Looks like real estate giant Zillow Group may only be on the hook for half of a copyright infringement verdict awarded to real estate photography firm VHT earlier this year.

July 11, 2017 UPDATE: A federal court issued a final judgment on this case on July 10, upholding last month’s $4.05 million ruling against Zillow Group. The final judgment — with VHT’s agreement — dismissed without prejudice VHT’s indirect copyright infringement claims for the 114 photos on which the court had granted a new trial in last month’s order. “Without prejudice” means that VHT could choose to bring the claims again. VHT and Zillow Group have 30 days to appeal the final judgment. Zillow Group today declined to comment on whether it would do so. VHT today affirmed its intent to appeal as described in the article below.

Looks like real estate giant Zillow Group may only be on the hook for half of a copyright infringement verdict awarded to real estate photography firm VHT earlier this year.

In February, a federal court ordered Zillow Group to pay $8.3 million in statutory and actual damages after a jury found that the real estate company had infringed 28,125 of VHT’s photos.

But on Tuesday, Judge James L. Robart of the U.S. District Court in the Western District of Washington in Seattle overruled the jury’s verdict regarding the vast majority of the images and cut VHT’s damages award down to $4.05 million.

This latest ruling offers some relief for Zillow Group, but the court nonetheless agreed with the jury that the company willfully infringed thousands of VHT’s photos, possibly for its own financial benefit.

In an emailed statement, Zillow Group spokeswoman Emily Heffter told Inman, “We have persistently maintained our belief that this suit was without merit and we are pleased that the court largely supported our position.

“We take copyright protection and enforcement seriously and will continue to respect copyright permissions across our platforms.”

When asked what Zillow Group’s next steps in the case would be and whether the company would appeal the $4 million award, Heffter said, “We are evaluating the verdict and our response.”

VHT CEO Brian Balduf told Inman the company was glad Judge Robart upheld the jury’s verdict that Zillow willfully infringed on thousands of images.

“[W]e do plan to appeal some of the rulings in this latest decision and we also plan to appeal an earlier decision regarding listing photographs being used long after a listing is sold,” he said.

In a press release, Balduf added that this ruling is “important because it protects the interests of photographers, real estate agents, brokerages, homebuyers and sellers.”

The real estate industry has been following the VHT lawsuit closely, in part because the photos at issue in the case were provided to Zillow by real estate agents, brokers and multiple listing services (MLSs) — possibly under misattributed rights. The case highlights how real estate agents and brokers may want to keep track of what happens to the photos they send to Zillow and other listing sites, and the terms under which they are sent.

VHT did not name any agents, brokers or MLSs as defendants in the case, but purporting to license photos under rights they don’t have could land real estate pros in legal hot water in the future.

Rights to property photos — essential marketing tools for agents wishing to sell homes — have been the target of increased scrutiny in recent years as the photos increasingly appear on multiple websites and their value beyond selling a specific home becomes apparent.

‘The court is unpersuaded’

Robart found that VHT failed to present sufficient evidence that Zillow directly infringed on 24,202 of VHT’s photos. He also denied VHT’s motion for a permanent injunction against Zillow, saying “the court is unpersuaded that Zillow’s past actions suggest future infringements.”

Robart found that VHT also “did not present substantial evidence that simple measures for removing the VHT Photos were available or that Zillow induced its users to post the VHT Photos.”

Therefore, he granted Zillow’s motion to overturn the jury verdict related to VHT’s contributory infringement claims for all but 131 VHT photos that were created on Zillow Digs after VHT first specifically identified the images. He ordered a new trial on VHT’s indirect infringement claims as to 114 of those 131 VHT photos.

Evidence of ‘recklessness or willful blindness’

The jury’s direct infringement verdict stands with regard to 3,923 of VHT’s photos, of which 2,702 were eligible for statutory damages. Most were both displayed and searchable on Zillow Digs, the home home improvement section of Zillow.com.

The jury found — and Robart agreed — that Zillow willfully infringed on 2,700 (all but two) of those eligible images.

“The court concludes that substantial evidence supports a finding of recklessness or willful blindness,” Robart wrote in the order.

“Multiple witnesses testified that Zillow relies on representations from its users without performing further investigation into the rights each user possesses.

“Furthermore, although the evidence suggests that the letters VHT sent to Zillow did not adequately identify allegedly infringing images, there is no evidence Zillow took responsive measures to obtain further information.

“Zillow’s witnesses indicated several good-faith reasons for its inaction, but the record also suggests an economic incentive not to remove photographs.”

VHT recommends checking Zillow feed agreements

In its release, VHT said it plans to appeal Robart’s December 2016 ruling dismissing VHT’s claims over tens of thousands of additional photographs. VHT says Zillow continues to display these images on Zillow.com’s individual home detail pages after the subject properties are off market — either sold, expired, or transferred to other agents.

“Many agents have expressed concerns with such post-listing uses, including worries over homebuyers’ privacy rights, since photos showing the layout and rooms of specific homes, along with the addresses of the homes, remain available on Zillow’s website long after the subject listing is bought,” VHT said.

The company has been urging real estate organizations with Zillow listing feed agreements to consider making sure agreement terms require Zillow to take down listing data, including photographs, when a listing sells or otherwise goes off-market.

In legal filings, Zillow calls such feeds “deciduous,” while feeds that are “evergreen” are those under which Zillow says it has the right to continuing using and displaying data and photographs after a property sells or a listing goes off-market.

“VHT encourages all real estate organizations who have feed agreements with Zillow to consider moving to a deciduous feed agreement,” VHT said.

“Organizations should consider what benefits, if any, they receive from telling Zillow that they can continue to use listing assets for purposes other than the marketing and sale of the subject listing.

“Organizations should understand the rights that they have and are able to convey when it comes to [intellectual property], as well as the business implications of allowing a third party to continue using listing assets after the brokerage or agent no longer has a contractual relationship to the property.”

Email Andrea V. Brambila.

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