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Photographic Illustrators Corp. v. Orgill, Inc.

United States District Court, D. Massachusetts

July 29, 2015

PHOTOGRAPHIC ILLUSTRATORS CORPORATION, Plaintiff,
v.
ORGILL, INC. and FARM & CITY SUPPLY, LLC, Defendants

Page 399

For Photographic Illustrators Corporation, Plaintiff: Michael N. Rader, LEAD ATTORNEY, Joshua J. Miller, Turhan F. Sarwar, Wolf, Greenfield & Sacks, PC, Boston, MA.

For Orgill, Inc., Farm & City Supply LLC, Defendants: Allison L. Brown, Lisa C. DeJaco, LEAD ATTORNEYS, PRO HAC VICE, Wyatt, Tarrant & Combs, LLP, Louisville, KY; James F. Radke, LEAD ATTORNEY, Murtha Cullina LLP, Boston, MA.

Page 400

MEMORANDUM AND ORDER

PATTI B. SARIS, United States District Judge.

INTRODUCTION

Plaintiff Photographic Illustrators Corporation (PIC), a Massachusetts corporation specializing in commercial photography, took photographs of lighting fixtures manufactured by Osram Sylvania (OSI), not party to this suit. Defendants Orgill, Inc. and Farm & City Supply, LLC are distributors of OSI products. PIC filed suit against the defendants alleging copyright infringement under 17 U.S.C. § 501 (Count I); mishandling of copyright management information under the Digital Millennium Copyright Act (DMCA), 17 U.S.C. § 1202 (Count II); and false designation of origin and false advertising under the Lanham Act, 15 U.S.C. § 1125(a) (Count III). The defendants seek summary judgment on all counts (Docket No. 54). PIC filed an opposition (Docket No. 58). After a review of the record and hearing, the defendants' motion for summary judgment is DENIED in part and ALLOWED in part as to Count I and ALLOWED in full as to Counts II and III.

STATEMENT OF UNDISPUTED FACTS

The following facts are undisputed except where otherwise stated. All reasonable inferences are drawn in favor of PIC, the non-moving party.

A. PIC's Copyright License with OSI

This case is about photographic images that Paul Picone, a photographer for PIC, took of OSI's light fixtures. Five of the images have Copyright Registration Certificates; twenty-nine were the subject of applications received by the United States Copyright Office between 2012 and 2013. PIC provides OSI with photographs of OSI products for use in sale and marketing. To this end, PIC had a licensing agreement with OSI, which gave OSI

a non-exclusive, worldwide license in and to all the Images and the copyrights thereto to freely Use, sub-license Use, and permit Use, in its sole and absolute discretion, in perpetuity, anywhere in the world. Notwithstanding the foregoing, OSI may not sub-license images in exchange for valuable consideration such as a fee (e.g., as stock photography).

Docket No. 56, DeJaco Aff., Ex. 1. The term " Use" is to be given the broadest possible interpretation, and includes, but is not limited to, the right to " copy, edit, modify, prepare derivative works, reproduce, transmit, display, broadcast, print, publish, use in connection with any media . . . and store in a database." Id. The licensing agreement also provided: " To the extent reasonably possible and practical, OSI shall . . . include a copyright notice indicating PIC as the copyright owner and/or include proper attribution indicating Paul Picone as the photographer for Images Used by OSI." Id.

B. OSI's Copyright Sublicense Agreement with Orgill

Defendant Orgill, a wholesale distributor for OSI, maintains a network of retail dealers who sell hardware, home improvement supplies, and building materials. Orgill's inventory includes numerous OSI products, and Orgill uses product information and images from OSI in its electronic and

Page 401

paper catalogues. Over the past decade, Orgill employee Dennis Sills has been the sole person responsible for procuring and managing OSI product images, including the images in question. Sills generally obtains these images from e-mail, Dropbox, OSI's external website, or OSI's internal web server. However, none of Orgill's employees specifically recalls the images at issue or how they were procured. It is disputed whether Orgill knew about the copyright license PIC had granted to OSI.

For the past five years, OSI has conducted twice-yearly reviews of its product images as they appear in Orgill's advertisements. OSI has never challenged the way that OSI images appear in Orgill's catalogue or on its website.

On July 23, 2014 -- after PIC filed suit -- OSI and Orgill executed a confirmatory copyright sublicense agreement, effective nunc pro tunc as of June 1, 2006. Under the sublicensing agreement, OSI " confirm[ed] that it previously granted permission to Orgill to Use and to sublicense the right to Use the Images to its dealers in accordance with the terms of this Agreement." Docket No. 56, Ex. 2. Those terms stated that OSI

is authorized to sublicense and permit Use . . . of certain photographs taken by Photographic Illustrators Corporation . . . [and] has permitted and sublicensed to Orgill to Use the Images . . . in connection with any media, including but not limited to advertising, packaging, promotional and collateral materials, and to sublicense that right to Use the Images to Orgill's dealers . . . .

Docket No. 56, Ex. 2. This agreement further stated,

Orgill covenants to include (and instruct its sublicensees/dealers to include), to the extent reasonably possible and practical with respect to size, prominence, aesthetics, and Use, a copyright notice indicating PIC as the copyright owner of the Images.

Id. Specifically, the sublicensing agreement noted, " Orgill and its dealers/sublicensees shall include such copyright notice and/or attribution as a side note or footnote for Images appearing on websites and in catalogues." Id. Orgill finally covenanted " on its behalf and on behalf of its sublicensees/dealers that it will not remove any copyright notice from Images provided to Orgill from OSI before distributing any Images to its sublicensees/dealers." Id.

C. Farm & City Supply

Defendant Farm & City Supply is one of Orgill's dealers. Orgill provides its dealers with an e-commerce platform known as ProShip. Through ProShip, Orgill populates an online store with products that dealers then brand and publish with their own names. To access ProShip, dealers must pay a $750 flat set-up fee as well as a subsequent monthly fee. Dealers can obtain pictures from the platform, including the PIC images. However, it is disputed whether these fees cover the pictures. Orgill also has a library of product information in a separate FTP (file transfer protocol) server. The dealer may download product images and other data after receiving a secure log-in to access the server. Orgill does not charge its dealers any additional fee to obtain pictures from the FTP server.[1] Farm & City obtained the images in question from both the FTP server and the ProShip platform.

Page 402

In order to market and sell Orgill's products, Farm & City has a commercial website and an eBay " storefront." Farm & City fills both the site and the store with product images and information obtained from Orgill's online resources. For a time, Farm & City placed a watermark reading " farmandcitysupply" across the images appearing on its eBay storefront. Eventually, Farm & City stopped adding its watermark to the images.

On April 11, 2014, PIC filed suit against Orgill and Farm & City under the Copyright Act, the DMCA, and the Lanham Act, seeking permanent injunctive relief against any and all further infringement, the recall and destruction of all infringing copies made of the PIC images, and payment of actual damages, attorney's fees, and costs.

STANDARD OF REVIEW

Summary judgment is appropriate when there is " no genuine issue as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a). To succeed on a motion for summary judgment, the moving party must demonstrate that there is an " absence of evidence supporting the non-moving party's case." Sands v. Ridefilm Corp., 212 F.3d 657, 660 (1st Cir. 2000) (citing Celotex Corp. v. Catrett, 477 U.S. 317, 325, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986)).

The burden then shifts to the non-moving party to set forth specific facts showing that there is a genuine issue of material fact for trial. Quinones v. Houser Buick,436 F.3d 284, 289 (1st Cir. 2006). A genuine issue exists where the evidence is " sufficiently open-ended to permit a rational factfinder to resolve the issue in favor of either side." Nat'l Amusements, Inc. v. Town of Dedham,43 F.3d 731, 735 (1st Cir. 1995). A material fact is " one that has the potential of ...


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