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Employer’s Liability for Independent Contractor’s Copyright Infringement

May 25, 2021/in All Blog Posts, Corporate Litigation/by John Ahn

You just hired a young web designer as an independent contractor to revamp your website.  After struggling through the creative process, you and your web designer ultimately come to a decision on the final product, and you launch your site. However, a few months later, you receive a letter from the Law Office of Koppi & Wright, PC accusing you of infringing on its client’s intellectual property—specifically pointing to a few graphics and photographs scattered throughout your homepage. Koppi & Wright demands that you remove the graphics and photographs from your website or else it will file a lawsuit against you and your business for copyright infringement.   

The main question is—did you do anything wrong?  Are you liable if the pictures and graphics are actually protected by copyrights?  After all, the web designer you hired placed the questionable graphics and photographs on the website—not you.  The simple answer to each of these questions is a resounding “maybe” depending on a few key circumstances, of course. 

Copyrights, In General 

Copyrights are a type of intellectual property that grants the owner or originator certain exclusive rights including the right to reproduce, copy, distribute, and perform the work created. (17 U.S. Code § 106.)  Specifically, copyrights protect original works of authorship including architectural, audiovisual, cartographic, choreographic, dramatic, graphic, literary, musical, pantomimic, pictorial, and sculptural creations. (copyright.gov.)

And to cover our bases, patents protect inventions and discoveries as opposed to works of authorship. (uspto.gov). On the other hand, trademarks generally protect names or logos that are associated with goods and/or services. (Id.).

As a general rule, if you want to use someone else’s property, you should probably ask for permission.  The same principle applies for intellectual property, and in this case, copyrights.  Once you receive permission from the owner or originator of the content or authored work, you should be able to use the work—such as a song or photograph—in your desired capacity.  For instance, if you wanted to use a certain artist’s photograph as a backdrop on your website, you may do so with the permission of said artist.  In another example, if you wanted to use the name and likeness of one of Disney’s fictional characters in your own business, you will need to get permission.  Conversely, any time you decide to go rogue and use someone else’s authored work without that person’s permission, you are likely infringing on a Copyright. 

Without getting too much into detail about fair use and other copyright exceptions (doing so would triple the length of this article), it is important to note that knowing when you are required to ask for permission can be a bit confusing.  This is especially true if your “use” of the copyrighted work is more than simply copying or reproducing the work.  For example, let’s say you wanted to take inspiration from a copyrighted work to create something of your own.  Do you need to ask the author/originator of that copyrighted work to begin creating?  The safe (albeit simplified) answer to that is “yes” unless you very clearly fall into an exception such as fair use.  Rogers v. Koons is a notable case addressing this very issue.  In Rogers, the court found that a sculptor’s faithfully copied sculpture of a copyrighted postcard photograph—which so blatantly copied the creative expression of the postcard photograph—did not fall under any fair use exceptions and therefore, constituted copyright infringement.  (Rogers v. Koons (2d Cir. 1992) 960 F.2d 301, 307.)  Although a sculptured version of a postcard photograph requires more work and transformation than simply photocopying, a faithful reproduction of an original copyrighted work can constitute copyright infringement.

Vicarious Liability of Copyright Infringement of Independent Contractors

We know that your direct actions can constitute infringement, but what happens when the infringement occurs due to a third party’s actions?  For example, what if the third party is the independent contractor you hired to create your website? 

In these instances, courts have held that anyone who has the “right and ability to supervise the infringing activity” of an independent contractor will be held vicariously liable for copyright infringement if he/she enjoys a “direct financial benefit from said infringing activity.” (See Rosen v. Martin. Cal. Apr. 19, 2013, No. CV 12-0657 ABC (Ex)) 2013 U.S.Dist.LEXIS 201985, at *12.)

In Rosen v. Martin, the court found the defendant had the ability to supervise the work of his independent contractors when they downloaded and uploaded copyrighted works without the Plaintiff’s permission.  (Id.)  Even though the defendant directed the independent contractors to not list these works again after the fact, the court still held the defendant vicariously liable for the independent contractors’ infringement.  (Id.)  In other words, even if your web designer is the one who actually infringed on an existing copyright, you could still be held accountable for the actions of your independent contractor. 

The “What Ifs” 

What if you completely unaware of the infringement?  Could you try to make the argument that as the employer, you did not know your independent contractor would or could be infringing on intellectual property?  The court in Hitek Software LLC echoed the ruling in Rosen but added that an employer who had the right to supervise the infringing activity would still be vicariously liable “even if the defendant initially lacks knowledge of the infringement.”  (See Hitek Software LLC v. Timios, Inc., (C.D.Cal. June 18, 2012, No. CV 12-709 CAS (AJWx)) 2012 U.S.Dist.LEXIS 86560, at *11.)  In Hitek Software LLC, the alleged infringement occurred when Timios, Inc. (the “Defendant”) employed an independent contractor computer specialist who installed software for the Defendant using an illegally generated product key and spoofing the software activation process.  (Id. at 3.)  However, the court determined that the Defendants had the right and ability to “oversee, govern, control, and direct” the independent contractor at all relevant times and was therefore liable for the independent contractor’s actions.  (Id. at 13.)  The idea here is that if you had the right and ability to supervise your independent contractor during employment, you should have known better and are not excused by your ignorance.

What if the independent contractor was simply negligent?  Would employers be absolved of liability?  As a general rule, employers will not be held vicariously liable for the negligent acts of their independent contractors.  (See Secci v. United Independant Taxi Drivers, Inc. (2017) 8 Cal.App.5th 846, 859 [214 Cal.Rptr.3d 379].)  This rule has a few caveats and exceptions like the peculiar risk doctrine, which states an employer can be held liable for an independent contractor’s negligence if the contractor was hired to perform work that is inherently dangerous, and the contractor’s negligence causes injury to others.  (Privette v. Superior Court (1993) 5 Cal.4th 689, 691 [21 Cal.Rptr.2d 72, 854 P.2d 721].)  However, assuming you haven’t hired an independent contractor for work that is inherently dangerous (and without getting into whether the court’s current view will continue to prevail) courts still generally view copyright infringement as a strict liability tort.  (See Educational Testing Serv. v. Simon (C.D.Cal. 1999) 95 F.Supp.2d 1081, 1087.)  Plaintiffs can merely show the defendant used their authored work without permission (e.g., copied, distributed, or performed) in order to prove a prima facie case of copyright infringement.  This essentially means that you will likely be unable to use your independent contractor’s negligence as a defense to vicarious liability for your independent contractor’s infringement.  

The takeaway here is simple: ask for permission.  When you are dealing with situations where you encounter authored work that catches your eye, and you plan on using the copyrighted material in some shape or form, make sure to ask for the owner’s permission.  Not all owners or originators of copyrights will ask for money.  In fact, many just want credit and recognition for their hard work.  If you don’t have the budget (or maybe you just don’t like talking to people), find something that is public domain including free stock images and try to make it work (because you don’t really have that many other legal options).  As an employer, make sure your independent contractor is taking the same precautions to avoid letters from firms like Koppi & Wright, PC to save yourself the headache. 

https://socal.law/wp-content/uploads/2021/05/markus-winkler-9XfSFjcwGh0-unsplash-1.jpg 1600 2400 John Ahn https://socal.law/wp-content/uploads/2021/08/gupta-evans-ayres_brand-identity_v4-02.png John Ahn2021-05-25 23:09:002022-06-20 17:46:45Employer’s Liability for Independent Contractor’s Copyright Infringement

Checking In On The Status of Residential and Commercial Leases in California

May 4, 2021/in All Blog Posts, Corporate Litigation, Real Estate/by Chris Evans

Vaccines are being administered, indoor and outdoor activities are beginning to resume throughout California and it would appear that life is starting to get back to normal.  Well, not quite.  Before you get ahead of yourself, a litany of COVID-related protections remain in place, namely in the landlord-tenant arena. The below is a quick refresher on the state of landlord-tenant protections in California, all of which must be considered before you seek to return to business (and evictions) as usual. 

SB 91 – COVID Eviction Protections Extended Through June 2021

Our last landlord-tenant summary focused primarily on California’s then recently passed Assembly Bill 3088, adopted at the end of August 2020 and formally known as the Tenant, Homeowner, and Small Landlord Relief and Stabilization Act of 2020 (“AB 3088”).  In short, AB 3088 was designed to protect residential tenants—not commercial tenants—who faced, and continue to face, economic hardship due to COVID-19.  With limited exceptions, the protections of AB 3088 apply to any tenant who is unable to pay all or part of their rent due to a COVID-19-related financial impact, so long as they provide an economic hardship declaration to the landlord within a specific period of time. A more detailed breakdown of AB 3088 can be found at our previous post here. 

Currently, the protections of AB 3088 remain largely in place.  Originally slated to protect residential tenants only through January 2021, the AB 3088 safeguards were extended by a second piece of legislation signed by Governor Newsom on January 29, 2021, known as Senate Bill (“SB 91”). The main thrust of SB 91 was to preserve the vast protections afforded by AB 3088 and extend its provisions another six months through June 2021.  As a result of SB 91, no residential tenant can be evicted before June 30, 2021, if the basis of the eviction is rent that has been unpaid due to a COVID-19-related hardship and the tenant attests such fact under penalty of perjury.  Additionally, if the tenant pays 25% of the rent owed from September 2020 through June 30, 2021, then the tenant cannot be evicted after the June 30, 2021 expiration.  Landlords will be able to recoup the remaining rent balance owed after June 30, 2021, via a reconfigured small claims court.  Alternatively, SB 91 also instituted a rental assistance program whereby residential landlords can apply to recover up to 80% of the unpaid rental balance through federal funds. 

Also remaining in place and a key point to keep top of mind, among other things, is the expansion of the “just cause” eviction requirement.  In essence, unless a tenant fails to attest to his or her COVID-related financial hardship, a residential tenant may only be evicted for either an “at-fault just cause” or “no-fault just cause.” In essence, unless a tenant fails to attest to his or her COVID-related financial hardship, a residential tenant may only be evicted for either an “at-fault just cause” or “no-fault just cause.”  In other words, whereas “just cause” was previously only required if certain length of possession thresholds were met (see Civil Code section 1946.2), AB 3088 extended just cause to all tenancies and this protection has been extended via SB 91.

The foregoing is a relatively general and tremendously compressed explanation of SB 91 (and AB 3088), and a thorough review of the Bill’s intricacies is highly recommended. To assist in such review, our Firm has put together this simplified and updated version of our prior flowchart. 

Again, What About Commercial Tenancies?

Like AB 3088 that came before it, SB 91 did not extend eviction protections to commercial tenants.  As a result, commercial landlords and tenants should continue to look for guidance on whether a commercial eviction can proceed by turning their attention to the respective eviction moratoriums in place, if any, at the city and county levels. 

The City of San Diego (the “City”), for instance, currently has its own eviction moratorium in place that sets forth the specific rules and regulations that would either permit or prohibit a commercial landlord from pursuing the eviction of a commercial tenant.  The City of San Diego’s commercial eviction moratorium was re-adopted[1] on January 26, 2021 and will remain in place until June 30, 2021.  Under the City’s commercial eviction moratorium, a commercial landlord cannot endeavor to evict (e.g. serving 3-day notices, filing unlawful detainer) a commercial tenant for nonpayment of rent if the tenant gives the landlord written notice of its inability to pay rent on or within seven days after the rent payment was due. The tenant’s notice must specify that the inability to pay is due to financial impacts related to COVID-19.  The tenant will only be required to provide supporting documentation if the landlord asks for it within seven days of the tenant’s notice.  If notice is sufficiently given by the tenant, the commercial tenant will have six months (or until December 30, 2021) to pay the unpaid rental balance due. 

Our Firm has also put together a summary flowchart of the City of San Diego’s commercial eviction moratorium to help commercial landlords and tenants through avoid likely pitfalls.

Whereas the above only pertain specifically to the City of San Diego, if a commercial eviction moratorium is in place at your city or county levels, such moratoriums typically apply exclusively to the non-payment of rent scenario; but, landlords and tenants should carefully review each particular moratorium for the specific provisions, prerequisites and/or deadlines included in their respective moratorium, if any.  As of the date of this posting, eviction moratoriums are currently in place in Southern California in, among other places, Carlsbad, Los Angeles County, and San Bernardino County.  Notably, San Diego County does not have an overarching eviction moratorium in place; but, rather, such moratoriums, if any, are unique to the specific cities within the County.

Conclusion

As we near the end of the COVID-19 pandemic and begin to get back to business as usual, it is important to be cognizant of the fact that many COVID-related legislative actions and changes, particularly in the landlord-tenant space, will likely remain in place for months, if not years, to come.  The landscape will continue to shift, and landlords and tenants should continue to look for the most recent updates with respect to how best to proceed, or not proceed, in the context of evictions.

The materials available at this web site are for informational purposes only and not for the purpose of providing legal advice. You should contact your attorney to obtain advice with respect to any particular issue or problem. Use of and access to this web site or any of the e-mail links contained within the site do not create an attorney-client relationship. The opinions expressed at or through this site are the opinions of the individual author and may not reflect the opinions of the firm or any individual attorney. 


[1] Oddly, the City of San Diego’s prior commercial eviction moratorium expired on September 30, 2020, and many commercial evictions were able to move forward given the gap in protection between October 1, 2021 through January 25, 2021.

https://socal.law/wp-content/uploads/2021/05/contract-408216_1920.jpg 1280 1920 Chris Evans https://socal.law/wp-content/uploads/2021/08/gupta-evans-ayres_brand-identity_v4-02.png Chris Evans2021-05-04 23:39:002022-06-20 20:05:40Checking In On The Status of Residential and Commercial Leases in California

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