63 F. Supp. 3d 882
N.D. Ill.2014Background
- Frerck, a professional stock photographer, licensed nonexclusive rights to Pearson for decades via a billing-request/invoice process; disputes arose over whether invoices were the complete, limiting licenses.
- Frerck sued Pearson in 2011 alleging 3,582 copyright infringements (mostly for exceeding print runs or geographic limits, and some uses without any permission) and 12 common-law fraud counts for understating planned uses to pay lower fees.
- Frerck moved for partial summary judgment of liability on 343 identified infringement claims; Pearson moved for partial summary judgment dismissing the fraud claims.
- Key documentary evidence: Pearson’s internal Global Rights Data Warehouse and Geography Reports showing print quantities and distributions; billing requests from Pearson and Frerck’s invoices/licences; some publications and scans showing Frerck’s photos.
- Disputed defenses included statute of limitations (discovery rule), laches, implied license, and corporate intent for fraud.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Statute of limitations (accrual) | Frerck contends he did not know (and reasonably could not know) of infringements before Aug 5, 2008. | Pearson argues earlier knowledge (disclosure in July 2008) creates a factual dispute and bars claims. | Court applied Seventh Circuit discovery rule and held no reasonable person in Frerck’s position should have known; limitations defense failed. |
| Laches | Frerck says delay was reasonable given course of dealings and disclosures. | Pearson says Frerck’s long delay prejudiced it and raises factual dispute. | Court found no unreasonable lack of diligence by Frerck and no evidence of prejudice to Pearson; laches failed. |
| Implied license | Frerck argues licenses were limited by invoices; no implied broader license. | Pearson contends a course-of-conduct implied license existed (invoking non-7th-Circuit authorities). | Court held Seventh Circuit law limits implied license to narrow circumstances and, even under broader tests, Pearson failed to show a course of conduct creating an implied license. |
| Fraud (corporate intent) | Frerck alleges Pearson’s billing requests understated uses and that Pearson (via internal forecasts) knowingly intended greater uses to pay less. | Pearson argues Frerck cannot show any specific agent made false statements with requisite intent; corporate collective intent insufficient. | Court held Frerck produced no evidence linking specific coordinators’ requests to any person with fraudulent intent; corporate intent theory fails; fraud claims dismissed. |
| Copyright infringement (scope exceeded) | Frerck relies on Pearson’s business records and his review of publications to show exceeding print/geographic limits. | Pearson argues reports don’t prove images were actually used (last-minute edits, replacement process) and challenges some missing publications. | Court found Frerck met his burden; Pearson’s contrary testimony was not materially probative that photos were removed; granted partial summary judgment for Frerck on identified claims (343 minus withdrawn lines). |
Key Cases Cited
- Celotex Corp. v. Catrett, 477 U.S. 317 (summary judgment standard)
- Anderson v. Liberty Lobby, 477 U.S. 242 (summary judgment and genuine dispute standard)
- Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574 (nonmoving party must show more than metaphysical doubt)
- Feist Publ’ns, Inc. v. Rural Tel. Serv. Co., 499 U.S. 340 (copyright infringement elements)
- I.A.E., Inc. v. Shaver, 74 F.3d 768 (Seventh Circuit on implied nonexclusive license)
- Kennedy v. Nat’l Juvenile Detention Ass’n, 187 F.3d 690 (Seventh Circuit on implied license standard)
- Gaiman v. McFarlane, 360 F.3d 644 (Seventh Circuit discovery rule for accrual)
- Hot Wax, Inc. v. Turtle Wax, Inc., 191 F.3d 813 (laches elements under Seventh Circuit)
- Orix Credit Alliance, Inc. v. Taylor Machine Works, Inc., 125 F.3d 468 (fraudulent intent proof by recklessness)
- Pugh v. Tribune Co., 521 F.3d 686 (discussed re: corporate intent pleading standards)
- Makor Issues & Rights, Ltd. v. Tellabs Inc., 513 F.3d 702 (discussed re: corporate intent pleading standards)