Olan Mills, Inc.; Professional Photographers of America,
Inc., Appellants, v. Linn Photo Co., Appellees. The
Recording Industry Association of America, Inc.; The
Newsletter Publishers Association, Inc.; Turner Broadcasting
System, Inc.; The Association of American Publishers, Inc.,
Amicus Curiae.
No. 93-1140
UNITED STATES COURT OF APPEALS FOR THE EIGHTH CIRCUIT
23 F.3d 1345; 1994 U.S. App. LEXIS 9737; 30 U.S.P.Q.2D
(BNA) 1798; Copy. L. Rep. (CCH) P27,258
September 13, 1993, Submitted
May 5, 1994, Filed
BEAM, Circuit Judge.
Olan Mills appeals from the district court's grant of summary judgment to Linn
Photo in this copyright infringement case. Olan Mills, Inc. v. Linn Photo Co.,
795 F. Supp. 1423 (D. Iowa 1991). Olan Mills also appeals the denial of its
motion for an injunction prohibiting Linn Photo from future infringement. We
reverse the entry of summary judgment for Linn Photo, direct the district court
to enter summary judgment in favor of Olan Mills, and remand the questions of
statutory damages, injunctive relief and attorney fees for Olan Mills.
I. BACKGROUND
Olan Mills, Inc. operates more than 1,000 portrait studios throughout the
United States. Linn Photo Company sells photographic equipment and supplies,
develops print and slide film, and reproduces photographs. In mid-1986, Olan
Mills discovered that Linn Photo was engaged in unauthorized copying of
photographs to which Olan Mills held the copyright. Olan Mills contacted Linn
Photo and requested that Linn Photo cease this [**2] activity.
In 1987, Olan Mills took a number of photographs of its employees and their
families. Olan Mills registered its copyrights in four of these photographs with
the United States Copyright Office. Olan Mills then hired a private investigator
to conduct an investigation into Linn Photo's allegedly infringing activity. On
four separate occasions the investigator ordered reproductions of the
copyrighted photographs from Linn Photo. Despite the fact that the photographs
were clearly marked with a copyright notice, Linn Photo made the reproductions
and the investigator paid for them. For at least three of the requested copies,
the investigator signed a "Permission to Copy Agreement" which provided:
THIS IS TO STATE THAT I AM THE OWNER OF THIS PHOTOGRAPH AND HAVE NOT
GIVEN ANY ONE ELSE PERMISSION TO COPYRIGHT THIS PHOTOGRAPH. I AM
SUBMITTING IT TO LINN PHOTO COMPANY FOR A COPY AT MY REQUEST. THIS
COPY IS FOR MY PERSONAL USE, AND I AGREE TO HOLD HARMLESS, LINN PHOTO
COMPANY OR ANY OF ITS AGENTS, FROM ANY LIABILITY ARISING FROM THE
COPYING OF THIS PHOTOGRAPH.
Olan Mills filed suit in federal district court alleging that Linn Photo's
activities infringed Olan Mills' copyrights. [**3] Olan Mills requested
statutory damages and an injunction prohibiting Linn Photo from future
infringement. After discovery, the district court granted Linn Photo's motion
for summary judgment on the ground that the investigator, as Olan Mills' agent,
licensed the copying. The district court also awarded attorney's fees to Linn
Photo on the basis of the three "hold-harmless" forms signed by the
investigator. Olan Mills appeals.
II. DISCUSSION
Article I § 8 of the Constitution provides:
The Congress shall have Power . . . To Promote the Progress of Science
and useful Arts, by securing for limited Times to Authors and
Inventors the exclusive Right to their respective Writings and
Discoveries.
Based on this Constitutional authority, Congress promulgated the Copyright Act
defining the scope and content of copyright protection. 17 U.S.C. §§ 101 et
seq. Olan Mills challenges the district court's dismissal of its suit under the
Copyright Act on two grounds: (1) that the district court misinterpreted agency
law; and (2) that the district court erred in concluding that it did not have
jurisdiction to consider Olan Mills' request for a permanent injunction. [**4]
Olan Mills also challenges the district court's rulings on indemnity law.
A. Agency
A copyright grants to the owner several exclusive rights, including the right to
reproduce the copyrighted work and to distribute copies to the public. Pacific
and Southern Co. v. Duncan, 744 F.2d 1490, 1494 (11th Cir. 1984), cert. denied,
471 U.S. 1004, 85 L. Ed. 2d 161, 105 S. Ct. 1867 (1985). The [*1348] district
court adopted Linn Photo's agency theory and concluded that because Olan Mills
authorized its investigator to seek reproductions of the photographs in
question, Olan Mills licensed Linn Photo to make copies of the protected works.
We disagree with this conclusion.
It is well-established that the lawful owner of a copyright cannot infringe
its own copyright. See United States Naval Inst. v. Charter Communications Inc.,
936 F.2d 692, 695 (2d Cir. 1991). Nor can a copyright owner authorize copying
but subsequently revoke its consent, thereby entrapping an otherwise innocent
party into infringement. Steve Altman Photography v. United States, 18 Cl. Ct.
267, 281 (1989). [**5] In our view, however, the licensing theory advanced by
Linn Photo is inapplicable. n1
- - - - - - - - - - - - - - Footnotes - - - - - - - - - - - - - - -
n1 In the district court's view, Olan Mills authorized the investigator to
waive its copyright. We disagree. Olan Mills authorized its investigator to act
as if he were a customer who owned a copy of a copyrighted work. The
investigator's authority is irrelevant to our inquiry because Linn Photo only
obtained a waiver from the copy owner without any inquiry as to whether the
copyright owner had waived its statutory right of exclusive reproduction.
- - - - - - - - - - - - End Footnotes- - - - - - - - - - - - - -
The scenario in this case is not different from investigative schemes that
have been upheld in other copyright enforcement cases in this and in other
circuits. See, e.g., RCA/Ariola Int'l Inc. v. Thomas & Grayston Co., 845 F.2d
773 (8th Cir. 1988); RCA Records v. All-Fast Sys. Inc., 594 F. Supp. 335
(S.D.N.Y. 1984). n2 The investigator in this case merely approached Linn Photo
in a conventional manner and offered Linn [**6] Photo an opportunity to
infringe upon four clearly marked copyrights. Olan Mills did not authorize the
investigator to validate Linn Photo's unlawful conduct. Indeed, the investigator
's assignment was part of Olan Mills' attempt to stop Linn Photo's infringement.
Accordingly, the copies made by Linn Photo at the request of the investigator
were copyright violations. Therefore, on remand, the district court should
determine the appropriate statutory damages award for Linn Photo's copyright
infringement.
- - - - - - - - - - - - - - Footnotes - - - - - - - - - - - - - - -
n2 Linn Photo stresses the fact that Olan Mills' investigator received
written instructions in this case. Although the investigators in the cited cases
received verbal instructions, we find this distinction inconsequential. By
authorizing an investigation of alleged copyright infringement, a copyright
holder necessarily gives the investigator authority to request copying,
regardless of whether the instructions are reduced to writing.
- - - - - - - - - - - - End Footnotes- - - - - - - - - - - - - -
B. Indemnity Law
The district court concluded the indemnity agreement signed by [**7] Olan Mills
' investigator was an enforceable contract under Iowa law, and, therefore, Olan
Mills was liable to Linn Photo for attorney's fees. We disagree. Linn Photo's
indemnity agreement does not constitute a good faith effort to avoid copyright
infringement. Therefore, Linn Photo cannot rely on that agreement to avoid
statutory liability. See Quinto v. Legal Times of Washington, Inc., 506 F. Supp.
554, 562 (D.D.C. 1981) (good faith entails both honesty in fact and
reasonableness).
A purchaser may own a copy of a photograph, but absent specific arrangements
to the contrary, the copyright remains vested in the author of a photograph,
here Olan Mills. Because the photographs in this case were clearly marked with a
copyright notice, Linn Photo could not reasonably rely on its indemnification
agreement. Indeed, in light of Olan Mills' earlier requests that Linn Photo
cease copying its copyrighted photographs, Linn Photo had actual notice that its
activities infringed on Olan Mills' copyrights. The record demonstrates that
Linn Photo developed the indemnity agreement, without the help of legal counsel,
in an effort to circumvent liability for its infringing [**8] conduct. Thus,
Linn Photo cannot use the indemnity agreement as a shield to protect itself from
liability for its clearly infringing acts.
C. Injunction
In concluding that it did not have jurisdiction to grant any injunctive relief
under 17 U.S.C. § 502(a) n3 the district court [*1349] concluded that Olan
Mills did not present a live controversy. See Olan Mills, Inc. v. Linn Photo,
795 F. Supp. at 1429. We disagree. Section 502(a) gives the district court the
power to issue an injunction to prevent infringement of "a copyright." The power
to grant injunctive relief is not limited to registered copyrights, or even to
those copyrights which give rise to an infringement action. Pacific and
Southern Co. v. Duncan, 744 F.2d 1490, 1499 n.17 (11th Cir. 1984), cert. denied,
471 U.S. 1004, 85 L. Ed. 2d 161, 105 S. Ct. 1867 (1985). While registration is
required under section 411 of the Copyright Act in order to bring a suit for
infringement, infringement itself is not conditioned upon registration of the
copyright. See 17 U.S.C. § 408 [**9] (a) (registration is not a condition of
copyright protection). Thus, a copyright holder can register a copyright and
file suit after infringement occurs. The timing of registration only determines
whether the copyright holder can recover statutory as opposed to actual damages.
n4 See Cable/Home Communication Corp. v. Network Productions, Inc., 902 F.2d
829, 850 (11th Cir. 1990).
- - - - - - - - - - - - - - Footnotes - - - - - - - - - - - - - - -
n3 17 U.S.C. § 502(a) provides in relevant part:
Any court having jurisdiction of a civil action arising under this
title may . . . grant temporary and final injunctions on such terms as
it may deem reasonable to prevent or restrain infringement of a
copyright.
n4 Section 504(c)(1) provides in relevant part:
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, . .
. in a sum of not less than $ 500 or more than $ 20,000 as the court
considers just.
- - - - - - - - - - - - End Footnotes- - - - - - - - - - - - - - [**10]
In our view, Olan Mills presented a live controversy when it requested a
permanent injunction against future infringement of its unregistered copyrighted
photographs. Therefore, the district court had jurisdiction to consider Olan
Mills' request.
Courts have traditionally crafted broad injunctions to protect copyright
holders, regardless of the registration status of the copyright. See Pacific and
Southern, 744 F.2d at 1499. Injunctions have even prohibited infringement of
works not yet in existence. Id. at 1499, n.17. (concluding the power of the
district courts to issue injunctions is not limited to works already in
existence but applies to future works as well). Faced with the question of
extending an injunction to include copyrighted material not included in the
suit, the D.C. Circuit decided that "where . . . liability has been determined
adversely to the infringer, there has been a history of continuing infringement
and a significant threat of future infringement remains, it is appropriate to
permanently enjoin the future infringement of works owned by the plaintiff but
not in the suit." Walt Disney Co. v. Powell, 283 U.S. App. D.C. 111, 897 F.2d
565, 568 (D.C. Cir. 1990). [**11] We agree with this statement of the law.
When a copyright owner has established a threat of continuing infringement,
the owner is entitled to an injunction regardless of registration. 897 F.2d at
567 (citing Universal City Studios v. Sony Corp. of America, 659 F.2d 963, 976
(9th Cir. 1981), rev'd on other grounds, 464 U.S. 417, 78 L. Ed. 2d 574, 104 S.
Ct. 774 (1984)). Based on our review of the record, we believe the circumstances
contemplated by 17 U.S.C. § 502(a) may exist in this case. Olan Mills presented
evidence of Linn Photo's past infringement and of the substantial likelihood of
future infringement. Olan Mills further asserted that it had no adequate remedy
at law. Therefore, the district court must consider Olan Mills' petition for
injunctive relief.
D. Attorney's Fees
Based on our holdings, we must set aside the district court's award of attorney
's fees to Linn Photo. On remand, the district court should consider whether
Olan Mills is entitled to recover attorney's fees under section 505 of the
Copyright Act.
III. CONCLUSION
In summary, [**12] we conclude that Linn Photo infringed Olan Mills'
copyrights and that Olan Mills is entitled to statutory damages under 17 U.S.C.
§ 504 for the registered photographs. We thus reverse and remand to the district
court for a determination of appropriate damages, consideration of injunctive
relief and attorney's fees for Olan Mills.
DISSENTBY: JOHN R. GIBSON
DISSENT: [*1350] JOHN R. GIBSON, Senior Circuit Judge, dissenting.
I respectfully dissent. The district court, in a carefully crafted opinion
reported at 795 F. Supp. 1423 (N.D. Iowa 1991), based the grant of summary
judgment on the express authority given by Olan Mills to the investigator to
have the photographs reproduced. I conclude that the district court did not err
when it decided this issue, and believe that the court's opinion today fails to
come to grips with the thrust of the district court's reasoning.
The district court's decision focused on the approval of Olan Mills, but the
court today dismisses a waiver and a "licensing theory . . . [as] inapplicable."
Slip op. at 4. A brief review of the record before the district court shows that
approval n1 was indeed the central issue before [**13] the district court and
was correctly decided by it.
- - - - - - - - - - - - - - Footnotes - - - - - - - - - - - - - - -
n1 The district court pointed to Olan Mills' concession that on some
occasions it permitted portrait subjects to obtain reproduction from outside
sources, particularly after the passage of two years. 795 F. Supp. at 1429,
1436.
- - - - - - - - - - - - End Footnotes- - - - - - - - - - - - - -
The letter written by Olan Mills' counsel in this case to the investigator
stated: "We would like you to visit various Linn Photo retail outlets in the
Cedar Rapids area posing as an ordinary customer interested in having an
enlargement (for example, 8" x 10" or 5" x 7") made of a 'family' photograph. We
would then like you to prepare affidavits reporting on your results." In
addition to this general guidance, Olan Mills provided detailed instructions:
1. When seeking reprints, pose as an ordinary customer using your own
name. Do not give an address or telephone number unless required to do
so. If you can, limit your response to your telephone number (if a
different area code, do not give area code). We do not [**14] want to
be in a position where another party can suggest that we asked you to
lie on our behalf. This could affect your credibility with respect to
the entire transaction.
* * *
3. When seeking reprints, the sales person may ask you to sign a form
releasing them (sic) from any liability or responsibility for making
the reprints. In such a case, sign the form, make sure that you
receive a copy either then or when your reprint order is ready for
pick-up.
4. The sales person also may state they (sic) they can't make copies
of the photograph with the copyright notice appearing as it is. The
sales person may then either (a) request persmission (sic) to cut-off
or otherwise remove the copyright notice; or (b) request that you do
so. In such a case, give the sales person permission or follow any
instructions regarding how you remove the notice. Make sure that our
Report details the conversation on this point and the manner in which
the copyright notice has been removed.
795 F.2d at 1430-31 (emphasis added).
The court today, in a time of burgeoning dockets, places its imprimatur on
this staged behavior, with overtones of misrepresentation, [**15] planned for
the particular purpose of initiating an infringement lawsuit.
As the district court observed, 17 U.S.C. § 106(1) (1988) gives the owner of
a copyright "exclusive rights to do and to authorize" the reproduction of "the
copyrighted work in copies." Thus, the statute specifically gives Olan Mills, as
owner of the copyrighted work, the exclusive right to authorize the reproduction
of the four photographs. In turn, Olan Mills entered into an arrangement with
the investigator and specifically authorized him to pose as an ordinary customer
in obtaining an enlargement of the copyrighted "family" photograph, and to sign
any document that he was given.
The court's opinion sets out the permission to copy agreement which the
investigator signed with respect to at least three of the four photographs. The
agreement specifically stated that the signer owned the photograph, [*1351]
had not given anyone permission to copy it, requested the copy for personal use,
and agreed to hold Linn Photo and its agents harmless from any liability arising
from the copying of the photograph.
In light of the record before it, the district court correctly held that the
investigator [**16] was authorized to order these particular photographs and,
as the agent of Olan Mills, did approve the copying, and Olan Mills should not
be allowed to repudiate it. As copying without approval is one of the elements
of an infringement claim, 17 U.S.C. § 106, the district court did not err in
concluding that plaintiffs' claim failed. The court today simply turns its head
from the district court's painstaking treatment of this issue. Further, the
"scenario" it outlines, slip op. at 4, characterizes the facts of the
transaction between the investigator and Linn in a light far different from the
district court's opinion, so faithfully based on the record before it.
The district court further reasoned that the indemnification provisions in
the agreement signed by the investigator with respect to three of the four
photographs establish Linn's right to obtain a judgment of attorney fees from
Olan Mills, and that the agreement was not against public policy. I believe that
the district court did not err in these conclusions, and I would affirm the fee
award based on the reasoning in the district court's published opinion.
The district court dealt only with [**17] the four photographs that had been
registered for copyright protection, two of which were presented directly to
Linn Photo Shops, and two to Drug Town stores for transmittal to Linn for
copying. The district court specifically refused to consider whether there was a
systematic course of infringement, finding that plaintiffs had presented no
specific evidence with respect to anything other than the four photographs at
issue. Olan Mills' general counsel conceded in his deposition that these four
specific cases of infringement were "all we've undertaken to prove, for purposes
of this lawsuit."
The court today also reasons that the investigator's action in this case is
indistinguishable from investigative schemes that have been upheld in other
copyright cases. See RCA/Ariola Int'l, Inc. v. Thomas & Grayston Co., 845 F.2d
773 (8th Cir. 1988); RCA Records v. All-Fast Sys., Inc., 594 F. Supp. 335
(S.D.N.Y. 1984). There are several shortcomings with this approach. Neither of
the cases referred to involved a written consent signed by the investigator.
Indeed, the district court based its reasoning on this distinction. Neither case
[**18] involved evidence about the instructions given to the investigator. The
investigators in those cases were not authorized by the copyright owners to
consent to the copying, and did not, in fact, consent. The investigators either
performed the copying themselves, or simply presented a tape to a store employee
for copying. RCA/Ariola, 845 F.2d at 777; RCA Records, 594 F. Supp. at 337.
Moreover, both cases involved copyrighted recordings and copying machines
prominently displaying decals expressly warning against the copying. RCA/Ariola,
845 F.2d at 777 & n.4; RCA Records, 594 F. Supp. at 337. Finally, and more
significantly, in neither case was the activity of the investigator at issue, or
passed upon by the court. Thus, the investigative cases relied upon by the court
today give it no support.
The court today, in reviewing the parties' summary judgment motions,
essentially ignores the record before the district court and the district court
's reasoning in support of its carefully crafted order. The court errs in
reversing the judgment of the district court.