In Copyright Case Over Photos, the Second Circuit Brings Four Critical Issues into Focus

The Second Circuit’s recent decision in Sohm v. Scholastic Inc., clarified four significant copyright issues.  First, the court held that where images have been licensed, the copyright owner bears the burden of proving that the licensee’s use of the images was outside the scope of the license.  Second, it rejected the licensee’s argument that the Supreme Court had eliminated the “discovery rule”—under which the Copyright Act’s three-year statute of limitations does not start to run until the copyright owner discovers (or should have discovered) the infringement—in a 2014 decision, Petrella v. MGM.  Third, it held that the Copyright Act limits damages to the three years prior to when an infringement action is filed.  And fourth, it held that the registration of a compilation of photos by someone who holds the rights to the individual photos that make up the compilation effectively registers each of the individual photos.

Joseph Sohm is a professional photographer and author of the 89 photos involved in the case.  Sohm entered into an agreement with Continuum Productions Corp. (“Corbis”), under which Corbis would register Sohm’s photos with the Copyright Office.  Sohm temporarily assigned his rights in the 89 photos to Corbis for registration purposes, and Corbis then registered the photos with the Copyright Office, after which it reassigned the copyrights and registrations to Sohm.  Rather than registering each photo separately Corbis registered them as part of several published group registrations.  And Corbis did that in its own name, without identifying Sohm as being the “author” of the photos (i.e., the person who took them). 

Sohm and Corbis also entered into an agreement under which Corbis would license Sohm’s photos to third parties on Sohm’s behalf.  One of the third parties to whom Corbis licensed Sohm’s photos was Scholastic, a publisher and distributor of children’s books.  Corbis entered into a license agreement with Scholastic that established fees for printing a certain number of Sohm’s photos.  But when Sohm later learned that Scholastic had printed more than the number of photos allowed under the license, he sued Scholastic for copyright infringement.

In the district court, the parties each moved for partial summary judgment on a variety of issues, but neither was completely successful.  Specifically, the court granted in part and denied in part each motion, and it determined that Scholastic infringed Sohm’s copyright on six of the photos but dismissed all of Sohm’s other claims.  Both parties appealed.

At the outset, the Second Circuit affirmed that the burden was on Sohm to demonstrate Scholastic’s use of his images outside the scope of the license.  The court noted that in a copyright infringement case, the plaintiff must ordinarily show (1) ownership of a valid copyright, and (2) unauthorized copying of the copyrighted work.  And where the case involves a license, the burden shifts to the alleged infringer to prove the existence of a license to engage in the challenged copying.  The court held, however,that when the dispute concerns the license’s scope, rather than its existence, the burden shifts back to the copyright owner to prove that the copying was not authorized by the license.  Accordingly, because it was undisputed both that Sohm owned the copyrights and that they had been licensed to Scholastic, the court held that Sohm bore the burden of proving “unauthorized copying” by Scholastic.

The court then rejected Scholastic’s argument that because the discovery rule had been cast into doubt, if not abolished, by the Supreme Court in Petrella, the Second Circuit should no longer apply the rule and should instead apply the “injury rule”—under which the statute of limitations runs from the date of injury rather than the date of discovery.  Indeed, the court said that “Petrella specifically noted that it was not passing on the question of the discovery rule” (and also “reaffirmed that position” in a subsequent case).  Accordingly, while the court noted that “some language in Petrella is perhaps consistent with the injury rule,” it also noted that the Second Circuit’s binding precedent regarding the discovery rule had not been overruled, “either expressly or implicitly.”  As a result, the court held, it was required to continue to apply the discovery rule. 

Further, the court affirmed the district court’s application of the discovery rule in determining when Sohm’s copyright infringement claims accrued.  The court found that Scholastic had failed to identify any facts that would have prompted Sohm to examine, at an earlier time, whether Scholastic had exceeded the copying limits allowed under its license.  And without having identified those facts, the court observed, Scholastic could not “rely on the passage of time alone to establish that Sohm should have discovered the alleged copyright infringements at issue in this case.”  Consequently, the court held that Scholastic had not shown that Sohm’s claims were barred by the Copyright Act’s statute of limitations, but it limited Sohm’s damages to the three years prior to when he brought suit.

Finally, on the issue of whether Corbis’s registration of collections of works operated to register the individual photographs that made up the collections, including Sohm’s, the Second Circuit recognized a difference of opinion among the courts.  Specifically, it noted that at least one district court (Muench v. Houghton Mifflin, in the Southern District of New York) had held that the author of each individual photo must be identified to register those photos. But it said that it agreed with the courts on the other side of this issue, including the Ninth Circuit and the district court in this case, which had held that this was not necessary.  Accordingly, finding that what needs to be provided is the “author” of the “work,” and that the statute defines a “collective work” as a type of “work,” the court held that because Corbis listed itself as the author of each collection, the district court had properly determined that each of the underlying photos was validly registered.

The case is Sohm v. Scholastic Inc., Nos. 18-2110, 18-2245 (2d Cir. May 12, 2020).