Olan Mills, Inc. Professional Photographers of America, Inc. v. Linn Photo Co., the Recording Industry Association of America, Inc. The Newsletter Publishers Association, Inc. Turner Broadcasting System, Inc. The Association of American Publishers, Inc., Amicus Curiae

Citation: 23 F.3d 1345Docket: 93-1140

Court: Court of Appeals for the Eighth Circuit; June 6, 1994; Federal Appellate Court

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Olan Mills, Inc. appeals the Eighth Circuit's decision regarding a copyright infringement case against Linn Photo Co. The district court had granted summary judgment to Linn Photo and denied Olan Mills' request for an injunction. Olan Mills operates over 1,000 portrait studios and discovered that Linn Photo was copying copyrighted photographs without authorization. After registering copyrights for several photographs, Olan Mills hired a private investigator to confirm the infringement. The investigator ordered copies of the copyrighted photos from Linn Photo, which were marked with copyright notices. Linn Photo proceeded with the reproductions despite these notices, and the investigator signed a "Permission to Copy Agreement" asserting ownership and holding Linn Photo harmless from any liability.

In its lawsuit, Olan Mills sought statutory damages and an injunction. The district court ruled in favor of Linn Photo, asserting that the investigator acted as Olan Mills' agent and thus licensed the copying, also awarding attorney's fees to Linn Photo based on the signed agreements. Olan Mills challenges the district court's interpretation of agency law, its jurisdiction over the injunction request, and its rulings on indemnity law. The appellate court reverses the summary judgment for Linn Photo, directs the district court to enter judgment for Olan Mills, and remands for determination of statutory damages, injunctive relief, and attorney fees.

A copyright confers exclusive rights to the owner, including reproduction and public distribution. The district court upheld Linn Photo’s agency theory, suggesting that Olan Mills licensed Linn Photo to reproduce photographs, but this conclusion is contested. It is established that a copyright owner cannot infringe their own copyright nor revoke consent to copy, which would unfairly entrap another party into infringement. The situation mirrors other copyright enforcement cases, where the investigator’s actions did not validate Linn Photo's infringement but were part of Olan Mills' effort to halt it. Thus, Linn Photo's copies were copyright violations, warranting a review of statutory damages upon remand.

Regarding indemnity law, the district court deemed the indemnity agreement valid under Iowa law, making Olan Mills liable for Linn Photo's attorney fees. This is disputed, as the agreement does not reflect a genuine attempt to avoid infringement; Linn Photo cannot invoke it to escape statutory liability. Ownership of a photograph does not transfer copyright, which remains with the author, Olan Mills, especially since the photographs bore clear copyright notices. Linn Photo had prior notice of infringement from Olan Mills and created the indemnity agreement without legal counsel, intending to evade liability, making it ineffective as a defense.

On the issue of injunctive relief, the district court found it lacked jurisdiction to grant an injunction, claiming no live controversy existed. This is also disputed, as 17 U.S.C. § 502(a) empowers the court to issue injunctions against copyright infringement, irrespective of whether the copyrights are registered or directly related to the infringement claim.

Registration under section 411 of the Copyright Act is necessary to initiate a lawsuit for copyright infringement, but infringement itself does not depend on registration, as stated in 17 U.S.C. Sec. 408(a). A copyright holder may register their work and file suit following infringement, with the timing of registration affecting the ability to recover statutory versus actual damages. Olan Mills demonstrated a live controversy by seeking a permanent injunction against the future infringement of its unregistered copyrighted photographs, granting the district court jurisdiction to consider its request. Courts typically issue broad injunctions to protect copyright holders, regardless of whether the copyrights are registered, and can extend these injunctions to works not yet created when there is a history of infringement and a significant threat of future infringement. The D.C. Circuit supports this approach, affirming that if a copyright owner shows a threat of ongoing infringement, they are entitled to an injunction regardless of registration status. Evidence presented by Olan Mills indicated past infringement by Linn Photo and a strong likelihood of future infringement, warranting judicial consideration of Olan Mills' request for injunctive relief.

Furthermore, the court determined that the district court’s prior award of attorney's fees to Linn Photo should be set aside, and the court will reassess Olan Mills’ entitlement to attorney's fees under section 505 of the Copyright Act upon remand. The conclusion reached indicates that Linn Photo infringed Olan Mills' copyrights, entitling Olan Mills to statutory damages for registered works. The case is reversed and remanded for further evaluation of damages, injunctive relief, and attorney's fees for Olan Mills.

In a dissent, Judge John R. Gibson argues that the district court correctly granted summary judgment based on Olan Mills' expressed authority for the reproduction of photographs, emphasizing that the central issue of approval was appropriately addressed by the district court.

Olan Mills' counsel instructed an investigator to visit Linn Photo retail outlets in Cedar Rapids, posing as a regular customer seeking enlargements of a family photograph. The investigator was directed to limit personal information and to avoid any implication of deceitful conduct to maintain credibility. The instructions included signing any liability release forms provided by the sales staff and following any requests to remove copyright notices from the photographs in question. The court recognized Olan Mills' exclusive rights under 17 U.S.C. Sec. 106 to authorize reproduction of their copyrighted works. The investigator acted as Olan Mills' agent and had permission to order enlargements, which negated claims of infringement. The agreement signed by the investigator, which indicated ownership of the photographs and included indemnification for Linn Photo, was upheld by the district court, supporting Linn's right to attorney fees from Olan Mills. The court affirmed the district court's conclusions regarding the investigator's authorization and the validity of the fee award.

The district court focused solely on four specific photographs registered for copyright protection, two provided to Linn Photo Shops and two to Drug Town stores for copying. It declined to assess a broader pattern of infringement, noting the plaintiffs lacked evidence beyond these four instances. Olan Mills' general counsel acknowledged that these were the only infringements intended to be proven in the lawsuit. The court's reasoning compared the investigator's actions to those in prior cases, but highlighted significant differences: in those cases, the investigators lacked written consent from copyright owners and were not authorized to consent to copying. Additionally, those prior cases involved recording media clearly marked against copying, and the investigators' actions were not the focus of judicial review. The court's review of summary judgment motions overlooked the district court's findings and rationale, incorrectly reversing its decision. The district court believed Olan Mills permitted the investigator to waive copyright, but the current interpretation disagrees, asserting that the investigator acted under the pretense of a customer who owned a copy. The interpretation contends that even with written instructions, the authority granted to the investigator does not equate to a waiver of the copyright owner's exclusive reproduction rights. Relevant statutes, 17 U.S.C. § 502(a) and § 504(c)(1), outline the court's authority to issue injunctions and the options for statutory damages, respectively. The district court noted instances where Olan Mills allowed reproduction from external sources after a two-year period.