Reminder: Cutting-and-Pasting Photos from the Internet Is Hazardous to Your Legal Health–Grecco v. Valuewalk

This is a mostly straightforward case of cutting-and-pasting a photo from the Internet. These cases don’t normally produce detailed federal court rulings because the defendant usually doesn’t have great defenses and prefers to settle early. This defendant decided to fight rather than settle, and predictably, it does not go well. Cautionary lessons abound.

Grecco is a professional photographer. The financial magazine Barron’s hired him to do a professional photo shoot of Jeffrey Gundlach, a bond trader. Barron’s paid Grecco about $2,200 for his work. Grecco retained the copyright and registered it in 2011. Barron’s published the photo in its Feb. 21, 2011 edition and behind its paywall online. Despite the paywall, the image is indexed in Google results.

Valuewalk competes with Barron’s. It’s an ad-supported site. It retained a contractor to prepare a resource page about Jeffrey Gundlach. The page was first published in 2012 and then edited and republished in 2015, but the photo apparently remained constant throughout. The contractor added the Barron’s photo of Gundlach despite explicit instructions to use a different photo. There’s no explanation for why the contractor made the switch. Valuewalk displayed the photo in reduced size (300×200 instead of 553×369) and in a flatter finish. and it omitted the photo credit. Grecco discovered the republication in 2015 using a third party service, ImageRights.  The images from the opinion:gundlachChoice of Law. Valuewalk’s contractor was located in Pakistan, so Valuewalk argued that the infringement didn’t occur in the US. The court labels this argument frivolous, saying “U.S.-based defendants cannot escape liability under the Copyright Act by offshoring part of their production process.” Plus, “The allegedly infringing images was stored on Valuewalk’s server in the United States, was accessible from computers within the United States, and its use was directed towards United States readers.”

Prima Facie Case. Grecco had a copyright registration showing his ownership. Actual copying was demonstrated by several pieces of circumstantial evidence, including the fact the photos are identical. As for wrongful copying, as illustrated by the images above, “A side-by-side comparison demonstrates that, even if there were any disparities between the Plaintiff’s image and those published by the Defendants, there is no doubt that an ordinary observer would not notice them.” The court disregards the fact that the secondary use was a smaller image size: ” Allowing infringers to freely use a copyrighted work with impunity if they only degrade its quality would enfeeble any force of the copyright holder’s limited monopoly.” Note the implicit conflict with Perfect 10 v. Amazon, where the 9th Circuit held that the reduced image size of Google’s thumbnails did support a fair use defense.

Fair Use. Nope:

  • Valuewalk didn’t add anything new to Grecco’s photo. The Bill Graham Archives case didn’t help Valuewalk because the initial photo was prepared for a biography, so Valuewalk’s biography was for the same purpose.
  • The photo was a creative work. but it was widely published, so this factor was a wash.
  • Unlike Kelly v. Arribasoft and the Bill Graham Archives cases, the photos here were 100% substitutable despite the slightly reduced size.
  • Grecco had a licensing program for the photo and had actually licensed it to others, so Valuewalk’s republication denigrated that licensing market.

DMCA Online Safe Harbor. 512(c) can apply to contractor-uploaded works. See BWP v. Examiner. However, Valuewalk didn’t designate an agent for 512(c)(3) notices with the Copyright Office until 2017, so 512(c) isn’t applicable to this 2016 lawsuit.

Copyright Misuse. “Defendants allege that MGP have misused copyright laws to create a market for its photographs where none exists, forcing licensees to pay exorbitant rates to use its photographs….The copyright misuse defense excludes copyright holders who seek to enforce the limited monopoly granted to them by the Copyright Office.”

Statute of Limitations. The plaintiff sued in 2016, and the initial page included the photo starting 2012. That is more than 3 years apart, but determining the last date of infringement causes the court to deny summary judgment. I don’t know why; there’s no way this case will fail on SOL grounds.

1202. “The Valuewalk pages containing the work reference the Barron’s article, supporting a finding that Defendants had knowledge of the CMI identifying Grecco as the photographer of the image. The knowledge element is further supported by the Google search results for the Gundlach photograph, proffered by Defendants themselves, which include the copyright management information with the description “Michael Grecco for Barron’s.” The question of whether Defendants had the requisite intent is one that the Court is unable to ascertain from the record.”

Lawsuits over a single photo rarely produce large damages awards. I’d be surprised if the court awarded more than $30,000 in statutory damages. The real payload is the attorneys’ fees, and this opinion signals pretty strongly that the judge will award a 505 fee shift to the plaintiff if asked. Thus, this ruling ought to spur a settlement so the defendant can stop the hemorrhaging.

Case citation: Michael Grecco Productions, Inc. v. Valuewalk, LLC, 2018 WL 5831311 (S.D.N.Y. Nov. 6, 2018)