Reed v. Ezelle Investment Properties Inc. et al
OPINION AND ORDER. Defendants' motion (ECF # 24 ) is DENIED, and plaintiff's motion (ECF # 26 ) is GRANTED. Defendants shall pay plaintiff $1,500 in statutory damages for infringing the copyright in the Image. Judgment shall be entered on behalf of plaintiff. Plaintiff shall submit proof of costs and reasonable attorney's fees within 14 days of this order. FRCP 54(d)(2). IT IS SO ORDERED. Signed on 11/5/2018 by Magistrate Judge Youlee Yim You. (pvh)
UNITED STATES DISTRICT COURT
DISTRICT OF OREGON
AARON C. REED, an individual,
Case No. 3:17-cv-01364-YY
OPINION AND ORDER
EZELLE INVESTMENT PROPERTIES INC.,
doing business as ezelleinvestmentproperties.com,
GLENN D. EZELLE JR., an individual, DOES 110 INCLUSIVE,
YOU, Magistrate Judge:
Plaintiff Aaron C. Reed (“Reed”) has brought this action for copyright infringement
against defendants Glenn D. Ezelle Jr. (“Ezelle”) and Ezelle Investment Properties Inc. (“EIP”)
(collectively “defendants”).1 Before the court are cross-motions for summary judgment. For the
reasons set forth below, Reed’s motion is granted and defendants’ motion is denied.
All parties have consented to allow a Magistrate Judge to enter final orders and judgment in
this case in accordance with FRCP 73 and 28 USC § 636(c). ECF #21.
1 – OPINION AND ORDER
Reed is a professional photographer specializing in the production of fine-art nature
photography. Decl. Aaron C. Reed ¶ 2 (“Reed Decl.”), ECF #26-1. Reed offers his works
through his website in the form of museum quality fine-art prints. Id. ¶ 3. He sets strict
production limits of between 50 and 200 prints for each work. Id. ¶ 4. His pieces sell for
thousands of dollars each. Id., Ex. A (displaying invoices of $12,000 for four pieces, $4,250 for
two pieces, $4,800 for one piece, and $5,000 for one piece). His customers pay a premium due
to the artificial scarcity of each piece. Id. ¶¶ 4-5. Reed has expended great time and effort
establishing his brand as a fine-art nature photographer and is very selective about when and how
his works are used. Id. ¶ 18. While Reed endeavors to protect his intellectual-property rights to
the best of his ability, he does not have the time or financial resources to stop the widespread
copyright infringement of his photographs. Id. ¶¶ 7-8.
In 2010, Reed took a photograph at the Japanese Garden in Portland, Oregon (“the
Image”), and displayed it on his website. Joint Stip. Undis. Facts ¶ 1, ECF #22; id., Ex. A
(showing a copy of the Image). Reed registered the Image as part of a group registration of
photographs taken in 2010 and did not assert a claim in the selection, coordination, or
arrangement of the works included within the group. Id. ¶ 4. On January 30, 2013, the
Copyright Office issued registration certificate number VAu 1-119-527 for the group of
photographs. Id. ¶ 3.
Ezelle is a real estate broker licensed in Oregon and California and operates a real estate
business. Decl. Glenn D. Ezelle Jr. ¶ 1 (“Ezelle Decl.”), ECF #24-2. He is the sole owner and
president of EIP. Joint Stip. Undis. Facts ¶ 7, ECF #22. In 2016, Ezelle searched Google for
“free images” to display on EIP’s website and found the Image. Ezelle Decl. ¶ 2, ECF #24-2. It
2 – OPINION AND ORDER
is unclear where Ezelle procured the Image. Decl. Ryan E. Carreon ¶ 4, Ex. B, ECF #35-1.
Regardless, Ezelle maintains that he did not see a watermark or any other information suggesting
the Image was copyrighted, and he believed he could use the Image for free. Ezelle Decl. ¶ 2,
ECF #24-2. On September 7, 2016, Ezelle uploaded a copy of the Image to EIP’s website where
it was displayed in rotation with seven other photographs in five-second intervals at the top of
the website’s homepage. Joint Stip. Undis. Facts ¶¶ 9-10, ECF #22; id., Ex. C (showing
screenshot of EIP website with the Image). The parties dispute the amount of website traffic the
EIP website received during the relevant period.2
In 2017, Reed discovered the Image on EIP’s website and instructed his attorneys to
contact Ezelle to try to resolve the matter. Reed Decl. ¶¶ 14, 19, ECF #26-1. In July 2017,
through his attorneys, Reed sent Ezelle a cease-and-desist letter. Ezelle Decl., Ex. A, ECF #243. The communication included a Rapid Conditional Release License Agreement (“Proposed
Settlement Agreement”), which provided Ezelle the option of immediately settling the matter for
$5,000. Id. The Proposed Settlement Agreement contained the following confidentiality clause:
The terms of this Agreement are confidential; provided however, that each Party
may disclose the terms of this Agreement, as necessary to enforce its terms, in
response to valid legal process or as otherwise required by law, and/or to its
financial advisors and/or legal advisors.
There is some evidence the EIP website received 3,851 visitors during this time. Ezelle Decl.,
Ex. B, ECF #24-3. Ezelle contends that this number is inflated and that his maintenance of the
website generated much of this traffic. See id. ¶ 3; Suppl. Decl. Glenn D. Ezelle Jr. ¶¶ 2-3
(“Suppl. Ezelle Decl.”), ECF #34. However, this disputed fact is not material because Reed
seeks statutory damages in lieu of actual damages. See 17 USC § 504(c)(1)-(2); Columbia
Pictures Television, Inc. v. Krypton Broad. of Birmingham, Inc., 259 F.3d 1186, 1194 (9th Cir.
3 – OPINION AND ORDER
Proposed Settlement Agreement ¶ 7, ECF #24-3. It also provided that the “Agreement may not
be modified or amended except by written agreement, signed by all Parties,” and contained a
severability clause. Id. ¶¶ 9, 11.
Upon receipt of the letter, Ezelle immediately removed the Image from EIP’s website and
retained counsel. Ezelle Decl., Ex. D at 31, ECF #24-6. Several days later, Ezelle’s counsel sent
Reed’s counsel an email, sparking negotiations via email that lasted a little under a month. Id.
In two emails sent in late July 2017, Ezelle’s counsel stated his belief that Reed had seeded the
internet with his photographs with the intent of later bringing dubious legal claims. Higbee Decl.
¶¶ 12-14 & Ex. B, ECF #26-1. Ezelle’s counsel also stated that he was writing an article about
these practices for publication in a legal magazine, and made several disparaging comments on
online forums. Id. ¶¶ 9-10 & Ex. B, E. Nevertheless, to quickly resolve the matter without the
expense of litigation, the parties made several attempts to settle the dispute. Reed Decl. ¶ 20,
ECF #26-1; Ezelle Decl. ¶¶ 8-9, ECF #24-2.
On August 11, 2017, Ezelle’s counsel sent an email to Reed’s counsel stating that “[a]t
this juncture, we intend to do as previously mentioned, but in the amount of $1000. We are not
making a settlement offer in this amount, although you are welcome to accept it. We are going to
send a check, payable to Mr. Reed in the amount of $1000.” Ezelle Decl., Ex. D at 7, ECF #24-6
(emphasis added). Reed’s counsel responded, “I have conveyed the $1000 offer to my client
which he accepted. Please see attached the release agreement for your review. Please sign it and
return it . . . .” Id. Ezelle returned the Proposed Settlement Agreement, but with lines drawn
through the agreement’s confidentiality clause. Ezelle Decl., Ex. C, ECF #24-5; id., Ex. D at 68, ECF #24-6. In response to inquiries from Reed’s counsel regarding the modification of the
agreement, Ezelle’s counsel’s said, “If the deletions are unacceptable, you can return the check
4 – OPINION AND ORDER
to me.” Ezelle Decl., Ex. D at 7, ECF #24-6. Through counsel, Reed responded that the
confidentiality clause was non-negotiable and demanded $20,000 to settle the case. Reed Decl.
¶ 28, ECF #26-1; Ezelle Decl., Ex. D at 4, ECF #24-6. In a later email, Ezelle’s counsel stated
that “[t]he only thing we did not agree on was the confidentiality clause demanded by your
office.” Ezelle Decl., Ex. D at 2, ECF #24-6.
After negotiations fell through, Ezelle’s counsel made what Reed considered additional
disparaging comments on online forums characterizing Reed’s efforts as “an ‘extrajudicial
business model’ driven by dishonest representation[s] . . . .” Higbee Decl., Ex. E, ECF #26-1;
Reed Decl. ¶ 24, ECF #26-1. Reed considered the confidentiality clause to be non-negotiable,
because he might otherwise suffer reputational harm from Ezelle’s counsel’s disparaging
comments about his attempts to protect his intellectual property. Higbee Decl. ¶ 11 & Ex. D,
ECF #26-1; Reed Decl. ¶¶ 23, 26, ECF #26-1; Decl. Naomi M. Sarega ¶ 7, ECF #26-1. Indeed,
“Reed felt that he would not be able to fully combat any negative statements made by
Defendants’ counsel . . . without procuring a favorable judgment on the merits . . . .” Higbee
Decl. ¶ 14, ECF #26-1; see also Reed Decl. ¶ 24, ECF #26-1. Reed then filed suit.
A party is entitled to summary judgment if the “movant shows that there is no genuine
dispute as to any material fact and the movant is entitled to judgment as a matter of law.” FRCP
56(a). The moving party has the burden of establishing the absence of a genuine dispute of
material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). “When judging the evidence
at the summary judgment stage, the district court is not to make credibility determinations or
weigh conflicting evidence, and is required to draw all inferences in a light most favorable to the
nonmoving party.” Musick v. Burke, 913 F.2d 1390, 1394 (9th Cir. 1990); see also Anderson v.
5 – OPINION AND ORDER
Liberty Lobby, Inc., 477 U.S. 242, 255 (1986) (“The evidence of the nonmovant is to be
believed, and all justifiable inferences are to be drawn in his favor.”). However, the “mere
existence of a scintilla of evidence in support of the plaintiff’s position [is] insufficient . . . .” Id.
at 252. “Where the record taken as a whole could not lead a rational trier of fact to find for the
non-moving party, there is no genuine issue for trial.” Matsushita Elec. Indus. Co. v. Zenith
Radio Corp., 475 U.S. 574, 587 (1986) (citation and quotation marks omitted).
Reed seeks a ruling that defendants infringed his copyright of the Image and an award of
$15,375 in statutory damages, $9,825 in attorneys’ fees, and $400 in costs. Pl.’s Mot. Summ. J.
6, ECF #26. Defendants contend that the parties entered into an enforceable settlement
agreement, and alternatively argue that if such an agreement did not exist, they are innocent and
not willful copyright infringers. Defs.’ Mot. Summ. J. 3, ECF #24.
Enforceability of Proposed Settlement Agreement
This court first considers defendants’ contention that the parties entered into an
enforceable settlement agreement.
Mirror Image Rule
Under Oregon law, whether a contract exists is a question of law. Wieck v. Hostetter, 274
Or. App. 457, 471 (2015). A “contract is most commonly formed by an offer, an acceptance of
that offer, and an exchange of consideration.” Moro v. State of Oregon, 357 Or. 167, 196 (2015).
“Oregon applies an objective theory of contracts.” Wieck, 274 Or. App. at 471. That is, the
existence and terms of a contract are determined by the evidence of the parties’ communications
and acts, not their subjective understandings. Rhoades v. Beck, 260 Or. App. 569, 572 (2014).
6 – OPINION AND ORDER
Oregon follows the mirror image rule of offer and acceptance. Arboireau v. AdidasSalomon AG, 347 F.3d 1158, 1163 (9th Cir. 2003). “In Oregon, it is settled that the acceptance
of an offer must correspond to the offer at every point, leaving nothing open for future
negotiations.” Id. (internal quotation and alterations omitted). “The acceptance must be
positive, unconditional, unequivocal, and unambiguous, and must not change, add to, or qualify
the terms of the offer.” C. R. Shaw Wholesale Co. v. Hackbarth, 102 Or. 80, 94 (1921). “Where
the offeree . . . makes a counter offer or conditional acceptance which amounts to a counter offer,
or makes an attempted acceptance which seeks to modify one or more of the terms of the offer,
this operates as a rejection of the original offer.” Id. at 95-96. Before the counteroffer can
become a contract, it must be accepted by the party who made the original offer. Id. at 96; see
also RESTATEMENT (SECOND) OF CONTRACTS § 59 (“a reply to an offer which purports to accept
but is . . . different from those offered is not an acceptance but is a counteroffer”).
Here, there is no binding settlement agreement because Ezelle’s purported acceptance
modified a material term of the agreement and thus constituted a counteroffer. Reed’s first email
to Ezelle included a copy of the Proposed Settlement Agreement, which contained the
confidentiality clause at issue. Ezelle Decl., Ex. A., ECF #24-3. The parties negotiated the
settlement amount for the next several weeks. Id., Ex. D at 8-32, ECF #24-6. Ezelle proposed a
settlement amount of $1,000, and Reed sent Ezelle another copy of the Proposed Settlement
Agreement to be signed and returned with payment. Ezelle Decl., Ex. D at 7, ECF #24-6. Ezelle
mailed a $1,000 check to Reed with a signed copy of the Proposed Settlement Agreement, but
with the confidentiality provision crossed out. Id., Ex. C, ECF #24-5; id., Ex. D at 8, ECF #24-6.
After that, Reed’s counsel advised Ezelle’s counsel that it was “a shame” they could not come to
an agreement and said they were filing a complaint. Id., Ex. D at 3, ECF #24-6.
7 – OPINION AND ORDER
Under the mirror image rule, Ezelle’s tender, which included the deletion of the
confidentiality clause, constituted as a rejection of Reed’s offer and a counteroffer that Reed was
then free to accept or reject. Given Reed did not accept this counteroffer, the parties did not
enter into a binding settlement agreement as a matter of law.
Statements by Ezelle’s attorney, before and after the making the counteroffer, support
this conclusion. In his August 11, 2017 email, Ezelle’s attorney stated “[w]e are not making a
settlement offer,” and after Reed’s counsel rejected the counteroffer, Ezelle’s attorney stated that
“[i]f the deletions are unacceptable, you can return the check to me.” Id., Ex. D at 6, 8, ECF
#24-6. Moreover, the Proposed Settlement Agreement specifically states that the “Agreement
may not be modified or amended except by written agreement, signed by all Parties.” Proposed
Settlement Agreement ¶ 9, ECF #24-3. Reed did not agree to Ezelle’s modification with a
Ezelle cites Remark LLC v. Adell Broad., 817 F. Supp. 2d 990, 995 (E.D. Mich. 2011),
aff'd sub nom. Remark, LLC v. Adell Broad. Corp., 702 F.3d 280 (6th Cir. 2012), in support of
his argument. Defs.’ Mot. Summ. J. 9, ECF #24. However, Remark is easily distinguishable
because there the plaintiff actually accepted the defendant’s counteroffer before it retained new
counsel and contested a term of the settlement agreement. 817 F. Supp. 2d at 994-95. Here,
Reed did not accept the counteroffer before contesting a term of the settlement agreement.
Instead, upon receiving the counteroffer, he informed Ezelle that the confidentiality clause was
non-negotiable. Reed Decl. ¶ 28, ECF #26-1; Ezelle Decl., Ex. D at 4, ECF #24-6.
Materiality, Unconscionability, and Severability
Ezelle argues that his deletion of the confidentiality clause was immaterial because it was
not a material term of the agreement. He also contends that enforcement of such a provision is
8 – OPINION AND ORDER
unconscionable because it violates public policy, and that a binding agreement exists even if the
confidentiality clause was material. Defs.’ Mot. Summ. J. 4, 8-11, ECF #24. These arguments
lack merit for the reasons discussed below.
“A term is ‘material’ to an enforceable agreement when it goes to the substance of the
contract and, if breached, defeats the object of the parties in entering into the agreement.”
Johnstone v. Zimmer, 191 Or. App. 26, 34 (2003). A term may be material in one situation and
immaterial in another, depending on the specific facts and circumstances. In Gabaldon v. City of
Peoria, for example, the court found that a confidentiality clause in a release agreement was a
material term because “the parties were still clearly engaged in negotiating the terms of the
agreement” and “[t]he parties had merely agreed on a dollar amount and not on the rest of the
terms.” No. CV12-01612-PHX-JAT, 2013 WL 5428755, at *3 (D. Ariz. Sept. 27, 2013).
Importantly, the Gabaldon court considered the specific circumstances surrounding the
negotiation process and found that they were determinative.
As such, Ezelle’s reliance on Dyer v. Bilaall, 983 A.2d 349 (D.C. 2009), for the
proposition that all confidentiality clauses are immaterial is misplaced. In Dyer, several
homeowners sued the defendants alleging they had engaged in a mortgage foreclosure rescue
scam. Id. at 353. The day before trial, one of the defendants offered to “completely” settle the
case with one of the plaintiffs. Id. at 355. The next day, that defendant’s attorney announced in
open court that his client had reached a settlement with the plaintiff and read the “material terms”
into the record, to which there was no objection. Id. at 356. There was no mention of a
confidentiality clause. Id. at 358. When the parties attempted to put their agreement in writing,
they reached an impasse regarding whether a confidentiality clause should be included. The
9 – OPINION AND ORDER
plaintiff filed a motion to enforce the settlement agreement, arguing that the parties had no
contract because the agreement omitted the material term of a confidentiality clause. The court
opined that “[a] case clearly may be settled without a confidentiality clause. Such a provision
certainly could have been deemed material, but neither party referred to confidentiality in the email, in the acceptance, or in open court.” Id. (emphasis in original). The court further noted
that “[i]f confidentiality were, indeed, an indispensable part of the settlement, it is curious that
[the plaintiff’s counsel] stood by silently while the material terms were stated by his opponent on
the record, in open court.” Id. The court thus concluded that the agreement was valid, even
though it did not contain a confidentiality clause. Id.
Dyer is factually distinguishable because the plaintiff did not raise the issue of a
confidentiality clause until after there was an offer and acceptance. Here, the facts show that the
confidentiality clause was always an essential part of the deal that Reed wanted to make. Every
proposed agreement that Reed sent to Ezelle contained a confidentiality clause. Reed insisted on
confidentiality because Ezelle’s counsel began making disparaging comments that he was
somehow engaging in fraudulent and unethical behavior for attempting to protect his intellectual
property. Reed Decl. ¶¶ 24-30, ECF #26-1; Higbee Decl. ¶¶ 12-14, ECF #26-1. Moreover,
unlike Dyer, Ezelle did not accept Reed’s offer, but instead rejected it and made a counteroffer
by returning the Proposed Settlement Agreement with the confidentiality clause crossed out.
Defendants argue that “if the confidentiality clause was truly a material term then
plaintiff would have filed suit when defendants’ counsel made them aware that aspects of the
settlement discussion had already been publicized.”3 Defs.’ Mot. Summ. J. 9, ECF #24. Indeed,
See Ezelle Decl. ¶¶ 9-10, Ex. B, E (referring to the disparaging comments Ezelle’s counsel
apparently made on several online forums).
10 – OPINION AND ORDER
Reed could have filed suit then, but it was not unreasonable for him to attempt to settle the
matter with a confidentiality clause, as he did. Reed cannot be faulted for making every effort to
resolve the matter before filing suit.
Ezelle contends that the confidentiality clause is unconscionable because Reed has an
“overwhelmingly one-sided advantage through maintaining a settlement-based business model.”
Defs.’ Mot. Summ. J. 10, ECF #24. However, Ezelle provides no evidence for this assertion.
Courts regularly enforce confidentiality clauses in settlement agreements, and “there is no reason
to think that it represent[ed] any overreaching” here. Doi v. Halekulani Corp., 276 F.3d 1131,
1139 (9th Cir. 2002). Reed is not a “copyright troll” who is “more focused on the business of
litigation than on selling a product or service or licensing their copyrights to third parties to sell a
product or service.” Malibu Media, LLC v. Doe, No. 15 CIV. 4369 AKH, 2015 WL 4092417, at
*2 (S.D.N.Y. July 6, 2015). He is a practicing entity who maintains his livelihood by creating
and selling fine-art nature photography. See Reed Decl., Ex. A, ECF #26-1; see also Malibu
Media, 2015 WL 4092417, at *2-3 (discussing copyright trolls and their questionable use of
Ezelle cites the dissenting opinion in Kilgore v. KeyBank, Nat. Ass’n, 718 F.3d 1052,
1061 (9th Cir. 2013) (Pregerson, dissenting), and argues: “Kilgore held that a confidentiality
clause was unconscionable and thus unenforceable because the party seeking to enforce the
clause was a repeat player in the settlement process, knows the outcome of each settlement, and
can use that knowledge to its advantage.” Defs.’ Mot. Summ. J 10, ECF #24. Ezelle mistakes
the dissenting opinion for binding authority. Moreover, the majority opinion in Kilgore held the
opposite. In Kilgore, the plaintiffs were former students who sought broad injunctive relief
11 – OPINION AND ORDER
against the bank that originated their student loans. 718 F.3d at 1055. To secure their student
loans, the plaintiffs executed promissory notes containing an arbitration clause, which contained
a confidentiality clause. Id. at 1056. The plaintiffs sought to invalidate the arbitration and
confidentiality clauses. The majority enforced the clauses, holding they were neither
substantively nor procedurally unconscionable. Id. at 1061 (remanding with instructions to
Ezelle next relies on Ingenuity 13, LLC v. Doe, a case involving a notorious “pornotrolling collective.” No. 2:12–cv–8333–ODW (JCx), 2013 WL 1898633 at *1 (C.D. Cal. May 6,
2013). Other than the fact that this case, like Ingenuity, concerns copyright infringement and
out-of-court settlements, they are nothing alike. In Ingenuity, attorneys with “shattered law
practices” obtained the copyrights to pornographic movies they did not produce, monitored
BitTorrent activity, sued Internet service providers to determine the identities of the subscribers
of IP addresses, and then sent cease-and-desist letters to subscribers demanding settlements of
about $4,000. Id. at *2. “This nationwide strategy was highly successful because of
statutory[ ]copyright damages, the pornographic subject matter, and the high cost of litigation,”
resulting in millions of dollars in proceeds due to the numerosity of the defendants. Id. The
plaintiffs misrepresented their operations, relationships, and financial interests, and attempted to
deceive the court. Id. at *3. Ultimately, the court awarded sanctions to the defendants and
referred the matter to both the U.S. Attorney and the Internal Revenue Service for investigation.
Id. at *4-*6.
In contrast, Reed is a practicing entity. Reed Decl., Ex. A, ECF #26-1. He is not using
the threat of associating Ezelle’s name with salacious activities to extract a settlement. He has
not attempted to deceive this court or obfuscate the facts. Instead, Reed found the Image on
12 – OPINION AND ORDER
defendants’ business website, where it had been posted for nine months. After contacting Ezelle
with an initial settlement offer, Ezelle’s counsel began making disparaging comments online and
in settlement negotiations. When it became clear the parties could not reach an agreement, Reed
filed suit. Reed has not engaged in the objectionable conduct described in Ingenuity.
Defendant’s reliance on that case could hardly be more misguided.
Lastly, Ezelle argues the court should sever the confidentiality clause and enforce the
Proposed Settlement Agreement as is. The agreement provides for severability:
The Parties acknowledge that if any provision or application of this Agreement is
held invalid or unenforceable then any such provision will be deemed severed
from this Agreement and the remaining provisions and applications of this
Agreement will not be affected, but will remain valid and enforceable.
Proposed Settlement Agreement ¶ 11, ECF #24-3. However, this clause does not apply before
an agreement has been made. Regardless, this court cannot sever the confidentiality clause on
the basis that it is invalid or unenforceable. As discussed above, courts regularly enforce
confidentiality clauses. Doi, 276 F.3d at 1139.
In sum, this court concludes that the parties did not enter into a binding settlement
agreement as a matter of law.
Copyright Infringement and Statutory Damages
The court next turns to the merits of Reed’s copyright infringement claim.
Anyone who violates the exclusive rights of a copyright owner is an infringer of a
copyright. 17 USC § 501(a). To prevail on a claim of copyright infringement, the plaintiff must
establish ownership of a valid copyright and copying of constituent elements of the work that are
original. Perfect 10, Inc. v. Amazon.com, Inc., 508 F.3d 1146, 1159 (9th Cir. 2007). Copyright
13 – OPINION AND ORDER
infringement is a strict liability offense—the defendant’s intent is not a required element of the
claim. See Precision Automation, Inc. v. Tech. Servs., Inc., 628 F. Supp. 2d 1244, 1250 (D. Or.
2008) (“No finding related to intent, including willfulness, is needed to establish this violation.”);
King Records, Inc. v. Bennett, 438 F. Supp. 2d 812, 852 (M.D. Tenn. 2006) (“Liability for
copyright infringement does not turn on the infringer’s mental state.”).
The copyright owner may elect to recover statutory damages instead of actual damages
and profits “in a sum of not less than $750 or more than $30,000 as the court considers just.” 17
USC § 504(c)(2). However, in cases of willful infringement, the court may increase the award of
statutory damages to $150,000. Id. In cases of innocent infringement, the court may reduce the
award of statutory damages to a sum of not less than $200. Id. “Thus, it is possible in the same
action for a plaintiff not to be able to prove a defendant’s willfulness, and, at the same time, for
the defendant to be unable to show that it acted innocently.” Fitzgerald Pub. Co. v. Baylor Pub.
Co., 807 F.2d 1110, 1115 (2d Cir. 1986).
Here, defendants concede they “unknowingly infringed” upon Reed’s copyright in the
Image. Defs.’ Resp. 4, ECF #28; Joint Stip. Undisp. Facts ¶¶ 9-10, ECF #22. Reed accuses
defendants of willful infringement and seeks the maximum amount of statutory damages in his
Complaint. See Compl. ¶¶ 23, 30, Prayer for Relief, ECF #1. However, in his motion for
summary judgment, Reed seeks $15,375, an amount within the range of damages applicable to
non-willful infringement. See Pl.’s Mot. Summ. J. 1, 13, ECF #26; Pl.’s Reply 8, ECF #35.
Because it is unclear whether Reed concedes defendants’ infringement was not willful, the court
addresses this issue on the merits.
14 – OPINION AND ORDER
To prove a defendant’s willfulness, the Copyright Act requires the plaintiff to show (1)
the defendant was actually aware of the infringing activity, or (2) 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). Willful
infringement can be either intentional or reckless. Id.
If an infringer knew his behavior was illegal, his infringement was intentional. See
Clear Skies Nevada, LLC v. Kainu, No. 3:16-CV-811-AC, 2017 WL 4021121, at *8 (D. Or. Aug.
21, 2017). For example, in Clear Skies, the defendant not only admitted to downloading a copy
of a movie through a BitTorrent client, but also admitted he was aware that what he was doing
was illegal when he was doing it. Id. The court held that the defendants’ actions were the result
of reckless, if not intentional, disregard for the plaintiff’s rights. Id.
If an infringer makes no attempt to inquire into whether the item was subject to copyright
protection, the infringer is reckless or willfully blind. Louis Vuitton Malletier, 658 F.3d at 944.
For example, in Unicolors, Inc. v. Urban Outfitters, Inc., the court upheld a jury verdict finding a
defendant liable for willful infringement because the defendant made no attempt to determine
whether the material was copyrighted, reasoning that “regardless of how difficult it may be to
determine whether particular designs have been registered, a party may act recklessly by refusing
. . . to even investigate or attempt to determine [whether it is copyright protected.]” 853 F.3d
980, 991-92 (9th Cir. 2017).
Here, Reed cannot show defendants’ infringement is either intentional or reckless.
Unlike in Clear Skies, where the defendant admitted he knew the movie was copyright-protected,
the uncontroverted evidence in this case is that Ezelle downloaded the Image from a “free
15 – OPINION AND ORDER
website” and believed the Image was “free.” 2017 WL 4021121, at *8; Suppl. Ezelle Decl. ¶ 7,
ECF #34. Unlike in Unicolors, where the defendants made no attempt to find copyright
information, Ezelle “believed he took steps to make sure he was using a free image” by
searching only for “free” images. 853 F.3d at 991-92; Ezelle Decl. ¶ 2, ECF #24-2. Ezelle
further declares that he did not see a watermark or any other copyright information before
downloading the Image. Suppl. Ezelle Decl. ¶ 7, ECF #34. Thus, defendants’ infringement was
not willful as a matter of law.
To be an “innocent infringer,” a defendant must show he was “not aware and had no
reason to believe that his . . . acts constituted an infringement of copyright.” 17 U.S.C. §
504(c)(2). An infringer is not innocent if he accessed works that had copyright notices, because
the infringer could have learned about the copyrights had he inquired. BMG Music v. Gonzalez,
430 F.3d 888, 892 (7th Cir. 2005). In BMG, for example, the defendant downloaded copyrighted
music online rather than obtaining it from phonorecord discs. The plaintiff provided copyright
notices on the surface of their phonorecords. Although the music posted online lacked copyright
notices, the court reasoned that the inquiry is “whether ‘access’ to legitimate works was available
rather than whether infringers earlier in the chain attached copyright notices to the pirated
Similarly, here, defendants cannot prove that they were innocent because, while a
copyright notice did not appear alongside the Image when Ezelle downloaded it, information that
a copyright existed was readily discoverable. Brown Decl. ¶ 3, ECF#28; Suppl. Higbee Decl.
¶ 8, ECF #31-1. As in BMG, defendants could have learned about the copyright through basic
16 – OPINION AND ORDER
online research. Thus, defendants cannot prove that they had no reason to believe their acts
constituted an infringement. As such, they are not innocent infringers.
Statutory Damages on Summary Judgment
When a plaintiff demands more than the minimum amount of statutory damages in a
copyright infringement action and a party demands a jury trial, the Seventh Amendment entitles
that party to have a jury decide the amount of statutory damages.4 Here, the parties confirmed at
oral argument that they both waived their right to a jury trial. As such, this court may award
statutory damages on summary judgment. See FRCP 38(d).
Because this case involves neither willful nor innocent infringement, the court may award
statutory damages of “not less than $750 or more than $30,000. ” 17 USC § 504(c)(1). The
court has “wide discretion” in determining the amount of statutory damages to be awarded,
“constrained only by the specified maxima and minima.” Peer Int’l Corp. v. Pausa Records,
Inc., 909 F.2d 1332, 1336 (9th Cir. 1990) (quoting Harris v. Emus Records Corp., 734 F.2d
1329, 1335 (9th Cir. 1984)). “In measuring the damages, the court is to be guided by ‘what is
just in a particular case, considering the nature of the copyright, the circumstances of the
infringement, and the like . . . .’” Peer Int’l, 909 F.2d at 1336 (quoting F. W. Woolworth Co. v.
See 17 USC § 504; Feltner v. Columbia Pictures Television, Inc., 523 U.S. 340, 353-55 (1998)
(“if a party so demands, a jury must determine the actual amount of statutory damages under
§ 504(c)”); GoPets Ltd. v. Hise, 657 F.3d 1024, 1034 (9th Cir. 2011) (discussing Feltner and
holding “there is no right to a jury trial when a judge awards the minimum statutory damages”);
Dream Games of Ariz., Inc. v. PC Onsite, 561 F.3d 983, 992 (9th Cir. 2009) (“We have
subsequently interpreted Feltner to uphold the constitutionality of the statutory damages
provision, provided that at the plaintiff’s election of a jury trial, we replace the term ‘court’ in
§504(c) with ‘jury.’”); Columbia Pictures Television, 259 F.3d at 1193 (affirming district court’s
denial of plaintiff’s motion to preclude a jury trial on statutory damages); BMG, 430 F.3d at 892
(holding that court may award minimum statutory damages on summary judgment where there is
no genuine issue of material fact).
17 – OPINION AND ORDER
Contemporary Arts, 344 U.S. 228, 232 (1952)). “The Supreme Court has stated that ‘even for
uninjurious and unprofitable invasions of copyright the court may, if it deems it just, impose a
liability within the statutory limits to sanction and vindicate the statutory policy’ of discouraging
infringement.” Id. (citing F. W. Woolworth, 344 U.S. at 233) (alterations omitted). The
Copyright Act does not require any evidence of actual damages or lost profits when awarding
statutory damages. Columbia Pictures Television, 259 F.3d at 1194. Even so, some courts have
held that statutory damages should bear some relation to the harm suffered. See Barcroft Media,
Ltd. v. Coed Media Group, LLC, 297 F. Supp. 3d 339, 345 (S.D.N.Y. 2017); Stark Carpet Corp.
v. Stark Carpet & Flooring Installations, Corp., 954 F. Supp. 2d 145 (E.D.N.Y. 2013).
Here, Ezelle is a licensed real estate broker who has dealt in real property for over two
decades. Arguably, with his level of professional experience, Ezelle should have known that he
could not use the Image in this case. While it is unclear from which website Ezelle downloaded
the Image, in this court’s view, simply searching Google for “free images” and not immediately
seeing a watermark lacks the type of diligence that would mitigate an award of statutory
damages. Moreover, the infringement was not merely for personal use; Ezelle used the
copyrighted work for profit and to further his own business interests.
On the other hand, Reed has not presented any evidence of actual damages or lost profits.
Reed has not specified what if any remaining value the image has, whether it has ever been sold
and at what price, and the importance of this specific image related to his whole practice as a
fine-art nature photographer. Defs.’ Resp. 3-5, ECF #28. Moreover, only a few thousand people
may have even visited the EIP website in the nine months during which the Image was
displayed, and the Image was displayed in rotation with seven other photographs at five-second
intervals. Id. at 2.
18 – OPINION AND ORDER
Furthermore, Ezelle and Reed are not competitors. Reed sells high-quality fine-art prints,
while Ezelle sells real estate. Ezelle infringed the copyright in the Image by visually enhancing
his website—not by reselling the Image itself. However, such use could still devalue Reed’s
brand and destroy his ability to offer that piece for sale as part of his fine-art collection. Reed’s
customers could be less likely to view his work as “fine art” or to pay a premium for its artificial
scarcity if they saw the same photo being used in that context. Pl.’s Mot. Summ. J. 13, ECF #26;
Reed Decl. ¶¶ 17-18, ECF #26-1.
Finally, and importantly, Ezelle terminated his infringing use immediately after receiving
Reed’s cease-and-desist letter. Ezelle Decl., Ex. D at 31, ECF #24-6. Ezelle’s immediate
compliance is a factor in favor of a lower award.
Considering all the circumstances, a statutory award of $1,500, i.e., twice the minimum,
is just in this case. The minimum award of $750 seems insufficient, given the length of time the
image was used on Ezelle’s commercial site and Ezelle’s level of experience as a professional.
An award that is twice the minimum would put “infringers on notice that it costs less to obey the
copyright laws than to violate them,” while anything higher would fail to discount for Ezelle’s
immediate compliance when he learned of the infringement. BMI v. R Bar of Manhattan, 919 F.
Supp. 656, 660 (S.D.N.Y. 1996).
Attorney’s Fees and Costs
The court may award full costs and “a reasonable attorney’s fee to the prevailing party as
part of the costs.” 17 USC § 505; Kirtsaeng v. John Wiley & Sons, Inc., 136 S. Ct. 1979, 198489 (2016). Reed has prevailed in this matter and is therefore entitled to costs and reasonable
19 – OPINION AND ORDER
Defendants’ motion (ECF #24) is DENIED, and plaintiff’s motion (ECF #26) is
GRANTED. Defendants shall pay plaintiff $1,500 in statutory damages for infringing the
copyright in the Image. Judgment shall be entered on behalf of plaintiff. Plaintiff shall submit
proof of costs and reasonable attorney’s fees within 14 days of this order. FRCP 54(d)(2).
IT IS SO ORDERED.
DATED November 5, 2018.
/s/ Youlee Yim You
Youlee Yim You
United States Magistrate Judge
20 – OPINION AND ORDER
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