United States District Court, E.D. Pennsylvania
AUSTIN McHUGH, UNITED STATES DISTRICT JUDGE
an action for copyright infringement. Plaintiff Bob Krist is
a professional photographer who licenses the use of his
photographs through an agency, Corbis, under agreements
allowing Corbis to sublicense those photographs to third
parties. Pearson Education, Inc. is a long-time Corbis
customer, and is one of the third-parties to whom Corbis has
sublicensed Krist's work. Krist contends that Pearson
made use of the photographs at issue here in ways that
exceeded the scope of its agreements with Corbis.
filed suit against Pearson for one count of copyright
infringement embracing 359 separate claims. Of the 359 claims
Krist asserts, 352 of them arise from the licenses granted to
Pearson through Corbis. The remaining seven claims involve
licenses Krist issued directly to Pearson.
parties now each move for summary judgment. For the reasons
that follow, I will deny summary judgment to both parties.
Rather than provide a detailed recitation of the facts
involved at the outset, I will instead address the facts
relevant to each issue below.
STANDARD OF REVIEW
Summary Judgment Motions
parties' Motions are governed by the well-established
standard for summary judgment set forth in Fed.R.Civ.P.
56(a), as amplified by Celotex Corporation v.
Catrett, 477 U.S. 317, 322-23 (1986). That standard does
not change when the parties cross-move for summary judgment.
Auto-Owners Ins. Co. v. Stevens & Ricci Inc.,
835 F.3d 388, 402 (3d Cir. 2016). When both parties move for
summary judgment, “‘[t]he court must rule on each
party's motion on an individual and separate basis,
determining, for each side, whether a judgment may be entered
in accordance with the Rule 56 standard.'”
Id. (quoting 10A Charles Alan Wright et al.,
Federal Practice & Procedure § 2720 (3d ed.
it is necessary to address the controlling standard because
the parties appear to dispute it. To establish copyright
infringement, a plaintiff must prove by a preponderance of
the evidence: “(1) ownership of a valid copyright, and
(2) copying of constituent elements of the work that are
original.” Feist Publications, Inc. v. Rural Tel.
Serv. Co., 499 U.S. 340, 361 (1991) (citing Harper
& Row Publishers, Inc. v. Nation Enterprises, 471
U.S. 539, 548 (1985)); see also Whelan Assocs. v. Jaslow
Dental Lab., Inc., 797 F.2d 1222, 1231 (3d Cir. 1986). A
valid license is a defense to a claim of copyright
infringement. MacLean Assocs., Inc. v. Wm. M.
Mercer-Meidinger-Hansen, Inc., 952 F.2d 769, 778-79 (3d
cites the Third Circuit's decision in Kay Berry, Inc.
v. Taylor Gifts, Inc., 421 F.3d 199, 203 (3d Cir. 2005)
for the proposition that under the second element of the
infringement analysis, a plaintiff must prove that the
defendant's copying was “unauthorized.” Def
Mot. for Summ. J., ECF 59-1, at 21. But the Third Circuit
recently repudiated this formulation. See In re
McGraw-Hill Glob. Educ. Holdings LLC, 909 F.3d 48, 66
(3d Cir. 2018). Of particular note here, the Third Circuit
observed that the inclusion of the word
“unauthorized” was at odds with the Supreme
Court's explication of the elements in Feist.
Id. Bearing the Third Circuit's analysis in mind, I
employ the Supreme Court's formula as expressed in
Feist to decide the dispute between the parties
here, leaving Pearson to assert that it was authorized to use
the works as an affirmative defense.
Pearson's Motion for Summary Judgment
Motion raises four grounds on which it seeks summary
judgment. First, it argues Krist's claims are barred by
the Copyright Act's three-year statute of limitations,
and that the “discovery rule” fails to save them,
because Krist discussed his claims with an attorney more than
three years before filing suit. Second, Pearson contends
Krist abandoned or waived more than half of his claims when
he failed to include them in a discovery response and then
ratified that abandonment during his deposition testimony.
Third, Pearson asserts that Krist has sought the incorrect
remedy by filing an action for copyright infringement when in
fact his claims sound in breach of contract. Finally, Pearson
contends that twenty-one of the claims are barred because the
underlying registrations are invalid.
Statute of Limitations
Copyright Act provides that “[n]o civil action shall be
maintained under the provisions of this title unless it is
commenced within three years after the claim accrued.”
17 U.S.C. § 507(b). A copyright claim accrues “at
the moment at which each of its component elements has come
into being as a matter of objective reality, such that an
attorney with knowledge of all the facts could get it past a
motion to dismiss for failure to state a claim.”
William A. Graham Co. v. Haughey, 646 F.3d 138, 150
(3d Cir. 2011) (Graham II); see also Petrella v.
Metro-Goldwyn-Mayer, Inc., 572 U.S. 663, 670 (2014)
(“A claim ordinarily accrues ‘when [a] plaintiff
has a complete and present cause of action.'”
(internal citation omitted)). Thus, if Krist's claim
accrued more than three years before he brought suit, as
Pearson contends, it would be barred by the statute of
controlling question is when the three-year period started to
run. That is because nine courts of appeals, including the
Third Circuit, have adopted “a ‘discovery
rule,' which starts the limitations period when
‘the plaintiff discovers, or with due diligence should
have discovered, the injury that forms the basis for the
claim.'” Petrella, 572 U.S. at 671 n.4
(2014) (citing and quoting William A. Graham Co. v.
Haughey, 568 F.3d 425, 433 (3d Cir. 2009) (Graham
I)). A court's first step in applying the
discovery rule is to determine when the act constituting the
alleged injury actually occurred. Graham I, 568 F.3d
at 438. Next, the court must ascertain whether that injury
could have been discovered immediately or whether the statute
of limitations must be tolled until the time that it
reasonably could have been discovered. Id.
evaluating whether Krist's injury could have been
discovered, the initial inquiry is whether Krist
“should have known of the basis for [his] claims,
” and that, in turn, requires me to determine when
Krist “had sufficient information of possible
wrongdoing [to be placed] on inquiry notice or to excite
storm warnings of culpable activity.” Id.
(citing Benak ex rel. Alliance Premier Growth Fund v.
Alliance Capital Mgmt. L.P., 435 F.3d 396, 400 (3d Cir.
2006)) (internal quotation marks omitted). Pearson bears the
initial burden to show the presence of storm warnings; if
Pearson succeeds, the burden shifts to Krist to show that
despite the exercise of reasonable diligence, he was unable
to discover the injury. Id. (citing Mathews v.
Kidder, Peabody & Co., 260 F.3d 239, 252 (3d Cir.
parties do not dispute that the claims asserted here arose
more than three years before Krist filed suit. Thus, as
Graham I requires, I turn to the question of
Krist's ability to discover his injury. To do so, I must
first examine whether Pearson has put forward evidence to
show Krist “had sufficient information of possible
wrongdoing [to be placed] on inquiry notice or to excite
storm warnings of culpable activity.” Graham
I, 568 F.3d at 438.
suit was filed on November 23, 2016. Ordinarily therefore,
any of Krist's claims that accrued before November 23,
2013 would be barred by the statute of limitations. To
support its statute defense, Pearson cites two meetings
between Krist and his attorney, Maurice Harmon, that took
place on November 14, 2013 and November 22, 2013
respectively, as well as email communications between Krist
and Harmon about the same matter. ECF 59-1, at 12-13 (citing
Def. Ex. 2 to Decl. of Karl Schweitzer, ECF 59-5). Pearson
also points me to Krist's deposition testimony that he
was aware Pearson had a “track record” of
infringement. Krist Dep. Tr., at 76:1-77:14; 113:13-114:15;
320:12-321:22. Krist further testified in his deposition that
Harmon informed him that Krist's “name kept coming
up” in searches Harmon conducted and that Krist might
have “a goodly number of infringements[.]”
Id. at 257:10-17. Pearson would therefore have me
find that the statute of limitations began to run on November
23, 2013, the day after Krist's second conversation with
considering Pearson's argument, I must bear in mind the
Third Circuit's admonition that “inquiry notice
demands more than evidence that a person is a bad actor in
some general sense before a court can conclude that a storm
warning exists as to a specific cause of action.”
Graham I, 568 F.3d at 440. The context here has
significance. The initial meetings between Krist and Harmon
took place at Harmon's instigation, which a reasonable
jury could conclude was Harmon essentially marketing his
services as a copyright lawyer. Krist Dep. Tr., at 76:16-22;
82:8-9. Krist did not in the first instance seek the services
of a copyright lawyer based on his intuition that
his rights were being violated; counsel approached him.
assuming Harmon told Krist he suspected Pearson was
infringing his copyrights, because that alerted him to the
fact that Pearson was a “bad actor in some general
sense, ” Graham I, 568 F.3d at 440, a jury
could find it reasonable for Krist to absorb Harmon's
information and conduct his own inquiry. Krist puts forth
evidence showing he did just that by gathering relevant
documents and speaking to fellow photographers about their
own experiences with infringement claims generally and with
Harmon in particular, before ultimately retaining
counsel. I therefore find that there is a jury
issue as to both prongs of the test: whether counsel's
solicitation by itself sufficed to provide Krist with
“sufficient information of possible wrongdoing [to be
placed] on inquiry notice or to excite storm warnings of
culpable activity, ” Graham I, 568 F.3d at
438, and whether Krist acted with reasonable diligence
argues that the discovery rule is inapplicable if a plaintiff
learns enough “to assert or investigate” their
claim but fails to do so for more than three years. ECF 59-1,
at 16 (citing Am. Bd. of Internal Med. v. Rushford,
2017 WL 1024267 (D.N.J. Mar. 16, 2017)). Its reliance upon
Rushford is misplaced. The court there granted the
defendant's motion for judgment on the pleadings because
the complaint on its face pled facts demonstrating the
plaintiff's actual knowledge of its injury before the
statute of limitations expired. Rushford, 2017 WL
1024267, at *3.
further argues that consulting an attorney necessarily starts
the clock running on the statute of limitations. ECF 59-1, at
17-18 (citing AQC v. United States, 656 F.3d 135 (2d
Cir. 2011)). In AQC, the plaintiff's infant
daughter suffered injuries that were obvious to the plaintiff
just after the daughter's birth. 656 F.3d at 140. An
early intervention counselor had already told the plaintiff
she believed the daughter's injuries were the result of
malpractice, and the plaintiff sought out a law firm
specializing in such matters after seeing its television
advertisement. Id. at 143. The Second Circuit held
the discovery rule did not rescue the plaintiff's
late-filed claim because her consultation with the attorney
showed she knew enough about the cause of her daughter's
injuries at that time to trigger the statute of
in contrast, Harmon approached Krist and, at that time,
Harmon was the only source of information as to the
possibility Krist had suffered injury. In that regard, I
would be reluctant to hold that an overture from an attorney
triggers the statute as a matter of law, lest a prudent
litigant be penalized for pausing to consider the merits and
wisdom of filing suit.
further cites Judge Rufe's recent decision in Krist
v. Scholastic, 2019 WL 6133861 (E.D. Pa. Nov. 18, 2019),
barring many of Krist's claims on the basis of the
statute of limitations, but the facts there were materially
different because the relevant events took place
after Krist and Harmon forged the relationship that
gave rise to this litigation.
refusing to enter summary judgment based on the statute of
limitations, I reject Plaintiff's analysis as well.
First, Krist cites a single district court decision,
Frerck v. John Wiley & Sons, Inc., et al., 2014
WL 3512991, at *6 (N.D. Ill. July 14, 2014), to argue that
Pearson cannot assert a statute of limitations defense
without also putting forth evidence showing when the
infringements of his work ...