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Attorneys

Ninth Circuit Rejects “General Possibility” of Infringement Theory

June 27 2018

By James Kachmar

Today’s real estate industry relies heavily on the use of websites displaying photographs of properties for sale to entice buyers. Many of the photographs on these sites are taken by professional photographers who license the use of their photos and retain the copyrights to them. In Stevens v. CoreLogic, Inc. (decided June 20, 2018), the Ninth Circuit was faced with the question of whether these photographers can maintain an action for copyright infringement against a company whose software apparently “scrubbed” metadata identifying the copyright holders of photographs on various real estate websites.

The plaintiffs in the CoreLogic case were photographers who were hired by various real estate agents to take digital photos of homes for sale. These photos would then be shown on the real estate agent’s websites and other sites to attract potential buyers for these properties. The digital photographs would contain metadata, which although invisible to the average user, contained information that could help identify the author of the photograph as well as potential copyright ownership information. Copyright law, specifically 17 U.S.C. § 1202(b) ,restricts “the removal or alteration of copyright management information (“CMI”) – information,” such as the title, the author, the copyright owner and other identifying information, from a copyrighted work.

CoreLogic develops and provides software to the real estate industry, primarily multiple listing services also known as MLSs. Because digital photos can entail large file sizes, CoreLogic’s software programs would “downsize” photos, which would include removing metadata from particular images. In May 2014, the Plaintiffs sued CoreLogic claiming that its software, by removing this metadata, constituted copyright infringement. (It appears that shortly after the lawsuit was filed, CoreLogic modified its software to allow at least one form of metadata to remain attached to images displayed on the MLS websites.)

After discovery was nearly complete, CoreLogic moved for summary judgment arguing that there was no evidence that it intended to allow infringement of Plaintiffs’ copyrights. The trial court agreed with CoreLogic and granted judgment in its favor, which judgment the photographers appealed to the Ninth Circuit. (This article does not address other issues raised on appeal by the Plaintiff photographers.)

In essence, the Ninth Circuit considered whether Plaintiffs could state prevail on a claim against CoreLogic that its software unlawfully removed CMI metadata in violation of 17 USC § 1202(b)(1) and that CoreLogic violated 17 U.S.C. § 1202(b)(3) by distributing images knowing that CMI had been removed. After reviewing the text of both of these statutes, the Ninth Circuit recognized that “[b]oth provisions … require the defendant to possess the mental state of knowing, or having a reasonable basis to know, that his actions `will induce, enable, facilitate or conceal’ infringement.” The Ninth Circuit agreed with the trial court that the Plaintiff- Photographers had not produced admissible evidence to satisfy this required mental state.

The Plaintiff-Photographers’ main argument was that by removing metadata, CoreLogic was impairing the ability of copyright owners to detect whether someone might be using their photographs in violation of their copyrights. The Ninth Circuit reasoned that this argument was not based on any affirmative evidence, but rather, “it simply identifies a general possibility that exists whenever CMI is removed.” The Ninth Circuit held that this “general possibility” was not sufficient to establish copyright infringement.

First, in reviewing the statutory language, the Ninth Circuit found it important to “give effect, if possible, to every clause and word of a statute.” Thus, in order not to make sure that the mental state requirement set forth in these provisions was not a “superfluity,” there must be a more specific application “than the universal possibility of encouraging infringement.” While the Plaintiff-Photographers were not required to show that any specific infringement had already occurred, the Ninth Circuit held that a plaintiff “must make an affirmative showing, such as by demonstrating a past `pattern of conduct’ or `modus operandi,’ that the defendant was aware of the probable future impact of its actions.” The Ninth Circuit continued by recognizing that the statutory intent is further evidenced by the fact that it was enacted in response to similar concerns addressed in the WIPO Copyright Treaty and the WIPO Performance and Phonograms Treaty. In sum, the Ninth Circuit concluded that in order to satisfy the knowledge requirement of section 1202(b), “a plaintiff … must offer more than a bare assertion that `when CMI metadata is removed, copyright infringement plaintiffs … lose an important method of identifying a photo as infringing.’”

The Ninth Circuit then concluded that the Plaintiff-Photographers had failed to offer any specific evidence that the removal of the CMI metadata impaired their ability of policing possible infringement. First, the Plaintiff-Photographers had not produced any evidence that they ever relied on the use of CMI metadata to prevent or detect copyright infringement of their works. In fact, at least one of the plaintiffs apparently testified that he had never looked at metadata information on any MLS system. Furthermore, on two occasions when one of the plaintiffs became aware that his photographs were being infringement upon, this discovery came through a notice provided by the real estate agent who had commissioned the photos later discovering them on another website.

Furthermore, the Plaintiff-Photographers had not offered any evidence that CoreLogic’s distribution of real estate photographs to other sites had ever resulted in an infringing use of photographs by third parties. Importantly, the Ninth Circuit recognized that if a third party was intent on infringing the copyrights of one of the photographers, that party could always remove any CMI metadata, which would also preclude the detection of infringement through the search of metadata. The Ninth Circuit concluded that “because the photographers have not put forward any evidence that CoreLogic knew its software carried even a substantial risk of inducing, enabling, facilitating or concealing infringement, let alone a pattern or probability of such a connection to an infringement, CoreLogic is not liable for violating 17 U.S.C. § 1202(b).”

The CoreLogic decision is a reminder to copyright infringement plaintiffs that in order to prevail on a copyright infringement claim, they must come forward with admissible evidence to meet each of their burdens of proof to establish their claim. The Ninth Circuit has made clear that relying on a “general possibility” of infringement theory will not suffice to meet this burden and risk dismissal of such claims.

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James Kachmar is a shareholder in Weintraub Tobin Chediak Coleman Grodin’s litigation section. He represents corporate and individual clients in both state and federal courts in various business litigation matters, including trade secret misappropriation, unfair business competition, stockholder disputes, and intellectual property disputes. For additional articles on intellectual property issues, please visit Weintraub’s law blog at www.theiplawblog.com.