Another Tough Ruling for Print-on-Demand Vendors–Sid Avery v. Pixels

October 19, 2020 · by Eric Goldman · in Copyright, Derivative Liability

Sid Avery photographed celebrities in the 1950s-1970s. At issue are six of his photos, all governed by the 1909 Copyright Act. Pixels[.]com is a print-on-demand vendor. Like Redbubble, it functions primarily as a marketing front-end; it outsources all manufacturing to third-party drop-shippers. Pixels admits that at least one of Avery’s photos was sold, producing revenue of $114.05 and a profit of $42.93. Avery never sent takedown notices, but Pixels did immediately remove the photos after getting the complaint. Avery sued Pixels for copyright infringement and 1202 violations. Pixels moved for summary judgment.

Volition. Quoting VHT v. Zillow, the court says “to establish volitional conduct, a plaintiff ‘must provide some evidence showing the alleged infringer exercised control (other than by general operation of its website); selected any material for upload, download, transmission, or storage; or instigated any copying, storage, or distribution of [the] photos.'”

The court says Pixels’ users select the uploaded photos and Pixels does a light review for pornography, which doesn’t count as volition. Nevertheless, the court denies Pixels summary judgment for two reasons. First, Pixels claimed that its systems were “fully automated,” but humans checked every photo for blurriness before sending orders to manufacturers. “This human touch suggests that Pixels’ transmission of images to its vendors may not be truly ‘automatic.'” Second, using drop-shippers doesn’t end the inquiry because Pixels may have a principal-agency relationship with them; for example, one vendor has an affiliated name, and one of the products bears a “Pixels” label.

Note: If anyone is liable for direct copyright infringement in this arrangement, it almost certainly collapses. Even if Pixels isn’t directly liable, it could be contributorily or vicariously liable for the manufacturers’ activities. This is why I keep expressing concern that reallocating responsibilities within different corporate entities may not fix the liability exposure.

512 Safe Harbor. Note: because Pixels doesn’t do manufacturing itself, it could qualify for the 512 safe harbor for publishing user-uploaded photos, even though vertically integrated print-on-demand vendors may not qualify for the manufacturing piece.

The court wonders if Pixels has disqualifying “right and ability to control,” which the Veoh case defined as when the defendant “exert[s] substantial influence on the activities of users.” This doesn’t really shed any additional insight, so the court seems to abandon it as the legal standard. Instead, the court cites Mavrix for the proposition that a “service provider exerts high levels of control, for example, when it, prescreens sites, gives them extensive advice, prohibits the proliferation of identical sites, provides detailed instructions regarding issues of layout, appearance, and content, and ensures that celebrity images do not oversaturate the content.” Applying that standard, the court says that “unlike eBay and Amazon, Pixels may have an active role in designing, listing, selling, manufacturing, and delivering products…. Pixels’ “fulfillment centers” apparently manufacture and ship products at Pixels’ direction and based on Pixels’ specifications. The evidence in the record suggests that Pixels—not its vendors—determine the menu of products that will be available on the Websites.” (I’m not really sure the court adequately distinguished Amazon’s marketplace, but OK). The court adds: “Calling one’s business a ‘platform’ is not a magic wand.”

The court also questions if Pixels has a disqualifying financial interest in the infringements because “there is a ‘causal relationship’ between the infringing activity—manufacturing and selling a product—and the financial benefit.”

1202. A user uploaded a photo with its own watermark. The court says that Pixels didn’t have the requisite scienter, so the court grants summary judgment.

Damages. Given that Pixels has only admitted to $42 of profit in this case, the court opines:

the Court is skeptical that Plaintiff will be able to support a claim for significant damages. It is undisputed that Pixels responded promptly upon receiving notice of the infringing images. Pixels’ profits and Plaintiff’s actual damages are apparently very modest—perhaps less than $100. The Court therefore strongly believes this case should settle. The cost of continued litigation will almost certainly outstrip the amount in controversy. The Court encourages counsel on both sides to use their best efforts to resolve this dispute informally and to avoid wasting their clients’ resources.

In the 2 months since this ruling, the litigants have kept their guns ablazin’, so it’s doubtful the judge will get his wish.

Case citation: Sid Avery & Associates, Inc., v. Pixels.com LLC, 2020 WL 6114918 (C.D. Cal. Aug. 18, 2020)

Another Tough Ruling for Print-on-Demand Vendors–Sid Avery v. Pixels

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