Reed v. Ezelle Inv. Props. Inc.
353 F. Supp. 3d 1025
D. Or.2018Background
- Plaintiff Aaron C. Reed is a professional fine‑art photographer who registered a 2010 photograph (the Image) and sells limited, high‑value prints; the Image was part of a group registration issued Jan. 30, 2013.
- Defendant Glenn D. Ezelle Jr., president and sole owner of Ezelle Investment Properties, found the Image online in 2016, downloaded it believing it was "free," and displayed it on EIP's commercial website in a rotating homepage banner for ~9 months.
- Reed discovered the Image in 2017, sent a cease‑and‑desist and a Proposed Settlement Agreement that included a confidentiality clause and a conditional $5,000 settlement option; parties negotiated and Ezelle mailed $1,000 with the agreement but had crossed out the confidentiality clause.
- Reed refused to accept the modified agreement, considered confidentiality non‑negotiable because of disparaging remarks by Ezelle’s counsel, and filed suit for copyright infringement seeking statutory damages, fees, and costs.
- Defendants asserted there was a binding settlement agreement; alternatively they argued innocence or non‑willfulness. The court held no binding settlement was formed, found infringement, rejected both willful and innocent characterizations, awarded $1,500 statutory damages, and granted fees/costs to Reed (to be submitted).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether parties formed binding settlement | Reed: he offered a settlement with confidentiality; he never accepted Ezelle's modified agreement | Ezelle: returning the signed form with $1,000 was acceptance, creating a binding settlement | No settlement: under Oregon mirror‑image rule Ezelle's deletion of confidentiality was a counteroffer and was not accepted |
| Materiality / severability of confidentiality clause | Reed: confidentiality was essential given counsel's disparagement; clause nonnegotiable | Ezelle: confidentiality immaterial or severable; should not defeat settlement | Confidentiality was material here; severability clause in draft cannot cure lack of mutual assent before formation |
| Willfulness of infringement | Reed: defendants should reasonably have known image was copyrighted; counsel's conduct shows bad faith | Ezelle: believed image was free, searched for "free images," did not see a watermark | Not willful: evidence supports that Ezelle believed the image was free and did take some (albeit limited) steps; no proof of intentional or reckless knowledge |
| Innocent infringer / reduction of statutory damages | Reed: basic research would have revealed copyright; defendants had reason to know | Ezelle: lack of notice where downloaded supports innocence | Not innocent: copyright notice was discoverable via basic inquiry; defendants had reason to know, so statutory minimum reduction unavailable |
| Appropriate statutory damages amount | Reed: seeks $15,375 or more; infringement harmed brand and justifies higher award | Ezelle: limited website exposure, brief display, removed promptly upon notice | Court awarded $1,500 (twice the $750 minimum): balances commercial use and lack of willfulness with prompt removal and small exposure |
| Entitlement to attorneys' fees and costs | Reed: prevailing party under 17 U.S.C. §505 | Ezelle: N/A | Reed entitled to reasonable fees and costs; to submit proof within 14 days |
Key Cases Cited
- Celotex Corp. v. Catrett, 477 U.S. 317 (summary judgment burden allocation)
- Arboireau v. Adidas‑Salomon AG, 347 F.3d 1158 (9th Cir. 2003) (Oregon mirror‑image rule applied re: offer/acceptance)
- Louis Vuitton Malletier S.A. v. Akanoc Sols., Inc., 658 F.3d 936 (9th Cir. 2011) (standards for willful copyright infringement)
- Unicolors, Inc. v. Urban Outfitters, Inc., 853 F.3d 980 (9th Cir. 2017) (reckless disregard/willful blindness inquiry)
- F. W. Woolworth Co. v. Contemporary Arts, 344 U.S. 228 (statutory damages may sanction even unprofitable invasions)
- Peer Int'l Corp. v. Pausa Records, Inc., 909 F.2d 1332 (9th Cir. 1990) (court discretion in statutory damages assessment)
- Doi v. Halekulani Corp., 276 F.3d 1131 (9th Cir. 2002) (enforcement of confidentiality clauses in settlements)