Friedman v. Live Nation Merchandise, Inc. , 833 F.3d 1180 ( 2016 )


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  •                      FOR PUBLICATION
    UNITED STATES COURT OF APPEALS
    FOR THE NINTH CIRCUIT
    GLEN E. FRIEDMAN,                                 No. 14-55302
    Plaintiff-Appellant,
    D.C. No.
    v.                           2:11-cv-02047-
    MWF-VBK
    LIVE NATION MERCHANDISE, INC.;
    ANTHILL TRADING, LLC; ART.COM,
    INC.,                                               OPINION
    Defendants-Appellees.
    Appeal from the United States District Court
    for the Central District of California
    Michael W. Fitzgerald, District Judge, Presiding
    Argued and Submitted February 11, 2016
    Pasadena, California
    Filed August 18, 2016
    Before: Marsha S. Berzon, and John B. Owens, Circuit
    Judges, and Algenon L. Marbley,* District Judge.
    Opinion by Judge Berzon
    *
    The Honorable Algenon L. Marbley, United States District Judge for
    the Southern District of Ohio, sitting by designation.
    2         FRIEDMAN V. LIVE NATION MERCHANDISE
    SUMMARY**
    Copyright
    In a case arising out of a copyright dispute over Live
    Nation’s unauthorized use, on t-shirts and a calendar, of
    photographs Glen Friedman took of the hip hop group Run-
    DMC, the panel (a) reversed the district court’s summary
    judgment in favor of Live Nation Merchandise, Inc., on
    claims that Live Nation willfully infringed Friedman’s
    copyrights and knowingly removed copyright management
    information from the images it used, and (b) affirmed the
    district court’s ruling on statutory damages.
    Live Nation stipulated that it infringed Friedman’s
    copyrights. The panel held that the evidence in the record
    gave rise to a triable issue of fact as to whether Live Nation’s
    infringement was willful, which would make it liable for
    additional damages under 
    17 U.S.C. § 504
    (c)(2), and that the
    district court therefore erred in granting summary judgment
    to Live Nation on willfulness.
    The panel held that the district court also erred in granting
    summary judgment on Friedman’s claim under section
    1202(b) of the Digital Millennium Copyright Act regarding
    removal of copyright management information. The panel
    explained that Friedman could prevail upon a showing that
    Live Nation distributed his works with knowledge that
    copyright management information had been removed, even
    if Live Nation did not remove it. The panel concluded that
    **
    This summary constitutes no part of the opinion of the court. It has
    been prepared by court staff for the convenience of the reader.
    FRIEDMAN V. LIVE NATION MERCHANDISE                   3
    evidence in the record creates a triable issue of fact as to
    whether Live Nation distributed Friedman’s photographs with
    the requisite knowledge.
    Affirming the district court’s ruling on statutory damages,
    the panel held that Copyright Act Section 504(c)(1)’s
    provision of separate statutory damage awards for the
    infringement of each work “for which any two or more
    infringers are liable jointly and severally” applies only to
    parties who have been determined jointly and severally liable
    in the course of the liability determinations in the case for the
    infringements adjudicated in the action, and that a plaintiff
    seeking separate damages awards on the basis of downstream
    infringement must join the alleged downstream infringers in
    the action and prove their liability for infringement. The
    panel concluded that because Friedman did not join any of his
    alleged downstream infringers as defendants in this case, the
    district court correctly held that he was limited to one award
    per work infringed by Live Nation.
    COUNSEL
    Lorin E. Brennan (argued), Erica Allen Gonzales, and
    Douglas A. Linde, The Linde Law Firm, Los Angeles,
    California, for Plaintiff-Appellant.
    Matthew R. Gershman (argued), Peter Yu, Jr., and Jeff E.
    Scott, Greenberg Traurig LLP, Los Angeles, California, for
    Defendants-Appellees.
    4        FRIEDMAN V. LIVE NATION MERCHANDISE
    OPINION
    BERZON, Circuit Judge:
    This case arises out of a copyright dispute over the use of
    photographs Appellant Glen Friedman took of the hip hop
    group Run-DMC. Appellee Live Nation Merchandise (“Live
    Nation”) stipulated in the district court that it infringed
    Friedman’s copyrights when it used his photos without his
    authorization on t-shirts and a calendar. Our questions are
    whether there is sufficient evidence in the record to permit a
    jury to conclude that Live Nation committed willful copyright
    infringement, making it liable for additional damages under
    
    17 U.S.C. § 504
    (c)(2); whether a jury could conclude that
    Live Nation knowingly removed copyright management
    information (“CMI”) from the photographs in violation of
    
    17 U.S.C. § 1202
    (b); and whether Friedman can recover
    statutory damages awards measured by the number of
    retailers who purchased infringing merchandise from Live
    Nation, even though Friedman did not join those retailers as
    defendants in his suit.
    FACTUAL AND PROCEDURAL HISTORY
    Glen Friedman is a well-known photographer whose work
    focuses on figures from several American subcultures,
    including skateboarders, punk rock musicians, and hip hop
    artists. His photography has been in gallery exhibitions and
    on record covers and has been published widely.
    During the 1980s, Friedman took a series of photographs
    of the hip hop group Run-DMC. Several of Friedman’s
    photographs of the group appeared in a book collecting his
    work. In 2005, Friedman granted a license to Sony Music to
    FRIEDMAN V. LIVE NATION MERCHANDISE                          5
    reproduce some of his Run-DMC photographs, accompanied
    by information indicating that Friedman owned the
    copyrights, on a website. Fans could download the images to
    use as computer “wallpapers.” Sony’s license permitted it to
    alter the images in some respects — for example, by adding
    a green tint, a Run-DMC logo, or a sparkle effect — and was
    the only license in which Friedman authorized such
    alterations to his photographs.
    Live Nation1 is a music merchandising company involved
    in the design, manufacture, and sale of apparel and other
    products featuring images and logos of various popular music
    artists. In developing products, Live Nation typically enters
    into written merchandising agreements with music artists in
    which the artists retain final approval authority on the design,
    development, distribution and sale of merchandise bearing the
    artists’ marks and likeness. In practice, Live Nation submits
    “Product Approval Forms” to artists asking them to sign off
    on the development of products displaying specific images.
    Those forms supplied by Live Nation include no reference to
    copyrights or other usage restrictions. Live Nation maintains
    that artists are “not supposed to” provide approval if they do
    not have the rights to the proposed photographs, but points to
    no instruction or agreement so stating.
    Live Nation also produced “Style Guides” — essentially,
    collections of available images of particular artists — to
    inform suppliers about images they could contract to use on
    merchandise. Like individual products, the Style Guides
    1
    In addition to Live Nation, three other parties, Art.com, Inc., NMR
    Distribution (America) Inc., and Michael Howard, who acted as
    “distributors, retailers, licensees, and vendors” are named as defendants
    as to Friedman’s copyright claims.
    6        FRIEDMAN V. LIVE NATION MERCHANDISE
    were first submitted to the artists, who were supposed to “pre-
    clear” the images of them included in the Guides. Live
    Nation’s Run-DMC Style Guide (“Run-DMC Guide”)
    included a number of Friedman’s images. Live Nation sought
    and obtained approval from Run-DMC for a 2008 Wall
    Calendar that included four of Friedman’s images, and later,
    for three t-shirt designs, that included Friedman images
    previously featured in the Run-DMC Guide.
    After he became aware of Live Nation’s use of his
    photographs, Friedman filed a complaint asserting claims for
    relief for (1) copyright infringement, under 
    17 U.S.C. § 101
    et seq., and (2) removal of copyright management
    information (“CMI”), under 
    17 U.S.C. § 1202
    . During
    discovery, Live Nation propounded a set of contention
    interrogatories and requests for admission.               The
    interrogatories asked Friedman to detail the evidence
    supporting his claims, while the requests for admission asked
    him to concede that he lacked evidence to support a number
    of his assertions. The district court had set April 23 as the
    discovery cut-off date. Friedman’s responses were due on
    April 19.
    Friedman did not respond in time. Instead, on April 20,
    Friedman filed objections asserting that each request was
    “untimely” because it “requires a response beyond the
    discovery cut-off.” Friedman claimed that this was so even
    though his responses were due before the discovery cut-off
    date as — according to him — the discovery cut-off “is the
    date by which all discovery, including all hearings on and any
    related motions, is to be completed.” Reasoning that “a
    hearing on any discovery motion could not be completed
    before” April 23, and because “discovery not completed
    before the discovery cut-off date is not enforceable,”
    FRIEDMAN V. LIVE NATION MERCHANDISE                 7
    Friedman maintained that he “was not required to provide any
    response to Defendants’ discovery requests.”
    After the close of discovery, Friedman moved for
    summary judgment on the copyright infringement issue. In
    response, Live Nation stipulated to liability for infringement,
    and the district court entered partial summary judgment in
    Friedman’s favor. Live Nation then moved for partial
    summary judgment on Friedman’s CMI claim, and, to the
    extent Friedman claimed Live Nation’s infringement was
    “committed willfully” under 
    17 U.S.C. § 504
    (c)(2), on the
    copyright infringement claim. Relying largely on Friedman’s
    discovery default, Live Nation argued that Friedman had
    produced no evidence whatsoever indicating that Live Nation
    had willfully infringed his copyrights or had knowingly
    removed CMI from any of the images. In his opposition to
    Live Nation’s motion, Friedman requested that the court
    permit him to withdraw any deemed admissions under
    Federal Rule of Civil Procedure 36(b).
    Without referring to deemed admissions or explicitly
    ruling on Friedman’s Rule 36(b) request, the district court
    granted Live Nation’s motion for partial summary judgment.
    On the CMI claim, the court found that “Friedman has
    offered no evidence suggesting that Live Nation Merchandise
    actually removed CMI from any of his Run-DMC
    photographs, much less that it did so knowingly or
    intentionally.”    As to Friedman’s claim of willful
    infringement, the court concluded that “the burden of proof
    here rests on Friedman, and it is not clear that he has offered
    any evidence that would create an issue of fact for a jury.”
    Friedman next filed a revised statement of damages
    claiming, “[i]n light of the Court’s Order Granting
    8        FRIEDMAN V. LIVE NATION MERCHANDISE
    Defendant’s Motion for Summary Judgment, the maximum
    statutory damage award” of $3,120,000. Friedman later
    explained that this figure was based on records indicating that
    Live Nation had distributed one of the t-shirts to 27 retailers,
    the other t-shirt to 44 retailers, and the calendar to 33 retailers
    for a total of 104 separate statutory damage awards of
    $30,000 each. See 
    17 U.S.C. § 504
    (c)(1).
    The district court rejected this calculation, ruling that
    Friedman was “entitled to only one statutory damages award
    per infringed work.” Even if Friedman’s calculation of 104
    “downstream infringers” were correct, the court held, this
    case “involves photographs in a mass-marketing campaign.”
    Although a prior Ninth Circuit case, Columbia Pictures
    Television v. Krypton Broadcasting of Birmingham, Inc.,
    
    106 F.3d 284
     (9th Cir. 1997), rev’d on other grounds sub
    nom. Feltner v. Columbia Pictures Television, Inc., 
    523 U.S. 340
     (1998), was “arguably consistent with [Friedman’s]
    position if read broadly enough,” the court stated that “there
    is nothing in [Columbia Pictures] that suggests its reasoning
    should be applied to a mass-marketing campaign such as that
    at issue in this case.”
    This appeal followed.
    DISCUSSION
    On appeal, Friedman challenges the district court’s grant
    of summary judgment to Live Nation on his willful
    infringement and CMI violation claims. He also challenges
    the district court’s order limiting his recovery to one statutory
    damages award per infringed work.
    FRIEDMAN V. LIVE NATION MERCHANDISE                            9
    I.
    “Summary judgment is appropriate only if, taking the
    evidence and all reasonable inferences drawn therefrom in the
    light most favorable to the non-moving party, there are no
    genuine issues of material fact and the moving party is
    entitled to judgment as a matter of law.” Torres v. City of
    Madera, 
    648 F.3d 1119
    , 1123 (9th Cir. 2011) (citing Corales
    v. Bennett, 
    567 F.3d 554
    , 562 (9th Cir. 2009)). “[T]here is no
    issue for trial unless there is sufficient evidence favoring the
    nonmoving party for a jury to return a verdict for that party.
    If the evidence is merely colorable, or is not significantly
    probative, summary judgment may be granted.” McIndoe v.
    Huntington Ingalls Inc., 
    817 F.3d 1170
    , 1173 (9th Cir. 2016)
    (quoting R.W. Beck & Assocs. v. City & Borough of Sitka,
    
    27 F.3d 1475
    , 1480 n.4 (9th Cir. 1994)). In determining
    whether there is sufficient evidence to support a grant of
    summary judgment, we “review[] the record as a whole.”
    Vander v. U.S. Dep’t of Justice, 
    268 F.3d 661
    , 663 (9th Cir.
    2001).
    Before proceeding to the merits of the grant of summary
    judgment, we consider, and reject, a threshold question —
    Live Nation’s contention that it is entitled to summary
    judgment on the basis of Friedman’s discovery default.2
    2
    Friedman does not dispute that his objections to the interrogatories and
    requests for admission were untimely. Friedman does continue to press
    his argument, raised initially in those objections, that Live Nation’s
    discovery requests were themselves untimely because they required a
    response on April 19, 2012, just four days before the discovery cut-off
    date of April 23. Friedman cites no authority for the proposition that a
    discovery request with a deadline prior to the discovery cut-off could be
    nonetheless untimely. In any case, Friedman waived this objection by
    failing timely to raise it. See Fed. R. Civ. P. 33(b)(2); 36(a)(3).
    10       FRIEDMAN V. LIVE NATION MERCHANDISE
    Friedman’s failure to specify evidence in response to an
    interrogatory does not mean that the evidence does not exist
    in the record. In both his motion for summary judgment and
    his opposition to Live Nation’s motion for partial summary
    judgment, Friedman pointed to specific evidence in the record
    upon which he relied.
    Second, as to any deemed admission due to his failure
    timely to respond to the request for admissions, Friedman
    made a motion for relief under Federal Rule of Civil
    Procedure 36(b), which provides that a court “may permit
    withdrawal or amendment [of any deemed admission] if it
    would promote the presentation of the merits of the action
    and if the court is not persuaded that it would prejudice the
    requesting party in maintaining or defending the action on the
    merits.”     Live Nation’s contention to the contrary
    notwithstanding, Conlon v. United States, 
    474 F.3d 616
    , 625
    (9th Cir. 2007) does not require that a request for relief under
    Rule 36(b) be brought in a separate motion. Rather, Conlon
    stresses the discretionary nature of relief under Rule 36(b).
    Nor does Rule 36(b) mandate that relief from a deemed
    admission may be granted only upon a showing of good
    cause. As Conlon explained, the two factors listed in the rule
    are mandatory, but a district court “may consider other
    factors, including whether the moving party can show good
    cause for the delay.” Conlon, 
    474 F.3d at 625
     (emphasis
    added).
    The district court never explicitly ruled on Friedman’s
    Rule 36(b) motion, but it necessarily granted it. The court
    never stated that Friedman had been deemed to make any
    admissions, nor did it rely on any of the requested
    admissions. Instead, the court considered the summary
    judgment issue on the merits, discussing specific evidence in
    FRIEDMAN V. LIVE NATION MERCHANDISE                   11
    the record and stating, with respect to the request for
    admissions dispute, only that Friedman had attempted to
    “sidestep[]” discovery. Given this sequence, the district court
    necessarily granted, albeit implicitly, Friedman’s request to
    withdraw the deemed admissions. It had authority to do so,
    to “promote the presentation of the merits of the action” and
    because the timing of the request was so late in the discovery
    period that Live Nation could not have been prejudiced in its
    discovery conduct by the inability to rely on deemed
    admissions.
    A. Willful Infringement
    Under the Copyright Act, the amount of damages a
    plaintiff may recover for infringement depends on whether
    the infringement was “committed willfully.” 
    17 U.S.C. § 504
    (c)(2). The copyright owner has the burden of proving
    willfulness. 
    Id.
     “[A] finding of ‘willfulness’ in this context
    can be based on either ‘intentional’ behavior, or merely
    ‘reckless’ behavior.” In re Barboza, 
    545 F.3d 702
    , 707 (9th
    Cir. 2008) (citations omitted). “To prove ‘willfulness’ under
    the Copyright Act, the plaintiff must show (1) that the
    defendant was actually aware of the infringing activity, or
    (2) that the defendant’s actions were the result of ‘reckless
    disregard’ for, or ‘willful blindness’ to, the copyright holder’s
    rights.” Louis Vuitton Malletier, S.A. v. Akanoc Sols., Inc.,
    
    658 F.3d 936
    , 944 (9th Cir. 2011) (quoting Island Software &
    Computer Serv., Inc. v. Microsoft Corp., 
    413 F.3d 257
    , 263
    (2d Cir. 2005)).
    A determination of willfulness requires an assessment of
    a defendant’s state of mind. “Questions involving a person’s
    state of mind . . . are generally factual issues inappropriate for
    resolution by summary judgment.” F.T.C. v. Network Servs.
    12       FRIEDMAN V. LIVE NATION MERCHANDISE
    Depot, Inc., 
    617 F.3d 1127
    , 1139 (9th Cir. 2010) (quoting
    Braxton-Secret v. A.H. Robins Co., 
    769 F.2d 528
    , 531 (9th
    Cir. 1985)). Indeed, as the district court noted, Live Nation
    was not able to cite any “cases in which a court has granted
    summary judgment in favor of a defendant on the issue of
    willfulness.”
    The district court nonetheless granted summary judgment
    to Live Nation on the willfulness issue, concluding that
    Friedman had not “offered any evidence that would create an
    issue of fact for a jury” regarding Live Nation’s awareness of
    or reckless disregard concerning Friedman’s copyright rights.
    Not so.
    On the current record, a jury could reasonably conclude
    that Live Nation’s approval procedures amounted to
    recklessness or willful blindness with respect to Friedman’s
    intellectual property rights. Live Nation’s Product Approval
    Forms say nothing whatsoever about establishing or reporting
    on who holds the rights to the images whose use is proposed.
    The forms only include fields indicating the manufacturer of
    the proposed product, the artist represented, and the suggested
    price, along with space for unspecified “comments” by Live
    Nation and the artist. From the face of the documents, one
    could conclude that they are directed at design decisions, not
    the rights to the photographs. Nor do the specific forms
    signed by Run-DMC indicate in any way that the group was
    clearing the legal right to use the photographs, on their own
    behalf or anyone else’s.
    In a declaration in support of Live Nation’s summary
    judgment motion, one of its employees explained that when
    artists did not own the rights to photographs, “they were not
    supposed to, and should not, provide their written approval
    FRIEDMAN V. LIVE NATION MERCHANDISE                   13
    . . . to develop merchandise using those photographs.” But
    the employee did not say how or when Run-DMC was
    apprised of this duty. She asserted only that as an industry
    practice “it is generally the responsibility of the music artists’
    personal managers to uncover the relevant facts and ascertain
    the scope of the music artists’ rights.” Given an approval
    process that never explicitly asks about copyrights at all, a
    jury could reasonably conclude that Live Nation’s reliance on
    the artists who were the subjects of the photographs at issue
    to clear photographic rights, rather than on the photographers
    who took them — based only on a purported industry practice
    never reflected in any document — amounted to recklessness
    or willful disregard, and thus willfulness.
    That inference is particularly strong in this case. Live
    Nation submitted evidence showing that it knew it needed to
    take special care with respect to Friedman’s images. In
    response to an unrelated request to use certain photographs of
    Run-DMC, a Live Nation employee sent an email stressing
    that “we do not want to use ANY Glenn Freidman [sic]
    Photos for RUN DMC[.] [H]e owns all the rights to his
    photos and is really not interested in using them for
    [m]erchandise and he is really expensive to even get
    clearance for.” This email was sent on March 26, 2009, after
    the infringing use of Friedman’s photographs at issue in this
    case, but before Friedman brought that infringing use to Live
    Nation’s attention on October 21, 2010. Live Nation argues
    that this email demonstrates that it took active steps to respect
    Friedman’s rights and avoid knowingly using any of his
    photos without permission. But a jury could as plausibly
    understand it to demonstrate that Live Nation knew there was
    a risk that photos of Run-DMC would be Friedman’s photos,
    but nonetheless went forward with developing the
    14        FRIEDMAN V. LIVE NATION MERCHANDISE
    merchandise without taking steps to ascertain whether it
    featured Friedman’s work.
    We therefore conclude that, drawing all inferences in
    Friedman’s favor, the evidence in the record gave rise to a
    triable issue of fact as to Live Nation’s willfulness, and we
    reverse the district court’s grant of summary judgment.
    B. The CMI Violations
    Section 1202(b) of the Digital Millennium Copyright Act
    prohibits, inter alia, the distribution of works “knowing that
    the copyright management information has been removed or
    altered without authority of the copyright owner or the law,”
    and with knowledge that such distribution “will induce,
    enable, facilitate, or conceal” copyright infringement.3
    
    17 U.S.C. § 1202
    (b). In granting summary judgment on the
    CMI claim, the district court again relied on what it described
    as “Friedman’s complete failure to adduce competent
    evidence in discovery or in opposition to Defendants’
    Motion” and concluded that “he has made no factual showing
    that Live Nation Merchandise either removed the CMI in
    question (the alleged ‘act’) or did so knowingly (the requisite
    state of mind).”
    We note at the outset that the district court focused on the
    wrong question. The statute does prohibit the intentional
    removal of CMI. See 
    17 U.S.C. § 1202
    (b)(1). But Friedman
    could also prevail upon a showing that Live Nation
    3
    As defined by the statute, “copyright management information” refers
    to various types of “information conveyed in connection with copies . . .
    of a work,” including the name of the work, the name of the author, and
    the name of the copyright holder, among others. 
    17 U.S.C. § 1202
    (c).
    FRIEDMAN V. LIVE NATION MERCHANDISE                           15
    distributed his works with the knowledge that CMI had been
    removed, even if Live Nation did not remove it. See 
    id.
    § 1202(b)(3). The question, therefore, is whether evidence in
    the record creates a triable issue of fact as to whether Live
    Nation distributed Friedman’s photographs with the requisite
    knowledge. We conclude that in the circumstances of this
    case, it does.4
    As we have previously explained, “[a] moving party
    without the ultimate burden of persuasion at trial” — such as
    Live Nation in this case — nonetheless “has both the initial
    burden of production and the ultimate burden of persuasion
    on a motion for summary judgment.” Nissan Fire & Marine
    Ins. Co. v. Fritz Companies, Inc., 
    210 F.3d 1099
    , 1102 (9th
    Cir. 2000) (citations omitted). The moving party may
    discharge its initial burden by “show[ing] that the nonmoving
    party does not have enough evidence of an essential element
    to carry its ultimate burden of persuasion at trial.” 
    Id.
     But,
    “to carry its ultimate burden of persuasion on the motion, the
    moving party must persuade the court that there is no genuine
    issue of material fact.” 
    Id.
    Where “a moving party carries its burden of production,
    the nonmoving party must produce evidence to support its
    claim or defense.” 
    Id. at 1103
     (citations omitted). We may
    4
    In reaching its contrary conclusion, the district court relied on another
    case with somewhat analogous facts, quoting it for the proposition that
    “Plaintiff asks the Court to simply assume that [Defendants] must have
    cropped the [CMI] and must have possessed the requisite intent.” (quoting
    William Wade Waller Co. v. Nexstar Broad., Inc., No. 4-10-CV-00764
    GTE, 
    2011 WL 2648584
    , at *5 (E.D. Ark. July 6, 2011) (alterations in the
    district court’s opinion). This reliance was misplaced, as, again, the
    statute does not require that Live nation have “cropped” the CMI,
    intentionally or otherwise.
    16       FRIEDMAN V. LIVE NATION MERCHANDISE
    assume that Live Nation carried its initial burden of
    production in its motion for partial summary judgment.
    Contrary to the district court’s assertion, however, Friedman
    did produce evidence supporting his claim.               Most
    importantly, Friedman produced the images as they appeared
    on Live Nation’s merchandise and the same images as they
    had appeared on Sony’s website and in his book. In his
    motion for summary judgment, he compared them,
    demonstrating that there were striking similarities.
    For example, some of the photographs used in Live
    Nation’s calendar included alterations, such as tint effects and
    added logos, that Friedman had authorized only for the Sony
    website. Photos that appeared in the Style Guide appeared to
    have been scanned from Friedman’s book, as they contained
    captions and other layout features that appeared in that source
    alone. The images on Live Nation’s products did not include
    copyright information that had been present on the earlier
    versions.
    “[A] ‘striking similarity’ between the works may give rise
    to a permissible inference of copying.” Baxter v. MCA, Inc.,
    
    812 F.2d 421
    , 423 (9th Cir. 1987). Here, the fact that the
    photographs used by Live Nation were exact copies of the
    images precisely as they appeared on Sony’s website and in
    Friedman’s book gives rise to the compelling inference that
    Live Nation’s photographs were directly copied from those
    sources. Because the only material difference in the Live
    Nation versions was that the CMI was missing, it was
    necessarily the case that the CMI had been removed on the
    copied version.
    The only question, then, is whether the evidence as a
    whole permits a reasonable inference that Live Nation knew
    FRIEDMAN V. LIVE NATION MERCHANDISE                17
    of the removal of the CMI. As to this question, a reasonable
    jury could certainly conclude that Live Nation had knowledge
    that photographs are often copyrighted. Indeed, Live
    Nation’s 2009 employee email indicates its awareness that
    Friedman himself often held the copyrights to photographs of
    Run-DMC. Furthermore, Live Nation has never offered any
    explanation of how it came to possess the images. It did,
    however, provide the declaration of one of its officers, who
    asserted that his “investigation . . . uncovered no evidence
    that [Live Nation] ever obtained any of Mr. Friedman’s
    claimed photographs of Run-DMC from any website.”
    (emphasis added). A jury could draw an adverse inference
    from this artfully worded language, which carefully avoids
    either an outright denial that Live Nation copied the
    photographs knowing that the CMI had been removed or an
    explanation as to what the investigation did uncover about the
    origin of the photographs.
    At bottom, Live Nation’s argument amounts to a claim
    that Friedman was required to produce direct evidence of
    Live Nation’s knowledge of the CMI removal. That is not the
    law. This court has long recognized that “circumstantial
    evidence can be used to prove any fact.” United States v.
    Ramirez-Rodriquez, 
    552 F.2d 883
    , 884 (9th Cir. 1977). We
    have noted in particular that whether a party had knowledge
    of a particular circumstance “is a question of fact subject to
    demonstration in the usual ways, including inference from
    circumstantial evidence.” Harrington v. Scribner, 
    785 F.3d 1299
    , 1304 (9th Cir. 2015) (quoting Farmer v. Brennan,
    
    511 U.S. 825
    , 841–42 (1994)). Indeed, whenever state of
    mind is at issue, “‘direct proof’ of one’s specific wrongful
    intent is ‘rarely available’” and so recourse to circumstantial
    evidence is most often necessary. United States v. Dearing,
    18       FRIEDMAN V. LIVE NATION MERCHANDISE
    
    504 F.3d 897
    , 901 (9th Cir. 2007) (quoting United States v.
    Marabelles, 
    724 F.2d 1374
    , 1379 (9th Cir. 1984)).
    Live Nation is wrong, therefore, that the evidence in the
    record as a whole is not consistent with a reasonable, if not
    particularly strong, inference that Live Nation knew of the
    removal of the CMI when it distributed Friedman’s
    photographs. Because Friedman had therefore discharged his
    burden of production at summary judgment, the burden
    shifted back to Live Nation “to carry its ultimate burden of
    persuasion” by “persuad[ing] the court that there is no
    genuine issue of material fact.” Nissan Fire, 
    210 F.3d at 1102
    . It might have done so by providing some explanation
    for how it came to possess Friedman’s images — missing
    their CMI — in the first place, establishing its lack of
    knowledge and negating the inference drawn from the
    juxtaposition of the photographs.
    We recently employed a similar burden-shifting approach
    in another copyright case. In Adobe Systems Inc. v.
    Christenson, 
    809 F.3d 1071
    , 1079 (9th Cir. 2015), we held
    that when a party asserts the first sale affirmative defense, its
    burden at summary judgment requires it only to produce
    “evidence sufficient for a jury to find lawful acquisition of
    title, through purchase or otherwise, to genuine copies of the
    copyrighted software.” If the copyright holder asserts that its
    acquisition could not have been lawful because “the software
    was never sold, only licensed, the burden shifts back to the
    copyright holder to establish such a license or the absence of
    a sale.” 
    Id.
     We noted that this rule “accords with . . . our
    general precedent that fairness dictates that a litigant ought
    not have the burden of proof with respect to facts particularly
    within the knowledge of the opposing party.” 
    Id.
    FRIEDMAN V. LIVE NATION MERCHANDISE                          19
    So too here. How Live Nation came to possess
    Friedman’s photographs — and thus whether it had
    knowledge that the CMI had been removed — is a fact
    “particularly within” Live Nation’s knowledge. It would be
    unfair to burden Friedman at the summary judgment stage
    with proving that knowledge with greater specificity than he
    did. We therefore reverse the district court’s decision
    granting summary judgment to Live Nation on Friedman’s
    CMI claim.
    II. Statutory Damages
    The Copyright Act provides 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, for which any one
    infringer is liable individually, or for which any two or more
    infringers are liable jointly and severally . . . .” 
    17 U.S.C. § 504
    (c)(1). The number of awards available under this
    provision depends not on the number of separate
    infringements, but rather on (1) the number of individual
    “works” infringed and (2) the number of separate infringers.
    See Walt Disney Co. v. Powell, 
    897 F.2d 565
    , 569 (D.C. Cir.
    1990). The only issue on appeal is the number of infringers.5
    5
    As to the number of works infringed, the district court said that it was
    “not clear” that it could “decide the issue of the number of works on the
    current record,” but that “[t]he number of infringed works is likely either
    five (the number of Friedman’s photographs that have been infringed) or
    two (the number of Friedman’s copyrighted books that have been
    infringed).” That ruling is not at issue on appeal.
    20       FRIEDMAN V. LIVE NATION MERCHANDISE
    We may assume for present purposes that, as Friedman
    claims, Live Nation sold infringing merchandise to 104
    separate retailers. Our question is whether, applying
    Columbia Pictures, Friedman is entitled under the statute to
    104 separate awards, because the retailers were each jointly
    and severally liable with Live Nation but not collectively
    jointly and severally liable for the infringement of any one
    work.
    In Columbia Pictures, the defendant owned three
    television stations — also defendants in the suit — each of
    which infringed works owned by the plaintiff. We concluded
    that the plaintiff was entitled to separate awards with regard
    to each of the three stations, which were “separate
    infringers.” 
    106 F.3d at 294
    . Looking to the text of Section
    504(c)(1), we explained that “when statutory damages are
    assessed against one defendant or a group of defendants held
    to be jointly and severally liable, each work infringed may
    form the basis of only one award, regardless of the number of
    separate infringements of that work.” 
    Id.
     (emphasis added).
    On the other hand, Columbia Pictures explained, legislative
    history indicated that “where separate infringements for
    which two or more defendants are not jointly liable are joined
    in the same action, separate awards of statutory damages
    would be appropriate.” 
    Id.
     (emphasis added) (quoting H.R.
    Rep. No. 94-1476, 94th Cong., 2d Sess., at 162). Because the
    stations were each jointly and severally liable with the
    defendant but not with each other, we concluded, the plaintiff
    was entitled to three separate awards. 
    Id.
     at 294–95 & 294
    n.7.
    A prominent treatise provides a hypothetical (much
    discussed by the parties and the lower court) explaining an
    analogous situation:
    FRIEDMAN V. LIVE NATION MERCHANDISE               21
    If each defendant is liable for only one of the
    several infringements that are the subject of
    the lawsuit, then each defendant will be liable
    for a separate set of statutory damages (each
    with its own minimum). Suppose, for
    example, a single complaint alleges
    infringements of the public performance right
    in a motion picture against A, B, and C, each
    of whom owns and operates her own motion
    picture theater, and each of whom, without
    authority, publicly performed plaintiff’s
    motion picture. If A, B, and C have no
    relationship with one another, there is no joint
    or several liability as between them, so that
    each is liable for at least a minimum $750
    statutory damage award. Suppose, further, that
    D, without authority, distributed plaintiff’s
    motion picture to A, B, and C. Although A, B,
    and C are not jointly or severally liable each
    with the other, D will be jointly and severally
    liable with each of the others. Therefore, three
    sets of statutory damages may be awarded, as
    to each of which D will be jointly liable for at
    least the minimum of $750. However, D’s
    participation will not create a fourth set of
    statutory damages.
    Nimmer on Copyright § 14.04[E][2][d] (2016) (emphasis
    added).
    Friedman argues that Columbia Pictures governs the
    situation in this case, as a number of “downstream infringers”
    — retailers to whom Live Nation distributed infringing
    merchandise — are each jointly and severally liable for
    22       FRIEDMAN V. LIVE NATION MERCHANDISE
    infringement with Live Nation, but not with each other. As
    in that case, he contends, he should be entitled to a separate
    award for each “unit” of infringers jointly and severally
    liable.
    The district court rejected this argument. It surveyed a
    number of recent district court decisions that “rejected
    outright both the [Columbia Pictures] decision and the
    Nimmer hypothetical, finding them inapplicable to situations
    involving large numbers of infringements.” (quoting Arista
    Records LLC v. Lime Grp. LLC, 
    784 F. Supp. 2d 313
    , 318
    (S.D.N.Y. 2011)); see also Bouchat v. Champion Prods., Inc.,
    
    327 F. Supp. 2d 537
    , 553 (D. Md. 2003) (“[Professor
    Nimmer] did not address, and doubtlessly did not consider, a
    coordinated mass marketing operation such as [the
    Defendant’s] business.”). Like those cases, the district court
    concluded that, due to the large number of downstream
    infringers, granting Friedman a separate award for each
    would “lead to an absurd result.” The court acknowledged
    that Columbia Pictures was “binding precedent” but
    concluded that this case was “distinguishable”: whereas
    Columbia Pictures “involved television shows and only
    [three] downstream infringers . . . , [t]his case involves
    photographs in a mass-marketing campaign with 104
    downstream infringers,” and there was “nothing in Columbia
    that suggests its reasoning should be applied to a mass-
    marketing campaign such as that at issue in this case.”
    We cannot accept this rationale. Columbia Pictures is the
    law of this circuit, and nothing in the opinion — or in the text
    of the statute itself — admits of a “mass-marketing”
    exception. Creating such an exception would mean reading
    the statute in two different ways depending on how many
    down-the-line violations there were. And it would require us
    FRIEDMAN V. LIVE NATION MERCHANDISE               23
    to come up with some definition of the number of violations
    required to invoke the exception, without any apparent basis
    for doing so.
    We do agree, though, that Friedman reads Columbia
    Pictures too broadly, albeit for a different reason. Our
    holding in Columbia Pictures was explicitly premised on the
    fact that each of the downstream infringers for whom the
    plaintiff received a separate damages award was a defendant
    in the case. Before the question of damages was raised, those
    parties had already been adjudicated liable for infringement,
    and jointly and severally liable with another infringer. That
    is not true in this case. Here, Friedman first asserted that
    there were 104 downstream infringers only after the question
    of Live Nation’s liability for its own infringement had been
    resolved, not having named any of those downstream
    infringers as defendants in the case.
    Columbia Pictures’s emphasis on the status of the
    downstream infringers as defendants is grounded in the
    language of the statute. Section 504(c)(1) provides for “an
    award of statutory damages for all infringements involved in
    the action, with respect to any one work, for which any one
    infringer is liable individually, or for which any two or more
    infringers are liable jointly and severally . . . .” 
    17 U.S.C. § 504
    (c)(1) (emphasis added).               Any downstream
    infringements cannot be “involved in the action” unless the
    alleged infringers responsible for those infringements were
    joined as defendants in the case, and the particular alleged
    infringements involving them adjudicated.
    This interpretation is supported by the legislative history
    on which Columbia Pictures relied, which explains that
    “where separate infringements for which two or more
    24       FRIEDMAN V. LIVE NATION MERCHANDISE
    defendants are not jointly liable are joined in the same action,
    separate awards of statutory damages would be appropriate.”
    H.R. Rep. No. 94-1476, 94th Cong., 2d Sess., at 162
    (emphasis added). Congress did not, therefore, intend for
    courts, in determining the amount of damages, to engage in
    an entirely separate adjudication as to the liability of a large
    group of people not parties to the case, with respect to
    separate infringing acts not involved in the action. To the
    contrary, the situation Congress contemplated was one like
    that in Columbia Pictures, in which each jointly and severally
    liable pair of infringers was “joined in the same action” and
    liable for the same infringements.
    As the district court rightly recognized, the broad reading
    of Columbia Pictures Friedman urges leads to extremely
    unlikely results, with direct infringers becoming liable for
    astronomical sums in cases with large numbers of
    downstream infringers unrelated to each other. This risk has
    become particularly acute in the internet era, where rapid
    peer-to-peer file sharing has enabled mass piracy of books,
    films, music, and other copyrighted materials. See, e.g.,
    Metro-Goldwyn-Mayer Studios Inc. v. Grokster, Ltd.,
    
    545 U.S. 913
    , 920 (2005).
    A district court decision illustrates the problem. In Arista
    Records LLC v. Lime Group LLC, 
    784 F. Supp. 2d 313
    (S.D.N.Y. 2011), a record company sued the maker of an
    online file-sharing program that allowed users to download
    recordings and thereby make them available for peer-to-peer
    sharing. The plaintiffs identified “approximately 11,000
    sound recordings that they allege[d] have been infringed
    through the LimeWire system.” 
    Id. at 315
    . Relying on
    Columbia Pictures and the Nimmer hypothetical, the
    plaintiffs argued that they were entitled to recover separate
    FRIEDMAN V. LIVE NATION MERCHANDISE                   25
    statutory damage awards for each downstream infringer —
    i.e., sharer — of each infringed work. The court rejected this
    position, noting that under this theory “Defendants’ damages
    could reach into the trillions” of dollars. 
    Id. at 317
    . Like the
    Arista Records court, we cannot conclude that Congress
    intended such an exorbitant result, although we reach that
    conclusion for different reasons than did the Arista Records
    court.
    We therefore hold that Section 504(c)(1)’s provision of
    separate statutory damage awards for the infringement of
    each work “for which any two or more infringers are liable
    jointly and severally” applies only to parties who have been
    determined jointly and severally liable in the course of the
    liability determinations in the case for the infringements
    adjudicated in the action. A plaintiff seeking separate
    damages awards on the basis of downstream infringement
    must join the alleged downstream infringers in the action and
    prove their liability for infringement. Because Friedman did
    not join any of his alleged downstream infringers as
    defendants in this case, the district court correctly held that he
    was limited to one award per work infringed by Live Nation.
    We therefore affirm the district court’s statutory damages
    ruling.
    CONCLUSION
    Because there was sufficient evidence in the record to
    allow a reasonable jury to conclude that Live Nation willfully
    infringed Friedman’s copyrights and knowingly removed
    CMI from the images it used, we reverse the district court’s
    26       FRIEDMAN V. LIVE NATION MERCHANDISE
    grant of summary judgment to Live Nation on those issues.
    We affirm the district court’s ruling as to statutory damages.
    AFFIRMED IN PART AND REVERSED IN PART.
    

Document Info

Docket Number: 14-55302

Citation Numbers: 833 F.3d 1180, 119 U.S.P.Q. 2d (BNA) 1852, 2016 U.S. App. LEXIS 15178, 2016 WL 4394585

Judges: Berzon, Owens, Marbley

Filed Date: 8/18/2016

Precedential Status: Precedential

Modified Date: 11/5/2024

Authorities (21)

nissan-fire-marine-insurance-company-ltd-hitachi-data-systems , 210 F.3d 1099 ( 2000 )

Bouchat v. Champion Products, Inc. , 327 F. Supp. 2d 537 ( 2003 )

prodliabrepcchp-10645-jeanette-braxton-secret-v-ah-robins-company , 769 F.2d 528 ( 1985 )

rw-beck-assoc-v-city-and-borough-of-sitka-and-providence-washington , 27 F.3d 1475 ( 1994 )

Metro-Goldwyn-Mayer Studios Inc. v. Grokster, Ltd. , 125 S. Ct. 2764 ( 2005 )

Arista Records LLC v. Lime Group LLC , 784 F. Supp. 2d 313 ( 2011 )

Michael J. Conlon v. United States , 474 F.3d 616 ( 2007 )

Barboza v. New Form, Inc. (In Re Barboza) , 545 F.3d 702 ( 2008 )

Corales v. Bennett , 567 F.3d 554 ( 2009 )

Charles M. Vander v. United States Department of Justice ... , 268 F.3d 661 ( 2001 )

Louis Vuitton Malletier, S.A. v. Akanoc Solutions, Inc. , 658 F.3d 936 ( 2011 )

Walt Disney Company v. Carl Powell , 897 F.2d 565 ( 1990 )

columbia-pictures-television-v-krypton-broadcasting-of-birmingham-inc , 106 F.3d 284 ( 1997 )

Farmer v. Brennan , 114 S. Ct. 1970 ( 1994 )

United States v. Alexander E. Marabelles , 724 F.2d 1374 ( 1984 )

leslie-t-baxter-v-mca-inc-a-delaware-corporation-universal-city , 812 F.2d 421 ( 1987 )

United States v. Reynaldo Ramirez-Rodriquez , 552 F.2d 883 ( 1977 )

Federal Trade Commission v. Network Services Depot, Inc. , 617 F.3d 1127 ( 2010 )

United States v. Dearing , 504 F.3d 897 ( 2007 )

Torres v. City of Madera , 648 F.3d 1119 ( 2011 )

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