Carol Highsmith, a renowned American photographer, has filed a lawsuit against Getty Images (“Getty”) and others for violation of the Digital Millennium Copyright Act (“DMCA”).1 Specifically, Highsmith alleges that the three defendants – Getty and Alamy (companies that sell stock photos) and License Compliance Services (“LCS”) (a company that searches the internet for copyright-infringing photographs and seeks to enforce copyright licenses) – violated 17 U.S.C. § 1202 by providing, distributing and altering the copyright management information (“CMI”) of thousands of Highsmith’s photographs. Statutory damages could bring the final judgment against Getty alone to over a billion dollars. The case raises interesting issues surrounding the interpretation of § 1202 and the statutory damages framework.
Alleged Improper and Illegal Use of Photographs
According to the complaint, Highsmith donated her photographs to the Library of Congress in 1988, making those photographs free for public use and duplication but remaining the copyright holder.2 Her photographs are all available on the Library of Congress website. In December 2015, Highsmith’s foundation received a letter from LCS on behalf of Alamy, accusing the foundation of copyright infringement and demanding payment of royalties for the use of one of Highsmith’s own photographs that her foundation was displaying on its website.3 Upon receiving this notice, Highsmith contacted LCS and afterwards received an e-mail stating that LCS had closed her case – “thereby implicitly acknowledging the correctness and propriety of her position.”4 She later discovered that Getty offered over 18,000 of her photographs available for sale on its website and that Alamy had over 500 for sale on its website.5 The Highsmith Complaint alleges that the defendants’ uses of her photos were improper and illegal.6
Both websites provided CMI for the photographs—i.e., information regarding the photographs’ authorship and copyright status—and Getty also provided a watermark claiming it had an ownership in the photographs.7 The Highsmith Complaint states that Getty did not identify Highsmith as the sole author and copyright owner of the images.8 Allegedly, Getty’s CMI for these photographs stated “By: Buyenlarge,” or “Credit: Buyenlarge/Contributor” together with the image title, or partial title, and “(Photo by Carol M. Highsmith/Buyenlarge/Getty Images).”9 The complaint alleges that Getty and Alamy violated 17 U.S.C. § 1202(a), which prohibits providing or distributing false CMI, and § 1202(b), which prohibits removing or altering CMI, by listing incorrect CMI alongside Highsmith’s photographs on their websites.10 Section 1202(c) defines CMI as information, such as the name of an author, the name of the copyright holder, and terms and conditions for the use of the work that is “conveyed in connection with copies or phonorecords of a work.” The Highsmith Complaint alleges, inter alia, that Getty and Alamy violated § 1202 by not listing Highsmith as the sole author and copyright owner of her photographs on their websites.11
On July 28, 2016, Getty stated that it was reviewing the Highsmith Complaint; that it is not illegal to charge money for works in the public domain; that it provides valuable services—indexing and making content searchable, providing a variety of delivery services for images, and furnishing legal indemnification for copyright violations for those who purchase images from it—and that it intends to contest the case “vigorously.”
The district courts are divided in their interpretation of CMI in § 1202. In IQ Grp., Ltd. v. Wiesner Pub., LLC, Judge Greenaway of the District of New Jersey limited CMI to information digitally embedded in a copyrighted work.12 “Digital watermarking technologies allow users to embed into audio, images, video and printed documents a digital code that is imperceptible during normal use but readable by computers and software.”13 In contrast, in Agence France Presse v. Morel, Judge Pauly of the Southern District of New York “decline[d] to adopt a narrow construction of the term ‘CMI’” and instead interpreted CMI to encompass the name of the author of eight photographs, where that information was posted next to the photographs on a webpage.14
Highsmith’s complaint alleges that Getty and Alamy posted the false copyright information next to Highsmith’s photographs on their websites. These allegations fall squarely within the Morel definition of CMI, but safely outside of the IQ Group definition. Highsmith filed suit in the Southern District of New York, but there is no binding Second Circuit precedent defining CMI, and how the court will interpret CMI is an open question.
Under the DMCA, Getty is potentially liable for over a billion dollars in statutory damages. In 2012, the Getty business was valued at $3.3 billion.15 While it seems unlikely that a judge would impose a company-destroying penalty, the case presents an example of how stacking violations in calculating statutory damages linearly can prove problematic.
17 U.S.C. § 1203(c)(3) sets statutory damages for each violation of § 1202 between $2,500 and $25,000, and if a defendant has been found to have violated § 1202 within the past three years, “the court may increase the award of damages up to triple the amount that would otherwise be awarded.”16 Getty was found liable of violating § 1202 in Agence France Presse v. Morel, and Morel, the photographer, elected to receive $1,200,000 in statutory damages.17 Here, Getty’s potential liability is $25,000 each for over 18,000 photographs, tripled: in total, well over a billion dollars.
Would such statutory damages violate due process? According to Judge Howard in the First Circuit, a statutory damage award violates due process only “where the penalty prescribed is so severe and oppressive as to be wholly disproportioned to the offense and obviously unreasonable,” as articulated in St. Louis, Iron Mountain & Southern Ry. Co. v. Willams.18 There, the defendant’s argument that statutory damages violated due process because they were not tied to the injury “disregard[s] the deterrent effect of statutory damages, the inherent difficulty in proving damages in a copyright suit, and [the plaintiff]’s evidence of the harm it suffered from conduct such as [defendant]’s.”19 The Eighth Circuit, in Capitol Records, Inc. v. Thomas-Rasset, also followed Williams in upholding a statutory damage award, stating that, as in Williams, “‘the interests of the public, the numberless opportunities for committing the offense, and the need for securing uniform adherence to [federal law]’ support the constitutionality of the award.”20 The Eighth Circuit stated that both the absolute amount of the award and the amount per violation are relevant in determining whether the award’s severity and oppressiveness are disproportioned to the offense and obviously unreasonable.21 In Capitol Records, the plaintiffs opted to sue over twenty-four recordings, and the court noted that, “[i]f they had sued over 1,000 recordings, then a finder of fact may well have considered the number of recordings and the proportionality of the total award” in determining whether the award was disproportional and unreasonable.”22
Professor Bert Huang of Columbia Law School has argued that cases such as this are examples of “diminishing marginal harm,” where each violation of a law that provides statutory damages is less injurious to the individual seeking redress than the last.23 Here, while Highsmith was injured by the first ten or hundred or thousand images that Getty allegedly misappropriated, under standard economic principles her injury from mislabeling the eighteen-thousandth photograph is presumably substantially lower than her injury from the first photograph. Professor Huang suggests that certain damages instead should be calculated “concurrently,” as sentences are often set in criminal cases. If Highsmith prevails, it will be interesting to see how the Southern District of New York and the Second Circuit handle statutory damages for over 18,000 of her images. The courts should consider the logic of Professor Huang’s argument for concurrent damages; however, Getty may settle this case before Highsmith’s statutory damages are adjudicated.
UPDATE: On October 17, 2016, oral argument in this case “focused almost completely on claims brought under Section 349 of New York’s General Business Law,” which forbids deceptive business practices generally. On October 28, 2016, Judge Jed Rakoff of the Southern District of New York dismissed Highsmith’s claims under the Copyright Act and trademark law, but allowed claims under Section 349 to go forward with discovery. Perhaps Judge Rakoff was persuaded by Getty’s argument that it did not infringe Highsmith’s copyrights because she “owns no such copyrights, having long ago dedicated [her photographs] to the public domain”; however, he did not issue a written opinion at that time, instead promising a fleshed-out memorandum “in due course.” On November 16, 2016, before issuing a written decision on the copyright and trademark claims, Judge Rakoff so-ordered the parties’ stipulation to dismiss the action with prejudice. Although the terms of the parties’ settlement were not disclosed, the sum was likely much less than the billion dollars originally claimed.
1. First Amended Complaint, Carol M. Highsmith v. Getty Images (US), Inc., No. 16-cv-5924 (S.D.N.Y. 2016), (hereinafter Highsmith Complaint).
2. Id. at 7.
3. Id. at 18-21.
4. Id. at 20-21.
5. Id. at 12-16.
7. Id. at 12-16, 27.
9. Id. at 12.
10. Id. at 24-32.
12. 409 F. Supp. 2d 587, 597 (D.N.J. 2006).
14. 769 F. Supp. 2d 295, 305 (S.D.N.Y. 2011).
15. In August 2012, the Carlyle Group bought a majority share in Getty Images from Hellman & Friedman; the Getty family and co-founder Jonathan Klein own the rest. That deal valued Getty Images at $3.3 billion.
16. 17 U.S.C. § 1202(c)(4).
17. 2014 WL 3963124 (S.D.N.Y. Aug. 13, 2014).
18. Sony BMG Music Entm’t v. Tenenbaum, 719 F.3d 67, 70 (1st Cir. 2013) (quoting 251 U.S. 63, 66-67 (1919)).
19. Id. at 71.
20. 692 F.3d 899, 910 (8th Cir. 2012).
23. Bert I. Huang, Concurrent Damages, 100 Virginia L. Rev. 711 (2014).