August Image LLC. v. Girard Entertainment & Media LLC

Background

August Image LLC brought a copyright-infringement action against Girard Entertainment & Media LLC and Keith Girard. It alleged that the defendants used eight photographs of Jennifer Lopez, taken by photographer Joseph Pugliese, on their websites without permission. August Image alleged that it serves as the sole and exclusive agent and representative for licensing and use of the photographs and owns the exclusive distribution right in them.

August Image moved under Federal Rule of Civil Procedure 15(a)(2) for permission to file a third amended complaint. The proposed complaint removed 143 images that August Image acknowledged were not timely registered, leaving eight photographs at issue. It also removed claims for secondary copyright infringement and violations of the Digital Millennium Copyright Act.

Legal standard

A court should generally allow a party to amend its complaint when justice requires, but may deny permission for reasons such as futility, bad faith, undue delay, or undue prejudice. An amendment is futile if the proposed claims could not survive a motion to dismiss for failure to state a legally sufficient claim. At this stage, the court generally accepts well-pleaded factual allegations as true and does not decide the ultimate merits of the claims.

Standing and pleading of infringement

The defendants argued that August Image lacked standing—the legal ability to bring the copyright claim—because Pugliese was identified in the copyright registrations as the author and copyright owner. The court explained that a copyright owner may grant an exclusive license to particular rights, and an exclusive licensee may sue for infringement of those rights. Distribution is one of the exclusive rights identified in the Copyright Act.

The court held that August Image sufficiently alleged that it was the exclusive licensee of the photographs’ distribution rights. August Image was not required at the pleading stage to attach or quote the underlying contracts with Pugliese. The court therefore treated the allegation that August Image held the exclusive distribution rights as true for purposes of the motion. The court did not decide whether August Image’s separate status as an exclusive agent would independently give it standing.

The court also found that August Image sufficiently alleged infringement of a right it claimed to hold. Although the proposed complaint alleged that the defendants copied, reproduced, displayed, and distributed the photographs, it specifically alleged unauthorized distribution, which was enough at this stage because August Image claimed the exclusive distribution right. The court further found that the allegations, along with the URLs and screen captures attached to the proposed complaint, sufficiently described the alleged infringing acts. Rule 8 did not require August Image to identify every act by each defendant separately at this point.

Timeliness

The defendants argued that the claims were barred by the Copyright Act’s three-year limitations period because the alleged uses occurred in 2015 and August Image did not sue until 2021. August Image responded that the claims accrued when it discovered, or should have discovered with reasonable diligence, the infringement and that it discovered the alleged infringement in 2020.

The court held that the proposed complaint did not clearly show that the claims were untimely. August Image alleged that it discovered the infringement in 2020 and sued one year later. The defendants offered no evidence, beyond a general assertion that August Image was a repeat copyright litigant, showing that August Image should have discovered the alleged infringement earlier. Because the defendants had not established that the claims were legally barred based on the complaint, they had not shown that amendment would be futile on timeliness grounds.

Prejudice and disposition

The defendants also argued that the delay caused prejudice because relevant licensing communications might have been deleted and asserted that August Image acted in bad faith. The court rejected those arguments as conclusory. It also explained that the relevant question was whether delay in seeking the amendment—not merely delay in filing the lawsuit—caused prejudice or reflected bad faith.

The court granted August Image’s motion for leave to file the third amended complaint. It ordered August Image to file that complaint by April 5, 2024, and directed the Clerk of Court to terminate the motion. The order addressed whether the proposed amendment could proceed; it did not resolve the ultimate copyright-infringement merits.