Yellowpages Photos, Inc. v. YP, LLC
Filing
196
ORDERED: Plaintiff's Notice to Take Judicial Notice 133 is GRANTED. Defendants YP LLC and Print Media LLC's Motion for Summary Judgment 119 157 is GRANTED-in-part and DENIED-in-part. The Court grants summary judgment in favor of Defendant Print Media LLC with respect to the issue of whether it was permitted to use the license referred to herein as the ATT License. As a matter of law, any use of Plaintiff's copyrighted images covered by this license did not constitute copyright infringement. The Court denies summary judgment with respect to the issue of whether Defendant Print Media LLC was permitted to use the license referred to herein as the Berry License. The Court grants summary judgment in favor of Defenda nts on the issue of whether Plaintiff may claim Defendants' profits as damages. Plaintiff may not claim Defendants' profits as damages. The Court denies summary judgment as to Counts I and II of the Amended Complaint because the evidence is disputed as to whether the images used by Defendants were covered by the licenses. Within FOURTEEN (14) DAYS of the date of this Order, YPPI shall advise the Court as to whether some or all of the images used by Defendants were covered by the Be rry License, the ATT License, or both. YPPI's response should be supported by any appropriate evidence. Defendants may file a response within FOURTEEN (14) DAYS of the date of YPPI's response. As discussed at the Final Pretrial Conference, in light of the Court's ruling on the motion for summary judgment, on or before December 20, 2019, the parties may file an Amended Pretrial Statement. Signed by Judge Charlene Edwards Honeywell on 11/27/2019. (LJB)
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
TAMPA DIVISION
YELLOWPAGES PHOTOS, INC.,
Plaintiff,
v.
Case No: 8:17-cv-764-T-36JSS
YP, LLC and PRINT MEDIA LLC,
Defendants.
___________________________________/
ORDER
This matter comes before the Court upon Defendants YP LLC and Print Media LLC’s
Motion for Summary Judgment (Doc. 175), Plaintiff’s response thereto (Doc. 135), Defendants’
reply (Doc. 141), Plaintiff’s Notice to Take Judicial Notice (Doc. 133), and Defendants’ response
thereto (Doc. 169). The Amended Complaint alleges two counts for copyright infringement, one
against Defendant YP, LLC, and one against Defendant Print Media LLC. Doc. 45 ¶¶ 23-48. In
their joint Motion for Summary Judgment, Defendants argue that they are entitled to summary
judgment and dismissal of Plaintiff’s Amended Complaint with prejudice because they were
permitted to use Plaintiff’s copyrighted images under the licenses. Doc. 175. Plaintiff responds
that Defendants are not among the entities permitted to use the licenses and that, even if they were,
Defendants exceeded the scope of the licenses. Doc. 135.
In the Motion for Judicial Notice, Plaintiff requests that this Court judicially notice a
Quarterly Report that AT&T Inc. filed with the Securities and Exchange Commission pursuant to
Section 13 or 15(d) of the Securities and Exchange Act of 1934 for the quarterly period that ended
June 30, 2012. Doc. 133. Defendants do not object to the motion. Doc. 169. The Court, having
considered the motions and being fully advised in the premises, will grant Defendants’ Motion for
Summary Judgment in part and deny it in part, and grant Plaintiff’s Motion for Judicial Notice.
With respect to Defendant YP, LLC, the undisputed evidence shows that it was permitted
to use the licenses at issue in this case, and that none of its actions fell outside the scope of the
license or otherwise invalidated its use of the images under the license. Accordingly, the Court
will grant Defendants’ Motion for Summary Judgment on the issue of whether Defendant YP, LLC
was permitted to use the licenses. As a matter of law, Defendant YP, LLC’s use of Plaintiff’s
copyrighted images covered by the licenses did not constitute copyright infringement. However,
because the evidence is disputed as to whether Defendant YP, LLC used only images covered by
the licenses, the Court cannot grant summary judgment as to Count I of the Amended Complaint.
With respect to Defendant Print Media LLC, the undisputed evidence shows that it was
permitted to use images covered by the “Software License and Maintenance—Snap-Out
Agreement 20071211.071.C Between Yellow Pages Photo, Inc. And AT&T Services, Inc.” (the
“ATT License”), and, as a matter of law, any use of such images did not constitute copyright
infringement. Doc. 157-6. However, the language of the License Agreement between L.M. Berry
and Company, and all affiliates owned or owning the same, and Yellow Pages Photos, Inc. (the
“Berry License”) (Doc. 157-2) is ambiguous with respect to whether all affiliates of L.M. Berry
and Company were covered by the license. The Court, therefore, cannot determine as a matter of
law whether Defendant Print Media LLC’s use of such images constituted copyright infringement.
Additionally, the evidence is disputed as to whether all images were covered by the licenses.
Accordingly, the Court will deny summary judgment as to Count II of the Amended Complaint.
Regarding Plaintiff’s request for Defendants’ profits from any copyright infringement, the
undisputed evidence shows that Defendants did not profit from their use of YPPI’s copyrighted
2
images. Accordingly, the Court will grant summary judgment on this issue. Plaintiff may not
claim Defendants’ profits as damages.
Additionally, pursuant to Federal Rule of Civil Procedure 56(f), the Court directs the
parties to advise the Court (1) whether all images used by Defendant YP, LLC were covered by
the licenses; and (2) whether all images used by Defendant Print Media LLC were covered by the
ATT License, so that the Court may determine whether summary judgment should be granted or
denied, in whole or in part, as to the claims contained in the Amended Complaint. The Court also
directs Defendants to advise the Court whether it intends to proceed on its counterclaims for
declaratory judgment and attorneys’ fees and costs. See doc. 51 at 13-14.
I.
BACKGROUND AND FACTS 1
A.
The Claims
Plaintiff Yellowpages Photos, Inc. (“YPPI”) filed a Complaint against Defendants YP LLC
d/b/a “The Real Yellow Pages” (“Yellow Pages”) and Print Media LLC, d/b/a Print Media
Solutions, LLC (“Print Media”) (collectively, “Defendants”) alleging that Defendants infringed on
at least 230 of YPPI’s federally registered copyrighted images. Doc. 45 ¶ 1. YPPI alleges that
Defendants profited from such use by publishing ads in their telephone directories using the images
without license or permission from YPPI. Id.
Plaintiff alleges one count for direct copyright infringement against Yellow Pages. Id. ¶¶
23-36. In that count, Plaintiff alleges that since April 2014, Yellow Pages copied, published,
transmitted, and used at least 230 of YPPI’s copyrighted images in connection with Yellow Pages’
1
The Court has determined the facts, which are undisputed unless otherwise noted, based on the
parties’ submissions, including depositions, interrogatory responses, declarations, and exhibits
(Doc. 119-122; Doc. 135; Doc. 141), as well as the parties’ Stipulation of Agreed Material Facts
(Doc. 143).
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sale, publication, distribution, and use of advertisements in web-based telephone directories. Id. ¶
24. Additionally, YPPI alleges that Yellow Pages copied, published, transmitted, and used YPPI’s
copyrighted images in connection with Yellow Pages’ creation, publication, and sale of websites
for Yellow Pages’ customers. Id. ¶ 25. YPPI further alleges that between April and August 2014,
Yellow Pages copied, published, transmitted, and used YPPI’s copyrighted images in connection
with Yellow Pages’ sale, publication, distribution, and use of advertisements in print-based
telephone directories. Id. ¶ 26. YPPI alleges that it did not license or otherwise authorize Yellow
Pages to copy, transmit, or use any of YPPI’s copyrighted images in connection with the infringing
advertisements, and that Yellow Pages’ actions were either knowing or due to willful ignorance.
Id. ¶¶ 31, 33. YPPI also alleges that Yellow Pages profited from its copyright infringement. Id. ¶
35.
In addition, YPPI alleges one count for direct copyright infringement against Print Media.
Id. ¶¶ 37-48. YPPI alleges that since August 1, 2014, Print Media has copied, published,
transmitted, and used at least 230 of YPPI’s copyrighted images in connection with Print Media’s
sale, publication, distribution, and use of advertisements in print-based telephone directories. Id.
¶ 38. Additionally, YPPI alleges that it did not license or otherwise authorize Print Media to copy,
transmit, or use any of YPPI’s images in connection with the infringing advertisements, and that
Print Media’s actions were either knowing or due to willful ignorance. Id. ¶¶ 43, 45. YPPI also
alleges that Print Media profited from its copyright infringement. Id. ¶ 47.
In the Answer, jointly filed by Defendants, they admit that certain YPPI images have been
used in web-based advertisements bearing “YP” branding, but contend that all such uses were
permitted under one or more license agreements with YPPI, or its affiliates, predecessors, or
principal. Doc. 51 ¶¶ 24, 38. Defendants deny infringing on YPPI’s copyrights, knowingly,
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willfully ignorantly, or otherwise. Id. ¶¶ 27-30, 39-43. Defendants also deny having profited from
any alleged copyright infringement. Id. ¶¶ 35-47.
Defendants assert two counterclaims against YPPI. Id. ¶¶ 1-27. Defendants contend in
their counterclaims that YPPI has been unable to sell a new license for its photos since 2008, so it
has made its business litigation. Id. ¶ 3. Defendants list various cases filed by YPPI, two of which
were settled, two of which resulted in recovery for YPPI, and one of which was dismissed on
grounds of res judicata, judicial estoppel, and collateral estoppel. Id. ¶ 4.
Defendants allege that they had rights to a license originally entered into between AT&T
Advertising, L.P. (“ATT Advertising”) and YPPI based on a series of mergers and name changes
of companies that made Defendants affiliates of the licensee, the ATT License. Id. ¶¶ 11-17.
Defendants also allege that an additional license between YPPI and an affiliate entitled Defendants
to use the images identified in the Complaint, the Berry License. Id. ¶ 18. Based on these
allegations, Defendants seek a declaratory judgment regarding their rights under the ATT License,
and claim entitlement to attorneys’ fees under copyright law. Id. ¶¶ 19-27.
B.
Undisputed Facts
1.
Corporate Structures
This case revolves around various businesses that have been involved in mergers and name
changes. Accordingly, the Court will begin by reviewing the relevant changes. In doing so, the
Court first notes the parties to the original two licenses that are at issue.
The first agreement, the Berry License, was entered into between L.M. Berry and Company
and YPPI. Doc. 119-2. YPPI is owned by W. Trent Moore, who is also the sole stockholder,
officer, and director. Doc. 45 ¶ 15. The Berry License was later amended to partially assign L.M.
Berry’s rights to The Berry Company LLC, with the agreement of YPPI. Doc. 119-4.
5
The second agreement, the ATT License, was entered into between YPPI and AT&T
Services, Inc (“ATT Services”). Doc. 119-6 at 1. The invoices for the ATT License were to be
sent to ATT Advertising. Id. ATT Advertising was the operating entity in AT&T Inc.’s yellow
pages business unit that was responsible for producing, publishing, and creating advertisements
for “The Real Yellow Pages” telephone directories. Doc. 121 ¶ 5. ATT Services was an AT&T,
Inc. affiliate that procured contracts and provided administrative services to AT&T Inc.’s
subsidiaries. Id. ¶ 6.
Each of the below changes regarding the companies occurred after these licenses were
established.
As is relevant to the Berry License, L.M. Berry and Company was a part of the yellow
pages business unit of BellSouth, which was acquired by AT&T Inc. on December 29, 2006. Doc.
121 ¶ 8. On May 9, 2012, L.M. Berry and Company was converted to L.M. Berry and Company
LLC. Doc. 157-11 at 3. L.M. Berry and Company LLC merged into and became YP Southeast
Advertising & Publishing LLC on December 31, 2014, a subsidiary owned by Defendant Yellow
Pages. Doc. 121 ¶¶ 9-10; Doc. 157-14 at 3; Doc. 157-10 at 2. That same day, YP Southeast
Advertising & Publishing LLC changed its name to YP Advertising & Publishing LLC. Doc. 15715 at 3.
As is relevant to the ATT License, on May 21, 2012, ATT Advertising amended its name
to YP Advertising LP, a subsidiary owned by Defendant Yellow Pages. Doc. 157-12 at 3; Doc.
157-10 at 2. Subsequently, on December 31, 2014, YP Advertising LP merged into and became
YP Southeast Advertising & Publishing LLC, or under its changed name, YP Advertising &
Publishing LLC. Doc. 157-13 at 3.
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According to AT&T, Inc.’s Form 10-Q, filed with the Securities and Exchange
Commission, on April 7, 2012, AT&T reached an agreement to sell its advertising solutions
business to Cerberus Capital Management, L.P, which is an affiliate of AT&T Inc. Doc. 135-4 at
9; Doc. 133-1 at 27. The sale was completed on May 8, 2012, and AT&T Inc. obtained, as a result
of the sale, a 47% equity interest in the new entity YP Holdings LLC. Id. at 3. YP Holdings LLC
is the holding company for Defendant Yellow Pages. Doc. 157-10.
Defendant Print Media was formed on August 1, 2014 under the common ownership of
L.M. Berry and Company LLC and YP Advertising L.P. Doc. 121 ¶ 11. As of January 1, 2015,
YP Advertising & Publishing LLC, and Defendants were all under common ownership with
Yellow Pages as the sole member of YP Advertising & Publishing LLC. Id. ¶¶ 12-13.
2.
The Berry License
The Berry License was an agreement entered into between L.M. Berry and Company, “and
all affiliates owned or owning the same” (collectively referred to as “Berry”) and YPPI in June
2006 for a one-year license for use of YPPI’s products and services which states it would be
governed by Ohio law. Doc. 157-2. Pursuant to the Berry License Agreement, Berry obtained
“the non-exclusive right to copy, crop, manipulate, modify, alter, reproduce, create derivative
works of, transmit, and display the Digital Media an unlimited number of times in any and all
media for any purpose . . . .” Id. ¶ 1.2.1. The Digital Media could also be reproduced by Berry’s
subcontractors. Id. ¶ 1.2.2. Berry’s rights to the Digital Media, and to use the Digital Media, were
“worldwide and perpetual.” Id. ¶ 1.2.3.
The Berry License limited the number of users who could “be involved in the process of
creating modified images or templates” to 48 employees. Id. ¶ 1.3. However, Berry was permitted
to provide “any given number” of employees with a “view-only library” of the Digital Media. Id.
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Additionally, the Berry License prohibited Berry from sublicensing, selling, assigning, conveying,
or transferring any of its rights under the Agreement. Id. ¶ 1.4.1.
The Berry License provided that it would be binding on the parties, their successors,
administrators, heirs, and permitted assigns. “Notwithstanding anything to the contrary in th[e
Berry License], the rights and obligations of either party under th[e] Agreement” were permitted
to “be assigned, sublicensed or otherwise transferred, without written consent of the other party,
to a third party that acquire[d] substantially all of the assets or business of a party to th[e]
Agreement or as the result of a merger, acquisition or other similar corporate transaction involving
one of the parties to th[e] Agreement.” Id. ¶ 9.
Berry and YPPI amended the Berry License on April 2, 2007 (the “First Amendment to the
Berry License”) to increase the number of seat licenses provided by the Agreement to 93
employees. Id. at 6.
The Berry License was inadvertently assigned to The Berry Company, LLC, on February
1, 2008. Doc. 157-4 at 3. Accordingly, on April 23, 2008, The Berry Company entered into a
Partial Assignment of Agreement and Consent with L.M. Berry and Company (the “Berry
Assignment”) under which The Berry Company assigned 45 seat licenses back to L.M. Berry and
Company. Id. YPPI agreed to the assignment. Id.
3.
The ATT License
On December 12, 2007, ATT Services and YPPI entered into the ATT License, which was
signed by ATT Services on behalf of ATT Advertising. Doc. 119-6. The agreement states that
“its performance and all disputes between the parties of any nature whatsoever arising out of or in
connection with the subject matter hereof shall be governed by the laws of the State of Texas . . .
.” Id. at 5. Additionally, the agreement provides that it was “the entire integrated agreement
8
between [YPPI] and AT&T with respect to the subject matter hereof,” and that it would “supersede
all prior oral and written discussions, agreements and understandings of the Parties, if any, with
respect hereto.” Id.at 5. The ATT License has an expiration date of December 31, 2010. Id. at 3.
The ATT License contains a description which provides: “The existing quantity of 2,150
photographs (“Digital Images”) is hereby extended with licensing for Unlimited Users. The seat
license applies to AT&T and its subsidiaries. . . .” Doc. 119-6 at 3. Additionally, the ATT License
states that subject to payment by “AT&T”, YPPI granted
to AT&T and its affiliates a non-exclusive, non-transferable, royalty-free, perpetual
license to: (i) copy the Digital Images on to AT&T’s server for unlimited End
Users (ii) use the Digital Images in AT&T’s business locations and for AT&T’s
business purposes only provided that such use is in accordance with the
Specifications detailed in this Agreement; (iii) make copies of the Digital Images
for archive or backup purposes.
Id. Additionally, “AT&T’s rights to the Digital Images [were] worldwide and perpetual.” Id. The
ATT License further states that AT&T could
incorporate any Digital Image(s) into its own original work and publish, display
and distribute the work in any media provided that a copyright notice [wa]s
included in any electronic or digital work reflecting on the copyright ownership of
both AT&T and Licensor as follows: “Copyright ©20__ [AT&T] and its licensors.
All rights reserved.”
Id. AT&T could also copy, crop, graphically alter, or combine the subject images with other
images, or creatively adapt the images to make a final image that would be incorporated into a
product or webpage. Id. However, AT&T could “not resell, sublicense or otherwise make
available the Digital Image(s) for use or distribution separately or detached from a product or Web
page.” Id. Similarly, AT&T was not permitted to “rent, lease, sublicense or lend the digital
images, or a copy thereof, to any other person or legal entity.” Id. at 4.
Regarding access to the images, the ATT License states that “AT&T may place the Digital
Images on their internal intranet or other common server for access and use by licensed End Users
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only.” Id. An “End User” is “defined as an individual that utilizes the high resolution Digital
Images for the specific purpose of creating a final image that will be used in a print or electronic
product(s). These End Users are generally defined as designers and artist.” Id. However, AT&T
was permitted to “copy any or all of the images to a browser CD ROM or other catalog media for
the specific purpose of allowing view only access, such as but not limited to, AT&T’s Sales
personnel or Advertising Customers.” Id.
The ATT License was subsequently amended on October 31, 2008 to include a per image
download price. Id. at 11. The ATT License was amended a second time in March 2009 to provide
that YPPI would supply certain images “on the CD collection know[n] by the parties as the
‘LMBerry/Nashville Collection.’ ” Id. at 15.
C.
Disputed Issues
1.
Evidence Regarding the ATT License
Moore testified that he recalled AT&T referring to the entity responsible for publishing the
AT&T yellow pages directories as the “Real Yellow Pages,” as well as various other names,
including ATT Services. Doc. 157-5 at 72:5-11. However, Moore also testified that he believed
ATT Advertising was the entity that would use the library to create advertisements for yellow
pages directories. Id. at 5-13. His understanding regarding ATT Services’ involvement was based
exclusively on the ATT License. Id. at 72:15-18. He further testified that his discussions with
AT&T led him to believe ATT Services were the ones publishing phone books because “they were
the one calling [him], they were the one wanting images, they were the one wanting the license.”
Id. at 73:7-10. The people he communicated with included Terry Thornton, Mildred Moore,
Robyn Brown, and Denise Davis. Id. at 73:13-19.
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Moore testified that in his proposals for the license, he used the name ATT Advertising,
included statements such as that ATT Advertising would be able to enhance its library’s dynamic
growth, and proposed that ATT Advertising license YPPI images. Id. at 88:16-21, 89:15-20, 91:425, 92:13-23; 102:16-18, 105:4-6; see also 157-9 at 6, 9, 11. However, Moore further testified
that he was not sure that he knew which AT&T entity would maintain the library of images, but
that he understood that ATT Services would execute the contract. Id. at 88:24-89:3. He stated
that he did not believe ATT Advertising was the name of the entity that would maintain the merged
library, but that it would maintain the library under a d/b/a or some other name. Id. at 90:1-6.
Overall, Moore indicated that AT&T used many names, he could not distinguish which entity was
which, and that it would be fair to say that AT&T would have more knowledge regarding its
corporate entities and which functions they performed. Id. at 94:13-18.
Thornton was the point person who communicated with Moore. Doc. 157-7 at 50:2-6. He
testified that the agreement was intended to be structured between YPPI and ATT Advertising. Id.
at 112:16-19. Thornton stated that ATT Advertising was the entity that received YPPI’s images
under the ATT License, used YPPI’s images and created ads, and paid for the YPPI images. Id.
at 264:9-17.
William Clenney, Defendants’ corporate representative, testified that ATT Services is a
subsidiary that provides administrative services to other ATT subsidiaries. Doc. 157-8 at 105:1517. He explained that ATT Advertising did most or all of the business negotiation and work with
YPPI, developed the terms and purchase price, then worked with ATT Services to execute and put
together the contract. Id. at 106:6-13
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2.
Profits
Clenney explained that the prices for advertising appearing in YP-branded directories was
determined by several factors, including the placement of the advertisement in the telephone
directory, the size of the advertisement, the color of the advertisement, the geographical
distribution of the directory, the type of customer purchasing the advertisement, and, in some
circumstances, the number of leads an advertisement generated. Doc. 121 ¶ 15. The use of an
image in an advertisement or website was not a factor that determined the price and inclusion of a
stock image did not increase the price. Id. ¶ 16.
Defendants removed or replaced imagery that YPPI alleges constitute copyright
infringement in this case. Doc. 120 ¶ 5. Robert Shawn Beard was responsible for such removal.
Id. He and his team removed alleged YPPI images from more than 400 advertisements. Id. ¶ 6.
None of the customers who had an advertisement from which an alleged YPPI image was removed
complained about the removal, cancelled their advertisement, demanded to pay less, or paid less
for the advertisement after the alleged YPPI images were removed. Id. ¶ 7.
YPPI retained Joseph J. Brown to provide an opinion as to whether revenue received from
the sale of an advertisement that contained one or more of YPPI’s copyrighted images would be
reasonably related to the use of the YPPI copyrighted images. Doc. 157-17. Pursuant to this
Court’s Order on Defendants’ Daubert 2 motion to exclude Brown’s testimony (Doc. 191), which
finds that Brown’s testimony does not meet the requirements of Federal Rule of Evidence 702, the
Court will not consider Brown’s testimony in support of YPPI’s claims for lost profits.
2
See Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993)
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C.
Motion for Summary Judgment
Defendants moved for summary judgment on both counts of YPPI’s Complaint. Doc. 157.
They did not move for summary judgment on their counterclaims for declaratory judgment and
attorneys’ fees. In the Motion for Summary Judgment, Defendants argue that YPPI’s copyright
infringement claims fail as a matter of law because Defendants were licensed to use the YPPI
images at issue under the Berry License and ATT License. Id. at 14-22. Defendants argue that
the Berry License granted L.M. Berry Company’s affiliates a perpetual license to use 5,000 of
YPPI’s images, including 256 of the 289 images that YPPI claims were infringed by Defendants,
and that Defendants were affiliates of L.M. Berry Company. Id. at 14-15. Defendants also argue
that the ATT License granted ATT Advertising and its affiliates a license to use 2,150 images,
including 267 of the 289 images that YPPI claims were infringed by Defendants, and that
Defendants were affiliates of ATT Advertising. Id. at 15-16. Defendants state that between the
two licenses, they were authorized to use all images that YPPI claims were infringed. Id. at 17.
Finally, Defendants argue that YPPI’s claim for profits fail as a matter of law because YPPI could
show no nexus between Defendants’ profits and their use of YPPI’s images. Id. at 22-26.
YPPI opposes the Motion for Summary Judgment. Doc. 135. In response, YPPI argues
that the Berry License did not authorize use by all of L.M. Berry Company’s affiliates, but only
by affiliates “owned or owning” L.M. Berry Company. Id. at 3. Additionally, YPPI argues that
Defendants could not use the Berry License because it did not provide sufficient seat licenses for
Defendants’ use, Defendants would not have needed the ATT License if they could use the Berry
License, the ATT License contains a provision that superseded the Berry License, and Defendants’
use of outsourcers made their use outside the scope of the Berry License. Id. at 7-8, 11-13. YPPI
argues that the ATT License did not apply to Defendants because ATT Services, not ATT
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Advertising, was a party to the ATT License, and Defendants were not affiliates or subsidiaries of
ATT Services. Id. at 13-14. Additionally, YPPI argues that the ATT License expired before
corporate restructuring, the ATT License could not be transferred, Defendants’ use of outsourcers
fell outside the scope of the license, and use of images without the required copyright language
fell outside the scope of the ATT License. Id. at 14-18.
Additionally, YPPI opposes Defendants’ argument regarding YPPI’s claim for profits,
arguing that they sufficiently showed a causal connection between Defendants’ infringement and
profits. Id. at 18-20. Finally, YPPI contends that the Motion for Summary Judgment should be
denied based on discovery violations by Defendants detailed in YPPI’s Motion for Discovery
Sanctions Against Defendants. Doc. 124; Doc. 135 at 20-21.
II.
LEGAL STANDARD
Summary judgment is appropriate when the pleadings, depositions, answers to
interrogatories, and admissions on file, together with the affidavits, show there is no genuine issue
as to any material fact and that the moving party is entitled to judgment as a matter of law. Fed.
R. Civ. P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). The moving party bears the
initial burden of stating the basis for its motion and identifying those portions of the record
demonstrating the absence of genuine issues of material fact. Celotex, 477 U.S. at 323; Hickson
Corp. v. N. Crossarm Co., 357 F.3d 1256, 1259-60 (11th Cir. 2004). That burden can be
discharged if the moving party can show the court that there is “an absence of evidence to support
the nonmoving party’s case.” Celotex, 477 U.S. at 325.
When the moving party has discharged its burden, the nonmoving party must then
designate specific facts showing that there is a genuine issue of material fact. Id. at 324. Issues
of fact are “genuine only if a reasonable jury, considering the evidence present, could find for the
14
nonmoving party,” and a fact is “material” if it may affect the outcome of the suit under governing
law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248-49 (1986). In determining whether a
genuine issue of material fact exists, the court must consider all the evidence in the light most
favorable to the nonmoving party. Celotex, 477 U.S. at 323. However, a party cannot defeat
summary judgment by relying upon conclusory allegations. See Hill v. Oil Dri Corp. of Ga., 198
Fed. Appx 852, 858 (11th Cir. 2006).
III.
DISCUSSION
17 U.S.C. § 501(b) allows “[t]he legal or beneficial owner of an exclusive right under a
copyright . . . to institute an action for any infringement of that particular right committed while
he or she is the owner of [the copyright].” A plaintiff in a copyright action must establish two
elements: (1) that he or she owned a valid copyright in the work alleged to be infringed upon; and
(2) that the defendant copied protected elements from that work. Peter Letterese & Assocs., Inc.
v. World Inst. Of Scientology Enters., 533 F.3d 1287, 1300 (11th Cir. 2008). The existence of a
license is an affirmative defense to copyright infringement. Id. at 1308. As an affirmative defense,
the defendant has the burden of proving the existence of the license. Fodere v. Lorenzo, No. 09cv-23120, 2011 WL 465468, at *4 (S.D. Fla. Feb. 4, 2011).
The parties here do not dispute that YPPI had valid copyrights in the images, or that
Defendants used the images.
The primary issue in this case is whether Defendants were
beneficiaries of the Berry License and ATT License.
A.
Motion for Judicial Notice
Plaintiff requests, pursuant to Federal Rule of Evidence 201, that the Court take judicial
notice of AT&T Inc.’s Form 10-Q filed with the Securities and Exchange Commission because it
is a document that can be accurately and readily determined from sources whose accuracy cannot
15
reasonably be questioned. Doc. 133. Defendants do not object to the request, but argue that it
does not affect their Motion for Summary Judgment.
Because Plaintiff’s motion is unopposed and documents publicly filed with the Securities
and Exchange Commission are the type that the Court may judicially notice pursuant to Rule
201(b), see Bryant v. Avado Brands, Inc., 187 F.3d 1271, 1278-79 (11th Cir. 1999), the Court will
grant Plaintiff’s request to take judicial notice of AT&T Inc.’s form 10-Q.
B.
Berry License
1.
Whether Defendants were Permitted to Use the Berry License
The Berry License was “between L.M. Berry and Company, and all affiliates owned or
owning the same . . . and Yellow Pages Photos, Inc. . . . .” Doc. 157-2 at 2. The parties dispute
the meaning of the phrase “owned or owning.” Doc. 135 at 3; Doc. 141 at 6. Although YPPI is
not clear on what it asserts this phrase to mean, it implies in the Response that it does not include
all affiliates of L.M. Berry and Company. Doc. 135 at 3. In their Reply, Defendants argue that
although the phrase “is not a model of clarity,” (Doc. 141 at 6), the meaning of the phrase is later
clarified in the indemnity provision of the Berry License, which states that YPPI:
[S]hall defend, indemnify, and hold [L.M. Berry and Company] and its parent,
subsidiaries, and commonly owned or controlled affiliates and their respective
officers, directors and employees harmless from all damages . . . , liabilities, and
expenses . . . , arising out of or connected with any actual or threatened lawsuit,
claim or legal proceeding alleging that the possession, distribution or use of the
Digital Media by [L.M. Berry and Company] pursuant to and in accordance with
this Agreement infringes on any [of the subsequently enumerated] intellectual
property or personal rights of any third party . . . .
Doc. 157-2 at 3. Defendants contend that the language “commonly owned or controlled affiliates”
in the indemnity provision clarifies the “owned or owning” because, according to Defendants, it
would not make sense for YPPI to have indemnification obligations to L.M. Berry and Company
affiliates that were not allowed to use the images under the L.M. Berry License. Doc. 141 at 6.
16
The Court disagrees with Defendants’ reading of the Berry License.
Notably, the
indemnity provision does not state that YPPI was required to indemnify the listed classes of people
and entities for those individuals’ or entities’ use of any images. Instead, the provision states that
those classes of people and entities would be indemnified for use and distribution of the images
by “Licensee,” which was defined as “L.M. Berry and Company, and all affiliates owned or
owning the same.” Doc. 157-2 at 2-3. The indemnity provision could reasonably be read to require
indemnification of commonly owned or controlled affiliates that were sued based on use or
distribution by “Licensee” where such affiliates were not the users or distributors of the images.
Indeed, a reader of the entire contract could argue that because the Berry License later includes the
language “commonly owned or controlled affiliates” in the indemnification provision, but not in
the definition of “Licensee,” such entities were deliberately excluded from inclusion as entities
permitted to use the license.
At best, the Berry License is clear that entities that owned or were owned by L.M. Berry
and Company were included as Licensees, but is unclear as to whether affiliates who had common
ownership with L.M. Berry and Company were included as Licensees. Under Ohio law, “it is
presumed that the intent of the parties to a contract resides in the language they chose to employ
in the agreement.” Brandon/Wiant Co. v. Teamor, 708 N.E.2d 1024, 1028 (Ohio Ct. App. 1998).
Accordingly, “[c]ourts will not construe contract language that is clear and unambiguous on its
face,” but will “give effect to the language of the contract.” Id. However, “ ‘where the language
of a contract is reasonably susceptible of more than one interpretation, the meaning of ambiguous
language is a question of fact’ to be determined by a jury.” Geczi v. Lifetime Fitness, 973 N.E.2d
801, 805 (Ohio Ct. App. 2012). Because of this, the Court will examine whether Defendants are
either owned by or own L.M. Berry and Company, which became YP Advertising & Publishing
17
LLC and are therefore clearly intended as Licensees, or whether they are simply affiliates with
common ownership, which are not clearly included as Licensees and whose inclusion is subject to
determination by a jury.
a.
Defendant Yellow Pages
AT&T Inc. purchased the business unit of BellSouth that included L.M. Berry and
Company in 2006, before the alleged copyright infringement occurred. Doc. 121 ¶ 8. Also, before
the alleged infringement, L.M. Berry and Company became L.M. Berry and Company LLC, which
became a wholly-owned subsidiary of YP Subsidiary Holdings LLC, which was a subsidiary of
Defendant YP LLC. Doc. 157-10. Thus, before the alleged infringement, L.M. Berry and
Company was owned by Defendant Yellow Pages, making Defendant Yellow Pages an affiliate 3
owning L.M. Berry and Company, and included within the scope of the Berry License.
YPPI asserts several arguments that Yellow Pages did not enjoy the benefits of a licensee
under the Berry License, none of which create a genuine issue of material fact as to this matter.
The first three arguments rely on the connection between L.M. Berry and Company and AT&T,
which is the original connection that granted Yellow Pages access to the Berry License. First,
YPPI argues that AT&T would not have had to expressly license, pursuant to the ATT License,
images known by the parties as the “LM Berry/Nashville Collection” if it already enjoyed the
benefits of the Berry License. Doc. 135 at 11 (citing Doc. 119-6). The Court disagrees. As noted
by both parties, AT&T required more than the 45 seat licenses provided for in the Berry License.
3
An “affiliate” is “[a] corporation that is related to another corporation by shareholdings or other
means of control; a subsidiary, parent, or sibling corporation.” Affiliate, Blacks Law Dictionary
(11th ed. 2019). Similarly, under Texas law, which governs the ATT License, an “affiliate” is “a
person who controls, is controlled by, or is under common control with another person.” Tex. Bus.
Organization Code, § 1.002(1).
18
Doc. 135 at 7; Doc. 141 at 4. Moreover, YPPI does not explain how acquisition of rights to the
images under a second license would automatically render the first license invalid. As explained
by Defendants, such facts simply show that the second license was unnecessary.
Second, YPPI argues that AT&T could not use the Berry License because it would need
far more than 45 seat licenses. Doc. 135 at 12. This argument answers the issue raised by YPPI’s
first argument—Yellow Pages could use the Berry License, but would need additional resources.
Third, YPPI argues that even if Yellow Pages could use the Berry License, a provision in
the ATT License superseded the Berry License. Specifically, the ATT License has an “entire
agreement” provision that states as follows:
The terms contained in this Agreement . . . will constitute the entire integrated
agreement between Supplier and AT&T with respect to the subject matter hereof.
This Agreement will supersede all prior oral and written discussions, agreements
and understandings of the Parties with respect hereto.
Doc. 157-6 at 5. YPPI’s argument is misplaced.
The clause is simply a merger clause. When a contract has a merger clause, it is
“presume[d] that all prior negotiations and agreements relating to the transaction have been merged
into the contract, and it will be enforced as written and cannot be added to, varied, or contradicted
by parol evidence.” ISG State Operations, Inc. v. Nat’l Heritage Ins. Co., Inc., 234 S.W.3d 711,
719 (Tex. App. 2007). The merger clause simply relates to the “subject matter” of the ATT
License, which is a different subject matter from the Berry License. Additionally, although L.M.
Berry and Company may have been owned by AT&T Inc., and an affiliate of other subsidiaries, it
was not a party to the ATT License. Accordingly, the merger clause in the ATT License did not
supersede the Berry License.
Finally, YPPI argues that Yellow Pages lost its right to use YPPI’s images by allowing
outsourcers to use images in violation of the Berry License. Doc. 135 at 12. YPPI contends that
19
the use of outsourcers fell outside the scope of the license, whereas Defendants contend that if
such a breach occurred—which they do not concede—it was merely a breach of a covenant, which
would not give rise to a copyright infringement claim. Compare Davis v. Tampa Bay Arena, Ltd.,
No. 8:12-cv-60-T-30MAP, 2013 WL 3285278, at *7 (M.D. Fla. June 27, 2013) (stating that
“copyright law is clear that a licensee’s breach of a covenant in a copyright license does not rescind
the authorization to sue the copyright work, but rather provides the licensor with a cause of action
for breach of contract.”); with Virtual Studios, Inc. v. Royalty Carpet Mills, Inc., No. 4:12-CV0077-HLM, 2014 WL 12495340, at *8 (N.D. Ga. Feb. 10, 2014) (explaining that when a licensee
acts outside the scope of the license, the licensor may bring an action for copyright infringement);
see also Eberhard Architects, LLC v. Bogart Architecture, Inc., 314 F.R.D. 567, 572 (N.D. Ohio
2016) (stating that generally a licensor has a claim for breach of contract, not copyright
infringement, where a licensee breaches a covenant).
“A covenant is a contractual promise, i.e., a manifestation of intention to act or refrain from
acting in a particular way, such that the promisee is justified in understanding that the promisor
has made a commitment.” MDY Indus., LLC v. Blizzard Entm’t, 629 F.3d 928, 939 (9th Cir. 2010).
Contractual terms that limit a licensee’s scope are known as “conditions.” Id. State law applies
in determining whether a matter is a condition or a covenant. Id.; see also Eberhard Architects,
314 F.R.D. at 572. “Ohio law disfavors conditions, and ‘whenever possible courts will avoid
construing provisions to be such unless the intent of the agreement is plainly to the contrary.’ ”
Eberhard Architects, 314, F.R.D. at 572 (quoting Evans, Mechwart, Hambleton & Tilton, Inc. v.
Triad Architects, Ltd., 196 Ohio App. 3d 784, 965, N.E.2d 1007 (2011)).
Here, the portion of the Berry License purportedly violated is the provision that limits the
use of the license to “no more than 48 employees” for purposes of “creating modified images or
20
templates.” Doc. 157-2 at 2-3. Nothing in the contract plainly indicates that this was a condition
and not a covenant. Accordingly, the proper remedy for any breach of the provision would be
breach of contract, not copyright infringement.
Based on the above, the undisputed evidence demonstrates that Defendant Yellow Pages
was entitled to use the Berry License. Accordingly, the Court will grant summary judgment in
favor of Defendant YP, LLC with respect to the issue of whether it was permitted to use the Berry
License. As a matter of law, Defendant YP, LLC’s use of images covered by the Berry License
did not constitute copyright infringement.
b.
Defendant Print Media
Defendants contend that Print Media was formed “under common ownership with L.M.
Berry and AT&T Advertising,” and that as of January 1, 2015 Defendants “were affiliates of YP
Advertising & Publishing LLC,” which L.M. Berry and Company (as originally named) had
merged into, with “common ownership.” Id. ¶¶ 11-12. Thus, although it is clear that Print Media
was an affiliate of L.M. Berry and Company, and owned by the same entity, it is not clear that it
qualified as an “affiliate[] owned or owning same” as required by the Berry License. Doc. 157-2
at 2. Accordingly, for purposes of summary judgment, Defendants have failed to establish the
existence of a license for Print Media based on the Berry License. The Court, therefore, will deny
Defendants’ motion for summary judgment on YPPI’s claim of copyright infringement against
Print Media.
2.
Whether the Images Fell Under the Berry License
According to Defendants, YPPI identified to Defendants advertisements that contained 289
unique image IDs in response to Defendants’ interrogatory requesting YPPI identify each
advertisement and/or website that it contended constituted an infringing use of a YPPI image. Doc.
21
122 ¶¶ 4-5. Defendants contend that 256 of the 289 YPPI images were covered by the Berry
License. Id. ¶ 6.
In response to the Motion for Summary Judgment, YPPI submitted a declaration by Moore,
who states that he identified over 330 different YPPI copyrighted images used by Defendants.
Doc. 135-1 ¶ 4. Moore asserts that in addition to those more than 330 images, he identified 365
YPPI images in Defendants’ document production. Id. ¶ 6. The declaration does not address
whether these images, or some portion of these images, fall under the Berry License or the ATT
License.
In their Reply, Defendants provided a declaration, of Kuangyan Huang, stating that Moore
has not identified to Defendants any images other than those 289 referenced in the Motion for
Summary Judgment. Doc. 142 ¶ 7. Additionally, the Huang declaration further provides that each
of the images identified by YPPI are covered by either the Berry License or the ATT License.
Determining whether Yellow Pages used images not covered by the Berry License would
require the Court to weigh the credibility between the conflicting affidavits, which the Court
cannot do on summary judgment. Accordingly, the Court cannot grant summary judgment in
whole on YPPI’s copyright infringement claim against Yellow Pages.
Nonetheless, this is a matter that may not genuinely be in dispute. YPPI is, therefore,
directed to respond within fourteen (14) days of the date of this Order and advise the Court as to
whether some or all of the images used by Defendants were covered by the Berry License. YPPI’s
response should be supported by any appropriate evidence. Defendants may file a response within
fourteen (14) days of the date of YPPI’s submission.
22
C.
ATT License
1.
Whether Defendants were Permitted to Use the ATT License
“For a court to be able to construe a contract as a matter of law, the contract must be
unambiguous.” Dynamic Pub. & Distrib. L.L.C. v. Unitec Indus. Ctr. Prop. Owners Ass’n, Inc.,
167 S.W.3d 341, 345 (Tex. App. 2005). “Whether an instrument is ambiguous is a question of
law that must be decided by reviewing the covenant as a whole in light of the circumstances present
when the covenant was entered.” Id. “[I]f the contract is subject to two or more reasonable
interpretations after applying the pertinent rules of construction, the contract is ambiguous, which
creates a fact issue on the parties’ intent.” Id. Ordinarily, summary judgment is not proper where
the contract is ambiguous because “interpretation of ambiguous contracts is a question for the
jury.” Id. However, “[t]he court may construe as a matter of law an ambiguous contract by
considering undisputed evidence of the parties’ intent. If there is a conflict in the parol evidence,
however, the question of the parties’ intent becomes one of fact, appropriate for consideration by
the jury.” Corley v. Entergy Corp., 246 F. Supp. 2d 565, 574 (E.D. Tex. 2003) (citing Trinity
Universal Ins. Co. v. Ponsford Bros., 423 S.W.2d 571, 575 (Tex. 1968)).
The cover page to the ATT License states that it is an agreement “Between Yellow Pages
Photo, Inc. And AT&T Services, Inc.” Doc. 157-6 at 2. On the first page of the ATT License, it
lists “AT&T Advertising, L.P. d/b/a/ AT&T Advertising and Publishing” as the entity to whom
invoices should be sent, and states the “AT&T: Affiliate Name” as ATT Services. Id. at 3.
Additionally, questions were to be addressed to Davis at ATT Services. Id. The Agreement does
not have a defined “Licensee.” On the signature line, the signatory is typed into the agreement as
“AT&T Affiliate Name: AT&T Services, Inc. On behalf of AT&T Advertising, L.P. dba AT&T
Advertising and Publishing.” Id. at 4.
23
The cover page for the first and second amendments to the ATT License states that they
are amendments “Between Yellow Pages Photo, Inc. And AT&T Services, Inc.” Id. at 10, 14.
The first page of the amendments states that they are between YPPI and ATT Services. Id. at 11,
15. ATT Services signed the first amendment and is listed as the signatory for the second
amendment. Id. at 13, 16.
Based on the above, the ATT License could reasonably be interpreted as being between
either ATT Advertising and YPPI, or ATT Services and YPPI. Although Defendants contend that
ATT Services was clearly an agent to a disclosed principal, the cover page and amendments
suggest that ATT Services may have been the intended party. Defendants are simply cherrypicking the signature line that is convenient for their purposes while ignoring the remainder of the
license. Nor is Defendants argument persuasive that because ATT Advertising is the first AT&T
entity used in the ATT License, it must be the entity intended any time the license uses the name
“AT&T”. Defendants cite to no law to support this proposition. The term AT&T is not a word
used earlier in a contract that should be given the same meaning in a subsequent portion of the
contract because the license specifically spells out ATT Advertising’s name and does not refer to
it as AT&T. Doc. 157-6 at 3. Moreover, the cover page first lists ATT Services, making ATT
Advertising the second use of “AT&T”. Id. at 2. Finally, no evidence supports Defendants’
proposition that ATT Services is an agent that is also a party to the contract, because no evidence
shows that ATT Services and YPPI agreed to such an arrangement.
Defendants argue that, in the event the Court finds the ATT License to be ambiguous, the
Court should interpret the contract as being between YPPI and ATT Advertising because the ATT
License was clearly intended to be with ATT Advertising. In support of this, Defendants cite to
testimony and evidence that (1) ATT Services was simply a contract procurement entity that
24
provided administrative services to other AT&T subsidiaries; (2) ATT Advertising was the
subsidiary responsible for producing, publishing, and creating advertisements; (3) Moore had no
understanding of the difference between ATT Services and ATT Advertising, but communicated
with ATT Advertising; (4) proposals sent from YPPI/Moore to ATT Advertising listed ATT
Advertising as the party to the license; and (5) ATT Advertising negotiated the pricing and paid
the invoices. Doc. 157 ¶¶ 14-19, pg. 21.
YPPI did not address the extrinsic evidence in its Response, but relies on the language of
the ATT License and amendments to argue that ATT was the party to the license. As the Court
explained, the ATT License is ambiguous as to whether ATT Services or ATT Advertising was
the intended party. Thus, the Court examines whether undisputed extrinsic evidence resolves this
ambiguity.
Moore’s testimony regarding the intended party to the ATT License is not entirely
consistent. Moore testified that he believed ATT Advertising would use the library of images to
create advertisements. He also testified that he believed ATT Services was responsible for
publishing AT&T’s yellow pages directories. Doc. 157-5 at 72:5-14; 94:5-12. However, Moore
also testified that he did not know, from a legal perspective, which AT&T entity was going to
maintain the merged library and could not distinguish between the different AT&T entities.
Other evidence supports the conclusion that Moore—and therefore YPPI—did know that
ATT Advertising was the entity intended to use the license. YPPI provided ATT Advertising with
a proposal for using YPPI’s stock photographs. The proposal specifically states that the options
offered “AT&T Advertising & Publishing the ability to: 1. Achieve significant image library value
across the new merged enterprise[;] 2. Enhance the libraries dynamic growth[; and] 3. Realize
substantial savings while positioning itself for greater revenue opportunities.” Doc. 157-9 at 6.
25
YPPI also provided an addendum to the proposal, to ATT Advertising, with proposed pricing. Id.
at 9, 13. The addendum states that YPPI “appreciates the opportunity to serve AT&T Advertising
& Publishing and looks forward to a long lasting business relationship.” Id. at 10. Moore drafted
the proposals. Doc. 157-5 at 101:8-9.
Based on the undisputed evidence, the most favorable interpretation for YPPI that can
reasonably be made is that YPPI was indifferent to which AT&T entity was the party to the license,
but intended for ATT Advertising to use the license. None of the extrinsic evidence is conflicting.
All of the evidence is consistent with ATT Advertising being the party to the ATT License, and
no extrinsic evidence supports the conclusion that ATT Servicing was the intended party to the
ATT License. Therefore, based on the undisputed evidence, the Court concludes that ATT
Advertising is the party to the ATT License.
The Court will next examine whether Defendants could use the ATT License with ATT
Advertising as the licensee. In the “description” portion of the ATT License, it states that the seat
license applies to AT&T and its subsidiaries. Doc. 157-6 at 3. In the “specifications” portion of
the license, it states that the “Licensor License Grant” is “to AT&T and its affiliates.” Id. Because
the language in the description stating AT&T and its subsidiaries differs from the language in the
specifications stating AT&T and its affiliates, YPPI contends that the ATT License is unclear as
to who enjoys rights under the license—AT&T subsidiaries, AT&T affiliates, or both. Doc. 135
at 4. The Court disagrees. The ATT License plainly states when specifying who is covered under
the license that it applies to AT&T and its affiliates, which would include subsidiaries. NuStar
Energy, L.P. v. Diamond Offshore Co., 402 S.W. 461, 466 (Tex. App. 2013) (stating that more
specific contractual provisions govern over general provisions). Thus, for summary judgment
26
purposes and based on the ambiguity in the ATT License, Defendants fall within the scope of the
ATT License if they are affiliates of ATT Services and ATT Advertising.
Both Defendants were affiliates to ATT Advertising. Defendants were under common
ownership with ATT Advertising. Doc. 121 ¶¶ 10-12; see also Vision Capital Real Estate, LLC
v. Wurzak Hotel Grp., No. 05-15-00917-CV, 2016 WL 6093977, at *4 (Tex. App. Oct. 19, 2016)
(“ ‘Affiliate’ is generally defined as a . . . ‘company effectively controlled by another or associated
with others under common ownership or control.’ ”). Accordingly, they were affiliates of ATT
Advertising and enjoyed rights under the ATT License to use images covered by the ATT License.
2.
Whether the Images Used Were Covered by the ATT License
As explained above, Defendants submitted a declaration stating that the ATT License
covers 267 of 289 images identified by YPPI as purportedly infringing on its copyrights. Doc. 122
¶ 6. The Berry License covers the remaining 22 images. Id. YPPI responded by filing a
declaration by Moore stating that 365 YPPI images were used. Doc. 135-1 ¶ 6. The declaration
does not address whether these images, or some portion of these images, fall under the Berry
License or the ATT License. Defendants replied that YPPI identified only 289 images to them.
Doc. 142 ¶ 7.
Although the Court cannot determine as a matter of law based on these affidavits whether
Defendants used only images covered by the ATT License, the Berry License, or both, this is a
matter that may not genuinely be in dispute. As previously directed, YPPI shall file a response
within fourteen (14) days of the date of this Order advising the Court whether some or all of the
images used by Defendants were covered by the Berry License. YPPI shall also address whether
some or all of the images used by Defendants were covered by the ATT License. Defendants may
file a response within fourteen (14) days of the date of YPPI’s submission.
27
3.
Expiration or Transfer of the License
YPPI argues that, even if Defendants could use the ATT License, the ATT License contains
an expiration date of December 31, 2010, resulting in a genuine issue of material fact as to whether
the license expired prior to any corporate restructuring. Doc. 135 at 15. YPPI further argues that
the expiration occurred before AT&T Inc. sold its advertising businesses, and that the license did
not survive the sale because no document shows an assignment or transfer of the ATT License.
Id.
Defendants contend that this argument is a red herring because the license states that it is
“perpetual.” Id. at 3, 7. Additionally, the ATT License states that “[o]bligations and rights under
this Agreement . . . which by their nature would reasonably continue beyond the Termination,
Cancellation or expiration of this Agreement (including in those Sections entitled . . .
“Specifications” [where the perpetual provision is found] . . . ) will survive the Termination,
Cancellation or expiration of this Agreement . . . .” Id. at 4.
The ATT License does, in fact, provide an expiration date of December 31, 2010. Doc.
157-6 at 3. However, the ATT License indicates that the license is perpetual, which is indisputably
an obligation or right that would, by its nature, continue beyond the expiration of the ATT License.
By reading the expiration date in conjunction with the remainder of the contract, which the Court
must do, there is no dispute of material fact regarding the perpetuity of the ATT License. Seagull
Energy E&P, Inc. v. Eland Energy, Inc., 207 S.W. 3d 342, 345 (Tex. 2006).
YPPI’s argument regarding the 2012 “spin-off,” in which AT&T Inc. placed its yellow
pages business unit into a newly formed holding company named YP Holdings LLC, in which
AT&T Inc. held a 47% equity interest, is also misplaced. Doc. 135 at 15; Doc. 135-4 at 5. YPPI
contends that neither Defendant or their related entities are “affiliates” of ATT Services or AT&T
28
Inc. under Texas law. YPPI is correct that no evidence demonstrates that ATT Services or AT&T
Inc. are affiliates of Defendants, but that is irrelevant. The undisputed evidence shows that ATT
Advertising is the intended party to the ATT License, and Defendants are affiliates to ATT
Advertising.
ATT Advertising became YP Advertising L.P. through a name change, which later merged
with YP Southeast Advertising & Publishing LLC.
Docs. 157-12, 157-13. YP Southeast
Advertising, formerly ATT Advertising, was owned by Defendant Yellow Pages. Doc. 157-10.
Both Defendants shared common ownership with ATT Advertising. Thus, the ATT License would
not need to be transferred or assumed, because the entities remained affiliates in the yellow pages
business unit.
4.
Breach of Covenants
YPPI further argues that Defendants’ use of outsourcers fell outside the scope of the ATT
License, which restricted use of YPPI images to “AT&T’s business locations.” Doc. 135 at 17.
YPPI also argues that Defendants’ failure to use the required copyright notice delineated by the
ATT License demonstrates that Defendants do not have rights under the license. Doc. 135 at 1718. As previously explained, where a licensee acts outside the scope of a license by violating a
condition to the license, the licensor may claim copyright infringement. Fantastic Fakes, Inc. v.
Pickwick Int’l, Inc., 661 F.2d 479, 483-84 (5th Cir. 1981). Texas law disfavors conditions, and
courts should construe contract language as covenants rather than conditions, where possible. PAJ,
Inc. v. Hanover Ins. Co., 243 S.W.3d 630, 636 (Tex. 2008).
YPPI has not shown that the provisions cited by it—that images should be used in AT&T
business locations only and that images were required to contain a copyright notice—are a
condition and not a covenant. No clear language in the ATT License establishes that these
29
provisions are a condition, as is required for a provision to be a condition under Texas law. W.F.
White Land Co. v. Christenson, 14 S.W.2d 369, 371 (Tex. App. 1928). Thus, the only reasonable
interpretation is that the provision is a covenant, not a condition, which YPPI cannot claim as the
basis for copyright infringement. Instead, any use of outsourcers by Defendants would give rise
only to a claim for breach of contract. Accordingly, arguments that Defendants used outsourcers
or failed to include the requisite copyright notice do not support a claim for copyright infringement.
Based on the above, the Court will grant summary judgment on the issue of whether
Defendants were permitted to use the licensed images under the ATT License, and their use of
such images did not constitute copyright infringement.
D.
Claim for Profits
In a claim for copyright infringement:
The copyright owner is entitled to recover the actual damages suffered by him or
her as a result of the infringement, and any profits of the infringer that are
attributable to the infringement and are not taken into account in computing the
actual damages. In establishing the infringer’s profits, the copyright owner is
required to present proof only of the infringer’s gross revenue, and the infringer is
required to prove his or her deductible expenses and the elements of profit
attributable to factors other than the copyrighted work.
17 U.S.C. § 504(b). In a claim for profits, “the plaintiff must show a causal relationship between
the infringement and profits . . . .” Pronman v. Styles, 676 F. App’x 846, 848 (11th Cir. 2017).
The initial burden placed on the copyright holder to show some causal connection is low. Latimer
v. Roaring Toys, Inc., No. 8:06-cv-1921-T-30AEP, 2010 WL 3747148, at *5 (M.D. Fla. Sept. 21,
2010). However, “a plaintiff may not seek gross revenues based entirely on a speculative
connection to the plaintiff’s claim.” Id. (quoting Thornton v. J Jargon Co., 580 F. Supp. 2d 1261,
1280 (M.D. Fla. 2008)).
30
Here, Defendants move for summary judgment on YPPI’s claim for profits and argue that
YPPI cannot show a causal relationship between their profits and any alleged infringement. Doc.
157 at 22-26. YPPI argues that “the causal relationship between the use of YPPI’s images in
Defendants’ ads and the revenue Defendants received from the sale of those ads is evident by
simply observing the Defendants’ ads containing YPPI images.” Doc. 135 at 19. Additionally,
YPPI relies on Defendants’ training materials which state that a picture is worth a thousand words.
Id. at 19-20. Although YPPI also relies on the opinion of an expert, Joseph J. Brown, the Court
found that the expert did not meet the Rule 702 and Daubert requirements for providing expert
testimony. Thus, the Court has not considered Brown’s opinion in opposition to Defendants’
motion.
Defendants provide unrebutted evidence that their profits are not affected by use of YPPI’s
images. Specifically, their pricing structure is not reliant on it, and their profits were not affected
by discontinuing use of YPPI’s images. Doc. 120 ¶ 7; Doc. 121 ¶¶ 15-16.
With respect to evidence that Defendants find images to be vital to advertisements, such
evidence does not show a connection specifically between use of YPPI’s images and profits from
advertisements. Defendants could—and did—use non-YPPI images with no effect on their profits.
Doc. 120 ¶ 7.
Based on the above, YPPI has failed to meet its burden to show a causal relationship
between Defendants’ use of YPPI images and their profits. Accordingly, the Court will grant
summary judgment in favor of Defendants with respect to YPPI’s claim for profits. YPPI may
pursue its claim for actual damages.
31
E.
Defendants’ Discovery Deficiencies
YPPI’s final argument in opposition to summary judgment is that Defendants violated this
Court’s discovery orders by not producing information critical to YPPI’s claims and damages, or
Defendants’ license defense. Doc. 135 at 20-21. YPPI relies on the arguments made in YPPI’s
Motion for Discovery Sanctions against Defendants (Doc. 124), in which YPPI requested the Court
sanction Defendants, including by precluding them from raising the licenses as a defense in this
case (id. at 17). The Court denied the motion and need not re-address its reasons for doing so
here. 4 Accordingly, it is
ORDERED:
1.
Plaintiff’s Notice to Take Judicial Notice (Doc. 133) is GRANTED.
2.
Defendants YP LLC and Print Media LLC’s Motion for Summary Judgment (Doc.
119) is GRANTED-in-part and DENIED-in-part.
3.
The Court grants summary judgment in favor of Defendant YP, LLC with respect
to the issue of whether it was permitted to use the licenses referred to herein as the Berry License
and the ATT License. As a matter of law, any use of Plaintiff’s copyrighted images covered by
these licenses did not constitute copyright infringement.
4.
The Court grants summary judgment in favor of Defendant Print Media LLC with
respect to the issue of whether it was permitted to use the license referred to herein as the ATT
License. As a matter of law, any use of Plaintiff’s copyrighted images covered by this license did
not constitute copyright infringement. The Court denies summary judgment with respect to the
4
Additionally, at the Final Pretrial Conference, YPPI acknowledged that all discovery issues
have been resolved.
32
issue of whether Defendant Print Media LLC was permitted to use the license referred to herein as
the Berry License.
5.
The Court grants summary judgment in favor of Defendants on the issue of whether
Plaintiff may claim Defendants’ profits as damages. Plaintiff may not claim Defendants’ profits
as damages.
6.
The Court denies summary judgment as to Counts I and II of the Amended
Complaint because the evidence is disputed as to whether the images used by Defendants were
covered by the licenses.
7.
Within FOURTEEN (14) DAYS of the date of this Order, YPPI shall advise the
Court as to whether some or all of the images used by Defendants were covered by the Berry
License, the ATT License, or both. YPPI’s response should be supported by any appropriate
evidence. Defendants may file a response within FOURTEEN (14) DAYS of the date of YPPI’s
response.
8.
As discussed at the Final Pretrial Conference, in light of the Court’s ruling on the
motion for summary judgment, on or before December 20, 2019, the parties may file an Amended
Pretrial Statement.
DONE AND ORDERED in Tampa, Florida on November 27, 2019.
Copies to:
Counsel of Record and Unrepresented Parties, if any
33
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