Erickson Productions Inc v. Kraig R Kast

Background

Erickson Productions, Inc. and Jim Erickson sued Kraig Rudinger Kast, alleging that three photographs were copied and used without authorization on the Atherton Trust website. Erickson owned registered copyrights in the photographs and had licensed them to Wells Fargo for use on Wells Fargo’s website. Neither Kast, Atherton Trust, nor Only Websites had obtained a license from Erickson for the photographs.

At the original trial, the jury found Kast liable for contributory and vicarious copyright infringement, but not direct infringement. It also found the infringement willful and awarded $150,000 per photograph, for a total of $450,000. The original court entered judgment for that amount.

The Ninth Circuit affirmed the contributory-infringement verdict but vacated the vicarious-liability verdict. It also vacated the willfulness finding because the jury had been instructed that infringement could be willful if Kast should have known about it—a negligence standard that was less demanding than the required standards of actual knowledge, willful blindness, or recklessness. The Ninth Circuit remanded the willfulness issue to the district court based on the existing trial record.

Legal standard

Under the Copyright Act, willful infringement requires proof that the defendant was actually aware of the infringing activity or acted with reckless disregard for, or willful blindness to, the copyright owner’s rights. A reckless defendant knows of a substantial and unjustified risk of wrongdoing. A willfully blind defendant deliberately avoids confirming a high probability of wrongdoing.

If infringement is willful, the court may award up to $150,000 in statutory damages per infringed work. Without willfulness, statutory damages generally range from $750 to $30,000 per work.

The parties disputed whether the court should review the record under a substantial-evidence standard or decide willfulness under the preponderance-of-the-evidence standard. The court did not resolve that dispute because it found that the evidence established willfulness under the preponderance standard—meaning that willfulness was more probably true than not true—and therefore also satisfied the lower substantial-evidence standard.

Court’s analysis

The court found that the evidence showed Kast’s contributory infringement was willful. Kast knew by January 2011 that the Atherton Trust website displayed the three photographs. The photographs were copied exactly as they appeared on the Wells Fargo website, which Kast had repeatedly identified as a model for the Atherton Trust website. His communications with Only Websites referred to using content from competitor websites and asked that the Atherton Trust website use a photograph resembling one on the Wells Fargo site.

The court found that Kast’s testimony that he did not know where the photographs came from or who owned them was undermined by his written communications and his familiarity with the Wells Fargo website. After learning that the photographs appeared on the Atherton Trust website, he did not take affirmative steps to determine whether they were copyrighted or licensed. The court concluded that it was not reasonable for him to assume that the developer had obtained licenses for photographs copied from a competitor’s website.

The court also found evidence that the website became publicly viewable while the photographs remained on it. Although Kast testified that he did not know the site was public until receiving the cease-and-desist letter, his emails referred to the site going live and being launched. After receiving the letter, Kast directed Only Websites to delete the photographs, and they were removed. The court concluded that this later action did not eliminate the earlier reckless disregard.

The court declined to reconsider Kast’s argument that the contributory-infringement verdict was incorrect because the Ninth Circuit had already rejected that argument. It also declined to consider Kast’s argument that he was an innocent infringer because the jury had rejected that position and the argument was apparently raised for the first time on remand.

Disposition

The court found that the evidence demonstrated that Kast’s contributory infringement of Erickson’s copyrights in the three photographs was willful. It awarded Erickson $450,000 in statutory damages, consisting of $150,000 per photograph. The opinion states that the court affirmed the jury’s statutory-damages award.