United States District Court, N.D. Illinois
PANORAMIC STOCK IMAGES, LTD., d/b/a PANORAMIC IMAGES, Plaintiff,
THE McGRAW-HILL COMPANIES, INC., Defendant
For Panoramic Stock Images, Ltd., doing business as Panoramic Images, Plaintiff: Maurice J. Harmon, LEAD ATTORNEY, Harmon & Seidman LLC, New Hope, PA; Amanda Leigh Bruss, Christopher Seidman, Harmon & Seidman, Llc, Grand Junction, CO; E. Bryan Dunigan, III, Law Offices of E. Bryan Dunigan, Chicago, IL.
For McGraw-Hill Companies, Inc., The, Defendant: Christopher P. Beall, LEAD ATTORNEY, Levine Sullivan Koch & Schulz, L.L.P., New York, NY; Kevin Andrew Thompson, William T. McGrath, Davis, Mannix & McGrath, Chicago, IL.
REBECCA R. PALLMEYER, United States District Judge.
MEMORANDUM OPINION AND ORDER
Plaintiff Panoramic Stock Images, Ltd. (" Panoramic" ) is an Illinois business that licenses photographs to publishers, including Defendant The McGraw-Hill Companies, Inc. (" McGraw-Hill" ), an education publisher. For several years, the parties operated under an agreement that permitted McGraw-Hill to make limited use of photographs in which Panoramic claims to hold a copyright. In this lawsuit, Panoramic alleges that McGraw-Hill has exceeded the scope of the license agreement by publishing copyrighted photos in unspecified " additional publications." (Compl.  ¶ 12.) Panoramic charges McGraw-Hill with copyright infringement and contributory copyright infringement and claims that McGraw-Hill itself maintains " a list of its wholly unauthorized uses." Id. McGraw-Hill has moved to dismiss certain of Panoramic's claims for failure to state a claim on the ground that, according to McGraw-Hill, those claims rely on defective or unissued copyright registrations in violation of 17 U.S.C. § 411(a). For the reasons explained below, Defendant's motion to dismiss  is denied.
Panoramic is a stock photography agency. It licenses photographs created by various photographers to other entities such as textbook publishers. McGraw-Hill is a licensee of Panoramic. (Compl.  ¶ ¶ 1-2, 7.) Between 1991 and 2012, McGraw-Hill paid Panoramic for limited licenses to use copies of 170 photographs  over which Panoramic claims copyright in some of McGraw-Hill's educational publications. (Compl. ¶ ¶ 5-7; Table of Images [1-1], Ex. 1 to Compl.) The licenses expressly limited the number of copies McGraw-Hill could use, as well as the distribution area, image size, language, duration and nature of the media in which McGraw-Hill was entitled to use the images. ( Id. )
At some point prior to December 2012, Panoramic allegedly learned that McGraw-Hill had violated the licensing agreements by exceeding the permitted uses of the photographs at issue here, including by using the photographs in publications that exceeded the licensing agreements' scope and terms. (Compl. ¶ ¶ 11-13.) Panoramic claims that " McGraw[-Hill] alone knows [the full extent of] these wholly unauthorized uses," but alleges that Defendant " has developed a list of its wholly unlicensed uses and Panoramic's Photographs are among those McGraw[-Hill] has so identified." (Compl. ¶ 12.) On December 4, 2012, Plaintiff provided Defendant with a detailed listing of the 276 limited licenses (involving 170 photographs) at issue, including the photographs' authors, descriptions, copyright registration identifications, and license limits. (Compl. ¶ 13.) According to Plaintiff, Defendant did not respond to Plaintiff's request that Defendant provide accurate information about Defendant's actual use of the photographs and declined to state which, if any, of the photographs it infringed. (Compl. ¶ 13.)
Plaintiff further alleges that Defendant has a pattern of copyright infringement. According to Panoramic, McGraw-Hill repeatedly
requests and pays for limited use licenses and then proceeds to exceed those limited uses. (Compl. ¶ 14.) Plaintiff asserts that Defendant's entire business model is, in fact, " built on a foundation of pervasive and willful copyright infringement." ( Id. ) As support for its claim, Plaintiff lists a series of suits filed by other stock photography agencies and photographers against Defendant, asserting similar copyright infringement claims. (Compl. ¶ 15.)
In response, McGraw-Hill argues that Panoramic cannot sue for copyright infringement of 101 of the 170 photographs at issue because, it claims, Panoramic lacks valid copyright registration for those 101 photos. (McGraw-Hill does not challenge Panoramic's standing to sue on the remaining 69 photographs.) According to Defendant, 52 of the relevant photographs lack valid copyright registrations, and 49 more are not registered at all. McGraw-Hill argues that Panoramic's claims that arise from those 101 photographs should therefore be dismissed because the alleged copyright registration deficiencies " preclude Panoramic ...