Panoramic Stock Images, Ltd. v. Mcgraw-Hill Cos.

961 F.Supp.2d 918

PANORAMIC STOCK IMAGES, LTD., d/b/a Panoramic Images, Plaintiff,

v.The McGRAW–HILL COMPANIES, INC., Defendant.

No. 12 C 9881.

United States District Court,

N.D. Illinois,

Eastern Division.

Aug. 9, 2013.

Maurice J. Harmon, Harmon & Seidman LLC, New Hope, PA, Amanda Leigh Bruss, Christopher Seidman, Harmon & Seidman, LLC, Grand Junction, CO, E. Bryan Dunigan, III, Law Offices of E. Bryan Dunigan, Chicago, IL, for Plaintiff.

Christopher P. Beall, Levine Sullivan Koch & Schulz, L.L.P., New York, NY, Kevin Andrew Thompson, William T. McGrath, Davis, Mannix & McGrath, Chicago, IL, for Defendant.

MEMORANDUM OPINION AND ORDER

REBECCA R. PALLMEYER, District Judge.

Plaintiff Panoramic Stock Images, Ltd. (“Panoramic”) is an Illinois business that licenses photographs to publishers, including Defendant The McGraw–Hill Companies, Inc. (“McGraw–Hill”), an education publisher. For several years, the parties operated under an agreement that permitted McGraw–Hill to make limited use of photographs in which Panoramic claims to hold a copyright. In this lawsuit, Panoramic alleges that McGraw–Hill has exceeded the scope of the license agreement by publishing copyrighted photos in unspecified “additional publications.” (Compl. [1] ¶ 12.) Panoramic charges McGraw–Hill with copyright infringement and contributory copyright infringement and claims that McGraw–Hill itself maintains “a list of its wholly unauthorized uses.” Id. McGraw–Hill has moved to dismiss certain of Panoramic's claims for failure to state a claim on the ground that, according to McGraw–Hill, those claims rely on defective or unissued copyright registrations in violation of 17 U.S.C. § 411(a). For the reasons explained below, Defendant's motion to dismiss [10] is denied.

FACTUAL BACKGROUND

Panoramic is a stock photography agency. It licenses photographs created by various photographers to other entities such as textbook publishers. McGraw–Hill is a licensee of Panoramic. (Compl. [1] ¶¶ 1–2, 7.) Between 1991 and 2012, McGraw–Hill paid Panoramic for limited licenses to use copies of 170 photographs ¹ over which Panoramic claims copyright in some of McGraw–Hill's educational publications. (Compl. ¶¶ 5–7; Table of Images [1–1], Ex. 1 to Compl.) The licenses expressly limited the number of copies McGraw–Hill could use, as well as the distribution area, image size, language, duration and nature of the media in which McGraw–Hill was entitled to use the images. ( Id.)

At some point prior to December 2012, Panoramic allegedly learned that McGraw–Hill had violated the licensing agreements by exceeding the permitted uses of the photographs at issue here, including by using the photographs in publications that exceeded the licensing agreements' scope and terms. (Compl. ¶¶ 11–13.) Panoramic claims that “McGraw[-Hill] alone knows [the full extent of] these wholly unauthorized uses,” but alleges that Defendant “has developed a list of its wholly unlicensed uses and Panoramic's Photographs are among those McGraw[-Hill] has so identified.” (Compl. ¶ 12.) On December 4, 2012, Plaintiff provided Defendant with a detailed listing of the 276 limited licenses (involving 170 photographs) at issue, including the photographs' authors, descriptions, copyright registration identifications, and license limits. (Compl. ¶ 13.) According to Plaintiff, Defendant did not respond to Plaintiff's request that Defendant provide accurate information about Defendant's actual use of the photographs and declined to state which, if any, of the photographs it infringed. (Compl. ¶ 13.)

Plaintiff further alleges that Defendant has a pattern of copyright infringement. According to Panoramic, McGraw–Hill repeatedlyrequests and pays for limited use licenses and then proceeds to exceed those limited uses. (Compl. ¶ 14.) Plaintiff asserts that Defendant's entire business model is, in fact, “built on a foundation of pervasive and willful copyright infringement.” ( Id.) As support for its claim, Plaintiff lists a series of suits filed by other stock photography agencies and photographers against Defendant, asserting similar copyright infringement claims. (Compl. ¶ 15.)

In response, McGraw–Hill argues that Panoramic cannot sue for copyright infringement of 101 of the 170 photographs at issue because, it claims, Panoramic lacks valid copyright registration for those 101 photos. (McGraw–Hill does not challenge Panoramic's standing to sue on the remaining 69 photographs.) According to Defendant, 52 of the relevant photographs lack valid copyright registrations, and 49 more are not registered at all. McGraw–Hill argues that Panoramic's claims that arise from those 101 photographs should therefore be dismissed because the alleged copyright registration deficiencies “preclude Panoramic from litigating the majority of its copyright infringement claims.” (Def.'s Partial Mot. to Dismiss [10], hereinafter “Def.'s Mot.”, at 2.)

DISCUSSION

Standard of Review

A party may seek dismissal of a complaint for a “failure to state a claim upon which relief can be granted.” Fed. R. Civ. P. 12(b)(6). A complaint must “contain sufficient factual matter, accepted as true, ‘to state a claim to relief that is plausible on its face.’ ” Ashcroft v. Iqbal, 556 U.S. 662, 663, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)). The court reads the complaint in the light most favorable to Plaintiff in order to determine whether Plaintiff has stated a plausible claim for copyright infringement. See Hobbs v. John, 722 F.3d 1089, 1093–95 (7th Cir.2013). To establish copyright infringement, Plaintiff must allege that it had ownership of a valid copyright and that Defendant committed unauthorized copying of constituent elements of original work. Id. (citing Peters v. West, 692 F.3d 629, 632 (7th Cir.2012)).

Plaintiff Panoramic has adequately alleged that McGraw–Hill made unauthorized use of the photographs at issue. At this stage, the parties dispute only whether Plaintiff held valid copyrights in those photographs. McGraw–Hill asserts that Panoramic failed to identify the authors or titles for 52 of the 101 disputed photographs when it sought copyright protection. As a result, McGraw–Hill urges, those registrations are improper and the photographs do not qualify for copyright protection. With respect to 49 other photographs, Panoramic has submitted a copyright application but has not yet received a registration certificate from the Copyright Office. McGraw–Hill contends that Panoramic is not entitled to enforce its copyright for those photographs in this action until the certificate has issued. The court addresses these arguments separately.

I. Copyright Protection for Works Listed Without an Author or Title

The court first addresses the matter of the photographs' identification in copyright registrations. A plaintiff must register a copyright claim with the Copyright Office before bringing a civil action for infringement. 17 U.S.C. § 411(a). As McGraw–Hill observes, 52 of the photographs at issue here were registered for copyright protection without their individual authors or titles listed. (Reply Mem. of Law in Further Support of Def.'s Partial Mot. to Dismiss [19], hereinafter “Def.'s Mem.”, at 2, referencing registrations VA841–131, VA957–799, VA957–800, and VA1–002–221 [10–1], Ex. A to Def.'s Mot.) Section 409 of the Copyright Act requires that “the name ... of the author or authors” of a work and “the title of the work” be included in the registration. 17 U.S.C. § 409(2), (6). Plaintiff admits that the registrations do not include this identification information for each of the 52 photographs, but argues that the photographs nevertheless qualify for copyright protection because (1) they were part of properly-registered compilations whose author and title were listed; or, alternatively, (2) the omissions were too minimal for the registrations to fail to satisfy the requirements of 17 U.S.C. § 411(b). (Pl.'s Opp'n to Partial Mot. to Dismiss [18], hereinafter “Pl.'s Mem.”, at 5 (admitting that “the registration applications did not include every author of the photographs”).)

The parties agree that there is no need to list the author of each individual work in a collective work in order to obtain registration for the collective work as a whole.²See, e.g., Muench Photography, Inc. v. Houghton Mifflin Harcourt Publ'g Co., 712 F.Supp.2d 84, 90 (S.D.N.Y.2010). Registration of a collective work protects the selection, coordination, and arrangement of the collective work. What is less clear is the extent to which that registration extends protection to the collective work's individual components. See Publ'ns Int'l, Ltd. v. Meredith Corp., 88 F.3d 473, 480 (7th Cir.1996) (denying copyright protection to the constituent recipes contained in a cookbook because they were not sufficiently original, and noting that registration of a compilation does “not necessarily” protect a compilation's elements) (emphasis in original); Muench, 712 F.Supp.2d at 90 (registration by a third party of an automated database consisting of a compilation of photographs does not permit the individual photographers to sue for copyright infringement) (citing 17 U.S.C. § 103(b)'s provision that “[t]he copyright in a compilation ... extends only to the material contributed by the author of such work ... and does not imply any exclusive right in the preexisting material.”).

The parties dispute whether Panoramic's registration of the 52 photographs only as part of several collective works allows Panoramic to sue for copyright infringement of the individual photographs whose identification information is not listed in the collective works' registrations. In registrations VA841–131, VA957–799, VA957–800, and VA1–002–221, which include the 52 photographs at issue, Plaintiff registered groups of photographs by listing titles for the collective work as a whole (for example, ...