Pierson v. Middleboro Restaurants, Inc. d/b/a Barrett 2019s Fireside Grille 918-cv-12268).

Photographic Illustrators, a company working in commercial photography, accused Orgill of infringing a number of Photographic Illustrators 2019 copyrights in photographs of Osram Sylvania lighting products. Orsram has a license to the photographs; PI asserts that Orgill, an Osram distributor, is not covered by that license. Orgill was granted summary judgment on PI 2019s DMCA and Lanham Act claims in 2015, but Orgill 2019s motion with respect to the copyright infringement claim was denied. Following an arbitration involving PI and Osram, Orgill again moved for summary judgment on the copyright claim, asserting that they were sublicensed under the Osram license and that that arbitration award precludes the copyright claim. PI cross-moved for summary judgment that there was no sublicense or that Orgill 2019s use fell outside of the purported sublicense.
Orgill asserted that it had impliedly been sublicensed by Osram, which was confirmed in a nunc pro tunc 2014 sublicense. In her 2015 decision, Judge Saris found that PI had provided sufficient evidence that Orgill had sublicensed the photographs to Orgill 2019s dealers for a fee, which was not permitted under PI 2019s license with Osram, and without the attribution required by the PI/Osram agreement. Subsequently, the arbitrator found that the no-fee provision and the attribution provision were merely covenants enforceable via contract law, rather than conditions on Osram 2019s license.
In her decision of last week, Judge Saris determined that Osram had granted Orgill an unwritten sublicense, through its course of conduct in giving Orgill images to promote Osram products since 1998 and in never objecting to Orgill 2019s use of the images. She further found that an implied sublicense could legally be granted. PI had asserted that an implied copyright license could not be granted by a licensee to a sublicensee who has no direct contact with the copyright holder; looking to the totality of the circumstances to determine that the parties intended Orgill to be licensed, specifically that PI intended to permit Osram to sublicense the photographs and that Osram intended that Orgill be licensed to use the images. The arbitration decision effectively precluded PI from arguing that Orgill exceeded the scope of this implied sublicense, because the relevant terms of PI 2019s license with Osram did not condition sublicenses Osram could make. She further found that the confirmatory sublicense, which included language requiring attribution where feasible, but further stated that this requirement was 201c[w]ithout effect on the rights of Orgill 2026 to Use the Images as granted 2026 201d This quoted language meant that the attribution requirement was not a condition which must be met to form the sublicense, but again merely a contractual obligation. Accordingly, use by Orgill of photographs lacking attribution cannot be the basis for the copyright infringement claim.
Judge Saris further addressed PI 2019s argument that it had not licensed 201capproval 201d images to Osram, such that Orgill could not have been sublicensed with respect to those images. These 201capproval 201d images were rough photographs sent to Osram for approval before being retouched and refined into he final photographs by PI. While the issue of whether these images were licensed was not affirmatively determined by the arbitrator, Judge Saris determined that PI had not disclosed this infringement theory during discovery, and precluded PI from pursuing this theory under FRCP 37(c)(1). Accordingly, she granted Orgill 2019s motion for summary judgment.