The court affirmed the district court’s denial of summary judgment based on defendants’ argument that plaintiff’s photographs of motorcycles featuring original artwork were unauthorized derivative works, but reversed the district court’s grant of summary judgment based on fair use, holding that the district court erred in raising the fair use defense sua sponte where fair use was not raised as a defense in the answer, and reversed the grant of summary judgment based on implied license, finding that genuine issues of material fact regarding whether defendants exceeded the scope of the implied license preclude summary judgment.
The plaintiff is a photographer who filed suit against several parties for copyright violation: (1) a motorcycle customizing shop (Roaring Toyz), (2) a motorcycle manufacturer (Kawasaki) and (3) a magazine publisher (Hachette) for using photographs the plaintiff had taken of several customized ZX-14 motorcycles. The defendants claimed (1) that the plaintiff’s photographs were derivative works based on the original artwork painted on the motorcycles, (2) that the plaintiff did not have a license from the creator of the artwork to make a derivative work, and (3) that therefore the plaintiff’s photographs were not entitled to copyright protection and (4) even if plaintiff’s photographs were entitled to copyright protection, the plaintiff granted defendants an implied license to use the photographs.
The defendants did not plead fair use, but the district court raised the issue sua sponte and granted defendant magazine publisher summary judgment based on its publication of the photographs being a fair use. The district court also held that the photographs were not derivative works because they did not “recast, transform, or adopt” the artwork and that they were entitled to copyright protection. However, the district court concluded that the plaintiff had granted the defendants an implied license to use the photographs, and granted summary judgment to defendants on this issue. On appeal, the plaintiff argued that the defendants exceeded the scope of the implied license and that the defendants waived their right to assert the affirmative defense of fair use by failing to plead it.
Ruling on the issue of whether the photographs were protected by copyright, the Eleventh Circuit held that it need not resolve the question of whether the photographs were derivative works based on the artwork painted on the customized motorcycles because the artist had granted an implied license that encompassed the photographs. Based on this conclusion, the court affirmed the district court’s denial of summary judgment based on the argument the photographs did not enjoy copyright protection.
However, the Eleventh Circuit reversed the district court’s summary judgment ruling on the issue of the implied license granted by plaintiff. According to the court, an implied license is created when one party (1) creates a work at another person’s request; (2) delivers the work to that person; and (3) intends that the person copy and distribute the work. Furthermore, implied licenses may be limited and a defendant who exceeds the scope of an implied license commits copyright infringement. The court held that an implied license will be limited to a specific use only if that limitation is expressly conveyed when the work is delivered.
The appeals court agreed with the district court that the plaintiff granted Kawasaki an implied license to use his photographs, but found that the defendants’ use might have exceeded the scope of that license. The court held that the plaintiff’s conduct satisfied all three prongs of the implied license test: the plaintiff granted Kawasaki an implied license to use his photographs; the plaintiff created the photographs at Kawasaki’s request and delivered the photographs to Kawasaki, and intended that Kawasaki use the photographs on a placard and in a screen presentation to promote its new sport bike. However, the parties disputed whether the plaintiff specifically limited how the defendants could use the photographs and the appeals court remanded this issue for the district court to determine, stating that there were genuine issues of material fact regarding whether the defendants exceeded the scope of the implied license.
The appeals court also reversed summary judgment for the magazine publisher on the basis of fair use. The plaintiff argued that the defendants never raised the fair use defense until after the district court raised it sua sponte and thus the defendants waived their right to raise the affirmative defense of fair use. The defendants argued that fair use is not an affirmative defense but is instead considered not infringement. The court rejected this argument and held that the district court erred by raising the fair use defense sua sponte where the defense was not asserted in Hachette’s answer or raised in its motion for summary judgment. The court reversed the district court’s grant of summary judgment to the defendant magazine publisher and remanded the issue. “We are not ruling as a matter of law that Hachette has waived the fair use defense because this issue has not been properly presented in the district court. As previously noted, failure to plead an affirmative defense generally results in a waiver of that defense. However, there are exceptions to this rule and the district court is free on remand to entertain a motion to amend by Hachette to assert the affirmative defense of fair use.”
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