Curb Appeal: Ninth Circuit Explains § 1202 State-of-Mind Requirements in Stevens v. CoreLogic

Nearly two years ago we wrote about a California case involving the alleged removal or alteration of copyright management information (“CMI”) in the context of real estate Multiple Listing Service (“MLS”) software.  Stevens v. CoreLogic, Inc. has since winded its way up to the U.S. Court of Appeals for the Ninth Circuit, which ruled last week in favor of MLS software developer CoreLogic and affirmed the lower court’s dismissal of the plaintiffs’ copyright infringement suit.

A quick refresher on the facts is warranted given the passage of time.  The plaintiffs are professional real estate photographers who photograph homes that are being put up for sale.  They retain the copyrights to their images but license them to real estate agents, who upload the images to MLS platforms through software programs like those created by CoreLogic.  The plaintiffs sued CoreLogic, claiming that CoreLogic’s resizing and processing of their images for upload to MLS platforms constituted purposeful alteration or deletion of CMI-containing metadata under § 1202 of the Copyright Act.  The district court disagreed and dismissed plaintiffs’ claims on a motion for summary judgment, holding that the photographers had failed to prove that CoreLogic provided or distributed false CMI; that any CMI was embedded in their photographs; that CoreLogic took any action that removed or altered any CMI (assuming it was embedded); or, if such actions were taken, that they were intentional, as required by the statute.

In affirming the district court, the Ninth Circuit focused only on CoreLogic’s state of mind, and because the plaintiffs’ claims failed on that element alone, the court did not address the other aspects of the statute.  Both applicable provisions of § 1202 only provides damages if CMI is altered or removed where a person knows or has a reasonable basis to know, that his or her actions will “induce, enable, facilitate, or conceal infringement.”  The Ninth Circuit held that the photographers had “not offered any evidence to satisfy that mental state requirement.”  Rather, they relied on the proposition that, because some metadata was purportedly removed, “someone might be able to use their photographs undetected.” But, according to the court, merely identifying “a general possibility that exists whenever CMI is removed” is insufficient to constitute a violation of § 1202.  To give effect to all relevant statutory language in § 1202, the court held that “the mental state requirement . . . must have a more specific application than the universal possibility of encouraging infringement; specific allegations as to how identifiable infringements ‘will’ be affected are necessary.”

The court expounded on the statutory language, explaining that § 1202’s knowledge requirement signifies less than absolute certainty that a future action will occur, but rather contemplates “‘a state of mind in which the knower is familiar with a pattern of conduct’ or ‘is aware of an established modus operandi that will in the future cause a person to engage’ in a certain act.”  Accordingly, a plaintiff “must make an affirmative showing” of such pattern or motive to show that the “defendant was aware of the probable future impact of its actions.”  Because the plaintiffs made no such allegations as to CoreLogic and produced no evidence that CoreLogic’s distribution of photographs ever “induce[d], enable[d], facilitate[d], or conceal[ed]” any particular infringement by anyone (let alone established a pattern), their § 1202 claim failed.  Indeed, the evidence even showed that the photographers had never used CMI metadata to prevent or detect infringements of their works, further undermining their otherwise unsupported allegations.

Claims for violations of § 1202 are becoming more and more common, typically as add-ons to copyright infringement complaints filed en masse by highly aggressive plaintiffs’ firms.  While the state-of-mind requirement in § 1202 was already a go-to basis for disposing of these claims, the Ninth Circuit’s ruling in CoreLogic makes this defense even stronger by placing some concrete boundaries around the knowledge prerequisite.  While CoreLogic arose in the summary judgment context, if a complaint offers no allegations consistent with the state-of-mind element as defined by the court, or where the facts themselves would contradict any plausible claim that a defendant acted in accordance with a pattern or modus operandi, defendants may well have a valid basis for dismissal at the pleading stage.   On the other hand, CoreLogic can serve as a useful guide for proponents of meritorious § 1202 claims to effectively plead them with less concern about early dismissal.