IP Law Daily Live Nation could be liable for enhanced damages for using Run-DMC images
Friday, August 19, 2016

Live Nation could be liable for enhanced damages for using Run-DMC images

By Thomas Long, J.D.

The merchandising arm of concert promoter Live Nation could have engaged in willful infringement when it used a photographer’s images of the hip-hop group Run-DMC on t-shirts and a calendar, potentially subjecting it to liability for enhanced damages, the U.S. Court of Appeals in San Francisco has held. The merchandiser’s failure to seek permission or clearance to use the images, or to inquire about rights to the images when it obtained approval to use them from the group, could have amounted to recklessness or willful blindness with respect to the photographer’s copyrights. The photographer also could go forward with a claim that Live Nation violated the Digital Millennium Copyright Act by distributing his works with knowledge that copyright management information had been removed, even if Live Nation did not remove it. The photographer was not, however, entitled to seek statutory damages with respect to alleged "downstream" infringers, and he was limited to one statutory damages award per work infringed by Live Nation (Friedman v. Live Nation Merchandise, Inc., August 18, 2016, Berzon, M.).

Plaintiff Glen E. Friedman was a well-known photographer whose pictures of people from various American subcultures had been exhibited and published widely. Friedman took a series of photos of the group Run-DMC in the 1980s; several of those photos appeared in a book of Friedman’s works. In 2005, Friedman granted a license to Sony Music to reproduce some of his Run-DMC photos on a website, accompanied by information indicating that Friedman owned the copyrights to the images.

Defendant Live Nation is a music merchandising company that designed, made, and sold apparel and other products bearing images and logos of popular music artists. Live Nation typically obtained approval from the artists to use photographs on merchandise; it maintained that artists were "not supposed to" provide photos for which they lacked rights, but there was generally no instruction or agreement so stating. Live Nation also produced "Style Guides" that collected available images of particular artists to inform suppliers about images they could contract to use on merchandise. Artists allegedly were supposed to "pre-screen" the images of them included in the Guides.

Live Nation’s Run-DMC Style Guide contained a number of Friedman’s images. Live Nation obtained approval from Run-DMC for a 2008 Wall Calendar that included four of Friedman’s images and for three t-shirt designs that bore Friedman photos that had appeared in the Run-DMC Style Guide. Friedman filed suit against Live Nation for copyright infringement and removal of copyright management information (CMI) in violation of Section 1202 of the Digital Millennium Copyright Act (DMCA). Live Nation admitted that it had infringed Friedman’s copyrights, but it disputed the CMI claim and contended that it had not willfully infringed, for purposes of Friedman’s claim for enhanced damages. Live Nation moved for summary judgment with respect to these contentions, and the district court granted its motion. Friedman then filed a revised statement of damages, requesting an award of $3.12 million, based on records indicating that Live Nation had distributed one of its t-shirts to 27 retailers, another shirt to 44 retailers, and the calendar to 33 retailers, for a total of 104 separate statutory damages awards of $30,000 each. The district court rejected this calculation, ruling that Friedman was entitled to only one damages award per infringed work. Friedman appealed.

Willful infringement. In the appellate court’s view, a jury could reasonably conclude that Live Nation’s approval procedures amounted to recklessness or willful blindness with respect to Friedman’s intellectual property rights. The approval forms given to artists said nothing about establishing who held the rights to images. The documents appeared to be directed to design considerations rather than intellectual property rights. The specific forms signed by Run-DMC did not indicate in any way that the group was clearing the legal right to use the photos. There was no evidence of how—or whether—Run-DMC was informed that it was "not supposed to" provide images for which it did not have the rights. There also was evidence that Live Nation was specifically aware that Friedman did not wish to license or grant approval to use his Run-DMC photos for merchandise. A jury could interpret this evidence as meaning that Live Nation knew there was a risk that photos of Run-DMC could be Friedman’s photos, but it went forward with developing the merchandise without taking steps to determine whether it was using Friedman’s work. Accordingly, summary judgment on this issue was reversed.

CMI violations. The district court granted summary judgment in Live Nation’s favor on Friedman’s DMCA claim because there was no evidence that Live Nation had removed CMI from Friedman’s images. This, however, was the wrong question, the Ninth Circuit said. The DMCA did prohibit the intentional removal of CMI, but Friedman could also prevail upon a showing that Live Nation distributed his works with the knowledge that someone else had removed the CMI. In the appellate court’s view, there was a triable issue of fact as to whether Live Nation had the requisite knowledge. Some of the photos used in the calendar included alterations—such as tint effects and added logos—that Friedman had authorized only for the Sony website. Photos in the Style Guide appeared to have been scanned from Friedman’s book because they contained captions and other layout features appearing only in that source. The images on Live Nation’s products did not include CMI that had been present on the earlier versions. The only difference between the images used by Live Nation and these earlier versions was the absence of CMI on the images used by Live Nation; therefore, it was necessarily the case that the CMI had been removed at some point. The circumstantial evidence in the record permitted an inference that Live Nation knew CMI had been removed from the photos. This knowledge would support the DMCA claim. Therefore, summary judgment on this claim was reversed.

Statutory damages. According to Friedman, a number of "downstream infringers"—retailers to whom Live Nation distributed infringing merchandise—were each jointly and severally liable for infringement with Live Nation, but not with each other. Therefore, he contended, he should be entitled to a separate award for each "unit" of infringers jointly and severally liable. The appellate court disagreed. In the precedent cited by Friedman in support of his damages theory, each of the downstream infringers for whom the plaintiff received a separate award was a defendant in the case. Before the question of damages had been raised, those parties had been found liable for infringement and held jointly and severally liable with another infringer. This was not the case here. Friedman had not named any of the purported 104 downstream infringers as defendants in the case, and he only raised the issue of Live Nation’s liability for damages for their infringement after the question of Live Nation’s own liability for infringement had been decided. Section 504(c)(1) of the Copyright Act provided for "an award of statutory damages for all infringements involved in the action, with respect to any one work, for which any one infringer is liable individually, or for which any two or more infringers are liable jointly and severally" (emphasis added). Downstream infringers could not be "involved in the action" unless they were joined as defendants in the case, and the particular alleged infringements involving them were adjudicated. Therefore, Friedman was limited to one award per work infringed by Live Nation. The district court’s statutory damages ruling was affirmed.

The case is No. 14-55302.

Attorneys: Lorin E. Brennan, Erica Allen Gonzales, and Douglas A. Linde (The Linde Law Firm) for Glen E. Friedman. Matthew R. Gershman, Peter Yu, Jr., and Jeff E. Scott (Greenberg Traurig LLP) for Live Nation Merchandise, Inc., Anthill Trading, LLC, and Art.com, Inc.

Companies: Live Nation Merchandise, Inc.; Anthill Trading, LLC; Art.com, Inc.

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