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Muench Photography, Inc. v. Pearson Education, Inc.

United States District Court, Ninth Circuit

November 19, 2013

MUENCH PHOTOGRAPHY, INC., Plaintiff,
v.
PEARSON EDUCATION, INC., Defendant.

ORDER GRANTING PEARSON EDUCATION, INC.'S MOTION FOR SUMMARY JUDGMENT Re: Dkt. No. 62

WILLIAM H. ORRICK, District Judge.

INTRODUCTION

Plaintiff Muench Photography, Inc. ("MPI"), brings suit against Pearson Education, Inc. ("Pearson"), asserting 485 copyright infringement claims concerning photographs taken by David and Marc Muench and licensed by Corbis Corporation ("Corbis"), a third-party stock photography agency, to Pearson over a ten-year period. Pearson moves for summary judgment, arguing that (1) MPI does not have standing to assert copyright infringement claims; (2) MPI's claims are based on invalid copyright registrations; and (3) Pearson has a general or implied license from Corbis to use the images.

For the reasons below, the Motion for Summary Judgment is GRANTED.

FACTUAL BACKGROUND

Pearson is a publisher of school textbooks and other educational materials. Soares Decl. (Dkt. No. 62 Ex. A) ¶ 1. David and Marc Muench are photographers who created the photographs at issue; both have agency agreements with Corbis authorizing it to license their photographs. Dudash Decl. (Dkt. No. 62) Exs. 1-4; Compl. (Dkt. No. 1) ¶¶ 2, 9. Pearson and Corbis have a long-standing and ongoing business relationship dating back to at least 1997. Soares Decl. ¶ 4. Throughout this relationship, Pearson and Corbis entered into a number of master licensing agreements ("MLAs") through which Pearson obtained the nonexclusive right to use images licensed by Corbis in Pearson's publications. Soares Decl. ¶ 4.

Beginning in the late 1990s, Pearson implemented a "preferred vendor" program in which Pearson and certain photograph vendors executed preferred vendor agreements ("PVAs") that provided pricing and other license terms applicable to Pearson's use of any photographs from that vendor. Soares Decl. ¶ 5. The MLAs with Corbis were similar to these PVAs, but contained additional contract terms. Soares Decl. ¶ 5.

Corbis and Pearson entered into three MLAs in 2001, 2004, and 2007, which governed almost every usage of the photographs at issue in this case.[1] Br. 3. "The MLAs governed Pearson's use of the Muenchs' photographs that Pearson obtained from Corbis." Br. 3. Pearson argues that these MLAs provided Pearson with a "nonexclusive, general license" to use images obtained from Corbis in Pearson's publications: Pearson would notify Corbis of its usage, and Corbis would bill Pearson for Pearson's projected distribution against the MLA's pricing schedules. Br. 3.

I. The Parties

Muench Photography, Inc., is a family business owned in part by David Muench and Marc Muench. Marc Muench Decl. (Dkt. No. 66) ¶ 2. MPI is a stock photography agency that licenses photographic images taken by both David Muench and Marc Muench. Marc Muench Decl. ¶ 1; David Muench Decl. (Dkt. No. 66) ¶ 1. Both Muenchs state that they took the photographs at issue in this case "within the scope of [their] employment." Marc Muench Decl. ¶ 3; David Muench Decl. ¶ 3.

Corbis Corporation is a stock photography agency that, with MPI's permission, allegedly licensed the photographs at issue to Pearson. Marc Muench Decl. ¶ 5. On July 27, 2010, Corbis notified MPI that Corbis did not intend to take any action regarding "unauthorized uses" of the photographs at issue by Pearson, and "Corbis assigned its claims" to MPI. Marc Muench Decl. ¶ 7, Ex. 4.

Marc and David Muench entered into representation agreements with Corbis. Dudash Decl. Exs. 1-4. The agreements provided that if the Muenchs chose to participate in Corbis's copyright registration program, Corbis would register the copyrights in the Muenchs' images on the Muenchs' behalf. Dudash Decl. Ex. 1 at 001491; Dudash Decl. Ex. 4 at 001502. "Corbis registered copyrights for some of the Photographs with the United States Copyright Office." Oppn 3 (citing Marc Muench Decl. ¶¶ 4-6, Exs. 1-3; Seidman Decl. ¶¶ 2-3; Byrne Decl. ¶¶ 2-4, Exs. 1-2). At MPI's request, Corbis provided it with two lists identifying the images sent to the Copyright Office with the associated copyright registrations relating to the photographs at issue. Oppn 3 (citing Marc Muench Decl. ¶ 6, Exs. 2-3; Seidman Decl. ¶¶ 2-3; Byrne Decl. ¶¶ 2-4, Exs. 1-2). In addition, David Muench personally registered the "David Muench Collection No. 1, " under certificate VAu 354-914. David Muench Decl. ¶ 4.

From 2001 to 2009, Corbis sold Pearson "limited licenses authorizing Pearson to reproduce the Photographs [at issue] in certain educational publications." Oppn 3.

II. The 2001 MLA

The 2001 MLA, which took effect September 1, 2001, gave the terms under which Pearson could use Corbis's images and established a price schedule of incremental fees Pearson would pay based on its use of the images.[2] Br. 3 (citing Dudash Decl. Ex. 5). In particular, the MLA set forth the "TERMS OF LICENSE, " including the image pricing schedule, provisions about usage and minimum commitment, and requirements related to "excluded" and "premium" images, " as well as "Invoicing/Usage Notification." Dudash Decl. Ex. 5 at D-MU00045823-26.

The "Invoicing/Usage Notification" section stated, "Pearson Education agrees to notify Corbis of the image numbers (2017The Images) of the images used on a product/title, quarterly. (100 images per quarter for 4 quarters of the term) Invoices will be sent to Pearson Education. Overdue statements will be sent to Pearson Education after 30 days. Pearson Education is responsible for all payments due." Dudash Decl. Ex. 5 at D-MU00045826.

The "Minimum Commitment" section required Pearson to spend a defined amount of money during the three-year term of the MLA. Dudash Decl. Ex. 5 at D-MU00045824. The MLA incorporated Corbis's "Terms & Conditions, " though the letter Agreement governed if they conflicted. Dudash Decl. Ex. 5 at D-MU00045824. The MLA excluded certain image collections, which required "pre-approval" for use, Dudash Decl. Ex. 5 at D-MU00045825, but none of the images at issue were excluded or required pre-approval, Soares Decl. ¶ 4.

Under the pricing schedule, Pearson paid a base rate per image to use the image in a print publication. Dudash Decl. Ex. 5 at D-MU00045823. This base rate applied to any size image used inside an English-language, North American publication with a print run up to 40, 000 copies; only 10 percent of distribution could be international and five percent could be through electronic books at no additional charge. Dudash Decl. Ex. 5 at D-MU00045824. Use of images in "any all" print and electronic form was available at a higher rate. Dudash Decl. Ex. 5 at D-MU00045823. Pearson could pay additional incremental fees for "Additional Usage" at a certain percentage increase for both "print runs exceeding 40, 000" and worldwide English distribution. Dudash Decl. Ex. 5 at D-MU00045824. Reuse in subsequent distributions cost half the price Pearson normally paid. Dudash Decl. Ex. 5 at D-MU00045824.

The Terms and Conditions incorporated into the agreement stated that "Corbis grants [Pearson] the limited rights set forth in the written 2017Invoice And License Agreement.... Any use of the Images not set forth in this Agreement shall require the prior written agreement of Corbis." Dudash Decl. Ex. 5 at D-MU00045828 § 4. Further, "unauthorized use of these Images constitutes copyright infringement and shall entitle Corbis to exercise all rights and remedies under applicable copyright law...." Dudash Decl. Ex. 5 at D-MU00045828 § 10.

III. The 2004 MLA

The 2004 MLA, which took effect October 1, 2004, also gave the terms under which Pearson could use images obtained from Corbis in Pearson publications.[3] Dudash Decl. Ex. 6. Like the 2001 MLA, the 2004 MLA contained a pricing schedule and minimum spending commitment; it also contained an "Invoicing/Usage Notification" section, which said, "Pearson Education agrees to notify Corbis of the Images used on a per usage basis. Pearson Education must include image IDs within each notice. Corbis will invoice Pearson Education according to this schedule. Overdue statements will be sent to Pearson Education after 30 days. Pearson Education is responsible for all payments due." Dudash Decl. Ex. 6 at D-MU00045843. The MLA specified a "base rate" for a "one time use." Dudash Decl. Ex. 6 at D-MU00045840.

The 2004 MLA stated that Pearson would "be advised if at any time an image requested or delivered by CORBIS would NOT be covered under the terms of this agreement." Dudash Decl. Ex. 6 at D-MU00045840. The MLA excluded certain image collections, which required pre-approval before use, Dudash Decl. Ex. 6 at D-MU00045842, but none of the images at issue were excluded or required pre-approval, Soares Decl. ¶ 4.

The MLA incorporated Corbis's "Terms & Conditions, " though the letter Agreement governed if they conflicted. Dudash Decl. Ex. 6 at D-MU00045841. The 2004 MLA also included an "Audit Rights section" that gave Corbis "the right to audit reported usage vs. actual usage, " and the right to bill Pearson for any discrepancy. Dudash Decl. Ex. 6 at D-MU00045842. The 2004 MLA had a pricing structure similar to the 2001 MLA, except it also had a specific rate for print runs between 40, 000 and 100, 000, and print runs over 100, 000. Dudash Decl. Ex. 6 at D-MU00045840. The Terms and Conditions stated under a section titled the "License granted by Corbis, " "your reproduction of Images is limited to... the specific use described in your invoice, which together with these terms shall constitute the ...


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