Whether You Register a Copyright as a Compilation or Individually May Affect Damages

(March 21, 2019) The question of damages in a copyright battle between Zillow and a professional photography company that takes pictures of houses for sale raises the important, but sometimes overlooked, question of whether to register images as a compilation or individually. The wrong decision could be costly.

Zillow, the online real estate site, was sued for infringing copyrights owned by VHT, Inc., a company that takes professional photos and touches them up for use by real estate brokers, listing services, and agents.

Zillow obtained the images from real estate agents who licensed them from VHT. Zillow required that the real estate agents to attest that they had permission to post the pictures on Zillow. VHT said its license applied only while the particular property was actively listed for sale and Zillow infringed VHT’s copyrights because some of the images remained after the property was sold. The trial and appellate court found Zillow had in place a method to take down images on its main site when the license expired, so there was no infringement on this count.

However, Zillow also had a function to tag certain images so they could be searched on Zillow’s “Digs” portion of its website. The trial court found that the tagging was not a transformative fair use and held that Zillow’s tagging was willful and awarded VHT $4 million in damages, an amount less than what the jury awarded. The appellate court agreed that Zillow’s tagging was not a fair use but held that it was not willful. It then remanded the question of the amount of damages to the trial court.

The appellate court could not determine if the over 3,000 images were part of a “compilation” or individual photos. “This distinction makes a difference,” the appellate court wrote. “If the VHT photo database is a ‘compilation,’ and therefore one ‘work’ for the purposes of the Copyright Act, then VHT would be limited to a single award of statutory damages for Zillow’s use of thousands of photos on Digs. But if the database is not a compilation, then VHT could seek damages for each photo that Zillow used.”

The appellate court noted that the problem for VHT on remand is that the company “registered thousands of photos as compilations. . . . Though the registration label is not controlling, it may be considered by the court when assessing whether a work is a compilation.”

“Because there were at least ten different copyright registrations, thousands of photos, and no explicit determination on compilation, we decline to sort out the compilation issue on appeal,” the appellate court opinion said.

The lesson for copyright owners is to carefully consider when seeking a copyright registration whether to file as a compilation or each image individually. The decision may affect damages down the road in litigation.

VHT, Inc. v. Zillow Group, Inc., Ninth Cir. No. 17-35587-88, issued March 15, 2019.