Facts

Plaintiff Greg Young Publishing Inc. is a California based art publisher representing several artists. Plaintiff commissioned Kerne Erickson to create a series of retro travel themed posters. Erickson transferred the copyrights to the artwork to plaintiff whose business includes licensing the artwork for printing onto merchandise. Plaintiff also represented Scott Westmoreland.

Defendant Zazzle Inc. is a print-on-demand e-commerce company based in Redwood City that offers consumers the ability to purchase products with nearly any design the customer chooses from defendant's website. Third-parties, such as artists and designers upload images (e.g., artwork, photographs, drawing) to virtual stores maintained on defendant's website where they offer the images for sale on their choice of merchandise such as clothing, calendars, mousepads, stamps, posters, stationary, coffee mugs, postcards, tote bags, etc., to be printed once a customer orders it.

PLAINTIFF'S CONTENTIONS: Plaintiff claimed defendant violated its copyrights to 35 works of art painted by artist Kerne Erickson. Plaintiff contended it owned the copyrights, and had sent numerous notices to Zazzle Inc. of infringements. Plaintiffs claimed Zazzle Inc. manufactured and sold over 2,200 infringing physical products.

At trial, plaintiff presented evidence of its copyrights, its notices to defendant advising of the infringements, and of defendant's manufacture and sale of over 2,200 products infringing plaintiff's copyright, since 2013.

Prior to trial, the court on summary judgment, found that the DMCA's safe harbor defense, under 17 U.S.C. 512(c), was inapplicable to defendant's manufacture and sale of physical products bearing copyright protected designs. The court found that because defendant had control over the infringement (as it was manufacturing the infringing products and because it financially benefited from its infringing manufacture and sale) the DMCA safe harbor did not apply.

However, the court expressly noted in its ruling that this finding did not preclude Zazzle from invoking section 512(c) in regards to images that were displayed on defendant's website but were never printed onto physical products. There were four such products, and plaintiff elected not to pursue at jury trial the claims of copyright infringement for those four display-only images. In addition, the court ruled that the plaintiff did not have standing to pursue claims on behalf of Westmoreland.

DEFENDANT'S CONTENTIONS: Defendants denied the allegations.

The court found that the DMCA safe harbor could apply to images on Zazzle's website that were never printed on a physical product. Plaintiff did not pursue infringements claims as to those images at trial.

Settlement Discussions

Defendant's initial offer to settle was $36,000, which was incrementally increased as trial approached. At mediation defendant offered $330,000. Defendants' last offer, 14 days before trial, was $525,000. All offers by defendant were made via a FRCP Rule 68 Offer of Judgment and never included attorney's fees or costs. Plaintiff initially demanded $1.2 million. At mediation, plaintiff demanded $725,000 and thereafter never again offered to settle.

Damages

Plaintiff sought statutory damages under 17 USC 504, in lieu of defendant's profits and plaintiff's actual damages.

Result

Unanimous verdict for plaintiff in the amount of $460,800, which included statutory damages for each of the 35 individual infringements ranging between $200 and $66,800 per infringement.

Other Information

Plaintiff will file a motion for attorney fees and costs under 17 USC section 505, which plaintiff claims should increase the judgment by another $400,000. Plaintiff has filed a motion for permanent injunctive relief and impoundment of infringing images to address Defendant's continuing violations of plaintiff's copyrights, under 17 U.S.C. 502 and 503. Plaintiff's motion raises issues about defendant using reverse image searching in the future to identify and stop infringement before it happens. Reverse image search technology creates a digital fingerprint. Defendant has filed a motion for judgment as a matter of law under Federal Rules of Civil Procedure, Rules 50 and 59, challenging the jury's award of damages exceeding $30,000 for five different works of art.

Deliberation

two hours

Length

two days