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Boatman v. Honig Realty, Inc.

United States District Court, N.D. Illinois, Eastern Division

September 5, 2017

MICHAEL BOATMAN, Plaintiff,
v.
HONIG REALTY, INC. d/b/a COLDWELL BANKER HONIG-BELL Defendant.

          MEMORANDUM OPINION AND ORDER

          John J. Tharp, Jr. Judge

         Defendant Honig Realty Inc. sells houses. Plaintiff Michael Boatman is a professional photographer who photographed several houses for Honig. Boatman alleges that Honig infringed his copyrights in the photographs by posting them on a number of real estate websites and altering his copyright management information. Honig has moved to dismiss all the counts of the complaint except for the breach of contract claim. For the reasons explained below, the motion to dismiss is granted in part and denied in part.

         BACKGROUND

         As required when considering a motion to dismiss, the Court takes all well-pleaded allegations in the complaint as true and draws all reasonable inferences in the plaintiff's favor. See Adkins v. VIM Recycling, Inc., 644 F.3d 483, 492-93 (7th Cir. 2011). Plaintiff Michael Boatman is a professional photographer living in Peoria, Illinois. Am. Compl. (“Compl.”) ¶ 2. In 2015, Boatman was hired by defendant Honig Realty Inc. (“Honig”) to take photographs of nine homes Honig was trying to sell. Id. at ¶ 6. Boatman took the photographs and registered each photograph with the U.S. Register of Copyrights. Id. When Boatman sent Honig the photographs, they contained embedded information listing his name, personal information, copyright, and the year. Id. at ¶ 12.

         Boatman granted Honig a license which allowed Honig to use the photographs for the “listing and marketing” of the homes, with the license expiring when the listing agreement was terminated (i.e., when the property sold). Id. at ¶ 9. The license also stated that “No usage rights are granted until full payment is made. Nontransferable to any 3rd party for any reason without prior written consent from the author and copyright owner Mike Boatman.” Id. On a different document that Boatman included as a part of his photography proposal, he stated that the photograph usage rights were “restricted to the marketing of the listed property” and that the “[u]sage lease is nontransferable to 3rd parties.” Compl. ¶ 11.

         Honig uploaded the photographs to Zillow, a popular real estate website, “in order to advertise the Photographed Properties for sale.” Id. at ¶ 13. Honig also uploaded some photographs to other real estate websites to advertise the properties, such as Realtor.com. Id. at ¶ 20. At least some of the photographs remained up on Zillow and Realtor.com after the properties were sold, despite the websites no longer having active listings for those properties. See Id. at ¶¶ 14, 21. On July 23, 2015, Boatman spoke to two of Honig's employees about their uploading of the photographs to Zillow, although it is not clear that he voiced any complaints regarding the photographs appearing on Zillow. See Id. at ¶ 15. Honig notes that pop-up advertisements sometimes appear when visiting the Realtor.com pages featuring the photographs. See Compl. ¶ 27. Zillow has also taken at least one photograph and used it on another segment of the website, called “Zillow Digs, ” which showcases certain home features. Id. at ¶ 28.

         Boatman also complains that Honig “intentionally removed” the copyright management information (“CMI”) that he had embedded in the file. Id. at ¶ 51. He further alleges that Honig added a watermark reading “PAAR, ” which he believes is an acronym for the Peoria Area Association of Realtors. Id. at ¶ 31. At least one of the photographs in the complaint shows a PAAR watermark on a photograph in a Realtor.com listing. Id. at ¶ 20.

         Boatman twice attempted to contact Honig regarding what he believed was the improper use of his photographs. In summer 2015, Boatman called one of Honig's real estate agents and informed her “of the improper publication of certain of the Registered Photographs.” Compl. ¶ 33. The agent allegedly agreed that the use of the photographs violated the terms of the lease and Boatman's copyright, but Honig took no action in response. Id. On August 28, 2015, Boatman's lawyer sent a letter to Honig's president “outlining in detail the infringement and CMI violations described above, ” but Honig allegedly “took no action to correct the problem or mitigate the harm.” Id. at ¶ 34.

         Boatman filed this lawsuit on August 26, 2016 and amended his complaint on October 17, 2016. The current complaint brings four claims: direct copyright infringement, contributory copyright infringement, violation of the Digital Millennium Copyright Act (“DMCA”) (17 U.S.C. § 1202), and breach of contract. Honig has moved to dismiss the first three counts.

         DISCUSSION

         Honig raises a number of reasons why Boatman has failed to state a claim under Rule 12(b)(6). As an initial matter, it objects that Boatman has “pled no facts” that Honig had knowledge or intent with regard to its alleged contributory infringement or DMCA violations. See Def.'s Mem. at 6, 8. Knowledge and intent, however, “may be pleaded generally (which is to say, in a conclusory fashion).” Burks v. Raemisch, 555 F.3d 592, 594 (7th Cir. 2009). Boatman has generally alleged that Honig knew its actions “were substantially certain to result in direct infringement” and that it “intentionally removed” the relevant CMI.[1] Compl. at ¶¶ 43, 51. Those allegations are sufficient at this stage. With that concern addressed, the Court moves on to the substantive objections to Boatman's claims.

         I. Direct Infringement

         An entity that holds a copyright license, such as Honig, can only commit copyright infringement (rather than breach of contract) if it exceeds the scope of the license. See Bergt v. McDougal Littell, 661 F.Supp.2d 916, 921 (N.D. Ill. 2009) (citing I.A.E., Inc. v. Shaver, 74 F.3d 768, 775 (7th Cir. 1996)). Copyright licenses are to be construed like any other contracts and interpreted under state law. Automation by Design, Inc. v. Raybestos Prods. Co., 463 F.3d 749, 753 (7th Cir. 2006). Honig argues that its conduct (uploading the photographs to Zillow and Realtor.com to market the properties) falls squarely within the license which was explicitly for “listing and marketing” the properties. See Def.'s Mem. at 4. Boatman claims that because the lease states it is “[n]ontransferable” without Boatman's consent, distributing the photographs to any third party (even for listing and marketing) was outside the scope of the lease.[2] See Pl.'s Resp. at 4.

         “The interpretation of an unambiguous contract is a question of law that can be decided at the motion to dismiss stage.” Golden v. Wiznitzer, No. 13 C 9003, 2014 WL 1329397, at *1(N.D. Ill. Apr. 2, 2014) (citing De Lage Landen Fin. Servs., Inc. v. M.D.M. Leasing Corp., No.07 C 0045, 2007 WL 4355037, at *2 (N.D. Ill.Dec. 10, 2007)). “A contract is ambiguous only where a reasonable person could find its terms susceptible to more than one interpretation.” Automation by Design, Inc., 463 F.3d at 754. When encountering similar language regarding a “non-transferable” license, the Seventh Circuit found the language “unambiguously” meant that the licensee's rights could not be transferred. Id. at 755. The Seventh Circuit rejected the understanding that the “non-transferable” language meant that the physical designs could not be ...


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