NEW YORK – Much of the time, the moral of the story in cautionary tales you about copyright litigation is one aimed at prospective defendants. In the context of the online adult industry, for example, site operators must exercise caution when using images created by third parties, lest they find themselves in court defending a claim of copyright infringement.
Perhaps less common are cautionary tales aimed at potential plaintiffs in copyright complaints, in part because as the undisputed rightsholder to the work(s) at issue, you’re generally presumed to be in the stronger legal position from the start.
As the recently-dismissed complaint filed by Zuma Press (and other plaintiffs) against Getty Images demonstrates, however, there are circumstances in which the rightsholder essentially can be determined to be at fault for the infringement alleged in its own complaint – resulting in a potentially expensive, largely self-inflicted wound.
The facts which led U.S. District Judge Alvin K. Hellerstein to enter summary judgment in favor of Getty are somewhat complicated. but boil down to Zuma not paying enough attention to its own licensing agreements.
As Hellerstein put it in his own summary of the facts of the case, the “story begins in 2010, when Zuma entered into a ‘Representation Agreement’ with an image licensing company called Corbis, which granted Corbis the right to distribute Zuma’s images in exchange for partial remittal of royalties received.”
Zuma came to learn that Corbis remitted royalties to Zuma at a rate of 40%, while it had a contract with NewSport, another company that owned a large portfolio of images, in which the remittal rate was 50%.
“At some point, and in order to receive higher royalty payments, Zuma decided to submit images through NewSport’s FTP,” Hellerstein explained in his decision. “Zuma hired Les Walker, the president of NewSport, as an independent contractor on September 26, 2011 and, to take advantage of NewSport’s higher remittal rate, Zuma began feeding images through NewSport’s FTP.”
All of this would have been fine, except as the judge notes, through “this scheme and Redirection Agreement, Zuma thus mixed its images into a collection otherwise associated with Walker and NewSport.”
Without getting deep into the details of everything that transpired between September 2011 and August 2016 (when Zuma filed its lawsuit), Zuma stopped using NewSport’s FTP in April 2012 and Walker resigned from Zuma in January 2013.
“Knowing that many of its images were still associated with the NewSport contract, Zuma requested that Walker speak with Corbis’s Seth Greenberg to switch the images back to the Zuma account,” Hellerstein writes, noting later in his summary that “no written consent was ever provided by Walker to Corbis. The Accused Images therefore remained as part of the NewSport collection.”
“In January of 2016, Corbis sold its image portfolio to Unity Glory, which in turn, through an affiliate, entered into an agreement with Getty, permitting Getty to distribute the portfolio in the United States,” Hellerstein adds. “After acquiring the rights to Corbis’ database, Getty reached out to Les Walker, as the authorized representative of NewSport, and, on April 4, 2016, entered into a licensing agreement with Walker.”
The problem, of course, was the Zuma-owner images which had been mixed into the NewSport/Walker collection were then imported into Getty’s database of images the company believed it had a license to use, by way of its contract with NewSport and Walker and its agreement with Unity Glory.
The whole confusing story might have ended without going to court, had Zuma not decided it needed more satisfaction than Getty simply removing the “accused images” upon being informed it was displaying such. That Getty did promptly remove the images is not in dispute, as Hellerstein notes in his decision.
“Shortly after the Walker-Getty agreement was signed and after the NewSport collection began to go live, Zuma discovered and notified Getty that many of Zuma’s images were on Getty’s website and were being offered for commercial license and use,” Hellerstein observes. “The next day, Getty removed 26,000 images that had references to Zuma in the free-script captions, and initiated an investigation. Getty confirmed with Zuma on May 19 that all images referencing Zuma had been removed. The migration of Corbis photos was on a rolling basis, and on May 24, Getty discovered additional photos with references to Zuma associated with Corbis Contract #9995. Getty promptly removed them as well.”
By way of analogy, this whole case is a bit like if an adult studio were to enter into a licensing agreement with a streaming service which leases feeds to third-party websites, mix its own content with that of another producer in the process, later terminate the licensing agreement with the streaming provider, then sue one of the third-party websites which leases content from the streaming service.
This hypothetical may sound unlikely on its face, but with the occasionally unclear relationships between adult directors and the studios they shoot for, it’s not a far-fetched scenario. All it would take is for a studio to get careless in how it handles its licensing agreements (or, to make things even more complicated, fail to make explicit the fact an outside director was contracted on a “work for hire” basis) and the seeds for such confusion could be quickly and accidentally sewn.
The cautionary tale here isn’t just that Zuma lost the case and likely spent a lot of money to do so. Two weeks after Hellerstein dismissed the case, Getty filed its application for attorneys’ fees and costs in the case – in which it asks the judge to award $2,868,785.
It remains to be seen whether Hellerstein grants Getty’s fees and costs request in full, denies it, or takes a red pen to Getty’s request and reduces it.
What isn’t in doubt is how the judge feels about Zuma’s self-imposed predicament.
“Zuma has nobody to blame but itself for how Getty came to possess these images,” Hellerstein writes. “Zuma comingled its images with the collection of Les Walker in 2011, and Getty later purchased the rights to Walker’s collection. Getty did not know, and could not reasonably have been expected to know, that, in displaying Walker’s collection, it was also displaying images originating from photographs Zuma represented.”
