28 F. Supp. 3d 399
E.D. Pa.2014Background
- Grant Heilman Photography, Inc. (GHP/GPHI) sued McGraw‑Hill for thousands of alleged copyright infringements based on invoice‑specific licenses covering stock photos; the motion concerns 57 images and several affirmative defenses.
- GPHI’s invoices contained printed "Terms as to Use" limiting geographic scope, duration, language, and print runs, and imposing a 10x liquidated‑damages/retroactive fee for unauthorized use. A 2003 Preferred Vendor Agreement (PVA) set pricing tiers.
- Defendants admit multiple instances of use beyond invoice limits and sometimes paid retroactive fees; GPHI’s communications characteristically described those payments as for "use without permission."
- Defendants argue the parties’ long course of dealing and the PVA produced implied licenses or industry customs permitting post‑publication payment and broader use. Defendants rely on testimony that publishers routinely sought retroactive or adjusted invoices.
- Court found GPHI has standing (agreements conveyed exclusive licensing rights) and that genuine disputes about scope of license (express invoice limits v. implied course of dealing) exist, but concluded evidence supports that the invoices limited use and that defendants exceeded those limits.
- Court denied plaintiff’s motion for partial summary judgment because of unresolved statute‑of‑limitations issues: equitable tolling/discovery rule questions and lack of undisputed evidence that the most recent infringing acts for these 57 images occurred within three years before the April 18, 2012 complaint.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing to sue | GPHI holds exclusive licensing/assignment rights from photographers and thus has standing | Some assignment riders do not convey full exclusive rights for all transfers | GPHI has sufficient exclusive rights under the photographer agreements to bring claims; standing granted |
| Scope of license / implied license defense | Invoice terms and back‑printed "Terms as to Use" set license scope; payments labeled "without permission" show no implied broad license | Long course of dealing and PVA pricing created industry practice/or implied license permitting broader use with payment | Court finds genuine dispute but concludes record supports that invoices limited use and that defendants used images beyond license; implied‑license defense unsupported by documentary correspondence showing payments were for unauthorized use |
| Copyright infringement liability | Use beyond invoice terms is infringement | Use was authorized/implied by custom and subsequent payments | Court concludes defendants infringed by exceeding invoice terms, and plaintiff likely entitled to a jury instruction to that effect |
| Statute of limitations / equitable tolling (discovery rule) | Claims are timely for acts within three years of complaint; plaintiff may show post‑2009 infringements | Plaintiff had inquiry notice of pattern of infringements as early as 1999 and 2006–2008; claims before April 18, 2009 may be time‑barred | Court applies Third Circuit discovery/tolling rule, finds triable issues whether GPHI was on inquiry notice (storm warnings) and cannot grant summary judgment; plaintiff may supplement record to show infringement within the 3‑year window |
Key Cases Cited
- Feist Publ’ns, Inc. v. Rural Tel. Serv. Co., 499 U.S. 340 (ownership and elements of copyright infringement)
- MacLean Associates, Inc. v. Wm. M. Mercer‑Meidinger‑Hansen, Inc., 952 F.2d 769 (3d Cir.) (scope of license, infringement where use exceeds license)
- Atkins v. Fischer, 331 F.3d 988 (D.C. Cir.) (factors for implied license; intent to permit use dispositive)
- Petrella v. Metro‑Goldwyn‑Mayer, Inc., 134 S. Ct. 1962 (Sup. Ct.) (most recent infringing act governs remedy period; discussion of laches and accrual)
- William A. Graham Co. v. Haughey, 568 F.3d 425 (3d Cir.) (discovery rule / equitable tolling inquiry notice standard)
- William A. Graham Co. v. Haughey, 646 F.3d 138 (3d Cir.) (clarifying accrual vs. tolling under the discovery rule)
- Ford Motor Co. v. Summit Motor Prods., Inc., 930 F.2d 277 (3d Cir.) (copyright registration prima facie evidence)
- Righthaven LLC v. Hoehn, 716 F.3d 1166 (9th Cir.) (standing problems where assignments limited to litigation rights)
- Bean v. Pearson Educ., Inc., 949 F. Supp. 2d 941 (D. Ariz.) (invoices limited licenses; no implied license from extensions)
- Psihoyos v. Pearson Educ., Inc., 855 F. Supp. 2d 103 (S.D.N.Y.) (denying summary judgment where course of conduct suggested backdating/acquiescence)