Menzel v. Scholastic, Inc.

Background

Peter Menzel sued Scholastic, Inc. for copyright infringement. The dispute concerned Scholastic’s use of Menzel’s photographs under license agreements. Menzel alleged that Scholastic exceeded license limits involving print runs, geographic distribution, online or electronic publication, and other uses. Both parties moved for summary judgment, which is a ruling without a trial when there is no genuine dispute over a fact important to the outcome.

Sealing requests

The court granted the parties’ motions to file materials under seal. Scholastic supported sealing information about its print runs with evidence that competitors could use precise print-run totals to plan publications, set prices, and assess the value of publications. The court found compelling reasons to keep that information confidential.

Burden of proof and license scope

The court held that, when the existence of a license is undisputed, Menzel had the burden of proving that Scholastic’s copying exceeded the license’s scope. The court relied on Ninth Circuit precedent stating that a copyright owner who grants a license generally cannot sue for infringement unless the licensee acted outside the license. The court rejected Menzel’s argument that Scholastic had to prove authorization in this situation.

The court also rejected Scholastic’s argument that any dispute about license terms necessarily created only a contract claim. License terms limiting the scope of permitted copying—such as limits on print runs, geography, or format—may be conditions, and violating such conditions may constitute copyright infringement. The court granted Menzel summary judgment on Scholastic’s defense that the claims arose only under contract law.

Time-limit and damages defenses

The court denied Scholastic’s motion for summary judgment on its statute-of-limitations defense and granted Menzel’s motion on that defense. Applying Ninth Circuit precedent, the court held that the copyright discovery rule remained binding. Under that rule, the three-year period generally begins when the copyright holder discovers, or reasonably should have discovered, the infringement. Scholastic had not shown that Menzel knew or should have known about the alleged infringements before September 2014.

The court also denied summary judgment for Scholastic and granted summary judgment for Menzel on Scholastic’s separate argument that damages were limited to the three years before the lawsuit. The court held that the cited Supreme Court decision did not clearly establish an independent damages bar and that Ninth Circuit precedent allowed damages for earlier infringement when the copyright owner did not discover, and reasonably could not have discovered, the infringement before the relevant period.

Other defenses

The court granted Menzel summary judgment on Scholastic’s copyright-registration defense to the extent it challenged registration VA 1-719-226. Scholastic identified inaccuracies involving six images in a registration covering thousands of photographs, but did not claim reliance on the errors or show that Menzel intended to defraud the Copyright Office. The court held that the alleged inaccuracies therefore did not invalidate the registration.

For Rows 50 and 51, however, the court denied Menzel’s motion on the registration defense because Scholastic could still argue that the alleged infringements occurred before registration. Except for those rows, the court granted Menzel’s motion on that defense because Scholastic had not identified other alleged infringements that occurred before registration.

Claim-by-claim rulings

The court denied Scholastic’s statute-of-limitations motion for the listed claims. It also ruled as follows:

- Rows 13a, 13b, 1, 2–11, 12, 13–21, 28–49, 50, 51, 52, 53–54, 55, 56, 69, 84, 85, and 92–93 had factual disputes and were to proceed to trial. For Rows 50 and 51, Menzel’s motions were denied. For Row 55 and Rows 92–93, both parties’ motions were denied. - Menzel’s motion was granted on Rows 14, 15a–15c, 17b–17f, 22–27, 58–61, 62–68, 70–83, and 89–91, although damages for those claims still required resolution. These rulings included alleged uses beyond print-run or geographic limits, online use outside the license, and use after an authorized online-use period ended. - Menzel’s motion was denied on Row 17a because a factual dispute remained about whether the use was licensed. - Scholastic’s motion was granted on Row 57, and the infringement claim based on that row was dismissed because the use was within the license. Scholastic’s motion was also granted on Rows 86–88 and Row 94, and the infringement claims based on Rows 87, 88, and 94 were dismissed. Menzel did not oppose the requested finding of noninfringement for Row 86.

Willful infringement

The court denied Menzel’s motion for summary judgment on willful infringement. The evidence did not establish willfulness as a matter of law because a reasonable jury could consider more than the number of alleged infringements, including Scholastic’s other licensing and infringement conduct and what Scholastic knew or should have known.

Disposition

The court stated that both parties’ motions were granted in part and denied in part. The issues remaining for trial were infringement claims involving factual disputes, damages for claims on which Menzel received summary judgment, and willful infringement. The order disposed of Docket Nos. 105 and 107.