Amy Sullivan v. Flora, Inc.

In the
United States Court of Appeals
For the Seventh Circuit
____________________
Nos. 17-2241 & 18-2534
AMY LEE SULLIVAN, d/b/a DESIGN KIT,
Plaintiff-Appellee,
Cross-Appellant,
v.
FLORA, INC.,
Defendant-Appellant,
Cross-Appellee.
____________________
Appeals from the United States District Court for the
Western District of Wisconsin.
No. 3:15-cv-298 — William M. Conley, Judge.
____________________
ARGUED FEBRUARY 8, 2019 — DECIDED AUGUST 21, 2019
____________________
Before FLAUM, BARRETT, and SCUDDER, Circuit Judges.
SCUDDER, Circuit Judge. This appeal presents a question of
first impression for us on the scope of statutory damages re-
coverable under the Copyright Act of 1976. Section 504(c)(1)
of the Act permits a copyright holder “to recover, instead of
actual damages and profits, an award of statutory damages
for all infringements involved in the action, with respect to
2 Nos. 17-2241 & 18-2534
any one work,” with Congress separately instructing that, in
determining statutory damages, “all the parts of a compila-
tion or derivative work constitute one work.” This case re-
quires us to determine what constitutes “one work” in a fact
pattern where a jury found infringement on multiple works
registered in a single copyright application.
Amy Sullivan, a graphic design artist, produced a series of
33 illustrations for Flora, Inc., an herbal supplement company,
to use in two advertising campaigns. Upon noticing that Flora
was using the illustrations in other ads, Sullivan brought suit
for copyright infringement and opted to pursue statutory
damages. She did so to maximize her potential payout by clas-
sifying each of her 33 illustrations as “one work” within the
meaning of § 504(c)(1) of the Copyright Act. Flora disagreed,
contending that the illustrations were part of two broader
compilations and thus, if Sullivan prevailed, § 504(c)(1) lim-
ited her to just two statutory damage awards—one award for
infringement on the illustrations used in each of the two ad-
vertising campaigns. The district court agreed with Sullivan,
and instructed the jury that she could recover separate awards
of statutory damages for 33 acts of infringement on 33 sepa-
rate illustrations. The jury found infringement on each of the
33 illustrations and returned a statutory damages award of
$3.6 million.
On appeal Flora challenges the district court’s ruling on
statutory damages and separate rulings on two additional de-
fenses to liability asserted at trial. While procedural shortcom-
ings defeat these latter two challenges, Flora is right that the
district court committed error in permitting separate awards
of statutory damages unaccompanied by any finding that
each or any of the 33 illustrations constituted “one work”
Nos. 17-2241 & 18-2534 3
within the meaning and protection of § 504(c)(1) of the Copy-
right Act. It is neither appropriate nor possible for us to make
that finding on the record before us. So we vacate the judg-
ment in Sullivan’s favor and remand for further proceedings.
I
Flora, Inc. manufactures herbal supplement and health
products. In 2013, looking to produce advertisements for two
new products, “7-Sources” and “Flor-Essence,” the company
contacted freelance production specialist Joseph Silver to de-
velop two animated videos. Unbeknownst to Flora, Silver
then contacted Amy Sullivan, a Wisconsin-based graphic de-
sign artist, to develop illustrations that would then be ani-
mated for use in the advertisements. In Sullivan’s written
agreement with Silver, she granted Flora exclusive rights to
her illustrations in the two specified advertising campaigns.
Over the following months, Silver and Sullivan corre-
sponded to develop the illustrations. Silver made suggestions
on color, style, and text, while also offering rough outlines
and sketches to guide Sullivan’s work. For her part, Sullivan
used digital design software to create the ultimate illustra-
tions, sometimes incorporating Silver’s suggestions and other
times not. Flora used Sullivan’s illustrations in its final adver-
tisements for the two product lines.
At some point in the summer or fall of 2013, Sullivan no-
ticed that Flora was using her illustrations to promote other
product lines. Exactly when the unauthorized use occurred is
unclear. What the record shows for certain is that, on October
16, 2013, Sullivan sent Flora a letter complaining of copyright
infringement. At that time, however, Sullivan had not (yet)
registered her illustrations with the Copyright Office.
4 Nos. 17-2241 & 18-2534
Sullivan subsequently did so in two copyright applica-
tions approved by the U.S. Copyright Office. Registration “VA
1-888-930” had an effective date of November 6, 2013 and cov-
ered the “7 Sources Illustration Collection.” It listed 17 sepa-
rate illustrations with names like “Frame7” and “7S-Bottle Il-
lustration.” Registration “VA 1-893-717” had an effective date
of December 12, 2013 and covered the “FEV Illustration Col-
lection,” short for Flor-Essence. It listed 16 separate illustra-
tions with names like “Frame-3,” “Herbs,” and “Amy Tex
Bubble.”
When settlement negotiations failed, Sullivan sued Flora
for copyright infringement in the Western District of Wiscon-
sin. The Copyright Act allows a plaintiff to choose to recover
either statutory damages or actual damages. See 17 U.S.C.
§ 504(a). The choice must come before the entry of final judg-
ment. See id. § 504(c)(1). As the litigation progressed, Sullivan
chose to pursue statutory damages, with the parties then stak-
ing out opposing positions on the scope of a permissible
award under § 504(c)(1). These competing positions frame the
primary issue before us on appeal.
Flora contended that Sullivan’s 33 illustrations fell into
one of two compilations (corresponding with the company’s
two advertising campaigns in which the illustrations ap-
peared and also aligning with the two copyright registrations)
and thus § 504(c)(1) precluded Sullivan from receiving more
than two separate awards of statutory damages—one for each
compilation infringed. Sullivan begged to differ. She urged
the district court to treat each of the 33 illustrations as 33 sep-
arate works entitled to 33 separate awards of statutory dam-
ages upon a showing that Flora infringed each work.
Nos. 17-2241 & 18-2534 5
Who was right very much mattered, for Congress author-
ized an award of between $750 and $30,000 in statutory dam-
ages for each work infringed, and up to $150,000 per work if
a jury found willful infringement. See id. § 504(c)(2). Put most
simply, Sullivan wanted the copyrighted work multiplier to
be 33 and not two.
The district court addressed the issue pretrial. It did so by
focusing on Sullivan’s copyright applications. The certificates
from the U.S. Copyright Office showed that Sullivan had reg-
istered each of the 33 illustrations in two applications, with
the illustrations grouped to correspond with Flora’s two ad-
vertised product lines. The Copyright Act and its implement-
ing regulations allow the registration of multiple works this
way. See id. § 408(c)(1) (authorizing the extension of copyright
protection from a single registration to multiple works listed
in the registration application); 37 C.F.R. § 202.3(b)(4) (same).
Relying on these provisions and drawing upon the statute’s
definition of “collective works,” the district court determined
that “[Sullivan’s] copyrighted works are collective works, in
which contributions, constituting separate and individual
works in themselves, are assembled into a collective whole.”
See 17 U.S.C. § 101 (defining “collective works” this way).
From there the district court concluded that “the [33] individ-
ual illustrations are individual works, entitling Sullivan to
separate statutory damages awards.” The case advanced to
trial against the backdrop of this ruling.
Trial proceeded in three phases. In phase one, the court
tasked the jury with determining whether Sullivan was the
sole author of the copyrighted works, or instead whether Sil-
ver was a joint author capable of granting his own rights to
Flora. In phase two, the jury considered whether Flora copied
6 Nos. 17-2241 & 18-2534
and used Sullivan’s illustrations without authorization. In
phase three, the jury determined what statutory damages re-
sulted from the infringement.
The jury ruled in Sullivan’s favor at each phase. In phases
one and two, the jury determined that Flora had copied and
used Sullivan’s illustrations willfully and without authoriza-
tion and furthermore that the works were not joint works but
instead belonged to Sullivan alone. At phase three, the jury
awarded $3,600,000 in statutory damages, finding that Flora
willfully infringed on each of Sullivan’s 33 individual illustra-
tions. The jury also found $143,500 in actual damages, which
Sullivan declined in favor of the larger statutory award.
II
Flora’s main contention on appeal is that the district court
committed legal error in determining that Sullivan could col-
lect statutory damages for infringement on each of the 33 il-
lustrations as separate works. Sullivan urges us to avoid the
issue on the basis that Flora waived any challenge to the dam-
ages award by not expressly objecting to the district court’s
jury instruction. We cannot agree. While Flora could have ob-
jected, the fairest reading of the record is that the company—
throughout the litigation—had made its position on statutory
damages abundantly clear, including by briefing the issue
during the pretrial proceeding that resulted in the district
court’s determinative ruling. The law required no more in this
circumstance. See Dresser Industries, Inc., Waukesha Engine Div.
v. Gradall Co., 965 F.2d 1442, 1450 (7th Cir. 1992) (explaining
that the failure to object to a jury instruction embodying a le-
gal determination “may be disregarded if the party’s position
had previously been clearly made to the court and it is plain
Nos. 17-2241 & 18-2534 7
that a further objection would be unavailing”). So we proceed
to the merits.
A
The scope of statutory damages available to Sullivan turns
on § 504(c)(1) of the Copyright Act:
[T]he copyright owner may elect, at any time be-
fore final judgment is rendered, to recover, in-
stead of actual damages and profits, an award
of statutory damages for all infringements in-
volved in the action, with respect to any one work,
for which any one infringer is liable individu-
ally, or for which any two or more infringers are
liable jointly and severally, in a sum of not less
than $750 or more than $30,000 as the court con-
siders just. For the purposes of this subsection, all
the parts of a compilation or derivative work consti-
tute one work.
17 U.S.C. § 504(c)(1) (emphasis added).
By its terms, § 504(c)(1) limits a plaintiff’s recovery to one
award of statutory damages for each work infringed. Put an-
other way, Congress focused the inquiry on the number of
protected works infringed, not the number of infringements.
See Twin Peaks Prods., Inc. v. Publications Int’l Ltd., 996 F.2d
1366, 1381 (2d Cir. 1993). In doing so, Congress imposed the
additional limitation that, in awarding statutory damages,
each part of a compilation shall be considered “one work.”
17 U.S.C. § 504(c)(1). In construing § 504(c)(1), it is therefore
essential to determine not only what constitutes “one
work”—a term Congress left undefined in the Copyright
8 Nos. 17-2241 & 18-2534
Act—but also when multiple works combine to form a “com-
pilation,” a term Congress did define in the statute.
In copyright law, a “work”—as its name implies—reflects
an original expression, whether in the form of art, literature,
music, or another tangible medium of expression, that may be
entitled to protection. See 17 U.S.C. § 102(a). An artist seeking
copyright protection for multiple works can do so in a single
registration application. See 17 U.S.C. § 408(c)(1) (allowing for
a single registration for a group of related works); 37 C.F.R.
§ 202.3(b)(4) (same); see also 2 Melville B. Nimmer & David
Nimmer, Nimmer on Copyright § 7.18(c) (Rev. Ed. 2019) (dis-
cussing the Copyright Act’s flexible approach in allowing a
single registration for multiple works). The Copyright Office’s
granting such a single application results in each registered
work receiving copyright protection. See Wildlife Express Corp.
v. Carol Wright Sales, Inc., 18 F.3d 502, 507, 508 (7th Cir. 1994)
(explaining that “[a] certificate of registration from the U.S.
Register of Copyrights constitutes prima facie evidence of the
validity of a copyright” and “[a]n owner of a copyright is pro-
tected against unauthorized copying”). Sullivan charted this
exact course here, applying to protect what she called “illus-
tration collections” and receiving two certificates of registra-
tion from the Copyright Office. These certificates resulted in
Sullivan’s 33 illustrations being registered and therefore hav-
ing copyright protection.
The district court began and ended its analysis of the stat-
utory damages question with this same observation. It put its
ruling on the scope of statutory damages this way:
Based on the undisputed fact that plaintiff reg-
istered her two illustration collections as a col-
lective or group work under 17 U.S.C.
Nos. 17-2241 & 18-2534 9
§ 408(c)(1) and 37 C.F.R. § 202.3(b)(4)(i), and that
that identification appears appropriate—or, at
least, defendant [Flora] has failed to explain
why the copyrighted works do not appropri-
ately fall within that designation—the court
conclude[s] that the copyrighted works are col-
lective works, in which contributions, constitut-
ing separate and individual works in themselves, are
assembled into a collective whole.
(Dkt. 240 at 1) (emphasis in the original). The court reinforced
its ruling when instructing the jury on the scope of statutory
damages it could award Sullivan upon findings of infringe-
ment by Flora, explaining that “for purposes of considering a
statutory damages award, you may consider each illustration
in the 7 Sources illustration collection and the Flor-Essence il-
lustration collection as an independent, copyrighted work.”
The district court drifted off course in seeing the 33 illus-
trations as “collective works” without first asking, as
§ 504(c)(1) requires, whether each illustration constituted
“one work” or instead combined to form a “compilation.” The
misstep becomes apparent upon recognizing that Congress,
in defining “compilation” in § 101 of the Copyright Act, made
clear that the term “includes collective works.” So the conse-
quence of the district court characterizing the 33 illustrations
as “collective works” was that the illustrations then also con-
stituted a “compilation” and thus, by operation of § 504(c)(1),
“all the parts of a compilation”—each of Sullivan’s 33 illustra-
tions—“constitute one work.” But that conclusion is at odds
with the district court also determining that the Copyright Act
authorized the jury to return 33 separate awards of statutory
damages for infringement on each of the 33 illustrations.
10 Nos. 17-2241 & 18-2534
The knot untangles by returning to the language of
§ 504(c)(1). The key distinction in § 504(c)(1) is not between a
compilation and a collective work—indeed, § 101’s definition
makes plain that the former includes the latter—but instead
between “one work” and a “compilation.” Or, stated another
way, the proper inquiry under § 504(c)(1) asks whether Sulli-
van’s 33 illustrations constitute 33 individual works or in-
stead are parts of two compilations (corresponding with the
two advertising campaigns in which Flora used the illustra-
tions). The district court stopped short of asking this question
(or putting it to the jury) by giving controlling weight to the
fact that Sullivan registered her illustrations as a group and
therefore protected each of the 33 illustrations. That observa-
tion, while reflecting an accurate understanding of the regis-
tration process, does not resolve the scope of statutory dam-
ages available to Sullivan. That answer, we conclude, must
come by parsing § 504(c)(1) and distinguishing between a
work and a compilation.
Identifying the right question is easier than knowing the
right answer, though. And this is where we benefit from not
being the first court to consider the scope of statutory dam-
ages available under § 504(c)(1)—and, more specifically, the
meaning of “one work.”
B
Other circuits seem to follow one of two approaches in an-
swering the question presented, though the dividing lines are
far from absolute. Start with the Second Circuit and its deci-
sion in Bryant v. Media Right Prods., Inc., 603 F.3d 135 (2d Cir.
2010). The case entailed allegations of infringement on two
copyrighted music albums, each with ten songs, and the par-
ties disputing whether statutory damages should be
Nos. 17-2241 & 18-2534 11
measured on a per-album or per-song basis. The court ob-
served that each song had separate copyright protection and,
in addition to being sold as part of an album, could be pur-
chased individually through retailers like iTunes. See id. at
138. Even when bought individually, however, the songs re-
mained part of and indeed were produced and marketed as
an album. That fact resolved the statutory damages question
because, as the court saw it, “[a]n album falls within the Act’s
expansive definition of compilation.” Id. at 140. “Based on a
plain reading of the statute,” the reasoning followed, “in-
fringement of an album should result in only one statutory
damage award.” Id. at 141. More to it, the court emphasized,
the “[Copyright] Act [in § 504(c)(1)] specifically states that all
parts of a compilation must be treated as one work for pur-
poses of calculating statutory damages.” Id. at 142. And,
drawing reinforcement from the Copyright Act’s definition of
compilation, the Second Circuit added that “[t]he fact that
each song may have received a separate copyright is irrele-
vant to this analysis.” Id. at 141.
In so holding, the Second Circuit distinguished its prior
decision in Twin Peaks Productions v. Publications International,
where the court held that eight distinct statutory damages
awards were available for infringement on the copyrighted
scripts of eight television episodes that the defendant later
combined into a single book. 996 F.2d 1366, 1381 (2d Cir.
1993). Separate awards of statutory damages were appropri-
ate in Twin Peaks, the Bryant court subsequently explained, be-
cause “the plaintiff had issued the works separately, as inde-
pendent television episodes,” and it was “the defendant [who]
printed eight teleplays from the series in one book.” 603 F.3d
at 141. Even though each episode of Twin Peaks contributed
to the drama’s broader plot, which unfolded over the course
12 Nos. 17-2241 & 18-2534
of a season, the fact remained that the episodes aired at sepa-
rate times and, in this way, stood on their own enough to
avoid being grouped with the other episodes and thus con-
sidered a compilation within the meaning of the Copyright
Act. The upshot, then, was that the plaintiff in Twin Peaks was
entitled to eight separate statutory damage awards for each
infringed episode. See Twin Peaks, 996 F.2d at 1381; see also
WB Music Corp. v. RTC Communication Grp., Inc., 445 F.3d 538,
540–41 (2d Cir. 2006) (following the same approach and re-
versing the district court’s limitation of a plaintiff’s statutory
damages on a per-album basis).
The Second Circuit’s approach—embodied, as we see it, in
its most recent decision in Bryant—gives controlling weight to
the last sentence of § 504(c)(1), where Congress directed that,
for purposes of assessing statutory damages, “all the parts of
a compilation or derivative work constitute one work.” The
approach has a limiting effect. Take, for instance, the song-
writer who produces an album, registers the album under the
group registration process made available by 17 U.S.C.
§ 408(c)(1), only then to learn someone infringed multiple
tracks. The artist would be entitled to one and only one award
of statutory damages because “it is the copyright holders who
issued their works as ‘compilations’; they chose to issue Al-
bums,” instead of producing each song as independent sin-
gles. Bryant, 603 F.3d at 141. The Second Circuit’s approach,
in short, places dispositive weight on the songwriter’s bun-
dling of songs—protected though they may be at the individ-
ual level—into an album. It is the production and publication
of each song as part of an album that limits the songwriter’s
recovery to one award of statutory damages no matter the in-
fringement that may have occurred at the level of any indi-
vidual song.
Nos. 17-2241 & 18-2534 13
Recognizing this limitation, most other circuits have inter-
preted § 504(c)(1) a different way. A good illustration comes
from the First Circuit’s decision in Gamma Audio & Video, Inc.
v. Ean-Chea, 11 F.3d 1106, 1118 (1st Cir. 1993). The court there
considered how to award statutory damages for infringement
on four episodes of the television series Jade Fox, where the
episodes had been registered together on one copyright cer-
tificate and later rented or sold in sets containing multiple ep-
isodes. Construing § 504(c)(1), the court adopted what it
called an “independent economic value test” to determine if
each episode of Jade Fox had copyright value unto itself and
was therefore an independent work—in statutory terms, “one
work”—for purposes of awarding statutory damages. Id. at
1116–17.
The First Circuit explained that such a substantive eco-
nomic inquiry better reflected the value of each episode and
gave effect to not only the language Congress used in
§ 504(c)(1), but also the absence on a broader level of anything
in “either the statute or the corresponding regulations that
precludes a copyright owner from registering the copyrights
in multiple works on a single registration form while still col-
lecting an award of statutory damages for the infringement
on each work’s copyright.” Id. at 1117. Applying the test, the
First Circuit determined that the evidence before it supported
a finding that each episode of Jade Fox, although plainly part
of a television series, constituted an independent work enti-
tled to its own award of statutory damages. See id. at 1117–18.
The Ninth, Eleventh, and D.C. Circuits follow the First Cir-
cuit’s approach. See, e.g., VHT, Inc. v. Zillow Grp., Inc., 918 F.3d
723, 747 (9th Cir. 2019) (adhering to its discussion in Columbia
Pictures Television, Inc. v. Krypton Bd. of Birmingham, Inc.,
14 Nos. 17-2241 & 18-2534
259 F.3d 1186 (9th Cir. 2001) and explaining that “the question
of whether something—like a photo, television episode, or so
forth—has ‘independent economic value’ informs our analy-
sis of whether the photo or episode is a work” within the
meaning of § 504(c)(1)); MCA Television Ltd. v. Feltner, 89 F.3d
766, 769 (11th Cir. 1996) (employing the same test to deter-
mine “whether each expression has an independent economic
value and is, in itself, viable”); Walt Disney Co. v. Powell,
897 F.2d 565, 570 (D.C. Cir. 1990) (asking whether certain cop-
yrighted materials are “distinct, viable works with separate
economic value and copyright lives” to determine the scope
of available statutory damages under § 504(c)(1)).
The Fourth Circuit is the only other circuit to have consid-
ered the question presented. Its answer came with mixed sig-
nals, following the Second Circuit’s approach in Bryant but
suggesting different facts may fit with a different construction
of § 504(c)(1). See Xoom, Inc. v. Imageline, Inc., 323 F.3d 279, 285
(4th Cir. 2003), abrogated on other grounds by Reed Elsevier,
Inc. v. Muchnick, 559 U.S. 154 (2010). In Xoom, the court deter-
mined that two collections of numerous digital images, pro-
tected under two copyright registrations, were compilations
and thus only subject to two statutory damages awards under
§ 504(c)(1). See id. at 285 n.8 (explaining that “Imageline is en-
titled to one award of statutory damages per work infringed
because SuperBundle and Master Gallery are compilations or
derivative works in which Imageline holds copyrights”). At an-
other point in its opinion, however, the Fourth Circuit ap-
peared to agree that “the Copyright Act does not bar multiple
awards for statutory damages when one registration includes
multiple works.” Id. at 285. This qualification is substantial
and seems to suggest the Fourth Circuit may chart a different
Nos. 17-2241 & 18-2534 15
course—perhaps the one followed by most other circuits—on
different facts.
C
Section 504(c)(1) is hardly a model of clarity, especially
when considering, as we are here, infringement of multiple
protected works and a plaintiff seeking multiple, separate
awards of statutory damages. It is not at all surprising that
two approaches find recognition in the caselaw of other cir-
cuits. In the end, we conclude, in closer keeping with the ap-
proach of the First, Ninth, Eleventh, and D.C. Circuits, that
§ 504(c)(1) requires courts confronted with circumstances
with multiple works and multiple infringements to deter-
mine, or to charge a jury with fact finding tailored to answer-
ing, whether the protected works have value only in and
through their composite whole (and thus meet the definition
of a “compilation” in § 101) or instead have standalone value
at the level of “one work.” A protected work has standalone
value if the evidence shows that work has distinct and dis-
cernable value to the copyright holder. See Gamma Audio,
11 F.3d at 1116 (explaining that “separate copyrights are not
distinct ‘works’ unless they can live their own copyright
life”—a viability determination that turns on whether the
work in question has independent economic value); see also
Feltner, 89 F.3d at 769; Walt Disney Co., 897 F.2d at 569.
The question at the heart of the Second Circuit’s more lim-
ited approach in Bryant—which focuses on whether the cop-
yright holder marketed and distributed the multiple pro-
tected works as individual works or as a compendium of
works (like, for example, an album)—is certainly relevant to
the inquiry we believe Congress has required in § 504(c)(1).
But we also believe the inquiry needs to extend further to
16 Nos. 17-2241 & 18-2534
discern and give more fulsome effect to the distinction Con-
gress drew in the text of § 504(c)(1) between “one work” and
a “compilation.” See Yellow Pages Photos, Inc. v. Ziplocal, LP,
795 F.3d 1255, 1281 (11th Cir. 2015) (employing a similar ap-
proach to discerning whether multiple photos constituted a
compilation or individual works). To stop at the Second Cir-
cuit’s inquiry does not allow a possibility Congress made
available in § 504(c)(1)—a situation where a copyright holder
encounters infringement on multiple works available in the
market as a group but where discernable value lies at the level
of a particular individual work—for example, at the level of a
particular photo or song which, although released as part of
an album, is likewise marketed and available at the individual
level. Sellers regularly allow buyers to acquire a part of a
whole and the market assigns value accordingly.
The inquiry and fact finding demanded by § 504(c)(1) is
more functional than formal, taking account of the economic
value, if any, of a protected work more than the fact that the
protection came about by an artist registering multiple works
in a single application. The necessary finding requires a focus
on where the market assigns value. By way of an analogy, im-
perfect though it may be, think in the first instance of the mul-
tiple protected works as a quilt and then ask whether any one
individual patch has discernable, independent economic
value—whether once separated from the quilt a particular
patch lives its own copyright life (as “one work”)—or instead
whether the value lies in the patches’ combined assembly into
the quilt as a whole (as a “compilation”).
Our analysis must end here, though, as the record as it
presently stands does not allow us to resolve as a factual mat-
ter whether all or part of Sullivan’s 33 illustrations are
Nos. 17-2241 & 18-2534 17
separate works with distinct and discernable value or part of
two broader compilations. The district court did not ask (or
put to the jury) the questions we see as necessary for resolving
the statutory damages question. See VHT, Inc., 918 F.3d at 748
(remanding on similar reasoning for additional fact finding).
This error requires us to vacate the judgment in Sullivan’s
favor. Our doing so in no way calls the jury’s findings of in-
fringement into question. On remand the district court will
have ample flexibility to structure the proceedings to enable
the requisite findings pertinent to statutory damages.
III
Invoking an altogether different provision of the Copy-
right Act, Flora advances a separate and independent chal-
lenge to the jury’s statutory damages award based on the tim-
ing of the company’s infringement on Sullivan’s copyrighted
works. The district court determined that Flora waived this
challenge by raising it much too late at trial. We agree.
Section 412 of the Copyright Act prohibits an award of
statutory damages for “any infringement of a copyright in an
unpublished work commenced before the effective dates of
registration.” 17 U.S.C. § 412(1). By its terms, § 412 imposes a
bar to recovering statutory damages if a defendant can show
that any infringement began before the registration of the
works in question.
Neither the district court nor jury ever considered the tim-
ing bar imposed by § 412. The reason is because Flora raised
the § 412 limitation for the first time during the third and final
phase of trial—the damages phase—and even then, only at a
side bar on an unrelated issue. Flora’s doing so surprised the
district judge, as the position marked a substantial shift in the
18 Nos. 17-2241 & 18-2534
company’s trial strategy. All along Flora had sought to avoid
liability based on the defense of joint authorship—by arguing
that Silver and Sullivan jointly created each of the 33 illustra-
tions—and thus that the company (through Silver’s joint own-
ership) could not possibly be liable for infringement. By in-
voking § 412 and advancing a timing defense, Flora changed
course, recognizing (undoubtedly in response to the jury’s
verdict in phase two) that it had infringed on Sullivan’s works
but arguing that the infringement began before she had regis-
tered the illustrations. In Flora’s view, the timing of the in-
fringement—before Sullivan’s registration—triggered the ap-
plication of § 412 to bar any award of statutory damages.
The district judge reacted to Flora’s raising this § 412 ar-
gument when it did with meaningful frustration. The court
rightly underscored that Flora made no mention of any § 412
defense in its answer, motion to dismiss, or request for sum-
mary judgment. Nor, the district court added, did Flora ever
say a word about any possible § 412 bar at the jury charge
conference—at a time when the court and parties could have
considered how to put the infringement-timing question to
the jury. Indeed, when asked directly whether either party
had concerns with the jury instruction on statutory damages,
counsel for Flora responded, “None, Your Honor.”
As the district court saw it, then, Flora waited to pursue
and raise its newfound § 412 defense until the close of evi-
dence and thus well after either party could have structured
its presentation of evidence—as to liability and defenses
alike—to address the timing predicate on which application
of the damages bar hinges. Or, as the district judge put the
point, “by sitting on its challenge until the end of the evi-
dence, defendant left plaintiff and the court to believe that it
Nos. 17-2241 & 18-2534 19
had conceded this requirement for an award of statutory
damages.” Accordingly, the district court concluded that
Flora had waived any § 412 timing defense.
We see no error in the district court’s conclusion, in no
small part because § 412 operates akin to an affirmative
defense that Flora should have raised far earlier in the
proceedings. Waiting this long resulted in waiver. See Carr v.
O’Leary, 167 F.3d 1124, 1126 (7th Cir. 1999) (explaining that a
party’s unreasonable delay in advancing an argument “is
normally a compelling ground for deeming even a good
ground waived”). Our cases are clear that waiver, not
forfeiture, occurs when a defendant waits until the eleventh
hour or beyond to raise an affirmative defense and in doing
so prejudices the opposing party. See Reed v. Columbia St.
Mary’s Hosp., 915 F.3d 473, 482 (7th Cir. 2019). “Allowing a
last-minute defense that introduces new factual and legal
issues after discovery has closed,” we have emphasized,
“raises the costs of litigation and allows the party that was at
least negligent in failing to plead its defense to take unfair
advantage of its opposing party.” Id.
It is hard to see what happened here any other way than
the district judge put it: for whatever reason, strategic or in-
advertent, Flora waited to raise its timing-of-infringement de-
fense until the jury had already found infringement, leaving
the trial record altogether missing evidence on precisely when
the infringement began—the lynchpin inquiry under § 412.
Without any notice that this change of course was coming,
Sullivan had no reason to believe her infringement claim may
rise or fall on evidence pinpointing the timing of Flora’s in-
fringement on each of the 33 illustrations.
20 Nos. 17-2241 & 18-2534
In these circumstances, we cannot say the district court
was wrong to conclude that “Flora, at minimum, needed to put
the timing requirement of § 412 in issue by timely challenging
it” and its failure to do so constituted waiver.
IV
Flora’s final effort on appeal to avoid liability comes in its
contention that the district court erred in not setting aside the
jury’s verdict on the basis that the trial evidence showed be-
yond dispute that Silver and Sullivan were joint authors of the
33 illustrations. Here too, though, Flora runs into waiver, as
the company failed to present this challenge to the district
court in response to the jury’s adverse verdict. The pathway
to that conclusion is straightforward.
Joint authorship is a defense to copyright infringement.
See Janky v. Lake County Convention and Visitors Bureau,
576 F.3d 356, 361 (7th Cir. 2009). The defense, as its name im-
plies, turns on whether two or more authors jointly created
the work in question. If so, they hold undivided interests in
the work and the underlying rights are shared and not exclu-
sive to one or the other authors. See 17 U.S.C. § 201(a); Janky,
576 F.3d at 361 (“The benefits of co-authorship are therefore
significant: each author may use or license the joint work.”).
Throughout the pretrial proceedings, Flora sought to
show that Joseph Silver’s contributions to Sullivan’s illustra-
tions resulted in joint authorship, which in turn would have
allowed Silver to authorize Flora’s use of the illustrations,
eliminating the basis for infringement. A copyright owner
cannot infringe its own work. Flora continued to advance the
joint authorship defense at trial, moving, for example, on day
two for judgment as a matter of law on the issue. See Fed. R.
Nos. 17-2241 & 18-2534 21
Civ. P. 50(a). The district court denied the motion, and the
case went to the jury. In finding infringement, the jury ex-
pressly found (and so answered on the verdict form) that
Flora had not carried its burden of showing that the illustra-
tions were the result of a joint effort by Silver and Sullivan.
But Flora never renewed its challenge at any point after
the jury returned its verdict in Sullivan’s favor. And therein
lies the problem. Flora insists on appeal that the district court
erred in not keeping the joint authorship question from the
jury and failing to grant its Rule 50(a) motion on the issue. Yet
this contention runs headlong into the well-settled precept
that “a court of appeals may not award judgment due to in-
sufficiency of the evidence where no Rule 50(b) motion was
filed after the verdict.” Fuesting v. Zimmer, Inc., 448 F.3d 936,
938 (7th Cir. 2006); see also Lexington Ins. Co. v. Horace Mann
Ins. Co., 861 F.3d 661, 669 (7th Cir. 2017) (making clear that for
a party to seek judgment on appeal, “the requesting party
must not only have filed a motion under Rule 50(a), but must
also have renewed that motion under Rule 50(b)”).
The demands of Rule 50(b) serve a sound purpose. As the
Supreme Court has emphasized, the “determination of
whether a new trial should be granted or a judgment entered
under Rule 50(b) calls for the judgment in the first instance of
the judge who saw and heard the witnesses and has the feel
of the case which no appellate printed transcript can impart.”
Unitherm v. Food Sys., Inc. v. Swift-Eckrich, Inc., 546 U.S. 394,
401 (2006). This explains why our caselaw is unyielding in
requiring a party who believes a jury’s verdict lacks a
sufficient evidentiary basis to raise that challenge in the
district court. It is not enough to rest on having made a pre-
verdict sufficiency-of-evidence challenge under Rule 50(a).
22 Nos. 17-2241 & 18-2534
To excuse its failure to move under Rule 50(b) following
the jury’s adverse verdict, Flora argues that we have discre-
tion on appeal to consider pure questions of law. But the ques-
tion of joint authorship is not a pure question of law: answer-
ing whether two or more individuals or entities contributed
enough to a work to result in joint authorship requires con-
sideration of facts. And this is precisely why other courts have
recognized, properly in our view, that the question is one for
a jury to consider guided by an instruction from the district
court. See Medforms, Inc. v. Healthcare Mgmt. Solutions, 290
F.3d 98, 110 (2d Cir. 2002) (explaining that in a copyright case,
“[a]uthorship is generally a question of fact for the jury”).
Having failed to lodge a post-verdict challenge under Rule
50(b), Flora waived the very issue it now wants us to review.
We cannot do so.
Even if Flora had not waived its joint authorship chal-
lenge, we would be quick to conclude that the jury reasonably
found Sullivan was the sole author of the 33 illustrations in
question. The jury received evidence of the contributions of
both Silver and Sullivan and viewed both of the copyright reg-
istrations submitted solely in Sullivan’s name. The district
court also properly instructed the jury that “[a] ‘joint work’ is
a work that two or more persons prepared with the intention
that their contributions be merged into inseparable elements
of a single work.” This instruction mirrored the Copyright
Act’s definition of a “joint work.” See 17 U.S.C. § 101. It also
aligns precisely with what we have described as the attributes
of a joint work. See Janky, 576 F.3d at 362 (explaining that a
joint work requires “(1) intent to create a joint work; and (2)
contribution of independently copyrightable material”).
Nos. 17-2241 & 18-2534 23
Asked whether a preponderance of the evidence demon-
strated that the copyrighted illustrations were joint works, the
jury answered in the negative, finding that Sullivan was the
sole author. We cannot say this was an unreasonable result in
light of the evidence presented. See Collins v. Kibort, 143 F.3d
331, 335 (7th Cir. 1998) (explaining that we will “overturn a
jury verdict for the plaintiff only if we conclude that no ra-
tional jury could have found for the plaintiff”).
V
We conclude with a brief word in response to Sullivan’s
cross appeal challenging the district court’s refusal to award
attorneys’ fees. Our review is limited to whether the district
court’s ruling reflected an abuse of discretion. See Gastineau v.
Wright, 592 F.3d 747, 748 (7th Cir. 2010).
The Copyright Act affords a district court discretion in
awarding attorneys’ fees to the prevailing party in an infringe-
ment case. See 17 U.S.C. § 505 (explaining that “the court in its
discretion may allow the recovery of full costs by or against any
party” in an infringement case) (emphasis added). The Su-
preme Court offered further guidance in Fogerty v. Fantasy,
Inc., outlining a series of factors for courts to consider when
awarding fees. 510 U.S. 517, 534 n.19 (1994) (setting out a se-
ries of nonexclusive factors, including frivolousness, motiva-
tion, objective unreasonableness of factual or legal positions,
and considerations of compensation and deterrence).
In denying Sullivan’s fee application, the district court rea-
soned well within the discretion afforded by Congress. Con-
sidering the factors outlined in Fogerty, the court saw the case
as close on the merits and hard fought by the parties. From
there the district court underscored that Sullivan had won a
24 Nos. 17-2241 & 18-2534
substantial verdict that would be costly for Flora to satisfy
and that, when balancing the totality of what occurred in the
litigation, an additional award of fees was neither required
nor appropriate, especially in light of the reasonableness of
the joint authorship defense Flora pressed at trial. Or, in the
district court’s own words, “no further compensation or de-
terrence in the form of an attorneys’ fee award [was] neces-
sary.” We cannot call the district court’s reasoning an abuse
of discretion and therefore affirm its denial of Sullivan’s fee
application.
* * *
For these reasons, we AFFIRM in part and otherwise
VACATE the judgment in Sullivan’s favor and REMAND to
the district court for further proceedings consistent with this
opinion.