Zillow Loses Second Spherical of Copyright Struggle Over Actual Property Images

On June 7, 2023, the Ninth Circuit issued its opinion in VHT, Inc. v. Zillow Group, Inc., wherein it affirmed the trial court docket’s findings of infringement towards Zillow and the award of statutory damages. In 2019, the Ninth Circuit had beforehand discovered principally in Zillow’s favor as to an earlier trial and had reversed and remanded the case again for additional proceedings.

VHT “is the most important skilled actual property images studio” within the U.S., and 1000’s of its photographs seem on Zillow’s web site. Actual property brokers usually retain VHT to {photograph} properties they’re trying to promote after which edit the photographs, save them of their digital database, and ship them to the shopper pursuant to a license settlement.

Zillow utilized images from VHT in two other ways. First, it primarily used them in reference to the show of properties listed on the market on Zillow’s web site. Second, Zillow chosen sure images “of artfully-designed rooms in a few of these properties” to put up to its “Digs” web site, which is directed towards house enchancment.

In 2019, the Ninth Circuit agreed with the decrease Courtroom that Zillow was “not answerable for direct, secondary, or contributory infringement;” nevertheless, it had concluded that “Zillow’s addition of searchable performance on the Digs house design webpages was not honest use.” It reversed the jury’s discovering that Zillow had dedicated willful infringement and remanded the case for consideration of “whether or not VHT’s photographs used on Digs are a part of a compilation” or if they’re “particular person photographs” for functions of statutory damages.

After additional motions and a bench trial, the district court docket discovered principally in VHT’s favor. Each events appealed the trial court docket’s findings to the Ninth Circuit. 

The primary difficulty the Ninth Circuit addressed was whether or not the U.S. Supreme Courtroom’s 2019 resolution in Fourth Property Public Profit Courtroom v. Wal-Avenue.com, LLC, required the dismissal of VHT’s infringement claims for the reason that Copyright Workplace had not accomplished the registration course of for VHT’s pictures on the time VHT filed go well with. (VHT did apply for registration previous to submitting  the lawsuit.)

The Ninth Circuit famous that the U.S. Supreme Courtroom’s Fourth Property resolution was determined simply 11 days earlier than it issued its opinion within the first Zillow attraction, and neither social gathering raised any points with regard to that call. On remand, the district court docket discovered that VHT “both complied with [the prefiling registration requirement] or was excused from compliance.”  The Ninth Circuit agreed with this discovering.

In figuring out that VHT was excused from this prefiling requirement, the Ninth Circuit acknowledged that it needed to contemplate three points: “[whether] (1) the declare is `wholly collateral’ to the substantive declare of entitlement; (2) there’s a `colorable exhibiting of irreparable hurt;’ and (3) `exhaustion could be futile.’”  First, the Ninth Circuit held that copyright registration is “wholly collateral” to the difficulty of whether or not Zillow infringed on VHT’s copyrights. Second, the Ninth Circuit held that dismissal would trigger irreparable hurt to VHT as a result of it will not have the ability to carry the claims once more as a result of they might be barred by the statute of limitations. Third, permitting the excusal wouldn’t undermine the aim of the prefiling requirement for the reason that Copyright Workplace had granted the registrations years earlier than the case went to trial the second time.

The primary difficulty the Ninth Circuit thought of was whether or not the pictures from VHT’s database constituted a “compilation” for which there would solely be a single statutory infringement award; or whether or not the person photographs from VHT’s database might lead to particular person statutory awards. The district court docket had rejected Zillow’s arguments that “VHT’s pictures are a `compilation’ as a result of they’re a part of VHT’s grasp photograph database and since the Copyright Workplace decided that VHT’s database is a compilation.”  As an alternative, the district court docket discovered that “to the extent, the unbiased financial worth of the person photographs separate from the database stays an element, the jury’s discovering indicated that the person pictures have been particular person works.” 

The Ninth Circuit started by noting that “the query of whether or not a piece constitutes a `compilation’ for the needs of statutory damages pursuant to … the Copyright Act is a combined query of regulation and truth.”  The Copyright Act comprises a provision that “all of the elements of a compilation or by-product work constitutes one work” for functions of statutory damages. Thus, the Ninth Circuit needed to decide whether or not, for functions beneath that provision, “the photographs at difficulty certified as `one work.’” 

VHT argued it owned copyrights in each the person photographs and in its database; and that “the Copyright Workplace has acknowledged the twin copyright nature of registration of the database itself, in addition to the works inside it.”  It famous that VHT was “not claiming `that Zillow infringed the elements of its database that make it a compilation, i.e., the choice, coordination, and association of preexisting pictorial works.”

Zillow, then again, requested the Ninth Circuit “to observe a easy syllogism” that as a result of the photographs have been in a database and the database was registered as a compilation, the photographs should have been a part of a compilation as effectively. The Ninth Circuit said that this argument “elevates the type of registration above all else, a conclusion [that it and other courts] have rejected.”

In practicality, the person photographs are created on the request of a selected VHT shopper after which licensed and given to that shopper for advertising a person itemizing. VHT licenses the person photographs themselves, not the database, and the database itself just isn’t revealed.

Likewise, Zillow used every photograph independently to market house designs. Zillow would choose images based mostly on the content material of the photographs, particularly searching for “photographs of artfully- designed rooms for its Diggs platform.”  As a result of it didn’t choose an “association of the photographs throughout the database,” it infringed on VHT’s rights within the particular person photographs and never within the database.

The Ninth Circuit additionally acknowledged that the Copyright Act “doesn’t say that any work included in a compilation can not additionally exist as a separate unbiased work.” This supported the conclusion that “although VHT saved photographs in a database, it marketed and licensed particular person photographs that existed as separate pictorial works” and that these photographs had separate unbiased financial worth from its database. 

Zillow lastly argued that if VHT was claiming that the photographs that had been registered as a part of a database compilation have been now particular person, then VHT’s registration of the database as a compilation should have been invalid. The Ninth Circuit rejected this argument with out a lot evaluation.

Within the first trial, the jury had awarded VHT damages within the quantity of $1,500 per picture after discovering that Zillow had willfully infringed VHT’s copyrights to 2,700 photographs. After remand, the district court docket awarded VHT statutory damages of $800 every for about 2,300 pictures and $200 per picture for the remaining 388 photographs. VHT appealed this ruling and argued that $1,500 per picture was the correct statutory damages that ought to have been awarded. 

In rejecting VHT’s declare that the district court docket erred by not awarding it the $1,500 per picture, the Courtroom famous that these damages had been awarded by the simply on account of a discovering of willful infringement that didn’t exist within the retrial. Thus, the Ninth Circuit concluded that the district court docket had correctly awarded the right amount of damages to VHT after the retrial.