Court Upholds Group Registrations but Cuts "Look Back" to Three Years

Appellate Court Decides Important Copyright Issues Regarding Corbis Registrations and “Look Back” Period for Copyright Damages (Sohm v. Scholastic Inc., No. 18-2110, 2020 WL 2375056 (2d Cir. May 12, 2020)In a recent decision that finally resolved two outstanding copyright issues, the Second Circuit Court of Appeals—the appellate court encompassing New York—upheld the validity of the copyright registration procedure utilized by photography licensing agencies like Corbis Corporation, and held that courts may award copyright damages only for the three-year period preceding commencement of the action.  The decision vindicates photography agencies who file group registrations on behalf of photographers, as the court held that both the individual images and the collection are protected by the registration.  Photographers and agencies, however, should be aware of the court’s holding, which limits the amount of damages that can be collected: courts will no longer “look back” farther in time than three years prior to suit.  So copyright owners should be sure to bring timely suit when infringements occur or risk losing out on damages outside the three-year window.In the case, Sohm v. Scholastic Inc., No. 18-2110, 2020 WL 2375056 (2d Cir. May 12, 2020), a photographer, Joseph Sohm, brought a copyright infringement action against Scholastic Inc., which had used 89 of Sohm’s photographs in various publications, outside the limited license granted by Sohm’s third-party licensing agent. As Sohm’s agent, Corbis had previously registered a number of Sohm’s photographs with the Copyright Office.  Under the agreement, Sohm assigned his copyrights to Corbis for registration purposes, and Corbis reassigned the copyrights back to Sohm after registration was completed.  Corbis then managed the licensing of the photographs and entered into preferred vendor agreements with publishers like Scholastic.  In this instance, Scholastic was accused of using images outside the scope of the license agreement, in numbers exceeding the print runs contemplated in the invoices.  Before the district court, Scholastic made several arguments to try to defeat Sohm’s claims and invalidate his copyright registration, including arguing that the Corbis group registrations did not extend to the individual photographs in the collection because the registrations failed to list the name of the “author” (i.e., the individual photographers).  The district court did not buy this argument, even though another court in the district had reached the opposite conclusion eight years earlier.  See Muench Photography, Inc. v. Houghton Mifflin Harcourt Pub. Co., 712 F. Supp. 2d 84, 87 (S.D.N.Y. 2010).  The court instead followed the reasoning of the Ninth Circuit, concluding that because the name of the author of the “work” (i.e., the collection) was provided, this was sufficient to satisfy the statutory requirements for registration.  In a comprehensive opinion, reviewing both cases, the Second Circuit affirmed this view, concluding that the “‘author’ that must be identified in a group registration under 17 U.S.C. § 409(2) is the author of the compilation, rather than the author of each underlying work, and a valid group registration works to register each individual work included in the compilation.”  The court’s decision on this point is favorable to photographers and agencies who file group registrations on their behalf. Additionally, the Second Circuit also considered whether the district court had appropriately awarded Sohm copyright damages spanning back years and years before the commencement of the lawsuit.  This analysis involved a somewhat tricky interpretation of the Second Circuit’s prior ruling on the Copyright Act’s statute of limitations (Psihoyos v. John Wiley & Sons, Inc., 748 F.3d 120 (2d Cir. 2014)) and a Supreme Court case on when an infringement is actionable (Petrella v. Metro-Goldwyn-Mayer, Inc., 572 U.S. 663 (2014)).  For the most part, courts to date have read these two decisions separately, acknowledging the Petrella court’s three-year look-back period for a plaintiff’s recovery of monetary damages in a copyright action, while continuing to apply the Psihoyos court’s “discovery” rule, which extends the time when the Copyright Act’s statute of limitations period starts to run based on when the copyright owner “discovers” the infringement.  The Second Circuit in the Sohm case, however, finally resolved how the decisions should be read together.  Reviewing the prior decisions, the appellate court explained that the discovery rule is binding precedent in this circuit, so that rule remains operative—meaning that a copyright owner’s claim does not accrue until he “discovers” the infringement, thereby delaying the start of the three-year statute of limitations period.  However, the Second Circuit also determined that the Supreme Court’s decision in Petrella counsels that there is only a three-year “look back” period from when suit is filed to determine the extent of monetary damages available.  As a result, the court’s holding limits a copyright owner’s recovery when the discovery rule is applied. For example, if an infringement occurred 10 years ago but was only recently discovered, prompting the copyright owner to file suit, the copyright owner would only be able to recover damages for the three years prior to filing, and would not be able to “look back” through the 10 years since the infringement.  The decision on this point lends an advantage to copyright defendants where plaintiffs delay in bringing suit yet still seek to recover expansive damages dating back as far as they can count.  While this decision may force plaintiffs to sue promptly instead of negotiating a settlement, one way to stop the statute of limitations clock while negotiating any agreement is to request a “tolling agreement” that stops the statute of limitations running for an agreed-upon period of time.