In this week’s Alabama Law Weekly Update, we present a case from the United States Court of Appeals for the Eleventh Circuit, which considers willful infringement under the Copyright Act and the statutory damages from a violation of that act.

Yellow Pages Photos, Inc. v. Ziplocal, LP, 2015 WL 4577269 (11th Cir. July 30, 2015) (holding that willful infringement includes reckless disregard of the possibility that one's actions are infringing upon a copyright, and that creating, marketing, and registering items as a collection results in each collection being considered a compilation for purposes of determining statutory damages).

In this case, Yellow Pages Photos, Inc. (“YPPI”) filed suit against Ziplocal, LP (“Ziplocal”) and Yellow Pages Group, LLC (“YPG”) for claims which included breach of contract and copyright infringement. YPPI is the owner and creator of stock photographs tailored to the yellow pages industry and entered into an agreement with Ziplocal to provide such photographs for Ziplocal's use in publishing phone books. In particular, YPPI provided photographs that were grouped into collections based upon typical yellow pages headings. YPPI's contracts with Ziplocal provided that Ziplocal was not permitted to transfer the images to any outside parties unless authorized by YPPI. YPG, a publishing services company, was not a party to either of these agreements.

YPG became involved when it sold its phone books to Ziplocal and was hired by Ziplocal as a subcontractor to produce and assemble Ziplocal's phone books. In order to perform these services, Ziplocal provided YPG with digital copies of its phone books, which included photos owned and licensed by YPPI. The photographs were subsequently used by YPG (without YPPI's authorization) in the provision of its services to Ziplocal. As a result, YPPI brought this action against Ziplocal and YPG. At trial, the jury determined that Ziplocal had breached its contract with YPPI and that both Ziplocal and YPG willfully infringed YPPI's copyrighted works. YPG subsequently appealed on a number of issues, including that there was no evidence to support a finding of willful infringement on YPPI's copyrights.

On appeal, the appeals court noted that willful infringement under the Copyright Act includes knowing violations of a standard as well as reckless disregard of the possibility that one's actions are infringing upon a copyright. In analyzing the facts, the court observed that YPG did not follow any specific measures to determine which photos were being used, did not conduct any due diligence to determine whether Ziplocal had a right to use the photos, and did not provide third party companies with any parameters regarding the use of the photos. Although the contract between YPG and Ziplocal contained a provision whereby YPG agreed it would not infringe on any copyrights, the court found that this provision was not sufficient to reverse a finding of infringement. The court also rejected YPG's claim that outsourcing was common in the industry and that YPG had no reason to know that such work would infringe upon the copyrights of others. Consequently, the willful infringement verdict against YPG was upheld.

The appeals court also considered an appeal by YPPI as to whether each individual photo owned by YPPI was a “work” for purposes of determining statutory damages. Because YPPI created, marketed, published, registered and repeatedly described its photos as collections organized by reference to the typical yellow pages headings, the court determined that each collection was considered a compilation. Thus, each collection was considered a “work” for purposes of determining statutory damages. As a result, YPPI was only entitled to recover statutory damages on each collection rather than each individual photo.