Correcting a transcription error in a prior decision, the US Court of Appeals for the Seventh Circuit confirmed that a plaintiff does not have to prove that infringing copies are unauthorized as part of a prima facie case of copyright infringement. Rather, license, first sale or any other type of authorization defense must be proven by the defendant. Muhammad-Ali v. Final Call, Inc., Case No. 15-2963 (7th Cir., Aug. 10, 2016) (Wood, J).
In 1984, Jesus Muhammad-Ali created a portrait of Louis Farrakhan, the leader of the Nation of Islam, at Farrakhan’s request. Ali registered and recorded a copyright in the painting in 1986. The Final Call, the “propagation arm of the Nation of Islam,” began selling lithographic copies of Ali’s portrait of Farrakhan at some point after the original painting was created. Ali later sued for copyright infringement, seeking damages for 115 lithographs that The Final Call admitted it had sold in the previous three years.
Prior to trial, The Final Call relinquished all of its defenses and explained that its only argument was that the 115 copies were authorized by Ali. According to The Final Call, its authorization “argument [was] a negative defense, not an affirmative one,” and instead was “an attack on the plaintiff’s ability to establish its own burden.” During the ensuing bench trial, the primary witness for The Final Call testified that he had no knowledge of who made the lithographs or how The Final Call acquired them, and that no lithographs had been made since 1993 when he began working at The Final Call. He further admitted that The Final Call had no formal relationship with Farrakhan.
In its ruling, the district court admitted that it was unsure which party had the burden of proving whether the prints were authorized. However, it ruled in The Final Call’s favor because the facts demonstrated that Ali authorized the making of lithographs in his original agreement with Louis Farrakhan—and alluded to the implied license and first sale defenses. Ali appealed.
The Seventh Circuit found that the district court misapplied the legal standard for copyright infringement, and confirmed that Ali was not required to prove that the copying was unauthorized. It noted that the reason for the district court’s error was a transcription error in a 2013 Seventh Circuit case, Hobbs v. John. In Hobbs, the Seventh Circuit misquoted the copyright infringement standard as requiring “unauthorized copying of constituent elements of the work that are original” even though the word “unauthorized” was not part of the standard in the prior case law cited by Hobbs. The current Seventh Circuit corrected Hobbs’ mistake and emphasized that Ali had met his prima facie case.
The Seventh Circuit then noted that The Final Call could not prove authorization as an affirmative defense because it had waived all affirmative defenses, and even if the district court’s resuscitation of the implied license and first sale defenses was appropriate, The Final Call could not establish either defense. As to the implied license defense, the Court ruled that The Final Call could not prove that it had requested the creation of the original work and that the original work had been delivered to The Final Call, because it was Farrakhan who had requested the work and later accepted delivery. While the district court found a “practical identity of interests” between Farrakhan and The Final Call, the Seventh Circuit rejected this idea and found no evidence to connect the lithographs sold by The Final Call to Farrakhan. The Seventh Circuit also rejected the first sale defense because The Final Call could not prove that the specific lithographs sold were from an authorized batch. Accordingly, the Seventh Circuit reversed the district court and found that Ali had successfully proven copyright infringement.