VHT, INC. V. ZILLOW GROUP, INC., ET AL, No. 22-35147 (9th Cir. 2023)
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Thousands of copyrighted photos on Zillow’s site come from VHT, a professional real estate photography studio. Zillow used VHT’s photos on its real estate “Listing Platform,” which is the primary display of properties, and on a home design section of the website called “Digs.” Following summary judgment rulings, a jury trial, and various post-trial motions, the Ninth Circuit affirmed the district court in large part in prior appeal Zillow I. Essentially, the panel agreed with the district court that Zillow was not liable for direct, secondary, or contributory infringement.
Back on remand, the Ninth Circuit affirmed the district court’s decision in full. The panel held that the district court properly excused VHT’s failure to meet Section 411(a)’s non-jurisdictional exhaustion requirement because copyright registration was wholly collateral to whether Zillow infringed on VHT's copyright, dismissing VHT’s claim after the statute of limitations had already expired would cause irreparable harm, and excusal would not undermine the purpose of administrative exhaustion. The panel affirmed the district court’s ruling, on remand, that the 2,700 VHT photos remaining at issue were not a compilation, which would entitle VHT to only a single award of statutory damages under 17 U.S.C. Section 504(c), but rather, each individual photo constituted an infringement. The photos were part of VHT’s master photo database, and the VHT group registered its images as a “compilation.” But VHT also registered the underlying individual images and licensed these images on a per-image or per-property basis. The panel held that the photos had independent economic value separate from the database and did not qualify as “one work.”
Court Description: Copyright The panel affirmed the district court’s judgment on remand in a copyright action brought by VHT, Inc., concerning the online display of photos by Zillow Group, Inc., and Zillow Inc., an online real estate marketplace.
Thousands of copyrighted photos on Zillow’s site come from VHT, a professional real estate photography studio. Zillow used VHT’s photos on its real estate “Listing Platform,” which is the primary display of properties, and on a home design section of the website called “Digs.” Following summary judgment rulings, a jury trial, and various post-trial motions, the panel affirmed the district court in large part in prior appeal Zillow I. Essentially, the panel agreed with the district court that Zillow was not liable for direct, secondary, or contributory infringement. However, the panel determined that Zillow’s addition of searchable functionality on the Digs home design webpages was not fair use. The panel also reversed the jury’s finding that Zillow had willfully infringed 2,700 searchable photos displayed on Digs, and it remanded for consideration of statutory damages and a determination whether VHT’s photos used on Digs were part of a compilation or were individual photos. Following more motions and a bench trial on remand, the parties again appealed. The panel held that, on remand, the district court properly excused VHT’s compliance with the non-jurisdictional registration requirement of 17 U.S.C. § 411(a), which provides that no infringement action “shall be instated until preregistration or registration of the copyright has been made in accordance with this title.” Before filing suit, VHT submitted to the Copyright Office completed registration applications for its images, but the Copyright Office did not issue registration certificates until after the suit was filed. Fourth Estate Public Benefit Corp. v. Wall-Street.com, LLC, 139 S. Ct. 881 (2019), issued 11 days before Zillow I, overruled Ninth Circuit precedent and held that registration is made not when an application for registration is filed, but when the Copyright Register has registered a copyright after examining a properly filed application. On remand, Zillow argued for the first time that VHT failed to satisfy § 411(a)’s registration requirement and that its claims therefore must be dismissed. The panel held that the district court properly excused VHT’s failure to meet § 411(a)’s non-jurisdictional exhaustion requirement because copyright registration was wholly collateral to whether Zillow infringed on VHT's copyright, dismissing VHT’s claim after the statute of limitations had already expired would cause irreparable harm, and excusal would not undermine the purpose of administrative exhaustion.
The panel affirmed the district court’s ruling, on remand, that the 2,700 VHT photos remaining at issue were not a compilation, which would entitle VHT to only a single award of statutory damages under 17 U.S.C. § 504(c), but rather, each individual photo constituted an infringement. The photos were part of VHT’s master photo database, and VHT group-registered its images as “compilation.” But VHT also registered the underlying individual images and licensed these images on a per-image or per-property basis. The panel held that the photos had independent economic value separate from the database and did not qualify as “one work.” Following Alaska Stock, LLC v. Houghton Mifflin Harcourt Publishing Co., 747 F.3d 673 (9th Cir. 2014), the Copyright Office stated that a database is, by definition, a compilation, and in 2018 it updated registration options to allow registration of a number of works as a group that is not considered a compilation. The panel clarified that Alaska Stock does not limit recovery to one award for any infringements in a database. The panel held that the statutory text, caselaw, and common sense compelled one result: the infringed works were not the database but instead were the 2,700 individual photographs, and VHT was entitled to an award of statutory damages for each of the 2,700 infringements.
On VHT’s cross-appeal, the panel held that, because the panel in Zillow I had vacated the jury’s finding of willfulness, the district court did not exceed its mandate on remand by conducting a new bench trial to decide statutory damages and determine whether any of the infringements were innocent. The panel also affirmed the amount of the statutory award.
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