On June 7, 2023, the Ninth Circuit issued its opinion in VHT, Inc. v. Zillow Group, Inc., by which it affirmed the trial courtroom’s findings of infringement towards Zillow and the award of statutory damages. In 2019, the Ninth Circuit had beforehand discovered largely in Zillow’s favor as to an earlier trial and had reversed and remanded the case again for additional proceedings.
VHT “is the biggest skilled actual property pictures studio” within the U.S., and hundreds of its images seem on Zillow’s web site. Actual property brokers usually retain VHT to {photograph} properties they’re making an attempt to promote after which edit the images, save them of their digital database, and ship them to the consumer pursuant to a license settlement.
Zillow utilized pictures from VHT in two alternative ways. First, it primarily used them in reference to the show of properties listed on the market on Zillow’s web site. Second, Zillow chosen sure pictures “of artfully-designed rooms in a few of these properties” to submit to its “Digs” web site, which is directed towards residence enchancment.
In 2019, the Ninth Circuit agreed with the decrease Court docket that Zillow was “not responsible for direct, secondary, or contributory infringement;” nevertheless, it had concluded that “Zillow’s addition of searchable performance on the Digs residence design webpages was not honest use.” It reversed the jury’s discovering that Zillow had dedicated willful infringement and remanded the case for consideration of “whether or not VHT’s images used on Digs are a part of a compilation” or if they’re “particular person images” for functions of statutory damages.
After additional motions and a bench trial, the district courtroom discovered largely in VHT’s favor. Each events appealed the trial courtroom’s findings to the Ninth Circuit.
The primary subject the Ninth Circuit addressed was whether or not the U.S. Supreme Court docket’s 2019 resolution in Fourth Property Public Profit Court docket v. Wal-Road.com, LLC, required the dismissal of VHT’s infringement claims because the Copyright Workplace had not accomplished the registration course of for VHT’s pictures on the time VHT filed swimsuit. (VHT did apply for registration previous to submitting the lawsuit.)
The Ninth Circuit famous that the U.S. Supreme Court docket’s Fourth Property resolution was determined simply 11 days earlier than it issued its opinion within the first Zillow enchantment, and neither get together raised any points with regard to that call. On remand, the district courtroom discovered that VHT “both complied with [the prefiling registration requirement] or was excused from compliance.” The Ninth Circuit agreed with this discovering.
In figuring out that VHT was excused from this prefiling requirement, the Ninth Circuit acknowledged that it needed to think about three points: “[whether] (1) the declare is `wholly collateral’ to the substantive declare of entitlement; (2) there’s a `colorable displaying of irreparable hurt;’ and (3) `exhaustion can be futile.’” First, the Ninth Circuit held that copyright registration is “wholly collateral” to the difficulty of whether or not Zillow infringed on VHT’s copyrights. Second, the Ninth Circuit held that dismissal would trigger irreparable hurt to VHT as a result of it might not have the ability to convey the claims once more as a result of they might be barred by the statute of limitations. Third, permitting the excusal wouldn’t undermine the aim of the prefiling requirement because the Copyright Workplace had granted the registrations years earlier than the case went to trial the second time.
The primary subject the Ninth Circuit thought-about was whether or not the pictures from VHT’s database constituted a “compilation” for which there would solely be a single statutory infringement award; or whether or not the person images from VHT’s database might end in particular person statutory awards. The district courtroom had rejected Zillow’s arguments that “VHT’s pictures are a `compilation’ as a result of they’re a part of VHT’s grasp photograph database and since the Copyright Workplace decided that VHT’s database is a compilation.” As a substitute, the district courtroom discovered that “to the extent, the impartial financial worth of the person images separate from the database stays an element, the jury’s discovering indicated that the person pictures have been particular person works.”
The Ninth Circuit started by noting that “the query of whether or not a piece constitutes a `compilation’ for the needs of statutory damages pursuant to … the Copyright Act is a combined query of regulation and truth.” The Copyright Act incorporates a provision that “all of the components of a compilation or by-product work constitutes one work” for functions of statutory damages. Thus, the Ninth Circuit needed to decide whether or not, for functions beneath that provision, “the images at subject certified as `one work.’”
VHT argued it owned copyrights in each the person images and in its database; and that “the Copyright Workplace has acknowledged the twin copyright nature of registration of the database itself, in addition to the works inside it.” It famous that VHT was “not claiming `that Zillow infringed the points of its database that make it a compilation, i.e., the choice, coordination, and association of preexisting pictorial works.”
Zillow, however, requested the Ninth Circuit “to observe a easy syllogism” that as a result of the images have been in a database and the database was registered as a compilation, the images will need to have been a part of a compilation as effectively. The Ninth Circuit said that this argument “elevates the type of registration above all else, a conclusion [that it and other courts] have rejected.”
In practicality, the person images are created on the request of a particular VHT consumer after which licensed and given to that consumer for advertising and marketing a person itemizing. VHT licenses the person images themselves, not the database, and the database itself will not be printed.
Likewise, Zillow used every photograph independently to market residence designs. Zillow would choose pictures based mostly on the content material of the photographs, particularly searching for “images of artfully- designed rooms for its Diggs platform.” As a result of it didn’t choose an “association of the images inside the database,” it infringed on VHT’s rights within the particular person images and never within the database.
The Ninth Circuit additionally acknowledged that the Copyright Act “doesn’t say that any work included in a compilation can not additionally exist as a separate impartial work.” This supported the conclusion that “although VHT saved images in a database, it marketed and licensed particular person images that existed as separate pictorial works” and that these images had separate impartial financial worth from its database.
Zillow lastly argued that if VHT was claiming that the images that had been registered as a part of a database compilation have been now particular person, then VHT’s registration of the database as a compilation will need to have been invalid. The Ninth Circuit rejected this argument with out a lot evaluation.
Within the first trial, the jury had awarded VHT damages within the quantity of $1,500 per picture after discovering that Zillow had willfully infringed VHT’s copyrights to 2,700 images. After remand, the district courtroom awarded VHT statutory damages of $800 every for roughly 2,300 pictures and $200 per picture for the remaining 388 images. VHT appealed this ruling and argued that $1,500 per picture was the right statutory damages that ought to have been awarded.
In rejecting VHT’s declare that the district courtroom erred by not awarding it the $1,500 per picture, the Court docket famous that these damages had been awarded by the simply on account of a discovering of willful infringement that didn’t exist within the retrial. Thus, the Ninth Circuit concluded that the district courtroom had correctly awarded the right amount of damages to VHT after the retrial.
