12-4874-cv(L) Psihoyos v. John Wiley & Sons, Inc.

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UNITEDSTATESCOURTOFAPPEALS FORTHESECONDCIRCUIT AugustTerm,2013 Decided:April4,2014)

(Argued:October31,2013

DocketNos.124874cv(L),125069cv(XAP) X LOUISPSIHOYOS, PlaintiffAppelleeCrossAppellant, v. JOHNWILEY&SONS,INC., DefendantAppellantCrossAppellee. X Before:WALKER,CABRANES,andLOHIER,CircuitJudges. PhotographerLouisPsihoyossuedpublisherJohnWiley&Sons,Inc. (Wiley)forcopyrightinfringementbasedonWileyspublicationof textbookscontainingPsihoyossphotographs.TheUnitedStatesDistrict CourtfortheSouthernDistrictofNewYork(Rakoff,J.)determinedthatthe applicablethreeyearstatuteoflimitationsbarrednoneofPsihoyoss infringementclaimsbecausePsihoyos,exercisingreasonablediligence,did notdiscovertheinfringementsuntilfewerthanthreeyearspriortobringing suit.TheDistrictCourtnonethelessgrantedWileysmotionforsummary judgmentastoseveraloftheinfringementclaimsonthegroundthat PsihoyoshadfailedtoregistertherelevantphotographswiththeCopyright

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Officepriortoinstitutingsuitasrequiredby17U.S.C.411(a).Afterajury trialinwhichthejuryawardedstatutorydamagesconcerningthreeofthe remainingphotographs,theDistrictCourt(Oetken,J.)deniedWileysmotion forremittituror,inthealternative,foranewtrial.WeAFFIRM. KEVINP.MCCULLOCH(DanialNelson, onthebrief),Nelson&McCullochLLP, NewYork,NY,forPlaintiffAppellee CrossAppellant. CHRISTOPHERPERRYBEALL(Robert Penchina,onthebrief),LevineSullivan Koch&Schulz,LLP,NewYork,NY,for DefendantAppellantCrossAppellee. LOHIER,CircuitJudge: PhotographerLouisPsihoyossuedpublisherJohnWiley&Sons,Inc. (Wiley)forcopyrightinfringementundertheCopyrightActof1976,17 U.S.C.101etseq.,basedonWileyspublicationoftextbookscontaining eightofPsihoyossphotographs.AlthoughtheUnitedStatesDistrictCourt fortheSouthernDistrictofNewYork(Rakoff,J.)determinedthatthe applicablethreeyearstatuteoflimitationsbarrednoneofPsihoyoss infringementclaims,itnonethelessgrantedWileysmotionforsummary judgmentastoseveralofthoseclaims,citingPsihoyossfailuretoregisterthe relevantworkspriortoinstitutingsuitasrequiredby17U.S.C.411(a).After ajurytrialinwhichthejuryfoundwillfulinfringementandawarded
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statutorydamagesforthreeoftheremainingfourclaims,theDistrictCourt (Oetken,J.)deniedWileysmotionforremittituror,inthealternative,fora newtrial.Weaffirm. BACKGROUND Psihoyos,aprofessionalphotographer,createdeightphotographsthat Wileypublishedinvarioustextbooksfrom2005to2009.InNovember2010 WileysoughtaretroactivelicensingarrangementwithPsihoyosafter discoveringthatithadpublishedinseveraltextbooksandwithoutalicensea pairofPsihoyossphotographsofaStanfordUniversityprofessorholdinga narcolepticdog(theNarcolepticDogphotos).Afterbeingnotifiedofthe unlicensedpublicationofthephotographs,Psihoyosrequestedfulldisclosure ofanyotherunauthorizeduseofPsihoyossphotographsbyWiley.After examiningitsrecords,Wileyrespondedthatithadpublishedwithout permissiononephotographofaTriceratopsskeleton(Triceratopsphoto) andoneofanOviraptorskeleton(Oviraptorphoto),1inadditiontothetwo NarcolepticDogphotos.

Likethebetterknowntriceratops,theoviraptorwasanonaviandinosaur oftendescribedasbirdlikeinitsfeatures.SeeGregoryS.Paul,Dinosaurs oftheAir:TheEvolutionandLossofFlightinDinosaursandBirds21920 (2002).

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InMarch2011PsihoyosfiledacomplaintallegingthatWileyhad infringedhiscopyrightineightphotographs,includingtheTriceratopsand Oviraptorphotos,alongwithtwophotographsofanarcolepticdogthat, Psihoyoswouldlaterrealize,weresimilartobutnotthesameasthe NarcolepticDogphotosWileyhadadmittedtousingwithoutauthorization. WerefertothefourremainingphotographsreferencedinPsihoyoss complaintastheDinamation,Gastroliths,FossilizedDinosaurTracks, andTelevisionsphotos. Duringdiscovery,Psihoyosacknowledgedthathisinitialcomplaint failedtorefertothecopyrightsinthetwoNarcolepticDogphotosthatWiley hadactuallyinfringedandmistakenlyreferredinsteadtothecopyrightsin twoother,similarphotographs.However,hedidnotthenmoveforleaveto amendthecomplainttocorrecttheerror. InAugust2011,afterdiscoverywascomplete,Wileymovedfor summaryjudgmentontwogrounds.First,WileyarguedthattheCopyright ActsthreeyearstatuteoflimitationsbarredmanyofPsihoyossinfringement claims,whicharosefrominfringementsthatoccurredoverthreeyearsprior tosuit.See17U.S.C.507(b).Second,asrelevanthere,Wileyarguedthat

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PsihoyoshadfailedtoregisterthetwoNarcolepticDogphotosandthe DinamationphotowiththeCopyrightOfficepriortofilingsuit.See17U.S.C. 411(a). TwodaysafterWileyfileditssummaryjudgmentbrief,Psihoyos finallymovedforleavetoamendhiscomplainttoallegeinfringementofthe copyrightinthecorrecttwoNarcolepticDogphotos.Tendayslater, PsihoyossubmittedapplicationsforcopyrightregistrationoftheNarcoleptic Dogphotos,aswellastheDinamationphoto. TheDistrictCourtgrantedPsihoyossmotionforleavetoamendthe complaintonlyforthepurposeofcorrectingscrivenerserrors,notforthe purposeofspecifyingthecorrectNarcolepticDogphotosoradding informationaboutthenewlyfiledapplicationsfortheNarcolepticDogphotos andtheDinamationphoto.InexplainingitspartialdenialofPsihoyoss motionforleavetoamend,theDistrictCourtemphasizedPsihoyoss significantdelayinrequestingleavetoamendandinsubmittingapplications forregistrationoftherelevantphotographs,aswellastheprejudicetoWiley ifthemotionweregrantedatsuchalatestageinthelitigation.

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TheDistrictCourtthenturnedtoWileysargumentsforsummary judgment.First,itheldthatcopyrightinfringementclaimsaccrueupon actualorconstructivediscoveryofinfringementandthatPsihoyosdidnot discovertheinfringementsuntil2010,wellwithinthreeyearsoffilingsuit. Second,theDistrictCourtconcludedthatPsihoyosspendingcopyright registrationapplicationsfortheNarcolepticDogandDinamationphotos failedtosatisfytheActsregistrationrequirementunder411(a). Accordingly,thecourtgrantedpartialsummaryjudgmentinWileysfavoras totheinfringementclaimsrelatingtotheNarcolepticDog,Televisionsand Dinamationphotos,leavingfourinfringementclaimsfortrial.2 AftertrialonPsihoyossremainingfourclaims,thejuryfoundno infringementoftheGastrolithsphoto,nonwillfulinfringementofthe FossilizedDinosaurTracksphoto,resultinginanawardof$750indamages, andwillfulinfringementoftheOviraptorandTriceratopsphotos,resultingin anawardof$30,000and$100,000indamages,respectively.Arguing

PsihoyosdoesnotchallengeonappealtheDistrictCourtsgrantofsummary judgmentastohisclaimrelatingtotheTelevisionsphoto.Thefour remainingclaimsrelatetotheOviraptor,Triceratops,Gastrolithsand FossilizedDinosaurTracksphotos.

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primarilythatthejurysawardwasexcessive,Wileymovedforremittituror, inthealternative,anewtrial.TheDistrictCourtdeniedthemotion. WileyappealedtheDistrictCourtspartialdenialofsummary judgmentaswellasthedenialofitsmotionforremittituroranewtrial. PsihoyoscrossappealedtheDistrictCourtspartialgrantofsummary judgmentinWileysfavorinconnectionwiththeNarcolepticDogand Dinamationphotos. DISCUSSION WeaddressfirsttheissuesrelatingtotheDistrictCourtspartialdenial

andpartialgrantofsummaryjudgmentandsecondWileysappealrelatingto damages. 1. SummaryJudgment WereviewdenovotheDistrictCourtspartialgrantandpartialdenial ofsummaryjudgment.Doningerv.Niehoff,642F.3d334,344(2dCir.2011). Summaryjudgmentisproperonlywhen,construingtheevidenceinthelight mostfavorabletothenonmovant,thereisnogenuinedisputeastoany materialfactandthemovantisentitledtojudgmentasamatteroflaw.Fed. R.Civ.P.56(a).

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a. AccrualofCopyrightInfringementClaims Civilactionsforcopyrightinfringementmustbecommencedwithin threeyearsaftertheclaimaccrued.17U.S.C.507(b).TheDistrictCourt heldthataninfringementclaimdoesnotaccrueuntilthecopyrightholder discovers,orwithduediligenceshouldhavediscovered,theinfringement (thesocalleddiscoveryrule).Thereisnodisputethatunderthediscovery rulenoneofPsihoyossclaimsaretimebarred. ThisCircuithaspreviouslyemployedadiscoveryruleforcopyright claimsunder17U.S.C.507(b).SeeMerchantv.Levy,92F.3d51,56(2dCir. 1996);Stonev.Williams,970F.2d1043,1048(2dCir.1992).Wileystrivesto distinguishthecasesinwhichwehavedonesoonthegroundthatthey involvedcoownershipclaims.WerejectWileyssuggestionthatweapply differentaccrualrulesforownershipandinfringementclaims,bothofwhich aregovernedby17U.S.C.507(b).Indoingso,wejoineveryCircuittohave consideredtheissueofclaimaccrualinthecontextofinfringementclaims.3

SeeDiverseyv.Schmidly,738F.3d1196,120001(10thCir.2013);WilliamA. GrahamCo.v.Haughey,568F.3d425,43337(3dCir.2009);Warren FreedenfeldAssocs.,Inc.v.McTigue,531F.3d38,4446(1stCir.2008); ComcastofIllinoisv.MultiVisionElecs.,Inc.,491F.3d938,944(8thCir. 2007);RogerMillerMusic,Inc.v.Sony/ATVPublg,LLC,477F.3d383,390 (6thCir.2007);PolarBearProds.,Inc.v.TimexCorp.,384F.3d700,70507

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Inurgingustoadoptaninjuryruleinstead,WileyreliesonTRWInc. v.Andrews,534U.S.19(2001).4InTRW,theSupremeCourtheldthatthe textandstructureof[theFairCreditReportingAct(FCRA)]evince Congressintenttoprecludejudicialimplicationofadiscoveryrulefor FCRAclaims.Id.at28.ObservingthattheFCRAprovidesthatthestatute oflimitationsrunsfromthedateonwhichtheliabilityarises,subjecttoa single[statutory]exception,theCourtconcludedthatthemostnatural readingof[theFCRA]isthatCongressimplicitlyexcludedageneral discoveryrulebyexplicitlyincludingamorelimitedone.Id.(quoting15 U.S.C.1681p).TheCourtthereforereversedadecisionoftheNinthCircuit, whichhademployedthediscoveryruleasadefaultunlessCongresshas expresslylegislatedotherwise.Id.at27(quotingAndrewsv.TRWInc.,225 F.3d1063,1067(9thCir.2000)). WeagreewithoursisterCircuitsthatthetextandstructureofthe CopyrightAct,unliketheFCRA,evinceCongresssintenttoemploythe

(9thCir.2004);Gaimanv.McFarlane,360F.3d644,653(7thCir.2004);Lyons Pship,L.P.v.MorrisCostumes,Inc.,243F.3d789,796(4thCir.2001). 4SeeAuscapeIntlv.NatlGeographicSocy,409F.Supp.2d235,244 (S.D.N.Y.2004)(holdingthatTRWsreasoningsupportsapplicationofan injuryruleforclaimaccrualundertheCopyrightAct).

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discoveryrule,nottheinjuryrule.5Policyconsiderationsalsocounselin favorofthediscoveryruleinthiscontext.SeeWilliamA.GrahamCo.v. Haughey,568F.3d425,43437(3dCir.2009)([U]seofthediscoveryrule comportswiththetext,structure,legislativehistoryandunderlyingpolicies oftheCopyrightAct).Forsubstantiallythereasonsarticulatedbyother CircuitsthathavegrappledwiththisissueafterTRWwasdecided,seesupra note3,weconcludethatcopyrightinfringementclaimsdonotaccrueuntil actualorconstructivediscoveryoftherelevantinfringementandthatthe ActsstatuteoflimitationsdidnotbaranyofPsihoyossinfringementclaims. b. CopyrightRegistrationPriortoInstitutionofSuit Under411(a)oftheAct,nocivilactionforinfringementofthe copyrightinanyUnitedStatesworkshallbeinstituteduntilpreregistrationor registrationofthecopyrightclaimhasbeenmadeinaccordancewiththe Act.617U.S.C.411(a).TheDistrictCourtheldthatPsihoyosspending

ItisforthesereasonsthatweconcludethattheSupremeCourtsdecisionin Gabelliv.S.E.C.,whichheld,inthereadilydistinguishablecontextof securitieslaw,thatthestandardruleisthataclaimaccrueswhenthe plaintiffhasacompleteandpresentcauseofaction,133S.Ct.1216,1220 (2013),doesnotbarapplicationofthediscoveryrulewhereprecedent, structureandpolicyallfavorsucharule. 6Preregistrationisnotatissueinthisappeal.

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applicationsforregistrationoftheNarcolepticDogandDinamationphotos failedtosatisfy411(a)sregistrationrequirement.Onappeal,Psihoyos countersthatthemereactofsubmittinganapplicationtotheCopyright Officesatisfies411(a)sregistrationrequirement. Asbothpartiesacknowledge,theFederalCourtsofAppealsare dividedoverwhetherapendingapplicationsatisfies411(a)srequirementof copyrightregistrationasapreconditiontoinstitutinganinfringementaction.7 CompareAppleBarrelProds.,Inc.v.Beard,730F.2d384,38687(5thCir. 1984)(CopyrightOfficesreceiptofapplicationsuffices),withM.G.B.Homes, Inc.v.AmeronHomes,Inc.,903F.2d1486,148889(11thCir.1990)(approving districtcourtsdecisiontoallowsuittoproceedonlyafterplaintiffreceived CopyrightOfficesresponsetoregistrationapplicationandamendedthe complaint),Gaimanv.McFarlane,360F.3d644,655(7thCir.2004)([A]n applicationtoregistermustbefiled,andeithergrantedorrefused,beforesuit canbebrought),andLaResolanaArchitects,PAv.ClayRealtorsAngelFire, 416F.3d1195,120205(10thCir.2005)(comparingtheFifthCircuits

Under17U.S.C.411(a),thecopyrightholdermaybringsuitevenifthe CopyrightOfficedeterminesthattheworkisnotcopyrightable,sowhatever registrationmeansforpurposesof411(a),itdoesnotrequireafindingof copyrightabilitybytheCopyrightOffice.

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applicationapproachwiththeEleventhCircuitsregistrationapproach andadoptingthelatter)abrogatedonothergroundsbyReedElsevier,Inc.v. Muchnick,559U.S.154(2010).Weneednotresolvethedisputeorotherwise embroilourselvesinthiscircuitsplitbecause,evenassumingarguendothata pendingapplicationconstitutesaregistrationunder411(a),Psihoyoshad notevenfiledtheapplicationsforregistrationoftherelevantworkspriorto institutingtheactionclaiminginfringementofthecopyrightintheseworks, asrequiredbytheplaintermsofthestatute.See17U.S.C.411(a)([N]o civilactionforinfringementofthecopyright...shallbeinstituteduntil preregistrationorregistrationofthecopyrightclaimhasbeenmade). Instead,Psihoyossubmittedtheapplicationsafterdiscoveryhadclosedand Wileyhadfileditssummaryjudgmentbrief.Accordingly,hefailedtosatisfy thepreconditionstosuitunder411(a). Inanefforttoclearthishurdle,PsihoyosarguesthattheDistrictCourt shouldhaveallowedhimtoamendhiscomplainttoassertclaimsrelatedto hisapplicationsforcopyrightregistrationofboththecorrectNarcolepticDog photosandtheDinamationphotooncetheseapplicationswerefiled. AppelleesBr.65.Psihoyossuggeststhathewouldthenhavesatisfied

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411(a)srequirementofregistrationpriortotheinstitutionofsuitregarding thosephotographs.Thisargumentignoresthewidediscretionweaccord districtcourtsinchoosingtograntordenyleavetoamend.AstheDistrict Courtpointedout,[a]lthoughliberalamendmentsareallowedinthetypical case,thisisnotatypicalcase.JointAppx859(citationomitted).The DistrictCourtexplaineditsreasoningasfollows: Plaintiffandhiscounselhavebeenonnoticesincetheoutsetofthis casethatplaintiffhadtoproduceregistrationnumbersforthe photographsatissue.NotonlydidtheCourtsoinstructplaintiffatthe earlyincourthearing...,butplaintiffandhiscounselwereputon noticeevenearlierwhen,...inanotherofplaintiffscopyright infringementcasesalsooriginallybeforethisCourt,theCourtordered plaintiff,onpainofcontempt,toproduceregistrationnumbers correspondingtothephotographspleadedinthatcomplaint.Thus, eventhoughplaintiffwasputonnoticeofthisissuelastyear,hewaited untilafterthecloseofalldiscoveryinthiscase...andafterdefendant hadfileditsmotionforsummaryjudgment...toevensubmit applicationstotheCopyrightOfficeforhisunregistered photographs....Now,necessary(andextensive)newdiscovery... wouldberequired....Toallowamendmentherewouldprejudice defendantwithbothsignificantdelayandexpenseassociatedwith further,belateddiscoveryontheseissues. JointAppx85961(citationsandquotationmarksomitted)(emphasesin original).Forsubstantiallythesereasons,weconcludethattheDistrictCourt actedwithinitsdiscretioninpartiallydenyingPsihoyosleavetoamendhis

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complaint.SeeLongmanv.WachoviaBank,N.A.,702F.3d148,15152(2d Cir.2012). Accordingly,weaffirmtheDistrictCourtsgrantofsummaryjudgment dismissingPsihoyossclaimsrelatingtotheNarcolepticDogandDinamation photos. 2. StatutoryDamages WereviewforabuseofdiscretiontheDistrictCourtsdenialofWileys motionforremittituroranewtrial.SeeInreMethylTertiaryButylEther (MTBE)ProductsLiabilityLitigation,725F.3d65,112n.34(2dCir.2013). Wherethecopyrightownersustainstheburdenofproving,andthecourt finds,thatinfringementwascommittedwillfully,thecourtinitsdiscretion mayincreasetheawardofstatutorydamagestoasumofnotmorethan $150,000.17U.S.C.504(c)(2).ThejuryfoundthatWileyhadwillfully infringedPsihoyosscopyrightintheTriceratopsandOviraptorphotosand awardedPsihoyos$100,000and$30,000,respectively.8 Wileydoesnotcontestthejurysfindingofwillfulinfringementand concedesthatthejurysawardofstatutorydamageswasnotagainstthe

ThesearetheonlydamagesawardsthatWileychallengesonappeal.
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weightoftheevidenceundertheinstructionsgiventothejury.9Rather, WileycontendsthattheDistrictCourterredbyfailingtoconsiderwhether thestatutorydamagesawardisreasonablyrelatedtotheprovenamountof plaintiffsactuallossandcomplainsthatthejurysawardbearsnorational relationshiptotheplaintiffsactuallossandisanepitomeofarunaway award.AppellantsReplyBr.50. Wehaveheldthatdistrictcourtsemployingtheirwidediscretion... insettingtheamountofstatutorydamagesshouldconsider: (1)theinfringersstateofmind;(2)theexpensessaved,andprofits earned,bytheinfringer;(3)therevenuelostbythecopyrightholder;(4) thedeterrenteffectontheinfringerandthirdparties;(5)theinfringers cooperationinprovidingevidenceconcerningthevalueofthe infringingmaterial;and(6)theconductandattitudeoftheparties. Bryantv.MediaRightProds.,Inc.,603F.3d135,14344(2dCir.2010) (quotationmarksomitted).Althoughrevenuelostisonefactortoconsider, wehavenotheldthattheremustbeadirectcorrelationbetweenstatutory damagesandactualdamages.Tosuggestotherwiseistoignorethevarious otherfactorsacourtmayconsiderandthepurposesofstatutorydamagesin thewillfulinfringementcontext. InsofarasWileyalsocomplainsaboutthejuryinstructionsrelatingto damages,weconcludethatWileyforfeiteditsobjectionbynotraisingitinthe DistrictCourt.
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TheDistrictCourtconcludedthatseveraloftherelevantfactorscould

explainthejurysawardbasedontheevidenceadducedattrialin particular,theevidencesupportedafindingofwillfulnessandthatWiley earnedsubstantialprofits,andthejurymayhaveviewedWileyasarepeat infringerinneedofdeterrence. Insum,wediscernnoerrorintheDistrictCourtsdenialofWileys motionforremittituroranewtrial.TheDistrictCourtdidnotabuseits discretioninrefusingtoalterthejurysawardofstatutorydamages. CONCLUSION Fortheforegoingreasons,thejudgmentoftheDistrictCourtis

AFFIRMED.

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