The US Court of Appeals for the Fifth Circuit reversed the district court’s grant of summary judgment on a claim of copyright infringement, holding that the district court erroneously conflated a copyright holder’s federal statutory cause of action with a downstream licensee’s state contract law defense, and that the copyright holder had created a genuine issue of material fact with regard to the time period and scope of the license issued to the defendant. Alexander Stross v. Redfin Corporation, Case No. 17-50046 (5th Cir., Apr. 9, 2018) (per curiam).
Alexander Stross, a photographer and real estate broker, licensed some of his images to the Austin/Central Texas Realty Information Service (ACTRIS). ACTRIS is a multiple listing service (MLS) that compiles real estate listings into a searchable database for area real estate agents and brokers. According to the rules of ACTRIS, any user who uploads a listing to the database grants to “ACTRIS (and its service providers and licensees) an irrevocable, worldwide, paid up, royalty-free, right and license to include the Listing Content in the MLS Compilation.” In order for brokers and realtors to download listings from ACTRIS, they must sign a sublicense agreement (the Participant Content Access Agreement (PCAA)), which incorporates the ACTRIS rules and provides a non-exclusive, limited-term, revocable license, subject to the participant’s compliance with the ACTRIS rules.
Stross filed a complaint in 2015 alleging direct and contributory copyright infringement by Redfin. The claims included use of more than 1,800 of Stross’ photographs in a manner he believed violated both the ACTRIS rules and his copyrights, including use to support an estimate on a property or to advertise prior sales by a particular real estate agent. Redfin had gained access to listings, including Stross’ listings and photographs, by signing a PCAA with ACTRIS. Moreover, Stross had also noted that Redfin “encouraged its users to post his sold home photographs to social-media sites like Facebook and Pinterest through ‘share’ buttons, and that it provided an online ‘Collections’ album for users to save his photographs for ‘design ideas’ and ‘fun’—separate from any anticipated real-estate transaction.” The district court held that Stross lacked standing to sue Redfin because he was not a party to the ACTRIS-Redfin PCAA and that Redfin’s licensed use of the photographs shielded it from Stross’ allegations of direct infringement, thereby granting Redfin’s motion for summary judgment. Stross appealed.
The Fifth Circuit reversed the grant of summary judgment, explaining that “whether Stross may sue (under federal law) for copyright infringement is a separate question from whether Redfin can prove (under state law) that it has a meritorious license defense,” and found that “the district court conflated these inquiries.” Stross did not sue for breach of contract; he sued for copyright infringement and “created a genuine issue of material fact” with regard to the time period and scope of the license issued to Redfin. “Simply put, because Stross fulfills the statutory requirements of the Copyright Act, he has a valid claim. He does not lose his right to bring this claim just because Redfin raises a downstream sublicense in its defense.”