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Appeals court confirms creator’s rights

In early May, 2007, the Ninth Circuit Court of Appeals ruled that an advertiser who licenses photos and uses them to create a collage must continue to honor all license restrictions that came with the original photos. In particular, if the license specified a limited time to use the images, the collage also cannot be used beyond that time.

The decision came in the case of Jarvis v. K2 Inc. For this case, ASMP worked closely with photographer (and ASMP member) Chase Jarvis and his attorneys, providing assistance during the preparation for trial. ASMP also filed an amicus curiae brief for the appeal, raising points of law that could not be argued during the trial.

The case. K2, a maker of sports equipment and outdoor clothing, had licensed images from Jarvis and used them in various print and Internet advertising campaigns. In all, K2 licensed 4,147 slides from Jarvis over a two-year span. During that time, it also assembled 24 of the images into collages that were used as magazine inserts.

K2 failed to give the attribution credit that was specified in its contract with Jarvis. More importantly, it lost 396 of Jarvis’ slides and refused to pay his lost-image fee. And, after the expiration of the license, K2 continued to use 82 of Jarvis’ images for online advertisements, both on its own web site and on other sites. In particular, it continued to use the collages. After a year of fruitless attempts to negotiate payment, Jarvis sued.

In court, K2 did not dispute the attribution and lost-slide claims, although it contested the amount of money that Jarvis was seeking. After weighing the testimony, the judge awarded modest damages to Jarvis for those claims. He allowed only $500 for each lost slide. (Jarvis had asked $1,500 per slide.) For the attribution credit issue, he allowed $50 per failure for online use, $200 per failure for print ads and $300 per failure for media use.

K2 did dispute the copyright claims. It first showed that the copyrights for 58 of the 82 images had not been registered prior to the infringement. Thus, Jarvis was eligible only for actual damages, not statutory damages or his attorney's fees. The judge ruled that online usage was worth half the average amount K2 had paid for print usage, so Jarvis should get $461 per image.

However, some of the 24 images that K2 used in its collages had been registered before the infringements. Under copyright law, the judge could make the company pay the legal costs for both sides if he found that those copyrights were infringed. So K2 made an interesting defense of its use of those images: It said that its use of the collages was legal because they were “compilations” and thus were covered by section 201(c) of the United States Code. This section gives certain ongoing rights to publishers of collective works (such as magazines, anthologies and encyclopedias) that can be revised and reissued.

The trial judge accepted K2’s argument and imposed no penalty for K2’s use of the collages. Jarvis appealed.

Overturned. The appeals court said that the trial judge was mistaken in treating the collages as compilations. It pointed out that a collage involves more than simply assembling independent contributions. In K2’s collages, the images were sized, distorted, overlapped and combined with images from other photographers to create a new graphic object. They should therefore be seen as “derivative works”, which are not privileged under section 201(c). Thus, said the appeals court, K2 did infringe Jarvis’ copyrights for those images.

Jarvis had also appealed the trial court’s determinations regarding fair market value. However, the appeals court saw no procedural error in the way the judge had computed the various damages, and it let those awards stand without change.

What next? The case will be returned to the trial court with instructions to determine the amount of damages for infringing the copyrights of the collage images. Because these copyrights were registered before the infringement took place, the stakes for K2 are now much higher. In assessing statutory damages, the judge can consider whether the infringement was willful. In addition, the judge could make K2 pay Jarvis’ legal fees.

As we write this, the attorneys for both K2 and Jarvis are examining their options. One of the options is to negotiate a settlement of the case out of court. If that happens, the appeals court ruling — and the fact that the copyrights were registered — has put Jarvis in a much better bargaining position. If they fight another round in court, K2 will have a much harder time.