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Photographic Illustrators Corp. v. Orgill, Inc.

United States District Court, D. Massachusetts

March 11, 2016

PHOTOGRAPHIC ILLUSTRATORS CORPORATION, Plaintiff,
v.
ORGILL, Inc., Defendant.

MEMORANDUM AND ORDER

Patti B. Saris Chief United States District Judge

INTRODUCTION

Plaintiff Photographic Illustrators Corporation (PIC) is a Massachusetts corporation specializing in commercial photography, including photography of consumer products for advertising and product packaging. PIC took photographs of lighting fixtures manufactured by Osram Sylvania, Inc. (OSI), and entered into a licensing agreement with OSI regarding the product images in June 2006. The 2006 Agreement granted OSI a non-exclusive, worldwide license to use and sublicense the photographs with certain limitations: OSI could not sublicense the images in exchange for valuable consideration, such as a fee, and, to the extent reasonably possible and practical, OSI had to display the images with proper attribution. Defendant Orgill, Inc. is a one of OSI’s distributors. Orgill obtained the product images at issue in this case from OSI for use in its electronic and paper catalogues.

In April 2014, PIC filed suit against Orgill 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). OSI admits that it learned of the case shortly after PIC filed suit, and that it has been in consistent communication with Orgill since that time. Three months after PIC filed suit, Orgill and OSI executed a confirmatory copyright sublicense agreement, effective nunc pro tunc as of June 1, 2006. The confirmatory agreement cites to and incorporates language from the 2006 Agreement between PIC and OSI, and explicitly references the complaint in the present action. During the course of this litigation, Orgill and OSI have also entered into a common-interest agreement.

On July 28, 2015, the Court allowed in part and denied in part Orgill’s motion for summary judgment. See Photographic Illustrators Corp. v. Orgill, Inc., 118 F.Supp.3d 398, 411 (D. Mass. 2015). The Court assumes familiarity with the summary judgment order and the underlying facts of this case. In short, I allowed the defendant’s motion on the DMCA and Lanham Act claims. With respect to the copyright infringement claim, I held that Orgill had received an implied license from OSI to use the images at issue, and that Orgill’s “use of the images must be measured against the terms of the original licensing agreement between PIC and OSI.” Id. at 403. The 2006 Agreement “provides the relevant benchmark for the defendants’ conduct” because, as the parties agreed at the summary judgment hearing, “OSI could not give Orgill rights that went beyond those it in fact had.” Id. at 403-04.[1] I denied Orgill’s motion for summary judgment on the copyright infringement claim due to “fact disputes as to fee, attribution, and the nature of the implied license OSI granted Orgill.” Id. at 404.

On December 17, 2015, OSI filed a motion to intervene as a matter of right, or in the alternative permissively, pursuant to Federal Rule of Civil Procedure 24. OSI argues that the “determination of OSI’s rights under the 2006 Agreement will be essential to resolving PIC’s claims” because of the Court’s holding that the 2006 Agreement establishes the minimum limitations on Orgill’s use of the images. Docket No. 100 at 2. PIC counters that the motion is untimely because OSI waited over a year and a half-until after the close of fact discovery on liability and the Court’s summary judgment decision-to move to intervene.

After hearing, the Court DENIES OSI’s motion to intervene (Docket No. 99) because it is untimely. The only explanation OSI offers as to why it waited so long to move to intervene is that OSI believed the “defendants would have no difficulty showing that they were properly authorized to use PIC images because Orgill was an OSI customer that received images from OSI.” Docket No. 100 at 7. In other words, OSI considered PIC’s claim meritless. The First Circuit has explicitly rejected this argument twice, and held that motions to intervene were untimely when the putative intervenors delayed for less time than OSI did in this case.

DISCUSSION

I. Motion to Intervene as a Matter of Right

Federal Rule of Civil Procedure 24(a) provides for intervention as a matter of right on “timely motion” in two circumstances: (1) the putative intervenor “is given an unconditional right to intervene by federal statute, ” or (2) the putative intervenor “claims an interest relating to the property or transaction that is the subject of the action, and is so situated that disposing of the action may as a practical matter impair or impede the movant’s ability to protect its interest, unless existing parties adequately represent that interest.” “Rule 24(a)(1) statutory intervenors need not show inadequacy of representation or that their interests may be impaired if not allowed to intervene.” Ruiz v. Estelle, 161 F.3d 814, 828 (5th Cir. 1998) (internal quotation marks and citations omitted). Instead, to succeed on a motion to intervene under Rule 24(a)(1), a potential intervenor need only demonstrate (1) that its motion is timely and (2) that the statute clearly applies. See id. at 827-28; Moosehead Sanitary Dist. v. S. G. Phillips Corp., 610 F.2d 49, 52 n.6 (1st Cir. 1979) (noting “a party may intervene as of right upon timely application if unconditionally authorized to do so by federal law”).

Here, § 501(b) of the Copyright Act provides that the Court “shall permit the intervention, of any person having or claiming an interest in the copyright” in an infringement action. 17 U.S.C. § 501(b). Although there are no circuit court cases on point, several district courts have concluded that § 501(b) creates an “unconditional right to intervene” under Federal Rule of Civil Procedure 24(a)(1). See Distribuidora De Discos Karen C. Por A. v. Universal Music Grp., Inc., No. 13-CV-7706, 2015 WL 4041993, at *3 (S.D.N.Y. July 2, 2015); Vestron, Inc. v. Home Box Office, Inc., No. 87-4603, 1987 WL 123012, at *2 (C.D. Cal. Nov. 20, 1987). PIC makes a strained textual argument that § 501(b) does not create such a right in this case, but does not offer compelling support for its interpretation of the Copyright Act. OSI does not address whether the statute creates an unconditional right to intervene, and instead argues that it is entitled to intervene as a matter of right under Federal Rule of Civil Procedure 24(a)(2).

To succeed on a motion to intervene as of right under Rule 24(a)(2), a putative intervenor must demonstrate:

(i) the timeliness of its motion to intervene; (ii) the existence of an interest relating to the property or transaction that forms the basis of the pending action; (iii) a realistic threat that the disposition of the action will impede its ability to protect that interest; and (iv) the lack of adequate representation of its position by any existing party.

R & G Mortg. Corp. v. Fed. Home Loan Mortg. Corp., 584 F.3d 1, 7 (1st Cir. 2009); see also In re Efron, 746 F.3d 30, 35 (1st Cir. 2014). The putative intervenor must satisfy all four preconditions; the “failure to satisfy any one of them dooms intervention.” R & G Mortg. Corp., 584 F.3d at 7. “The first of these elements-timeliness-is the sentinel that guards the gateway to intervention.” In re Efron, 746 F.3d at 35. Although the timeliness requirement “is often applied less strictly with respect to intervention as of right, ” compared to permissive intervention, “even in the case of a motion to intervene as of right, the district court’s discretion is appreciable, and the timeliness requirement retains considerable bite.” R & G ...


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