By Thomas Long, J.D.
Schools’ exercise of their rights to reproduce the materials under a Creative Commons license through the use of Office Depot’s copying services did not result in Office Depot becoming a licensee.
A nonprofit organization that designs educational materials cannot go forward with copyright infringement claims against retailer Office Depot, Inc., for copying the organization’s math curriculum for schools and school districts because Office Depot either was not bound by a public license allowing noncommercial reproduction and distribution of the curriculum, the U.S. Court of Appeals in San Francisco has decided. Although Office Depot’s commercial copying was prohibited by the terms of the license and would constitute infringement if Office Depot were a licensee, the school and school district licensees’ exercise of their rights under the license through the services provided by Office Depot did not result in Office Depot becoming a licensee under California law (Great Minds v. Office Depot, Inc., December 27, 2019, Farris, J.).
Plaintiff Great Minds designs educational materials, including a copyrighted curriculum called "Eureka Math." Great Minds sold the curriculum in print form and also released digital files containing the materials to the public free of charge but subject to a Creative Commons public license. The license—which was extended to the general public on the same terms without the need to negotiate—allowed any member of the public to download, reproduce, and distribute the materials on a nonexclusive basis, for noncommercial purposes only. The license defined "noncommercial purposes" as purposes "not primarily intended for or directed towards commercial advantage or monetary compensation." The license reserved Great Minds’ right to collect royalties for commercial uses of Eureka Math. According to Great Minds, the terms of the license required all "downstream recipients," including commercial copy-service providers to negotiate a separate license and pay a royalty to Great Minds if they wished to reproduce the materials at the request of their customers.
Defendant Home Depot provided copy services on request on behalf of public schools and school districts, for a fee. At times it made copies of Eureka Math materials for the schools, which it did not sell to the public in its stores. In 2015, after Great Minds discovered that Office Depot was copying the materials for schools, the parties entered into a separate licensing agreement that permitted Office Depot to make the copies in exchange for royalty payments. After the Eastern District of New York ruling in Great Minds v. FedEx Office and Print Servs., Inc., No. 16-CV-1462 (DRH)(ARL), February 24, 2017, aff’d, 886 F.3d 91 (2d Cir. 2018), which held that the Creative Commons license could not "be read to preclude a licensee from hiring someone to make copies of [Eureka Math] so the licensee can use them for a ‘noncommercial’ purpose," Office Depot terminated the royalty agreement.
Great Minds filed suit for copyright infringement and breach of contract against Office Depot in October 2017. The district court dismissed the lawsuit without leave to amend, concluding that the license did not prohibit the schools from employing third parties, such as Home Depot, to make copies of the Eureka Math curriculum on their behalf. Great Minds appealed.
The parties agreed that California law applied to the construction of the Creative Commons license. There was no dispute that the schools and school districts were permitted under that license to copy Great Minds’ material. There also seemed to be no dispute, noted the appellate court, that if Office Depot were itself a licensee, commercial copying of the material would fall outside the license’s scope and would infringe Great Minds’ copyright. The issue, then, was whether the school and school district licensees’ exercise of their rights under the Creative Commons license through the services provided by Office Depot resulted in Office Depot becoming a licensee.
The court held that it did not, reasoning that a licensee’s hiring of a third-party copy service to reproduce licensed material strictly for the licensee’s own permitted use does not turn that third party into a licensee that is bound to the license terms.
Great Minds argued that third-party contractors like Office Depot were "downstream recipients" of Eureka Math as contemplated under the terms of the license, meaning that they "automatically receive an offer from [Great Minds] to exercise the Licensed Rights," they accept that offer the moment the copy store employee presses "copy" on a machine, and they become bound to the terms of the license. However, in the Ninth Circuit’s view, Office Depot was not a downstream recipient. "That Office Depot employed field representatives to advertise the availability of copying services for schools and school districts that use Eureka Math does not confer a licensee status on Office Depot," the court said. "Its activities remain within the ambit of the schools and school districts’ license."
According to the court, Great Minds’ argument that the Office Depot employee’s performance of the copying services constituted a "volitional" act sufficient to subject Office Depot to infringement liability would produce "absurd" results. Under that argument, a teacher would be permitted to copy the materials on a copy machine in Office Depot’s store, but could not hand the materials to an employee to do the copying; a school could pay a copy machine provider a fee to keep a machine on school premises to be used to copy the curriculum; and a school could permit teachers to copy the materials on school-owned or leased machines, but could not pay a high school student to make the same copies. This interpretation could not be correct because the license itself provided no basis to distinguish between permitted copies of Eureka Math by a licensee’s own employees versus those made by a third-party contractor. The court declined to read such a distinction in to the license.
The court concluded that the licensees’ contract with Office Depot to exercise the licensees’ rights under the license did not impose an independent liability on Office Depot. As a result, Great Minds failed to state a plausible claim to relief on its copyright infringement claim.
This case is No. 18-55331.
Attorneys: Rhett O. Millsaps, II (Millsaps & Associates PLLC) for Great Minds. Jennifer Golinveaux (Winston & Strawn LLP) for Office Depot, Inc.
Companies: Office Depot, Inc.
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