In a post last week, I described a recent SDNY case in which the Court found that an amateur photographer had suffered only $100 in actual damages by reason of a use by Hearst of the image to illustrate an online article. Now the transcript of the Court's decision explaining its award has been released.
As noted in my previous post, plaintiff Jonathan Otto was a guest at a wedding at President Trump's Bedminster resort. When Trump "crashed the wedding," Otto snapped a photo on his iPhone and sent to another wedding guest, eventually leading to the posting of the image on Instagram. Hearst, along with other news agencies, then used the photo to illustrate online articles about Trump's wedding crashing activities.
Following a bench trial, SDNY Judge Gregory Woods ruled that Otto was entitled to a statutory damage award of $750, the minimum possible award absent a finding of completely innocent infringement. Crucial to the Court's ruling was the unchallenged testimony presented by Hearst of its respect for the intellectual property rights of creators and its practice to pay for any use that it did not believe to be a fair use under copyright law. He also credited testimony that Hearst is careful to hire employees and freelancers who are knowledgeable about copyright law and clearance issues and also provides editors with copyright training sessions.
While Judge Woods had in a previous decision resoundingly rejected Hearst's claim that its use of the photo was a fair use, he concluded that, based on the evidence at trial, plaintiff had not met his burden to show that the decision by the Hearst editor to use the photo constituted willful copyright infringement.
The Court went on to find that the reasonable license fee for the use of the photograph was $100.00, and that the revenue Hearst derived from the advertising that ran alongside the article that included the photograph was $148.99. It then applied the various factors used to determine a statutory damage award, including any possible need to deter Hearst from future infringements, and concluded that an award of five times the reasonable license fee ($500.00) would be appropriate. The Court increased the award to $750.00 to meet the statutory minimum. In so doing, the Court cited a series of decisions in courts in the Second Circuit awarding plaintiffs a "single digit multiple of a reasonable licensing fee."
The case is noteworthy for a number of reasons, including the credit given to Hearst for the efforts it has made to prevent copyright infringement and the recitation of the "single digit multiple" concept. It will be interesting to see if other courts are willing to use this same concept to limit jury awards that, in some instances, have greatly exceeded this type of multiple.
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