United States District Court, D. New Jersey
WILLIAM J. MARTINI. U.S.D.J.
Jose Luis Pelaez and Jose Luis Pelaez, Inc. bring this
copyright infringement action against Defendant Pearson
Education Inc. Now before the Court are the parties'
cross motions for summary judgment. ECF Nos. 76-77. For the
reasons set forth below, Defendant's motion is
GRANTED and Plaintiffs motion is
Jose Luis Pelaez ("Pelaez") is a professional
photographer and owner of Jose Luis Pelaez, Inc ("Pelaez
Inc." and together with Pelaez, "Plaintiffs").
Plaintiffs entered into licensing agreements with Corbis
Corporation ("Corbis"), a stock photography agency
that serves as a licensing agent for photographers. The
agreements allowed Corbis to sub-license Pelaez's photos
to end users, including publishers.
Pearson Education, Inc. ("Defendant") is a
publisher of educational materials, including textbooks. In
2001, 2004, and 2007, Defendant and Corbis entered into three
separate preferred vendor agreements ("PVAs"). The
parties disagree over whether the PVAs constituted unlimited
licenses to use Corbis's clients' photos at certain
price points or merely pre-established some of the terms that
would be applied to subsequent licensing agreements.
point between 2009 and 2015, Plaintiffs became aware that
Defendant (and other publishers) faced allegations of
large-scale copyright infringement. Plaintiffs filed suit
against Defendant on August 26, 2016, alleging copyright
infringement (Count One) and contributory and/or vicarious
copyright infringement (Count Two). Comp., ECF No. 1. The
factual allegations are relatively barebones. Essentially,
Plaintiffs accuse Defendant of obtaining access to their
photos through Corbis and other licensing agencies, then (1)
printing unauthorized copies, and, without permission, (2)
distributing photos throughout the world, (3) publishing
photos in electronic, ancillary, or derivative publications;
and (4) publishing the photographs in international editions
and foreign publications. Id. ¶ 10.
parties originally moved for summary judgment in November
2018. ECF Nos. 43, 45. Defendant requested, and was granted,
leave to file a supplemental motion. ECF Nos. 56, 59, 62
(opposition). Defendant also filed a notice of supplemental
authority. ECF Nos. 66. In February 2019, Plaintiffs moved to
amend their complaint, ECF No. 67. In response, the Court
terminated the pending summary judgment motions, ECF No. 75.
Next, the Court denied Plaintiffs' motion for leave to
amend and invited the parties to refile their cross motions
for summary judgement. ECF Nos. 73-74. The parties did so on
August 9, 2019, relying on their previous briefing. ECF Nos.
76-77. The parties also submitted various opposition and
reply briefs. ECF Nos. 78-82.
STANDARD OF REVIEW
judgment is appropriate if "there is no genuine issue as
to any material fact and ... the moving party is entitled to
judgment as a matter of law." FRCP 56. A fact is
material if its determination might affect the outcome of the
suit under the applicable substantive law. Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 248-49 (1986). A
dispute is genuine if "a reasonable jury could return a
verdict for the nonmoving party." Id. To make
this determination, the Court views the facts in the light
most favorable to the nonmovant and all reasonable inferences
must be drawn in the nonmovant's favor. Scott v.
Harris, 550 U.S. 372, 378 (2007).
moving party bears the burden of demonstrating the absence of
a genuine dispute of material fact. Celotex Corp. v.
Catrett, 477 U.S. 317, 323 (1986). The movant can meet
this burden by pointing to an absence of evidence supporting
an essential element as to which the non-moving party will
bear the burden of proof at trial. Id. at 325. If
the moving party carries its initial burden, "the
nonmoving party must come forward with specific facts showing
that there is a genuine issue for trial." United
States v. Donovan, 661 F.3d 174, 185 (3d Cir. 2011)
(citation omitted). "The non-moving party cannot rest on
mere pleadings or allegations; rather it must point to actual
evidence in the record on which a jury could decide an issue
of fact its way." El v. SEPTA, 479 F.3d 232,
238 (3d Cir. 2007) (citation omitted). "A party moving
for summary judgment on an issue for which it bears the
ultimate burden of proof faces a more difficult road .... In
such a case, if there is a chance that a reasonable
factfinder would not accept a moving party's necessary
propositions of fact, summary judgment is
inappropriate." Donovan, 661 F.3d at 185
all the spilled ink, the issues here are relatively simple:
First, does Defendant's alleged conduct constitute a
breach of contract or copyright infringement? Second, did
Defendant have a valid license to copy the photographs?
Third, can Defendant be liable for contributory or vicarious
Prima Facie Direct Copyright Claim?
cases from the Second Circuit, Defendant argues that
Plaintiffs' allegations, at most, state claims for breach
of contract, not copyright infringement. Plaintiffs disagree,
arguing that Defendant's use of their copyrighted works
beyond the licenses provided constitutes copyright
infringement. Plaintiffs are correct with respect to the law
controlling their claims.
recent precedential opinion, the Third Circuit analyzed
whether photographer-plaintiffs were bound by the
forum-selection provision in vendor agreements between Corbis
and another publisher, McGraw Hill. In re McGraw-Hill
Glob. Educ. Holdings LLC, 909 F.3d 48, 52 (3d Cir.
2018). In holding the photographers were not bound, the court
clarified the elements of a copyright infringement claim: (1)
ownership of a valid copyright and (2) copying the
constituent elements of the work that are original.
Id. at 66-67. The court made clear that a prima
facie case did not require such copying be
"unauthorized." Id. ("[W]e cannot
expect them to plead unauthorized use as part of &
prima facie case."). Of course, holding a valid
license to copy the original work is an affirmative defense
to copyright infringement. See Id. (citing with
approval, Muhammad-Ali v. Final Call, Inc., 832 F.3d
755, 761 (7th Cir. 2016) ("[T]he existence of a license,
exclusive or nonexclusive, creates an affirmative defense to
a claim of copyright infringement.")); see also
FRCP 8 (listing "license" as affirmative defense);
Carlin v. Bezos, No. 14-cv-02406, 2015 WL 12803608,
at *4 (E.D. Pa. June 11, 2015), aff'd, 649
Fed.Appx. 181 (3d Cir. 2016). But the existence of some
limited license (or documents defendants argue amount to
licenses) does not preclude copyright holders from suing for
infringement. See In re McGraw-Hill, 909 F.3d at 61
("McGraw-Hill is an infringer to the extent it exceeds
any license that Krist or a sub-licensor granted it.").
Here, Plaintiffs contend Defendant reproduced their
copyrighted photographs without a license. Therefore, their
claims sound in copyright.
License to Copy Photographs?
parties agree that in 2001, 2004, and 2007, Corbis and
Defendant entered into the PVAs, which set forth at least
some of the terms under which Defendant could license photos
from Corbis (and its clients). Defendant argues that the PVAs
actually grant a license to use Plaintiffs' photos, with
such use producing a reciprocal obligation to pay Corbis
according to the price schedules. Def. Mot. at 10-16.
Plaintiffs disagree, arguing the PVAs merely set forth
certain terms that would be incorporated into specific
licenses granted via invoices sent from Corbis to Defendant.
PL Mot. at 8-15. According to Plaintiffs, Defendant did not
have a license to use their copyrighted photographs until
Defendant received and paid the invoice setting forth the
images licensed. Id.
holding an applicable license is an affirmative defense to
Plaintiffs' copyright claims, see supra Part
III.A; FRCP 8(c)(1), Defendant bears the burden of proof,
El, 479 F.3d at 238. Therefore, at this stage,
"if there is a chance that a reasonable factfinder would
not accept [Defendant's] propositions of fact, summary
judgment is inappropriate." Donovan, 661 F.3d
at 185 (citation omitted). Fortunately for Defendant, there
is no dispute that Corbis and Defendant agreed to the terms
of the PVAs as written. The issue before the Court is how to
interpret those terms. And interpreting the unambiguous
language of the PVAs is a question of law. See Fox v.
U.S. Dep't of Hous. & Urban Dev.,680 F.2d 315,
319 (3d Cir. 1982) ("Interpretation of a contract is
ordinarily a question of law for the courts. But when the
contract is ambiguous, ...