Barcroft Media, Ltd. v. Coed Media Grp., LLC
297 F.Supp.3d 339 (2017)
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Rule of Law:
Commercial use of copyrighted photographs does not qualify as fair use under the Copyright Act when the images are displayed for the same illustrative purpose as their original creation without transformative changes, thereby displacing the market for the original works. A claim of waiver requires an explicit, intentional relinquishment of a known right with full knowledge of its existence and intent to relinquish it.
Facts:
- Barcroft Media, Ltd. and FameFlynet, Inc. (Plaintiffs) are owners of copyrighted celebrity and human interest photographs, which they acquire from photographers and register with the U.S. Copyright Office.
- Coed Media Group, LLC (CMG) operates several popular culture, sports, and entertainment websites that generate revenue primarily by selling advertising space.
- Between 2014 and March 2016, CMG posted twelve of Plaintiffs' copyrighted images (the 'Images') on its websites without obtaining licensing or authorization.
- CMG used the Images in various contexts, including cropping them for rectangular banner photographs with added text (e.g., 'Daily Dump'), using them as thumbnails, and displaying them in full to accompany articles about the subjects or related topics.
- In May 2015, CMG received a cease-and-desist letter from FameFlynet regarding CMG's use of several of the Images.
- CMG's then-President, Bryant Jackson, contacted FameFlynet's head of sales, Justin Smith, to discuss the letter and explore a potential subscription licensing package; Smith allegedly told Jackson 'not to worry' about the FameFlynet Images depicted in the letter.
- The parties' proposed subscription licensing arrangement for future use was never finalized.
- CMG subsequently deleted the Images specifically referenced in the cease-and-desist letter, as well as other content, from its websites in August 2015.
Procedural Posture:
- Barcroft Media, Ltd. and FameFlynet, Inc. (Plaintiffs) filed a lawsuit against Coed Media Group, LLC (CMG) in the United States District Court for the Southern District of New York on September 29, 2016, alleging copyright infringement.
- CMG conceded ownership of the copyrights and unauthorized use of the images but asserted affirmative defenses of waiver and fair use.
- The United States District Court for the Southern District of New York held a one-day bench trial on Plaintiffs' infringement claims and CMG's asserted defenses.
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Issue:
Does a commercial media group's unauthorized display of copyrighted celebrity and human interest photographs constitute fair use under the Copyright Act, or were the copyright owners' infringement claims waived through negotiation attempts?
Opinions:
Majority - Jesse M. Furman
No, Coed Media Group's (CMG) unauthorized display of the images did not constitute fair use, nor did FameFlynet waive its infringement claims. The court first rejected CMG's waiver defense, finding that Justin Smith's alleged 'not to worry' comment did not satisfy the legal standard for waiver, which requires an intentional relinquishment of a known right with full knowledge and explicit intent. Smith was not fully aware of the cease-and-desist letter's contents, and the subsequent negotiations for a licensing agreement indicated both parties understood that CMG would need to pay for future use, contradicting any intent to waive rights or grant an implied license. Next, the court analyzed CMG's fair use defense using the four statutory factors: (1) Purpose and Character of the Use: This factor weighed strongly against CMG. The court found CMG's use was not transformative because the images were displayed for the same purpose as their original creation—to document celebrities, illustrate gossip, and accompany news—without adding new expression, meaning, or message to the images themselves. CMG's articles commented on the subjects of the photographs, not the photographs as works of art. The addition of generic text like 'Daily Dump' or using images as thumbnails was not transformative. Furthermore, the use was commercial, aimed at generating advertising revenue by attracting traffic, regardless of CMG's overall profitability. (2) Nature of the Copyrighted Work: This factor weighed only slightly in CMG's favor. While the images were primarily factual (paparazzi photos of public figures) rather than highly creative or fictional, which generally makes fair use easier to establish, the court noted that photography still involves skill and expressive merit. CMG's own use of these factual works was also commercial and non-creative, diminishing the significance of this factor. (3) Amount and Substantiality of the Portion Used: This factor weighed against CMG. CMG used all or most of each original image, often focusing on the most 'attention-grabbing' portions. Given the non-transformative nature of CMG's use, the substantial quantitative and qualitative amount of the copyrighted material taken was deemed unreasonable. (4) Effect of the Use Upon the Potential Market: This factor also weighed heavily against CMG. By displaying the images for the very purpose for which they were originally intended, CMG's use directly 'usurped' the market for the original works. The court reasoned that if CMG's practice of using such images without licensing became widespread, the market for Plaintiffs' works would significantly diminish, as there would be little incentive for other websites to pay for licenses. Considering all factors together, the court concluded that CMG's use was not fair. The court granted a permanent injunction prohibiting CMG from further infringement and awarded Plaintiffs $255 in actual damages for the Bynes Images (not timely registered for statutory damages) and $10,625 in statutory damages for the other ten Images, totaling $10,880. The court deferred a decision on attorney's fees.
Analysis:
This case provides crucial guidance on the application of the fair use doctrine in the context of commercial online media. It reinforces that using copyrighted photographs merely as illustrative aids for content about the photograph's subject, without adding new meaning or commentary on the image itself, will generally not be considered transformative. The ruling clarifies that the commercial nature of a use is determined by whether the user seeks to profit from the exploitation of the copyrighted material, not by the overall financial success of the infringer's business. For content creators and publishers, the case underscores the importance of securing licenses for images, particularly when the use directly competes with or supplants the primary market for the original work, even if the images are considered 'factual' paparazzi shots.
