Court Opinion

ID: 3048481
Source: CourtListenerOpinion
Date Created: 2015-10-13 23:24:12.699358+00
Date Added: 2024-06-11T11:49:17.756718
License: Public Domain

FOR PUBLICATION
  UNITED STATES COURT OF APPEALS
       FOR THE NINTH CIRCUIT

CHASE JARVIS; CHASE JARVIS INC., a     
Washington Corporation,
                                            No. 05-35609
              Plaintiffs-Appellants,
                v.                            D.C. No.
                                           CV-03-01265-TSZ
K2 INC., a Delaware Corporation;
                                              OPINION
K-2 CORPORATION,
            Defendants-Appellees.
                                       
        Appeal from the United States District Court
          for the Western District of Washington
         Thomas S. Zilly, District Judge, Presiding

                  Argued and Submitted
          February 7, 2007—Seattle, Washington

                    Filed April 30, 2007

     Before: Robert R. Beezer, Raymond C. Fisher and
            Richard C. Tallman, Circuit Judges.

                  Opinion by Judge Fisher

                            4733
4736                   JARVIS v. K2 INC.

                         COUNSEL

Katherine Hendricks (argued) and J. Bowman Neely, Hen-
dricks & Lewis, Seattle, Washington, for the plaintiffs-
appellants.

Shannon L. McDougald (argued), Seattle, Washington, and
Jennifer Bell, Ryan McBrayer and Matthew Diggs, Perkins
Coie, LLP, Seattle, Washington, for the defendants-appellees.

                         OPINION

FISHER, Circuit Judge:

   Chase Jarvis is a professional photographer who created
several thousand photographic slides over a three-year period
for K2, Inc. (“K2”), a maker of outdoor sporting goods.
Unfortunately, this relationship eventually soured. Jarvis sued
K2, alleging that it infringed his copyrights in his photo-
                           JARVIS v. K2 INC.                        4737
graphic images, lost many of the slides that he delivered and
repeatedly failed to credit him when it used his images. The
district court agreed that K2 was liable under each of these
theories and awarded damages to Jarvis. However, the district
court found that 24 of Jarvis’ images — contained in four K2
collage advertisements that combined Jarvis’ images with
other images and graphics — were not infringed because the
ads were covered by the collective works privilege of 17
U.S.C. § 201(c).1 Jarvis now appeals the district court’s dam-
ages awards and its ruling as to the collage ads’ privileged
status.

   We hold that the district court did not clearly err in any of
its damages calculations. It employed reasonable estimates of
the market value of the infringed images as well as the busi-
ness lost by Jarvis because of the lost images and failures to
credit him. We do not agree with the district court, however,
that the 24 images in the collage ads were privileged under
§ 201(c). The collage ads were derivative rather than collec-
tive works because they transformed Jarvis’ original images
into new promotional posters.2 The collective works privilege
therefore did not apply to the ads, and their online display
after K2’s term of use had expired infringed Jarvis’ copy-
rights in the underlying images. Accordingly, we reverse the
district court’s ruling as to § 201(c) and remand for determi-
nations of willfulness, actual and statutory damages and attor-
ney’s fees with respect to the collage ads.

                          I.   BACKGROUND

A.    Factual History

  Jarvis is a professional photographer who specializes in
outdoor sports images. K2 is a corporation that sells outdoor
  1
    Unless otherwise noted, all statutory citations in this opinion are to
Title 17 of the United States Code.
  2
    The collage ads are appended to this opinion as Appendix A.
4738                       JARVIS v. K2 INC.
sporting goods such as skis, snowboards, skates and bikes.
Jarvis and K2 entered into five separate agreements from
1999 to 2002, pursuant to which Jarvis took photographs for
K2 and sent it the resulting slides in exchange for compensa-
tion. Each delivery of slides was accompanied by a delivery
memorandum that, among other things, stated that “[l]oss or
damage of any image will result in a $1,500 fee per image, as
set forth by industry standards.”

   Three of the five agreements between Jarvis and K2 were
oral. Of greater relevance here, two agreements were written
by Jarvis and entered into, respectively, on October 6, 2000
(“2000 Agreement”) and December 13, 2001 (“2001 Agree-
ment”). Both of these agreements authorized K2 to “publish
images” provided by Jarvis in K2’s “brochures, print adver-
tisements, trade show display booths, posters, and electroni-
cally for the web so as to market [its] business.” All uses of
Jarvis’ images had to include an attribution credit. K2’s
“photo use rights” in the 2000 Agreement images were to “ex-
tend through the 2001-02 ski year or one year from [the
images’] delivery date,” while its rights in the 2001 Agree-
ment images were to last “for the 2002-03 ski season, ending
in May 2003.”3 There was an integration clause in both agree-
ments stating, “This Agreement constitutes the entire agree-
ment of the parties as to the subject matter hereto.” Jarvis
delivered 2,516 slides to K2 and received $10,000 under the
2000 Agreement, and delivered 1,210 slides and received
$7,200 under the 2001 Agreement.

   In total, Jarvis provided 4,147 slides to K2, the vast major-
ity of them pursuant to the 2000 and 2001 Agreements. K2
lost 396 of these slides and hence was unable to return them
to Jarvis. K2 also failed to provide a photo credit to Jarvis in
105 images that it used, and miscredited one of his images to
  3
    The alternative proviso in the 2000 Agreement that K2’s rights to use
Jarvis’ images were to last “for one year from date of delivery” is immate-
rial to our decision.
                        JARVIS v. K2 INC.                     4739
another photographer. Finally, 82 of Jarvis’ images were used
by K2 after the underlying licenses had expired or by third
parties to whom K2 had improperly provided the images.
Twenty-four of the 82 images were incorporated into four
“collage” advertisements that were initially published as mag-
azine inserts during the time period the 2001 Agreement
authorized K2 to use the images. The ads combined edited
versions of Jarvis’ images with other images, marketing
graphics and promotional slogans. After the contractual term
limit for using Jarvis’ images had expired, K2 scanned the
collage ads and displayed them on its website.

B.    Procedural History

   Jarvis filed his action against K2 in June 2003. The district
court granted partial summary judgment against K2 on Jarvis’
copyright infringement, breach of contract and conversion
claims in September 2004. The court later bifurcated Jarvis’
claims, ordering the Lanham Act and damages issues to pro-
ceed to trial but staying the vicarious copyright infringement,
breach of contract and conversion claims. Upon conclusion of
a bench trial in March 2005, the court entered comprehensive
findings of fact and conclusions of law. Although the court
ruled in Jarvis’ favor in many respects and awarded him dam-
ages, Jarvis takes issue with the court’s ruling as to the collec-
tive works privilege as well as its determination of damages.

   The district court’s award of damages for the 396 unre-
turned slides totaled $199,000 ($500 each for the 395 uniden-
tified slides and $1,500 for one slide identified as having been
created for K2 Bike). Damages for the 105 failures to credit
and one miscredit totaled $11,400, based on a rate of $50 per
failure for online use, $200 per failure for print ads and $300
per failure for media use. And damages for 58 infringements
of Jarvis’ copyrights totaled $40,107, based largely on a fair
market value of $461 each for images used online.4
  4
   As noted above, 82 images were used by K2 after its licenses had
expired or by third parties to whom K2 had improperly provided the
4740                      JARVIS v. K2 INC.
   The district court’s damages awards were premised on sev-
eral legal and factual determinations, two of which are partic-
ularly relevant here. First, the court found that the 2000 and
2001 Agreements were fully integrated contracts, and that Jar-
vis’ delivery memos specifying a $1,500 liquidated damages
amount for lost or damaged slides were simply proposed con-
tract modifications that K2 never accepted. Second, the court
ruled that K2’s collage ads — which contained 24 images that
would otherwise have infringed Jarvis’ copyrights — consti-
tuted collective works and thus were privileged under
§ 201(c). According to the court, the time limits for usage
specified in the Agreements did not obviate the rights con-
ferred by § 201(c), and the transfer of the ads from print to
electronic form did not transform them into unprotected new
works. Importantly, by finding the ads privileged under
§ 201(c), the court negated the effect of Jarvis’ registration of
his copyrights in some of the 24 images in the collage ads
before K2’s alleged infringement. Otherwise, Jarvis could
have elected statutory damages and potentially received attor-
ney’s fees for those infringements.

  Judgment was entered in May 2005, and Jarvis timely
appealed.

                    II.   STANDARD OF REVIEW

   The district court’s findings of fact are reviewed for clear
error whereas its conclusions of law are reviewed de novo.
See Zivkovic v. S. Cal. Edison Co., 302 F.3d 1080, 1088 (9th
Cir. 2002). Actual damages awards are reviewed for clear
error. See Frank Music Corp. v. Metro-Goldwyn-Mayer, Inc.,
772 F.2d 505, 513 (9th Cir. 1985). Whether a contract is inte-

images. However, the court found that 24 of these images that were used
in the collage ads were not infringements because the ads were privileged
under § 201(c). The infringement damages were for the remaining 58
images.
                        JARVIS v. K2 INC.                   4741
grated is a factual determination that we review for substantial
error. See Sierra Diesel Injection Serv., Inc. v. Burroughs
Corp., 890 F.2d 108, 112 (9th Cir. 1989).

                       III.   DISCUSSION

A.     The Collage Advertisements

   Jarvis contends that the 2001 Agreement, which applied to
all the images in the collage ads, did not permit the images’
use by K2 in any capacity after May 2003. He also argues that
the district court erred in ruling that K2’s collage ads were
collective works protected by § 201(c) and hence not infringe-
ments of Jarvis’ copyrights. We agree with Jarvis on both
counts, because the 2001 Agreement explicitly limited the
term of use of Jarvis’ images and because the collage ads
were derivative works not protected by § 201(c). We do not
reach Jarvis’ other arguments for why the collective works
privilege did not apply to the collage ads, namely that the ads
were publicly displayed when they were posted on K2’s web-
site, that the ads were new works rather than revisions of the
original magazine inserts and that § 201(c) had been circum-
vented by the 2001 Agreement. Accordingly, we reverse the
district court’s ruling that the collage ads were privileged col-
lective works and remand for determinations of K2’s willful-
ness, statutory and actual damages and attorney’s fees.

  1.    The 2001 Agreement’s Term Limit on Use

   [1] The 2001 Agreement authorized K2 to “publish” Jarvis’
images in media including K2’s “brochures, print advertise-
ments . . . posters, and electronically for the web so as to mar-
ket [its] business.” K2 therefore acted within its rights when
it first created the collage ads and published them in the form
of magazine inserts. K2 also would not have breached the
Agreement had it scanned the ads and placed them online dur-
ing the time period authorized by the contract. These uses
were (or would have been) examples of the “publi[cation]” in
4742                    JARVIS v. K2 INC.
“posters” and “electronically for the web” contemplated by
the Agreement.

   [2] However, the 2001 Agreement also contained language
that explicitly limited the time period during which K2 could
use Jarvis’ images. The “Usage” section of the contract speci-
fied that K2’s rights were for “2002-2003, ending May 2003.”
Analogously, the “Term” section stated that K2’s “photo
usage rights apply for the 2002-03 ski season, ending in May
2003.” This language plainly barred any use by K2 of Jarvis’
images after May 2003. The usage term appeared twice in the
contract, indicating its significance to the parties and rebutting
any claim of inadequate notice. Moreover, the first statement
of the term limit came directly after K2’s photo use rights
were described, while the second statement was located in a
section labeled “Term” and referred specifically to K2’s
“photo usage rights.” Given the Agreement’s phrasing and
structure, we conclude that the parties agreed that K2 would
not use Jarvis’ images in any capacity after May 2003. Cf. 1
Melville B. Nimmer & David Nimmer, Nimmer on Copyright
§ 3.07[B] (2005) [hereinafter Nimmer on Copyright] (“[I]f
consent to use the underlying material is limited in time, then
the owner of the derivative work may not exploit the underly-
ing material beyond the time limit.”). K2 notably fails to
argue to the contrary, thus apparently conceding that its scan-
ning and online display of the collage ads after May 2003
were not authorized by the Agreement.

  2.   Derivative Versus Collective Works

   Rather than claim that its post-May 2003 use of the collage
ads was permitted by the 2001 Agreement itself, K2 relies on
the collective works privilege of § 201(c). In relevant part,
§ 201(c) provides that, “[i]n the absence of an express transfer
of the copyright or of any rights under it, the owner of copy-
right in the collective work is presumed to have acquired only
the privilege of reproducing and distributing the contribution
as part of that particular collective work, any revision of that
                             JARVIS v. K2 INC.                             4743
collective work, and any later collective work in the same
series.” K2 contends — and the district court agreed — that
the collage ads were collective works and that even though
the Agreement’s usage term had expired, K2’s scanning and
online display of the ads were permissible uses under
§ 201(c). We disagree, because the ads were not collective
works and thus not eligible for protection under § 201(c).5

   [3] By its own terms, § 201(c) protects only collective
works. “[T]he owner of copyright in the collective work is
presumed to have acquired” certain rights. Id. (emphasis
added); see also H.R. Rep. No. 94-1476, at 122 (1976), as
reprinted in 1976 U.S.C.C.A.N. 5659, 5737 [hereinafter
House Report] (referencing within section on § 201(c) the
definition of “collective work” in § 101 and stating that
§ 201(c) “deals with the troublesome problem of ownership of
copyright in contributions to collective works”). Collective
and derivative works are both defined in § 101:

        A “collective work” is a work, such as a periodical
     issue, anthology, or encyclopedia, in which a number
     of contributions, constituting separate and indepen-
     dent works in themselves, are assembled into a col-
     lective whole.

         ....
   5
     K2 asserts that Jarvis waived his derivative works argument because he
did not raise it in the district court. However, as Jarvis points out, he had
no reason to make the argument during trial because K2 did not assert the
§ 201(c) privilege until its closing argument. Furthermore, the district
court explicitly found that the ads constituted collective works and the
record is well-developed on this point. See A-1 Ambulance Serv., Inc. v.
County of Monterey, 90 F.3d 333, 338 (9th Cir. 1996) (“Generally, in
order for an argument to be considered on appeal, the argument must have
been raised sufficiently for the trial court to rule on it.”). At base, the ques-
tion of whether the ads are derivative or a collective work is a mixed ques-
tion of law and fact, and the relevant facts are clear and the parties have
thoroughly briefed the issue.
4744                    JARVIS v. K2 INC.
       A “derivative work” is a work based upon one or
    more preexisting works, such as a translation, musi-
    cal arrangement . . . art reproduction, abridgement,
    condensation, or any other form in which a work
    may be recast, transformed, or adapted. A work
    consisting of editorial revisions, annotations, elabo-
    rations, or other modifications which, as a whole,
    represent an original work of authorship, is a “deriv-
    ative work.”

Id. (emphasis added); see also id. (defining a “compilation,”
of which collective works are a subcategory, as “a work
formed by the collection and assembling of preexisting mate-
rials . . . that are selected, coordinated, or arranged in such a
way that the resulting work as a whole constitutes an original
work of authorship”); House Report at 122 (“[T]here is a
basic distinction between a ‘joint work’ [by multiple authors],
where the separate elements merge into a unified whole, and
a ‘collective work,’ where they remain unintegrated and dis-
parate.”) (emphasis added); 1 Nimmer on Copyright § 3.02
(“[T]he originality called for in a collective work consists of
the collection and assembling of pre-existing works, while
derivative work originality lies in the manner in which a pre-
existing work is transformed . . . .”).

   [4] Under these statutory definitions, somewhat clarified by
the legislative history, the collage ads were derivative rather
than collective works. In accordance with his usual practice,
Jarvis delivered all of his images to K2 in the form of identi-
cal square slides. The collage ads did not merely compile
these slides as an album might, or as Jarvis’ own website
does. See Chase Jarvis Portfolio, http://www.chasejarvis.com/
portfolio.html. To the contrary, the ads shrank, expanded, dis-
torted, overlaid and otherwise edited the original images,
while also combining them with photos taken by other pho-
tographers, additional graphics, the K2 logo and marketing
slogans. In the “SP5” ad, for example, Jarvis’ six photos are
of all different shapes and sizes, one of them has a drawing
                       JARVIS v. K2 INC.                   4745
of a falling skier superimposed, there are at least six photos
not taken by Jarvis in the arrangement and K2’s logo and the
slogan “Are You Listening” are prominently displayed. Simi-
larly, in the “FT10” ad, seven of Jarvis’ photos are arranged
in trapezoidal wooden frames of different sizes along with
more than a dozen other photos, and the words “Factory
Team: Forty Years in the Making” appear in the upper right-
hand section of the ad. The two remaining collage ads, “SP6”
and “FT11,” are strikingly similar, respectively, to the SP5
and FT10 ads; the SP6 ad is largely a vertically aligned ver-
sion of the SP5 ad while the FT11 ad is largely a black-and-
white version of the FT10 ad. See Appendix A.

   [5] The changes to which K2 subjected Jarvis’ images are
examples of the “recast[ing], transform[ing], or adapt[ing]”
and “editorial revisions, annotations, elaborations, or other
modifications” that define derivative works. See § 101. Jarvis
delivered the images to K2 in one form, and they were subse-
quently used in the collage ads in a quite different (though
still recognizable) form. The ads did not simply compile or
collect Jarvis’ images, but rather altered them in various ways
and fused them with other images and artistic elements into
new works that were based on — i.e., derivative of — Jarvis’
original images. These circumstances are somewhat similar to
Mirage Editions, Inc. v. Albuquerque A.R.T. Co., 856 F.2d
1341 (9th Cir. 1988), in which the appellant purchased art
prints, encased them in a black plastic border, glued them
onto ceramic tiles and then sold the resulting products. We
held that “[b]y borrowing and mounting the preexisting, copy-
righted individual art images . . . appellant has prepared a
derivative work and infringed the subject copyrights.” Id. at
1343. Even more analogous is Greenberg v. Nat’l Geographic
Soc’y, 244 F.3d 1267 (11th Cir. 2001), in which the National
Geographical Society’s animated sequence of magazine cover
images “repositioned Greenberg’s photograph from a horizon-
tal representation of the diver into a vertical presentation of
that diver.” Id. at 1274. According to the court, “[m]anifestly,
this . . . arrangement of preexisting copyrighted photographs
4746                        JARVIS v. K2 INC.
constitutes . . . with reference to the Greenberg photograph,
a derivative work.” Id.

   K2 fails to offer any case law in support of its position that
the collage ads were collective works. It does argue that the
collage ads “in no way transformed or altered [Jarvis’] preex-
isting photographs.” However, even a cursory look at the ads
— which “transformed or altered” Jarvis’ photographs in a
variety of ways — demonstrates the weakness of this claim.
Counsel for K2 also emphasized during oral argument that the
collage ads that appeared on K2’s website were identical to
the original magazine inserts. But this fact is irrelevant to our
inquiry into the ads’ nature. A derivative work remains deriv-
ative when it is scanned and placed online, just as a collective
work would remain collective if it were transferred from one
medium to another.

   [6] We thus hold that the four collage ads were all deriva-
tive rather than collective works. Accordingly, when K2
scanned and placed the ads online after the usage period spec-
ified in the 2001 Agreement had terminated, the collective
works privilege did not rescue them from infringement.6

  3.    Remand

   [7] Our holding as to the inapplicability of § 201(c) means
that K2 infringed Jarvis’ copyrights in the 24 images of his
that were contained in the four collage ads. This increases the
total number of images that K2 infringed from 58 to 82. We
  6
    K2 is undisputably the owner of a copyright in the collage ads, which
were creative works derived from copyrightable underlying material (Jar-
vis’ photos). K2 could thus sue a third party that reproduced the ads even
though it has been unable since May 2003 to take advantage of the ads
itself. See 1 Nimmer on Copyright § 3.07[B] (“[E]ven if the owner of the
derivative work is unable to exploit it because the new material is inextri-
cably intermingled with the underlying material, still any unauthorized use
by a third party of such new material will infringe the derivative work
copyright.”).
                        JARVIS v. K2 INC.                    4747
remand to the district court to determine what damages are
appropriate for the 24 additional instances of copyright
infringement. We also note that, unlike the other 58 infringed
images, some of the images in the collage ads appear to have
been registered by Jarvis before their infringement by K2
commenced. Jarvis may be entitled to statutory damages and
attorney’s fees under §§ 412, 504(c)(1) for these images, and
he may attempt to show that K2’s infringement was willful
under § 504(c)(2).

   On remand, the district court should determine which of the
24 images in the collage ads Jarvis registered and when he did
so. The court should consider Jarvis’ argument, which we do
not address here, that he registered all 24 of the images (rather
than the 16 the court originally designated). The court should
then determine which of the images were registered before
their infringement commenced, and address the issues of
attorney’s fees and statutory damages for those images
(assuming Jarvis elects that option) and actual damages for
the remainder of the 24 images. Finally, the court should
determine whether K2 willfully infringed any of the images
whose infringement began after their registration.

B.     Damages

   Jarvis argues that all of the district court’s damages calcula-
tions were flawed. We disagree and uphold the damages that
the court awarded to Jarvis because of K2’s copyright
infringements, losses of images and failures to credit Jarvis.
All three of these awards were based on reasonable estimates
of loss and thus were not clearly erroneous.

  1.    Copyright Infringement

   The district court awarded Jarvis $40,107 in actual dam-
ages for the 58 images whose copyrights K2 infringed. This
figure was based largely on a fair market value estimate of
$461 each for images used online, i.e., half the average mar-
4748                       JARVIS v. K2 INC.
ket value of the images used in print. Jarvis complains that in
coming up with its damages award, the court erroneously
relied on royalty-free rather than rights-managed rates and
annual rather than monthly prices for use.7

   [8] Actual damages for copyright infringement are gov-
erned by § 504(b), which states that “[t]he copyright owner is
entitled to recover the actual damages suffered by him or her
as a result of the infringement,” but does not elaborate on how
the damages are to be calculated. We have held that in situa-
tions where the infringer could have bargained with the copy-
right owner to purchase the right to use the work, actual
damages are “ ‘what a willing buyer would have been reason-
ably required to pay to a willing seller for plaintiffs’ work.’ ”
Frank Music Corp., 772 F.2d at 512 (quoting Sid & Marty
Krofft Television Prods., Inc. v. McDonald’s Corp., 562 F.2d
1157, 1174 (9th Cir. 1977)). Excessively speculative claims
of damages are to be rejected, id. at 513, and the “market
value approach is an objective, not a subjective, analysis,”
Mackie v. Rieser, 296 F.3d 909, 917 (9th Cir. 2002); see also
On Davis v. The Gap, Inc., 246 F.3d 152, 166 (2d Cir. 2001)
(“The question is not what the owner would have charged, but
rather what is the fair market value.”).

   [9] Jarvis’ actual damages argument fails because the dis-
trict court properly based its calculations on objective consid-
erations of market value. The court’s findings show that it
examined at least six estimates of the fair market value of Jar-
vis’ infringed images: (1) the testimony of Jarvis’ expert wit-
ness Richard Weisgrau that, assuming rights-managed
monthly rates, Jarvis’ images were worth $1,500 to $5,000
  7
    Rights-managed images are typically licensed for a specific use and a
limited duration, with the price varying based on the intended use.
Royalty-free images, in contrast, allow a wider range of uses for a single
initial fee. Rights-managed images are typically higher quality and more
expensive than royalty-free images and allow exclusive use by the licen-
sor.
                             JARVIS v. K2 INC.                            4749
each; (2) the testimony of a senior K2 executive that he would
pay $5-20 for an image to be used online and $500-750 for
a glossy high-definition image for a print advertisement or
magazine cover; (3) Jarvis’ compensation of $10,000 for the
2,516 images he delivered to K2 under the 2000 Agreement;
(4) Jarvis’ compensation of $7,200 for the 1,210 images he
delivered to K2 under the 2001 Agreement; (5) Jarvis’ com-
pensation of $3,000 for seven images he delivered to K2 in
2001; and (6) Jarvis’ settlement offer of $15,520 for all
images infringed by K2. Although these estimates informed
the district court’s calculations, it ultimately cited Jarvis’ own
damages figures for images used in print and then halved the
average of these figures to determine the damages per online
use. The court based its halving on its finding that “the fair
market value of an online use is less than the average fair
market value of a print use.” This methodology produced a
damages figure of $461 per online use, a figure below Weis-
grau’s estimate but well within the range of the other five esti-
mates.

   [10] We believe that the district court’s calculations were
entirely consistent with § 504(b) and the case law. The court’s
inquiry was objective, avoiding references to what Jarvis
thought he should have earned or wished he had charged. The
court also examined the financial perspectives of both the
willing buyer (in the form of evidence about what K2 typi-
cally pays for images and what it specifically paid Jarvis in
its prior dealings with him) and the willing seller (in the form
of Jarvis’ earlier deals with K2 and his revenue from image
databanks) at the hypothetical time of sale.8 Furthermore, the
  8
    Jarvis claims that the district court ignored the willing seller half of the
equation. However, four of the estimates cited by the court involved Jarvis
as seller or would-be seller. Jarvis also argues that the 2000 and 2001
Agreements covered photographic shoots rather than the granting of
licenses. This is incorrect because the contracts also set forth in consider-
able detail the terms of K2’s use of Jarvis’ images. Moreover, Jarvis him-
self states in his briefing that “[t]he subject matter” of the Agreements
“was personal services and a license” (emphasis added).
4750                        JARVIS v. K2 INC.
court gave logical reasons why it discounted Weisgrau’s testi-
mony; according to the court, he “relied almost exclusively on
the Getty website for his figures and unrealistically used a
monthly licensing fee as the basis for his valuations.”9 Finally,
the figure the court adopted was near the center of the range
supported by the evidence. Cf. Duckett v. Godinez, 109 F.3d
533, 535 (9th Cir. 1997) (“ ‘Where there are two permissible
views of the evidence, the factfinder’s choice between them
cannot be clearly erroneous.’ ”) (quoting Anderson v. Besse-
mer City, 470 U.S. 564, 574 (1985)).

   Jarvis argues, in essence, that it was clear error for the dis-
trict court not to adopt Weisgrau’s assumptions of rights-
managed fees paid monthly. But, as the court found, monthly
prices are not particularly relevant since the annual price is
only about twice as high; “any reasonable business person” —
and particularly a company that updates its web content only
once a year — “would pay to license the image[s] on a yearly
basis rather than a monthly basis.” Jarvis’ policy argument
about deterring infringers by charging them the higher price
is also unsupported by the statutory text or by the case law’s
emphasis on fair market value at the time of the infringement.
Making the plaintiff whole is plainly different from punishing
the infringer by charging the highest possible rate for the
infringement. See Stehrenberger v. R.J. Reynolds Tobacco
Holdings, Inc., 335 F. Supp. 2d 466, 468 (S.D.N.Y. 2004)
   9
     Weisgrau’s $1,500 to $5,000 estimate also did not represent “what a
willing buyer would have been reasonably required to pay to a willing
seller,” Frank Music Corp., 772 F.2d at 512 (internal quotation omitted),
but rather what K2 should have paid Jarvis after its infringement. As
Weisgrau testified, his estimate was based on the likely outcome if K2
“tried to make a deal after [it had] infringed” and Jarvis saw that a photo
of his “was a proprietary image, that it had their logo, that it had a greater
value for them.” In that case, Jarvis and K2 “would have negotiated a
higher fee.” This legally defective emphasis on post-infringement dam-
ages rather than the pre-infringement fair market value of Jarvis’ images
provided the district court with another compelling reason to discount
Weisgrau’s testimony.
                        JARVIS v. K2 INC.                    4751
(criticizing effort to inflate actual damages and stating that the
effort “represents concepts of punishment for infringement,
deterrence of similar behavior in the future, and recompense
for the costs and effort of litigation” that “form no part of
‘actual damages’ under the statute”).

   The rights-managed versus royalty-free issue is more diffi-
cult, but we need not resolve it here for two reasons. First, the
district court did not clearly embrace royalty-free pricing in
its decision. The district court did opine that such pricing is
more appropriate for assessing online uses of images, but the
court’s actual methodology was to consider the various esti-
mates of the images’ worth, to accept Jarvis’ figures for the
fair market value of the print uses and then to halve these fig-
ures in order to calculate damages for the online uses. The
court did not cite any evidence about royalty-free prices, let
alone use such evidence in its own calculations. Second, the
court’s $461 figure for online uses was consistent with both
royalty-free and rights-managed pricing. Weisgrau testified
that one-year rights-managed licenses for Jarvis’ images cost
$440 to $615 on the open market, and the nine rights-
managed licenses that Jarvis actually sold for online use had
prices ranging from $41.19 to $595.

   [11] We therefore hold that the district court’s actual dam-
ages award for K2’s copyright infringement was not clearly
erroneous. However, we take no position on whether royalty-
free or rights-based pricing is the appropriate method for
determining actual damages in this and other similar cases,
and we do not approve any implied endorsement of royalty-
free pricing by the district court.

  2.   Unreturned Images

  Jarvis also challenges the district court’s $199,000 damages
award for the 396 images that K2 failed to return to him. This
award was based on a $500 loss estimate for each of the 395
unidentified slides and a $1,500 loss estimate for one slide
4752                   JARVIS v. K2 INC.
that was the subject of correspondence between Jarvis and a
K2 Bike employee. Jarvis argues that the 2000 and 2001
Agreements were only partially integrated, not, as the district
court found, fully integrated. As a result, Jarvis contends that
the provision in his delivery memos stating that K2 must
reimburse him $1,500 for each lost slide is contractually bind-
ing on K2.

   [12] Whether a contract is integrated is a factual question
reviewable for substantial error. See Sierra Diesel Injection
Serv., 890 F.2d at 112. The trial court “must hear all relevant,
extrinsic evidence, oral or written,” and determine whether
the parties intended the contract to be the “final and complete
expression of the parties’ agreement.” Emrich v. Connell, 716
P.2d 863, 866 (Wash. 1986). If a contract is fully integrated,
it may be modified only by a writing signed by both parties.
Wash. Rev. Code § 62A.2-209(2).

   Here the district court specifically found that the 2000 and
2001 Agreements were “fully integrated contract[s] that could
not be modified except by a writing signed by both parties.”
In making this finding, the court emphasized the language of
the contracts, the last clause of which stated that “[t]his
Agreement constitutes the entire agreement of the parties as
to the subject matter hereof. This Agreement may only be
modified in writing signed by the parties hereto” (emphasis
added). The integration clause is not dispositive but it cer-
tainly suggests that Jarvis and K2 intended the contracts to be
fully integrated. See M.A. Mortenson Co. v. Timberline Soft-
ware Corp., 998 P.2d 305, 311 (Wash. 2000) (“The presence
of an integration clause strongly supports a conclusion that
the parties’ agreement was fully integrated.”) (internal quota-
tion omitted). The court also heard Jarvis’ testimony that he
never discussed the $1,500 reimbursement figure with anyone
at K2 before signing the 2000 Agreement. This statement
indicates that there was no separate agreement about lost
slides before the 2000 Agreement was signed, thus bolstering
                        JARVIS v. K2 INC.                   4753
the district court’s conclusion that the contracts were fully
integrated.

   Jarvis’ strongest argument to the contrary is a subclause in
both Agreements stating that “[f]or additional terms and con-
ditions standard to the photographic image industry consult
Jarvis, licensor.” The district court explicitly cited this sub-
clause and concluded that the contracts were fully integrated
despite it — a determination that is entitled to some weight
given the factual nature of the integration inquiry. Moreover,
the subclause neither stated what the “additional terms and
conditions” were nor indicated that the parties planned to
reach a binding agreement about them. That the subclause
directed K2 to consult Jarvis about these industry standards
— apparently, at its discretion and without any requirement
that it agree to them — does not mean that the parties
intended their written contracts to be anything less than the
“final and complete expression of [their] agreement.” Emrich,
716 P.2d at 866.

   [13] Jarvis also emphasizes the words “as to the subject
matter hereof” in the integration clause. But there is no evi-
dence that, as he contends, the parties understood this term as
limiting the Agreements’ scope to “personal services and a
license” and thus excluding the slides that were central to the
entire contractual arrangement. This contention is particularly
implausible given the Agreements’ references to “film gener-
ated” from Jarvis’ shoots and “all viewable renditions fur-
nished by Chase Jarvis . . . whether captured or stored in
photographic, magnetic, optical, or any other medium.”
Finally, Jarvis points out that the Agreements did not mention
the slides’ delivery, the penalty for losing them or all the pho-
tographic shoots that Jarvis would carry out. However, the
Agreements did refer to the “date of delivery” of the slides as
well as to some of Jarvis’ shoots. Moreover, that a contract
does not cover all issues that eventually arise between two
parties does not mean that the parties did not intend the con-
tract to be fully integrated when they signed it. Taking into
4754                      JARVIS v. K2 INC.
account the relevant record, we agree with the district court
that the best reading of the Agreements is that they were
meant to be “final and complete,” but that, as often happens,
they failed to plan for the unfortunate turns that the parties’
relationship eventually took. Accordingly, the district court’s
finding that the Agreements were fully integrated was not
clearly erroneous.

   Jarvis does not specifically challenge the court’s loss esti-
mate of $500 per unreturned slide so we need not decide
whether that estimate was reasonable. We also need not con-
sider Jarvis’ argument, based on Wash. Rev. Code § 62A.2-
207, that the terms in the delivery memos became binding
when K2 accepted the images without objecting to the
memos’ terms. This argument would be applicable only if the
Agreements were not fully integrated and hence modifiable
only by a writing signed by both parties. Finally, Jarvis’ coun-
sel conceded at oral argument that it is impossible to deter-
mine which, if any, of the unreturned images came from
shoots conducted prior to the entry of the Agreements. We
therefore need not decide whether Jarvis’ § 62A.2-207 argu-
ment applies to those particular images. Were the argument to
apply, neither we nor the district court would have any way
of calculating the number of unreturned images from shoots
conducted before the Agreements and the corresponding dam-
ages.10

  3.   Failures To Credit

   Finally, Jarvis objects to the $11,400 in damages that he
was awarded because of K2’s 105 failures to credit him in
various images and one miscredit to another photographer.
Jarvis argues that the district court’s loss estimates of $50 per
  10
    We also note that approximately 90 percent of the images that Jarvis
delivered to K2 were produced under the 2000 and 2001 Agreements. The
number of unreturned slides from shoots conducted prior to the Agree-
ments was thus in all likelihood quite small.
                        JARVIS v. K2 INC.                   4755
online failure to credit and $200 per failure to credit in print
were too low and did “not come close to compensating [him]
for lost business opportunities.”

   [14] The district court’s damages calculations for the fail-
ures to credit Jarvis were based on reasonable assumptions
and logic. Noting that Weisgrau “[could not] estimate the
actual value of a missing credit in print or on the web,” the
court subdivided the failures to credit by medium (online,
vehicle wrap, print and media). The court then found that
“[m]any of the images for which Mr. Jarvis did not receive
credit are very small images which appeared online.” The
court added that “[i]t is difficult to make out the content and
quality of these images” and that “[m]any of these images are
simply filler on a webpage, and a photo credit for such images
would have little, if any, value.” Images that are mainly
located online and “are very small and difficult to identify[ ]
would yield little in the way of new work for Mr. Jarvis.”
Taking these considerations into account, the court set the rea-
sonable value of a failure to credit at $50 for online uses, and
up to $300 for other media. These estimates, made in the
wake of Jarvis’ inability to provide any evidence about busi-
ness he lost due to failures to credit him, were eminently sen-
sible and hence not clearly erroneous.

   Jarvis contends that he should have received the alleged
industry standard of three times his license fee for each failure
to credit (and four times his license fee for the one miscredit).
Based on K2’s 105 failures to credit as well as Jarvis’ license
fee of at least $1,500 per image, this methodology would have
entitled Jarvis to nearly $500,000 — an amount that dwarfs
his actual compensation from K2 and other clients. Jarvis fur-
ther notes that his most popular images produce large
amounts of royalties each year. The royalty data do not, how-
ever, imply that the uncredited images would have produced
an average of $4,500 each in revenue but for the failure to
credit, and indeed the notion is implausible. As the district
found, the vast majority of the uncredited images had “little,
4756                    JARVIS v. K2 INC.
if any, value.” Finally, Jarvis objects to the lower rate set by
the district court for online failures to cite. But this lower rate
was reasonable given the small size, poor quality and non-
trivial editing of most of the online images, as well as their
juxtaposition in many cases with other photographers’ images
and marketing graphics.

   [15] We therefore hold that the damages awarded by the
district court for K2’s failures to credit and miscredit were not
clearly erroneous.

                       IV.   CONCLUSION

   We affirm in part and reverse in part the district court’s
judgment and remand for further proceedings consistent with
this opinion. We reverse the district court’s finding that the
collage advertisements were privileged under § 201(c), but
otherwise affirm the damages the court awarded to Jarvis
because of K2’s copyright infringements, losses of slides and
failures to credit. On remand, the district court should deter-
mine what actual and statutory damages Jarvis is due for the
24 infringing images contained in the collage advertisements.
The court should also address attorney’s fees and determine
whether K2 willfully infringed Jarvis’ copyright in any of the
images whose infringement commenced after their registra-
tion.

  The parties shall bear their own costs on appeal.

 AFFIRMED IN PART AND REVERSED IN PART;
REMANDED.