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Krist v. Scholastic, Inc.

Citations: 253 F. Supp. 3d 804; 2017 WL 2349004; 2017 U.S. Dist. LEXIS 81839Docket: CIVIL ACTION NO. 16-6251

Court: District Court, E.D. Pennsylvania; May 30, 2017; Federal District Court

Narrative Opinion Summary

In this copyright infringement case, a professional photographer accuses a publishing company of unauthorized use of his photographs, which were sublicensed through an agreement with Corbis Corporation. The defendant filed a motion to dismiss or transfer the venue, arguing insufficient pleading and the applicability of forum-selection clauses in the Preferred Pricing Agreements (PPAs) between Corbis and the defendant. The court, however, found the plaintiff's allegations sufficient to state a claim, noting that detailed information may be under the defendant's control. It also ruled that the forum-selection clauses did not bind the plaintiff, as these were not intended to cover copyright claims, and the plaintiff was neither a party nor a beneficiary of the PPAs. The court denied the motion to transfer venue under 28 U.S.C. § 1404(a), giving deference to the plaintiff's choice of forum and finding no significant public interest factors to warrant a transfer. Additionally, the court rejected the defendant's request to limit discovery based on statute of limitations issues, allowing the plaintiff to pursue broader discovery while the defendant addresses its defenses. The court emphasized the Third Circuit's discovery rule, which permits equitable tolling until the plaintiff discovers the infringement, potentially allowing claims for infringements beyond the typical three-year limitations period.

Legal Issues Addressed

Agency Relationship and Licensing Agreements

Application: The court found that the licensing agreement between the plaintiff and Corbis did not establish an agency relationship, as the plaintiff had no control over Corbis’s licensing practices.

Reasoning: Plaintiff's agreement with Corbis granted Corbis sole discretion over licensing terms for Plaintiff's work, indicating Plaintiff had no control over Corbis's licensing practices.

Discovery Rule and Statute of Limitations in Copyright Claims

Application: The court declined to limit discovery based on the statute of limitations, citing the Third Circuit's discovery rule, which allows for equitable tolling until the injury is discovered or should have been discovered.

Reasoning: The Court also finds that it cannot rule out the possibility of Plaintiff recovering for infringements that occurred more than three years prior to the lawsuit, as such claims may be timely under the Third Circuit discovery rule.

Forum-Selection Clauses and Non-Parties

Application: The court determined that the forum-selection clauses in the PPAs did not bind the plaintiff, as the clauses explicitly applied only to 'the parties,' and the plaintiff was neither a party nor a third-party beneficiary of the agreements.

Reasoning: The clauses explicitly state they apply to "the parties," and Defendant’s claims that Plaintiff should be bound due to Corbis acting as his agent or because he benefits from the PPAs are rejected.

Pleading Standard for Copyright Infringement

Application: The court found that the plaintiff's allegations were sufficiently detailed to establish a plausible claim for copyright infringement, despite the defendant's contention that elements like timing and specific acts were inadequately pled.

Reasoning: The Court found Krist's allegations, which assert infringement occurred shortly after licensing, sufficient to establish a plausible claim.

Transfer of Venue Under 28 U.S.C. § 1404(a)

Application: The court denied the defendant's motion to transfer venue, emphasizing that the plaintiff's choice of forum was given deference and that public interest factors did not sufficiently favor the defendant to justify transfer.

Reasoning: Factors such as the parties' forum preferences, the origin of the claim, and the convenience of witnesses overwhelmingly favor Plaintiff, particularly since Plaintiff's choice of forum is given deference.