927 F. Supp. 2d 991
D. Haw.2013Background
- Pacific Stock licenses its stock photographs to Pearson for textbook use; licensing terms include per-image numerical and distribution limits.
- Pricing evolved via two vendor agreements (Sept. 2003 and March 2004) that set base rates and may add percentages for larger print runs; Pearson’s use generally aligned with invoiced licenses.
- Pacific Stock discovered possible overuse around 2011–2012, leading to suspension of some licenses and a 2011 complaint alleging infringement, fraud, and fraudulent concealment for 131 affected images.
- Pacific Stock seeks partial summary judgment on 59 images, asserting license exceeding use; Pearson seeks full summary judgment arguing no proof of exceedance across 131 images.
- Ownership of the 59 images is contested for 18 images under challenged registrations; Pacific Stock relies on assignments and contributor agreements dating 1992–2011 to establish ownership; Pearson disputes registration validity for those 18 images.
- Court proceedings involve parallel motions for summary judgment, with rulings denying both sides’ requests on various grounds and addressing implied licenses, registrations, and assignment standing.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Pacific Stock showed actual inclusion of images in textbooks beyond license scope. | Pacific Stock. Exceeding numerical/license limits evidenced by Pearson’s own report. | Pearson. Exhibit F insufficient to prove textbook inclusion, and distributions alone don’t prove infringement. | Questions of fact prevent summary judgment for Pacific Stock. |
| Whether registrations preclude summary judgment on ownership/infringement for disputed images. | Pacific Stock owns copyrights via assignments; registrations for 18 images should be valid. | Pearson challenges validity of registrations for those images. | Registrations do not preclude summary judgment; ownership issues remain for trial. |
| Whether Pearson had an implied license to use images in excess of paid terms. | Possibility of implied license based on conduct or course of dealing. | No evidence of implied consent to exceed license terms. | No basis from record to affirm an implied license; issue for trial. |
| Whether Pacific Stock’s fraud and fraudulent concealment claims survive summary judgment. | Evidence suggests misrepresentations or concealment regarding license scope. | Arguments insufficient to prove fraud as a matter of law. | Triable issues exist; fraud claims survive summary judgment. |
| Whether Pacific Stock’s action is time-barred by the statute of limitations. | Infringement accrues at knowledge/chargeable knowledge; suit timely. | Likely time-barred under 3-year rule if known earlier. | Not time-barred; claims timely. |
Key Cases Cited
- MDY Industries, LLC v. Blizzard Entertainment, Inc., 629 F.3d 928 (9th Cir. 2010) (exceeding license scope supports infringement action; MDY guides license vs. covenant distinction)
- LGS Architects, Inc. v. Concordia Homes of Nevada, 434 F.3d 1150 (9th Cir. 2006) (license scope exceeded when used outside permitted context)
- Storage Tech. Corp. v. Custom Hardware Eng’g & Consulting, Inc., 421 F.3d 1307 (Fed. Cir. 2005) (distinguishes breach of covenant from infringement when license limits are exceeded)
- Hawaii’s Thousand Friends v. Anderson, 70 Haw. 276, 768 P.2d 1293 (Haw. 1989) (fraud elements for claims including misrepresentations and concealment are recognized)
- Roley v. New World Pictures, Ltd., 19 F.3d 479 (9th Cir. 1994) (traces accrual and knowledge for copyright infringement timing)
- Entm’t Research Grp. v. Genesis Creative Grp., 122 F.3d 1211 (9th Cir. 1997) (presumption effects of copyright registrations on validity)