Yellow Pages Photos, Inc. v. Yellow Pages Group, LLC ( 2015 )

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[PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________
Nos. 14–13355; 14–13401
________________________
D.C. Docket No. 8:12-cv-00755-RAL-EAJ
YELLOW PAGES PHOTOS, INC.,
Plaintiff–Counter Defendant–Appellee,
versus
ZIPLOCAL, LP,
Defendant–Counter Claimant,
YELLOW PAGES GROUP, LLC,
Defendant–Appellant.
________________________
Appeals from the United States District Court
for the Middle District of Florida
________________________
(July 30, 2015)
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Before MARTIN and ROSENBAUM, Circuit Judges, and COOGLER, * District
Judge.
COOGLER, District Judge:
Yellow Pages Group, LLC appeals from a $123,000 judgment against it in
favor of Yellow Pages Photos, Inc., following a jury verdict in a copyright
infringement trial. Yellow Pages Photos, Inc. cross appeals, arguing that it is
entitled to a new trial on damages due to the alleged error of the district court in
several of its discovery, evidentiary, and procedural rulings. After careful review
of the record and briefs of the parties, and having the benefit of oral argument, we
affirm the district court on all issues raised on appeal.
I.
A.
The facts presented at trial are as follows. In the late 1990s, Trent Moore
(“Moore”), an amateur photographer and former owner of a yellow pages ad
production company, founded Yellow Pages Photos, Inc. (“YPPI”), to create and
license stock photographs tailored to the yellow pages industry. YPPI set out to
create stock photos that were relevant to the directory industry from a subject
matter perspective. By 2004, YPPI owned a library of over 4,000 copyrighted
photos that for efficiency were grouped into collections—also referred to
*
The Honorable L. Scott Coogler, United States District Judge for the Northern District
of Alabama, sitting by designation.
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throughout as “headings”—that generally corresponded to yellow pages headings,
such as “Plumbers,” “Roofers,” “Attorneys,” or “Landscape.” In Moore’s words,
[S]ince I was going to provide imagery specifically to the yellow
pages industry, the idea was to develop images such that when they
were looking for the image and the heading and the artwork requested,
everything has the same vernacular. And so efficiencies can be made
by okay, I can go here and I’ll have 50 of these, a hundred of these
different looks.
[Doc. 423 at 66.] Moore also explained that the stock photos were not redundant in
that every photo could be used by a publisher: “[T]hey were shot in such a way
that each image could be used to its fullest. . . . What we wanted to do was have ten
different photos of this, not one guy ten ways. We need ten guys one way.” [Id. at
65–67.]
In March of 2004, Moore met with John Woodall (“Woodall”), the CEO of
phone book publisher Ziplocal, LP (“Ziplocal”), then called Phone Directories
Company. Woodall found Moore’s product interesting because it consisted of a
large number of “images of things organized by Yellow Page headings.” [Doc. 425
at 40–41, 77.] As Woodall put it, “I had never seen at that point a collection
organized the way that we actually did business, which was dealing with
businesses by heading.” [Id. at 41.] At that meeting, Moore and Woodall reached
an agreement for the use of YPPI’s photos. YPPI’s contract with Ziplocal consisted
of two documents, the terms of which were agreed to during the meeting. The first
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was titled “Site License Purchase Agreement” (“SLPA”). The second was titled
“End User License Agreement” (“EULA”).
The SLPA is a one-page, bullet-pointed document signed on March 15,
2004, by Moore and Woodall that provided, among other things, that for the price
of $875 per CD-ROM disk, “[Ziplocal] agrees to purchase all current titles as well
as all new relevant headings as they become available, up to the first 200
Headings. YPPI will ship 1–2 headings per month.” [Joint Trial Exhibit 2.] The
SLPA thus contemplated an initial purchase of a license to use, and delivery of,
YPPI’s photos that were then available, followed by additional purchases and
deliveries of an additional 120 headings over time. The SLPA provided for an
unlimited number of “authorized users” of the photos, and although it permitted
Ziplocal to use any type of “server or information system [necessary] to facilitate
multiple user simultaneous access,” it required Ziplocal to protect the photos from
“unauthorized distribution to unlicensed users.” [Id.] The SLPA, which refers to
itself internally as “this agreement,” also refers to another agreement called “the
license agreement.” [Id.] Both Moore and Woodall testified that this reference to
“the license agreement” was to the EULA. There was no testimony to the contrary,
and no dispute the SLPA was a binding contract between YPPI and Ziplocal.
The EULA is a two-page, unsigned document that contained terms in
addition to, and that expanded upon, the terms of the SLPA, including the
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following, relative to the use and transfer of photos: “[Ziplocal] may not transfer
these images to any outside parties or individuals unless authorized by YPPI. All
users must be Employees of [Ziplocal].” [Joint Trial Exhibit 20.] The EULA also
limited the number of users of the photos to 40, indicated that opening the package
containing the photos “indicates your acceptance of the terms and conditions set
forth,” and stated that “if you do not agree with these conditions YPPI does not
grant license and you should return the unopened packages within 10 days for a
full refund.” [Id.]
Moore testified that there were two contracts because, “There’s the purchase
agreement which details, you know, things like how many CDs or images are
going to be purchased and there’s a license agreement that details the restrictions
and use.” [Doc. 424 at 19.] Woodall’s testimony was also that both the SLPA and
EULA were contracts of YPPI and Ziplocal and that the EULA was simply “the
detail of the license agreement behind the [SLPA].” [Doc. 425 at 44.]
Notwithstanding persistent cross examination, Woodall repeated over and over that
the EULA was an agreement between YPPI and Ziplocal. [Id. at 98–100.] Moore
and Woodall also testified that the SLPA and EULA were agreed to
contemporaneously. Moore stated that “when I consummated the deal with John
Woodall, [the SLPA and EULA] were together.” [Doc. 424 at 19–20.] Woodall
testified that he saw the SLPA and EULA around the same time. [Doc. 425 at 44.]
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At their meeting in March 2004, Moore gave Woodall a hard drive with the
first 4,000 photos, or 80 collections, on it. In April 2004, Moore sent the first CD
of additional photos to Ziplocal, and the package contained the EULA. From 2004
to 2009, Ziplocal made payments and received in installments more collections of
photos, until it had acquired YPPI’s entire library of 10,411 photos grouped into
178 headings organized by subject matter. Each time Moore sent a new collection
of around 50 photos burned onto a CD, he would enclose the EULA in the
packaging. Moore testified that “[e]ach time I delivered images, there would be a
license agreement attached to the disks.” [Doc. 424 at 58.] Lee Lott, the Director of
Production and later the Vice President of Operations at Ziplocal, testified that
“[The EULA] was basically put in with his CDs when he sent them in a package.
So it was there all the time.” [Doc. 425 at 189–90.] Moore testified that he never
changed the terms of the EULA.
Yellow Pages Group, LLC (“YPG”) was not a party to either the SLPA or
the EULA. YPG and Ziplocal did not start doing business until six years later, in
2010, when YPG sold its phone books to Ziplocal and subcontracted with Ziplocal
so that YPG’s employees could provide support in producing Ziplocal’s phone
books. YPG employees assembled and paginated the digital pages to prepare them
for printing, modified existing ads by updating phone numbers and addresses, and
created new ads, tasks that Ziplocal had previously done in-house. The relationship
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between Ziplocal and YPG was governed by an Outsourcing Agreement signed in
November 2010. The agreement provided that any work performed by YPG for
Ziplocal would not infringe third-party intellectual property rights. As part of their
agreement, Ziplocal provided YPG with digital copies of its phone books that
included photos that had been licensed from YPPI. In updating those books, YPG
used some of YPPI’s licensed photos. YPPI was never asked to consent to any
transfer of its photos by Ziplocal to YPG, or to the use of its photos by YPG. In
any event, and as Moore admitted at trial, Ziplocal’s outsourcing to YPG resulted
in YPPI’s photos being used as intended under the SLPA, which was only in
Ziplocal publications. [Doc. 424 at 225–26.]
In 2011, YPPI discovered that Ziplocal outsourced its graphics functions to
YPG, and that YPG was using YPPI’s photos without a license. YPPI sent Ziplocal
a cease and desist letter, containing a copy of the EULA, which required all
“users” of YPPI’s photos to be employees of Ziplocal’s. When YPG was notified
of the particular ads that YPPI thought were infringing, Ziplocal and YPG removed
them from the next edition of the phone books, substituting photos licensed from
another company, Getty Images, for YPPI’s photos. Moore testified that it took
many months to identify which of his photos he thought YPG and Ziplocal were
infringing because he had to compare them to his master set, and that he was
working on identifying infringing photos right up until the time of trial. On April 9,
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2012, YPPI commenced this action. Ziplocal and YPG were still using YPPI’s
photos to build ads after the commencement of the lawsuit.
B.
YPPI filed a two-count complaint, for breach of contract against Ziplocal,
and for infringement against both Ziplocal and YPG under the United States
Copyright Act of 1976, 17 U.S.C. § 101, et seq. After the claims survived cross
motions for summary judgment, the case was tried to a jury from March 17 to 27,
2014. YPPI contended at trial that its contract with Ziplocal was comprised of two
documents, the SLPA and the EULA, that both the SLPA and the EULA
prohibited transfer of YPPI’s photos and restricted use of the photos to employees
of Ziplocal, and that the terms of both the SLPA and EULA were breached when
Ziplocal transferred photos to, and permitted use of the photos by, YPG. On the
other hand, Ziplocal and YPG claimed that only the SLPA was the operative
contract between the parties, and that the EULA was invalid. In Ziplocal and
YPG’s view, since their conduct did not violate the terms of the SLPA, they could
not have infringed YPPI’s copyrights.
During trial, both parties requested that, before the case was submitted to the
jury, the district court decide, based on the evidence introduced at trial, how many
individual photos constituted a “work” as that term is defined in the Copyright Act
for purposes of computing statutory damages. The court ruled that each of YPPI’s
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178 collections of photos relating to phone directory subject matter such as
“Appliances,” “Attorneys,” etc., was a work for statutory damages purposes,
rejecting YPPI’s contention that each of its 10,411 individual photos was a work.
The court reached this conclusion by considering how YPPI arranged the photos
for marketing purposes, noting that Moore had testified that the purpose for
grouping his photo collections by subject matter heading, rather than marketing
individual photos, was for customer appeal and efficiency. The court also
considered how YPPI registered the photos with the Copyright Office, under the
178 titles, grouping various title collections together on 44 different registration
applications, how it delivered the photos to Ziplocal, in that the SLPA provided
that YPPI would sell “up to the first 200 Headings” initially and would
subsequently “ship 1–2 headings per month,” and how it described the photos in its
complaints as collections, pointing out that YPPI did not take the position until it
filed its Third Amended Complaint that each photograph constituted a single work.
At the close of the evidence, the court used YPPI’s proposed jury
instructions and verdict form in submitting the case to the jury. In response to
questions on the verdict form, the jury first found by a preponderance of the
evidence that “the EULA is a valid and binding contract between YPPI and
Ziplocal.” It then found that Ziplocal breached “its contract” with YPPI. The jury
then filled in a blank to award YPPI zero dollars on its breach of contract claim. In
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response to further questions, the jury found both Ziplocal and YPG to be willful
infringers of YPPI’s copyrights and that 123 of YPPI’s 178 works had been
infringed. The jury then awarded one dollar in actual damages and zero dollars in
statutory damages against Ziplocal, and zero dollars in actual damages and
$123,000 in statutory damages against YPG. Finally, the jury found that Ziplocal
was a contributory infringer to YPG’s copyright infringement and awarded
$100,000 in actual damages and zero dollars in statutory damages to YPPI on the
contributory infringement claim.
After trial, Ziplocal and YPG renewed their motions for a judgment as a
matter of law, which were denied by the district court. YPPI made its election
between actual and statutory damages, as it was authorized to do under the
Copyright Act, electing to recover 1) $100,001.00 in actual damages from Ziplocal
and 2) $123,000.00 in statutory damages from YPG. YPPI filed a motion for
attorneys’ fees and nontaxable and taxable costs, seeking over $2 million. The
district court denied YPPI’s motion without prejudice, pending the outcome of this
appeal. YPG timely appealed the district court’s denial of its post-trial renewed
motion for a judgment as a matter of law to this Court. Ziplocal also appealed, but
its appeal was dismissed for want of prosecution. YPPI cross appealed several of
the district court’s discovery, evidentiary, and procedural rulings. We have
jurisdiction pursuant to 28 U.S.C. § 1291.
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II.
A.
YPG argues that it is entitled to a judgment as a matter of law for several
reasons, the first being that the SLPA permitted Ziplocal to outsource the use of
YPPI’s photos to YPG, irrespective of the EULA’s prohibition on transferring
photos to non-employees, and as such, YPG’s assistance to Ziplocal in publishing
its phone books by using YPPI’s photos was not copyright infringement.
Alternatively, YPG contends that even if the EULA could override the SLPA, it is
still entitled to a judgment as a matter of law because the EULA was invalid for
several reasons: Ziplocal did not give consideration for it, YPPI did not present
evidence that each EULA accompanying the attached CD of photos was accepted
by someone at Ziplocal with authority to bind the company, and YPPI did not
prove that the EULA applied to any of the 123 works the jury found YPG
infringed. Finally, YPG contends that it is entitled to a judgment as a matter of law
because it believes that YPPI did not present evidence that it acted willfully in
infringing YPPI’s copyrights. As explained further in this opinion, the jury’s
verdict is not due to be disturbed for any of the reasons set forth by YPG.
1.
Before addressing YPG’s arguments, we must take up YPPI’s contention
that YPG lacks standing to make several of those arguments in this appeal. See
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Doe No. 1 v. United States, 749 F.3d 999, 1003 (11th Cir. 2014) (“We review de
novo whether we have jurisdiction . . . before addressing the merits.”).
In addressing YPPI’s claims, the jury had to determine what documents
constituted the contract between YPPI and Ziplocal (i.e., just the SLPA, or the
EULA as well), what the terms of the contract were, and whether Ziplocal
breached its contract with YPPI, before it could address whether YPG and Ziplocal
infringed YPPI’s copyrights. Because Ziplocal has no pending appeal, YPPI
asserts that YPG, not a party to the contract between Ziplocal and YPPI, and
nowhere arguing that it is an intended third-party beneficiary of the contract, lacks
“standing” to assert arguments relating to the validity and interpretation of the
SLPA or the EULA. YPPI’s contention is based primarily on this Court’s previous
holding that if a plaintiff is not an intended third-party beneficiary of a contract, the
plaintiff lacks standing to sue under the contract and that, consequently, the court
lacks jurisdiction. See Interface Kanner, LLC v. JPMorgan Chase Bank, N.A., 704
F.3d 927, 932–33 (11th Cir. 2013). However, as explained below, YPPI’s
jurisdictional argument is misplaced, as YPG without question possesses standing
to litigate this appeal.
“[T]he core component of standing is an essential and unchanging part of
the case-or-controversy requirement of Article III.” Lujan v. Defenders of Wildlife,
504 U.S. 555, 560, 112 S. Ct. 2130, 2136 (1992). Accordingly, standing “is the
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threshold question in every federal case, determining the power of the court to
entertain the suit.” Warth v. Seldin, 422 U.S. 490, 498, 95 S. Ct. 2197, 2205
(1975). “In essence the question of standing is whether the litigant is entitled to
have the court decide the merits of the dispute or of particular issues.” Id. A litigant
is so entitled only when he has “such a personal stake in the outcome of the
controversy to assure that concrete adverseness which sharpens the presentation of
issues upon which the court so largely depends.” Baker v. Carr, 369 U.S. 186, 204,
82 S. Ct. 691, 703 (1962). A plaintiff must meet three requirements in order to
establish Article III standing: injury in fact—“a harm that is both concrete and
actual or imminent, not conjectural or hypothetical,” causation—“a fairly traceable
connection between the alleged injury in fact and the alleged conduct of the
defendant,” and redressability—“a substantial likelihood that the requested relief
will remedy the alleged injury in fact.” Vt. Agency of Nat. Res. v. U.S. ex rel.
Stevens, 529 U.S. 765, 771, 120 S. Ct. 1858, 1861–62 (2000) (internal quotation
marks, citations and alterations omitted). To establish standing, a litigant ordinarily
“must assert his own legal rights and interests, and cannot rest his claim to relief on
the legal rights or interests of third parties.” Warth, 422 U.S. at 499, 95 S. Ct. at
2205. This “general prohibition on a litigant’s raising another person’s legal rights”
is a “prudential standing” doctrine, “not derived from Article III.” Lexmark Int’l,
Inc. v. Static Control Components, Inc., 134 S. Ct. 1377, 1386 (2014). “[T]his
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obligation on the court to examine its own jurisdiction,” including whether the
parties have standing, “continues at each stage of the proceedings . . . .” Cuban Am.
Bar Ass’n, Inc. v. Christopher, 43 F.3d 1412, 1422 (11th Cir. 1995).
YPPI’s assertion that YPG lacks “standing” is problematic because YPG
advances its interpretation of the SLPA and the EULA not as a plaintiff in pursuit
of a contract claim—indeed, YPG has no breach of contract claim—but in its
defense against the copyright infringement claim levied against it by YPPI. To be
sure, the requirement that a party establish its standing to litigate applies not only
to plaintiffs but also defendants. See Arizonans for Official English v. Arizona, 520
U.S. 43, 64, 117 S. Ct. 1055, 1067 (1997) (stating that “[s]tanding to sue or defend
is an aspect of the case-or-controversy requirement” and “[s]tanding to defend on
appeal in the place of an original defendant, no less than standing to sue, demands
that the litigant possess a direct stake in the outcome”) (emphasis added and
internal quotation marks omitted). Nonetheless, the issue of standing in civil
litigation normally arises in the context of the plaintiff’s standing to sue, and not in
the defendant’s standing to defend against suit. See 13A Charles Alan Wright &
Arthur R. Miller, Federal Practice and Procedure § 3531 (3d ed. 2014) (noting
that the party focused upon is “almost invariably the plaintiff” and that “ordinarily
the role of defendants is considered only in determining whether they have caused
the injury complained of and whether an order directed to them will redress that
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injury”). For example, the cases relied upon by YPPI for determining whether
YPG has established standing in this case are cases in which the plaintiff’s
standing to sue on a contract was challenged, not the defendant’s standing to assert
a defense. See, e.g., Interface Kanner, 704 F.3d at 932. The concept of the
defendant’s standing does not typically arise because the requirement that a
defendant possess standing is almost always satisfied by the plaintiff’s claim for
relief against that defendant. After all, any defendant against whom relief is sought
will generally have standing to defend due to its exposure to an adverse judgment,
the threat of which is imminent.
In the instant case, the justiciable controversy before the Court is whether
YPG infringed YPPI’s copyrights in its photos. YPG meets the requirement that it
possess standing to litigate this controversy, as it has a concrete and actual interest
in avoiding a judgment being entered against it on YPPI’s copyright infringement
claim, an interest that will be directly affected by the outcome of this appeal. YPG
unquestionably has standing.
Moreover, whether YPG can assert a defense to YPPI’s copyright
infringement claim based on a particular interpretation of the SLPA and the EULA
is simply not an issue of “standing” in the same sense that the term “standing” is
used in resolving a challenge to a plaintiff’s ability to pursue a claim. This point is
illustrated in Excel Willowbrook, L.L.C. v. JPMorgan Chase Bank, National
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Association, 758 F.3d 592 (5th Cir. 2014), where Judge Edith Brown Clement
observed in her concurrence that a litigant’s request that a court interpret a third-
party contract in a manner favorable to its interests is not a matter of that litigant’s
Article III standing but is instead a question of contract law. Id. at 604. In that case,
the owners (the “Landlords”) of tracts of land that had been leased to a bank before
its failure brought actions to enforce the leases against the purchaser of the bank’s
assets (“Chase”). Id. at 595–96. The Landlords sought to enforce the leases by
virtue of the FDIC’s conveyance of the failed bank’s assets and liabilities to Chase.
Id. The FDIC argued that the Landlords lacked standing to interpret or enforce the
contract of conveyance between the FDIC and Chase because they were neither
parties to it nor intended third-party beneficiaries. Id. at 596. The court held that
the Landlords were not intended third-party beneficiaries but that they nonetheless
possessed standing by virtue of their privity of estate with Chase. Id. at 599–600.
Judge Clement observed separately that the Landlords made the requisite showing
to demonstrate the injury, causation, and redressability components of standing
because the assignment of the leases from the failed bank to the FDIC to Chase
directly caused them to lose rental income, and a money judgment against either
the FDIC or Chase would redress their loss. Id. at 603–04. She rejected the FDIC’s
argument, writing:
The FDIC’s counterargument that non-third-party beneficiaries
cannot interpret and enforce a contract against the understanding of
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the contracting parties improperly tries to stretch a question of
contract law into a dubious principle of constitutional law. Non-third-
party beneficiaries to contracts usually cannot show that they have
suffered an injury to a legally protected interest because contract law
does not recognize and compensate non-third-party beneficiaries for
the injuries that they often suffer when a contracting party fails to
comply with a contract. But when jurisdiction is otherwise proper,
there is no inherent bar prohibiting a stranger to a contract from
asking the court to interpret a contract that has bearing on its case.
Id. at 604. Similarly here, having already determined that YPG has standing, there
is no jurisdictional bar to YPG asking this Court to interpret YPPI’s licensing
agreement with Ziplocal. That agreement precipitated the copyright infringement
claim YPPI now asserts against YPG, and whether YPG will be absolved of
liability or made to pay the damages award depends in part on this Court’s
interpretation of the agreement at issue. Judge Clement’s conclusion in Excel
Willowbrook that the Landlords did not have a standing problem is exceptionally
persuasive given our facts, considering that the non-third party beneficiaries asking
the court to interpret the contract in Excel Willowbrook actually initiated the
litigation, while here, YPG offers its interpretation of the SLPA and the EULA as a
defendant—YPG is only in court because YPPI put it there. Cf Culhane v. Aurora
Loan Serv. of Neb., 708 F.3d 282, 290 (1st Cir. 2013) (while noting that “[i]t is true
that a nonparty who does not benefit from a contract generally lacks standing to
assert rights under that contract,” making clear that a debtor “could challenge an
assignment as a defense upon being haled into court by the assignee seeking to
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collect on her debt”) (citing 6A C.J.S. Assignments § 132 (2012)). Simply put, the
rule from Interface Kanner preventing a non-party from enforcing a contract by
seeking damages or specific performance under the contract is not applicable in the
instant case. Here, YPG is not seeking to enforce rights it believes it has under the
SLPA and the EULA but is merely asking the Court to interpret a contract that has
some bearing on its defense to YPPI’s copyright infringement claim. YPG’s
chosen defense is not a matter of jurisdictional consequence.
Finding no standing problem, we pause to satisfy ourselves that YPG can
nonetheless assert its defense even though it was not in privity of contract with
YPPI. 1 To the extent that this issue is properly before us, we find that YPG may do
so. Outsiders to contracts have successfully asked courts to interpret those
contracts for various purposes. For example, courts have allowed defendants to
rely on written contracts, to which they were neither parties nor intended
beneficiaries, in support of their defenses, and have rejected, pursuant to the parol
evidence rule, the contracting parties’ testimony, which contradicted the written
terms of the contract. See United States v. Ivey, 414 F.2d 199, 203 (5th Cir. 1969)
(in a taxpayer suit against the United States to recover income taxes paid, allowing
the United States to rely on a contract between a cotton grower and his agent, to
1
While it could be said that this issue is inherent in YPPI’s position that YPG lacks
standing because it is not a party to the contract between YPPI and Ziplocal, YPPI did not
articulate this issue as we do here. To the extent it was not waived, we address its merits.
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which the United States was not a party, as evidence to support its defense that
certain monies received by the grower pursuant to the contract were advances or
loans and not partial sales proceeds, and thus taxable);2 Clark v. United States, 341
F.2d 691, 693 (9th Cir. 1965) (similarly allowing the United States to rely on the
written terms of a third-party employment contract between the plaintiff-taxpayer
and his employer as evidence that income taxes were properly owed and stating,
“The dispositive issue is the agreement. It is immaterial that the litigation which
gives rise to the issue is between a party to the writing and a stranger.”). Further,
when intellectual property doctrines are at issue, defendants charged as infringers
often assert defenses involving the validity and interpretation of licenses to which
the defendants were not parties. For example, in UMG Recordings, Inc. v. Augusto,
628 F.3d 1175 (9th Cir. 2011), the doctrine of “first sale” embodied in § 109(a) of
the Copyright Act was at issue, meaning that if a copyrighted work is sold rather
than licensed, the copyright owner’s copyright rights are exhausted and the
downstream purchaser who uses the work is not an infringer. Id. at 1179–80 (citing
17 U.S.C. § 109(a)). The defendant in that case argued that under the first sale
doctrine, he was not an infringer of the plaintiff’s copyrights because the plaintiff’s
agreement with the original recipients of its promotional CDs was properly
characterized as a sale rather than a license. Id. at 1179. The court interpreted the
2
In Bonner v. City of Pritchard, 661 F.2d 1206, 1209 (11th Cir. 1981) (en banc), this
Court adopted as binding precedent all Fifth Circuit decisions issued before October 1, 1981.
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copyright owner’s agreements with the original recipients of the CDs as a sale,
rather than a license, ruling for the defendant. Id. at 1180. This required the court
to interpret that agreement and determine its validity. See id. Similarly, in Quanta
Computer, Inc. v. LG Electronics, Inc., 553 U.S. 617, 128 S. Ct. 2109 (2008), LG
had licensed a patent portfolio to Intel, who in turn sold computer chipsets to
Quanta. Id. at 623–24, 128 S. Ct. at 2114. The Supreme Court addressed the
doctrine of “patent exhaustion,” which provides that the initial authorized sale of a
patented item terminates all patent rights to that item. Id. at 625, 128 S. Ct. at 2115.
That doctrine enabled Quanta, who was sued for patent infringement, to argue that
the license between LG and Intel was such that the downstream users of LG’s
products were permitted to use the products for their intended use without a
license. Id. at 628, 128 S. Ct. at 2117. The Court had to interpret the license
between LC and Intel to decide the case as to Quanta. Like the “first sale” doctrine,
the “patent exhaustion” doctrine enabled downstream users who were not parties to
initial contracts to make arguments about the validity of those contracts. In sum,
we also see no reason based upon contract law why YPG should not be permitted
to assert its arguments. We now turn to YPG’s appeal.
2.
We review the denial of a motion for a judgment as a matter of law de novo
and apply the same standards as the district court. Skye v. Maersk Line, Ltd. Corp.,
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751 F.3d 1262, 1265 (11th Cir. 2014). We will reverse the district court’s denial of
a motion for a judgment as a matter of law “only if the facts and inferences point
overwhelmingly in favor of one party, such that reasonable people could not arrive
at a contrary verdict.” Id. (quotation marks omitted). “We will not second-guess
the jury or substitute our judgment for its judgment if its verdict is supported by
sufficient evidence.” Id. (quotation marks omitted).
YPG’s first contention is that the SLPA permitted Ziplocal to outsource the
use of YPPI’s photos to contractors like YPG, irrespective of the EULA’s
prohibition on transferring photos to non-employees, and as such, YPG’s
assistance to Ziplocal in publishing its phone books by using YPPI’s photos was
not copyright infringement. However, the jury’s verdict to the contrary is
supported by sufficient evidence. 3 As the district court instructed the jury, there
was a dispute between YPPI and Ziplocal as to what constituted the contract—
YPPI claimed the contract was comprised of both the SLPA and the EULA
together, while Ziplocal claimed that only the SLPA was the contract, and that the
EULA was invalid. Pursuant to YPPI’s theory, if the jury found that the EULA
was a valid and binding contract of Ziplocal’s, it must be construed together with
the SLPA, because where multiple agreements are entered into by the same parties,
3
YPPI asserts in its response brief that YPG waived this particular argument by not first
asserting it at the close of all of the evidence in its motion for a judgment as a matter of law
pursuant to Fed. R. Civ. P. 50(a). We assume, without deciding, that YPG properly preserved
this argument because we find that YPG’s argument fails substantively.
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at the same time, concerning the same transaction or subject matter, they are
generally construed together as a single contract. Florida contract law supports
YPPI’s theory. See Quix Snaxx, Inc. v. Sorensen, 710 So. 2d 152, 153 (Fla. Dist.
Ct. App. 1998); Clayton v. Howard Johnson Franchise Sys., Inc., 954 F.2d 645,
648 (11th Cir. 1992). There was sufficient evidence presented to support YPPI’s
theory that the SLPA and the EULA should be construed together. For example,
the testimony of not only YPPI’s president, Moore, but also Ziplocal’s president,
Woodall, was that they reached an agreement in March 2004 that consisted of both
the SLPA and the EULA. [Docs. 424 at 19 (Moore’s testimony); 425 at 44, 98–100
(Woodall’s testimony, i.e., that the EULA was an agreement of YPPI and Ziplocal
and that the EULA was simply the “license agreement behind the [SLPA]”).] Both
Moore and Woodall also testified that that the SLPA and the EULA were agreed to
at the same time. [Docs. 424 at 19–20 (Moore’s testimony); 425 at 44 (Woodall’s
testimony).] Moreover, the jury never heard any testimony that Woodall rejected
or refused to enter into the EULA.
Further, the district court charged the jury that in deciding the meaning of
the disputed terms of the contract, it should consider how the parties acted before
and after the contract was created. Terms in the SLPA such as “authorized users,”
“unauthorized distribution,” “unlicensed users,” and “the license agreement” were
not defined in the SLPA, and the jury was instructed that there was a dispute
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between YPPI and Ziplocal as to the meaning of these terms. The jury heard that
YPPI’s position was that these particular terms in the SLPA should be construed
consistently with the EULA to mean that “authorized users” in the SLPA means
“employees of [Ziplocal],” “unlicensed users” in the SLPA means outside parties
or individuals who are not employees of Ziplocal, “unauthorized distribution”
means transfer of the photos without authorization by YPPI, and the term “the
license agreement” in the SLPA refers to the EULA. If these constructions were
adopted by the jury, the SLPA could, on its face, have been found to prohibit the
use of YPPI’s photos by non-employees, just as the EULA does, which is even
referenced in the SLPA as “the license agreement.” See Quix Snaxx, 710 So. 2d at
153 (“Where a writing expressly refers to and sufficiently describes another
document, the other document, or so much of it as is referred to, is to be interpreted
as part of the writing.”). Sufficient evidence was presented to support these
constructions as argued by YPPI, such as the actions of Ziplocal over the years in
continuing to accept, pay for, and use each collection of photos sent by YPPI, each
time in packaging containing a EULA. In sum, the evidence supports the jury’s
conclusion that Ziplocal breached its contract—consisting of the SLPA and EULA
together—with YPPI by transferring YPPI’s photos to YPG.
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3.
Nor do we find merit in any of YPG’s contentions that it was entitled to a
judgment as a matter of law because the EULA was an invalid contract. YPG first
argues that there was no benefit provided to Ziplocal by the EULA that it did not
already get through the SLPA, and the EULA actually contained more restrictive
provisions than the SLPA. To the contrary, there was a legally sufficient
evidentiary basis for the jury to conclude that there was consideration for the
EULA. As noted in the previous section, a reasonable jury could have construed
the SLPA and EULA together as one contract, a finding that was supported by the
evidence at trial. Because there was consideration for the SLPA, in the form of
Ziplocal paying YPPI for the photos and promising to abide by the contract
restrictions, there was consideration for the EULA as well, which was even
referenced in the SLPA as “the license agreement.” Indeed, as YPPI delivered
more photos for years after the initial agreement between Moore and Woodall,
each time accompanied by the EULA, Ziplocal continued to pay. YPG has not
demonstrated a lack of evidence of consideration such that the judgment in favor of
YPPI would be brought into question.
YPG next contends that the EULA is invalid because it was not agreed to by
anyone with authority to bind Ziplocal for shipments of photos subsequent to the
first delivery of the initial hard drive to Woodall in April 2004. Again, there was
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sufficient evidence presented for the jury to conclude otherwise. Woodall testified
that the EULA was an agreement of Ziplocal and that he agreed to its terms.
Moore’s testimony that the terms of the EULA never changed after the initial
meeting in March 2004, was uncontroverted at trial. Woodall, as Ziplocal’s
president, unquestionably had authority to commit Ziplocal to those terms. The
jury also heard testimony that Mr. Lott, the Director of Production and later the
Vice President of Operations at Ziplocal, received the EULA with each additional
CD shipment, and that after Mr. Lott left Ziplocal, Geri Suster, the former Chief
Operating Officer at Ziplocal, also received the EULA with additional CD
shipments. YPG argues that there was no showing that Mr. Lott or Ms. Suster was
authorized to agree to the terms of the EULA when they opened the packages.
However, given that Woodall was aware that Mr. Lott was receiving CD shipments
on behalf of Ziplocal, this argument is without merit. See Computel, Inc. v. Emery
Air Freight Corp., 919 F.2d 678, 683 (11th Cir. 1990) (a principal is bound by the
acts of his agent where the principal is informed and approved of the act).4 Further,
the jury heard nothing to indicate that Woodall ever rejected or refused to enter
into the EULA, but it did receive evidence that he was aware that Mr. Lott was
4
There was also a question raised at trial about who actually opened the mail for Mr.
Lott. When asked “Do you know who from [Ziplocal] would have received those shipments,”
Woodall answered, “It would have come directly to either Janice Riggs, the vice president of
production; Lee Lott, the production manager, or Charlene Davis, his assistant.” [Doc. 425 at
48–49.] If officers of Ziplocal delegated authority to agents within their company to open mail
for them, they are bound by the acts of those agents as if they had opened the mail themselves.
See Computel, 919 F.2d at 683.
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receiving and using the photos. Therefore, Mr. Lott’s continued acceptance of the
EULA with shipments was binding on Ziplocal, just as the same is true for Ms.
Suster after she took over Mr. Lott’s position. YPG has failed to demonstrate how
the evidence points in its favor such to necessitate a reversal of the judgment in
favor of YPPI.
YPG also asserts that there was no evidence presented that the EULA
governed the first 4,000 photos initially delivered on March 15, 2004, by YPPI to
Ziplocal. YPG argues that the EULA could not have applied to this initial delivery
of photos, because the photos were on a hard drive as opposed to a CD, and the
EULA was not affixed to the hard drive, as it was to the subsequent CD shipments.
YPG’s argument again disregards the testimony at trial that led the jury to construe
the SLPA together with the EULA, rather than each in isolation, and YPG does not
dispute that the SLPA applies to all 10,411 photos. Moreover, Moore testified that
the EULA governed all 10,411 of the photos at issue in this lawsuit. Moore also
testified that he and Woodall agreed to the terms of the EULA when he delivered
the hard drive containing the initial set of photos with the EULA, on March 15,
2004. Woodall’s testimony confirmed this agreement, in that he stated that the
EULA was the “license agreement behind the [SLPA],” that the EULA was an
agreement of YPPI and Ziplocal, and that he saw the two agreements at around the
same time. [Doc. 425 at 44, 98–100.] YPG’s argument that the EULA could not
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have applied to the initial delivery of photos because there was no package with an
attached EULA containing a CD for Ziplocal to open, a specific mode of
acceptance set forth in the EULA, disregards the intent of YPPI and Ziplocal to
reach an agreement on March 15, 2004, and for it to apply to the initial 4,000
photos. Florida law provides that a valid contract is formed, notwithstanding a
deviation from the offeror’s designated mode of acceptance, if there was a meeting
of the minds and the offer was indeed accepted. See Caldwell v. Snyder, 949 So. 2d
1048, 1050 (Fla. Dist. Ct. App. 2006) (offer accepted even though cashier’s check
was provided instead of wire transfer or cash as required by “non-negotiable
conditions”). Further, the offeror is free to waive a designated mode of acceptance.
See id. In any event, the EULA does not provide that opening a package containing
a CD with an attached EULA is the only way to accept the EULA. In sum, the only
testimony at trial was that there was a meeting of the minds as to the terms that
would govern all photos delivered to Ziplocal by YPPI on the first day and
thereafter, and that the SLPA and EULA contained those terms. There was
sufficient evidence for the jury to conclude that all 10,411 photos licensed to
Ziplocal were governed by the agreement reflected in the SLPA and the EULA.
4.
YPG’s final contention is that it is entitled to a judgment as a matter of law
because there was no evidence presented at trial supporting the jury’s finding that
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it willfully infringed YPPI’s copyrights. The Copyright Act entitles a copyright
owner to recover actual damages suffered, as well as any profits made by the
defendant, that are the result of the infringement. 17 U.S.C. § 504(b). However,
under § 504(c)(1) of the Act, an owner may elect to recover statutory damages in
lieu of any other form of monetary relief. The Copyright Act’s statutory damages
provision is designed to discourage wrongful conduct. F.W. Woolworth Co. v.
Contemporary Arts, Inc., 344 U.S. 228, 233, 73 S. Ct. 222, 225 (1952). The range
of statutory damages is between $750 and $30,000 for each infringed work, 17
U.S.C. § 504(c)(1), but the Act also allows “the court in its discretion [to] increase
. . . award[s] of statutory damages” in cases involving willful infringement to
$150,000 per work, id. § 504(c)(2). This Court has stated that willfulness under the
Copyright Act “means that the defendant ‘knows his actions constitute an
infringement; the actions need not have been malicious.’” Cable/Home Commc’n
Corp. v. Network Prods., Inc., 902 F.2d 829, 851 (11th Cir. 1990) (quoting
Broadcast Music, Inc. v. Xanthas, Inc., 855 F.2d 233, 236 (5th Cir. 1988)).
Numerous other circuits have held that a finding of willfulness under the Copyright
Act is also appropriate where a defendant recklessly disregarded the possibility that
it was infringing a copyright. See Graper v. Mid-Continent Cas. Co., 756 F.3d 388,
394–95 & n.7 (5th Cir. 2014); N.A.S. Import, Corp. v. Chenson Enters., Inc., 968
F.2d 250, 252 (2d Cir.1992) (holding that a finding of “reckless disregard of the
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copyright holder’s rights (rather than actual knowledge of infringement) suffices to
warrant [an] award of enhanced damages”); Video Views, Inc. v. Studio 21, Ltd.,
925 F.2d 1010, 1020–21 (7th Cir.1991) (holding that the term “willful”
encompasses the “reckless disregard of the copyright owner’s right”); RCA/Ariola
Intern., Inc. v. Thomas & Grayston Co., 845 F.2d 773, 779 (8th Cir.1988) (holding
that “willfully” under the Copyright Act encompasses reckless disregard). As
opined by the Fifth Circuit Court of Appeals,
Although the Supreme Court has not directly addressed
the definition of “willful” under the Copyright Act, “the
general rule [is] that a common law term in a statute
comes with a common law meaning, absent anything
pointing another way.” Safeco Ins. Co. of America v.
Burr, 551 U.S. 47, 58, 127 S. Ct. 2201, 167 L. Ed. 2d
1045 (2007) (internal citation omitted). Because the
common law construction of the term “willful” covers
behavior that is “wanton” or “reckless[,]” the “standard
civil usage” should as well. Id. Thus, when “willfulness
is a statutory condition of civil liability, [it] cover[s] not
only knowing violations of a standard, but reckless ones
as well.” Id. Safeco mandates that we interpret “willful”
under § 504(c)(2) as encompassing more than just
“knowing” infringements.
Graper, 756 F.3d at 394–95 (footnote omitted). We agree with the Fifth Circuit
and others that willful copyright infringement under § 504(c)(2) encompasses
reckless disregard of the possibility that one’s actions are infringing a copyright.
There were sufficient facts at trial to support a finding of willful
infringement based on YPG’s reckless disregard for the possibility that it might be
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infringing on YPPI’s copyrights. Michelle Meloy, a senior manager in YPG’s
directory services department and former Creative Services Manager, admitted that
YPG never received authorization to use YPPI’s photos. Notwithstanding this lack
of authorization, Ms. Meloy testified that YPG continued building new
advertisements with YPPI’s photos into 2013, after this litigation began. She also
testified that YPG transferred YPPI’s photos to third parties, such as when YPG
aided a third-party company in creating and publishing video ads for one of
Ziplocal’s customers, to be used in one of Ziplocal’s publications. She stated that
when YPG helped create these ads, it did not follow any specific measures to
regulate what photos it was taking from Ziplocal’s customer folders, nor did it
provide third party companies with any parameters regarding how the photos could
be used. The evidence showed that YPG only began swapping out YPPI’s photos
from ads after it was caught using the photos without a license. YPG’s Director of
Legal Affairs, Treena Cooper, also testified that YPG did not conduct any due
diligence to determine whether it had a right to use the photos received from
Ziplocal, and in fact YPG had “no idea” who owned the photos. [Doc. 426 at 151.]
Ms. Cooper testified that “it wasn’t a concern” of YPG what the source of the
images it was receiving from Ziplocal was. [Id.] YPG’s Vice President of Business
Solutions, Gregory Shearer, also testified that YPG had no knowledge of any
license agreement between Ziplocal and YPPI “because frankly it wouldn’t have
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made any difference to us.” [Id. at 175–81.] YPG argues that willfulness is negated
because outsourcing is common in the industry, so YPG had no reason to know
that performing outsourcing work using photos received from Ziplocal would
infringe the copyrights of others. YPG further argues that there was no evidence
YPG knew of the license agreement between Ziplocal and YPPI, and YPG’s
outsourcing agreement with Ziplocal stated that the work performed would not
infringe on any copyrights. However, according to YPG’s own witnesses, YPG
was not only fully aware that permission is required to use copyrighted photos, but
it would not have made any difference whether YPG knew about Ziplocal’s license
from YPPI or not, because YPG was not at all concerned about the source of the
photos it was receiving from Ziplocal. This evidence is more than sufficient to
support a finding of willful copyright infringement under the Copyright Act.
In sum, we reject YPG’s challenge to the sufficiency of the evidence to
support a verdict that it infringed YPPI’s copyrights. Accordingly, we affirm the
district court’s denial of YPG’s renewed motion for a judgment as a matter of law.
B.
We turn now to YPPI’s cross appeal, in which it contends that it is entitled
to a new trial on damages due to alleged error in several of the district court’s
rulings: the court’s denial of YPPI’s request during discovery to issue letters
rogatory to Canadian authorities to depose a Canadian affiliate of YPG; its refusal
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to allow YPPI to admit evidence at trial of the Canadian affiliate’s alleged use of
YPPI’s photos; its decision that each of YPPI’s 178 collections of photos, rather
than each of YPPI’s 10,411 individual photos, is a “work” for purposes of
computing statutory damages under the Copyright Act; and its denial of YPPI’s
request that it alter the jury’s statutory damages award against Ziplocal after trial.
For the following reasons, YPPI’s arguments lack merit and thus do not warrant a
new trial on damages.
1.
Letters rogatory are the means by which a court in one country requests a
court of another country to assist in the production of evidence located in the
foreign country. See United States v. El-Mezain, 664 F.3d 467, 516–17 (5th Cir.
2011). Federal courts have authority to issue letters rogatory in civil and criminal
cases. See United States v. Staples, 256 F.2d 290, 292 (9th Cir. 1958); United
States v. Steele, 685 F.2d 793, 809 (3d Cir. 1982). For example, Rule 28 of the
Federal Rules of Civil Procedure allows for depositions to be taken in foreign
countries. Fed. R. Civ. P. 28(b) provides that a letter of request (“whether or not
captioned a ‘letter rogatory’”) may be issued: 1) “on appropriate terms after an
application and notice of it;” and 2) “without a showing that taking the deposition
in another manner is impracticable or inconvenient.” Fed. R. Civ. P. 28(b)(1)–(2).
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The Supreme Court has described the letters rogatory process as
“complicated, dilatory, and expensive.” Societe Nationale Industrielle Aerospatiale
v. U.S. Dist. Ct. for the S. Dist. of Iowa, 482 U.S. 522, 531, 107 S. Ct. 2542, 2549
(1987). The decision whether to issue letters rogatory lies within the discretion of
the district court and is reviewed for an abuse of that discretion. El-Mazain, 664
F.3d at 517 (citing United States v. Liner, 435 F.3d 920, 924 (8th Cir. 2006)).
Several other circuits have held that there must be “good reason” to deny the
request for the issuance of letters rogatory, at least when the request is made
pursuant to Fed. R. Civ. P. 28(b). See Complaint of Bankers Trust Co., 752 F.2d
874, 890 (3rd Cir. 1984) (“Although we do not dispute that it may be proper to
refuse the issuance of a commission or letters rogatory, there are cases in which
courts have indicated that there must be some ‘good reason’ justifying the denial of
this particular type of judicial assistance.”) (citing Zassenhaus v. Evening Star
Newspaper Co., 404 F.2d 1361, 1364 (D.C. Cir. 1968)).5 Nonetheless, when a
request to issue letters rogatory is overly broad or unlikely to lead to the discovery
of relevant evidence, district courts retain discretion to refuse to issue them. See
5
The “good reason to deny” standard originates from the 1963 amendments to Fed. R.
Civ. P. 28(b). Prior to 1963, Rule 28(b) read in part, “A commission or letters rogatory shall be
issued only when necessary and convenient, on application and notice, and on such terms and
with such directions as are just and appropriate.” The 1963 amendment deleted the words “only
when necessary and convenient” from that sentence. See 8A Charles Alan Wright & Arthur R.
Miller, Federal Practice and Procedure § 2083 (3d ed. 2014) (stating that “[a]lthough this
change was not explained in the Committee Note, it seems clear that the discretion the courts
formerly had in deciding whether to issue a commission or letters rogatory has been considerably
reduced”).
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e.g., El- Mezain, 664 F.3d at 518 (holding that the district court did not abuse its
discretion in refusing to issue letters rogatory to Israeli authorities to review
approximately 2,000 boxes of material to search for exculpatory evidence because
the hope that the evidence would reveal favorable evidence was merely speculative
and the request was thus a “fishing expedition”); United States v. Rosen, 240
F.R.D. 204, 215 (E.D. Va. 2007) (factors counseling against issuance of the letters
rogatory were that the proffered testimony was not exculpatory and was
cumulative of testimony from other witnesses available in the United States, the
inherent delay in the letters rogatory process, and the fact that the testimony was
not necessary to ensure a fair trial).
Over a year into discovery, YPPI asked the district court to issue letters
rogatory to the appropriate Canadian authorities to depose Yellow Pages Group
Corp. (hereinafter “YPG Canada”), a Canadian affiliate of YPG that also publishes
phone directories. YPPI’s motion, filed pursuant to Fed. R. Civ. P. 28(b), sought to
depose a YPG Canada designee on all of the sources of its photos used in all of its
phone directories, on all of the company’s salespeople and graphic artists, and on
all third parties used by the company for advertisement production. It also sought a
corporate designee on the relationship of YPG Canada with three other non-parties:
Canpages, Inc., a company that YPG Canada had acquired in 2010 and that was
also a licensee of YPPI’s, Volt Information Sciences, Inc., also a licensee of
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YPPI’s, and YPG Directories, LLC. The associated document requests sought all
agreements between YPG Canada and other third parties such as Canpages, and
copies of all Canpages phone directories, regardless of whether they contained
YPPI’s photos. YPPI sought this nearly unfettered access to YPG Canada because
it argued that YPG builds ads for not only Ziplocal but also YPG Canada, and
YPPI’s photos were showing up in YPG Canada’s publications, such as in videos
located on YPG Canada’s website. Since YPG Canada was not one of YPPI’s
licensees, YPPI believed that YPG was illegally transferring YPPI’s photos to
YPG Canada for use in its ads. YPG and Ziplocal opposed the request, arguing that
it was overbroad and irrelevant because it amounted to YPPI’s attempt to discover
infringement activities on the part of YPG Canada, who was not sued or otherwise
mentioned in any of YPPI’s complaints. The district court refused to issue letters
rogatory to the Canadian authorities, finding that any information that YPPI
needed could be gathered within the confines of the United States.
YPPI now argues that the district court’s denial of its motion to issue letters
rogatory to depose YPG Canada prejudiced it to the extent that a new trial on
damages is warranted. YPPI believes that had it been able to depose YPG Canada,
it would have discovered that YPG or Ziplocal had transferred some of YPPI’s
photos to YPG Canada for its use, and if it had been able to present evidence to the
jury that YPG or Ziplocal had allowed the use of YPPI’s photos by another party,
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that it would have undermined YPG and Ziplocal’s defense at trial that there was
no “real” damage in this case because Ziplocal merely transferred YPPI’s photos to
YPG for use in Ziplocal’s phone directories and for no other purpose.
The issuance of letters rogatory is a discovery issue, and a party is not
entitled to a new trial for an alleged discovery violation unless it shows that the
denial of access to evidence was prejudicial to its substantial rights. El-Mezain,
664 F.3d at 517. This requires a showing of “a reasonable probability that, had the
evidence been disclosed to the defense, the result of the proceeding would have
been different.” Id. (quotation marks omitted). “[A] reasonable probability is
shown where the nondisclosure could reasonably be taken to put the whole case in
such a different light as to undermine confidence in the jury verdict.” Id. (quotation
marks omitted). Here, YPPI was not prejudiced by its inability to conduct
discovery from YPG Canada. After YPPI’s motion was denied, the discovery it
took from YPG confirmed that YPG had not transferred any of YPPI’s photos to
YPG Canada, and that YPG Canada had not used YPG to make the video ads in
question. YPG’s corporate designee, Ms. Meloy, testified that data was not
transferred from YPG to YPG Canada and that YPG Canada built its own video
ads without the help of YPG, either by using its own production team or by
utilizing outside vendors. She stated that she had no knowledge as to the source of
the photos that were appearing in YPG Canada’s ads. Indeed, millions of pages of
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documents were produced by YPG in this case, none of which evidenced such a
transfer of photos to YPG Canada. We therefore cannot say that the evidence
sought would have “cast the case in a different light, thereby undermining
confidence in the verdict.” Id. at 518. Accordingly, the district court did not abuse
its discretion in failing to issue letters rogatory to the Canadian authorities to
depose YPG Canada.6
2.
YPPI’s second argument on cross appeal is that the district court should
have allowed it to present at trial Moore’s testimony that photos appearing on YPG
Canada’s website could be from YPG. We review a district court’s evidentiary
rulings for an abuse of discretion. Burchfield v. CSX Transp. Inc., 636 F.3d 1330,
1333 (11th Cir. 2001). We will only overturn an evidentiary ruling if the moving
party establishes a substantial prejudicial effect. Id. A prejudicial effect is
demonstrated when the moving party shows that the error “probably had a
substantial influence on the jury’s verdict.” Id. (quotation marks omitted).
Prior to trial, YPG asked the district court to preclude YPPI from
introducing any evidence at trial of the use of YPPI’s photos by YPG Canada.
6
We note that we reach the same conclusion even if the breadth of the district court’s
discretion in this matter is circumscribed by the “good reason to deny” standard as pronounced
by several other courts of appeal. See Complaint of Bankers Trust Co., 752 F.2d at 889–90,
Zassenhaus, 404 F.2d at 1364.
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YPPI had listed several print and online video ads that were published by YPG
Canada on its exhibit list. YPG pointed out that Ms. Meloy, its corporate designee,
had denied at deposition that any of the ads or videos were prepared by YPG or
that YPG Canada obtained YPPI’s photos from YPG, and that YPPI had no other
evidence that YPG Canada obtained any of its photos from YPG. During trial, the
court allowed YPPI to make a proffer regarding the evidence it sought to admit.
During the proffer, Moore identified a series of ads published by YPG Canada that
contained YPPI’s photos. Moore testified that it was his belief that the YPPI
photos appearing on YPG Canada’s website could have been transferred to YPG
Canada from YPG. However, he admitted that he had no direct knowledge of
YPG’s transfer of photos to outside parties. He also admitted that the photos could
have come from other sources, such as Canpages, a company acquired by YPG
Canada that had also licensed photos from YPPI. The district court excluded
Moore’s testimony, stating that it was too speculative to be considered by the jury.
YPPI now argues that it was prejudiced by the district court’s exclusion of
this evidence because a centerpiece of YPG and Ziplocal’s defense was the lack of
evidence that YPPI’s photos were used for anything other than Ziplocal products.
YPPI believes that had the jury been made aware of the further redistribution of the
photos to YPG Canada, and the use of the photos in YPG Canada’s ads, it would
have awarded a higher damages amount.
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The district court did not abuse its discretion in excluding the evidence.
Moore’s testimony was pure speculation, and thus too attenuated to be relevant.
See R.M.R. ex rel. P.A.L. v. Muscogee Cty. Sch. Dist., 165 F.3d 812, 817 n.9 (11th
Cir. 1999) (“Abuse of discretion is the proper standard when reviewing a district
court’s decision to exclude evidence as irrelevant under Federal Rule of Evidence
401.”). Despite conducting discovery for two years, YPPI uncovered no evidence
that YPG transferred YPPI’s photos to YPG Canada. To the contrary, Ms. Meloy’s
testimony was that YPG had not made any such transfers. As such, the jury would
have had to reach the opposite conclusion based solely on Moore’s conjecture.
Moore’s speculation had no probative value and as such would have been
substantially outweighed by the unfair prejudicial impact to YPG. See Fed. R.
Evid. 403 (even relevant evidence may be excluded “if its probative value is
substantially outweighed by a danger of one or more of the following: unfair
prejudice, confusing the issues, misleading the jury, undue delay, wasting time, or
needlessly presenting cumulative evidence”). Further, YPG Canada was not a party
in the action. In YPG Canada’s absence, the jury could easily have confused YPG
with YPG Canada, and tagged YPG with alleged extraterritorial infringement by
YPG Canada. See United States v. Dohan, 508 F.3d 989, 993 (11th Cir. 2007)
(stating that “[d]istrict courts are well within their discretion to exclude even
relevant evidence” for the reasons enumerated in Fed. R. Evid. 403).
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3.
YPPI’s third argument is that the district court erred in ruling that each of its
178 collections of photos organized by heading name, rather than each of its
10,411 individual photos, was a “work” for the purpose of computing statutory
damages under § 504(c)(1) of the Copyright Act. Section 504(c)(1) allows for
statutory damages based on each “work” infringed. See 17 U.S.C. § 504(c)(1)
(providing that “the copyright owner may elect, at any time before final judgment
is rendered, to recover, instead of actual damages and profits, an award of statutory
damages for all infringements involved in the action, with respect to any one
work”). That section then immediately states that “all the parts of a compilation . . .
constitute one work.” Id. § 504(c)(1). The Copyright Act defines a “compilation”
as “a work formed by the collection and assembling of preexisting materials or of
data that are selected, coordinated, or arranged in such a way that the resulting
work as a whole constitutes an original work of authorship.” Id. § 101. The term
“compilation” includes “collective works,” which are defined as works “such as a
periodical issue, anthology, or encyclopedia, in which a number of contributions,
constituting separate and independent works in themselves, are assembled into a
collective whole.” Id. By taking the position that its 10,411 individual photos are
each separate works, YPPI presumably seeks to raise the statutory damages award
in this case from $123,000 to a minimum of $1.5 million and a potential maximum
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of $300 million. See id. § 504(c)(1)–(2) (providing for a range of statutory
damages between $750 and $30,000 for each infringed work and authorizing a
court to increase the award of statutory damages to a maximum of $150,000 per
infringed work in cases of willful infringement).
This Court has not previously determined the standard by which it reviews a
district court’s determination of what constitutes a work for statutory damages
purposes under the Copyright Act. At least one other circuit has concluded that the
review is de novo. See Bryant v. Media Right Prod., Inc., 603 F.3d 135, 140 (2d
Cir. 2010) (holding that the “question of whether a work constitutes a
‘compilation’ for the purposes of statutory damages . . . is a mixed question of law
and fact” and therefore reviewed “de novo”) (citing Gamma Audio & Video, Inc. v.
Ean–Chea, 11 F.3d 1106, 1116 (1st Cir. 1993)). We hold that this issue is a mixed
question of law and fact, and we review the district court’s application of the law
to the facts de novo.
In deciding that each of YPPI’s 178 collections was the relevant work, the
district court found that each collection was a “compilation” of photos under 17
U.S.C. §§ 504(c)(1) and 101. The factual record supports that conclusion. First,
Moore’s own testimony supports the collective nature and purpose of YPPI’s
photos organized by subject matter heading. Moore testified that the entire purpose
of grouping his photo collections by subject matter—rather than marketing
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individual photos—was customer appeal and efficiency. He stated that YPPI’s
customers were publishers of phone directories, and their artists liked being able to
search for photos to include in ads by specific subject matter. Indeed, to make his
photos relevant and marketable, Moore spent “a lot of years” working with
customers “to determine what headings generate revenue and what headings
generate usage.” [Doc. 423 at 67–68.] Once Moore selected a heading, he would
develop the photo collections around it. Using a “Food” heading for an example,
Moore testified that, once the heading was selected, the next step was to have the
photographer produce the associated photo collection. [Id. at 68.] In other words,
the heading drove the collection of the photos, not the other way around. In every
sense, then, each of Moore’s 178 headings is compilation as defined in the Act
because each is a collection of photos that Moore and YPPI “selected, coordinated,
or arranged” in a way that results in “an original work of authorship.” See 17
U.S.C. § 101.
The manner in which Moore registered his photos with the Copyright
Office—as collections rather than as individual photos—also supports the
conclusion that the 178 headings, and not the 10,411 individual photos, are the
“works” in this case. Although the manner of copyright registration is not
dispositive of the works issue, this Court has previously considered it to be at least
a relevant factor. See MCA Television Ltd. v. Feltner, 89 F.3d 766, 769 (11th Cir.
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1996). As Moore put it, customers “bought collections. And I registered my images
the same way. . . . you get images. You register them in a group. And so they
wanted the relevance of having multiple images.” [Doc. 424 at 265–66.] Moore
registered each of his 178 photo collections with the Copyright Office under their
heading titles, grouping various title collections together on 44 registration
applications. As noted on the registrations, each collection of photos was taken by
the same photographer, shared the same subject matter, and was published on the
same date. For example, one such copyright registration lists 50 photos for “Golf”-
related ads, all taken by “Trent Moore,” and all published together on “1-Mar-
2001.” Another lists 66 photos for “Auto Repair and Crashes”-related ads, all taken
by “Richard Lawless,” and all published together on “02/03/2009.” The photos in
each group share a title, e.g., “Golf” or “Auto Repair and Crashes 3.” Where the
registration form called for a “Title of This Work,” YPPI listed the heading names
for the photos covered, not individual photos.
Not only did Moore create, market, and register his photos as collections
organized by subject matter heading, he almost exclusively distributed them as
collections to his customers, on hard drives, CDs or DVDs, or through a web-
portal, always organized by heading so that they were searchable “by key word,
category, or collection name.” [Doc. 423 at 76–78.] Further, YPPI’s SLPA with
Ziplocal provided that YPPI “will ship 1–2 headings per month” and contemplated
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that Ziplocal would “purchase all current titles as well as all new relevant headings
as they become available, up to the first 200 headings.” [Joint Trial Exhibit 2.]
Finally, we find telling that YPPI’s own complaints described each of the
178 collections as a “Work[].” Each complaint alleged that YPPI “created and
produced a series of photographic images as follows,” which was followed by a list
of each collection of photos by heading name, and then alleged that each “series of
images is collectively referred to in this Complaint as the ‘Works.’” [See
Complaint, doc. 1 at ¶ 17; First Amended Complaint, doc. 39-1 at ¶ 17; Second
Amended Complaint, doc. 56 at ¶ 18; Third Amended Complaint, doc. 248 at ¶
15.] Because YPPI chose to create, market, deliver, register, and describe the
photos as collections, not as individual photos, this Court is convinced that
infringement of each collection should result in only one statutory damage award. 7
We are not persuaded, as YPPI argues, that this Court’s previous opinion in
MCA Television Ltd. v. Feltner, supra, should change our conclusion. In Feltner,
7
We reject YPG’s argument that YPPI should not prevail on this claim because YPPI
invited the district court’s error in its works determination by arguing in the alternative that each
of its 178 collections constituted a work. YPPI’s primary argument to the district court was
always that each of its 10,411 photos was as separate work, but it also posited as a secondary
“fallback” position that if the district court rejected that argument, that it should find that each of
its 178 collections is a work, rather than find that each of its 44 copyright registrations is a work
or that the entire library of photos is one work, as argued by Ziplocal. Offering such a “fallback”
position in mere response to an issue raised by the opposing party does not equate to inviting the
district court’s error so as to waive review of the issue on appeal. Cf. United States v. Frank, 599
F.3d 1221, 1240 (11th Cir. 2010) (the doctrine of invited error applies when a defendant
affirmatively requests or stipulates to a particular point, which is then adopted by the court).
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this Court agreed with other circuits that have held that each episode of a
syndicated television series was a separate work and not part of a compilation
because each had “independent economic value and is, in itself, viable.” 89 F.3d at769 (citing Gamma, 11 F.3d at 1116; Robert Stigwood Grp., Ltd. v. O’Reilly, 530
F.2d 1096, 1105 (2d Cir. 1976); Walt Disney Co. v. Powell, 897 F.2d 565, 569
(D.C. Cir. 1990)). In support, the Court noted that regardless of “the decision of a
distributor of television programs to sell television series as a block, rather than as
individual shows,” each episode was “produced independently from the other
episodes,” was “aired independently from preceding and subsequent episodes,” and
was “individually copyrighted” by the owner. Id. The Court rejected the argument
that the episodes were part of an anthology, and thus the entire series was one
collective work subject to only one award, because each episode had an individual
plot, and it was not necessary to view the episodes in chronological order. Id. at
769–70. In reaching that conclusion, the Court relied upon Twin Peaks
Productions, Inc. v. Publications, International, Ltd., 996 F.2d 1366, 1381 (2d Cir.
1993), where the Second Circuit had reached the same result with respect to each
episode of a television series even though each succeeding episode continued a
single plot line. Id. at 770.8
8
At least three other circuits have adopted the “independent economic value” test as
articulated by this Court in Feltner. See Gamma, 11 F.3d at 1116–17 (applying what that court
described as a “functional” test to hold that each episode of a television show, although released
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Although this Court held that the particular television episodes in Feltner
were separate works because they could each “live their own copyright life,” 89
F.3d at 769, we certainly do not read the Feltner decision as foreclosing the
application of 17 U.S.C. § 504(c)(1)’s directive that “all parts of a compilation . . .
constitute one work” for all cases. Instead, this Court in Feltner evaluated real
world conditions related to how the episodes were created, produced, aired, and
registered with the Copyright Office, to find that each episode had an economic
value independent from the other episodes, and thus were not part of a compilation
or collective work. 89 F.3d at 769. An application of the same factors considered in
on videotape as part of a complete series, could be the subject of a separate statutory damage
award because each episode could be rented and viewed separately and each was separately
produced); Columbia Pictures Television v. Krypton Broad. of Birmingham, Inc., 106 F.3d 284,
295 (9th Cir. 1997) (same), rev’d on other grounds sub nom. Feltner v. Columbia Pictures
Television, Inc., 523 U.S. 340, 118 S. Ct. 1279 (1998)); Walt Disney Co., 897 F.2d at 569(opining that “separate copyrights are not distinct works unless they can ‘live their own
copyright life’” in reaching the conclusion that the copyright owner could not receive a separate
statutory damage award for each separate picture of Mickey Mouse and Minnie Mouse in
different poses, because each picture did not have independent economic value) (quoting
Stigwood, 530 F.2d at 1015). However, the United States Court of Appeals for the Second
Circuit declined to adopt the independent economic value test to an album of songs in Bryant v.
Media Right Productions, Inc., 603 F.3d at 140–42, stating, “The [Copyright] Act specifically
states that all parts of a compilation must be treated as one work for the purpose of calculating
statutory damages. This language provides no exception for a part of a compilation that has
independent economic value, and the Court will not create such an exception.” Id. at 142. The
Second Circuit distinguished its prior decision in Stigwood, 530 F.2d at 1105, where it had “held
that each separately copyrighted song from the musical Jesus Christ Superstar could be the
subject of a separate statutory award because each song could ‘live [its] own copyright life.’”
Bryant, 603 F.3d at 142 n. 7 (quoting Stigwood, 530 F.2d at 1104–05) (alteration in original).
The Second Circuit explained that, in Stigwood, it had been “awarding statutory damages
pursuant to the Copyright Act of 1909, which provided for a separate statutory damage award
‘for each infringement that was separate,’” and not under the Copyright Act of 1976, in which
“[t]he one-award restriction for compilations was introduced.” Id.46
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Feltner to YPPI’s photos supports our conclusion that each of YPPI’s 10,411
individual photos does not have independent economic value for statutory damages
purposes. As described more fully above, Moore created his photos for the sole
purpose of being organized into collections based on the subject matter of the
photos, e.g., “Golf,” “Roofing,” “Plumbers,” and he marketed them as such for
easy searchability by phone book publishing customers. In other words, the photos’
usefulness and economic value is derived from their collective nature, not their
individuality. The Feltner court also considered that the television episodes were
registered individually, unlike here, where they were registered as collections
under their heading name, and grouped together on 44 registration applications.
YPPI argues that because group registration is permitted under regulations
promulgated by the Copyright Office, see 37 C.F.R. § 202.3, the fact that Moore
registered his photos in groups should not indicate that the photos are a
compilation under 17 U.S.C. § 504(c)(1). See Gamma Audio, 11 F.3d at 1117(holding that registering copyrights as multiple works on a single registration form
does not preclude the owner from collecting an award of statutory damages for the
infringement of each individual work). However, 37 C.F.R. § 202.3(b)(10),
covering “[g]roup registration of published photographs,” provides that to be
eligible for group registration, the “same person” must have taken all of the photos,
see id. § 202.3(b)(10)(ii), and the photos must have been published in similar
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circumstances, i.e. “within the same calendar year,” and if “published on the same
date” the common date of publication “must be identified,” see id. §
202.3(b)(10)(iii)–(iv). If anything, these requirements reinforce the conclusion that
the headings and photos associated with them are collective works.
We act consistently with Feltner in finding that, under the independent
economic value test, Moore’s 10,411 individual photos equate to 178 compilations
and 178 works under 17 U.S.C. § 504(c)(1). We note that numerous district courts
have applied the independent economic value test to find that groups of photos
should be collectively treated as compilations under § 504(c)(1) of the Copyright
Act and thus a single work for statutory damages purposes. See Greenberg v. Nat’l
Geographic Soc’y, No. 97–3924–CIV, 2003 WL 25841579, at *3, *5–6 (S.D. Fla.
Feb. 18, 2003) (applying the independent economic value test to the plaintiff’s 64
photos to find that they only represented four works for statutory damages
purposes because they had been compiled into four National Geographic articles
and registered by the plaintiff in the Copyright Office as belonging to those four
“collective works”); Tang v. Putruss, 521 F. Supp. 2d 600, 609–10 (E.D. Mich.
2007) (although noting that the Sixth Circuit had not indicated what analysis courts
are to use in determining whether a group of photos constitutes a single work,
applying the independent economic value test to find that a series of photos of
models wearing a line of dresses taken at a single session, by a single
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photographer, for a single purpose, i.e. to advertise the clothing line, was a single
work); Coogan v. Avnet, Inc., No. CV040621PHXSRB, 2005 WL 2789311, at *5–
6 (D. Ariz. Oct. 24, 2005) (applying the independent economic value test to find
that a series of photos taken of a company’s CEO at a single session, by a single
photographer, for a single purpose, and subject to a single license agreement, was
one work). One exception, upon which YPPI heavily relies, is Playboy Enterprises,
Inc. v. Sanfilippo, No. 97-0670-IEG (LSP), 1998 WL 207856 (S.D. Cal. Mar. 24,
1998), where the district court applied the independent economic value test to find
that each of 7,475 separate copyrighted photos at issue were separate works for
statutory damages purposes. Id. at *5. There, the infringer copied thousands of
copyrighted photos from Playboy, which he offered for sale via a website. Id. at
*1. When Playboy sought statutory damages for each of the photos copied, the
infringer attempted to argue that since the photos were collectively displayed in
only 27 of Playboy’s copyrighted magazines, each magazine constituted a singular
violation, but not each photo. Id. at *5. In awarding statutory damages for each of
the 7,475 photos, the court found:
[A]lthough each of these images may have appeared in a singular
issue of one of plaintiff’s copyrighted publications, these images are
subject to re-use and redistribution in accordance with various
licensing arrangements. Furthermore, each image represents a singular
and copyrightable effort concerning a particular model, photographer,
and location. The fact that many of these images appeared together
should not detract from the protection afforded to each individual
effort. Furthermore, defendant marketed each one of these images
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separately. Based on these circumstances, the Court finds it
appropriate to award statutory damages for each separate image under
§ 504(c)(1).
Id.
Unlike the photos in Playboy that were copyrighted and marketed
individually, Moore’s photos were always registered and marketed as collections.
YPPI’s collections of photos are more like the series of photos in Greenberg, Tang,
and Coogan, which were taken of one subject, by one photographer, at a single
session. Indeed, YPPI’s retrospective attempts to highlight the singular aspects of
its photos are not persuasive. It argues that the photos were taken by four different
photographers: Trent Moore, Richard Lawless, Richard Suggs, and Heather
Rossick, and consist of multiple objects and models in multiple settings. However,
while YPPI used four different photographers to create its entire library over the
years, for each individual collection organized by subject matter that is at issue in
this lawsuit, only a single photographer was ever used, as confirmed in YPPI’s
copyright registrations. Further, Moore testified that he took most of the photos
and personally edited each one. Additionally, while, for instance, all of the 50 to
100 photos categorized and sold under the heading of “Roofers” may depict
different models and settings, each photo obviously is relevant to inclusion in ads
about the roofing industry and was marketed and sold for that purpose.
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YPPI also points to some instances where it sold its photos individually, but
the record reveals that such instances are outliers.9 In any event, if the dispositive
factor for whether a work has an independent economic value is whether it can
conceivably be sold on its own, Congress’s express mandate in 17 U.S.C. §
504(c)(1) that “all parts of a compilation [are to] constitute one work” would be
rendered meaningless, as the very definition of a collective work in the Copyright
Act—“a periodical issue, anthology, or encyclopedia, in which a number of
contributions, constituting separate and independent works in themselves, are
assembled into a collective whole,” see id. § 101—presupposes that each
individual work in the collection has independent value. For this reason, we
believe that the independent economic value test does not begin and end with an
inquiry into whether a separate unit in a multi-work project could possibly have
some independent economic value if sold separately.
We are also not persuaded by YPPI’s insistence that the photos compiled
under a heading only become useful when a customer selects a particular photo to
build an ad. To the contrary, Moore testified about the collective usefulness of the
headings: they allowed the customer to search by subject matter relevant to their
business, and the multiple photos under that heading gave the customer flexibility
9
For instance, Moore testified that “there was a guy in Louisiana who loved his
advertising so much he called the company and wanted an image for other stuff. So yeah, I’ve
sold by image.” [Doc. 423 at 114–15.]
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to choose between different “looks” for the same subject. According to Moore, the
very idea at the heart of his business was to provide customers with an integrated
collection of photos, whose chief value came from being “heading specific” and
sharing the “same vernacular.” [Doc. 423 at 66.] Neither the fact that YPPI would
sometimes offer per-photo prices rather than per-collection prices to customers, 10
nor that its photos were eventually used individually to create separate
advertisements, diminishes the importance of the fact that YPPI’s entire business
strategy was to distribute and publish the photos collectively, so that customers
could access and search them collectively. Courts applying the independent
economic value test have considered the way the owner marketed his work product
as relevant to the determination of the number of works at issue, and we think
rightly so. See Coogan, 2005 WL 2789311, at *5 (“Unlike the photographs at issue
in Playboy, there is no evidence in the record that Plaintiff marketed the images to
the public separately.”); Playboy, 1998 WL 207856, at *5 (“Furthermore, the
defendant marketed each one of these images separately.”). 11
10
While YPPI would occasionally offer per-image prices to customers, virtually all of
those customers would buy access to the entire inventory of photos collections, on a collective
basis via YPPI’s web portal, before selecting various groups of images to download. [Doc. 423 at
115–25.]
11
We acknowledge that the Court in Feltner assigned little relevance to how the
distributor of the television programs chose to sell the series, i.e., as a block rather than as
individual shows, in its determination that each episode could stand alone. 89 F.3d at 769.
However, at issue in Feltner were episodes with individual plot lines that were produced, aired,
and copyrighted separately, evidence of their independent value despite the fact that it was
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Finally, YPPI’s argument that this Court should disregard the way it
described its 178 collections of photos in its complaints is not well taken. YPPI’s
description of its 178 collections as “Works” is an admission by a party, akin to
witness testimony or any other evidence the district court could have used in
determining the works issue.12
In sum, because YPPI created, marketed, published, registered, and
repeatedly described its photos as 178 collections under 178 headings organized by
subject matter, we affirm the district court’s decision to treat each collection as a
compilation, subject to only one award of statutory damages.
4.
YPPI’s final argument on cross appeal does not involve YPG. YPPI argues
that the district court erred when it refused to address an apparent inconsistency
between the jury awarding $123,000 in statutory damages against YPG and
nothing in statutory damages against Ziplocal. YPPI argues that the jury’s statutory
damages award against Ziplocal of zero dollars should be at least $750 for each
customary in the industry to sell episodes as a block series. We don’t think Feltner’s reasoning
suggests that we must simply ignore the overwhelming evidence in this case that Moore’s photos
were marketed as collections.
12
After YPG began arguing that each of YPPI’s 10,411 photographs could not be
considered a work, YPPI amended its complaint to allege for the first time that its photos were
“distributed both individually and in collections,” citing as the reason for the amendment the
discovery of additional facts in discovery. [See Third Amended Complaint, Doc. 248 at ¶ 15.]
The district court properly noted that this was a significant change in YPPI’s legal theory as to
what constituted a work, which was wholly unrelated to the discovery of additional facts.
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work it found Ziplocal directly infringed, which would total $92,250 for 123
infringed works.13 As a result, YPPI asserts that this Court should reverse and
remand for the district court to conduct a trial on the issue of damages alone.
[Reply Brief of YPPI at 29.]
A prevailing plaintiff may not recover both actual and statutory damages
under the Copyright Act: statutory damages recovery is “instead of actual damages
and profits.” 17 U.S.C. § 504(c)(1). “[I]f a party so demands, a jury must
determine the actual amount of statutory damages under § 504(c) in order ‘to
preserve the substance of the common-law right of trial by jury.’” Feltner, 523
U.S. at 355, 118 S. Ct. at 1288 (quoting Tull v. United States, 481 U.S. 412, 426,
107 S. Ct. 1831, 1841 (1987)) (internal quotation marks omitted). The plaintiff
may make its election between actual and statutory damages “‘at any time before
final judgment is rendered.’” Jordan v. Time, Inc., 111 F.3d 102, 104 (11th Cir.
1997) (quoting 17 U.S.C. § 504(c)). Ordinarily, when the issue of damages in this
type of case is tried to a jury, and the plaintiff is successful in making out its claim,
the plaintiff would simply choose between the actual or statutory damages as
determined by the jury. This, however, was no ordinary case.
13
We note that Ziplocal never filed a brief in response to YPPI’s argument, but this fact
alone does not warrant reversal, as YPPI argues. The only sanction authorized by the federal
rules for an appellee’s failure to file a response brief is the refusal to hear the nonfiling appellee
at oral argument. See Fed. R. App. P. 31(c) (an appellee who failed to file a brief will not be
heard at oral argument, except by permission of the Court).
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Despite 17 U.S.C. § 504(c)(1)’s instruction that statutory damages must be
awarded “in a sum of not less than $750” for each work infringed, the jury
awarded zero dollars in statutory damages for Ziplocal’s willful direct
infringement of 123 of YPPI’s copyrighted works. The jury awarded YPPI only
one dollar in actual damages against Ziplocal on the direct infringement claim.
Clearly, YPPI was not happy with having to choose between nothing on one hand
and one dollar on the other hand, so it requested that the district court address the
jury’s inconsistent statutory awards. Although YPPI is correct that a court may in
appropriate instances correct a jury’s damages verdict when it falls below the
minimum amount required by law, see U.S. E.E.O.C. v. Massey Yardley Chrysler
Plymouth, Inc., 117 F.3d 1244, 1252–53 (11th Cir. 1997), principles of invited
error require YPPI to now be bound by the jury’s statutory damages award and bar
us from reviewing YPPI’s claim on appeal. See United States v. Ross, 131 F.3d
970, 988 (11th Cir. 1997) (“It is a cardinal rule of appellate review that a party may
not challenge as error a ruling or other trial proceeding invited by that party.”)
(quotation marks omitted). The doctrine of invited error “stems from the common
sense view that where a party invites the trial court to commit error, he cannot later
cry foul on appeal.” United States v. Brannan, 562 F.3d 1300, 1306 (11th Cir.
2009).
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Here, YPPI elected to present both actual and statutory damages theories to
the jury, so it could then choose the higher award. Indeed, the court chose to read
YPPI’s proposed jury instructions to the jury, stating:
Now, plaintiff may recover actual or statutory damages. And I’ll
define those terms now for you. Plaintiff is entitled to recover any
actual damages suffered because of the infringement. Actual damages
means the amount of money adequate to compensate plaintiff for the
injury to the market value of the copyrighted work caused by the
infringement. . . . Now, plaintiff also seeks a statutory damage award.
Statutory damages are damages that are established by the Congress in
the Copyright Act. The purposes are to compensate the copyright
owner, penalize the infringer and deter future copyright law
violations. The amount awarded must be between $750 and $30,000
for each copyrighted work that you find to be infringed unless one of
the exceptions applies and I’ll explain later.
[Doc. 429 at 107–08.] This wording follows the Eleventh Circuit Pattern Jury
Instructions as well as the rule that YPPI was entitled to either actual or statutory
damages, but not both. See Eleventh Circuit Civil Pattern Jury Instructions, No.
9.30 (2013); 17 U.S.C. § 504(c)(1). The district court also chose the verdict form
drafted and submitted by YPPI. The verdict form asked in Question No. 4 whether
the jury found by a preponderance of the evidence that Ziplocal had infringed any
of YPPI’s copyrights. [Doc. 422.] The jury placed an “x” in the blank for “Yes.”
On the same page of the verdict form, Question No. 6, the question on damages
against Ziplocal, provided:
If you answered “Yes” to No. 4, that Plaintiff Yellow Pages Photos,
Inc. should be awarded:
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$_____________ in actual damages or
$_____________ in statutory damages.
[Doc. 422 (emphasis added).] The use of “or” between the two types of damages
could have led the jury to conclude either 1) that it should determine both actual
and statutory damages so that a decision could later be made by the plaintiff
between the two amounts (and this is certainly what the law requires), or 2) that it
should determine an amount for actual or statutory damages, but not both. The
problem is that the pattern jury instruction, as well as the verdict form, could have
been clearer on this point. The instruction could perhaps have been clarified by
telling the jury that if it finds infringement on the part of a defendant, then it is
required to determine an amount to award the plaintiff for both statutory damages
against that defendant in an amount no less than $750 for each work that it found
was infringed as well as an amount for actual damages. The jury could also have
been specifically told that one or the other would ultimately be awarded to the
plaintiff, but not both. Here, the jury ultimately completed the verdict form in
Question No. 6 and awarded YPPI actual damages (albeit one dollar) and no
statutory damages.
YPPI points out that immediately after the court instructed the jury and
explained the verdict form, its counsel requested that the court clarify for the jury
that, if the jury found infringement, it should put down an amount for both actual
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and statutory damages, stating: “I’m not sure it was entirely clear to the jury that
they should put an amount for actual and statutory damages—amount for statutory
damages. If that happens, we think we’d like to have that clear for the jury.” [Doc.
429 at 119.] Counsel for Ziplocal and YPG then objected, claiming: “It’s their
form. The form is clear. You’ve already read the instructions.” [Id. at 119-120.]
We note here that we do not find that YPPI’s submission of the jury instructions
and verdict form invited the error of which YPPI complains. First, YPPI’s jury
instruction and verdict form submission generally followed this Circuit’s Pattern
Instruction and accurately stated the law: under § 504(c), a copyright owner is
entitled to an award of only actual damages or statutory damages, but not both.
Second, YPPI specifically requested an additional instruction clarifying that the
jury should find both statutory and actual damages, so YPPI could later elect. In
part, the invited error doctrine serves to prevent a party from building error into the
record and later capitalizing on that error. Here, that purpose is not served since
YPPI’s instruction and verdict form were not incorrect statements of the law, and,
in any case, when the district court could still do something about it, YPPI
attempted to correct that aspect of the problem that it now appeals.
Nevertheless, even assuming without deciding that the district court erred in
declining to give further instructions to the jury, we decline to review the district
court’s decision not to adjust the statutory award for Ziplocal’s direct infringement
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to at least $750 for each work infringed because YPPI did invite error regarding
that issue in another regard. More specifically, the jury submitted a question to the
court during its deliberations, asking whether it could award “actual damages to
one and statutory damages to the other?” [Doc. 430 at 4.] The court read this
question as referring to “actual damages to one defendant and statutory damages to
the other,” referring to YPG and Ziplocal. [Id.] When the court inquired of YPPI’s
counsel what the answer to this question should be, YPPI’s counsel at first noted
that he believed that the jury was “supposed to put actual and statutory damages
calculations in both blanks.” [Id. at 5.] But upon reflection, YPPI’s counsel
decided that the jury could indeed award only statutory damages to one defendant
and only actual damages to the other, meaning that YPPI agreed that the jury’s
statutory damages award could indeed be zero dollars as to one of the defendants.
When asked what the answer should be to the jury’s question, YPPI’s counsel
answered: “Yes. Okay. We would say yes, Your Honor. That’s okay.” [Id. at 6–7.]
In agreeing that the jury could indeed award zero dollars in statutory damages
against one or the other of the defendants, YPPI waived the argument that such an
award was legal error.
This situation is similar to that in United States v. Fulford, 267 F.3d 1241(11th Cir. 2001), where the defendant-appellant argued that the district court gave
an erroneous supplemental instruction in response to a jury question during
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deliberation. Id. at 1247. The trial court read the jury’s question into the record and
engaged in a lengthy colloquy with the parties. Id. At the end of the colloquy, the
court read its proposed supplemental instruction, confirming with the parties that
the instruction was acceptable to them before instructing the jury. Id. The
defendant’s attorney responded that the instruction was “acceptable to us.” Id.When the defendant later attempted to overturn the verdict by arguing that the
supplemental instruction was erroneous, the court held that it did not have to reach
the question whether the instruction was plain error because the error was invited
by the defendant. Id. at 1247. Similarly here, YPPI expressly agreed to the
supplemental instruction by stating, “Yes. Okay. We would say yes, Your Honor.
That’s okay.” [Doc. 430 at 6–7.] Having agreed to the proposed instruction in
response to the jury’s question, indicating that the jury could award zero dollars in
statutory damages to one defendant, YPPI has waived its right to challenge that
award on appeal. 14
After the verdict was read, counsel for YPPI did assert that it was
“inconsistent” for the jury to award zero dollars in statutory damages against
14
The Court notes that here, the jury also found Ziplocal to be guilty of contributory
copyright infringement and awarded YPPI $100,000 in actual damages and zero dollars in
statutory damages against Ziplocal on that claim. After trial, YPPI elected to recover $100,001 in
actual damages from Ziplocal, in lieu of statutory damages of zero dollars. Had YPPI made the
same argument with regard to the statutory damages award on the contributory infringement
claim, namely that that the jury’s award of zero dollars in statutory damages on that claim was
error, our ruling on invited error would also apply. However, nothing we say here affects YPPI’s
election of actual damages against Ziplocal on the contributory infringement claim.
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Ziplocal. However, this was after the jury had already deliberated based, in part, on
the agreement of all counsel, including YPPI’s, that the jury should be told that it
could indeed award no statutory damages to one or the other of the defendants. See
Fulton, 267 F.3d at 1247 (rejecting the defendant’s argument that his acceptance of
the court’s supplemental instruction did not render it invited error because, five
hours later, his counsel requested an additional instruction based on subsequent
research, because the subsequent attempt to submit an additional instruction “has
no bearing on [the defendant’s] earlier unconditional acceptance of the court’s
instruction”). In post-trial briefing, YPPI again asked the court to correct the jury’s
statutory damages award and to assess statutory damages against Ziplocal on
YPPI’s direct infringement claim “in no less than the statutory minimum amount
of $750 per work infringed, for a total of no less than $92,250.” The court
declined, finding that YPPI had invited the error. Having submitted the
determination of the amount of statutory damages to the jury and then having
agreed that the district court should tell the jury that it could find that amount to be
zero, YPPI cannot now complain that the jury returned a verdict finding that
amount. YPPI was left to elect between the actual and statutory amounts
determined by the jury.
III.
We affirm the district court on all issues raised on appeal.
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AFFIRMED.
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