Vedder Thinking | Articles The Shadow of the Billion-Dollar Copyright Award
On March 18, the Ninth Circuit issued a decision with significant impact for copyright owners in Alaska Stock v. Houghton Mifflin Harcourt Pub. Co., holding that a registration for a compilation covers any copyrightable component works that are also owned by the applicant, even if the registration application did not list the title and author of each component work.
This ruling affirms that a copyright owner can obtain a single copyright registration covering a large number of works. For example, a magazine might contain over 100 separately copyrighted images along with 10 individually copyrighted articles. If the copyrights for the compilation, the photographs and the articles are held by a single owner, all of these works may be covered using a single registration by applying for a copyright in the compilation of the magazine. Using this approach, the owner is saved from needing to submit 111 separate copyright applications, each requiring a separate application and fee.
Going forward, content distributors such as website operators that regularly publish large numbers of copyrighted works must take care to ensure they only use works with the permission of the copyright owner. Statutory damages awards for the violation of a registered copyright generally include an award of "not less than $750" for each infringed work.1 This creates a possibility of incredibly large damages awards if a website contains a significant quantity of infringing content, as each infringed work is entitled to a separate award of statutory damages. For example, a large website, such as a real estate aggregation website, may utilize a database with over ten million images. If even ten percent of these images infringe a third party's copyrights, the statutory minimum liability would be nearly $1 billion.
Generally, a content distributor's protection against this level of liability comes from using content from a large number of different owners, from securing licenses to use the works from the copyright owners, and in the inability of copyright owners to easily secure copyright registrations for each separate work. However, based on the Ninth Circuit's ruling, content distributors must be aware that going forward, they will have less protection, particularly against copyright owners that have a large number of works. In particular, content distributors must be careful to avoid publishing infringing content from a database supplied by an outside data vendor. For example, if a data vendor illegally provides a database containing a number of infringing photographs to a website, the website would be liable for a separate statutory damages award for each copyrighted photograph from the database that it displayed, creating a potentially massive liability for copyright infringement.
Alaska Stock is a stock photography company that contracts with independent photographers for licensing of photographs. Alaska Stock registered 13 automated databases and one "CD-ROM collection," each containing between 500 and 6,000 separate photographs from dozens of different photographers. Each photographer transferred ownership of the copyright in his or her photographs to Alaska Stock solely to enable Alaska Stock to obtain copyright registrations. The Copyright Office issued a single certificate for each of the collections, which purportedly covered both the collective work (the collection) and the component parts (the individual photographs).
At issue was whether the certificates for the collective work covered the individual component works when the application did not list the titles or the names of the authors for each of the component works. The Copyright Act requires that applications list "the name and address of the copyright claimant" and the "title of the work."2 Houghton Mifflin argued that the word "work" should be construed to refer to each separate component "copyrighted work," rather than to the collective work as a whole. While Alaska Stock listed the titles for each of the collections, along with the names of three of the photographers, it did not provide titles for each photograph or list the names of all of the photographers. However, the Ninth Circuit held that the Copyright Act requires only that applicants provide the author and title of the collective work as a whole. In reaching this conclusion, the court emphasized that the long-standing practice of the Copyright Office was to grant registration for component works without requiring the applicant to provide a title and author for each. The court noted that, as Alaska Stock complied with all of the regulations in effect at the time of its applications and the Copyright Office granted registration, it would be unjust to invalidate the registrations.
By finding that a copyright registration for a collective work extends to all of the component parts owned by the applicant, the Ninth Circuit agreed with the majority view shared by the Second3, Third4, Fourth5 and Fifth6 Circuits, as well as the opinion of the U.S. Government. Said otherwise, by filing to register the databases and the CD-ROM collection as collective works, each of the components were de facto registered as well.
If you have questions about Alaska Stock v. Houghton Mifflin Harcourt Pub. Co., obtaining copyright protection for a collective work and its component parts, or for more information on copyright law, please contact Alain Villeneuve at +1 (312) 609 7745, John K. Burke at +1 (312) 609 7622, or your Vedder Price attorney.
To view the decision in its entirety, please download the attachment below.
1 17 U.S.C. § 504(c)(1). Note that if an infringer proves that he or she "was not aware and had no reason to believe that his or her acts constituted an infringement of copyright," a court has discretion to reduce this minimum award to $200 per work.
2 17 U.S.C. § 409.
3 Morris v. Business Concepts, Inc., 283 F.3d 502, 505 (2d Cir. 2002) (denying rehearing and clarifying previous opinion).
4 Kay Berry, Inc. v. Taylor Gifts, Inc., 421 F.3d 199, 204, 206 n.2 (3d Cir. 2005).
5 Metro. Reg'l Info. Sys., Inc. v. Am. Home Realty Network, Inc., 722 F.3d 591 (4th Cir. 2013).
6 Szabo v. Errisson, 68 F.3d 940 (5th Cir. 1995), abrogated on other grounds by Reed Elsevier, Inc. v. Muchnick, 559 U.S. 154 (2010).