In a recent opinion, the U.S. Court of Appeals for the First Circuit ("First Circuit") affirmed the grant of summary judgment by the District Court for the District of Massachusetts ("district court") in favor of Orgill, Inc. ("Orgill") in a copyright infringement case, holding that a copyright licensee giving an unrestricted right to grant sublicenses may do so without using express language. This seems to be the first time a federal Circuit acknowledges a copyright sublicense by implication.
Orgill, a global hardware distributor, markets and sells Osram Sylvania, Inc. ("Sylvania") lightbulbs. Photographic Illustrators Corporation ("PIC") provides commercial photography services with Paul Picone as the main photographer. PIC holds among their clientele corporations like Sylvania. At issue before the First Circuit was Orgill's use of PIC's photos of Sylvania lightbulbs in Orgill's electronic and paper catalogs. PIC and Sylvania had negotiated a license setting forth the scope of Sylvania's permission to use PIC's photographs of Sylvania lightbulbs. The key provision in the license concerned the use of the photos by those dealers and distributors who market and sell Sylvania products. Included among the license requirements in this provision was a copyright notice in each photograph used indicating PIC as the copyright owner and/or proper attribution indicating Mr. Picone as the photographer. In turn, however, Sylvania did not communicate to Orgill that they needed to abide by an attribution restriction in Sylvania's own license. Consequently, PIC sued Orgill and other Sylvania dealers and distributors claiming copyright infringement.
The district court determined that Orgill had a sublicense from Sylvania to use the photos and rejected PIC's argument that sublicensee of copyrights are ineffective absent language expressly granting permission to use the copyrighted work and dismissed the Complaint. The First Circuit affirmed, holding that (1) where a licensor grants a licensee the unrestricted right to sublicense and permit others to use a copyrighted work, a sublicense may be implied by the conduct of the sublicensor and sublicensee; and (2) a reasonable jury could have found that Sylvania granted an implied sublicense to Orgill.