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Exploring the Latest in Intellectual Property Law
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No Fair Use Defense Results in Default Judgment

by | Jun 5, 2025 |

The US Court of Appeals for the Second Circuit reversed a district court’s dismissal of a copyright infringement claim alleging copying of a photograph, finding that the defendant’s use of the photograph did not constitute fair use and that the district court erred in its substantive fair use analysis. Jana Romanova v. Amilus Inc., Case No. 23-828 (2d Cir. May 23, 2025) (Jacobs, Leval, Sullivan, JJ.) (Sullivan, J., concurring).

Jana Romanova, a professional photographer, sued Amilus for willful copyright infringement, alleging that the company unlawfully published her photograph, originally licensed to National Geographic, without authorization on its subscription-based website. Amilus failed to appear or respond in the district court proceedings, and Romanova sought entry of default judgment.

Instead of granting the motion, the district court sua sponte raised the affirmative defense of fair use. After considering Romanova’s show cause order response, the district court dismissed the complaint with prejudice, finding that the fair use defense was “clearly established on the face of the complaint.” Romanova appealed on substantive and procedural grounds.

Romanova argued that the district court erred in finding a basis for the fair use defense within the four corners of the complaint and erred by sua sponte raising a substantive, non-jurisdictional affirmative defense on behalf of a defendant that failed to appear or respond.

Citing the Supreme Court decisions in Campbell v. Acuff-Rose Music (1994) and Warhol v. Goldsmith (2023), the Second Circuit reversed. The Court explained that “the district court’s analysis depended on a misunderstanding of the fair use doctrine and of how the facts of the case relate to the doctrine. We see no basis in the facts alleged in the complaint for a finding of fair use.”

The Second Circuit explained that the district court misapplied the first fair use factor (“the purpose and character of the use”). The Court noted that a transformative use must do more than merely assert a different message; it must communicate a new meaning or purpose through the act of copying itself. Here, Amilus’ use of Romanova’s photograph did not alter or comment on the original work but merely republished it in a commercial context.

The Second Circuit also found no basis for the district court’s finding of justification for the copying, a factor that typically depends on the nature of the message communicated through the copying, such as parody or satire, and was mandated by the Supreme Court in Warhol. The Court rejected the notion that Amilus’ editorial framing – claiming to highlight a trend in pet photography – could justify the unauthorized use.

On the procedural issue, the majority noted that an “overly rigid refusal to consider an affirmative defense sua sponte can make a lawsuit an instrument of abuse. A defendant’s default does not necessarily mean that the defendant has insouciantly snubbed the legal process.” In this case, the Second Circuit explained that it “cannot fault the district court for considering a defense which it believed (albeit mistakenly) was valid and important. While district courts should [...]

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Copyright, AI, and Politics

by | May 22, 2025 |

In early 2023, the US Copyright Office (CO) initiated an examination of copyright law and policy issues raised by artificial intelligence (AI), including the scope of copyright in AI-generated works and the use of copyrighted materials in AI training. Since then, the CO has issued the first two installments of a three-part report: part one on digital replicas, and part two on copyrightability.

On May 9, 2025, the CO released a pre-publication version of the third and final part of its report on Generative AI (GenAI) training. The report addresses stakeholder concerns and offers the CO’s interpretation of copyright’s fair use doctrine in the context of GenAI.

GenAI training involves using algorithms to train models on large datasets to generate new content. This process allows models to learn patterns and structures from existing data and then create new text, images, audio, or other forms of content. The use of copyrighted materials to train GenAI models raises complex copyright issues, particularly issues arising under the “fair use” doctrine. The key question is whether using copyrighted works to train AI without explicit permission from the rights holders is fair use and therefore not an infringement or whether such use violates copyright.

The 107-page report provides a thorough technical and legal overview and takes a carefully calculated approach responding to the legal issues underlying fair use in GenAI. The report suggests that each case is context specific and requires a thorough evaluation of the four factors outlined in Section 107 of the Copyright Act:

  • The purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes
  • The nature of the copyrighted work
  • The amount and substantiality of the portion used in relation to the copyrighted work as a whole
  • The effect of the use upon the potential market for or value of the copyrighted work.

With regard to the first factor, the report concludes that GenAI training run on large diverse datasets “will often be transformative.” However, the use of copyright-protected materials for AI model training alone is insufficient to justify fair use. The report states that “transformativeness is a matter of degree of the model and how it is deployed.”

The report notes that training a model is most transformative where “the purpose is to deploy it for research, or in a closed system that constrains it to a non-substitutive task,” as opposed to instances where the AI output closely tracks the creative intent of the input (e.g., generating art, music, or writing in a similar style or substance to the original source materials).

As to the second factor (commercial nature of the use), the report notes that a GenAI model is often the product of efforts undertaken by distinct and multiple actors, some of which are commercial entities and some of which are not, and that it is typically difficult to discern attribution and definitively determine that a model is the product of a commercial or a noncommercial [...]

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Creative License: Fair Use Defense Paints Over Infringement Battle

by | Oct 3, 2024 | ,

Affirming the application of the fair use defense to copyright infringement, the US Court of Appeals for the Fifth Circuit determined that a district court’s sua sponte invocation of a fair use defense to parallel trademark claims was harmless error. The Court also affirmed that the district court did not abuse its discretion in awarding attorneys’ fees based on the prevailing party standard for copyright claims. Keck v. Mix Creative Learning Ctr., L.L.C., Case No. 23-20188 (5th Cir. Sept. 18, 2024) (Jones, Smith, Ho, JJ.)

Michel Keck, a multimedia artist, sued Mix Creative Learning Center, a Texas-based art studio, for copyright and trademark infringement after Mix Creative sold art kits featuring Keck’s dog-themed artwork and a brief biography, intended for at-home learning during the pandemic. Keck had registered her Dog Art series (in the form of decorative works) with the US Copyright Office and her name as a trademark with the US Patent & Trademark Office. Keck claimed that Mix Creative’s art kits violated her rights. After receiving notice of the lawsuit, Mix Creative promptly ceased selling its kits.

Following discovery, both parties filed cross-motions for summary judgment. The district court granted summary judgment in favor of Mix Creative on Keck’s copyright claim, finding fair use, and also granted summary judgment on the trademark claim sua sponte, as both parties had agreed that the fair use defense applied to both claims. The district court further awarded Mix Creative more than $100,000 in attorneys’ fees and costs, although it declined to hold Keck’s attorneys jointly and severally liable.

Keck appealed, challenging the copyright fair use finding and the district court’s sua sponte application of the fair use defense to the trademark claim. Mix Creative challenged the district court’s refusal to hold Keck’s attorneys jointly and severally liable for fees.

The Fifth Circuit affirmed the district court’s application of the fair use defense to Keck’s copyright claims. The Court focused on the first and fourth factors of the fair use defense (respectively, the purpose and character of the use and the effect of the use on the potential market for or value of the original work), noting that the courts typically give these two factors special attention.

On the first factor, the Fifth Circuit found Mix Creative’s use to be transformative. Although Mix Creative is a commercial enterprise, the art kits served an educational purpose, distinct from the decorative purpose of Keck’s original works. As a result, the likelihood of Mix Creative’s kits serving as a substitute for Keck’s original works in the market was low.

The fourth factor also favored Mix Creative, as the Fifth Circuit found no evidence that Mix Creative’s kits would harm the market value of Keck’s original decorative works. In fact, the Court suggested that the kits might enhance Keck’s reputation and sales by providing her with free advertising. Furthermore, Mix Creative operated in a different market (educational rather than decorative), and Keck had not demonstrated any history of selling derivative works for children’s art lessons. The [...]

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Digital Rights, Digital Wrongs: The DMCA Lives On

by | Aug 15, 2024 |

The US Court of Appeals for the District of Columbia affirmed that the Digital Millennium Copyright Act’s (DMCA) laws against bypassing digital locks and distributing circumvention tools are designed to prevent piracy and are not unconstitutionally broad. Matthew D. Green, et al. v. United States Department of Justice, et al., Case No. 23-5159 (D.C. Cir. Aug. 2, 2024) (Pillard, Henderson, Millett, JJ.)

As technology has advanced, access to copyrighted content has expanded dramatically, with billions of people now able to stream or download content instantly. In response to this digital revolution, Congress enacted the DMCA 26 years ago to address the growing threat of digital piracy and unauthorized access to copyrighted materials online. The DMCA reinforces the use of technological protection measures, or “digital walls,” to secure copyrighted works from unauthorized access. The DMCA’s anticircumvention provision prohibits bypassing these technological protections, treating such acts as akin to digital trespassing.

Matthew Green, a computer science professor at Johns Hopkins University, and Andrew Huang, a tech inventor, challenged the constitutionality of key sections of the DMCA. They argued that the DMCA’s anticircumvention and antitrafficking provisions, which prohibit the circumvention of technological protections on copyrighted works and the distribution of circumvention tools, violated their First Amendment rights. They claimed that these provisions excessively restricted their ability to engage in lawful speech, particularly in the context of fair use.

While the DMCA leaves the fair use defense intact, Green and Huang argued that the DMCA unduly restricts fair use, particularly when the DMCA prohibits activities that would otherwise be considered lawful under copyright law. The district court dismissed Green and Huang’s facial First Amendment challenges, finding that they had not demonstrated that § 1201 of the DMCA overwhelmingly restricted protected speech to the extent that it warranted facial invalidation. Green and Huang appealed.

The DC Circuit explained that the DMCA’s anticircumvention provisions primarily target conduct – specifically, the act of bypassing digital protections – rather than expression. The Court noted that such conduct is not inherently expressive and does not typically implicate the First Amendment. The Court also found that the DMCA’s anticircumvention provisions serve a legitimate and extensive purpose in preventing piracy. While Green and Huang cited examples of potential overreach, such as a teacher circumventing a DVD’s encryption for classroom use, the Court explained that these examples did not convincingly demonstrate that the statute’s unconstitutional applications outweighed its lawful ones. The Court further explained that existing exemptions, such as those allowing circumvention for educational purposes, reduce the burden on free speech.

Green and Huang also argued that § 1201(a) imposes an unconstitutional prior restraint on speech by requiring fair users to obtain exemptions from the Librarian of Congress before circumventing technological protections. They likened this process to a speech-licensing regime, claiming that it invites content and viewpoint discrimination without sufficient judicial oversight. However, the DC Circuit rejected this claim, ruling that the DMCA’s exemption process is not a prior restraint on speech. The Court reiterated and emphasized that § 1201(a) regulates conduct, [...]

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David-Versus-Goliath Trademark Victory Isn’t Necessarily “Exceptional”

by | Jul 25, 2024 |

The US Court of Appeals for the Third Circuit vacated an award of attorneys’ fees for reanalysis, explaining that the district court’s finding that the case was “exceptional” under the Lanham Act was based on policy considerations rather than the totality of the circumstances. Lontex Corp. v. Nike, Inc., Case Nos. 22-1417; -1418 (3rd Cir. July 10, 2024) (Hardiman, Matey, Phipps, JJ.)

Lontex Corporation is a small Pennsylvania business that manufactures and sells compression apparel to professional athletes and the public. Since 2008 it has held a registered trademark for the mark COOL COMPRESSION, which it used in conjunction with its sale of apparel. In 2015, Nike rebranded an athletic clothing line that included a category of “Cool” products designed to reduce body temperature, as well as various fits, including “Compression.” It also began using the words “Cool” and “Compression” together in the names of Nike clothing products sold online and in Nike catalogues. Nike used “Cool Compression” as a product name on tech sheets, which are internal documents used to explain Nike products to employees and third-party retailers.

The following year, upon discovering Nike’s use of the phrase “Cool Compression,” Lontex sent Nike a cease-and-desist letter. Nike’s lawyers directed the company to stop using the phrase “as soon as possible.” Nike took steps to remove the phrase from its website and catalogs but not its tech sheets. Two years later, Nike reached out to its third-party retailers and asked them to stop using “Compression” in product names.

Lontex sued Nike for trademark infringement of its COOL COMPRESSION mark, for contributory infringement based on its supply of “Cool Compression” products to retailers, and for counterfeiting. The district court dismissed the counterfeiting claim, and a jury trial was held on the infringement actions. The jury returned a verdict for Lontex, finding Nike liable for willful and contributory infringement. The jury awarded Lontex $142,000 in compensatory damages and $365,000 in punitive damages but declined to award Lontex disgorgement of Nike’s profits.

Post-trial, Nike renewed motions for judgment as a matter of law on fair use, trademark infringement, contributory infringement, willfulness and punitive damages. Lontex moved for disgorgement of profits and trebling of the damages awarded by the jury. The district court granted Lontex’s request for treble damages, increased the compensatory award to $426,000, and separately awarded Lontex almost $5 million in attorneys’ fees after finding that the case was “exceptional” under the Lanham Act. Both parties appealed.

As to the willfulness finding, Nike argued that the jury should not have been permitted to infer willfulness solely from its continued use of the mark after it received its cease-and-desist letter. The Third Circuit disagreed, pointing out that not only did Nike adopt the “Cool Compression” phrase without doing a trademark search, it also continued to use the phrase after receiving Lontex’s cease-and-desist letter and being advised by its own legal team to stop using it as soon as possible. The Court concluded that a jury could reasonably infer willful infringement. For similar reasons, [...]

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What Do You Meme? TFW Commercial Use Outweighs Fair Use

by | Jun 20, 2024 |

The US Court of Appeals for the Eighth Circuit affirmed a district court’s copyright infringement decision, finding that a congressional reelection campaign’s use of a popular meme to solicit donations was commercial in nature and therefore not fair use. Laney Griner v. King for Congress, Case No. 22-3623 (8th Cir. June 7, 2024) (Benton, Erickson, Kobes JJ.)

Laney Griner owns the copyright for the popular meme “Success Kid,” which is a photograph of then 11-month-old Sam Griner with his hand in a fist clenching sand at the beach.

Griner took the photograph in 2007. The photograph went on to become one of the first viral memes, with billions of internet users spreading the image with a variety of captions. Griner registered the copyright of the Success Kid meme in 2012 and has since licensed that photograph to many companies, including Virgin Mobile, Vitamin Water, Microsoft and Coca-Cola, for commercial use.

Steven King served as a congressional representative from Iowa from 2003 to 2021. During his 2020 reelection campaign, the King for Congress Committee, which supported the congressional campaign, posted the meme on its website, Facebook and Twitter in an effort to seek donations:

After requesting the removal of the posts to no avail, Griner filed a lawsuit for copyright infringement and violation of Sam’s privacy. The jury found that neither the committee nor the congressman violated Sam’s privacy, but it did find that the committee (but not the congressman) had “innocently” infringed Griner’s copyright. The jury awarded $750 in damages, which is the statutory minimum. The committee appealed.

The committee argued that its use of the meme was fair use under Section 107 of the Copyright Act. Under the Copyright Act, four factors define fair use:

  1. The purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes
  2. The nature of the copyrighted work
  3. The amount and substantiality of the portion used in relation to the copyrighted work as a whole
  4. The effect of the use upon the potential market for or value of the copyrighted work

The Eighth Circuit found that the first factor weighed against the committee since the post clearly used the meme to call for donations and was undoubtedly commercial in nature. The commercial nature of the use voided the committee’s argument that the meme had been used millions, if not billions, of times without permission by users across the internet. Likewise, the “transformative elements” that the committee added (original text) were not persuasive enough to overcome this commercial nature. The Court found that the third factor also weighed against the committee since the “most substantial part of the work,” the “Success Kid himself,” was used in the committee’s post. The Court found that the fourth factor weighed in neither party’s favor, despite the fact [...]

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Easy Tiger: Docuseries Summary Judgment Remanded for Further Fair Use Consideration

by and | Apr 11, 2024 |

Addressing copyright fair use in the wake of the Supreme Court’s recent guidance in Warhol, the US Court of Appeals for the Tenth Circuit partially reversed the district court’s grant of summary judgment in favor of the defendants. The Tenth Circuit held that the first fair use factor (the purpose and character of the use) weighed in favor of the plaintiffs and remanded for further consideration of the accused infringing work’s effect on the potential market for the copyrighted work. Whyte Monkee Productions, LLC; Timothy Sepi v. Netflix, Inc.; Royal Goode Productions, LLC, Case No. 22-6068 (10th Cir. Mar. 27, 2024) (Holmes, C.J.; Hartz, Carson, JJ.)

In 2020, Netflix and Royal Goode Productions (the defendants) released the popular multipart documentary Tiger King: Murder, Mayhem and Madness. Tiger King included eight videos filmed by Timothy Sepi (the plaintiff), seven of which were filmed while Sepi was employed by the zoological park featured in the docuseries. The eighth video, a 24-minute recording of the funeral of Travis Maldonado (who was the husband of Joe Exotic, aka the Tiger King) was filmed by Sepi after his employment ended. After the release of Tiger King, the plaintiffs registered the copyrights for the eight videos and sued the defendants for copyright infringement.

The district court granted summary judgment in favor of the defendants, holding that Sepi did not own the copyright for the seven videos he filmed during his employment because they were “works made for hire” and that the defendant’s use of the eighth video was permissible fair use. The plaintiffs appealed.

On appeal, the plaintiffs argued that the district court erred in holding that seven of the videos were works made for hire because Sepi’s scope of employment “did not extend to cinematography and film editing conducted on his own time.” The plaintiffs also argued that the district court incorrectly assessed each of the fair use factors in connection with the eighth video.

The Tenth Circuit swiftly affirmed the grant of summary judgment on the first seven videos, noting that the plaintiffs’ argument regarding the scope of Sepi’s employment was a new theory on appeal and therefore had been waived. Nonetheless, the Court reversed the grant of summary judgment in favor of the defendants with respect to the eighth video, stating that the district court erred in concluding that the first and fourth fair use factors weighed in favor of the defendants.

As set forth in the Copyright Act, there are four nonexclusive factors to consider in assessing whether the use of a copyrighted work is protected fair use:

  • The purpose and character of the use
  • The nature of the copyrighted work
  • The amount and substantiality of the portion used
  • The effect of the use on the potential market for or value of the copyrighted work.

Important here, the Tenth Circuit noted that all four factors should be weighed together “in light of the aim of copyright, which is ‘to promote the progress of science and the arts, [...]

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No Fair Use for Photo Used Without Required Attribution

by | Feb 15, 2024 |

The US Court of Appeals for the Fourth Circuit concluded that the copyright on a photograph of an entertainment icon was the subject of a valid copyright registration and that use of the photograph in an article missing the author’s required attribution language was not otherwise “fair use.” Philpot v. Independent Journal Review, Case No. 21-2021 (4th Cir. Feb. 6, 2024) (King, Wynn, Rushing, JJ.)

Larry Philpot, a professional concert photographer, photographed Ted Nugent at a concert in July 2013. In August 2013, Philpot registered the photograph with the US Copyright Office and published the photograph on Wiki Commons under a Creative Commons License specifying that anyone could use the photograph for free as long as they provided the following attribution: “Photo Credit: Larry Philpot of www.soundstagephotography.com.”

In 2016, Independent Journal Review (IJR) published an article titled, “Signs Your Daddy Was a Conservative.” One of the “signs” listed in the article was whether “your daddy” was a fan of “The Nuge.” The article used Philpot’s photo in conjunction with this list item. Rather than including the required attribution with Philpot’s photo, IJR included a link to Nugent’s Wikipedia page, which in turn linked to the Wiki Commons site where the photograph was hosted with the proper attribution. IJR generated only $2 to $3 in advertising revenue from the article.

Philpot sued IJR for copyright infringement in May 2020. IJR moved for summary judgment based on its fair use defense and alternatively for a finding that Philpot’s registration was invalid. Philpot moved for summary judgment of valid registration and that IJR’s use did not meet the requirements of fair use. The district court found that there was a genuine issue of material fact regarding the validity of Philpot’s registration but granted IJR’s motion for summary judgment of fair use. Philpot appealed both findings.

Following the statutory four-prong fair use framework and the Supreme Court 2023 fair use analysis in Andy Warhol Foundation for the Visual Arts v. Goldsmith, the Fourth Circuit considered whether IJR’s use of the photo was transformative and of a commercial nature or for nonprofit educational purposes. A secondary use is transformative when it has a “further purpose or different character” than the original work. The larger the difference is, the more likely a court is to find that the use constitutes “fair use.” The district court found the work transformative because IJR placed the photo in a new context (i.e., a list of “Signs Your Daddy Was a Conservative.”) The Fourth Circuit, however, found that IJR’s use was not transformative because the two uses “shared substantially the same purpose,” which was to depict Ted Nugent. Beyond cropping negative space in the photo, IJR did not alter or add new expression to the photo and did not “add new purpose or meaning.”

In considering whether the work was for a commercial purpose, the Fourth Circuit questioned whether IJR stood to profit from its use of the photo, not whether IJR was successful at that venture. While the article [...]

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Serving a Perfect 10: No Protection for Embedding

by and | Jul 27, 2023 |

The US Court of Appeals for the Ninth Circuit found that a photo- and video-sharing social networking service could not be liable for secondary copyright infringement because embedding a photo does not “display a copy” of the underlying image. Hunley v. Instagram, LLC, Case No. 22-15293 (9th Cir. July 17, 2023) (Bybee, Bumatay, Bennett, JJ.)

Embedding is a method of displaying images on a website by directing a browser to retrieve an image from the host server. Instead of hosting an image file on a home server, a website merely pulls the image, along with any other content, from an external server and displays it.

Alexis Hunley and Matthew Brauer are photographers who brought a class action lawsuit against Instagram on behalf of copyright owners whose work was “caused to be displayed via Instagram’s embedding tool on a third party website without the copyright owner’s consent.” Hunley alleged that Buzzfeed News and Time embedded Hunley’s Instagram posts (copyrighted photos and videos) within news articles. Hunley also alleged that Instagram’s embedding tool violated her exclusive display right under the Copyright Act by enabling third-party websites to display copyrighted photos posted to Instagram.

Hunley’s argument was unsuccessful, and the district court granted Instagram’s motion to dismiss. The district court determined that the Ninth Circuit’s 2007 holding in Perfect 10 precluded relief to Hunley. The court explained that under the “server test” set forth in Perfect 10, embedding websites that do not store an image or video does not “communicate a copy” of the image or video and therefore does not violate the copyright owner’s exclusive display right. The court explained that because Buzzfeed News and Time do not store images and videos, they do not “fix” the copyrighted work in any “tangible medium of express” (a copy), and therefore when they embed the images and videos on a website, they are not displaying “copies” of the copyrighted work. Hunley appealed.

Hunley argued that Perfect 10 was inconsistent with the Copyright Act, but the Ninth Circuit declined to consider the argument in detail as the proper procedure was to seek a rehearing en banc. While the Court was sympathetic to policy arguments advanced by Hunley (as well as other amici), the Court stated it was not its place to create a policy solution. Hunley’s final major argument questioned the validity of Perfect 10 in light of the Supreme Court’s 2014 decision in American Broadcasting Co. v. Aereo, but this too was rejected. The Ninth Circuit failed to see sufficient similarities between the performance and display rights, holding them as two distinct rights with few parallels.

Applying the server test to the facts presented, the Ninth Circuit found that Instagram could not be found secondarily liable for displaying images on third-party sites. Since Buzzfeed News and Time embedded the images and no copy was stored, they could not be liable for direct infringement. Because there was no direct infringement, there could be no secondary infringement, and the Court found that the district court properly [...]

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A Single Picture Database Is Worth a Thousand Statutory Damages Awards

by | Jun 22, 2023 |

In the latest appeal of a copyright infringement dispute, the US Court of Appeals for the Ninth Circuit upheld the lower court’s finding that the copyright owner’s photographs were not part of a single compilation for purposes of awarding statutory damages. VHT, Inc. v. Zillow Grp., Inc., Case Nos. 22-35147; -35200 (9th Cir. June 7, 2023) (McKeown, Fletcher, Gould, JJ.)

VHT is a professional real estate photography studio that real estate brokerages and listing services hire to photograph properties. VHT retouches the photographs, saves them in its photo database and licenses them to its clients for marketing purposes. In 2015, VHT sued Zillow for copyright infringement based on Zillow’s display of VHT photographs on its real estate listing website and on its Digs home design website. The district court found that Zillow was not liable for displaying VHT photographs on its real estate listing website or for displaying untagged, unsearchable VHT photographs on its Digs home design website. However, the district court found that Zillow’s display of tagged, searchable VHT photographs on Digs constituted infringement and that the searchability functionality was not fair use.

The parties cross-appealed, and the Ninth Circuit considered the issue of infringement in a 2019 decision (Zillow I). In this prior appeal, the Ninth Circuit agreed that Zillow’s display of VHT photographs on its real estate listing website was not copyright infringement, while Zillow’s display of searchable VHT photographs on its Digs home design website constituted infringement and was not fair use. The Ninth Circuit also reversed the jury’s finding that Zillow had willfully infringed 2,700 searchable VHT photographs displayed on Digs and remanded for consideration of whether the searchable photographs were a compilation for purposes of awarding statutory damages. On remand, the district court found that the photographs were not a compilation and awarded statutory damages of $200 for each innocently infringed photograph and $800 for each remaining photograph.

The district court also considered the impact of the Copyright Act’s preregistration requirement and Fourth Estate v. Wall-Street (Supreme Court, 2019) on VHT’s ability to sue. In accordance with Ninth Circuit precedent holding that registration is made when the Copyright Office receives a completed registration application, VHT had sued Zillow for copyright infringement after applying for copyright registration. However, the works were not registered until after the suit was filed. Just 11 days before Zillow I was decided, in Fourth Estate, the Supreme Court held that registration is made when the Copyright Office has registered a copyright after examination—not when the application is filed. Zillow argued that VHT’s claims should be dismissed because VHT did not satisfy the preregistration requirement. The district court excused the exhaustion requirement because dismissal would result in a massive waste of resources. The parties again cross-appealed.

Preregistration and Fourth Estate

Addressing the preregistration issue, the Ninth Circuit agreed that dismissal was not required. The decision to excuse compliance with a non-jurisdictional exhaustion requirement is based on whether the claim is wholly collateral to the substantive [...]

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