs from obtaining any damages resulting from infringement occurring more than three years before filing the copyright action, regardless of the date the plaintiff discovered the infringement. In Kling v. Hallmark Cards, Inc., 225 F.3d 1030, 1041-42 (9th Cir. 2000), we left for another day precisely this argument; that day is now upon us. We conclude that § 507(b) permits damages occurring outside of the three-year window, so long as the copyright owner did not discover - and reasonably could not have discovered - the infringement before the commencement of the three-year limitation period. Because Polar Bear did not discover Timex's infringement until within three years of filing suit, Polar Bear may recover damages for infringement that occurred outside of the three-year window.
Id. at 705-06 (emphasis added).
The cases on which Scholastic relies, see, e.g., Papazian v. Sony Music Entm't, No. 16-cv-07911 (RJS), 2017 U.S. Dist. LEXIS 164217 (S.D.N.Y. Sept. 28, 2017), are not persuasive in that (1) they do not do much other than quote Petrella and/or (2) they do not provide any real explanation as to why a plaintiff who, under the discovery rule, has a timely claim cannot get damages outside of the three-year period prior to the filing of his suit. Indeed, it is not even clear that the courts were asked to address this specific issue. Furthermore, as Mr. Menzel points out, there are post-Petrella cases that expressly reject Scholastic's position. See, e.g., PK Music Performance, Inc. v. Timberlake, No. 16-CV-1215 (VSB), 2018 U.S. Dist. LEXIS 169652 (S.D.N.Y. Sep. 30, 2018); Mitchell v. Capitol Records, LLC, 287 F.Supp.3d 673 (W.D. Ky. 2017).
Accordingly, as to the "damages bar" asserted by Scholastic, the Court denies summary judgment in favor of Scholastic and grants summary judgment in favor of Mr. Menzel.
2. Claims Arise Under Contract Law
In its fourth affirmative defense, Scholastic alleges that, "[t]o the extent [it] has breached the terms of any license agreement, Plaintiffs claims arise under contract law, not copyright law." Ans., 4th Affirm. Def Only Mr. Menzel has moved for summary judgment on this defense.
The backdrop for the defense is related to a distinction that courts have made between contract "conditions" and contract "covenants" when a plaintiff gives a license to the defendant to use its copyright. The Ninth Circuit has explained as follows:
"A copyright owner who grants a nonexclusive, limited license ordinarily waives the right to sue licensees for copyright infringement, and it may sue only for breach of contract." However, if the licensee acts outside the scope of the license, the licensor may sue for copyright infringement. Enforcing a copyright license "raises issues that lie at the intersection of copyright and contract law."
We refer to contractual terms that limit a license's scope as "conditions," the breach of which constitute copyright infringement. We refer to all other license terms as "covenants," the breach of which is actionable only under contract law. We distinguish between conditions and covenants according to state contract law, to the extent consistent with federal copyright law and policy.
MDY Indus., LLC v. Blizzard Entm't, Inc., 629 F.3d 928, 939 (9th Cir. 2010); see also Graham v. James, 144 F.3d 229, 237 (2d Cir. 1998) (noting that, "if the nature of the licensee's violation consists of a failure to satisfy a condition to the license . . . any use by the licensee is without authority from the licensor and may therefore[] constitute infringement of copyright") (internal quotation marks omitted).
In MDY, the Ninth Circuit gave the following example distinguishing conditions from covenants.
"[C]onsider a license in which the copyright owner grants a person the right to make one and only one copy of a book with the caveat that the licensee may not read the last ten pages. Obviously, a licensee who made a hundred copies of the book would be liable for copyright infringement because the copying would violate the Copyright Act's prohibition on reproduction and would exceed the scope of the license. Alternatively, if the licensee made a single copy of the book, but read the last ten pages, the only cause of action would be for breach of contract, because reading a book does not violate any right protected by copyright law."
Id. at 940 (quoting Storage Tech. Corp. v. Custom Hardware Eng'g & Consulting, Inc., 421 F.3d 1307, 1316 (Fed. Cir. 2005)). The MDY court confirmed this approach by making the following comment with respect to the facts of the case before it:
For instance, [Term of Use] § 4(D) forbids creation of derivative works based on [World of Warcraft] without Blizzard's [i.e., the game creator's] consent. A player who violates this prohibition would exceed the scope of her license and violate one of Blizzard's exclusive rights under the Copyright Act. In contrast, ToU § 4(C)(ii) prohibits a player's disruption of another player's game experience. A player might violate this prohibition while playing the game by harassing another player with unsolicited instant messages. Although this conduct may violate the contractual covenants with Blizzard, it would not violate any of Blizzard's exclusive rights of copyright.
Id. at 940-41.[3] But see Sohm v. Scholastic Inc., No. 16-CV-7098 (JPO), 2018 U.S. Dist. LEXIS 53490, at *34-35 (S.D.N.Y. Mar. 28, 2018) (concluding that a license term limiting print runs was a covenant and not a condition because, under New York contract law, a contract term that simply delineates acceptable and unacceptable behavior under a license (i.e., no condition created) is a covenant; license was given to Scholastic by Corbis, a third party to whom the plaintiff-photographer gave authority to issue licenses on his behalf). Thus, "for a licensee's violation of a contract to constitute copyright infringement, there must be a nexus between the condition and the licensor's exclusive rights of copyright." Id. (emphasis added).
In the instant case, Mr. Menzel alleges that Scholastic exceeded the terms of the license agreements by, e.g., exceeding print runs, going outside geographical restraints, and violating restrictions to the printed (as opposed to electronic) form. MDY is thus on point. See also Actuate Corp. v. Fid. Nat'l Info. Servs., No. C 14-02274 RS, 2014 U.S. Dist. LEXIS 117513, at *6 (N.D. Cal. Aug. 21, 2014) (stating that "courts in this circuit have recognized claims for copyright infringement where the licensee created or distributed copies in excess of explicit numeric conditions within the licensing agreement while rejecting such claims where the gravamen of the complaint was a failure to remit sufficient royalties"); Actuate, 2014 U.S. Dist. LEXIS 117513, at *8 (indicating that "form and geographic limitations" would be considered conditions). Moreover, tellingly, Scholastic has not identified any specific contract term that it believes should be construed as a covenant instead of a condition. Because it is Scholastic's burden to prove its affirmative defense, and not Mr. Menzel's, the Court grants Mr. Menzel's motion for summary judgment on the affirmative defense.
Scholastic argues still that there will be questions of fact as to whether contract terms are conditions or covenants, citing in particular Mr. Menzel's deposition. Scholastic relies on the following to argue it is a question of fact as to whether, e.g., a print run limitation is a condition or covenant.
A. ... I remember in grade school seeing all these little pamphlets and magazines that they would send around, and you know, I really trusted Scholastic.
Q. And you don't anymore?
A. I trust them less.
A. Because if they fall into the category of textbook publishing in general, print runs are overrun and they don't come back and ask for, you know, a renewed license. People tend to ask when they get caught and they are not proactive in knowing that their print run doubled and that they should go back to all the people that they licensed from and tell them that fact so that they could increase their fee a little bit.
Docket No. 113-2 (Rosenthal Decl., Ex. A) (Menzel Depo. at 100-01). But the deposition testimony weighs more in favor of Mr. Menzel rather than Scholastic - i.e., a "renewed license" with more money would be required because the original license was conditioned on compliance with the specific print run limitations.
3. Invalid and/or Unenforceable Copyright Registration
In the sixth affirmative defense, Scholastic asserts that "some or all. . . copyright registrations may be invalid and/or unenforceable." Ans., 6th Affirm. Def; see also 7 U.S.C. § 411(a) (providing that "no civil action for infringement of the copyright in any United States work shall be instituted until preregi strati on or registration of the copyright claim has been made in accordance with this title").
Only Mr. Menzel has moved for summary judgment on this defense.
Based on its opposition, Scholastic seems to make two arguments as to why certain copyright registrations are problematic. Each argument is addressed below, a. Copyright Registration VA 1-719-226
According to Scholastic, one problematic copyright registration is VA 1-719-226 (registered in October 2007). That registration apparently covers hundreds of images, including eight images at issue in this case. See Def's Opp'n at 11 (identifying rows from SAC that are covered by the registration VA 1-719-226; also stating that the "backup" for the copyright registration consists of "approximately fifty pages, each identifying over one hundred images that are purportedly registered").
Under the Copyright Act regulations, an applicant may ask for one registration - a "group registration" - to cover more than one photograph. The Copyright Office has a circular on "Multiple Works" (Circular No. 34) that addresses, inter alia, group registrations. It provides, inter alia, as follows:
When the Copyright Office issues a group registration, it prepares one certificate of registration for the entire group and assigns one registration number to that certificate. A registration for a group of unpublished works, a group of unpublished photographs, a group of published photographs, a group of contributions to periodicals, or a group of secure test items covers the copyrightable authorship in each work that has been included in the group, and each work is considered to be registered as a separate work. Similarly, a registration for a group of serials, newspapers, or newsletters covers each issue in the group, and each issue is considered to be registered as a separate work.
https://www.copyright.gov/circs/circ34.pdf(ast visited December 4, 2019).
In October 2007, the federal regulations specified as follows with respect to group registration of photographs:
Pursuant to the authority granted by 17 U.S.C. 408(c)(1), the Register of Copyrights will accept a single application (on Form VA), deposit and filing fee for registration of a group of photographs if the following conditions are met: [inter alia] (iii) The photographs in the group must have been published within the same calendar year.
37 C.F.R. § 202.3(b)(10)(iii) (version effective July 25, 2007, to July 1, 2008) (emphasis added).[4]
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;According to Scholastic, Mr. Menzel is not entitled to summary judgment on the affirmative defense of invalidity/unenforceability because there is a question of fact as to whether the photographs in the group covered by the registration were all published within the same calendar year. The registration on its face indicates that the date of publication is October 2007. See 17 U.S.C. &sect; 101 (defining "publication" as "the distribution of copies or phonorecords of a work to the public by sale or other transfer of ownership, or by rental, lease, or lending"). But, Scholastic notes, per Row 3 in the SAC, it got a license to use one photograph covered by the registration in 1998 - i.e., before the alleged date ...