Zazzle And Other Print-On-Demand Websites Can Breathe A Sigh Of Relief . . . For Now
Last month, in a February 8, 2018 Order, the Central District of California vacated its injunction in Greg Young Publishing, Inc. v. Zazzle, Inc., 2:16-cv-04587-SVW-KS, in which Zazzle was “permanently enjoined from infringing any of the exclusive rights in 17 U.S.C. § 106 with respect to Plaintiff’s copyrighted works…” See Permanent Injunction and Order, October 27, 2017. The court’s February 8th decision acknowledged the practical challenges a platform such as Zazzle would face in complying with the injunction and found that damages were an adequate remedy in the circumstances.
Zazzle is a website that allows users to upload and print images on a wide variety of household items. In 2016, Zazzle was sued for copyright infringement by a licensing company alleging that Zazzle allowed users to upload the licensing company’s copyrighted artwork. Following a trial last fall, the judge ordered Zazzle to cease infringing the copyright in artists’ works owned by the plaintiff.
Zazzle unsuccessfully tried to seek shelter under Section 512(c) of the Digital Millennium Copyright Act (DMCA), which provides a safe harbor from copyright liability for service providers. The court held, however, that the DMCA did not protect Zazzle from liability for products manufactured and sold by Zazzle bearing the infringing images. By printing the infringing images onto items, the court found that Zazzle took an active role in the infringement.
In its February 8, 2018 order, the court vacated the permanent injunction on the grounds that the plaintiff failed to show irreparable harm or a lack of adequate remedy at law and that the scope of the injunction went beyond the issues at trial.
In arguing irreparable harm, the plaintiff alleged that its “competitive position” would be harmed because it would lose market share, but the court found the plaintiff had provided no evidence of such loss, or loss of reputation due to Zazzle’s infringing products. Further, the court found that the $351,100 in statutory damages that the jury awarded the plaintiff were “more than adequate” to compensate the plaintiff. The court reasoned that Zazzle was unlikely to repeat the infringement in the future because Zazzle reviews millions of images each year to prevent infringement, and therefore, it is not a willful infringer.
Finally, the court held that the injunction was broadly worded and the scope went beyond the issues at trial. The injunction did not differentiate between infringing products manufactured by Zazzle and infringing images displayed on Zazzle’s website. The plaintiff had dropped its infringement claim regarding the images displayed on Zazzle’s website prior to trial, and therefore, the court never decided whether Zazzle had a viable DMCA defense as to those images.
Based on the foregoing, the court concluded that the permanent injunction should be vacated. Just last week, the court denied the plaintiff’s motion for attorneys’ fees in this case.
Takeaway: The decision highlights that not all copyright infringement claims will justify an injunction where the plaintiff cannot provide evidence of actual harm for which damages are an inadequate remedy. It is also certainly welcome news for Zazzle, and similar print-on-demand platforms, who would likely find complying with such an injunction to be a nearly impossible and overwhelming burden.