Greg Young Publishing and Zazzle resumed the parties’ battle over willful copyright infringement this past Thursday, July 9 in California federal court. This copyright battle goes back to June 23, 2016, when Greg Young, a publisher of visual arts brought legal action against Zazzle, a website allowing its users to upload images of artwork to apply to their products of choice. Prior to last week, the case was last relevant in 2019, when the Ninth Circuit reinstated Greg Young’s 2017 jury award of $460,800.
In 2017, Zazzle successfully defended against Greg Young by asserting the “safe harbor” provision of the Digital Millennium Copyright Act (“DMCA”). The safe harbor provision of the DMCA protects service providers, like Zazzle, from liability for infringing works stored on a system or network that the provider controls. Companies like Zazzle are protected under the DMCA as long as they do not have actual knowledge that its website contains infringing work and they are acting quickly to remove infringing work they are aware of.
Zazzle was granted DMCA protection from the safe harbor provision to items that were displayed but not sold. Greg Young did not challenge this DMCA defense for “display-only” images. This left nine infringed images at issue from 2017 until last Thursday.
At issue in the Ninth Circuit and in the Central District of California was which of these nine copyrighted images were willfully infringed upon. A willfully infringed copyright is worth, at minimum, $30,000. Meanwhile, infringement that is not willful maximizes at a court award of $30,000.
Greg Young prevailed on proving that five of these nine infringements were considered to be willful infringement. Zazzle moved for a renewed judgment as a matter of law where Judge Stephen V. Wilson decided against the jury, finding that Zazzle did not willfully infringe on any of Greg Young’s copyrights. Greg Young’s award for statutory damages decreased by $109,700.
In 2019, Greg Young appealed to the Ninth Circuit. The Ninth Circuit agreed with the 2017 jury findings and reinstated the award, finding that Zazzle’s recklessness against policing copyright infringement was to be considered as willfulness. Subsequent to Greg Young’s victory in the Ninth Circuit, the publishing company motioned for the lower court to reconsider its 2018 motions to permanently enjoin Zazzle from all infringement of its copyright images, and to pay the publishing company’s attorneys’ fees.
Injunction Against All Infringement
Last Thursday, Greg Young alleged that Zazzle’s use caused suffering to its reputation, market share, and ability to exclude others, and moved to enjoin Zazzle from all infringement.
The court disagreed with Greg Young as it evaluated whether the publishing company: (1) suffered an irreparable injury; (2) was afforded adequate remedies; (3) could be warranted a remedy in equity balancing Zazzle’s best interest; and (4) would serve the public interest by being allowed this permanent injunction.
The court viewed whether Greg Young would likely experience irreparable suffering or lack of adequate remedying as the most important factors for Greg Young to win on its motion. However, Greg Young was only successful on proving that the company’s motion would serve the public interest.
Greg Young argued that irreparable harm had been occurring because of Zazzle’s continued infringement on four of its copyrighted images. However, irreparable harm is not automatically proven by a finding of copyright infringement, but instead when monetary damages alone are unsuitable to remedy the harm because of the other party’s inability to pay, or the moving party’s loss of reputation or market share. Greg Young was unable to prove such reputational or market harm. The lower court felt the monetary award could best repair its harm, as three of the four images that Greg Young brought to issue were display-only images, and the fourth image was purchased by Greg Young’s camp.
The court next evaluated whether Greg Young’s remedies were inadequate given the harm the publishing company suffered. In this evaluation, the court looked to whether Zazzle was able to pay the damages previously awarded and whether a multiplicity of suits would be necessary in obtaining a proper remedy for Greg Young. The court determined that Zazzle was able to make payment and that a multiplicity of suits would not be necessary given Greg Young’s lack of harm to its reputation and market share.
In addressing whether a remedy in equity would be warranted, the court balanced the hardships between both parties. The court evaluated Zazzle’s likeliness to further infringe absent an injunction. In prior proceedings, the Ninth Circuit court determined Zazzle did not change or improve its knowingly flawed system for policing copyright infringement. However, Greg Young was unable to argue any solution to Zazzle further policing copyrighted work without adding a burden or inefficiency towards Zazzle as a business. Further, Greg Young was not able to prove that Zazzle’s infringement did not decrease, nor that the injunction’s approval would make a difference in Zazzle monitoring infringement. Therefore, the court found for Zazzle on this sub-issue.
Greg Young prevailed in serving the public interest, as the court held that “the public interest factor falls in favor of a plaintiff when an injunction protects the rights of copyright holders.” The fact that Zazzle was unable to police further copyright infringement with its current copyright infringement policing method was found to be dispositive here. With Greg Young’s shortcomings on three of the four elements necessary to prevail, the court denied the permanent injunction.
Attorneys’ Fees
In evaluating whether awarding Greg Young its attorneys’ fees on Zazzle’s behalf would be proper, the court weighed Greg Young’s degree of success obtained on the claim, and its motivation in bringing this action. The court also weighed Zazzle’s frivolousness and the objective reasonableness of their actual and legal arguments. Lastly, the court decided whether there was a need for additional compensation and deterrence.
Greg Young was not as successful as the publishing company may have thought. The court evaluated success based on Zazzle’s liability in comparison to Greg Young’s initial request for relief. Outside of the monetary award received, the court went through each copyright claim individually. The court then weighed the two perspectives together.
Greg Young originally requested for $2.1 million in relief, however, Greg Young received a jury verdict of $460,800, accounting for only 21% of that request.
Greg Young was able to prove that Zazzle willfully infringed on Greg Young’s copyright to five works, but the jury found that four other instances of infringement were not considered willful. Meanwhile, Zazzle also obtained summary judgment on eight works and succeeded in confirming its ability to assert the DMCA defense.
The court held that “[b]ecause the percentage of damages awarded was only 21% of [Greg Young’s] original request for relief, and because Zazzle succeeded in obtaining summary judgment on several grounds, [Greg Young] did not achieve complete success.”
Frivolousness and objective reasonableness turned the court’s attention to Zazzle, determining whether Zazzle’s claims and attempts at raising defenses had merit. Zazzle’s ability in the case’s prior stages to prevail in excluding certain works, utilize the DMCA defense, and prove that four instances of infringement were not willful, helped them to prevail in showing merit to its arguments.
Greg Young prevailed on the assessment of its motivation, as the court held that the publishing company’s goal was in good faith protecting the original creative expression of artists and advancing the public good as envisioned by the Copyright Act.
When evaluating compensation and deterrence, the court looked at whether the damages would be considered small, insufficient, and unlikely to deter. The court strongly felt that the damages awarded were not small, and that Zazzle was unlikely to willfully infringe on Greg Young’s copyrights in any way that would cause an actual threat to Greg Young.
Lastly, the court evaluated whether Greg Young’s motion was in furtherance of the Copyright Act’s purpose to promote creativity. The court stated that here, attorneys’ fees would not be warranted because infringement is out of Zazzle’s complete control. Zazzle does not have complete control over who posts what images on their website, therefore further punishing them with attorneys’ fees would not further police willful copyright infringement.
Weighing the factors, the court ruled against Greg Young’s motion, as the only factor that weighed in its favor was that its motivation was not based in bad faith.
The many stages of Greg Young and Zazzle’s copyright battle brought mixed results. Zazzle, and other like website services, were put on notice that recklessly allowing copyright infringements would be treated as willfully allowing copyright infringements. Greg Young failed to accept Zazzle’s final settlement offer—allegedly, it was an amount greater than its near half-million-dollar award. Greg Young then lost a second time on its motion for its attorneys’ fees and permanent injunction. However, Zazzle’s payments in statutory damages for willful infringement will far outweigh any commission they would ever make on the selling of Greg Young’s images.
If anything, Greg Young and Zazzle can probably agree that being reckless is costly.