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Gener-Villar v. Adcom Group, Inc., D. Puerto Rico

A district court in Puerto Rico accepted a magistrate’s report and recommendation and denied a motion for summary judgment made by an advertising agency’s client in a copyright infringement case filed by a photographer against the advertising agency and its client. The client of the advertising agency claimed dismissal was warranted because it was an “innocent infringer” of the plaintiff’s photographs, but the magistrate disagreed, finding that “innocence” is relevant only to a determination of damages. The magistrate additionally found genuine controversies of material fact regarding the purported innocence of the client based on testimony that the client provided detailed instructions to the advertising agency about which photos it wanted and how to use them in ads, and the client continued to use the plaintiff’s photographs in its advertising campaign ever after it learned of the ongoing litigation.

The court had earlier determined that the photographs were not a work for hire and that the plaintiff could enforce his rights in the photographs against all unauthorized users. The co-defendant Supermercado Mr. Special, a supermarket and client of the advertising agency, filed a motion for summary judgment and requested dismissal, claiming that it was an innocent party in the litigation because it lacked information as to any actual copyright infringement, it did not contribute to or participate in the infringement, and it was not informed about which photographs were used in the company’s advertising campaign. This motion was referred to the magistrate for consideration.

The magistrate judge recommend denial of defendant’s motion for summary judgment. The magistrate noted that a claim of being an innocent infringer is only relevant to determining damages because the Copyright Act only provides for the reduction in statutory damages for an innocent infringer. The magistrate specifically found that innocence is not a defense to a claim of copyright infringement, whether that claim is for direct infringement or secondary infringement (i.e., contributory or vicarious infringement). The magistrate also disagreed with the defendant’s assertion that it was unaware of the copyright infringement and did not participate in it. Testimony by the advertising agency’s officers (who all happened to be children of the owner of the supermarket client) indicated that the supermarket was very involved in the selection and use of the plaintiff’s photographs, even after the litigation began. For example, the supermarket had a list of the plaintiff’s photographs and would tell the advertising agency which of the plaintiff’s photographs it wanted to use; it would give the advertising agency a list of new photographs it wanted taken; and it would choose the layout of the photographs. In recommending denial of defendant’s motion, the magistrate also focused on evidence that the supermarket was aware of the plaintiff’s lawsuit and continued to request and use photographs that were the subject of the litigation in its advertising campaign. The district court, in turn, denied defendant’s motion for summary judgment based on the magistrate’s recommendations.

The district court subsequently denied the advertising agency’s motion for summary judgment on the copyright infringement claims; although a state court had held that the advertising agency owned the CDs that contained the plaintiff’s photographs, the court found that the agency did not own the copyright to the photographs and therefore rejected the agency’s argument which relied on the first sale doctrine.