Despite acknowledging that Live Nation offered no case law supporting summary judgment on an issue of willfullness, the district court granted it and the 9th Circuit appellate panel found that decision was premature and reversed the ruling.
"[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," writes circuit judge Marsha S. Berzon.
Typical protocol for Live Nation merchandising includes having artists sign product approval forms for items with images, with the assumption that artists won't sign off if they don't have the rights to the photos. The company also asks artists to approve style guides, which are essentially photo galleries that are used to show suppliers the full array of available images.
"From the face of the documents, one could conclude that they are directed at design decisions, not the rights to the photographs," Berzon writes. "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."
Further, Berzon points to an internal Live Nation email stressing the company did not want to use any of Friedman's photos because he owns the rights, isn't interested in merchandise and is "really expensive to even get clearance for." That, she says, could be interpreted as proof the company knew about the legal risk and moved forward with the merchandise anyway.
Another issue considered by the panel is whether Live Nation knowingly removed the copyright management information from Friedman's photos in violation of the Digital Millennium Copyright Act.
During district court proceedings, Friedman missed a discovery deadline, which Live Nation spun into a summary judgment argument that he had produced no evidence the company willfully infringed on his copyrights or knowingly removed copyright management information from his images. The district court granted the motion, finding “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.”
The appellate panel rejected this notion, finding "Friedman's failure to specify evidence in response to an interrogatory does not mean that the evidence does not exist on the record," Berzon writes. "Friedman could also prevail upon a showing that Live Nation distributed his works with the knowledge that CMI had been removed, even if Live Nation did not remove it."
Berzon points out that Friedman showed the only material difference between his works as shown in his book and on Sony's website (which had been licensed by Sony) and those used by Live Nation is the absence of the CMI, which supports that it had been removed on the copied version.
"It would be unfair to burden Friedman at the summary judgment stage with proving that knowledge with greater specificity than he did," Berzon writes. "We therefore reverse the district court’s decision granting summary judgment to Live Nation on Friedman’s CMI claim."
The appellate panel's opinion wasn't a total loss for Live Nation, though. The lower court had rejected Friedman's argument that damages be awarded for each of the 104 retailers who sold the infringing Live Nation merchandise. The 9th Circuit judgess agreed, upholding the decision.
"[T]he 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,'" Berzon writes. "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."
Read the 9th Circuit's full opinion here.
This article was first published by The Hollywood Reporter.