We have previously written about strategies to defend against claims by copyright trolls, Copyright Case Teaches How to Deal with Trolls. A recent decision by a federal court in New York, Minden Pictures, Inc. v. Buzzfeed, Inc. (S.D.N.Y. 2019), teaches some further valuable strategies to deal with such claims.
Minden Pictures is a wildlife and nature photo licensing agency that has filed 36 copyright infringement lawsuits since 2010. In this case, Minden alleged that the copyrighted photographs were displayed on Buzzfeed’s website at various times since 2011. Buzzfeed moved to dismiss, and the district court granted much of Buzzfeed’s various dismissal motions.
One key ruling was that the three-year statute of limitations applied to any pictures posted more than three-years prior to suit. Minden tried to avoid the statute of limitations by invoking the Second Circuit’s “discovery rule.” But the court ruled that as a sophisticated party that had brought numerous copyright suits, Minden was expected to exercise considerable diligence to protect its rights. It could have discovered the infringements had it reviewed Buzzfeed’s site.
Other rulings include dismissal of conclusory allegations of willful infringement, barring of statutory damages (and attorney’s fees) for pictures that had not been registered before infringement, and limiting statutory damages to one award for an entire “collection” of works registered as such.
The overall strategy highlighted by the Minden decision is that, even if one cannot achieve full dismissal of a troll’s case, paring down the claims as much and as early as possible can be an effective and useful strategy.
Buzzfeed made what was in effect four separate motions to dismiss parts of Minden’s complaint, all of which were granted. The end result was a far narrower set of claims against it. The areas where Buzzfeed successfully moved included:
Statute of Limitations
The statute of limitations for a copyright claim is three years. 17 U.S.C. § 507(b). Buzzfeed argued that 24 of the 40 allegedly infringed photographs had been posted more than three years prior. The Second Circuit applies a “discovery rule,” whereby the statute is tolled until the copyright owner discovers “or with due diligence should have discovered the infringement.” The 24 photographs allegedly infringed were posted prior to 2015; Minden alleged that it only discovered these infringements in 2017 or 2018. But the court noted that Minden was a sophisticated party (having brought numerous copyright suits since 2010), and given its sophistication, should have discovered these postings long before.
So more than half of the infringements were held time-barred.
The other three motions each relate to statutory damages. The Copyright Act allows a copyright owner to collect its actual damages plus the defendant’s profits from the infringement, to the extent they are not duplicative. 17 U.S.C. § 504(b). Alternatively, the copyright owner can elect statutory damages, which range from $750 to $30,000 for each “work” and up to $150,000 per work if the infringement is found to be willful. 17 U.S.C. § 504(c).
In many troll cases, it is statutory damages that potentially may cause a large award. Without statutory damages, a plaintiff is limited to the plaintiff’s acutal damages and the defendant’s profits. These are often very small, as the Minden case illustrates. As to damages, a company like Minden licenses the photographs for a small sum; Minden’s website lists license fees from $200 to $350, depending on the type of use. As to the defendant’s profits, defendants like Buzzfeed often times do not make any direct profit from posting the photographs.
Thus, the awardable actual damages and profits are often quite small, usually only the lost licensing fee. Statutory damages potentially can be far larger, so it is key for a defendant to try to eliminate them from the case.
Buzzfeed did so in three ways:
To qualify for statutory damages, the copyright in the work must be registered before the infringement commences. (The same applies as to attorney’s fees awards – the work must be registered before infringement.) Several of Minden’s photographs were not timely registered, and it lost the option of collecting statutory damages as to those.
In conclusory fashion, Minden alleged that Buzzfeed had acted with knowledge or reckless disregard for the infringement. But it provided no factual basis for this assertion. The court held this was insufficient, and the court dismissed the allegations of willful infringement – effectively limiting the statutory damages to $30,000 per work as opposed to $150,000.
Minden asked for leave to amend to add more allegations of willfulness. But this was denied, as it failed to specify what additional facts it might allege.
As noted, the Copyright Act provides a statutory damages range ($750 to $30,000) which range is applied for each “work” infringed. If multiple “works” are infringed, then the total potential damages award is increased.
The Copyright Act also provides for the registration of a “collective work,” basically a collection or assembly of other works. This makes it easier to register multiple works (like a collection of photographs) in one registration. But, that, for the purposes of statutory damages, makes all the elements in the collection a single “work.”
Minden learned this the hard way. Eleven of its photographs had been registered as five “sets” of photographs. The court ruled that these would be counted as five, not eleven, “works” for statutory damages.
Overall, Buzzfeed’s pare-down strategy worked well. Buzzfeed’s allegations potentially might have resulted in an award of $6 Million. After all the motions were decided, the maximum award that could be awarded was $360,000, plus actual damages on three photographs (likely very small) and no attorney’s fees.