VHT, Inc. v. Zillow Grp., Inc. - 918 F.3d 723 (9th Cir. 2019)

Rule:

To prevail on a claim of direct copyright infringement, a plaintiff must establish causation, which is commonly referred to as the "volitional-conduct requirement." Volition in this context does not really mean an act of willing or choosing or an act of deciding; rather, it simply stands for the unremarkable proposition that proximate causation historically underlines copyright infringement liability no less than other torts. Stated differently, direct liability must be premised on conduct that can reasonably be described as the direct cause of the infringement. This prerequisite takes on greater importance in cases involving automated systems.

Facts:

Zillow, an online real estate marketplace, has become a popular website for homeowners and others to check estimated valuations of their property, look for houses and condominiums for sale and rent, and see photographs of a wide range of properties. Thousands of those copyrighted photos come from VHT, the largest professional real estate photography studio in the country. VHT initiated the present copyright infringement action against Zillow, arguing that the latter’s use of photos on the Listing Platform and "Digs" parts of its website exceeded the scope of VHT's licenses to brokers, agents, and listing services that provided those photos to Zillow. The district court granted partial summary judgment on a limited set of claims. The jury found in favor of VHT on most remaining claims, awarding over $8.27 million in damages. The district court partially granted Zillow's post-trial motion for judgment notwithstanding the verdict, reversing in part the jury verdict and reducing total damages to approximately $4 million. The parties cross-appealed issues stemming from partial summary judgment, the jury verdict, and judgment notwithstanding the verdict.

Issue:

Under the circumstances, did Zillow infringe VHT’s copyright? 

Answer:

Yes, but only with respect to the displayable, searchable Digs photos.

Conclusion:

The Court affirmed the district court’s summary judgment in favor of Zillow on direct infringement of the Listing Platform photos. The Court held that VHT failed to establish that Zillow engaged in volitional conduct by exercising control over the content of the Listing Platform. With respect to direct liability on the Digs photos, the Court affirmed the district court's grant in favor of Zillow of judgment notwithstanding the verdict on 22,109 non-displayed photos and 2,093 displayed but not searchable photos. The panel held that VHT did not present substantial evidence that Zillow, through the Digs platform, directly infringed its display, reproduction, or adaption rights. However, the Court upheld summary judgment in favor of VHT on 3,921 displayed, searchable Digs photos, holding that fair use did not absolve Zillow of liability because Zillow's tagging of the photos for searchable functionality was not a transformative fair use. As to damages, the panel remanded consideration of the issue whether VHT's photos used on Digs were part of a compilation or were individual photos.