Glen Friedman v. Live Nation Merchandise , 833 F.3d 1180 ( 2016 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
GLEN E. FRIEDMAN, No. 14-55302
Plaintiff-Appellant,
D.C. No.
v. 2:11-cv-02047-
MWF-VBK
LIVE NATION MERCHANDISE, INC.;
ANTHILL TRADING, LLC; ART.COM,
INC., OPINION
Defendants-Appellees.
Appeal from the United States District Court
for the Central District of California
Michael W. Fitzgerald, District Judge, Presiding
Argued and Submitted February 11, 2016
Pasadena, California
Filed August 18, 2016
Before: Marsha S. Berzon, and John B. Owens, Circuit
Judges, and Algenon L. Marbley,* District Judge.
Opinion by Judge Berzon
*
The Honorable Algenon L. Marbley, United States District Judge for
the Southern District of Ohio, sitting by designation.
2 FRIEDMAN V. LIVE NATION MERCHANDISE
SUMMARY**
Copyright
In a case arising out of a copyright dispute over Live
Nation’s unauthorized use, on t-shirts and a calendar, of
photographs Glen Friedman took of the hip hop group Run-
DMC, the panel (a) reversed the district court’s summary
judgment in favor of Live Nation Merchandise, Inc., on
claims that Live Nation willfully infringed Friedman’s
copyrights and knowingly removed copyright management
information from the images it used, and (b) affirmed the
district court’s ruling on statutory damages.
Live Nation stipulated that it infringed Friedman’s
copyrights. The panel held that the evidence in the record
gave rise to a triable issue of fact as to whether Live Nation’s
infringement was willful, which would make it liable for
additional damages under 17 U.S.C. § 504(c)(2), and that the
district court therefore erred in granting summary judgment
to Live Nation on willfulness.
The panel held that the district court also erred in granting
summary judgment on Friedman’s claim under section
1202(b) of the Digital Millennium Copyright Act regarding
removal of copyright management information. The panel
explained that Friedman could prevail upon a showing that
Live Nation distributed his works with knowledge that
copyright management information had been removed, even
if Live Nation did not remove it. The panel concluded that
**
This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
FRIEDMAN V. LIVE NATION MERCHANDISE 3
evidence in the record creates a triable issue of fact as to
whether Live Nation distributed Friedman’s photographs with
the requisite knowledge.
Affirming the district court’s ruling on statutory damages,
the panel held that Copyright Act Section 504(c)(1)’s
provision of separate statutory damage awards for the
infringement of each work “for which any two or more
infringers are liable jointly and severally” applies only to
parties who have been determined jointly and severally liable
in the course of the liability determinations in the case for the
infringements adjudicated in the action, and that a plaintiff
seeking separate damages awards on the basis of downstream
infringement must join the alleged downstream infringers in
the action and prove their liability for infringement. The
panel concluded that because Friedman did not join any of his
alleged downstream infringers as defendants in this case, the
district court correctly held that he was limited to one award
per work infringed by Live Nation.
COUNSEL
Lorin E. Brennan (argued), Erica Allen Gonzales, and
Douglas A. Linde, The Linde Law Firm, Los Angeles,
California, for Plaintiff-Appellant.
Matthew R. Gershman (argued), Peter Yu, Jr., and Jeff E.
Scott, Greenberg Traurig LLP, Los Angeles, California, for
Defendants-Appellees.
4 FRIEDMAN V. LIVE NATION MERCHANDISE
OPINION
BERZON, Circuit Judge:
This case arises out of a copyright dispute over the use of
photographs Appellant Glen Friedman took of the hip hop
group Run-DMC. Appellee Live Nation Merchandise (“Live
Nation”) stipulated in the district court that it infringed
Friedman’s copyrights when it used his photos without his
authorization on t-shirts and a calendar. Our questions are
whether there is sufficient evidence in the record to permit a
jury to conclude that Live Nation committed willful copyright
infringement, making it liable for additional damages under
17 U.S.C. § 504(c)(2); whether a jury could conclude that
Live Nation knowingly removed copyright management
information (“CMI”) from the photographs in violation of
17 U.S.C. § 1202(b); and whether Friedman can recover
statutory damages awards measured by the number of
retailers who purchased infringing merchandise from Live
Nation, even though Friedman did not join those retailers as
defendants in his suit.
FACTUAL AND PROCEDURAL HISTORY
Glen Friedman is a well-known photographer whose work
focuses on figures from several American subcultures,
including skateboarders, punk rock musicians, and hip hop
artists. His photography has been in gallery exhibitions and
on record covers and has been published widely.
During the 1980s, Friedman took a series of photographs
of the hip hop group Run-DMC. Several of Friedman’s
photographs of the group appeared in a book collecting his
work. In 2005, Friedman granted a license to Sony Music to
FRIEDMAN V. LIVE NATION MERCHANDISE 5
reproduce some of his Run-DMC photographs, accompanied
by information indicating that Friedman owned the
copyrights, on a website. Fans could download the images to
use as computer “wallpapers.” Sony’s license permitted it to
alter the images in some respects — for example, by adding
a green tint, a Run-DMC logo, or a sparkle effect — and was
the only license in which Friedman authorized such
alterations to his photographs.
Live Nation1 is a music merchandising company involved
in the design, manufacture, and sale of apparel and other
products featuring images and logos of various popular music
artists. In developing products, Live Nation typically enters
into written merchandising agreements with music artists in
which the artists retain final approval authority on the design,
development, distribution and sale of merchandise bearing the
artists’ marks and likeness. In practice, Live Nation submits
“Product Approval Forms” to artists asking them to sign off
on the development of products displaying specific images.
Those forms supplied by Live Nation include no reference to
copyrights or other usage restrictions. Live Nation maintains
that artists are “not supposed to” provide approval if they do
not have the rights to the proposed photographs, but points to
no instruction or agreement so stating.
Live Nation also produced “Style Guides” — essentially,
collections of available images of particular artists — to
inform suppliers about images they could contract to use on
merchandise. Like individual products, the Style Guides
1
In addition to Live Nation, three other parties, Art.com, Inc., NMR
Distribution (America) Inc., and Michael Howard, who acted as
“distributors, retailers, licensees, and vendors” are named as defendants
as to Friedman’s copyright claims.
6 FRIEDMAN V. LIVE NATION MERCHANDISE
were first submitted to the artists, who were supposed to “pre-
clear” the images of them included in the Guides. Live
Nation’s Run-DMC Style Guide (“Run-DMC Guide”)
included a number of Friedman’s images. Live Nation sought
and obtained approval from Run-DMC for a 2008 Wall
Calendar that included four of Friedman’s images, and later,
for three t-shirt designs, that included Friedman images
previously featured in the Run-DMC Guide.
After he became aware of Live Nation’s use of his
photographs, Friedman filed a complaint asserting claims for
relief for (1) copyright infringement, under 17 U.S.C. § 101et seq., and (2) removal of copyright management
information (“CMI”), under 17 U.S.C. § 1202. During
discovery, Live Nation propounded a set of contention
interrogatories and requests for admission. The
interrogatories asked Friedman to detail the evidence
supporting his claims, while the requests for admission asked
him to concede that he lacked evidence to support a number
of his assertions. The district court had set April 23 as the
discovery cut-off date. Friedman’s responses were due on
April 19.
Friedman did not respond in time. Instead, on April 20,
Friedman filed objections asserting that each request was
“untimely” because it “requires a response beyond the
discovery cut-off.” Friedman claimed that this was so even
though his responses were due before the discovery cut-off
date as — according to him — the discovery cut-off “is the
date by which all discovery, including all hearings on and any
related motions, is to be completed.” Reasoning that “a
hearing on any discovery motion could not be completed
before” April 23, and because “discovery not completed
before the discovery cut-off date is not enforceable,”
FRIEDMAN V. LIVE NATION MERCHANDISE 7
Friedman maintained that he “was not required to provide any
response to Defendants’ discovery requests.”
After the close of discovery, Friedman moved for
summary judgment on the copyright infringement issue. In
response, Live Nation stipulated to liability for infringement,
and the district court entered partial summary judgment in
Friedman’s favor. Live Nation then moved for partial
summary judgment on Friedman’s CMI claim, and, to the
extent Friedman claimed Live Nation’s infringement was
“committed willfully” under 17 U.S.C. § 504(c)(2), on the
copyright infringement claim. Relying largely on Friedman’s
discovery default, Live Nation argued that Friedman had
produced no evidence whatsoever indicating that Live Nation
had willfully infringed his copyrights or had knowingly
removed CMI from any of the images. In his opposition to
Live Nation’s motion, Friedman requested that the court
permit him to withdraw any deemed admissions under
Federal Rule of Civil Procedure 36(b).
Without referring to deemed admissions or explicitly
ruling on Friedman’s Rule 36(b) request, the district court
granted Live Nation’s motion for partial summary judgment.
On the CMI claim, the court found that “Friedman has
offered no evidence suggesting that Live Nation Merchandise
actually removed CMI from any of his Run-DMC
photographs, much less that it did so knowingly or
intentionally.” As to Friedman’s claim of willful
infringement, the court concluded that “the burden of proof
here rests on Friedman, and it is not clear that he has offered
any evidence that would create an issue of fact for a jury.”
Friedman next filed a revised statement of damages
claiming, “[i]n light of the Court’s Order Granting
8 FRIEDMAN V. LIVE NATION MERCHANDISE
Defendant’s Motion for Summary Judgment, the maximum
statutory damage award” of $3,120,000. Friedman later
explained that this figure was based on records indicating that
Live Nation had distributed one of the t-shirts to 27 retailers,
the other t-shirt to 44 retailers, and the calendar to 33 retailers
for a total of 104 separate statutory damage awards of
$30,000 each. See 17 U.S.C. § 504(c)(1).
The district court rejected this calculation, ruling that
Friedman was “entitled to only one statutory damages award
per infringed work.” Even if Friedman’s calculation of 104
“downstream infringers” were correct, the court held, this
case “involves photographs in a mass-marketing campaign.”
Although a prior Ninth Circuit case, Columbia Pictures
Television v. Krypton Broadcasting of Birmingham, Inc.,
106 F.3d 284 (9th Cir. 1997), rev’d on other grounds sub
nom. Feltner v. Columbia Pictures Television, Inc., 523 U.S.
340 (1998), was “arguably consistent with [Friedman’s]
position if read broadly enough,” the court stated that “there
is nothing in [Columbia Pictures] that suggests its reasoning
should be applied to a mass-marketing campaign such as that
at issue in this case.”
This appeal followed.
DISCUSSION
On appeal, Friedman challenges the district court’s grant
of summary judgment to Live Nation on his willful
infringement and CMI violation claims. He also challenges
the district court’s order limiting his recovery to one statutory
damages award per infringed work.
FRIEDMAN V. LIVE NATION MERCHANDISE 9
I.
“Summary judgment is appropriate only if, taking the
evidence and all reasonable inferences drawn therefrom in the
light most favorable to the non-moving party, there are no
genuine issues of material fact and the moving party is
entitled to judgment as a matter of law.” Torres v. City of
Madera, 648 F.3d 1119, 1123 (9th Cir. 2011) (citing Corales
v. Bennett, 567 F.3d 554, 562 (9th Cir. 2009)). “[T]here is no
issue for trial unless there is sufficient evidence favoring the
nonmoving party for a jury to return a verdict for that party.
If the evidence is merely colorable, or is not significantly
probative, summary judgment may be granted.” McIndoe v.
Huntington Ingalls Inc., 817 F.3d 1170, 1173 (9th Cir. 2016)
(quoting R.W. Beck & Assocs. v. City & Borough of Sitka,
27 F.3d 1475, 1480 n.4 (9th Cir. 1994)). In determining
whether there is sufficient evidence to support a grant of
summary judgment, we “review[] the record as a whole.”
Vander v. U.S. Dep’t of Justice, 268 F.3d 661, 663 (9th Cir.
2001).
Before proceeding to the merits of the grant of summary
judgment, we consider, and reject, a threshold question —
Live Nation’s contention that it is entitled to summary
judgment on the basis of Friedman’s discovery default.2
2
Friedman does not dispute that his objections to the interrogatories and
requests for admission were untimely. Friedman does continue to press
his argument, raised initially in those objections, that Live Nation’s
discovery requests were themselves untimely because they required a
response on April 19, 2012, just four days before the discovery cut-off
date of April 23. Friedman cites no authority for the proposition that a
discovery request with a deadline prior to the discovery cut-off could be
nonetheless untimely. In any case, Friedman waived this objection by
failing timely to raise it. See Fed. R. Civ. P. 33(b)(2); 36(a)(3).
10 FRIEDMAN V. LIVE NATION MERCHANDISE
Friedman’s failure to specify evidence in response to an
interrogatory does not mean that the evidence does not exist
in the record. In both his motion for summary judgment and
his opposition to Live Nation’s motion for partial summary
judgment, Friedman pointed to specific evidence in the record
upon which he relied.
Second, as to any deemed admission due to his failure
timely to respond to the request for admissions, Friedman
made a motion for relief under Federal Rule of Civil
Procedure 36(b), which provides that a court “may permit
withdrawal or amendment [of any deemed admission] if it
would promote the presentation of the merits of the action
and if the court is not persuaded that it would prejudice the
requesting party in maintaining or defending the action on the
merits.” Live Nation’s contention to the contrary
notwithstanding, Conlon v. United States, 474 F.3d 616, 625
(9th Cir. 2007) does not require that a request for relief under
Rule 36(b) be brought in a separate motion. Rather, Conlon
stresses the discretionary nature of relief under Rule 36(b).
Nor does Rule 36(b) mandate that relief from a deemed
admission may be granted only upon a showing of good
cause. As Conlon explained, the two factors listed in the rule
are mandatory, but a district court “may consider other
factors, including whether the moving party can show good
cause for the delay.” Conlon, 474 F.3d at 625 (emphasis
added).
The district court never explicitly ruled on Friedman’s
Rule 36(b) motion, but it necessarily granted it. The court
never stated that Friedman had been deemed to make any
admissions, nor did it rely on any of the requested
admissions. Instead, the court considered the summary
judgment issue on the merits, discussing specific evidence in
FRIEDMAN V. LIVE NATION MERCHANDISE 11
the record and stating, with respect to the request for
admissions dispute, only that Friedman had attempted to
“sidestep[]” discovery. Given this sequence, the district court
necessarily granted, albeit implicitly, Friedman’s request to
withdraw the deemed admissions. It had authority to do so,
to “promote the presentation of the merits of the action” and
because the timing of the request was so late in the discovery
period that Live Nation could not have been prejudiced in its
discovery conduct by the inability to rely on deemed
admissions.
A. Willful Infringement
Under the Copyright Act, the amount of damages a
plaintiff may recover for infringement depends on whether
the infringement was “committed willfully.” 17 U.S.C.
§ 504(c)(2). The copyright owner has the burden of proving
willfulness. Id. “[A] finding of ‘willfulness’ in this context
can be based on either ‘intentional’ behavior, or merely
‘reckless’ behavior.” In re Barboza, 545 F.3d 702, 707 (9th
Cir. 2008) (citations omitted). “To prove ‘willfulness’ under
the Copyright Act, the plaintiff must show (1) that the
defendant was actually aware of the infringing activity, or
(2) that the defendant’s actions were the result of ‘reckless
disregard’ for, or ‘willful blindness’ to, the copyright holder’s
rights.” Louis Vuitton Malletier, S.A. v. Akanoc Sols., Inc.,
658 F.3d 936, 944 (9th Cir. 2011) (quoting Island Software &
Computer Serv., Inc. v. Microsoft Corp., 413 F.3d 257, 263
(2d Cir. 2005)).
A determination of willfulness requires an assessment of
a defendant’s state of mind. “Questions involving a person’s
state of mind . . . are generally factual issues inappropriate for
resolution by summary judgment.” F.T.C. v. Network Servs.
12 FRIEDMAN V. LIVE NATION MERCHANDISE
Depot, Inc., 617 F.3d 1127, 1139 (9th Cir. 2010) (quoting
Braxton-Secret v. A.H. Robins Co., 769 F.2d 528, 531 (9th
Cir. 1985)). Indeed, as the district court noted, Live Nation
was not able to cite any “cases in which a court has granted
summary judgment in favor of a defendant on the issue of
willfulness.”
The district court nonetheless granted summary judgment
to Live Nation on the willfulness issue, concluding that
Friedman had not “offered any evidence that would create an
issue of fact for a jury” regarding Live Nation’s awareness of
or reckless disregard concerning Friedman’s copyright rights.
Not so.
On the current record, a jury could reasonably conclude
that Live Nation’s approval procedures amounted to
recklessness or willful blindness with respect to Friedman’s
intellectual property rights. Live Nation’s Product Approval
Forms say nothing whatsoever about establishing or reporting
on who holds the rights to the images whose use is proposed.
The forms only include fields indicating the manufacturer of
the proposed product, the artist represented, and the suggested
price, along with space for unspecified “comments” by Live
Nation and the artist. From the face of the documents, one
could conclude that they are directed at design decisions, not
the rights to the photographs. Nor do the specific forms
signed by Run-DMC indicate in any way that the group was
clearing the legal right to use the photographs, on their own
behalf or anyone else’s.
In a declaration in support of Live Nation’s summary
judgment motion, one of its employees explained that when
artists did not own the rights to photographs, “they were not
supposed to, and should not, provide their written approval
FRIEDMAN V. LIVE NATION MERCHANDISE 13
. . . to develop merchandise using those photographs.” But
the employee did not say how or when Run-DMC was
apprised of this duty. She asserted only that as an industry
practice “it is generally the responsibility of the music artists’
personal managers to uncover the relevant facts and ascertain
the scope of the music artists’ rights.” Given an approval
process that never explicitly asks about copyrights at all, a
jury could reasonably conclude that Live Nation’s reliance on
the artists who were the subjects of the photographs at issue
to clear photographic rights, rather than on the photographers
who took them — based only on a purported industry practice
never reflected in any document — amounted to recklessness
or willful disregard, and thus willfulness.
That inference is particularly strong in this case. Live
Nation submitted evidence showing that it knew it needed to
take special care with respect to Friedman’s images. In
response to an unrelated request to use certain photographs of
Run-DMC, a Live Nation employee sent an email stressing
that “we do not want to use ANY Glenn Freidman [sic]
Photos for RUN DMC[.] [H]e owns all the rights to his
photos and is really not interested in using them for
[m]erchandise and he is really expensive to even get
clearance for.” This email was sent on March 26, 2009, after
the infringing use of Friedman’s photographs at issue in this
case, but before Friedman brought that infringing use to Live
Nation’s attention on October 21, 2010. Live Nation argues
that this email demonstrates that it took active steps to respect
Friedman’s rights and avoid knowingly using any of his
photos without permission. But a jury could as plausibly
understand it to demonstrate that Live Nation knew there was
a risk that photos of Run-DMC would be Friedman’s photos,
but nonetheless went forward with developing the
14 FRIEDMAN V. LIVE NATION MERCHANDISE
merchandise without taking steps to ascertain whether it
featured Friedman’s work.
We therefore conclude that, drawing all inferences in
Friedman’s favor, the evidence in the record gave rise to a
triable issue of fact as to Live Nation’s willfulness, and we
reverse the district court’s grant of summary judgment.
B. The CMI Violations
Section 1202(b) of the Digital Millennium Copyright Act
prohibits, inter alia, the distribution of works “knowing that
the copyright management information has been removed or
altered without authority of the copyright owner or the law,”
and with knowledge that such distribution “will induce,
enable, facilitate, or conceal” copyright infringement.3
17 U.S.C. § 1202(b). In granting summary judgment on the
CMI claim, the district court again relied on what it described
as “Friedman’s complete failure to adduce competent
evidence in discovery or in opposition to Defendants’
Motion” and concluded that “he has made no factual showing
that Live Nation Merchandise either removed the CMI in
question (the alleged ‘act’) or did so knowingly (the requisite
state of mind).”
We note at the outset that the district court focused on the
wrong question. The statute does prohibit the intentional
removal of CMI. See 17 U.S.C. § 1202(b)(1). But Friedman
could also prevail upon a showing that Live Nation
3
As defined by the statute, “copyright management information” refers
to various types of “information conveyed in connection with copies . . .
of a work,” including the name of the work, the name of the author, and
the name of the copyright holder, among others. 17 U.S.C. § 1202(c).
FRIEDMAN V. LIVE NATION MERCHANDISE 15
distributed his works with the knowledge that CMI had been
removed, even if Live Nation did not remove it. See id.§ 1202(b)(3). The question, therefore, is whether evidence in
the record creates a triable issue of fact as to whether Live
Nation distributed Friedman’s photographs with the requisite
knowledge. We conclude that in the circumstances of this
case, it does.4
As we have previously explained, “[a] moving party
without the ultimate burden of persuasion at trial” — such as
Live Nation in this case — nonetheless “has both the initial
burden of production and the ultimate burden of persuasion
on a motion for summary judgment.” Nissan Fire & Marine
Ins. Co. v. Fritz Companies, Inc., 210 F.3d 1099, 1102 (9th
Cir. 2000) (citations omitted). The moving party may
discharge its initial burden by “show[ing] that the nonmoving
party does not have enough evidence of an essential element
to carry its ultimate burden of persuasion at trial.” Id. But,
“to carry its ultimate burden of persuasion on the motion, the
moving party must persuade the court that there is no genuine
issue of material fact.” Id.Where “a moving party carries its burden of production,
the nonmoving party must produce evidence to support its
claim or defense.” Id. at 1103 (citations omitted). We may
4
In reaching its contrary conclusion, the district court relied on another
case with somewhat analogous facts, quoting it for the proposition that
“Plaintiff asks the Court to simply assume that [Defendants] must have
cropped the [CMI] and must have possessed the requisite intent.” (quoting
William Wade Waller Co. v. Nexstar Broad., Inc., No. 4-10-CV-00764
GTE, 2011 WL 2648584, at *5 (E.D. Ark. July 6, 2011) (alterations in the
district court’s opinion). This reliance was misplaced, as, again, the
statute does not require that Live nation have “cropped” the CMI,
intentionally or otherwise.
16 FRIEDMAN V. LIVE NATION MERCHANDISE
assume that Live Nation carried its initial burden of
production in its motion for partial summary judgment.
Contrary to the district court’s assertion, however, Friedman
did produce evidence supporting his claim. Most
importantly, Friedman produced the images as they appeared
on Live Nation’s merchandise and the same images as they
had appeared on Sony’s website and in his book. In his
motion for summary judgment, he compared them,
demonstrating that there were striking similarities.
For example, some of the photographs used in Live
Nation’s calendar included alterations, such as tint effects and
added logos, that Friedman had authorized only for the Sony
website. Photos that appeared in the Style Guide appeared to
have been scanned from Friedman’s book, as they contained
captions and other layout features that appeared in that source
alone. The images on Live Nation’s products did not include
copyright information that had been present on the earlier
versions.
“[A] ‘striking similarity’ between the works may give rise
to a permissible inference of copying.” Baxter v. MCA, Inc.,
812 F.2d 421, 423 (9th Cir. 1987). Here, the fact that the
photographs used by Live Nation were exact copies of the
images precisely as they appeared on Sony’s website and in
Friedman’s book gives rise to the compelling inference that
Live Nation’s photographs were directly copied from those
sources. Because the only material difference in the Live
Nation versions was that the CMI was missing, it was
necessarily the case that the CMI had been removed on the
copied version.
The only question, then, is whether the evidence as a
whole permits a reasonable inference that Live Nation knew
FRIEDMAN V. LIVE NATION MERCHANDISE 17
of the removal of the CMI. As to this question, a reasonable
jury could certainly conclude that Live Nation had knowledge
that photographs are often copyrighted. Indeed, Live
Nation’s 2009 employee email indicates its awareness that
Friedman himself often held the copyrights to photographs of
Run-DMC. Furthermore, Live Nation has never offered any
explanation of how it came to possess the images. It did,
however, provide the declaration of one of its officers, who
asserted that his “investigation . . . uncovered no evidence
that [Live Nation] ever obtained any of Mr. Friedman’s
claimed photographs of Run-DMC from any website.”
(emphasis added). A jury could draw an adverse inference
from this artfully worded language, which carefully avoids
either an outright denial that Live Nation copied the
photographs knowing that the CMI had been removed or an
explanation as to what the investigation did uncover about the
origin of the photographs.
At bottom, Live Nation’s argument amounts to a claim
that Friedman was required to produce direct evidence of
Live Nation’s knowledge of the CMI removal. That is not the
law. This court has long recognized that “circumstantial
evidence can be used to prove any fact.” United States v.
Ramirez-Rodriquez, 552 F.2d 883, 884 (9th Cir. 1977). We
have noted in particular that whether a party had knowledge
of a particular circumstance “is a question of fact subject to
demonstration in the usual ways, including inference from
circumstantial evidence.” Harrington v. Scribner, 785 F.3d
1299, 1304 (9th Cir. 2015) (quoting Farmer v. Brennan,
511 U.S. 825, 841–42 (1994)). Indeed, whenever state of
mind is at issue, “‘direct proof’ of one’s specific wrongful
intent is ‘rarely available’” and so recourse to circumstantial
evidence is most often necessary. United States v. Dearing,
18 FRIEDMAN V. LIVE NATION MERCHANDISE
504 F.3d 897, 901 (9th Cir. 2007) (quoting United States v.
Marabelles, 724 F.2d 1374, 1379 (9th Cir. 1984)).
Live Nation is wrong, therefore, that the evidence in the
record as a whole is not consistent with a reasonable, if not
particularly strong, inference that Live Nation knew of the
removal of the CMI when it distributed Friedman’s
photographs. Because Friedman had therefore discharged his
burden of production at summary judgment, the burden
shifted back to Live Nation “to carry its ultimate burden of
persuasion” by “persuad[ing] the court that there is no
genuine issue of material fact.” Nissan Fire, 210 F.3d at
1102. It might have done so by providing some explanation
for how it came to possess Friedman’s images — missing
their CMI — in the first place, establishing its lack of
knowledge and negating the inference drawn from the
juxtaposition of the photographs.
We recently employed a similar burden-shifting approach
in another copyright case. In Adobe Systems Inc. v.
Christenson, 809 F.3d 1071, 1079 (9th Cir. 2015), we held
that when a party asserts the first sale affirmative defense, its
burden at summary judgment requires it only to produce
“evidence sufficient for a jury to find lawful acquisition of
title, through purchase or otherwise, to genuine copies of the
copyrighted software.” If the copyright holder asserts that its
acquisition could not have been lawful because “the software
was never sold, only licensed, the burden shifts back to the
copyright holder to establish such a license or the absence of
a sale.” Id. We noted that this rule “accords with . . . our
general precedent that fairness dictates that a litigant ought
not have the burden of proof with respect to facts particularly
within the knowledge of the opposing party.” Id.FRIEDMAN V. LIVE NATION MERCHANDISE 19
So too here. How Live Nation came to possess
Friedman’s photographs — and thus whether it had
knowledge that the CMI had been removed — is a fact
“particularly within” Live Nation’s knowledge. It would be
unfair to burden Friedman at the summary judgment stage
with proving that knowledge with greater specificity than he
did. We therefore reverse the district court’s decision
granting summary judgment to Live Nation on Friedman’s
CMI claim.
II. Statutory Damages
The Copyright Act provides that “the copyright owner
may elect, at any time before final judgment is rendered, to
recover, instead of actual damages and profits, an award of
statutory damages for all infringements involved in the
action, with respect to any one work, for which any one
infringer is liable individually, or for which any two or more
infringers are liable jointly and severally . . . .” 17 U.S.C.
§ 504(c)(1). The number of awards available under this
provision depends not on the number of separate
infringements, but rather on (1) the number of individual
“works” infringed and (2) the number of separate infringers.
See Walt Disney Co. v. Powell, 897 F.2d 565, 569 (D.C. Cir.
1990). The only issue on appeal is the number of infringers.5
5
As to the number of works infringed, the district court said that it was
“not clear” that it could “decide the issue of the number of works on the
current record,” but that “[t]he number of infringed works is likely either
five (the number of Friedman’s photographs that have been infringed) or
two (the number of Friedman’s copyrighted books that have been
infringed).” That ruling is not at issue on appeal.
20 FRIEDMAN V. LIVE NATION MERCHANDISE
We may assume for present purposes that, as Friedman
claims, Live Nation sold infringing merchandise to 104
separate retailers. Our question is whether, applying
Columbia Pictures, Friedman is entitled under the statute to
104 separate awards, because the retailers were each jointly
and severally liable with Live Nation but not collectively
jointly and severally liable for the infringement of any one
work.
In Columbia Pictures, the defendant owned three
television stations — also defendants in the suit — each of
which infringed works owned by the plaintiff. We concluded
that the plaintiff was entitled to separate awards with regard
to each of the three stations, which were “separate
infringers.” 106 F.3d at 294. Looking to the text of Section
504(c)(1), we explained that “when statutory damages are
assessed against one defendant or a group of defendants held
to be jointly and severally liable, each work infringed may
form the basis of only one award, regardless of the number of
separate infringements of that work.” Id. (emphasis added).
On the other hand, Columbia Pictures explained, legislative
history indicated that “where separate infringements for
which two or more defendants are not jointly liable are joined
in the same action, separate awards of statutory damages
would be appropriate.” Id. (emphasis added) (quoting H.R.
Rep. No. 94-1476, 94th Cong., 2d Sess., at 162). Because the
stations were each jointly and severally liable with the
defendant but not with each other, we concluded, the plaintiff
was entitled to three separate awards. Id. at 294–95 & 294
n.7.
A prominent treatise provides a hypothetical (much
discussed by the parties and the lower court) explaining an
analogous situation:
FRIEDMAN V. LIVE NATION MERCHANDISE 21
If each defendant is liable for only one of the
several infringements that are the subject of
the lawsuit, then each defendant will be liable
for a separate set of statutory damages (each
with its own minimum). Suppose, for
example, a single complaint alleges
infringements of the public performance right
in a motion picture against A, B, and C, each
of whom owns and operates her own motion
picture theater, and each of whom, without
authority, publicly performed plaintiff’s
motion picture. If A, B, and C have no
relationship with one another, there is no joint
or several liability as between them, so that
each is liable for at least a minimum $750
statutory damage award. Suppose, further, that
D, without authority, distributed plaintiff’s
motion picture to A, B, and C. Although A, B,
and C are not jointly or severally liable each
with the other, D will be jointly and severally
liable with each of the others. Therefore, three
sets of statutory damages may be awarded, as
to each of which D will be jointly liable for at
least the minimum of $750. However, D’s
participation will not create a fourth set of
statutory damages.
Nimmer on Copyright § 14.04[E][2][d] (2016) (emphasis
added).
Friedman argues that Columbia Pictures governs the
situation in this case, as a number of “downstream infringers”
— retailers to whom Live Nation distributed infringing
merchandise — are each jointly and severally liable for
22 FRIEDMAN V. LIVE NATION MERCHANDISE
infringement with Live Nation, but not with each other. As
in that case, he contends, he should be entitled to a separate
award for each “unit” of infringers jointly and severally
liable.
The district court rejected this argument. It surveyed a
number of recent district court decisions that “rejected
outright both the [Columbia Pictures] decision and the
Nimmer hypothetical, finding them inapplicable to situations
involving large numbers of infringements.” (quoting Arista
Records LLC v. Lime Grp. LLC, 784 F. Supp. 2d 313, 318
(S.D.N.Y. 2011)); see also Bouchat v. Champion Prods., Inc.,
327 F. Supp. 2d 537, 553 (D. Md. 2003) (“[Professor
Nimmer] did not address, and doubtlessly did not consider, a
coordinated mass marketing operation such as [the
Defendant’s] business.”). Like those cases, the district court
concluded that, due to the large number of downstream
infringers, granting Friedman a separate award for each
would “lead to an absurd result.” The court acknowledged
that Columbia Pictures was “binding precedent” but
concluded that this case was “distinguishable”: whereas
Columbia Pictures “involved television shows and only
[three] downstream infringers . . . , [t]his case involves
photographs in a mass-marketing campaign with 104
downstream infringers,” and there was “nothing in Columbia
that suggests its reasoning should be applied to a mass-
marketing campaign such as that at issue in this case.”
We cannot accept this rationale. Columbia Pictures is the
law of this circuit, and nothing in the opinion — or in the text
of the statute itself — admits of a “mass-marketing”
exception. Creating such an exception would mean reading
the statute in two different ways depending on how many
down-the-line violations there were. And it would require us
FRIEDMAN V. LIVE NATION MERCHANDISE 23
to come up with some definition of the number of violations
required to invoke the exception, without any apparent basis
for doing so.
We do agree, though, that Friedman reads Columbia
Pictures too broadly, albeit for a different reason. Our
holding in Columbia Pictures was explicitly premised on the
fact that each of the downstream infringers for whom the
plaintiff received a separate damages award was a defendant
in the case. Before the question of damages was raised, those
parties had already been adjudicated liable for infringement,
and jointly and severally liable with another infringer. That
is not true in this case. Here, Friedman first asserted that
there were 104 downstream infringers only after the question
of Live Nation’s liability for its own infringement had been
resolved, not having named any of those downstream
infringers as defendants in the case.
Columbia Pictures’s emphasis on the status of the
downstream infringers as defendants is grounded in the
language of the statute. Section 504(c)(1) provides for “an
award of statutory damages for all infringements involved in
the action, with respect to any one work, for which any one
infringer is liable individually, or for which any two or more
infringers are liable jointly and severally . . . .” 17 U.S.C.
§ 504(c)(1) (emphasis added). Any downstream
infringements cannot be “involved in the action” unless the
alleged infringers responsible for those infringements were
joined as defendants in the case, and the particular alleged
infringements involving them adjudicated.
This interpretation is supported by the legislative history
on which Columbia Pictures relied, which explains that
“where separate infringements for which two or more
24 FRIEDMAN V. LIVE NATION MERCHANDISE
defendants are not jointly liable are joined in the same action,
separate awards of statutory damages would be appropriate.”
H.R. Rep. No. 94-1476, 94th Cong., 2d Sess., at 162
(emphasis added). Congress did not, therefore, intend for
courts, in determining the amount of damages, to engage in
an entirely separate adjudication as to the liability of a large
group of people not parties to the case, with respect to
separate infringing acts not involved in the action. To the
contrary, the situation Congress contemplated was one like
that in Columbia Pictures, in which each jointly and severally
liable pair of infringers was “joined in the same action” and
liable for the same infringements.
As the district court rightly recognized, the broad reading
of Columbia Pictures Friedman urges leads to extremely
unlikely results, with direct infringers becoming liable for
astronomical sums in cases with large numbers of
downstream infringers unrelated to each other. This risk has
become particularly acute in the internet era, where rapid
peer-to-peer file sharing has enabled mass piracy of books,
films, music, and other copyrighted materials. See, e.g.,
Metro-Goldwyn-Mayer Studios Inc. v. Grokster, Ltd.,
545 U.S. 913, 920 (2005).
A district court decision illustrates the problem. In Arista
Records LLC v. Lime Group LLC, 784 F. Supp. 2d 313(S.D.N.Y. 2011), a record company sued the maker of an
online file-sharing program that allowed users to download
recordings and thereby make them available for peer-to-peer
sharing. The plaintiffs identified “approximately 11,000
sound recordings that they allege[d] have been infringed
through the LimeWire system.” Id. at 315. Relying on
Columbia Pictures and the Nimmer hypothetical, the
plaintiffs argued that they were entitled to recover separate
FRIEDMAN V. LIVE NATION MERCHANDISE 25
statutory damage awards for each downstream infringer —
i.e., sharer — of each infringed work. The court rejected this
position, noting that under this theory “Defendants’ damages
could reach into the trillions” of dollars. Id. at 317. Like the
Arista Records court, we cannot conclude that Congress
intended such an exorbitant result, although we reach that
conclusion for different reasons than did the Arista Records
court.
We therefore hold that Section 504(c)(1)’s provision of
separate statutory damage awards for the infringement of
each work “for which any two or more infringers are liable
jointly and severally” applies only to parties who have been
determined jointly and severally liable in the course of the
liability determinations in the case for the infringements
adjudicated in the action. A plaintiff seeking separate
damages awards on the basis of downstream infringement
must join the alleged downstream infringers in the action and
prove their liability for infringement. Because Friedman did
not join any of his alleged downstream infringers as
defendants in this case, the district court correctly held that he
was limited to one award per work infringed by Live Nation.
We therefore affirm the district court’s statutory damages
ruling.
CONCLUSION
Because there was sufficient evidence in the record to
allow a reasonable jury to conclude that Live Nation willfully
infringed Friedman’s copyrights and knowingly removed
CMI from the images it used, we reverse the district court’s
26 FRIEDMAN V. LIVE NATION MERCHANDISE
grant of summary judgment to Live Nation on those issues.
We affirm the district court’s ruling as to statutory damages.
AFFIRMED IN PART AND REVERSED IN PART.