United States District Court, N.D. California
PUBLIC/REDACTED VERSION ORDER GRANTING IN PART
DEFENDANT'S MOTION FOR SUMMARY JUDGMENT; AND GRANTING IN
PART AND DENYING IN PART PLAINTIFF'S MOTION FOR PARTIAL
SUMMARY JUDGMENT, Docket Nos. 105, 107
M. CHEN UNITED STATES DISTRICT JUDGE
Peter Menzel has sued Defendant Scholastic, Inc. for
copyright infringement. Currently pending before the Court
are motions for summary judgment or partial summary judgment
filed by both parties. Having considered the parties'
briefs and accompanying submissions, as well as the oral
argument of counsel, the Court hereby GRANTS
in part and DENIES in part each party's
motion. The Court also GRANTS the various
motions to file under seal that have been filed in
conjunction with the summary judgment briefing.
initial matter, the Court address the parties' motions to
file under seal. See Docket Nos. 104, 106, 115, 119,
125 (motions). The motions have been filed because Scholastic
has designated certain information as confidential - more
specifically, information about its print runs. Because
dispositive motions are at issue, Scholastic has the burden
of showing that there are compelling reasons to prevent
public disclosure. See Kamakana v. City & County of
Honolulu, 447 F.3d 1172, 1178-79 (9th Cir. 2006)
(stating that a "party must articulate compelling
reasons supported by specific factual findings that outweigh
the general history of access and the public policies
favoring disclosure, such as the public interest in
understanding the judicial process") (internal quotation
marks omitted). Mr. Menzel opposes sealing.
Court has reviewed the substantive submitted by Scholastic.
Based on the declaration, there are compelling reasons to
seal. See Docket No. 104-1 (Lick Decl. ¶ 4)
(testifying that Scholastic keeps "its print run totals
confidential because exposing this information could give
competitors an advantage in planning their own publications
or book lines, including in determining how many books to
print or setting prices for the publications, as well as
knowing the value of various publications to
Scholastic"). Mr. Menzel's arguments to the contrary
are not persuasive. For example, the print run information
does not have to be a trade secret in order to qualify for
sealing. Also, that Scholastic has stipulated to public
disclosure of certain print runs in a different case does not
mean that it should thereby be compelled to file all of its
print run information publicly. In addition, while some of
the print run information is old (e.g., from 2003),
that is not true for all of the print run information and, in
any event, even historical information can still be
information not shared with competitors. Finally, the Court
notes that knowing precise numbers for print runs is not of
especial public significance. If Mr. Menzel prevails in this
case -even just in part - that will be public information
available to other photographers.
the motions to file under seal are granted. The Court now
turns to the parties' motions for summary judgment.
Rule of Civil Procedure 56 provides that a "court shall
grant summary judgment [to a moving party] if the movant
shows that there is no genuine dispute as to any material
fact and the movant is entitled to judgment as a matter of
law." Fed.R.Civ.P. 56(a). An issue of fact is genuine
only if there is sufficient evidence for a reasonable jury to
find for the nonmoving party. See Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 248-49 (1986). "The mere
existence of a scintilla of evidence . . . will be
insufficient; there must be evidence on which the jury could
reasonably find for the [nonmoving party]." Id.
at 252. At the summary judgment stage, evidence must be
viewed in the light most favorable to the nonmoving party and
all justifiable inferences are to be drawn in the
nonmovant's favor. See Id. at 255.
defendant moves for summary judgment based on a claim for
which the plaintiff bears the burden of proof, the defendant
need only by pointing to the plaintiffs failure "to make
a showing sufficient to establish the existence of an element
essential to [the plaintiffs] case." Celotex Corp.
v. Catrett, 477 U.S. 317, 322 (1986); see also
Fontenot v. Upjohn Co., 780 F.2d 1190, 1194 (5th Cir.
1986) (stating that, "if the movant bears the burden of
proof on an issue, either because he is the plaintiff or as a
defendant he is asserting an affirmative defense, he must
establish beyond peradventure all of the essential elements
of the claim or defense to warrant judgment in his
favor") (emphasis omitted).
plaintiff moves for summary judgment on claims that it has
brought (i.e., for which it has the burden of
proof), it "must prove each element essential of the
claims ... by undisputed facts." CaboDistrib. Co. v.
Brady, 821 F.Supp. 601, 607 (N.D. Cal. 1992).
defendant moves for summary judgment based on an affirmative
defense (i.e., an issue on which it bears the burden
of proof), the defendant must establish "all of the
essential elements of the . . . defense to warrant judgment
in [its] favor." Martin v. Alamo Cmty. College
Dist, 353 F.3d 409, 412 (5th Cir. 2003) (internal
quotation marks omitted; emphasis omitted); see also
Clark v. Capital Credit & Collection Servs., 460
F.3d 1162, 1177 (9th Cir. 2006) (noting that a defendant
bears the burden of proof at summary judgment with respect to
an affirmative defense).
Burden of Proof
initial matter, the Court addresses the parties' dispute
related to the burden of proof on Mr. Menzel's copyright
to Mr. Menzel, to prevail on his copyright claim, he need
only prove (1) ownership of a valid copyright and (2) copying
- nothing more. See, e.g., Feist Publ'ns, Inc. v.
Rural Tel. Serv. Co., 499 U.S. 340, 361 (1991) (stating
that, "[t]o establish infringement, two elements must be
proven: (1) ownership of a valid copyright, and (2) copying
of constituent elements of the work that are original");
Rentmeester v. Nike, Inc., 883 F.3d 1111, 1116-17
(9th Cir. 2018) (stating that "[t]o state a claim for
copyright infringement, Rentmeester must plausibly allege two
things: (1) that he owns a valid copyright in his photograph
of Jordan, and (2) that Nike copied protected aspects of the
photo's expression"). Mr. Menzel maintains that he
has no obligation to prove that the copying was unauthorized
- e.g., beyond the scope of a license. See,
e.g., Muhammad-Ali v. Final Call, Inc., 832 F.3d 755,
760-61 (7th Cir. 2016) (stating that "a plaintiff is
not required to prove that the defendant's
copying was unauthorized in order to state a prima
facie case of copyright infringement[;] [r]ather, the
burden of proving that the copying was authorized
lies with the defendant") (emphasis in original).
takes a contrary position. According to Scholastic, Mr.
Menzel admitted in his SAC that Scholastic did have licenses
to use his photographs, see Hakopian v. Mukasey, 551
F.3d 843, 846 (9th Cir. 2008) (stating that
"[allegations in a complaint are considered judicial
admissions"); Am. Title Ins. Co. v. Lacelaw
Corp., 861 F.2d 224, 227 (9th Cir. 1988) (stating that
"[j]udicial admissions are formal admissions in the
pleadings which have the effect of withdrawing a fact from
issue and dispensing wholly with the need for proof of the
fact[;] [f]actual assertions in pleadings and pretrial
orders, unless amended, are considered judicial admissions
conclusively binding on the party who made them"), and,
therefore, Mr. Menzel has the burden of proving that any use
of his photographs by Scholastic was beyond the scope of the
licenses. In support, Scholastic cites MAI Systems Corp.
v. Peak Computer, Inc., 991 F.2d 511 (9th Cir. 1993).
There, the Ninth Circuit stated that, "[t]o prevail on a
claim of copyright infringement, a plaintiff must prove
ownership of a copyright and a copying of protectable
expression beyond the scope of a license." Id.
at 517 (internal quotation marks omitted); see also
S.O.S., Inc. v. Payday, Inc., 886 F.2d 1081, 1085 (9th
Cir. 1989) (noting the same); Netbula, LLC v. Bind View
Dev. Corp., 516 F.Supp.2d 1137, 1151 (N.D. Cal. 2007)
(stating that "'[a] copyright owner who grants a
nonexclusive license to use his copyrighted material waives
his right to sue the licensee for copyright
infringement'" and, "[w]here the existence of a
license is not in dispute, and only the scope of the license
is at issue, the copyright owner bears the burden of proving
that the defendant's copying was unauthorized").
Scholastic also points out that the Second Circuit has
provided a rationale as to why this burden is placed on the
copyright owner. Although "the possession of a license
by an accused infringer traditionally has been characterized
as an affirmative defense," that is because, "in
most of the cases addressing the defense of license, the
issue has been whether a license is held by the accused
infringer." Bourne v. Walt Disney Co., 68 F.3d
621, 631 (2d Cir. 1995). "[I]n such cases, evidence of a
license is readily available to the alleged licensee, [and
so] it is sensible to place upon that party the burden of
coming forward with evidence of a license." Id.
But "in cases where only the scope of the license is at
issue, the copyright owner bears the burden of proving that
the defendant's copying was unauthorized" because
the court essentially has before it a contract dispute and,
"in an ordinary contract action, the party claiming a
breach carries the burden of persuasion." Id.; cf.
In re McGraw-Hill Global Educ. Holdings, LLC, 909 F.3d
48, 66 (3d Cir. 2018) (recognizing that, under Second Circuit
law, when the "the scope of the license is at
issue," then "unauthorized use is part of
the plaintiffs prima facie case" -
i.e., "where the plaintiff concedes the
existence of a license, the burden may fall on the plaintiff,
in the first instance, to demonstrate that the scope was
exceeded"; but "[w]e have yet to consider that
doctrine and have no cause to consider it today"
because, in the case at hand, "[t]he licenses obtained
by McGraw-Hill were not granted by the photographers directly
but by Corbis as a sub-licensor" and, as the
photographers "were not themselves directly privy to
those licenses," they could not be "expect[ed] . .
. to plead unauthorized use as part of a prima
facie case") (emphasis in original and added).
is correct. As a preliminary matter, the Court notes it has
already held in the case at bar that, "because Mr.
Menzel admitted in his complaint that license agreements do
exist, he must include in his complaint allegations that,
e.g., the licenses have been exceeded."
Menzel v. Scholastic, Inc., No. 17-cv-05499-EMC,
2018 U.S. Dist. LEXIS 44833, at *8 n.l (N.D. Cal. Mar. 19,
2018) (noting that, where allegations pled in a complaint
establish the existence of an affirmative defense, a court
addition, the Ninth Circuit has held that where, as here, it
is undisputed that there was a license agreement, "[t]o
prevail on a claim of copyright infringement, a plaintiff
must prove ownership of a copyright and a copying of
protectable expression beyond the scope of [the]
license'' MAI, 991 F.2d at 517 (internal
quotation marks omitted; emphasis added); see also
S.O.S., 886 F.2d at 1085 (noting the same). This
Court is bound by the Ninth Circuit precedent.
hearing, Mr. Menzel took the position that MAI and
S.O.S. are distinguishable. According to Mr. Menzel,
in each case, the parties had a dispute about the scope of
the license; given this circumstance, it was not unfair for
the plaintiff to first bear the burden of proving what the
actual scope of the license was. But contrary to what Mr.
Menzel asserts, MAI did not involve a dispute about
the scope of the license. Rather, the issue was whether the
defendant had engaged in any "copying" under the
Copyright Act. And in neither MAI nor
S.O.S. did the Ninth Circuit suggest that its
holding uniquely applies to a dispute about the scope of the
the Second Circuit case Bourne provides persuasive
rationale as to why the plaintiff should have the burden of
proving copying beyond the scope of a license where there is
no dispute that a license exists and the only question is
whether the defendant's use of copyrighted material falls
within the scope of the existing license. "[W]here only
the scope of the license is at issue, the copyright owner
bears the burden of proving that the defendant's copying
was unauthorized" as the court has essentially before it
a contract dispute and, "in an ordinary contract action,
the party claiming a breach carries the burden of
persuasion." Bourne, 68 F.3d at 631.
Court acknowledges the Seventh Circuit's
Muhammad-Ali decision on which Mr. Menzel relies.
See Muhammad-Ali, 832 F.3d at 760-61 (stating that
"a plaintiff is not required to prove that the
defendant's copying was unauthorized in order to state
aprimafacie case of copyright infringement[;]
[r]ather, the burden of proving that the copying was
authorized lies with the defendant") (emphasis
in original). However, as Scholastic points out, the case
provides limited support as, there, "the plaintiff had
not [pled] that a license had been issued and [exceeded].
Rather, the defendant contended that its distribution of
lithographs depicting Louis Farrakhan had been permitted
under an implied license." Def's Opp'n at 4 n.l.
Moreover, the Seventh Circuit Muhammad-Ali decision
makes the same point that the Second Circuit Bourne
decision did - i.e., that usually a defendant has
the burden of proving that a use was authorized
(e.g., by a license) because it is difficult for a
plaintiff to prove a negative (i.e., that the use
was not authorized) and, "if there is evidence of a
license, it is most likely to be in the possession of the
purported licensee." Muhammad-Ali, 832 F.3d at
761 (citing Bourne). In this case, it is largely
undisputed that there were licenses between Mr. Menzel and
with this predicament, Mr. Menzel argues that the instant
case is distinguishable from the cases on which Scholastic
relies because, here, there is no "disagreement about
the scope of a license"; rather, the "licenses are
clear on their face" and "Scholastic doesn't
argue that there is any disagreement as to what the licenses
permit, and what they do not." PL's Reply at 2-3.
But Mr. Menzel misses the point. Bourne
distinguished two situations: (1) where the existence of a
license was in dispute and (2) where the existence of a
license was not in dispute but there was a question as to
whether the defendant's use had gone beyond the scope of
the license. Bourne was not concerned about how
clear the scope of the license was- i.e.,
that license terms might need to be interpreted - although
admittedly some license terms did need interpretation in
Bourne. Where the fact of the license is clear, the
plaintiff must prove the defendant exceeded that license.
Cf, e.g., S.O.S., 886 F.2d at 1088-89
("concluding] that Payday exceeded the scope of its
license" based on the "unambiguous" and
"literal" language of the contract; remanding to
the district court to determine "[w]hether
[Payday's] acts, unshielded by any license, infringed
the Court holds that, to the extent that the existence of a
license is not disputed, Mr. Menzel has the burden of proving
of proving that Scholastic exceeded the scope of the license
Main Affirmative Defenses
Court addresses next the main affirmative defenses asserted
Time Bar/Damages Bar
second affirmative defense, Scholastic asserts that Mr.
Menzel's copyright claim "is barred, in whole or in
part, by the applicable three[-]year statute of limitations
for a claim of copyright infringement (17 U.S.C. §
507(b)) and/or the three[-]year limitation on
damages pursuant to Petrella v. Metro-Goldwyn-Mayer,
Inc., 134 S.Ct. 1962, 1969 (2014)." Ans., 2d
Affirm. Def (emphasis added). Because this case was filed
back in September 2017, Scholastic is arguing that Mr. Menzel
can sue only for infringements that took place from September
2014 and after, and, in any event, is limited to damages that
were incurred for that period.
is no dispute that the above defense is in fact an
affirmative defense for which Scholastic bears the burden of
proof. Both parties have moved for summary judgment on the
Discovery Rule v. Injury Rule
17 U.S.C. § 507(b) provides that "[n]o civil action
shall be maintained under the provisions of this title
[governing copyrights] unless it is commenced within three
years after the claim accrued." 15 U.S.C. § 507(b).
Polar Bear Products v. Timex Corp., 384 F.3d 700
(9th Cir. 2004), the Ninth Circuit explained that a copyright
claim accrues "when the copyright holder 'has
knowledge of a violation or is chargeable with such
knowledge.'" Id. at 706. In other words,
"the three-year clock begins upon discovery of the
infringement." Id. Accordingly, "the
statute of limitations does not prohibit recovery of damages
incurred more than three years prior to the filing of suit if
the copyright plaintiff was unaware of the infringement, and
that lack of knowledge was reasonable under the
circumstances." Id. The Ninth Circuit added
that "[i]t makes little sense ... to bar damages
recovery by copyright holders who have no knowledge of the
infringement, particularly in a case ... in which much of the
infringing material is in the control of the defendant."
Id. at 706-07.
instant case, Mr. Menzel relies on Polar Bear's
"discovery rule" to argue that his copyright claim
is not time barred. More specifically, he argues that, even
though many infringements took place before September 2014,
he did not sue at that time because "he had no reason to
believe Scholastic was infringing. It was only after he spoke
with a colleague at a National Geographic convention -
between 2 and 3 years ago - and retained counsel that he
suspected Scholastic had been infringing his work."
Pl.'s Opp'n at 14.
recognizes Polar Bear's discovery rule but
contends that it was effectively overruled by the Supreme
Court's 2014 decision in Petrella.
Petrella, the Supreme Court addressed "whether
the equitable defense of laches . . . may bar relief on a
copyright infringement claim brought within §
507(b)'s three-year limitations period."
Petrella, 572 U.S. at 667 (emphasis added); see
also Id. at 674-75 (noting that plaintiff "sought
relief only for acts of infringement occurring" three
years before she filed suit). The Court ultimately held that
the defense may not bar relief because "courts are not
at liberty to jettison Congress' judgment on the
timeliness of suit." Id.
the specific question being addressed by Supreme Court -
laches - Petrella is not on point. Scholastic argues
nevertheless that there is language in Petrella
indicating that the discovery rule has been supplanted by an
injury rule (i.e., that a claim accrues at time of
injury regardless of discovery). In particular:
• "A claim ordinarily accrues 'when [a]
plaintiff has a complete and present cause of action.' In
other words, the limitations period generally begins to run
at the point when 'the plaintiff can file suit and obtain
relief A copyright claim thus arises or 'accrue[s]'
when an infringing act occurs." Id. at 670.
• "Although we have not passed on the question,
nine Courts of Appeals have adopted, as an alternative to the
incident of injury rule, a 'discovery rule,' which
starts the limitations period when 'the plaintiff
discovers, or with due diligence should have discovered, the
injury that forms the basis for the claim.'"
Id. at 670 n.4.
language from Petrella does not do away with the
discovery rule. Instead, the Supreme Court recognized that it
had not passed on the question of whether the discovery rule
could serve as an alternative to the injury
rule. Absent a clear overruling by the Supreme
Court, this Court remains bound by the discovery rule as
established in Polar Bear. Cf. Day v. Apoliona, 496
F.3d 1027, 1031 (9th Cir. 2007) (noting that,
'"[w]here intervening Supreme Court authority is
clearly irreconcilable with our prior circuit authority [, ]
... a three judge panel of this court and district courts
should consider themselves bound by the intervening higher
authority and reject the prior opinion of this court as
having been effectively overruled'"). Even the case
cited by Scholastic, which states that "[s]ome language
in Petrella does appear to embrace an injury-rule
analysis," ultimately still applied the discovery rule.
Yue v. MSC Software Corp., No. 15-cv-05526-PJH, 2016
U.S. Dist. LEXIS 94884, at *2 (N.D. Cal. July 20, 2016)
(stating that, because the Supreme Court "did not
directly 'pass on' the issue of whether the discovery
rule was available to a plaintiff who was not aware of an
earlier infringement, ... the Ninth Circuit's decision in
Polar Bear Products remains binding precedent in
Application of Discovery Rule
contends that, even if the Court does apply the discovery
rule, Mr. Menzel's claims are still time barred. More
specifically, Scholastic contends that, if all that Mr.
Menzel has to prove for copyright infringement is (1)
ownership and (2) copying (as he claims), then he
"'discovered' ownership and use shortly after
the invoices [i.e., licenses] were issued."
Def's Mot. at 9.
argument makes little sense. The question is not when Mr.
Menzel knew or should have known that Scholastic was copying
his photographs but rather when it was (allegedly)
illegally copying them.
does try to clarify the issue somewhat in its reply brief:
Plaintiff claims that he can both file suit and be granted
summary judgment solely on the basis of a showing of
ownership and use of his photographs (i.e., that he
does not have any burden to show that the use was
infringing). There is nothing confusing or wrong about
holding him to this same position when it comes to
determining the time of accrual of his claims for statute of
Def.'s Reply at 6. But Scholastic's position is
problematic given that, as discussed above, for purposes of
the instant case, Mr. Menzel has to show that the copying
exceeded the scope of the license.
Court thus denies Scholastic's motion for summary
judgment on the statute of limitations. Scholastic has not
established the essential elements of its affirmative defense
- i.e., did Mr. Menzel know or should he have known
about the alleged infringements prior to September 2014?
Mr. Menzel's motion for summary judgment on the statute
of limitations, it is granted. Mr. Menzel argued that there
is no evidence to support Scholastic's argument that his
copyright claims are time barred. Scholastic did not provide
any such evidence of Mr. Menzel's earlier actual or
constructive knowledge of the alleged infringements prior to
2014 (e.g., that information on print runs are
public and that therefore Mr. Menzel should have known that a
print run was exceeded on a license prior to September 2014).
to Scholastic, even if the Court does not construe
Petrella in its favor on the statute of limitations,
Petrella holds that, even if a claim is not time
barred, a plaintiff is still limited to damages that were
incurred within the three years prior to the plaintiffs
are several problems with Scholastic's position. First,
Petrella is not on point because, in the case, the
plaintiff never sought damages outside of the three-year
period before the filing of the complaint. See
Petrella, 572 U.S. at 674-75 (noting that the plaintiff
filed suit on January 6, 2009, and "sought relief only
for acts of infringement occurring on or after January 6,
Scholastic isolates language used in Petrella from
the broader context of the case. Scholastic focuses on the
following language from Petrella: "As earlier
observed, see supra, at 671-672 . . ., a successful
plaintiff can gain retrospective relief only three years back
from the time of filing suit. No recovery may be had for
infringement in earlier years." Id. at 677
(emphasis added). But in pages 671-72, the Supreme Court was
simply making its point that, for statute-of-limitations
purposes, there is an injury rule for accrual: "[A]
copyright claim . . . arises or 'accrue[s]' when an
infringing act occurs." Id. at 671. Thus, the
statement above from Petrella did not clearly create
a damages bar independent of a time bar. The discovery rule
and the ability to recover damages consistent with that rule
was not at issue.
because Petrella did not clearly create damages bar
independent of the limitations bar, Polar Bear
continues to be binding precedent on this Court, and, in
Polar Bear, the Ninth Circuit made clear that a
plaintiff can be awarded damages outside of the
three-year period before the filing of his complaint.
In copyright litigation, the statute of limitations issue
that often arises is that the plaintiff filed its copyright
claim more than three years after it discovered or should
have discovered infringement. Here, Timex makes a different,
novel argument and asks us to rule that § 507(b)
prohibits copyright plaintiffs from obtaining any damages
resulting from infringement occurring more than three years
before filing the copyright action, regardless of the date
the plaintiff discovered the infringement. In Kling v.
Hallmark Cards, Inc., 225 F.3d 1030, 1041-42 (9th Cir.
2000), we left for another day precisely this argument; that
day is now upon us. We conclude that § 507(b)
permits damages occurring outside of the three-year
window, so long as the copyright owner did not discover
- and reasonably could not have discovered - the infringement
before the commencement of the three-year limitation period.
Because Polar Bear did not discover Timex's infringement
until within three years of filing suit, Polar Bear may
recover damages for infringement that occurred outside of the
Id. at 705-06 (emphasis added).
cases on which Scholastic relies, see, e.g., Papazian v.
Sony Music Entm't, No. 16-cv-07911 (RJS), 2017 U.S.
Dist. LEXIS 164217 (S.D.N.Y. Sept. 28, 2017), are not
persuasive in that (1) they do not do much other than quote
Petrella and/or (2) they do not provide any real
explanation as to why a plaintiff who, under the discovery
rule, has a timely claim cannot get damages outside of the
three-year period prior to the filing of his suit. Indeed, it
is not even clear that the courts were asked to address this
specific issue. Furthermore, as Mr. Menzel points out, there
are post-Petrella cases that expressly reject
Scholastic's position. See, e.g., PK Music
Performance, Inc. v. Timberlake, No. 16-CV-1215 (VSB),
2018 U.S. Dist. LEXIS 169652 (S.D.N.Y. Sep. 30, 2018);
Mitchell v. Capitol Records, LLC, 287 F.Supp.3d 673
(W.D. Ky. 2017).
as to the "damages bar" asserted by Scholastic, the
Court denies summary judgment in favor of Scholastic and
grants summary judgment in favor of Mr. Menzel.
Claims Arise Under Contract Law
fourth affirmative defense, Scholastic alleges that,
"[t]o the extent [it] has breached the terms of any
license agreement, Plaintiffs claims arise under contract
law, not copyright law." Ans., 4th Affirm. Def Only Mr.
Menzel has moved for summary judgment on this defense.
backdrop for the defense is related to a distinction that
courts have made between contract "conditions" and
contract "covenants" when a plaintiff gives a
license to the defendant to use its copyright. The Ninth
Circuit has explained as follows:
"A copyright owner who grants a nonexclusive, limited
license ordinarily waives the right to sue licensees for
copyright infringement, and it may sue only for breach of
contract." However, if the licensee acts outside the
scope of the license, the licensor may sue for copyright
infringement. Enforcing a copyright license "raises
issues that lie at the intersection of copyright and contract
We refer to contractual terms that limit a license's
scope as "conditions," the breach of which
constitute copyright infringement. We refer to all other
license terms as "covenants," the breach of which
is actionable only under contract law. We distinguish between
conditions and covenants according to state contract law, to
the extent consistent with federal copyright law and policy.
MDY Indus., LLC v. Blizzard Entm't, Inc., 629
F.3d 928, 939 (9th Cir. 2010); see also Graham v.
James, 144 F.3d 229, 237 (2d Cir. 1998) (noting that,
"if the nature of the licensee's violation consists
of a failure to satisfy a condition to the license . . . any
use by the licensee is without authority from the licensor
and may therefore constitute infringement of
copyright") (internal quotation marks omitted).
MDY, the Ninth Circuit gave the following example
distinguishing conditions from covenants.
"[C]onsider a license in which the copyright owner
grants a person the right to make one and only one copy of a
book with the caveat that the licensee may not read the last
ten pages. Obviously, a licensee who made a hundred copies of
the book would be liable for copyright infringement because
the copying would violate the Copyright Act's prohibition
on reproduction and would exceed the scope of the license.
Alternatively, if the licensee made a single copy of the
book, but read the last ten pages, the only cause of action
would be for breach of contract, because reading a book does
not violate any right protected by copyright law."
Id. at 940 (quoting Storage Tech. Corp. v.
Custom Hardware Eng'g & Consulting, Inc., 421
F.3d 1307, 1316 (Fed. Cir. 2005)). The MDY court
confirmed this approach by making the following comment with
respect to the facts of the case before it:
For instance, [Term of Use] § 4(D) forbids creation of
derivative works based on [World of Warcraft] without
Blizzard's [i.e., the game creator's]
consent. A player who violates this prohibition would exceed
the scope of her license and violate one of Blizzard's
exclusive rights under the Copyright Act. In contrast, ToU
§ 4(C)(ii) prohibits a player's disruption of
another player's game experience. A player might violate
this prohibition while playing the game by harassing another
player with unsolicited instant messages. Although this
conduct may violate the contractual covenants with Blizzard,
it would not violate any of Blizzard's exclusive rights
Id. at 940-41. But see Sohm v. Scholastic
Inc., No. 16-CV-7098 (JPO), 2018 U.S. Dist. LEXIS 53490,
at *34-35 (S.D.N.Y. Mar. 28, 2018) (concluding that a license
term limiting print runs was a covenant and not a condition
because, under New York contract law, a contract term that
simply delineates acceptable and unacceptable behavior under
a license (i.e., no condition created) is a
covenant; license was given to Scholastic by Corbis, a third
party to whom the plaintiff-photographer gave authority to
issue licenses on his behalf). Thus, "for a
licensee's violation of a contract to constitute
copyright infringement, there must be a nexus between the
condition and the licensor's exclusive rights of
copyright." Id. (emphasis added).
instant case, Mr. Menzel alleges that Scholastic exceeded the
terms of the license agreements by, e.g., exceeding
print runs, going outside geographical restraints, and
violating restrictions to the printed (as opposed to
electronic) form. MDY is thus on point. See also
Actuate Corp. v. Fid. Nat'l Info. Servs., No. C
14-02274 RS, 2014 U.S. Dist. LEXIS 117513, at *6 (N.D. Cal.
Aug. 21, 2014) (stating that "courts in this circuit
have recognized claims for copyright infringement where the
licensee created or distributed copies in excess of explicit
numeric conditions within the licensing agreement while
rejecting such claims where the gravamen of the complaint was
a failure to remit sufficient royalties");
Actuate, 2014 U.S. Dist. LEXIS 117513, at *8
(indicating that "form and geographic limitations"
would be considered conditions). Moreover, tellingly,
Scholastic has not identified any specific contract term that
it believes should be construed as a covenant instead of a
condition. Because it is Scholastic's burden to prove its
affirmative defense, and not Mr. Menzel's, the Court
grants Mr. Menzel's motion for summary judgment on the
argues still that there will be questions of fact as to
whether contract terms are conditions or covenants, citing in
particular Mr. Menzel's deposition. Scholastic relies on
the following to argue it is a question of fact as to
whether, e.g., a print run limitation is a condition
A. ... I remember in grade school seeing all these little
pamphlets and magazines that they would send around, and you
know, I really trusted Scholastic.
Q. And you don't anymore?
A. I trust them less.
Q. And why is that?
A. Because if they fall into the category of textbook
publishing in general, print runs are overrun and they
don't come back and ask for, you know, a renewed license.
People tend to ask when they get caught and they are not
proactive in knowing that their print run doubled and that
they should go back to all the people that they licensed from
and tell them that fact so that they could increase their fee
a little bit.
Docket No. 113-2 (Rosenthal Decl., Ex. A) (Menzel Depo. at
100-01). But the deposition testimony weighs more in favor of
Mr. Menzel rather than Scholastic - i.e., a
"renewed license" with more money would be required
because the original license was conditioned on compliance
with the specific print run limitations.
Invalid and/or Unenforceable Copyright Registration
sixth affirmative defense, Scholastic asserts that "some
or all. . . copyright registrations may be invalid and/or
unenforceable." Ans., 6th Affirm. Def; see also
7 U.S.C. § 411(a) (providing that "no civil action
for infringement of the copyright in any United States work
shall be instituted until preregi strati on or registration
of the copyright claim has been made in accordance with this
Mr. Menzel has moved for summary judgment on this defense.
on its opposition, Scholastic seems to make two arguments as
to why certain copyright registrations are problematic. Each
argument is addressed below, a. Copyright Registration VA
to Scholastic, one problematic copyright registration is VA
1-719-226 (registered in October 2007). That registration
apparently covers hundreds of images, including eight images
at issue in this case. See Def's Opp'n at 11
(identifying rows from SAC that are covered by the
registration VA 1-719-226; also stating that the
"backup" for the copyright registration consists of
"approximately fifty pages, each identifying over one
hundred images that are purportedly registered").
the Copyright Act regulations, an applicant may ask for one
registration - a "group registration" - to cover
more than one photograph. The Copyright Office has a circular
on "Multiple Works" (Circular No. 34) that
addresses, inter alia, group registrations. It
provides, inter alia, as follows:
When the Copyright Office issues a group registration, it
prepares one certificate of registration for the entire group
and assigns one registration number to that certificate. A
registration for a group of unpublished works, a group of
unpublished photographs, a group of published photographs, a
group of contributions to periodicals, or a group of secure
test items covers the copyrightable authorship in each work
that has been included in the group, and each work is
considered to be registered as a separate work. Similarly, a
registration for a group of serials, newspapers, or
newsletters covers each issue in the group, and each issue is
considered to be registered as a separate work.
December 4, 2019).
October 2007, the federal regulations specified as follows
with respect to group registration of photographs:
Pursuant to the authority granted by 17 U.S.C. 408(c)(1), the
Register of Copyrights will accept a single application (on
Form VA), deposit and filing fee for registration of a group
of photographs if the following conditions are met:
[inter alia] (iii) The photographs in the group must
have been published within the same calendar year.
37 C.F.R. § 202.3(b)(10)(iii) (version effective July
25, 2007, to July 1, 2008) (emphasis added).
to Scholastic, Mr. Menzel is not entitled to summary judgment
on the affirmative defense of invalidity/unenforceability
because there is a question of fact as to whether the
photographs in the group covered by the registration were all
published within the same calendar year. The registration on
its face indicates that the date of publication is October
2007. See 17 U.S.C. § 101 (defining
"publication" as "the distribution of copies
or phonorecords of a work to the public by sale or other
transfer of ownership, or by rental, lease, or
lending"). But, Scholastic notes, per Row 3 in the SAC,
it got a license to use one photograph covered by the
registration in 1998 - i.e., before the alleged date