Boehm, Scott et al v. Scheels All Sports, Inc. et al

Brief in Opposition

W.D. Wis.December 7, 2016

DOC NO RECT/FILED 20I6DEC -7 M111:55 PETER OPPENEER CLERK US 01ST COURT WO OF WI Good Day Your Honor Scott Gonnering Owner of Scooter G Sports Pertaining to the case of Boehm/Stluka Vs ScheeIs all sports,et al RESPONSE PERTAINING TO MEMORANDUM OF LAW IN SUPPORT OF PLAINTIFFS MOTION FOR PARTIAL SUMMARY JUDGEMENT RESPONSE TO PRELIMINARY STATEMENT..page 2 and 3..i did underline or circle the sentences I am responding to. Scott Gonnering and Scooter G Sports.. never downloaded anything from Getty Images.. I wouldn't even have known howl!!! Scott Gonnering and SCOOTER G Sports purchased items from Onto the Field and LOTF.. We did ask them how they could print these images.. We were told That they had to BUY the right to print the images for a fee from Getty Images.. they told us once they paid for the right to print..they had the right to use the image... Being that LOTF was in 4-5 stores in Wis.. and 1 in Illinois plus they had marketing rights in Wisconsin to Ryan Braun and Clay Matthews . and being the biggest Memorabilia Company in the state.. we had no reason at all to doubt them. Onto the Field told us the exact same thing..Dan(Zimprich) even called Scott Gonnering on occasions and asked if there was anything he(Scott) wanted as far as a print.. That HE(Dan) could buy the image and than print it exclusively for Scooter G Sports..Scooter G Sports told Dan that Onto the Field had a good selection and didnt see any need... They said they had about 20 stores carrying their products.. Again, all these storesall over the state and all over the internet were carrying these products, we never doubted them as well either. Scott Gonnering never once doubted the legal aspect of the photos.. How would anyone know if someone did or did not have the right to print?? I realize Photofile has emblems or logos in the corners.. but I also have seen many photos from photographer that didn't have any logos., that they said they took the photo themselves.. So does that mean because there were no LOGOS.. I couldn't have asked that photographer to print one or 5 or 10 of an image that he/she owned?? Even though it didn't have logos from the NFL?? PAGE 45 SCOOTER G STATEMENTS OF SCOOTER G SPORTS We are not arguing that we may have purchased or had in our store some of the Plaintiffs photos.. We did everything we thought we had to to insure we were doing the right thing in bringing those prints in our store.. We asked the vendor as to how they obtained and they answered in a matter that was very Case: 3:15-cv-00379-jdp Document #: 714 Filed: 12/07/16 Page 1 of 3 • sufficient to us and seemed very much on the up and up..When we have bought From Photofile.. we have never received any paperwork stating they owned the rights to print and sell their wares....When we bought from Everlasting Images and Blakeway prints..They never sent us anything saying they owned the rights to such photos..So why would that be any different?? How do we know that Photofile does or does not print there prints in a warehouse or anywhere else??? As the Plaintiffs maintain that should have tipped us off.. Does Blakeway Prints and Everlasting images print out of a warehouse?? Scooter G Sports(SCOTT Gonnering) did post his items for sale on his facebook page and on his website.. If Scott Gonnering knew that these were copyright infringed or counterfeit prints.., why would he post it to huge social media groups for all the world to see??? Scott Gonnering posted those photos of items for sale because he was sure the vendors were good vendors and his products for sale were good to sell.. Scott Gonnering would not risk losing everything over copyright or counterfeit items..lf Plaintiffs or anyone else would have ever come into the Scooter G Sports store and say.. hey.. these are copyright infringed., and that person could show proof.. I would take everything down and give them to the person and tell them where I got them and anything else that needed to be done..i did hear that several defendants did receive a cease and desist.. All we ever have done is try to everything the best we could. Scooter G Sports opened in 2010.. Scooter G Sports was very new to the business and was not experienced so he trusted the much larger and more experienced Sports stores..When we walk into countless stores in malls and outside of malls and we see these prints/canvas's everywhere. Even in stores that have 20-30 stores across the Midwest.. There was no reason for us to doubt the vendors we were working with To us this is a case of victim suing victim.. We feel horrible knowing what we know now that some of the vendors we worked with were actually doing. That they were working off a scam and scamming quite a few good small businesses.. Including ours.. In the deposition of Ciara Zimprich....Page 86. She said..."Stating that everyone knew about Boehm 1"..that case was in 2014.. Scott Gonnering and Scooter G Sports was no longer dealing with the Zimprichs..Even as early as late 2011 I believe we were already not dealing with them and didn't have anything in store that was theres.. And as Ciara Zimprich stated it's a small community.. We knew nothing of Zimprich case until somewhere in late 2015. Page 94 Think it was the letter from Attorneys for plaintiffs..They stated..."gonnering and wein.. wein was aware of boehm 1 lawsuit and no where does gonnering question the legitimacy"......REPLY.... Wein worked for LOTF.. we dealt with LOTF.. We assumed that Wein decided to go out on his own.. If Wein would have told us that his work with LOTF was unlawful..Scooter g sports would have stopped working with him asap!! There was no reason to question Wein because he was working with LOTF which we had figured was very legit..Again there never was a reason to question the legality of Wein.. Case: 3:15-cv-00379-jdp Document #: 714 Filed: 12/07/16 Page 2 of 3 e Response to DECLARATION OF KEVIN MCCULLOCH.. PAGE 14.. #83.. ITEM IN QUESTION IS A PHOTFILE CANVAS. WE state licensed because it was.. same as if anyone came into our store and asked if our item was licensed., our answer would have been yes....We started stating that in 2016 once we found out about this case and that people were actually stealing images for use.. So when we posted an auction on line..we stated it was Officially Licensed so the potential buyer would know... if we would have posted any of this prior to this case and knowing what we knew back than.. we would not have put that on any of our auctions Page 14..#84.. canvas was a 9x11 canvas from Mounted Memories.. Another company we worked with.. another company that never sent us any info on their authenticness... another company we never questioned due to their name in the industry..Again.. we only started saying that as of 2016 when this case started.. Case: 3:15-cv-00379-jdp Document #: 714 Filed: 12/07/16 Page 3 of 3 UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF WISCONSIN SCOTT BOEHM; and DAVID STLUKA, Plaintiffs, V. SCHEELS ALL SPORTS, INC.; et al., Defendants. Civil Case No. 3:15-cv-0379 (JDP) Hon. James D. Peterson ECF Case Electronically Filed MEMORANDUM OF LAW IN SUPPORT OF PLAINTIFFS' MOTION FOR PARTIAL SUMMARY JUDGMENT Kevin P. McCulloch Nathaniel A. Kleinman THE MCCULLOCH LAW FIRM, PLLC 155 East 56th Street New York, New York 10022 T: (212) 355-6050 F: (646) 308-1178 kevin@mccullochiplaw.com nate@mccullochiplaw.com July 29, 2016 Attorneys for Plaintiffs' Case: 3:15-cv-00379-jdp Document #: 714-2 Filed: 12/07/16 Page 1 of 94 Plaintiffs Scott Boehm ("Boehm") and David Stluka ("Stluka") (together "Plaintiffs"), by and through undersigned counsel, hereby submit this memorandum of law in support of their motion for partial summary judgment pursuant to Federal Rule of Civil Procedure 56(a). Plaintiffs seek summary judgment on the following issues: (i) that Defendants are liable for copyright infringement for the unauthorized use of Plaintiffs' copyrighted photographs as identified herein; (ii) that Defendants' affirmative defenses are without merit; and (iii) that the infringements committed by Defendants were "willful" under 17 U.S.C. § 504(c)(2). Plaintiffs are not moving for summary judgment on all infringement claims and also anticipate that ongoing discovery will reveal additional infringements. Plaintiffs thus reserve the right to bring any additional and/or subsequently discovered claims for infringement to trial. PRELIMINARY STATEMENT This is an open-and-shut case of willful copyright infringement. This case involves a group of Defendants who collectively operate dozens of sports memorabilia retail stores throughout Wisconsin and Illinois, along with dozens of websites and online "stores" through eBay and Amazon. This case involves well over 300+ photographs to which Plaintiffs own copyrights-not to mention easily hundreds of additional photographs owned by other professional photographers-that Defendants either downloaded themselves from the website of Plaintiffs' former licensor, Getty Images (US), Inc. ("Getty Images"), under fraudulent, sham "licenses" or had others illegally acquire on their behalf Although at the outset of this case counsel for these latter Defendants loudly claimed that their clients had "no relation" to the "bad guys and bad things"' done by the defendants in Plaintiffs' prior infringement action in this Court, Boehm v. Zimprich, et al., No. 3:14-cv-16 (Op) ("Boehm /"), those same Defendants now admit and fully See pkt. No. 130 (Aug. 14, 2015 Hearing Trans.) at 35:23-24 & 33:21-24. Case: 3:15-cv-00379-jdp Document #: 714-2 Filed: 12/07/16 Page 2 of 94 memorabilia companiec that had not and could not possibly have acquired the licensing rights to produce such items from the NFL, NBA, NHL, MLB and NCAA. concede that they "acted in concert"' with those "bad guys" and are full-fledged joint tortfeasors. Given this admission, Defendants can no longer claim that it is hyperbole that this case involves a massive, joint counterfeiting ring involving thousands of illegally produced prints, canvases, other memorabilia that the Defendants pawned off on the public as "authentic" and "officially licensed" despite knowing that the products were being printed in warehouses and stores owned by local There is no possible dispute that Defendants copied, displayed, published, and offered for sale commercial prints, canvases, and other sports memorabilia products featuring copies of Plaintiffs' copyrighted photographs. (See FAC Exs. 2-9; Boehm Decl. Ex. 2; Stluka Decl. Ex. 2.) The Defendants have failed to provide any evidence of a valid license from an authorized licensor or any evidence that would otherwise rebut Plaintiffs' claims that the uses of Plaintiffs' photos identified herein were unauthorized and infringing. Nor have Defendants produced any evidence demonstrating that Plaintiffs do not own copyrights in these photos. Because there is no dispute on these facts, Plaintiffs are entitled to summary judgment on their claims for copyright infringement against Defendants. Summary judgment on liability for copyright infringement also is required for numerous Defendants precisely because they have pleaded and now moved for summary judgment on the basis that they are joint tortfeasors with Dan and Ciara Zimprich (the "Zimprichs") and Legends of the Field, LLC ("LOTF") (collectively, the "Boehm I defendants"). As the Court is well aware, it granted summary judgment against the Boehm I defendants on the issue of liability with respect to numerous images and held that the Zimprichs' use of Plaintiffs' photos in commercial products See Dkt. No. 474 (Memorandum of Law in support of Motion for Summary Judgment by Defendants Nicholas Martin and Jerry Miller) at 18. 3 Case: 3:15-cv-00379-jdp Document #: 714-2 Filed: 12/07/16 Page 3 of 94 in violation of their sham "Editorial-Newspaper" licenses obtained from Getty Images was willful. Boehm 1, 68 F. Supp. 3d 969,976-79 (W.D. Wis. 2014). Although the Court did not grant summary judgment on willfulness against LOTF in Boehm I, the record now demonstrates that all of the infringements committed by LOTF are indisputably willful, as shown herein. Because these Defendants have elected to tie their fate to that of the Boehm I defendants and now admit to being joint tortfeasors, they are bound by those judicial admissions and thus bound by the Court's rulings in Boehm I. Because these Defendants admit that they are jointly liable with the Boehm I defendants, they are judicially estopped from denying liability. As one Defendant conceded in its (redundant) set of motions for summary judgment, "Where is only one interwoven story here" and all Defendants are "jointly and severally liable for any statutory damages sought by Plaintiffs deriving from" the illegal acquisition of their photographs from Getty Images.3 Plaintiffs also are entitled to summary judgment on their claim that Defendants' infringements were "willful" under Section 504(c)(2) of the Copyright Act. As the Court already has ruled, the nature of the Defendants' businesses precludes them from credibly arguing that they were not aware that they were required to purchase products from officially licensed retailers and thus acted-at the very least-with reckless disregard by purchasing products from obviously unauthorized vendors. The record also shows that many Defendants had prior actual notice that any commercial use of Plaintiffs' photos was unlicensed, and all other Defendants acted recklessly, in light of both the nature of their business and their obligations under Wisconsin law, if they did not take the steps necessary to confirm that their suppliers, and in particular the Boehm I 3 See Dkt. No. 413 (Reply Memorandum of Law in support of Defendant Event USA's First Motion for Summary Judgment) at 17; Dkt. No. 433 (Memorandum of Law in support of Defendant Event USA's Second Motion for Summary Judgment) at 11. ' 4 Case: 3:15-cv-00379-jdp Document #: 714-2 Filed: 12/07/16 Page 4 of 94 defendants, were officially licensed by the NFL, NBA, NHL, MLB, and NCAA to create prints and canvases on demand. There also can be no dispute that, even despite this lawsuit, numerous Defendants continue to display and sell to the public counterfeit products that they know were purchased from these unlicensed dealers. The record thus supports granting summary judgment against Defendants on Plaintiffs' claim that these infringements were willful as a matter of law. Those Defendants that have admitted to being joint tortfeasors with the Boehm I defendants also are bound by the Court's summary judgment ruling in that case and are estopped from denying that their commercial use of images illegally and fraudulently obtained from Getty Images by the Zimprichs (or other suppliers who perpetrated the same fraud) are willful infringements. Any Defendants claiming to be joint tortfeasors with the Boehm I defendants cannot deny the unfavorable consequences of the Court's findings as applied to the photos that they sold. FACTUAL AND PROCEDURAL BACKGROUND A. The Defendants. All of the Defendants are in the sports memorabilia business in one way or another. Most of the Defendants own and operate retail stores that specialize in selling commercial sports memorabilia, including posters, prints, canvases, and other similar products. (See Plaintiffs' Statement of Undisputed Facts (hereinafter "PL SUF") 111 4-49.) The remaining Defendants acted as printers or wholesale suppliers to the other Defendants. (PL SUF ¶J 50-64.) Defendant Event USA Corp. ("EUSA") is a business entity specializing in selling sports, prints, posters, canvases, and other memorabilia and operates a retail store in Green Bay, Wisconsin. (PL SUF lpg 36-37.) EUSA also operates a website through which it sells prints, canvases, and other similar items. (PL SUF ¶ 39.) Defendant Scott Svehla owns and does business as Scott's Brewery Collectibles, LLC (together as "Svehla"), and operates stores in various locations in Wisconsin and Illinois. (PL SUF 5 Case: 3:15-cv-00379-jdp Document #: 714-2 Filed: 12/07/16 Page 5 of 94 9-12.) Svehla is in the business of selling beer advertising and memorabilia with sports items on the side, including prints, canvases and other memorabilia. (PL SUF ¶ 13.) Defendant Nicolas Martin owns and does business as "Sports-4-Less" (together as "Martin"), and also sells sports collectibles, including prints, canvases, and other memorabilia. (PL SUF ¶11 15-17.) Martin operates a retail store in McHenry, Illinois, owns or operates a website located at www.sports-4-less.com, and also sells products through Amazon.com and eBay.com. (PL SUF irg 18-22.) Defendant Jerry Miller owns or does business as Signature Sports (together as "Miller") through which he acts as a wholesale supplier of various sports collectibles, including prints and canvases. (PL SUF ¶J 33-35.) Miller is the supplier for, at the very least, Defendant Ma'rtin and his Sports-4-Less store. (PL SUF silt 148-49.) Miller also owns a building located in McHenry, Illinois and rents a portion of that building to Martin for use as his retail Sports-4-Less store. (PL SUF ¶ 151.) Defendant Andrew Wredberg is the founder and sole owner of AW Artworks, LLC (together as "Wredberg" or "AW"), a graphic design business that creates prints and custom canvases, including for sports memorabilia businesses, prints located in Sun Prairie, Wigconsin. Wredberg also created and controls the Facebook page https://www.facebook.com/awartworld. (PL SUF ¶11 60-64.) Defendant Jesse Winiecki ("Winiecki") owns and does business as (or claims to have previously owned and done business as) "Classic Sports Originals" which sells sports collectibles including prints, posters, canvases and other memorabilia. (PL SUF ¶IJ 45-47.) Like the Zimprichs and LOTF, Winiecki created an account with Getty Images through which he downloaded hundreds of sports-related photographs, including numerous photos owned by Plaintiffs at issue 6 Case: 3:15-cv-00379-jdp Document #: 714-2 Filed: 12/07/16 Page 6 of 94 in this action, under the same type of sham "Editorial - Newspaper" licenses that were in issue in Boehm I. (PL SUF ¶J 185-95.) Winiecki previously claimed that he "left Classic Sports Originals in December 2007"4, but the evidence demonstrates that he continued to license images from Getty Images until March of 2013 (PL SUF 11 197) and his Classic Sports Originals website was functional until 2014. (PL SUF ¶ 1985.) Winiecki has not offered any evidence to support his claim that he "left Classic Sports Originals" or isn't responsible for the images download to his Getty Images account up through 2013. Defendant Amanda McVeigh ("McVeigh"), who is now Winiecki's wife but at the time of her conduct at issue here was his girlfriend, aided and abetted Winiecki in selling copies of the high-resolution digital files of the sports photographs that Winiecki fraudulently downloaded from Getty Images. (PL SUF ¶ 200.) In particular, McVeigh assisted Winiecki in selling his illegal copies of photos, including Plaintiffs' photos, to the Zimprichs who then sold prints and canvases featuring those photos throughout Wisconsin and Illinois. (PL SUF ¶ 204.) Defendant Scheels All Sports, Inc. ("Scheels") is a retail business specializing in selling sports-related products, apparel, and collectibles, including canvases, prints, posters, and other memorabilia. (PL SUF ¶ 6.) Scheels operates twenty-six stores in 10 different states, including stores in Eau Claire and Appleton, Wisconsin. Scheels also operates a website located at http://www.scheels.com, created and controls a Facebook page at https://www.facebook.com/scheels and a twitter feed at https://twittencom/scheels. (PL SUF 5-8.) Defendant Scott Gonnering owns or does business as Scooter G. Sports (together as See Dkt. No. 64-1 (Declaration of Jesse Winiecki in opposition to Plaintiffs' Motion for Preliminary Injunction) at 2,117. 5 See Boehm I, Dkt. No. 121 (Affidavit of Dan Zimprich in opposition to Plaintiffs' Motion for Summary Judgment (Oct. 21, 2014) ("D. Zimp. Boehm / Aff."), Ex. 2 at 3 & 44. 7 Case: 3:15-cv-00379-jdp Document #: 714-2 Filed: 12/07/16 Page 7 of 94 "Gonnering"), and also is in the business of selling sports collectibles, including prints, posters, canvases, and other memorabilia. (PL SUF 1127.) Gonnering owns and operates a website located at http://www.scootergsports.com, created and controls a Facebook page at https://www.facebook.com/scootergsports/, a twitter feed at https://twitter.com/scootergsports, and sells products through eBay.com at http://stores.ebay.com/scooter-a-sports. (PL SUF igif 29-30.) B. The Fraudulent Acquisition of Plaintiffs' Photos from Getty Images and Distribution to Memorabilia Dealers Throughout Wisconsin and Illinois. Winiecki The sports memorabilia business in Wisconsin evidently is an incestuous group of dealers who learned from each other how to fraudulently obtain high-resolution digital copies of photographs from Getty Images under sham licenses because the record confirms that the Zimprichs were not the first ones to engage in this deceptive and fraudulent practice that thle Court held in Boehm I constituted willful copyright infringement, instead that honor appears to belong to Winiecki. And if Defendant EUSA is correct that all infringements in this case derive from "one interwoven story," then the roots of that common liability do not terminate with the Boehm I defendants, but rather extend equally to Winiecki and by virtue of him to McVeigh. Starting in June 2006 and continuing through March 2013, Defendant Winiecki used an account that he created through Getty Images' website-registered under the business name "Waukesha News Perspective"-to purchase 148 sham "newspaper" licenses for sports-related photographs. (McCulloch Decl. Ex. 60.) Of the 148 photos that Winiecki obtained from Getty Images, nine (9) belong to Plaintiffs.6 (McCulloch Decl. Ex. 41.) 6 The Court did not permit discovery related to Winiecki's violations of these other licenses, but even the limited records from Getty Images make clear that Winiecki also violated the copyrights of over 100 other photographers who licensed their sports-related photos through Getty Images. Shockingly, however, 8 Case: 3:15-cv-00379-jdp Document #: 714-2 Filed: 12/07/16 Page 8 of 94 Just like the Zimprichs, all 148 of the licenses purchased by Winiecki authorized only "Editorial - Newspaper" use of the photos. (Id.) Each time Winiecki purchased such a license through Getty Images' website, he received an invoice that confirmed he had licensed the photo for "Editorial - Newspaper" use. (Id.) Each invoice also specifically stated that the licensing rights-which are selected by the customer himself-were restricted to use of the photo for "1 Day" only and only in the "inside" of a "periodical." (Id.) Each invoice issued to Winiecki also explicitly stated that "no commercial or wireless uses" were authorized. (Id.) As with the Zimprichs, each invoice issued to Winiecki also was accompanied by a copy of Getty Images' standard "Editorial License Agreement" which included numerous provisions expressly notifying Winiecki that he was not permitted to use the photos beyond the scope of his license terms and that the license explicitly precluded any commercial uses. (Id. Ex. 54.) For instance, Getty Images' standard Editorial License Agreement explicitly provided: If 2.2. Use of the Licensed Material is strictly limited to the use, medium, period of time, print run, placement, size of Licensed Material, territory and any other restrictions specified in the Rights and Restrictions stated in the invoice issued by Getty Images. 2.3. Unless additional rights are stipulated in the Rights and Restrictions or granted pursuant to a separate license agreement, Editorial Licensed Material may not be used for any commercial, promotional, endorsement, advertising or merchandising use. If 2.12. Licensed Material shall not be used contrary to the Rights and Restrictions. 11 .1. Any use of Licensed Material in a manner not expressly authorized by this Agreement constitutes copyright infringement[.] . . . Licensee shall be responsible for any damages resulting from any such copyright infringement, including any claims by a third party. Getty Images has not asserted any claims against Winiecki or notified any of the copyright owners that it is aware of these infringements and has made no effort to curb the ongoing use of these fraudulently acquired photos in the Wisconsin and Illinois sports memorabilia market. 9 Case: 3:15-cv-00379-jdp Document #: 714-2 Filed: 12/07/16 Page 9 of 94 Despite these clear restrictions and even though he obviously knew that the usage rights he was purchasing were inapplicable because he intended all along to use the photos for his sports memorabilia business, Winiecki lied about his true intended use merely to avoid paying higher licensing fees for a legitimate license, just like the Zimprichs. Winiecki has provided no evidence in discovery showing that any of his representations to Getty Images were true or that "Waukesha News Perspective" was even an actual publication. In fact, when Winiecki licensed works from Getty Images he repeatedly identified "self" or "Jeff's Sports" or "jsports"-referring to Jeff LeMieux who is the owner of Jeff's Sports, Inc., another Wisconsin sports memorabilia chain7- as the intended end users (i.e., the "final client"), fatally discrediting Winiecki's claim at the outset of this case that he was completely innocent.' (See McCulloch Decl. Ex. 60.) This is the same duplicitous conduct that the Court held on summary judgment constituted willful copyright infringement in Boehm I. See 68 F. Supp. 3d 969, 977 (W.D. Wis. 2014) ("But even if the Zimpriches did not read the license agreement, they turned a blind eye to the cascade of information from Getty Images informing them that they were acquiring only the right to use plaintiffs' photos on the inside of a newspaper. .. The undisputed facts show that the Zimpriches were willful infringers with respect to the photos they acquired from Getty Images."). In this case, there is an even stronger basis for holding Winiecki was a willful infringer given that before this evidence came to light, Winiecki represented to the Court that he "left Classic Sports Originals in December 2007" and that he was not in the memorabilia business at all after that time. (Dkt. No. 64-1 at 2 ¶ 7.) This evidence utterly discredits that story. Not only do the records from Getty 7 See McCulloch Decl. Ex. 18 at 2. 8 As the Court may recall, it noted at the outset of this case in granting Plaintiffs' motion for a preliminary injunction that "Defendants Wein, Winiecki, and McVeigh deny that they committed any infringement, or at least any infringement within the limitations period. But plaintiff has adduced evidence that raises substantial doubts about Winiecki's and McVeigh's denials." (Dlff. No. 107 at 2.) 10 Case: 3:15-cv-00379-jdp Document #: 714-2 Filed: 12/07/16 Page 10 of 94 Images confirm that Winiecki continued to download photographs (or allow someone to use his account to do so) until at least March 2013, but the Classic Sports Original website was active through at least 2014. (McCulloch Decl. Ex. 29 at 44.) The fact that Winiecki's illegal downloading of photos from Getty Images stopped in March 2013 cannot be a coincidence. As the Court may recall from Plaintiffs' filings in Boehm I (see Boehm I, Dkt. No. 79-3), counsel for Getty Images first disclosed the infringements by LOTF and the Zimprichs in December 2012 (McCulloch Decl. Ex. 61) and Plaintiffs filed suit against these parties in New York in February 2013, see Boehm, et al. v. Zimprich, et al., No. 13-cv-1031 (S.D.N.Y. filed February 14, 2013). The strong correlation in time between Plaintiffs' filing suit against the Boehm I defendants and Winiecki's suddenly stopping his illegal downloading activity after 7 years cannot be ignored, particularly in light of testimony of Ciara Zimprich that the Defendants in this action all were aware of Plaintiffs' claims in Boehm I. (See McCulloch Decl. Ex. 31 ("C. Zimprich Dep.") at 199:16-18; 218:12-17; 234:21 ("I'm sure they knew [about Boehm I]"); id. at 235:5-236:6; 262:19-20 ("Again, it's a small community. Everybody knows of each other.").) McVeigh McVeigh claimed in her prior filings in this case that she "never copied the images at issue in this action to my computer, or any other electronic storage device for that matter, for the purpose of distributing these images to different individuals or business" and that she has "never met, spoken with or had contact with Dan or Ciara Zimprich, or anyone else on behalf of the business 'On 2 the Field'. (Dkt. No. 69 at ¶IJ 9, 10.) She also claimed in response to discovery that she has no copies of any electronic files that include any of Plaintiffs' photographs. (McCulloch Decl. Ex. 48 at if 42.) This story was utterly discredited by Ciara Zimprich who testified repeatedly that 11 Case: 3:15-cv-00379-jdp Document #: 714-2 Filed: 12/07/16 Page 11 of 94 "Amanda [McVeigh] is the one who Dan [Zimprich] met [at a bar/restaurant in 20111 ... Amanda was the vehicle to get the images downloaded." (C. Zimprich Dep. at 262:25-263:6.) Although McVeigh's counsel repeatedly challenged Ms. Zimprich's memory on trivial details from this meeting (see id. at 273:20-274:7 ("I don't remember if they had a bottle of wine on the table, if they had a full seven-course meal, if their server was sitting there, if they had a laptop, what she was wearing, or anything. I don't remember that"), Ms. Zimprich was unwavering in her testimony that McVeigh was personally involved in helping Winiecki sell the photos that he illegally acquired from Getty Images and she was adamant that her story was truthful and accurate: Q. [T]here's been some questions about the veracity of the statements you made [in March 2015] and again repeated today. Did everything you say in this March 2015 meeting reflect honest and forthright answers? A. Yes. Q. And in terms of your testimony about Ms. McVeigh being the person that provided you copies of the photos that came from Jesse Winiecki, is that accurate and honest testimony? A Yes. Q And are you positive that it was-the photos came from Jesse Winiecki and were provided to you by Amanda McVeigh and that she was paid for them? A The first portion of your question, yes. The second portion Q About the payment? A The payment. With a high degree of probability, yes, the payment went to Amanda. (Id. at 270:9-21.) 12 Case: 3:15-cv-00379-jdp Document #: 714-2 Filed: 12/07/16 Page 12 of 94 Event USA Just like Winiecki, EUSA and its counsel proclaimed at the outset of this case that Plaintiffs were "attempt[ing] to paint all the defendants with a broad brush as being unscrupulous or at least irresponsible" and that "nothing could be further from the truth." (Dkt. No. 39 at 1.) EUSA also claimed that other than the one photograph identified in the FAC, it "has no other unauthorized copies of any of plaintiffs' copyrighted photographs" (id. at 2). Discovery quickly discredited this story too, as an inspection of EUSA's Green Bay offices, as well as documents produced by Defendant Thomason, revealed that EUSA had other infringing products in its possession and that it had sold many more infringing products than just five canvases featuring the one copyrighted work it was accused of infringing and that it was actively involved in acquiring Plaintiffs' photos from Getty Images' illegally vis-à-vis LOTF. (See Dkt. Nos. 210, 211.) Based on the evidence provided to the Court on Plaintiffs' motion for contempt and sanctions against EUSA (Dkt. No. 209), the Court already found that EUSA's "statements of compliance [with the preliminary injunction] ... turned out to be false." (Dkt. No. 242 at 5.) The record already before the Court on Plaintiffs' motion for contempt demonstrated that (i) Event USA directed LOTF to obtain digital photos from Getty Images on its behalf; (ii) LOTF obtained these photos from Getty Images and then sold the digital files to Event USA; and (iii) Event USA engaged Heyrman Printing, LLC ("Heyrman"), a printing service in Wisconsin, to print thousands of copies of these photos. The details behind those facts are even more damning. Documents produced in discovery show that Dennis Garrity ("Garrity"), EUSA's founder and president, personally accessed Getty Images' website to select the NFL photographs that he wished to acquire and then requested that LOTF's employee, Jason Sarchet, download high- 13 Case: 3:15-cv-00379-jdp Document #: 714-2 Filed: 12/07/16 Page 13 of 94 resolution copies of those photos from Getty Images and send them to EUSA. (McCulloch Decl. Ex. 55.) In an e-mail from Garrity to Sarchet with the subject line "Need these images - AJ HAWK," Garrity actually attached digital copies of four images, including Plaintiff Boehm's photo of Green Bay Packers player A.J. Hawk', that he copied directly from the Getty Images' website with Getty Images' watermark still prominently stamped across the photos. (Id.) Two days later, Sarchet e-mailed Garrity back, attaching Plaintiff Boehm's photo with the Getty Images watermark removed. (Id. Ex. 56.) Garrity engaged in this same process to obtain a copy of Plaintiff Boehm's photo of Derek Sherrod.1° (Id. Exs. 57-58.) Garrity also confirmed during his deposition that he was personally involved in this practice of obtaining copies of Plaintiffs' images from Getty Images vis-a-vis LOTF. (McCulloch Decl. Ex. 30 ("Garrity Dep."") at 76:23-77:4; 97:2-98:13 ("I probably would have clicked on [the Getty Images photo] and copied the thumbnail or the icon . . into the body of an e-mail and sent it to Jason [Sarchet].").) Garrity also testified that EUSA sent the digital copies of Plaintiffs' Hawk and Sherrod photos to Heyrman (see id. at 59:19-60:30; 79:24-80:6.), and the Heyrman invoices produced in discovery show that EUSA ordered literally hundreds of prints of each of Plaintiffs' photographs and thousands of total prints involving Getty Images' photos-and that is just in the handful of orders for which the Court permitted discovery. (McCulloch Decl. Ex. 17.) Although the Court limited discovery from EUSA to those transactions involving Plaintiffs' photos, it is important to note that EUSA's president did not visit the Getty Images website once or twice and this process did not involve only a couple of photos. On the contrary, it is evident even from the narrow discovery permitted by the Court that Garrity and EUSA 9 This photograph of A.J. Hawk is Plaintiff Boehm's photograph in Row 267 of FAC Exhibit I. 10 This photograph of Derek Sherrod is Plaintiff Boehm's photograph in Row 266 of FAC Exhibit I. "The full transcript of the Garrity deposition was filed with the Court under Dkt. No. 439. 14 Case: 3:15-cv-00379-jdp Document #: 714-2 Filed: 12/07/16 Page 14 of 94 acquired at least several dozen photos illegally from Getty Images. Indeed, in just one print request sent to Heyrman in September 2011, EUSA ordered 1,090 prints involving at least 37 photos obtained illegally from Getty Images. (Id.) And this likely is just the tip of the iceberg, given that records from' Getty Images show that LOTF was able to illegally acquire high-resolution digital copies of 289 of Plaintiffs 'photographs.' (Id. Ex. 52.) Although the Court did not hold that LOTF was a willful infringer on summary judgment in Boehm I, documents produced by Getty Images after Plaintiffs filed for summary judgment against LOTF show that these infringements were unquestionably willful. Specifically, the documents show that LOTF downloaded 289 digital copies of Plaintiffs' photos from Getty Images under so-called "comp" (for "composite") licenses.' 3 (Id.) Getty Images' issued a copy of its then-current "Comping File and Video Preview License Agreement" with each of the "comp" licenses that it issued to LOTF. (Id. Ex. 51.) LOTF also could not download the images from Getty Images' website without being prompted to review and accept these license terms. (Id. Exs. 2 & 4.) All of LOTF's "comp" licenses were subject to the following terms and restrictions: lj 1. Grant of License. Getty Images grants to you, for a period of thirty (30) days, a non-exclusive, nonsublicensable, non-transferable and non-assignable right to use the image and/or film preview file you have selected and any derivatives or copies (collectively, the "Licensed Material"), on your personal computer and, in the case of film, in any test, sample, comp or rough cut evaluation materials. The 12 LOTF was able to procure hundreds of high-resolution photographs from Getty Images for literally zero dollars because one of LOTF's employees convinced John George, an employee of Getty Images' Sport Photography division, to agree to give him essentially unfettered access to high-resolution digital copies of Getty Images' sports collections in exchange for personal kickbacks and gifts. See Boehm v. Getty Images (US), Inc., et al., Case No. 16-cv-311 (W.D. Wis.), Dkt. No. 24 (filed July 15,2016). Despite the fact that Getty Images is aware of widespread infringements by the parties to which it granted such licenses, Getty Images continues to refuse to provide any information to Plaintiffs regarding any other "comp" licenses under which it provided copies of Plaintiffs' photos (for no compensation) to sports memorabilia dealers. n As the Court is aware, Getty Images' practice of allowing such licenses to be granted to commercial customers are at issue in the related case against Getty Images and its employee, John George, who admits that he assisted LOTF in downloading "comp" licenses as part of his normal duties. (Dkt. No. 255 [George Answer], i] 25 ("admitting he processed complementary licenses to Legends of the Field").) 15 Case: 3:15-cv-00379-jdp Document #: 714-2 Filed: 12/07/16 Page 15 of 94 Licensed Material may only be used in materials for personal, noncommercial use and test or sample use, including comps and layouts. 2.1 The Licensed Material may not be used in . . . any materials distributed outside of your company or to the public, including, but not limited to, advertising and marketing materials or in any online or other electronic distribution system (except that you may transmit comps digitally or electronically to your clients for their review) and may not be distributed, sublicensed or made available for use ori distribution separately or individually and no rights may be granted to the Licensed Material. ¶ 2.2 [T]he Licensed Material may not be shared or copied[.] IT 7. General. . . . The license contained in this Agreement will terminate automatically without notice from Getty Images upon expiry of the 30-day comp license period or, if sooner, upon you failing to comply with any provision of this Agreement. Upon termination, you must immediately stop using the Licensed Material and either destroy any digital Licensed Material or return the Licensed Material and all copies to Getty Images. (McCulloch Decl. Ex. 51 (emphasis added).) These explicit restrictions are unambiguous that the "comp" licenses obtained by LOTF on behalf of Garrity and EUSA (i) were not transferable to EUSA; (ii) did not allow LOTF to copy or share these files with EUSA; (iii) did not allow for any external use of the images, let alone commercial reproduction and distribution, by either LOTF or EUSA; and (iv) terminated after 30 days, requiring the digital files to be deleted. By sharing these files with EUSA, who then shared them with Heyrman who then printed hundreds of copies for commercial use by EUSA,! LOTF unquestionably and indisputably committed willful copyright infringement. And because EUSA now admits that it is jointly liable with LOTF-not to mention that LOTF acquired these images on behalf of and at the specific request of EUSA's president, and thus LOTF was acting as EUSA's agent in these illegal transactions-there also can be no dispute that EUSA is liable for willful copyright infringement. A W 16 Case: 3:15-cv-00379-jdp Document #: 714-2 Filed: 12/07/16 Page 16 of 94 Defendant AW obtained digital copies of the images that LOTF downloaded illegally from Getty Images (see McCulloch Decl. Ex. 44 at 1) and then distributed prints of these photographs to other sports memorabilia retailers in the Wisconsin area, shopping digital copies to Defendants Waukesha Sportscards and Scooter G, as well as to the Zimprichs. (McCulloch Decl. Exs. 35-36; D. Zimp. Boehm I Aff. at lj 21; C. Zimp. Dep. at 59:12-17.) Ironically, LOTF even required AW to execute a "Letter of Agreement" in August 2009 prior to engaging AW that precluded AW from using photos that LOTF provided to AW to edit. (McCulloch Decl. Ex. 37.) This is ironic because LOTF did not have any rights to these photos because it had acquired them from Getty Images under fraudulent licenses, so AW's blatant violations of this agreement are not really relevant but the fact that it printed these unlicensed photos for or sold copies of them to other memorabilia dealers does mean that AW violated copyright laws. Svehla/SBC Defendant Svehla has produced multiple invoices from the Zimprichs showing that he purchased over 1,000 items (306 canvases and 886 photo prints) from the Zimprichs just between April 19,2012 and July 29,2014. (McCulloch Decl. Ex. 5.) And these 1,000+ products also likely are just the tip of iceberg as Dan Zimprich claimed he did not typically invoice Svehla and Ciara Zimprich testified that there were many more transactions than just these few for which an invoice exists.I4 (C. Zimp. Dep. at 102:2-17.) 14 Although Defendant Svehla claims that these invoices relate to Plaintiffs' photographs and prove he obtained the infringing products from the Zimprichs (which is the basis for his "joint tortfeasor" defense), the invoices do not identify which photos were purchased and Svehla claims that he has no means of determining whether any of Plaintiffs' photographs were included in the over 1000 products he purchased from the Zimprichs. Thus, the Court cannot be certain how Svehla obtained items that featured Plaintiffs' photos. But, if the Court were to credit Svehla's story that he obtained them from the Zimprichs, the record is devoid of any evidence showing that Svehla obtained any other items from the Zimprichs so the only conclusion from the record is that all 1000+ items involved Plaintiffs' photos. 17 Case: 3:15-cv-00379-jdp Document #: 714-2 Filed: 12/07/16 Page 17 of 94 Despite evidence showing that SBC spent many thousands of dollars purchasing over 1000 products from the Zimprichs up through 2014 and notwithstanding that Svehla claims' that he returned any allegedly infringing products to the Zimprichs, Svehla claims that he has no communications with the Zimprichs related to any of these transactions and that, despite doing business repeatedly with Dan Zimprich during the ongoing litigation in Boehm I, he was totally unaware of Plaintiffs' prior lawsuit against the Zimprichs until Plaintiffs filed this lawsuit and never corresponded with the Zimprichs in writing. The record discredits Svehla's story. The timing of the major uptick in Svehla's purchases from the Zimprichs also is no coincidence. The majority of these sales occurred in the months immediately after this Court entered a preliminary injunction in February 2014 in Boehm I requiring the Zimprichs to stop selling and to quarantine any products featuring Plaintiffs' works. This is precisely the same time that other memorabilia dealers have admitted that Dan Zimprich began to unload massive quantities of infringing canvases in order to sell them before they were discovered in discovery in Boehm L According to the sworn testimony of Paul Leister, the owner of Boehm I co-defendant Sports Plus, the Zimprichs knowingly sold off literally hundreds of canvases at steeply discounted rates beginning in February 2014. (See McCulloch Decl. Ex. 46 ("Leister Dep. Tr."') at 118:22- 137:7.) Shockingly, this mass sell-off occurred more than a year after being sued by Plaintiffs for copyright infringement (originally in S.D.N.Y. and then transferred to this Court) and literally at the same time that the Zimprichs were stipulating to a preliminary injunction that required them to "quarantine all existing inventory" of any products featuring Plaintiffs' photographs, which the parties jointly submitted to the Court on February 13, 2014. See Boehm I at Dkt. No. 25, Ex. 17. According to Leister, although the Zimprichs sold him "a couple hundred" canvases in IS The full transcript of the Leister deposition was filed with the Court under Mt. No. 61. 18 Case: 3:15-cv-00379-jdp Document #: 714-2 Filed: 12/07/16 Page 18 of 94 February 2014 (which, again, was the exact same time that the injunction/quarantine order was being entered by the Court), Leister did not pick the canvases up from the Zimprichs' storage facility because Plaintiffs added Sports Plus as a defendant to Boehm I shortly thereafter. (Leister Dep. Tr. at 124:15-127:18.) Although Leister testified that a "red flag went off in [his] head" that these "couple hundred" canvases were likely illegal counterfeits when he was sued, he admitted that (i) neither he nor the Zimprichs disclosed the existence of these canvases at any point in discovery until his deposition; (ii) he never reviewed the canvases to determine how many included illegal copies of Plaintiffs' photographs, conceding that "it could be all of them"; and (iii) he conspired with Dan Zimprich to move these "couple hundred" canvases to an undisclosed storage facility only days before Plaintiffs' counsel arrived to inspect the Zimprichs' and Leister's stores. (Id. at 125:11-133:13.) Even these admissions do not fully convey the staggering depth of the discovery abuses committed by the Zimprichs. The preliminary injunction order entered by the Court in Boehm I required the Zimprichs to "quarantine all existing inventory" and to "provide to Plaintiffs' counsel no later than February 26, 2014 a full and complete accounting of all quarantined products[.]" (McCulloch Decl. Ex. 17 at 2.) Despite these Court-ordered requirements, the Zimprichs intentionally conspired with a co-defendant for the express purpose of trying to avoid Plaintiffs discovering the existence of these canvases during a discovery inspection in what can only be described as textbook contumacious and sanctionable conduct. According to Leister, about a week prior to the premises inspections noticed by Plaintiffs, he made "two trips" from Milwaukee to the Zimprichs' warehouse in Madison and filled up his Suburban SUV with "hundreds of canvases." (Leister Dep. Tr. at 126:17-129:15.) Leister testified that he had to make numerous trips to the warehouse to carry all of this illegal merchandise 19 Case: 3:15-cv-00379-jdp Document #: 714-2 Filed: 12/07/16 Page 19 of 94 and that Dan Zimprich "would help me from upstairs [in the warehouse], bring them down, put them in my arms, [and] into my car." (Id.) Again, the Zimprichs engaged in this duplicitous, unethical, and illegal conduct despite the Court-ordered injunction and obviously did so, for the express purpose of hiding evidence during discovery. Even setting aside Ciara Zimprichs' testimony and the remarkable coincidence in the timing of Svehla's purchases, any suggestion by Svehla that he believed that the Zimprichs were officially licensed by the NFL, NBA, NHL, MLB, and NCAA to create memorabilia is not credible. Given that his business involves a significant amount of re-selling commercial products that include third-party photos involving players and games from all major sports leagues, there can be no serious doubt that Svehla was aware-or reasonably should have been aware-that he needed to purchase these products from legitimate and officially licensed retailers and could not purchase his inventory from just any vendor with the ability to print photos. As this Court already has held, it is not credible that any person in the sports memorabilia business would believe that they could purchase prints and canvases from any person with a large- format printer, particularly when the products did not include any indicia of being legitimately licensed. Svehla has provided no evidence to suggest that there was a reasonable basis for him to believe that the products in question were legitimately licensed from an authorized retailer. Even assuming arguendo that Svehla was not aware that the products he purchased from the Zimprichs were infringingprior to this lawsuit, he certainly had actual notice as of March 2015 when he received a cease and desist letter from Plaintiffs' counsel. (See McCulloch Decl. Ex. 49.) Nevertheless, Plaintiff Boehm confirmed during discovery inspections of Svehla's stores in early 2016, nearly a year later, that Svehla still was selling hundreds of canvases and prints from the Zimprichs, none of which included any logos or holograms or other normal indicia of being 20 Case: 3:15-cv-00379-jdp Document #: 714-2 Filed: 12/07/16 Page 20 of 94 purchased from a legitimately licensed dealer. (See Boehm Decl. If 14, Ex. 5.) Because the Court confusingly ordered that Plaintiffs' counsel could not photograph these ongoing infringements (even though they were in publicly accessible spaces in Svehla's stores located in public shopping malls around Wisconsin and Illinois), Plaintiff Boehm personally counted and took detailed notes regarding the infringing canvases and prints that he could identify at each store. (Id. 119, Ex. 9.) This evidence demonstrates conclusively that Svehla has no respect for the law or the rights of photographers whose works he continues to use with impunity. It thus is no surprise that he has been sued again for infringing another photographers' copyrights. See Robbins v. Svehla, et aL, No. 16-cv-532, Dkt. No. 1 (W.D. Wis. Filed July 28, 2016) (McCulloch Decl. Ex. 86). Miller/Martin Defendant Miller has admitted that he acquired photos from the Zimprichs, and then re- sold those canvases to Defendant Martin. (See Dkt. Nos. 41, 99.) Despite claiming in a sworn declaration that he had removed all of the infringing products from his stores (see Dkt. No. 43), Martin continued to sell products featuring Plaintiffs' photographs even after this lawsuit was filed and in violation of the injunction order. (See Dkt. No. 125.) Plaintiffs thus requested that the Court broaden the injunction because Martin either is "incapable or unwilling to diligently comply with the Injunction and thus additional protections are necessary to preserve relevant evidence and stop the ongoing violations of Plaintiffs' rights." (Dkt. No. 218 at 4.) As Plaintiffs also advised the Court in their motion to expand the preliminary injunction, Defendant Martin not only violated the terms of the injunction but also continued to sell products that featured infringing copies of other photographers' photos. (Dkt. No. 218 at 4.) Like Svehla, it also is no surprise that Miller and Martin have been sued again for copyright infringement by another photographer given that their demonstrated disregard for the law and the rights of others. See Robbins, No. 16-cv-532, 21 Case: 3:15-cv-00379-jdp Document #: 714-2 Filed: 12/07/16 Page 21 of 94 Dkt. No. 1. C. The Photos At Issue. Plaintiffs' copyright registration information for the photos at issue in this action were identified in detail in Exhibit 1 to Plaintiffs' First Amended Complaint. Defendants have offered no evidence to dispute these facts, and Plaintiffs have presented evidence to confirm those facts. Plaintiff Boehm's declaration provides a thumbnail copy and description of each of his photos at issue on this Motion. (See Boehm Decl. Ex. 1.) Plaintiff Boehm created and is the sole author of each of the photographs identified as his in Exhibit 1 to his declaration and he is the sole and exclusive owner of all copyrights in and to these photos. (Id. 11 9) Boehm also personally registered his copyrights in the subject photos with the Copyright Office. (Id 1110.) Exhibit Ito Boehm's declaration identifies the relevant copyright registration number for each photo, and copies of the applicable certificates of registration are attached as Exhibits 2. (Id Ex. 2.) Stluka's declaration also provides a thumbnail copy and description of each of his photos at issue on this Motion and identifies each photo's Getty Images ID number if relevant. (See Stluka Decl. Ex. 1.) Plaintiff Stluka also created each of the photos identified as his in Exhibit 1 to his declaration and is the sole and exclusive owner of all copyrights in and to these photos. (Id. ¶ 9.) Plaintiff Stluka also personally registered his copyrights in each photo. (Id. ¶ 10.) Exhibit 1 to Stluka's declaration identifies the relevant copyright registration number for each photo, and copies of the applicable certificates of registration are attached as Exhibit 2. (Id Ex. 2.) D. Procedural History. Plaintiffs filed their complaint alleging copyright infringement and related claims on all Defendants on June 19, 2015. (PL SUF ¶ 73.) Plaintiffs promptly filed their Motion for a Preliminary Injunction on June 23, 2015. Plaintiffs filed their First Amended Complaint ("FAC") 22 Case: 3:15-cv-00379-jdp Document #: 714-2 Filed: 12/07/16 Page 22 of 94 on August 7,2015. (Dlct. No. 63.) Defendants filed their answers to the amended complaint from August 18, 2015 to December 21, 2015. (PL SUF ¶J 75-85.) At the August 14, 2015 hearing, the Court granted Plaintiffs' motion for a preliminary injunction and enjoined defendants from creating, displaying, selling or distributing any products containing Plaintiffs' photographs, and required them to segregate and quarantine such products within five days of the order as well as file status reports within forty-eight (48) hours of completing the segregating and quarantining of the products. (Id. Irg 87-89.) Defendants all filed their status reports pursuant to the Court's order. (Id. ¶J 90-96.) After the completion of various store inspections, Plaintiffs filed motions for sanctions against Defendants Angela Cleary, Michael Cleary, Gameday Sports, Nicolas Martin and Event USA as their status reports turned out to be false and they showed to be in direct violation the preliminary injunction order. (Id.lf 97.) The Court imposed sanctions for civil contempt on these Defendants by granting Plaintiffs' attorneys fees incurred in bringing the various contempt motions. (Id. iff 98.) Defendants Event USA, Thomason, Svehla, Martin, Miller, Scheels, and AW (collectively the "Joint Tortfeasor Defendants") each filed motions to amend their answers to the Amended Complaint to include the affirmative defense that Plaintiffs' copyright infringement claims were released by settlement agreements in Boehm land alleging as a necessary corollary to that defense that they are "joint tortfeasors" with the Boehm I defendants. (Id. ifilf 98, 261-68.) Each of these Joint Tortfeasor Defendants also has moved for summary judgment on that basis, explicitly arguing that they are jointly liable with the Boehm I defendants. (See Dkt. Nos. 432, 441, 449, 458, 473, & 479.) SUMMARY OF ARGUMENT The record conclusively establishes that each Defendant identified herein created, 23 Case: 3:15-cv-00379-jdp Document #: 714-2 Filed: 12/07/16 Page 23 of 94 displayed, and/or sold commercial products that featured Plaintiffs' copyrighted photos without any license or valid permission to use Plaintiffs' photo in the products and items identified herein. There is no evidence in the record showing that any Defendant ever purchased a valid license to make any commercial prints of Plaintiffs' photos or that their suppliers did either. The undeniable evidence that Defendants used Plaintiffs' photos in commercial products and the lack of any evidence of valid permission for such uses supports summary judgment in favor Plaintiffs on liability for their claims for copyright infringement against these Defendants. The record also supports granting summary judgment against Defendants on the issue of whether their infringements were willful for purposes of Section 504(c) of the Copyright Act. Plaintiffs previously opposed the motions to amend filed by certain Defendants and EUSA's first summary judgment motion on the issue of joint liability by pointing out that their reasoning is inconsistent with settled law. In particular, Plaintiffs pointed out that not every downstream reseller is necessarily a joint tortfeasor in a copyright infringement action. Instead, whether joint liability applies in the copyright context turns on the "nexus" between the defendants, including the degree of knowledge, connection, and control between the parties related to the infringements. See, e.g., Respect Inc. v. Fremgen, 897 F. Supp. 361, 363 (N.D. Ill. 1995). Accepting Defendants' position would ignore these factors and instead imply that joint and several liability under 17 U.S.C. § 504(c) would automatically apply to all parties involved in a distribution chain regardless of their level of control, knowledge, or involvement in the infringing acts of the other parties. Despite having several months to consider this law and the logic underlying those decisions, the Joint Tortfeasor Defendants have made the intentional choice to stand by their allegations and to argue on summary judgment that they are full-fledged joint tortfeasors with the 24 Case: 3:15-cv-00379-jdp Document #: 714-2 Filed: 12/07/16 Page 24 of 94 defendants in Boehm I. Because the Joint Tortfeasor Defendants have advanced this argument on motions for summary judgment, they now are bound by their elected remedy and cannot take positions inconsistent with being jointly liable with the Boehm I defendants. The consequence of this election are that the Joint Tortfeasor Defendants are now bound by the Court's rulings in Boehm I, including that any infringements involving photos obtained from Getty Images are willful, and they are jointly liable with the Boehm I defendants for the full chain of infringements involving Plaintiffs' photos that the Court already has ruled were obtained from Getty Images under patently fraudulent licenses. Accordingly, the Joint Tortfeasor Defendants are estopped from denying liability or willfulness, and the Court must enter summary judgment against them on both issues. ARGUMENT I. APPLICABLE LEGAL STANDARD. Summary judgment is appropriate if "there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). On a motion for summary judgment, the moving party "bears the initial responsibility for informing the district court that there is an absence of evidence to support the nonmoving party's case." Celotex v. Catrett, 477 U.S. 317, 325 (1986). The non-moving party must then "set forth specific facts showing that there is a genuine issue for trial; the party may not hold back evidence until trial but rather must present sufficient evidence to show that there is a triable issue." Celex Group, Inc. v Executive Gallery, Inc, 877 F. Supp. 1114, 1125 (N.D. III. 1995) (quotations omitted). A party opposing summary judgment must come forward with specific evidence to show a disputed issue of fact, "conclusory statements unsupported by specific facts are not sufficient to raise a genuine issue of material fact." Palmer v. Circuit Court of Cook County, Social Service Dept, 905 F. Supp. 499, 505 (N.D. 111. 1995) (citing First Commodity Traders, Inc. v. Heinold Commodities, Inc., 766 25 Case: 3:15-cv-00379-jdp Document #: 714-2 Filed: 12/07/16 Page 25 of 94 F.2d 1007, 1011 (7th Cir. 1985)). Where the Court determines that "a rational trier of fact could not find for the non-moving party based on the record as a whole, [then] there is no 'genuine issue for trial.' Matsushita Elec. Indus. Co. v. Zenith Radio, 475 U.S. 574, 587 (1986). If the evidence offered by Defendants "is merely colorable, or is not significantly probative, summary judgment may be granted." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249-50 (1986). II. THE JOINT TORTFEASOR DEFENDANTS ARE BOUND BY THIS COURT'S RULINGS IN BOEHM I AND THUS SUMMARY JUDGMENT ON LIABILITY AND WILLFULNESS AGAINST THEM IS REQUIRED. A. The Joint Tortfeasor Defendants Have Elected Their Remedy And Cannot Take Inconsistent Positions. Despite all claiming to be "joint tortfeasors" with the Boehm I defendants, the Joint Tortfeasor Defendants also attempt to argue that they are all entitled to summary judgment on the issue of willfulness. In other words, the Joint Tortfeasor Defendants contend that they are jointly liable with the Zimprichs-who already were found to be willful infringers, see Boehm I, 68 F. Supp. 3d at 976-while also contending that there is no dispute of material fact that their infringements, if any, were not willful. As a matter of law, the Joint Tortfeasor Defendants cannot assert both of these diametrically opposed positions on a motion for summary judgment. "The doctrine of election of remedies is 'an equitable principle barring one from maintaining inconsistent theories or forms of relief." Jarosch v. Am. Family Mut Ins. Co., 837 F. Supp. 2d 980, 1017 (E.D. Wis. 2011) (quoting Wickenhauser v. Lehtinen, 734 N.W.2d 855, 861 (Wis. 2007)). Inconsistency arises where either "one remedy must allege as fact what the other denies, or because the theory of one must necessarily be repugnant to the other." Bank of Commerce v. Paine, Webber, Jackson & Curtis, 158 N.W.2d 350, 353 (Wis. 1968). Under this doctrine, Defendants cannot simultaneously claim to be jointly and severally liable for the willful 26 Case: 3:15-cv-00379-jdp Document #: 714-2 Filed: 12/07/16 Page 26 of 94 infringements of the Zimprichs and yet maintain that their infringements were not willful, as these positions obviously are "repugnant" to each other. The Joint Tortfeasor Defendants are also bound by their formal admissions to this Court in multiple filings over the last several months, and those admissions require granting summary judgment against them on both liability and willfulness. A party's "formal concessions" in pleadings and court filings amount to "judicial admissions" that the Seventh Circuit repeatedly has held "are binding upon the party making them." Keller v. United States, 58 F.3d 1194, 1198 n. 8 (7th Cir. 1995). Even though the Court has not yet granted the Joint Tortfeasor Defendants' motions to amend their pleadings to add the "joint tortfeasor" defense, judicial admissions also include formal concessions and legal characterizations made to the Court in other filings. See Help At Home Inc. v. Med. Capital, L.L.C., 260 F.3d 748, 753 (7th Cir. 2001) (holding party bound by legal characterizations where the litigation position is asserted with "deliberate repetition of that characterization in the operative complaint and the maintenance of that characterization up to the time that the motion was submitted to the district court for decision"). Because the Joint Tortfeasor Defendants have pleaded that they are joint tortfeasors with the Boehm I defendants and have moved for summary judgment on that basis, "judicial efficiency demands that [they] not be allowed to controvert what [they have] already unequivocally told a court by the most formal and considered means possible." Soo Line R. Co. v. St. Louis Sw. Ry. Co., 125 F.3d 481, 483 (7th Cir. 1997) (collecting cases). 27 Case: 3:15-cv-00379-jdp Document #: 714-2 Filed: 12/07/16 Page 27 of 94 B. The Joint Tortfeasor Defendants Are Bound By The Court's Prior Summary Judgment Ruling Against The Zimprichs On Both Liability And Willfulness. The Joint Tortfeasor Defendants' attempts to argue that their infringements were innocent must be rejected. Because these defendants claim to be in privity with the Boehm I defendants, contend that they are joint tortfeasors, and admit that they are jointly liable with those defendants, the Joint Tortfeasor Defendants are estopped from taking a contrary position and summary judgment must be entered against them on both liability and willfulness. The Federal Rules of Civil Procedure provide that summary judgment is proper "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits" show that one party is entitled to a judgment as a matter of law. Fed. R. Civ. P. 56(c) (emphasis added). Having repeatedly argued to this Court that they are joint tortfeasors and have attempted to plead that position formally, the Joint Tortfeasor Defendants can no longer maintain their supposed innocence. Simply put, these defendants "[have] fallen victim to the well-settled rule that a party is bound by what it states in its pleadings," Soo Line R. Co., 125 at 483, and thus they are bound by the legal consequences of their own litigation strategy and cannot simultaneously deny any unfavorable consequences that flow from pleading and arguing to the Court that they are joint tortfeasors with the Boehm I defendants. See Warzon v. Drew, 60 F.3d 1234, 1240 (7th Cir. 1995) (holding party "could not have proven facts consistent with the allegations in her complaint"); Walton v. Bayer Corp., 643 F.3d 994, 1003 (7th Cir. 2011) (finding that the doctrine of judicial estoppel precludes a party from "advancing a ground for relief in one stage of a lawsuit with the undisclosed intention of arguing against it in a later stage."); cf. Matter of Cassidy, 892 F.2d 637, 641 (7th Cir. 1990) ("Where a party assumes a certain position in a legal proceeding, and succeeds in maintaining that position, he may not thereafter, simply because 28 Case: 3:15-cv-00379-jdp Document #: 714-2 Filed: 12/07/16 Page 28 of 94 his interests have changed, assume a contrary position.") (quoting Davis v. Wakelee, 156 U.S. 680, 689 (1895)). As admitted joint tortfeasors, the Joint Tortfeasor Defendants must accept joint and several liability for all damages related to the infringements of Plaintiffs' photographs by the Zimprichs and/or LOTF. See, e.g., Stifle v. Marathon Petroleum Co., 876 F.2d 552, 556 (7th Cir. 1989) ("When multiple tortfeasors are found jointly and severally liable, each is responsible for the entire amount of the injured party's damages."); Dunlop v. Beloit Colt, 411 F. Supp. 398, 402 (W.D. Wis. 1976) ("It is generally understood that the liability of joint tort-feasors is both joint and several"); In re Uranium Antitrust Litig., 473 F. Supp. 382, 387 (N.D. III. 1979) ("Despite this semantic fog, however, one feature of a 'joint tort' has long been settled: joint tortfeasors are jointly and severally liable. All might be joined together in the same action at law, but each is liable for the plaintiffs entire damages."). Because the Joint Tortfeasor Defendants claim that they are in privity and jointly liable with the Boehm I defendants, they are also bound by the Court's rulings in that case. As the district court explained in the underlying decision affirmed in the Bouchat IV decision on which the Joint Tortfeasor Defendant EUSA heavily relies: [T]he Downstream Defendants seek to bind Plaintiff to the prior determination with regard to damages, on the basis that they are "privities" of the Bouchat I Defendants and thus may prevent relitigation of issues that were determined vis a vis NFLP. The Downstream Defendants present no persuasive argument for the proposition that they are in privity for damages issues, but not liability issues.... They are, therefore, bound by the findings in that case. Accordingly, it is established in Bouchat II and /V that the use of the Flying B Logo by the Downstream Defendants infringed Bouchat's copyright in the Shield Drawing. Bouchat v. Champion Products, Inc., 327 F. Supp. 2d 537, 544 (D. Md. 2003) (emphasis added). In reaching that conclusion, the district court specifically rejected the downstream defendants' argument that, despite claiming to be in privity with the NFLP defendant in the first action, issue 29 Case: 3:15-cv-00379-jdp Document #: 714-2 Filed: 12/07/16 Page 29 of 94 preclusion did not require holding them liable for infringement because they were not parties in the first action. Id. at 543 ("The Court concludes that neither side is entitled to any inconsistency. The issue resolution in Bouchat I is binding on all of the Bouchat II and /Vparties."). The Fourth Circuit affirmed that ruling in Bouchat v. Bon-Ton Dep't Stores, Inc., 506 F.3d 315 (4th Cit. 2007) ("Bouchat IV"), holding "that when an injured person sues joint tortfeasors in successive actions, preclusion principles determine the effect of the first judgment on the later actions." Id. at 328. For the same reasons, the Joint Tortfeasor Defendants now are bound by the Court's holding on summary judgment in Boehm I that the Zimprichs' use of Plaintiffs' photos in sports memorabilia products was infringing and that the infringements related to photos obtained from Getty Images were willful. Boehm I, 68 F. Supp. 3d at 976 ("The undisputed facts show that the Zimpriches were willful infringers with respect to the photos they acquired from Getty Images."). Accordingly, to the extent the same photos are at issue here, the Joint Tortfeasor Defendants must be held jointly liable for the willful infringements by the Zimprichs at issue in Boehm I and the Court must enter summary judgment against them on these same points, notwithstanding their inconsistent argument that their infringements were innocent. See Zimmer, Inc. v. Stryker Corp., No. 3:14-CV-152-JD, 2014 WL 3866454, at *11 (N.D. Ind. Aug. 6, 2014) ("Rif parties are found to have conspired in the commission of another tort, the parties are 'responsible as a joint tortfeasor for damages caused by the wrongful or contemptuous acts regardless of the degree of active participation."). III. PLAINTIFFS ARE ENTITLED TO SUMMARY JUDGMENT ON LIABILITY FOR THEIR COPYRIGHT INFRINGEMENT CLAIMS. Plaintiffs are entitled to summary judgment on their copyright infringement claims because there is no genuine dispute as to any issue of material fact related to any element of liability and Defendants failed to proffer any evidence in discovery that could provide a defense. Moreover, 30 Case: 3:15-cv-00379-jdp Document #: 714-2 Filed: 12/07/16 Page 30 of 94 the Joint Tortfeasor Defendants have already admitted that they are jointly liable with the Boehm I defendants with respect to certain photos. Plaintiffs thus seek summary judgment on their infringement claims for each photo and against each Defendant as set forth herein. The charts attached as Exhibit 1 to each Plaintiff's declaration identify the photos at issue on this Motion and the applicable registration information for each photo. (Boehm Decl. Ex. 1; Stluka Decl. Ex. 1.) A. Elements Required To Show Copyright Infringement. The Copyright Act guarantees to copyright owners certain "exclusive rights" over their original works, including the rights to copy and display their works and to distribute copies of their work by sale. 17 U.S.C. § 106. This bundle of rights is reserved by federal statute exclusively to the copyright owner and " a]nyone who violates any of the exclusive rights of the copyright owner,' that is, anyone who trespasses into his exclusive domain by using or authorizing the use of the copyrighted work in one of the five ways set forth in the statute, 'is an infringer of the copyright!" Sony Corp. of Am. v. Universal City Studios, Inc., 464 U.S. 417,433 (1984) (quoting 17 U.S.C. § 501). To prevail on an infringement claim, copyright claimants must demonstrate (1) that they own a valid copyright interest in the subject works; and (2) that the defendants violated any one of the exclusive rights guaranteed to copyright owners under Section 106 of the Copyright Act. See Feist Publ 'ns, Inc. v. Rural Tel. Set-v. Co., 499 U.S. 340, 361 (1991); Scott v. WKJG, Inc., 376 F.2d 467, 469 (7th Cir. 1967). Thus, once Plaintiffs demonstrate that they own copyrights in the subject photos, the only remaining question is whether Defendants copied, displayed, or sold their copyrighted works. See JCW Investments, Inc. v. Novelty, Inc., 482 F.3d 910, 915 (7th Cir. 2007). Although courts often note that such evidence typically is difficult to come by, all courts agree that unauthorized "copying may be proven by direct evidence." Id. 31 Case: 3:15-cv-00379-jdp Document #: 714-2 Filed: 12/07/16 Page 31 of 94 Once Plaintiffs establish that copying of their works occurred, the burden shifts to Defendants to establish that they had a valid license to create, display, and/or sell products featuring Plaintiffs' photos. See Fed. R. Civ. P. 8(c) (license is affirmative defense); I.A.E., Inc. v. Shaver, 74 F.3d 768, 775 (7th Cir. 1996) (noting that license is "an affirmative defense to a claim of copyright infringement"); AT & T Corp. v. Microsoft Corp., No. 01-cv-4872, 2004 WL 188078 (S.D.N.Y. Feb. 2, 2004) (holding defendant "bears the burden of proving the implied license affirmative defense"); Bourne v. Walt Disney Co., 68 F.3d 621, 631 (2d Cir. 1995) (burden of proving existence of license is on licensee). Where Defendants proffer evidence of a license that they claim applies to the use in issue, Plaintiffs can prevail on their infringement claims by showing that Defendants exceeded the scope of their purported license. See LA.E., Inc., 74 F.3d at 775 ("The licensee violates the copyright by exceeding the scope of [its] license."); Jacobsen v. Katzer, 535 F.3d 1373, 1379-80 (Fed. Cir. 2008) ("If. . . a license is limited in scope and the licensee acts outside the scope, the licensor can bring an action for copyright infringement"); B. Plaintiffs Own Validly Registered Copyrights In All Photos At Issue. There is no genuine dispute that Plaintiffs created and own sole and exclusive copyrights to all of the photos at issue on this Motion as identified in the charts attached as Exhibit 1 to each Plaintiffs declaration. Plaintiffs created these photos and personally registered their copyrights in these photos with the Copyright Office. (Boehm Decl. ¶¶ 9-10; Stluka Decl. ¶J 9-10.) The applicable certificates of registration are attached as Exhibits 2 to each Plaintiffs declaration. Because all of the effective dates of registration are within five years of Plaintiffs' creation of the photos (and thus necessarily within five years of first publication), the Copyright Act provides that the certificates constitute prima facie evidence of the validity of Plaintiffs' copyrights. See 17 U.S.C. § 410(c); Wildlife Express Corp. v. Carol Wright Sales, Inc., 18 F.3d 502, 507 (7th Cir. 1994). Although this presumption is rebuttable, there is no evidence in the 32 Case: 3:15-cv-00379-jdp Document #: 714-2 Filed: 12/07/16 Page 32 of 94 record that possibly could support an argument challenging the validity of Plaintiffs' copyrights. C. The Record Is Conclusive That Defendants Infringed Plaintiffs' Copyrights. Event USA When Plaintiffs filed their original complaint in this action, they had evidence of just one of their photographs being used without permission by EUSA (see Dkt. No. I, Ex. 9). Through discovery, Plaintiffs uncovered several additional infringements that not only contradicted EUSA's sworn representations to the Court but also violated the preliminary injunction. On July 21, 2015, EUSA filed an answer to the initial complaint and filed its opposition to Plaintiffs' motion for preliminary injunction the following day. (Dkt. Nos. 30 & 39.) In opposing Plaintiffs' request for an injunction, EUSA claimed to have "sold all copies of the one copyrighted work that it is accused of infringing and does not intend [to] obtain or sell any more of them." (Dkt. No. 39 at 1.) EUSA also represented to the Court that it "has no other unauthorized copies of any of plaintiffs' copyrighted photographs." (Id. ¶ 2.) In support of this claim, EUSA submitted the sworn declaration of Dennis G. Garrity, Event USA's owner, who declared based on his personal knowledge that EUSA had "no other unauthorized copies of any of plaintiffs' copyright photographs." (Dkt. No. 40 at 2.) The Court held a hearing on Plaintiffs' motion on August 14, 2015. (Dkt. No. 80.) EUSA was represented at the hearing by Attorney Boyle. As the Court will recall, Attorney Boyle joined the chorus of defendants, led by counsel for Defendant Martin, unequivocally claiming that the injunction was unnecessary and that the particular infringements identified in the defendant- specific exhibits to the Complaint were the total universe of their infringements. The Court found the injunction warranted, however, and issued an order enjoining defendants from creating, displaying, selling or distributing any products containing Plaintiffs' photographs, and requiring them to segregate and quarantine such products within five days of the order. (Dkt. No. 107.) 33 Case: 3:15-cv-00379-jdp Document #: 714-2 Filed: 12/07/16 Page 33 of 94 On September 24, 2015, EUSA filed a status report, as required under the Preliminary Injunction Order, claiming to have "examined its entire inventory of sports memorabilia" and representing that it "has no reproductions in its possession of any photographs identified as 'covered photographs' in the Court's Order Preliminary Injunction." (Dlct. No. 132 If 2.) This status report was signed and filed by Attorney Boyle, meaning that, pursuant to Federal Rule of Civil Procedure 11(b), he was "certiflying] that to the best of [his] knowledge, information, and belief, formed after an inquiry reasonable under the circumstances" that the factual representations therein "have evidentiary support" and "the denials of factual contentions are warranted on the evidence." Shortly thereafter, in an e-mail exchange on October 9, 2015, Attorney Boyle represented that EUSA purchased the infringing works from Defendant David Thomason who does business as both "Fan4Ever" and "Official Brett Favre." (See Mt. No. 211-2.) According to Attorney Boyle, EUSA purchased only five (5) canvases-total-from Thomason, and all five featured the same photo. (Id) Attorney Boyle provided this information in response to a query seeking information regarding all of EUSA's transactions with Thomason. (Id. Ex. 1.) Attorney Boyle provided this information over three months after EUSA was served with the initial complaint. In other words, after investigating Plaintiffs' claims for over three months, EUSA and Attorney Boyle had concluded with certainty that EUSA (i) had purchased only 5 total canvases from Thomason, all of which featured the same photo of Ryan Braun shaking hands with Aaron Rogers; (ii) EUSA had not purchased any other products from Thomason, and certainly none that included Plaintiffs' photos; (iii) EUSA had not purchased any other products from any other sources that featured any of Plaintiffs' photos; (iv) EUSA had no remaining inventory that featured any covered photographs; and (v) EUSA did not have any digital files featuring any covered photographs. 34 Case: 3:15-cv-00379-jdp Document #: 714-2 Filed: 12/07/16 Page 34 of 94 As the Court subsequently recognized in its order for sanctions, "[EUSA's] statements of compliance . . . turned out to be false." (Dkt. No. 242 at 5.) Through document requests from Defendant Thomason, as well as an inspection of EUSA's offices, Plaintiffs uncovered that EUSA had in its possession several other infringing canvases. (See Dkt. Nos. 210, 211.) In a belated attempt to comply with the injunction, EUSA engaged Shawn Oily of Midwest Legal & eData Services, Inc., to conduct an audit of EUSA's inventory and electronic records. (See Dkt. No. 231, 3.) According to Oily, she reviewed "256 photographs of memorabilia and photographs" taken at EUSA's offices and 449 digital photo files that EUSA had in its possession and/or sent to a local printing company, Heyrman, to create prints, posters, advertisements, etc. (Id. It 8.) During her review, Oily identified yet another print in EUSA's possession and two additional digital files of "covered photographs." (Id. 11 6.) These findings unequivocally showed that EUSA's infringements were much more substantial than it had originally represented. Third-party discovery also confirmed these revelations. In response to a document subpoena, Heyrman produced invoices to EUSA showing that it had ordered thousands of copies of photo prints dating back several years. (See Dkt. No. 323, Ex. 2).16 These records also demonstrated that EUSA referred to photos by their Getty ID numbers, suggesting that the photos were downloaded directly from the Getty Images website. Indeed, an email from Garrity to Jason Sarchet of LOTF shows that Garrity personally copied the photos from the Getty Images website, as evidenced by the Getty Images watermark clearly displayed on the photos. (McCulloch Decl. Ex. 55.) Garrity confirmed this practice at his deposition, which took place on June 1, 2016. (Garrity Dep. Trans. at 97:2-98:13.) These acts alone are sufficient to find EUSA liable for 16 The records produced by Heyman included several invoices sent to EUSA identifying the file names of photos printed on its behalf. For the Court's convenience, Plaintiffs reviewed these records and compiled a single chart demonstrating the scope of Heyrman's work for Event USA. 35 Case: 3:15-cv-00379-jdp Document #: 714-2 Filed: 12/07/16 Page 35 of 94 infringement. See Playboy Enters., Inc. v. Webbworld, 991 F. Supp. 543, 551 (N.D. Tex. 1997) (finding unauthorized reproduction of images on computer server to be infringement); 3 Melville B. Nimmer & David Nimmer, NIMMER ON COPYRIGHT, § 8.08 (2008) ("[T]he input of a work into a computer results in the making of a copy, and hence, that unauthorized input infringes the copyright owner's reproduction right."). In total, Plaintiffs seek summary judgment on the issue of liability with respect to three (3) photographs, as shown in the chart attached and submitted herewith. (Boehm Decl. Ex. 8.) Because there is a dispute as to whether EUSA ever offered for sale or displayed the Clay Matthews photo found during Plaintiffs' discovery inspection, Plaintiffs are not seeking summary judgment with respect to that photo. Martin & Miller Plaintiffs seek summary judgment against Defendant Martin for the 5 photos identified in Boehm Decl. Ex. 16 (one photo appears twice). These are the same photos identified in FAC Ex. 4. In January 2015, Plaintiff Boehm visited the Sports-4-Less retail store in McHenry, Illinois that is owned by Defendant Martin, where he discovered that Martin was displaying and offering for sale numerous products that included unlicensed copies of Plaintiffs' copyrighted photographs. (PL SUF ¶f 139-40.) On February 25, 2015, Plaintiffs' counsel sent a letter to Martin advising him that Plaintiffs owned copyrights in at least six photos that he was displaying and selling in his store and demanding that he cease and desist his infringing conduct. (PL SUF ¶ 141.) That same day, Plaintiffs' counsel also issued a takedown demand to Amazon's copyright agent demanding that Amazon.com remove the listings for a number of infringing items being sold by Martin as the "Canvas King." (PL SUF ¶ 143.) Martin did not respond to Plaintiffs' letters. 36 Case: 3:15-cv-00379-jdp Document #: 714-2 Filed: 12/07/16 Page 36 of 94 When Plaintiffs originally filed suit, Defendant Miller was not a party. In Defendant Martin's answer to the complaint, he "admit[ted] that doing business as Sports-4-Less, he has sold at least one canvas including a photographic image from a photograph claimed to be owned by the plaintiffs that he purchased from Jerry Miller d/b/a Signature Sports[.]" (Dkt. No. 41 at ¶ 132.) Plaintiffs subsequently amended their complaint to include Signature Sports (Dkt. No. 63), and Miller stipulated to be joined personally as a defendant (Dkt. No. 100). In his answer to the amended complaint, Miller also "admit[ted] that doing business as Signature Sports, he has sold at least one canvas including a photographic image from a photograph claimed to be owned by the plaintiffs[.]" (Dkt. No. 99 at ¶ 150.) These statements are judicial admissions to which Defendants Martin and Miller are bound. See supra. In his amended inventory status report (Dkt. No. 148), Martin also confirmed that he had in his possession seven (7) items featuring Plaintiffs' photographs: one stretched canvas image of Clay Matthews (FAC Ex. 4, Row 3), five plaques featuring Plaintiff Boehm's photo of Soldier Field (FAC Ex. 4, Row 1), and one stretched canvas of the same image of Soldier Field. In the deposition of Ciara Zimprich, which was conducted on July 6, 2016 and to which both Plaintiffs' and Defendants' counsel were present, Ms. Zimprich testified that Defendant Miller had sent several digital copies of photos to be printed by the Zimprichs, which he claimed were from a "photographer [who] was a friend of his." (See C. Zimp. Dep. at 81:18-20.) One of these photos was of Soldier Field, which was then sold to Defendant Scott Svehla (id. at 81:6-17; FAC Ex. 3, Row 1) and almost certainly Defendant Martin as well (FAC Ex. 4, Row 1). Defendant Miller thus materially contributed to, caused or enabled, and directly benefitted from both Svehla's and Martin's infringements, and is secondarily liable for such infringements. See In re Aimster Copyright Litigation, 252 F. Supp. 2d 634, 649 (N.D. III. 2002) ("A party can be liable for 37 Case: 3:15-cv-00379-jdp Document #: 714-2 Filed: 12/07/16 Page 37 of 94 contributory infringement where the party with knowledge of the infringing activity, induces, causes, or materially contributes to the infringing conduct of another.") (internal quotation marks omitted); id. at 645 (alternatively, "[v]icarious copyright infringement is established when a defendant has the right and ability to supervise infringing activity and also has a direct financial interest in such activities. Unlike contributory liability, one can be liable for vicarious copyright infringement even without knowledge of the infringement.") (internal citations and quotation marks omitted). There can be no doubt that Miller had the right and ability to supervise Martin's infringements and is secondarily liable for them-in addition to his own infringements for purchasing the infringing products from the Zimprichs and reselling them-because in addition to being Martin's supplier he was also his landlord and thus provided the "site and facilities" for Martin's infringements. See Columbia Pictures Industries, Inc. v. Aveco, Inc., 800 F.2d 59 (3rd Cir. 1986) (holding that "providing the site and facilities for known infringing activity is sufficient to establish contributory liability"); Gershwin Publ 'g Corp. v. Columbia Artists Mgmnt., Inc., 443 F.2d 1159, 1162 (2d Cir. 1971) ("even in the absence of an employer-employee relationship one may be vicariously liable if he has the right and ability to supervise the infringing activity and also has a direct financial interest in such activities"); Shapiro, Bernstein & Co. v. H. L. Green Co., 316 F.2d 304, 307-08 (2d Cir. 1963) ("[T]he imposition of vicarious liability in the case before us cannot be deemed unduly harsh or unfair. Green has the power to police carefully the conduct of its concessionaire Jalen; our judgment will simply encourage it to do so, thus placing responsibility where it can and should be effectively exercised. Green's burden will not be unlike that quite commonly imposed upon publishers, printers, and vendors of copyrighted materials."); See 2 38 Case: 3:15-cv-00379-jdp Document #: 714-2 Filed: 12/07/16 Page 38 of 94 William F. Patry, COPYRIGHT LAW & PRACTICE 1147 ("Merely providing the means for infringement may be sufficient" to incur contributory copyright liability). Svehla As shown in Exhibit 3 to the First Amended Complaint ("FAC"), Svehla displayed and offered for sale at least four (4) of Plaintiffs' registered photographs. Plaintiffs filed suit against Svehla after they visited one of his stores located in the Southridge Mall in January 2015 and discovered a number of canvases and prints for sale, including the four photos shown in FAC Ex. 3, which Plaintiffs documented by surreptitiously taking photographs with their phones. (PL SUF ¶ 160-61) Plaintiffs were only able to take a few photographs before they feared being discovered by the store clerks, and obviously were not able to inspect Svehla's back-room inventory. (Id.¶ 162.) Plaintiffs' counsel sent a cease and desist letter to Svehla on March 5, 2015. (McCulloch Decl. Ex. 39.) After receiving this letter, Svehla called Plaintiffs' counsel's office and claimed that he had removed the infringing items from his stores. (PL SUF ¶ 165.) In an e-mail to Plaintiffs' counsel three days later, however, Svehla changed his story and claimed that he had actually sold all of the infringing items. (Id. ¶ 166.) Then in discovery, Svehla again changed his story and claimed that he removed all of the products and returned them to Dan and Ciara Zimprich (the "Zimprichs") for a refund, but has not produced any evidence to support or corroborate his story. (Id. If 167.) Whichever story is true, there is no question that Svehla displayed and offered for sale (and allegedly did sell) several products containing Plaintiffs' photographs without ever seeking a license or otherwise getting permission to do so. Defendant Svehla has produced a handful of invoices related to purchases of canvases and prints that he made from the Zimprichs between April 2012 and July 2014. (Id. If 168.) These 39 Case: 3:15-cv-00379-jdp Document #: 714-2 Filed: 12/07/16 Page 39 of 94 invoices show that Svehla purchased at least 306 canvases and 886 photo prints from the Zimprichs during that time. (Id.) These invoices, however, do not identify which photographs were included in the nearly 1200 products Svehla purchased from the Zimprichs and Svehla's discovery responses acknowledge that he cannot conclusively determine whether any of Plaintiffs' other photographs were included in these large purchases. WinieckiMcVeigh As discussed supra, the evidence of Defendant Winiecki's infringements is indisputable. Documents produced by Getty Images show that Winiecki downloaded 148 images - nine (9) of which belong to Plaintiffs - under "Editorial - Newspaper" licenses that granted permission for "1 Day" use only and only in a "periodical." (See McCulloch Decl. Exs. 41 & 60 (Getty_000002- 13, 179).) The photos are listed below: • "Green Bay Packers v Minnesota Vikings," Stluka; • "Temple Owls v Wisconsin Badgers," Stluka; • "San Diego Chargers v Green Bay Packers," Stluka; • "Northern Illinois v Wisconsin," Boehm; • "Ohio State Buckeyes v Wisconsin Badgers," Stluka; • "Green Bay Packers v Minnesota Vikings," Boehm; • "New York Mets v Milwaukee Brewers," Boehm; • "New York Mets v. Milwaukee Brewers [2]," Boehm; and • "Cincinnati Reds at Chicago Cubs," Boehm. (PL SUF ¶11186-94.) Because Winiecki downloaded these photos for commercial purposes, his license was invalid due to his fraud and/or he violated the terms of his licenses and those violations constitute copyright infringement. See LA.E., Inc., 74 F.3d at 775. Even if he did not use Plaintiffs' photos to create commercial memorabilia products, Winiecki still infringed Plaintiffs' copyrights because illegal "copying" includes merely downloading a copyrighted photo without a valid license, which Winiecki did by "copying" the photos from Getty Images without a valid license. See Sony Corp. 40 Case: 3:15-cv-00379-jdp Document #: 714-2 Filed: 12/07/16 Page 40 of 94 of Am., 464 U.S. at 432; Sega Enters. Ltd v. MAPHIA, 857 F. Supp. 679, 687 (N.D. Cal. 1994) (finding infringement for downloading copies of video games); Playboy Enters., Inc., 991 F. Supp. at 551 (finding infringement for reproduction of images on computer server). Because Winiecki misrepresented the intended use of Plaintiffs' photos during the licensing process, he never obtained a valid license from Getty Images. Indeed, Section 11.1 of the Getty licensing agreement specifically voids licenses obtained through deceit. Defendant Winiecki thus infringed Plaintiffs' copyrights by downloading (or "copying") photos onto his own computer from the Getty Images website without a valid license, regardless of whether there is any evidence that he also printed and/or sold the photos in commercial products. See Melville Nimmer & David Nimmer, 3 NIMMER ON COPYRIGHTS § 8.08 [A][5] [a], 8-131-32 ("[T]he input of a work into a computer results in the making of a copy, and hence, that unauthorized input infringes the copyright owner's reproduction right."). Defendant McVeigh's participation in Winiecki's infringements has now also been confirmed by Ciara Zimprich's sworn testimony (see C. Zimprich Dep. at 250:20-256:24; 262:21-263:8), as discussed supra. Other than their own self-serving declarations, neither Defendant Winiecki nor McVeigh have produced any evidence rebutting this testimony. AD' Plaintiffs seek summary judgment against Defendant Wredberg for the 49 photos identified in Boehm Decl. Ex. 14. As one of the "Supply Defendants," Wredberg was responsible for printing and distributing many of the infringing products subsequently sold by other defendants in this case. For example, Defendants Dobratz/Waukesha Sportscards and Gonnering/Scooter G Sports both identify Wredberg as the source of infringing products. (See Dkt. No. 118, response to If 84; McCulloch 41 Case: 3:15-cv-00379-jdp Document #: 714-2 Filed: 12/07/16 Page 41 of 94 Decl. Ex. 35.) Through discovery requests, Defendant Waukesha Sportscards identified at least eleven (11) photos that it received from AW Artworks. (McCulloch Decl. Ex. 36.) Evidence produced in Boehm I also demonstrates that Jason Sarchet of LOTF regularly emailed Defendant Wredberg to request that photos be printed for LOTF, and attached several digital files containing Plaintiffs' photographs. (Boehm Decl. Ex. 37.) The Zimprichs also produced emails in discovery showing communications between Wredberg and Dan Zimprich, in which Wredberg offered to print the photos he presumably obtained from LOTF. (McCulloch Decl. Ex. 87.) The Zimprichs confirmed this practice in a sworn affidavit in Boehm I, in which Ciara Zimprich stated that they purchased six (6) of Plaintiffs' photographs from Wredberg after he "contacted either Dan [Zimprich] or [Ciara Zimprich] to tell [them] these pictures were available for sale." (McCulloch Decl. Ex. 28 at If 20.). In the deposition of Ms. Zimprich, which both Plaintiffs' and Defendant Wredberg's counsel participated, Ms. Zimprich also testified about the Zimprichs' business dealings with Wredberg. (See C. Zimprich Dep. at 57:2-60:6.) Specifically, Ms. Zimprich testified that Wredberg sold the Zimprichs both physical and digital copies of Plaintiffs' photographs and would at times upload them directly onto a "thumbdrive" for the Zimprichs to copy and print. (Id. at 58:2-59:17.) These acts alone are sufficient to establish copyright infringement. See Playboy Enters., Inc., 991 F. Supp. at 551 (finding unauthorized reproduction of images on computer server to be infringement); 3 Melville B. Nimmer & David Nimmer, NIMMER ON COPYRIGHT, § 8.08 (2008) ("[T]he input of a work into a computer results in the making of a copy, and hence, that unauthorized input infringes the copyright owner's reproduction right."). Wein/Beyond Studio LLC 42 Case: 3:15-cv-00379-jdp Document #: 714-2 Filed: 12/07/16 Page 42 of 94 Defendant Wein, like Defendant Wredberg, is identified in the complaint as a "Supply Defendant" and is responsible for printing and distributing several of Plaintiffs' photographs to other Defendants in this case. Plaintiffs seek summary judgment against Defendant Wein for the seven (7) photos identified in Boehm Decl. Ex. 12. Defendant Wein was previously an employee of LOTF, where he handled the printing of canvases and other products. (PL SUF If 205.) In or around 2007, Wein founded Beyond Studio Publishing LLC, of which he is the sole owner. (Id. ¶ 206.) Defendants Wein and Beyond Studio are in the business of creating and printing canvases and other large-format prints, including but not limited to sports-related photographs. (Id ¶ 55.) Despite admitting this fact, Wein stated in his August 6, 2015 declaration, filed in opposition to the Plaintiffs' preliminary injunction motion, that he "no longer sell[s] or display[s] any type of sports photographs through [his] business." (Id. 206.) Regardless of his current business activities, the evidence is clear that Defendant Wein is responsible for printing and distributing several of Plaintiffs' copyrighted photographs. Defendant Gonnering produced in discovery several emails between him and Defendant Wein, showing that Gonnering routinely requested various prints for signing events and to otherwise sell. (Id. ¶ 208.) These communications took place as late as December 2014, just a few months before Plaintiffs filed this lawsuit. (Id. If 209.) Plaintiffs reviewed these communications and were able to identify with near-certainty several of their photographs included in Gonnering's requests. Attached as Ex. 12 to Plaintiff Boehm's declaration submitted herewith is a chart demonstrating which of Plaintiffs' photographs were requested for printing, of which there are seven (7). Defendant Wein has not produced any evidence to dispute the fact that he complied with Gonnering's requests and printed these photos. 43 Case: 3:15-cv-00379-jdp Document #: 714-2 Filed: 12/07/16 Page 43 of 94 During her deposition, Ciara Zimprich testified that Defendant Wein provided prints for Waukesha Sportscards, which was in partnership with the Zimprichs. (C. Zimprich Dep. at 113:4- 14.) Ms. Zimprich further testified that Wein did all of the printing for LOTF (id.), which was identified by Waukesha as the source of dozens of Plaintiffs' photographs. (PL SUF '1211.) This evidence clearly establishes that Defendant Wein printed and distributed at least 37 of Plaintiffs' copyrighted works' 7 and is thus liable for infringement with respect to these works. Scheels Plaintiffs seek summary judgment against Defendant Scheels for the fifteen (15) photos identified in Boehm Decl. Ex. 10. Of all of the Defendants in this case, Defendant Scheels is by far the largest, with twenty- six (26) retail stores across ten different states, two of which are in Wisconsin. (PL SUF ¶ 5) As with any major retail chain, Scheels also maintains a website with an online shopping feature, known as the "Scheels Fan Shop," as well as multiple social media accounts. (Id. ¶ 6-8.) The Scheels Fan Shop is the subject of an agreement between Scheels and a third-party supplier, Fanatics Retail Group North Dakota, Inc. ("Fanatics"), which agreed to supply images and merchandise for the online shop. (Id. IT 179.) For its retail stores, however, Scheels obtains merchandise from other suppliers, including a company called North Central Canvas Prints ("NCCP"), owned by John Paul. (Id. ¶ 180.) When Plaintiffs originally filed suit, they had evidence of two (2) of their photographs being displayed and offered for sale in Scheels' Appleton store location as well as one (1) on the Scheels Fan Shop. (See FAC Ex. 2.) With respect to one of the photographs found in the Appleton store-the "Lambeau Field" photo (FAC Ex. 2, Row 2)-Scheels has produced evidence of a '7 The seven identified by Plaintiff Boehm plus 30 identified by Waukesha Sportscards as being from LOTF. 44 Case: 3:15-cv-00379-jdp Document #: 714-2 Filed: 12/07/16 Page 44 of 94 license to sell this photo from AP (PL SUF 411 182), and thus Plaintiffs do not seek summary judgment with respect to this photo. However, Plaintiffs have since discovered several other infringements committed by Scheels in addition to those shown in the complaint, and for which no evidence of a license has been produced. Scheels produced in discovery several invoices showing purchases it made from NCCP. (PL SUF ¶ 183.) After reviewing these invoices, Plaintiffs were able to identify with near- certainty-based on the image descriptions, dates, and similar infringements by other Defendants-that Scheels offered for sale at least fourteen (14) additional photographs18 not included in FAC Ex. 2. (Boehm Decl. Ex. 10) These infringements, including the image descriptions and other information from the NCCP invoices, are demonstrated in a chart for the Court's convenience. (Boehm Decl. Ex. 10.) This chart, combined with the infringements shown in FAC Ex. 2, demonstrate fifteen(15) total in gements of Plaintiffs' copyrighted works by Defendant Scheels for which Plaintiff e summary judgment. Scooter G Plaintiffs seek summary judgmen against Defendant Gon ing for the 23 photos identified in Boehm Deci. Ex. 11 and 15. The .ims again innering in FAC Exhibits (Beohm Decl. Ex. 15) setting forth claims against Gonnering included a repeat of the Braun/Rodgers photo so it has 18 rows, but 17 unique photos. Together with the 6 new infringements revealed in discovery, Plaintiffs now have 23 claims against Gonnering. Defendant Gonnering owns and operates Scooter G Sports as a sole proprietor. (PL SUF ¶ 25.) Gonnering operates a brick-and-mortar retail store in Appleton, Wisconsin, as well as an online store through his website, www.scootergsports.com. (Id. If 26.) Gonnering also operates multiple social media accounts, "The Rodgers/Braun image was included in FAC Ex. 2, Row 1. 45 Case: 3:15-cv-00379-jdp Document #: 714-2 Filed: 12/07/16 Page 45 of 94 including through Facebook and Twitter, to promote his business and advertise the products he offers for sale. (Id. ¶¶ 29-30.) Exhibit 5 to the Amended Complaint shows several unauthorized uses of Plaintiffs' photographs both in Gonnering's retail store as well as published online on his various platforms. In his answer to the Amended Complaint, Gonnering "admit[ted] to displaying and possibly selling some if any items that may have contained Plaintiffs photos." (Id. ¶ 224.) This is a judicial admission to which Gonnering is bound. See supra. Gonnering has not denied- nor could he deny-that the photos shown in Exhibit 5 are Plaintiffs' and that they were offered for sale in his store and/or published online. Gonnering has not offered any evidence of a license or to rebut Plaintiffs' claims. Thomason Plaintiffs are not yet moving for summary judgment against Thomason for the uses identified in Boehm Decl. Ex. 13 as Thomason has failed to produce records sufficient to conclusively determine that these sales relate to Plaintiffs' photos. Plaintiffs reserve the right to bring claims to trial as discovery reveals additional infringements. In a declaration filed in connection with Defendant Event USA's opposition to Plaintiffs' motion for sanctions, Thomason admitted selling the photo of Aaron Rodgers and Ryan Braun shaking hands to Dennis Garrity of EUSA. (PL SUF 11212.) Garrity confirmed that he often did business with Thomason under both the tradenames Fan-4-Ever and Official Brett Favre. (Id. ¶ 213.) EUSA also filed a cross-claim against Thomason for selling it these infringing canvases. (See Dkt. No. 251.) In addition to selling the Rogers/Braun canvases to EUSA, Thomason also offered copies for sale on eBay-and sold at least one copy to a Derek Anunson ("griff751") who made his payment to a (previously undisclosed) PayPal account operated by Thomason's business partner, Tim Stahl. (McCulloch Decl. Ex. 68-70.) By copying, displaying, and distributing this photo, Thomason has infringed 46 Case: 3:15-cv-00379-jdp Document #: 714-2 Filed: 12/07/16 Page 46 of 94 Plaintiff Boehm's copyright. As discussed infra, Thomason's defenses of license and resjudicata based on the Zimprich settlement agreement are meritless and do not absolve him from his own liability and failure to ensure the legitimacy of the products he offered for sale. With respect to the White/Favre photo, judgment against Thomason also is required. Not only has Thomason failed to produce any documentation suggesting that it was legitimately purchased from an authorized retailer, he also violated the Preliminary Injunction Order and committed serious discovery infractions by failing to produce for nearly nine months the documents showing that he copied, published, and sold this Covered Photo and repeatedly misled Plaintiffs and the Court regarding his dealings relating to this Covered Photo. Thomason 's Preliminary Injunction Compliance Report Over a year ago, on June 23, 2015, Plaintiffs filed a motion for a preliminary injunction against all defendants. (Mt. No. 2.) The Court held a hearing on Plaintiffs' motion on August 14, 2015. (Dlct. No. 80.) During the hearing, the Court granted Plaintiffs' request for a preliminary injunction and made absolutely clear that all Defendants were required to diligently search their records to comply with the Court's instructions. The Court subsequently issued a written order to the same effect (the "Preliminary Injunction Order"). (Dkt. No. 107.) Specifically, the Court ordered that "Whose bound by this order are further ordered to: I. Collect and segregate in some safe place all reproductions in any medium of any photograph by Scott Boehm or David Stluka in that party's possession. The collection and segregation provided for in this order must be completed within five days of the enjoined party's receipt of notice of this order. 2. File with the court a report of all reproductions collected and segregated by that party within 48 hours of completion of the collection and segregation by that party. 3. Collect and preserve any record, communication, or document relating to the acquisition, sale, inventory, or storage of any reproduction of any photograph by Scott Boehm or David Stluka. (Id.) In so ordering, the Court recognized that Plaintiffs "would face serious harm" if any 47 Case: 3:15-cv-00379-jdp Document #: 714-2 Filed: 12/07/16 Page 47 of 94 defendant violated the terms of the injunction. (Id. at 3.) The Court's order was not limited to photographs that the Defendants believed were infringing or even that Plaintiffs alleged had been infringed, but rather explicitly included "any photograph by Scott Boehm or David Stluka." On October 23, 2015, Defendant Thomason filed his "Report in Compliance with this Court's Order for Preliminary Injunction." (Dkt. No. 166 ("Injunction Report")) In his Injunction Report, Thomason represented to the Court that he "has examined his inventory of sports memorabilia and reports that Defendant has no reproductions in his possession of photographs identified as 'covered photographs' in the Order." (Id. at 2, If 2 (emphasis added).) Thomason's Rule 26 Disclosures Defendant Thomason served his Initial Disclosure pursuant to Fed. R. Civ. P. 26(a) on November 5, 2015. (McCulloch Decl. Ex. 66.) Thomason's Initial Disclosure identified only (I) himself, (2) Dennis Garrity (president of Event USA), and (3) Dan and Ciara Zimprich ("the Zimprichs") as individuals likely to have discoverable information. (Id.) Thomason did not disclose that he owned a limited liability corporation, Fan 4 Ever, LLC, that was registered in Arizona and still is an ongoing entity. (Id. Ex. 71.) Thomason also did not disclose that he was business partners with a person named Tim Stahl ("Stahl"), let alone that Stahl was the registered owner of several websites owned by Thomason and that the Pay Pal account that accepted payments for Thomason's businesses was registered to Stahl's e-mail address. (Id. Ex. 76.) Thomason also did not disclose that he used the alias "OfficialBrettFavre" to conduct business or that he owned multiple websites (including the officialbrettfavre.com; fan4ever.com; uwcanvas.com; brettfavrecanvas.com; greenbaycanvas.com; or greenbavpackerscanvas.com), or that some of these websites were formally registered to Stahl or a company called Scottsdale Canvas, LLC, which Thomason also owned. (Id. Ex. 63.) Nor did Thomason disclose any of his 48 Case: 3:15-cv-00379-jdp Document #: 714-2 Filed: 12/07/16 Page 48 of 94 seller accounts on eBay or Amazon, including that he currently has an online eBay store registered under "Packerslegends" or that he previously operated accounts through eBay under the names "Brettfavrestore" and "OfficialBrettfavre4," which he now has acknowledged in his July 19, 2016 declaration in support of his motion for summary judgment. (See Dkt. No. 452 at ¶¶ 5-6.) Nor did Thomason identify Photo File as a party with relevant information regarding his defenses. Nearly three months later, on March 04, 2016, Defendant Thomason served supplemental Rule 26 disclosures. (McCulloch Decl. Ex. 67.) Again, however, Thomason's supplemental disclosures did not disclose the existence of his Fan4Ever or OfficialBrettFavre businesses; did not identify Stahl as a witness with relevant information; did not disclose that he owns or conducts business through Scottsdale Canvas; did not disclose any of his seller accounts on eBay or Amazon or any of his websites; and did not identify Photo File as a party with relevant information regarding his defenses. Thomason's Representations to the Court On November 30, 2015, in response to a motion for contempt, Defendant Event USA filed a sworn affidavit from Thomason in which he claimed that his company Fan 4 Ever, LLC is a "now-defunct" company and that his "OfficialBrettFavre" business is "not involved" in the claims at issue in this action. (Dkt. No. 230 at rf 3 & 19.) Contrary to Thomason's representations to the Court, public records from the Arizona Corporation Commission demonstrate that Fan 4 Ever, LLC is not "defunct" but rather is an ongoing business entity that Thomason registered in Arizona before any of the alleged conduct at issue in this action. (McCulloch Decl. Ex. 71.) And despite Thomason's representation to the Court that his "OfficialBrettFavre" business was "not involved" in any conduct at issue in this litigation, records produced in discovery confirmed that EUSA invoiced and paid 49 Case: 3:15-cv-00379-jdp Document #: 714-2 Filed: 12/07/16 Page 49 of 94 "OfficialBrettFavre" for infringing canvases at issue in this action. (Id. Ex. 81.) EUSA's president also testified that Thomason regularly did business with EUSA using either the alias or through a business called "OfficialBrettFavre." (Garrity Dep. at 146:20-24.) Thomason 's Discovery Reponses and Document Production On January 8, 2016, Thomason served his response to Plaintiffs' initial request for production of documents and produced a total of seven (7) pages of discovery. Although the Court had ordered nearly four months earlier that all defendants must preserve "any record, communication, or document relating to the acquisition, sale, inventory, or storage of any reproduction of any photograph by Scott Boehm or David Stluka" and notwithstanding that Plaintiffs specifically sought any such documents related to Plaintiffs' photographs, Thomason did not produce any such records. He did not produce any invoices showing that he had purchased any Covered Photos, any receipts showing sales of Covered Photos, or any copies of photographs of Covered Photos that he may have posted online to advertise items that feature Covered Photos. Instead, Thomason stuck by his prior representation in his Injunction Report that he was not in possession of any such records and that he had no reproductions of any Covered Photos. Three months later, on March 04, 2016, Defendant Thomason produced supplemental document discovery and his responses to Plaintiffs' interrogatories. (McCulloch Decl. Ex. 67.) Once again, Thomason did not produce any records related to any items he had posted for sale on any of his various websites or through his numerous Amazon and eBay accounts. He also did not produce any records (receipts, cancelled checks, payment vouchers, invoices, etc.) of any alleged transactions with either Event USA or the Zimprichs. He also did not produce any documents or records of any alleged purchases from Photo File. In response to Plaintiffs' interrogatories, Thomason claimed that he had purchased and sold 50 Case: 3:15-cv-00379-jdp Document #: 714-2 Filed: 12/07/16 Page 50 of 94 only three Covered Photos. According to Thomason's interrogatory responses, he "purchased from Dan and Ciara Zimprich, of On 2 The Field, approximately 15 canvases that allegedly feature Subject Photograph #252 [featuring Ryan Braun and Aaron Rodgers shaking hands]." (McCulloch Decl. Ex. 82 at Resp. No. 2.) Notwithstanding this claim, Thomason did not produce (and has never produced) any documents regarding his acquisition of these canvases, including any documents showing that he paid (let alone the amount he allegedly paid) the Zimprichs. Although Thomason's response also acknowledged (for the first time in this litigation) that he "posted the remaining canvases to my website Fan4Ever.com and eBay for resale" (id.), he also did not produce (and has not produced since) any records related to his publication of the Braun/Rodgers canvases to his website or any records related to the sales of this inventory. Significantly, Thomason also has not complied with the Court's Preliminary Injunction Order requiring that he produce copies of the photographs that he admits that he "posted" to his website and eBay. Thomason's contention that he did not fail to provide such discovery but rather simply lacks any responsive documents is not credible. If Thomason "posted" this infringing item on both his own website and his eBay store, he must have some records of the postings, copies of the photos of the canvas that he posted, records of the sales, etc. Moreover, Ciara Zimprich testified that the Zimprichs created the canvases featuring a collage of Braun/Rodgers photos at the request of Thomason and Richard Moncher, who is a defendant in a related action involving infringement claims related to this same photo being used in multiple canvases offered for sale on Moncher's website. (C. Zimp. Dep. at 124:9-125:18.) According to Ciara Zimprich, Thomason and Moncher arranged to have these canvases made in order to have them signed by Braun and Rodgers and the Zimprichs provided the canvases to Moncher and Thomason. (Id. at 127:8-129:25.) Despite the involvement of the Zimprichs, Moncher, Thomason, EUSA, and two high- 51 Case: 3:15-cv-00379-jdp Document #: 714-2 Filed: 12/07/16 Page 51 of 94 profile athletes, Thomason has not produced a single e-mail related to these infringing canvases, no records of any sales of these canvases, no invoices or proof of any payments to the Zimprichs, and no records of any communications with Braun or Rodgers or any revenue he earned from the singing of these canvases. It is not credible that not a single document exists related to the creation, distribution, and sales of these canvases. Thomason also claimed in response to Interrogatory No. 2 that he has "no records of other individuals or entities to whom I sold such canvases." And in response to Interrogatory No. 5, that "I do not have any additional records of the sale of any products that featured, incorporated, or included any Subject Photograph." After Plaintiffs' counsel expressed serious doubts regarding the accuracy of these representations and demanded a meet and confer before moving to compel discovery, Attorney Nold reversed course and, in an e-mail dated May 31, 2016, capitulated to Plaintiffs' demands and agreed that "we will be disclosing redacted versions of all products sold on both sites (Fan4Ever.com and OfficialBrettFavre.com) going back to May 2008 for Fan4Ever, and January 2009 for OBF. This will give you a list of all products that have been sold through the websites." (McCulloch Decl. Ex. 83.) Thomason's counsel also agreed to produce records related to Thomason's eBay and Amazon accounts, which he still had not identified or disclosed in any discovery responses. On June 3, 2016, Thomason produced his "2nd Round of Supplemental Discovery" that included a list of 232 items sold by Thomason through his Fan4Ever.com website (see McCulloch Decl. Ex. 74; and a second list of 319 items that Thomason sold through his OfficialBrettFavre.com website (id. Ex. 75). Despite Attorney Nold previously agreeing to "disclose the eBay and PayPal account pages," Thomason did not (and still has not) produced any records of items that he sold 52 Case: 3:15-cv-00379-jdp Document #: 714-2 Filed: 12/07/16 Page 52 of 94 through those accounts. Although these records included descriptions of the photos that were involved, Thomason did not produce records or documents showing the photos, including any photos that he may have taken of the products in order to "post" them on his websites. On June 9, 2016, Plaintiffs' counsel demanded that Thomason "produce copies of photos for each item listed below, sales records for each item below, and any other records or communications that involve any of these products (including emails referring to these products, records of when the product was first posted for sale, receipts for sales of these products, etc." (McCulloch Decl. Ex. 84.) Plaintiffs' counsel even identified nearly two dozen products that matched photographs at issue in this action. (Id.) Doubling down on his claim that Thomason already had reviewed these item descriptions and confirmed that none involved Covered Photos, not to mention his own assurances that he personally reviewed at least certain of these transactions and confirmed that none involved Covered Photos, Attorney Nold scoffed at Plaintiffs' demand for additional discovery, claiming "it is premature and frankly irresponsible to automatically assume these photos either belong to your clients and/or were infringed upon." (McCulloch Decl. Ex. 84). It is confusing that Attorney Nold would call a demand on June 9 for discovery related to product descriptions that perfectly matched Covered Photos as "premature" given that the Court ordered these records to be reviewed at the outset of this litigation and this discovery should have been produced in response to Plaintiffs' initial requests for production in December 2015. Three weeks later, on June 30, 2016, Thomason finally produced copies of photographs related to some of the items identified in Plaintiffs' June 9 email. (McCulloch Decl. Ex. 85.) Although Plaintiffs identified 19 photos to review, Thomason produced copies of only 10 photographs. Of those 10 photographs, several involve Covered Photographs subject to the 53 Case: 3:15-cv-00379-jdp Document #: 714-2 Filed: 12/07/16 Page 53 of 94 Preliminary Injunction and at least one-the Reggie White/Brett Favre photo does not include any indicia that it was obtained from Photo File or any other licensed dealer. (McCulloch Decl. Ex. 77.) Among the photos for which Thomason did not produce visual depictions, there almost certainly are additional photographs that belong to Plaintiffs and are Covered Photos. (See Boehm Decl. ¶ 41, Ex. 13.) For instance, one of the photos for which Thomason failed to produce discovery is a photo described by Thomason as an "AJ Hawk Action Photo." (McCulloch Decl. Ex. 74 at Row 147.) This is significant because Plaintiffs' claims involve an in-game "action shot" of A.J. Hawk, and this a Covered Photo subject to the Preliminary Injunction. (See FAC Ex. 1, Rows 267.) In fact, Plaintiffs' claims against EUSA-with whom Thomason admits doing business-also involve a photograph of A.J. Hawk that is referred to as the "A.J. Hawk action shot" in multiple invoices produced by Dennis Garrity. (Dkt. No. 372, Ex. D.) GatTity also testified later about how he confirmed that this "action shot" sold by EUSA was one of Plaintiffs' photographs.I9 (Garrity Dep. at 82:9-14 ("As I recall, we had different types of photos of Mr. Hawk. One he was in action. I believe we had others where he was maybe in more of a posed stature. So based upon the fact that this is an action shot, it would appear to relate to the [Plaintiffs.] image in question here.").) Even setting aside the photos for which Thomason has not produced records, the fact that the documents involving items that undoubtedly involved Covered Photos (e.g., the White/Favre photo) were not produced earlier is shocking, not only because these documents are obviously relevant and subject to discovery but also because Thomason's October 23, 2015 report to the 19 This "A.J. Hawk action shot" that is included in Plaintiffs' claims against Event USA is one of the photographs that Garrity selected from the Getty Images' website and LOTF downloaded illegally. Thomason, however, claimed that "I have not acquired any products bearing Subject Photographs from Legends of the Field, LLC." (See McCulloch Decl. Ex. 82 at Resp. 10.) 54 Case: 3:15-cv-00379-jdp Document #: 714-2 Filed: 12/07/16 Page 54 of 94 Court claimed that he had "examined his inventory of sports memorabilia" and that he "has no reproductions in his possession of photographs identified as 'covered photographs' in the Order." (Dkt. No. 166 at 2, IT 2.) Similarly, on March 24, 2016, Attorney Nold claimed that for each transaction through his websites "[Thomason] compared the description of the item with the covered photos listed in Exhibit A" and determined that there were no relevant transactions related to Covered Photos. It also is surprising that these sales occurred through Thomason's Fan4Ever and OfficialBrettFavre businesses given that Thomason's November 30, 2015 declaration claimed that his Fan4Ever company is "now defunct" and that his OfficialBrettFavre company has not sold any products at issue in this lawsuit. (Dkt. No. 230 at 'ffif 3 & 19.) Judgment Against Thomason Is Warranted Plaintiffs now seek summary judgment or an order of default judgment as a sanction against Thomason related to, at the very least, the White/Favre photograph. Thomason's document production on June 30, 2016 included a photographic "reproduction" of this Covered Photograph despite previously representing to the Court and to Plaintiffs in discovery that he had no such reproductions. This evidence also comes from a website that Thomason did not disclose in his Rule 26 disclosures and the records he finally produced demonstrate he made sales of this photo through companies that Thomason claimed were "defunct" or "not involved" in the claims against him and records from websites for which he evidently waited seven months to even search given that he falsely claimed he had no reproductions of this or any other Covered Photo back in October 2015. And the payments related to sales of this photograph were made to a PayPal account operated by Stahl, who Thomason did not identify in his disclosures. It took months of hounding and repeated demands for proper discovery searches for Thomason and counsel to even produce 55 Case: 3:15-cv-00379-jdp Document #: 714-2 Filed: 12/07/16 Page 55 of 94 these records, and they plainly show that Thomason possessed this reproduction of a Covered Photo, and many others, but failed to identify them as required under the Preliminary Injunction Order. These are precisely the sort of "willful and unexcused violations" of an injunction order that the Seventh Circuit has held "certainly qualify as 'contumacious conduct' that supports a finding of willfulness and entry of judgment against the violator. Marrocco v. General Motors Corp., 966 F.2d 220, 224 (7th Cir. 1992). As the Seventh Circuit explained: These omissions cannot be characterized merely as a mistake or carelessness. Rather, they reflect gross negligence on the part of [defendant]-a flagrant disregard of its assumed duty, under the protective order, to preserve and monitor the condition of evidence which could be pivotal in a lawsuit. Such being the case, the district court reasonably concluded that [defendant's] misconduct was punishable with a directed verdict in favor of the plaintiffs. Id. at 224-25. In such cases, entering "[d]efault judgment or dismissal is appropriate [because] a lesser sanction under the circumstances would unfairly minimize the seriousness of the misconduct and fail sufficiently to deter such misconduct by others in the future." Grubb v. Bd. of Trustees of the Univ. of Illinois, 730 F. Supp. 2d 860, 864 (N.D. Ill. 2010) (citations omitted) (collecting cases). Under such circumstances, the Seventh Circuit has concluded that it is appropriate to impose the ultimate penalty against willfully disobedient parties: We recognize that dismissal is a harsh sanction, but the most severe in the spectrum of sanctions provided by statute or rule must be available not merely to penalize those whose conduct may be deemed to warrant such a sanction, but to deter those who might be tempted to such conduct in the absence of such a deterrent. Further, it is axiomatic that the appropriateness of lesser sanctions need not be explored if the circumstances justify imposition of the ultimate penalty-dismissal with prejudice. We have held that [even] incomplete or evasive responses to interrogatories can support, in part, dismissal of the entire action under Rule 37(b). Dotson v. Bravo, 321 F.3d 663, 667 (7th Cir. 2003) (internal quotations and citations omitted). 56 Case: 3:15-cv-00379-jdp Document #: 714-2 Filed: 12/07/16 Page 56 of 94 IV. DEFENDANTS' VARIOUS AFFIRMATIVE DEFENSES ARE WITHOUT MERIT. As discussed above, many of the Defendants in this case do not dispute that they offered for sale (and did sell) various products containing Plaintiffs' copyrighted works, and thus admit to liability. However, they also assert various affirmative defenses which they contend absolve them from liability. Each of these defenses are without merit and should be denied by the Court. A. Plaintiffs Have Standing To Pursue Their Copyright Claims. Defendant Scheels purports to challenge whether Plaintiffs own valid copyrights in the photos in this suit or have standing to pursue their claims, but its answer conspicuously did not include any factual allegations to support this alleged "defense." (Dkt. No. 111 at 24.) In any case, this "defense" is without merit. Under the Copyright Act, "Nile legal or beneficial owner of an exclusive right under a copyright is entitled, subject to the requirements of section 411, to institute an action for any infringement of that particular right committed while he or she is the owner of it." See 17 U.S.C. § 501(b). Plaintiffs are the legal owners of the copyrights in the photos and they have complied with the registration requirements of Section 411. (See Boehm Decl. II 9; Stluka Decl. ill 9.) The certificates of registration also confirm that Plaintiffs are the "authors" of all photos at issue and the only "claimants" for copyrights therein. (Boehm Decl. Ex. 2; Stluka Decl. Ex. 2.) These certificates provide prima facie evidence that Plaintiffs complied with the requirements of Section 411 and that their registered copyright claims are valid. See 17 U.S.C. § 410(c). Defendant Scheels has offered no basis for rebutting this presumption. Therefore, there is no genuine dispute that Plaintiffs own copyrights in the photos in suit and have standing to pursue their infringement claims. 57 Case: 3:15-cv-00379-jdp Document #: 714-2 Filed: 12/07/16 Page 57 of 94 B. License. Defendants Scheels and Svehla also assert "license" as an affirmative defense. (Dkt No. 11 at 24; Dkt. No. 88 at 48.) Because license is an affirmative defense, the burden is on the party asserting license to sufficiently establish that a license was granted. See Tasini v. New York Times Co., Inc., 206 F.3d 161, 171 (2d Cir. 2000) ("the burden is on the alleged infringer to prove the existence of the license."); Bourne v. Walt Disney Co., 68 F.3d 621, 631 (2d Cir. 1995) (where existence of license is in dispute, "it is sensible to place upon [the alleged licensee] the burden of coming forward with evidence of a license"). With respect to the photos that Plaintiffs seek summary judgment on, Defendant Scheels and Svehla have failed to meet their burden of proving license as a defense. These Defendants have produced no evidence to support this defense. In a letter to Plaintiffs' counsel, dated January 22, 2016, counsel for Scheels stated that it believed the Brett Favre photo (FAC Ex. 2, Row 3) was "licensed through Fanatics," its third-party supplier. (McCulloch Decl. Ex. 40.) However, Scheels has not produced any such license or any evidence that it obtained this photo from Fanatics. Getty Images also has confirmed that 56 licenses were issued to Scheels' canvas supplier, John Paul, but none of them involved Plaintiffs' photos. (See May 20, 2016 Decl. of Douglas Andersen, ¶ 1-3, Ex. 1 (McCulloch Decl. Ex. 73).) As for Svehla, who claims he obtained all of the infringing products from the Zimprichs, see supra, this Court has already found the Zimprichs to be willful infringers who Copied and distributed Plaintiffs' works without a valid license. See Boehm I, 68 F. Supp. 3d at 976-77 (finding that "the Zimpriches' licensing defense . . . can be disposed of easily."). And the Court also rejected the Zimprichs" license defense based on their settlement with Plaintiffs, calling the defense "frivolous." See Boehm v. Legends of the Field, LLC, et al., No. 15-cv-683, Dkt. No. 70 at 3 (W.D. Wis. May 10, 2016) ("LOTE). In light of these rulings, Svehla cannot plausibly claim 58 Case: 3:15-cv-00379-jdp Document #: 714-2 Filed: 12/07/16 Page 58 of 94 to have a valid license when the parties from whom he claims to have obtained all of Plaintiffs' photos have been held not to have a valid license. C. Failure to Mitigate. Defendants Scheels and AW allege as an affirmative defense that Plaintiffs failed to mitigate their damages. (Dkt. No. 111 at 25; Dkt. No. 247 at 9.) Again, Defendants pleaded no facts and produced no evidence in discovery to support this defense. (See id.; McCulloch Decl. 53.) Plaintiffs, therefore, are entitled to summary judgment on this defense. See Coleman v. Compton, No. 13-CV-765-JDP, 2016 WL 3190284, at *6 (W.D. Wis. June 7, 2016) ("If the nonmoving party fails to establish the existence of an essential element on which that party will bear the burden of proof at trial, summary judgment for the moving party is proper.") (citing Celotex Corp., 477 U.S. at 322). This defense also fails as a matter of law because there is no duty under law to inform an infringer of its own infringing conduct prior to filing suit. See, e.g., Petrella v. Metro-Goldwyn- Mayer, Inc., U.S. , 134 S. Ct. 1962, 1976 (2014) (holding copyright owners have no duty to inform infringer of claim or to file suit promptly); Broadcast Music, Inc. v. Niro 's Palace, Inc., 619 F. Supp. 958, 962 (N.D. III. 1985) (holding "[plaintiff] clearly did not have a duty to provide [defendant] with a list of copyrighted songs"). As this Court also already ruled in LOTF, a "failure to mitigate" defense does not apply in copyright cases and pleading this defense was "frivolous." LOTF, Dkt. No. 70 at 3. D. Waiver / Acquiescence / Estoppel. Defendants Scheels and AW also assert that equitable doctrines such as "waiver" and "estoppel" and "acquiescence" provide an affirmative defense. (Dkt. No. 111 at 25; Dkt. No. 247 at 9.) Yet again, Defendants' pleadings fail to allege any factual basis for the "laches, acquiescence, implied license, estoppel, and/or waiver" defenses, including any facts that would 59 Case: 3:15-cv-00379-jdp Document #: 714-2 Filed: 12/07/16 Page 59 of 94 explain how Plaintiffs supposedly acquiesced to the infringements in issue or supposedly waived the claims in suit. Nor have Defendants proffered any basis for their laches and estoppel claims. Because Defendants offered no facts or evidence to support these alleged defenses, summary judgment is warranted. These defenses also fail as a matter of law because laches and other similar equitable defenses "cannot be invoked to bar legal relief' in copyright suits brought within the limitations period established in the Copyright Act. Petrella, 134 S. Ct. at 1974-76. Because the discovery rule applies, see infra, Plaintiffs' claims did not accrue until discovery and thus Plaintiffs' suit falls within the limitations period and thus these equitable timing defenses cannot apply here. E. Implied License Defendant Scheels also asserts "implied license" as an affirmative defense. (Dia. No. 111 at 25.) Again, this is an outright frivolous allegation. To maintain an implied license defense, ScheeIs bears the burden to show that the elements of the defense were present, including that "(1) the licensee requests the creation of a work; (2) the licensor creates the work and delivers it to the licensee who asked for it; and (3) the licensor intends that the licensee copy and distribute the work." Kennedy v. Nat'l Juvenile Detention Ass 'n, 187 F.3d 690, 694 (7th Cir. 1999) (citing I.A.E., Inc., 74 F.3d at 776). Ultimately, the Defendant must show that there was "a 'meeting of the minds' between the parties to permit the particular usage at issue." Psihoyos v. Pearson Educ., Inc., 855 F. Supp. 2d 103, 124 (S.D.N.Y. 2012) (collecting cases). Defendant's Answer failed to include any allegations that show the requisite elements of an "implied license" were present, and Defendant failed to proffer any evidence of an implied license during discovery. (See Dkt. No. 111 at 25; McCulloch Decl. 1154.) Accordingly, Plaintiffs are entitled to summary judgment on this defense. 60 Case: 3:15-cv-00379-jdp Document #: 714-2 Filed: 12/07/16 Page 60 of 94 To the extent that Defendant intends to argue that Plaintiffs' supposed "silence" gave rise to an "implied license" to Defendant, this argument is easily dismissed. First, Plaintiffs were not silent but rather filed suit promptly after learning of Defendant's infringements. Second, even if they were silent, such "conduct" is insufficient to establish the existence of an implied license under the circumstances. See Flo & Eddie, Inc. v. Sirius XM Radio Inc., 80 F. Supp. 3d 535, 539 (S.D.N.Y. 2015) ("mere acquiescence is insufficient to establish an implied license"); see also Petrella, 134 S. Ct. at 1976 (holding that a copyright owner is free to "defer suit until she can estimate whether litigation is worth the candle."). F. Copyright Misuse. Defendant Scheels also asserts "copyright misuse" as an affirmative defense. (Dkt. No. 111 at 24.) In the Seventh Circuit, however, this defense applies only in the antitrust context. See Saturday Evening Post Co. v. Rumbleseat Press, Inc., 816 F.2d 1191, 1200 (7th Cir. 1991). Even assuming that this were a potentially relevant defense in this context, Scheels' pleading it in this case was patently frivolous. Contrary to the premise of this defense, Plaintiffs' copyrights do indeed grant them an exclusive monopoly over exploitation and copying of their copyrighted works. See Sony Corp. of Am, 464 U.S. at 433 (explaining that Copyright Act was intended to create a "limited monopoly" and "exclusive domain" for copyright owners). Defendant has not alleged any facts to support a facially plausible claim that Plaintiffs have misused their copyrights by bringing suit under these circumstances. G. Statute of Limitations. Defendants Scheels, Martin, Miller, AW, Winiecki, McVeigh, EUSA, and Thomason assert that Plaintiffs' claims are barred by the statute of limitations. (Dkt. No. 111 at 24; Dkt. No. 98 at 14; Dkt. No. 99 at 14; Dkt. No. 247 at 9; Dkt. No. 97 at 22; Dkt. No. 94 at 13; Dkt. No. 224 61 Case: 3:15-cv-00379-jdp Document #: 714-2 Filed: 12/07/16 Page 61 of 94 at 24.) Yet again, this defense is completely without merit and unsupported by facts or law. The Copyright Act provides for a three-year statute of limitations for civil claims for infringement. See 17 U.S.C. § 507(b). This Circuit-like every other Circuit in the country-has determined that the "discovery rule" applies in copyright cases and thus "the copyright statute of limitations starts to run when the plaintiff learns, or should as a reasonable person have learned, that the defendant was violating his rights." Gaiman v. McFarlane, 360 F.3d 644, 653 (7th Cir. 2004); accord Psihoyos v. John Wiley & Sons, Inc., 748 F.3d 120, 124 (2d Cir. 2014) ("We agree with our sister Circuits that the text and structure of the Copyright Act, unlike the FCRA, evince Congress's intent to employ the discovery rule, not the injury rule. Policy considerations also counsel in favor of the discovery rule in this context"); William A. Graham Co. v. Haughey, 568 F.3d 425, 432 (3d Cir. 2009); Roger Miller Music, Inc. v. Sony/ ATV Publishing, LLC, 477 F.3d 383 (6th Cir. 2007); Roley v. New World Pictures, 19 F.3d 479 (9th Cir. 1994). Defendants did not allege that Plaintiffs discovered, or reasonably should have discovered, the at-issue infringements more than three years prior to suit and discovery revealed no evidence to support such a claim. Plaintiffs thus are entitled to summary judgment on this defense. Even if these Defendants had shown that Plaintiffs were aware of these infringements in 2012 or earlier-which they have not done-this ignores that "the statute of limitations does not begin to run on a copyright claim involving a continuing series of infringements until the entire series is over and done with." Peterson v. Harley-Davidson, Inc., No. 12-CV-00381, 2012 WL 3113184, at *2 (E.D. Wis. July 31, 2012) (citing Taylor v. Meirick, 712 F.2d 1112, 1118-19 (7th Cir. 1983)). Accordingly, Plaintiffs would have three years from the time Defendant stopped selling or otherwise using Plaintiffs' copyrighted works, which the Defendants cannot demonstrate occurred more than three years prior to this lawsuit being filed. 62 Case: 3:15-cv-00379-jdp Document #: 714-2 Filed: 12/07/16 Page 62 of 94 EUSA's contention in its summary judgment motion (Dkt. No. 433 at 20) - which Defendants Martin and Miller expressly incorporated by reference in their motion (Dkt. No. 474 at 31-32) and Defendant AW also echoed (Dkt. No. 481 at 22) - that Petrella reversed the holding of Gaiman and requires imposing a strict three-year limitations period from the date of the infringing act is mistaken. As the Court in Petrella expressly noted, it was not opining on that issue. See 134 S. Ct. at 1969 n.4 ("Although we have not passed on the question, nine Courts of Appeals have adopted, as an alternative to the incident of injury rule, a "discovery rule," which starts the limitations period when "the plaintiff discovers, or with due diligence should have discovered, the injury that forms the basis for the claim."). Instead, the Petrella Court addressed only whether a copyright owner that was aware of infringements prior to limitations period but failed to file suit could recover damages for infringements more than three years prior to suit. Id. at 1972. But that issue is not presented here as Plaintiffs unquestionably were not aware of these infringements-and EUSA has presented no evidence that they should have been aware of these infringements-until they were discovered in 2015 and through discovery in this action. As multiple district courts in this Circuit already have held, Petrella does not constitute an intervening change in law and thus district courts in this Circuit are bound to apply the governing rule laid out by the Court of Appeals. See Design Basics LIE v. J& V Roberts Investments, Inc., 130 F. Supp. 3d 1266, 1282 (E.D. Wis. 2015) ("Until the Seventh Circuits holds otherwise, this Court concludes that the discovery rule is still the law of this circuit. Thus, the Court will apply the discovery rule to determine when the plaintiffs' claims accrued."); Frerck v. Pearson Educ., Inc., 63 F. Supp. 3d 882, 887 n.3 (N.D. 111. 2014) ("In Petrella, the Supreme Court explicitly said it was not passing on the question of the 'nine Courts of Appeals [who] have adopted, as an alternative to the incident of injury rule, a 'discovery rule,' which starts the limitations period when 63 Case: 3:15-cv-00379-jdp Document #: 714-2 Filed: 12/07/16 Page 63 of 94 `the plaintiff discovers, or with due diligence should have discovered, the injury that forms the basis for the claim.' Since the Court did not take up this issue-and because I am bound to follow Seventh Circuit precedent-I will continue to apply the discovery rule.") (quoting Petrella)). There also is no textual basis for imposing a strict three-year limit on damages and the legislative history of the Copyright Act does not support judicially imposing such a limitation. On the contrary, the text and history of the Copyright Act make clear that Congress intended to allow courts to limit damages only where there is an equitable basis for doing so based on the circumstances of the particular case. At a hearing held on January 30, 1955, the Principal Legal Adviser for the Copyright Office recommended that the committee should not enumerate all the considerations that would justify equitable tolling and instead employ language that would allow the courts more discretion to determine where equity required tolling. See Copyrights - Statute of Limitations: Hearing on H.R. 781 Before Subcomm. No. 3 of the H. Jud. Comm., 84th Cong., at 11-12, 16-17 (1955). The Advisor also urged the committee to explicitly indicate that the limitations period is "a limitation upon the remedy and not upon the right itself" Id. This is significant because, as the Copyright Office Advisor explained, "the distinction the courts have held is that where there is a limitation on the right at the end of the stated period the right ceases and no equitable considerations may be applied" and, conversely, "where [there] is a limitation on the remedy, the courts have held that the equitable considerations can be taken into account." Id. The respective committee reports include explicit statements demonstrating that both the House and Senate agreed with this suggestion and adopted the precise language suggested by the Copyright Office's Advisor. See S. Rep. No. 85-1014 at 3, 1957 U.S.C.C.A.N. 1961, 1963 (1957); see H.R. Rep. No. 85-150, at 2(1957). 64 Case: 3:15-cv-00379-jdp Document #: 714-2 Filed: 12/07/16 Page 64 of 94 This crucial aspect of the legislative history is cited in Petrel/a. See 134 S. Ct. at 1982 ("For one thing, the legislative history for § 507 shows that Congress chose not to 'specifically enumerat[e] certain equitable considerations which might be advanced in connection with civil copyright actions' because it understood that Ifjederal district courts, generally, recognize these equitable defenses anyway.') (quoting S. Rep. No. 1014, 85th Cong., 1st Sess., 2-3 (1957)). And based on this history, other courts addressing the question (both before and after Petrel/a) have correctly rejected the strict damages limitation recommended by these Defendants, particularly as a matter of law on a motion for summary judgment prior to a determination on liability and willfulness which are the crucial factors in any equitable analysis. See Frerck, 63 F. Supp. 3d at 887; Design Basics, 130 F. Supp. 3d at 1282 ("Since Petrel/a, district courts in the Seventh Circuit have continued to apply the discovery rule, and have specifically declined to adopt the defendants' line of reasoning. ... This Court agrees with the reasoning of its sister courts, and recognizes that it is bound by the controlling case law of the Seventh Circuit."); Panoramic Stock Images, Ltd v. McGraw-Hill Global Educ. Holdings, LLC, No. 12-cv-9881, 2015 WL 393381, at *2 (N.D. Ill. Jan. 27, 2015) ("The court agrees that Panoramic may pursue damages for all infringing activity that it first became aware of in October 2012, including infringements that ended in 2008."); Grant Heilman Photography, Inc. v. McGraw-Hill Global Educ. Holdings, LLC, No. 12-cv-2061, 2015 WL 1279502, at *20 (E.D. Pa. Mar. 20, 2015) (same); accord Polar Bear Productions, Inc. v. Timex Corp., 384 F.3d 700, 705-706 (9th Cir. 2004) (same); Taylor v. Meirick, 712 F.2d 1112, 1119 (7th Cir. 1983) (same). The strict damages approach endorsed by EUSA, Martin/Miller, and AW also must be rejected because it would have perverse and disastrous consequences. To bring an action for copyright infringement, a plaintiff must allege "which specific works are the subject of the 65 Case: 3:15-cv-00379-jdp Document #: 714-2 Filed: 12/07/16 Page 65 of 94 copyright claim" and "by what acts during what time defendant infringed the copyright." Arma v. Buyseasons, Inc., 591 F. Supp. 2d 637, 643-44 (S.D.N.Y. 2008). If it were not for the discovery rule, then copyright holders could not possibly vindicate their rights if copyright infringers are successful in concealing their misconduct long enough. As the facts in this case show, these Defendants obtained illegal copies of Plaintiffs' images years ago without any possible reason for Plaintiffs to have known or reasonably discovered about such infringements at the time. Because information regarding Defendants' infringements remained at all times in their sole possession or would have been difficult for Plaintiffs to have discovered without constantly monitoring every sports memorabilia website in the world at all times, Plaintiffs could not possibly have known sufficient information to bring an action to protect their copyrights. As this Court already has recognized, Plaintiffs cannot be expected to monitor the stores and website of even the defendants in this action, let alone every potential infringer in the world. (See Dkt. No. 107 at 3 (acknowledging "the potential for continued, but undetectable, infringement" and that "plaintiffs would have no way to detect" misconduct by Defendants) (emphasis added).) For this same reason, courts have recognized that claims involving infringements that are self-concealing also warrant an equitable tolling of the statute of limitations. See Grant Heilman Photography, 2015 WL 1279502, at *20 (holding that "an objectively reasonable copyright holder, who was dependent on [publisher defendant] for information, could not be charged with inquiry notice"); Caputo v. Pfizer, Inc., 267 F.3d 181, 189 (2d Cir. 2001) (holding an act that "is of such character as to conceal itself' tolls statute of limitations); Armstrong v. Virgin Records, Ltd., 91 F. Supp. 2d 628, 638 (S.D.N.Y. 2000) (applying discovery rule because it is only "through discovery that [copyright owners] presumably will learn about the defendants' distribution and licensing 66 Case: 3:15-cv-00379-jdp Document #: 714-2 Filed: 12/07/16 Page 66 of 94 activities"); Haughey, 568 F.3d at 437 ("UST would distinguish copyright infriugement, arguing that there is nothing intrinsically 'hidden' or 'latent' about copyright infringement because it is by its nature a public act that is only very rarely hidden from the copyright owner. That may be true in some instances but not in all. Technological advances such as personal computing and the Internet have made it more difficult for rights holders to stridently police and protect their copyrights." (citations and quotations omitted)); Zalewski v. T.P. Builders, No. 10 Civ. 0876, 2011 WL 3328549, at *7 (N.D.N.Y. Aug. 2, 2011) ("[T]he court shares the Third Circuit's concern that certain types of infringement may not constitute truly 'public acts' that are readily subject to detection."); State of N.Y v. Hendrickson Bros., 840 F.2d 1065, 1083 (2d Cir. 1988) (same) (citing Bailey v. Glover, 88 U.S. (21 Wall.) 342, 349 (1874)); Bethlehem Steel Corp. v. Fischbach & Moore, Inc., 641 F. Supp. 271, 274 (E.D. Pa. 1986) (statute of limitations tolled where "plaintiff lacks the opportunity to bring the claim because of its inability to discover it"). Given the nature of the very public infringements at issue in Petrella, the Court did not need to address whether those infringements would support tolling. But that is not the case here. Applying the holding of Petrella under these very different facts creates an absurd outcome that is inconsistent with the Supreme Court's very recent holding that "the law does not require" claimants to "live in a state of constant investigation." Gabelli v. S.E.C., U.S. , 133 S. Ct. 1216, 1222 (2013); accord Gaiman, 360 F.3d at 654 (rejecting "a duty of authors to read the copyright pages of works containing their copyrighted materials" and holding "accrual of the cause of action only if the victim reads it"); Design Basics, LLC v. Chelsea Lumber Co., 977 F. Supp. 2d 714, 725 (E.D. Mich. 2013) (same). H. Innocent Intent. Defendants Martin, Miller, AW, Winiecki, McVeigh, Event USA, and Thomason also assert "innocent intent" as an affirmative defense. (Did. Nos. 98 at 14; Dkt. No. 99 at 14; Dkt. No. 67 Case: 3:15-cv-00379-jdp Document #: 714-2 Filed: 12/07/16 Page 67 of 94 247 at 9; Dkt. No. 97 at 22; Dkt. No. 94 at 13; Dkt. No. 224 at 24.) Defendants' pleadings, however, do not include any factual basis for such a defense and no evidence of innocence was produced in discovery. In any event, even if supported by evidence, mistake and/or innocence is not a defense to copyright infringement. See Columbia Pictures Indus., Inc. v. Zakarian, No. 90 C 4057, 1991 WL 93889, at *4 (N.D. Ill. May 28, 1991) ("[A]lthough the statute provides a lesser sanction for innocent infringements, it clearly contemplates that such infringements are actionable. • . . Thus, [defendant's] attempt to assert a defense of innocence or honest mistake is unavailing on the issue of liability for copyright infringement.") (internal citations omitted) (collecting cases); accord Fitzgerald Publ'g v. Baylor Publ'g Co., 807 F.2d 1110, 1113 (2d Cir.1986) ("Even an innocent infringer is liable for infringement. Under § 501(a) intent or knowledge is not an element of infringement."). And as demonstrated herein, these same Defendants excluding Winiecki and McVeigh already are precluded from denying that their infringements are willful because they have admitted to being joint tortfeasor and "acting in concert" with the Zimprichs. As for Winiecki and McVeigh, the evidence that Winiecki received actual notice of his license restrictions from Getty Images is undeniable and thus the same reasons the Court found compelled a finding of willfulness against the Zimprichs supporting holding Winiecki's infringements to be willful. I. Fair Use Defendants Scheels, Svehla, AW, Winiecki, McVeigh, and Thomason assert that their infringing conduct at issue is protected under the Copyright Act as a "fair use." (DM. Nos. 111 at 24; Dkt. No. 88 at 48; Dkt. No. 247 at 9; Dkt. No. 97 at 22; Dkt. No. 224 at 25;.) In order to maintain a "fair use" defense to copyright infringement, Defendants must show that the "copyright law's goal of promoting the Progress of Science and useful Arts . . . would be better served by allowing the use than by preventing it." Neri v. Monroe, No. 11-CV-429-SLC, 2014 WL 793336, at *5 (W.D. Wis. Feb. 26, 2014), affd, 567 F. App'x 465 (7th Cir. 2014) (quoting Castle Rock 68 Case: 3:15-cv-00379-jdp Document #: 714-2 Filed: 12/07/16 Page 68 of 94 Entm't,Inc. v. Carol Pub! g Group, Inc., 150 F.3d 132, 141 (2nd Cir. 1998)). The Copyright Act in 17 U.S.C. § 107 set forth the following non-exclusive factors to use to determine fair use: (1) the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes; (2) the nature of the copyrighted work; (3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and (4) the effect of the use upon the potential market for or value of the copyrighted work. 17 U.S.C. § 107; Kienitz v. Sconnie Nation LLC, 965 F. Supp. 2d 1042, 1049 (W.D. Wis. 2013), affd, 766 F.3d 756 (7th Cir. 2014). Defendants' Answers failed to include any factual allegations supporting a finding that any of these factors are satisfied here, and Defendants failed to proffer any evidence of fair use during discovery. This alone supports granting Plaintiffs summary judgment on this defense. Coleman, 2016 WL 3190284, at *6. Not only is summary judgment on this defense required, but Defendants' asserting the defense was frivolous from the outset. There is no serious dispute that none of the factors are possibly met in this case. Courts routinely have held that commercial exploitation of copyrighted material - which is undoubtedly what Defendants did - is "strong indicia of no fair use." Marcus v. Rowley, 695 F.2d 1171, 1175 (9th Cir. 1983). Indeed, the Supreme Court has noted that fair use is presumed not to apply where the unauthorized use is commercial in nature. See Harper & Row Publishers, Inc. v. Nation Enters., 471 U.S. 539, 562 (1985). Because none of these Defendants allege that their use of the photos in suit was for purposes such as criticism, comrnent, news reporting, teaching, scholarship, or research, they cannot qualify for protection under Section 107. Furthermore, Defendants do not deny that they made purely commercial uses of the products in question. Under the circumstances, any claim of "fair use" is patently frivolous and lacks any basis under Rule 11 and should be summarily denied. 69 Case: 3:15-cv-00379-jdp Document #: 714-2 Filed: 12/07/16 Page 69 of 94 J. First Sale. Defendants Svehla, Winiecki, McVeigh, and Thomason also assert that their conduct at issue is protected under the "first sale doctrine." (Dkt. No. 88 at 48; Dkt. No. 97 at 22; Dkt. No. 224 at 25.) In order to prevail on a "first sale" defense, Defendants bear the burden to show that the prints and other memorabilia products at issue were "lawfully made" in the first instance. See 17 U.S.C. § 109(a); Microsoft Corp. v. Harmony Computers & Elecs., Inc., 846 F. Supp. 208, 212 (E.D.N.Y. 1994) ("In civil actions for copyright infringement, the defendant has the burden of proving that the particular pieces of the copyrighted work that he sold were lawfully made or acquired."). Where the initial copy was "pirated"-and thus not "lawfully made" by definition- the first sale doctrine does not apply. See, e.g., Kirtsaeng v. John Wiley & Sons, Inc., U.S. , 133 S. Ct. 1351, 1361(2013) (holding "first sale protection" applies only if "the copy was 'lawfully made' and not pirated"); United States v. Moore, 604 F.2d 1228, 1232 (9th Cir. 1979) ("A pirated [work] that is reproduced from the original ... without authorization is plainly not the subject of a first sale."). Because the Defendants concede that they received the products at issue on this Motion from either the Zimprichs or LOTF (or, in the case of Winiecki and McVeigh, they were downloaded from Getty Images under sham licenses), there can be no question that the products were not "lawfully made" in the first instance. These Defendants have proffered no evidence to show that either LOTF or the Zimprichs had any authority to make the products that these Defendants acquired and sold. As stated above, this Court has already found that the Zimprichs' and LOTF's conduct was infringing, and specifically that the practice of downloading "newspaper" licenses for purposes printing and selling commercial memorabilia products is illegal. See Boehm I, 68 F. Supp. 3d at 976-77. Because these Defendants have not and cannot prove that any of Plaintiffs' photographs at issue in this Motion were lawfully licensed or that any 70 Case: 3:15-cv-00379-jdp Document #: 714-2 Filed: 12/07/16 Page 70 of 94 of the products being sold were lawfully made, they are not entitled to any protection under the first sale doctrine. Defendants' contention that Plaintiffs' settlement agreements with the Boehm I defendants somehow transformed a prior infringing use into a legitimate "first sale" is unavailing. Neither of the settlement agreements granted a "retroactive license" to the Defendants, nor are such "licenses" valid under law in any event. See David v. Showtime/The Movie Channel, Inc., 697 F. Supp. 752, 764 (S.D.N.Y. 1988) ("recognition of the subsequent filing of an application for a 'retroactive' license as a defense for prior infringing conduct would eviscerate the protections inherent in the copyright scheme"); Leicester v. Warner Bros., No. CV95-4058-HLH, 1998 WL 34016724, at *6 (C.D. Cal. May 29, 1998) ("an infringement of [plaintiffs] copyright could not be later validated by the grant of the license"), aff'd, 232 F.3d 1212 (9th Cir. 2000); Schering Corp. v. Roussel- UCLAF SA, 104 F.3d 341, 345 (Fed. Cir. 1997) ("[T]he grant of a license by one co-owner cannot deprive the other co-owner of the right to sue for accrued damages for past infringement. That would require a release, not a license[.]"). I. Res Judicata. Defendant Wredberg asserts a defense of claim preclusion, or res judicata, in his answer to the amended complaint. (Dkt. No. 247 at ¶ 55.) The other Joint Tortfeasor Defendants have sought to add this defense and also moved for summary judgment on this basis. As already demonstrated in Plaintiffs' opposition to EUSA's first motion for summary judgment (see Dkt. No. 403) and as set even more fully on Plaintiffs' opposition to EUSA's second motion for summary, this defense is meritless. Plaintiffs hereby incorporate those arguments by reference as if stated herein. 71 Case: 3:15-cv-00379-jdp Document #: 714-2 Filed: 12/07/16 Page 71 of 94 Although the Joint Tortfeasor Defendants are bound by the preclusive effects of the Court's rulings on the issues of liability and willfulness in Boehm I, their argument that Plaintiffs' claims in this case are barred by the doctrine of res judicata, or claim preclusion, is mistaken. Because there was no damages trial in Boehm I, Plaintiffs' damages were not determined and thus there can be no preclusive effect from Boehm I with respect to damages. Plaintiffs thus are entitled to a trial on damages against Defendants to make that detelrmination. Defendants cannot avoid the claims against them in this separate action even if they are joint tortfeasors because it is settled federal law that res judicata does not preclude a copyright owner from bringing claims separately against joint tortfeasors. Defendants' claim preclusion defense has been "thoroughly repudiated" by both the United States Supreme Court and the Seventh Circuit. See, e.g., McDermott, Inc. v. AmClyde, 511 U.S. 202, 218 (1994) ("In the 19th and early 20th centuries, the 'one satisfaction rule' barred a plaintiff from litigating against one joint tortfeasor, if he had settled with and released another. This version of the one satisfaction rule has been thoroughly repudiated."); Temple v. Synthes Corp., Ltd, 498 U.S. 5, 7 (1990) (stating the general rule that joint tortfeasors are not necessary parties under Rule 19 and quoting Advisory Committee Notes to Rule 19(a) stating that "a tortfeasor with the usual 'joint-and-several' liability is merely a permissive party to an action against another with like liability"); Salton, Inc. v. Philips Domestic Appliances & Pers. Care B.V., 391 F.3d 871, 877 (7th Cir. 2004) ("[A] single litigation rule automatically deeming joint tortfeasors indispensable parties to suits against each of them would be inconsistent with this common law principle and is therefore rejected."); Edgenet, Inc. v. GS] AIBSL, No. 09-CV-65, 2010 WL 55843, at *4 (E.D. Wis. Jan. 5, 2010) ("The liability of potential joint tortfeasors is several, allowing one of a number ofjoint tortfeasors to be sued alone." (citing Pasco Int 1 (London) Ltd. v. Stenograph Corp., 637 F.2d 496, 503 (7th Cir. 1980)). 72 Case: 3:15-cv-00379-jdp Document #: 714-2 Filed: 12/07/16 Page 72 of 94 Even setting aside (1) that Plaintiffs' settlements were not (and not intended) to be full compensation for their entire injury and (2) that Plaintiffs did not receive full compensation in any event because the Zimprichs defaulted on their payment obligations-both of which are fatal to Defendants' contention that the single satisfaction rule applies-that still does not preclude Plaintiffs from asserting a subsequent claim against the other joint tortfeasors in this action. See Minix, 597 F.3d at 829 (citing RESTATEMENT (SECOND) OF JUDGMENTS § 49 (1982) ("A judgment against one person liable for a loss does not terminate a claim that the injured party may have against another person who may be liable therefor.") (emphasis added).) Instead, the prior judgment/release merely provides-at best-a claim for an "offset" requiring that Plaintiffs' damages award in this case be reduced by the amount that they were previously compensated. Id. (citing RESTATEMENT (SECOND) OF TORTS § 885(3) & cmt. e (1979) ("Compensation paid by one jointly and severally liable tortfeasor diminishes the plaintiffs claim against the remaining tortfeasors.") (emphasis added)). The fact that some Defendants may eventually be entitled to an offset based on the amount the Zimprichs and LOTF have paid is irrelevant in determining their liability at this stage. TMTV, Corp. v. Mass Prods., Inc., 645 F.3d 464, 472 (1st Cir. 2011) (holding that a settlement becomes an offset only "against later judgments if needed to avoid double recovery"). Under this controlling law, Defendants' res judicata defense must be rejected. To the extent that the Joint Tortfeasors Defendants assert defenses of release or even set- off under the "single satisfaction rule," Plaintiffs address those arguments fully in their opposition to EUSA's second motion for summary judgment. (See Opp. to EUSA Mtn. for Summary Judgment at Part IV (pages 17-43).) Those arguments also are incorporated herein by reference. 73 Case: 3:15-cv-00379-jdp Document #: 714-2 Filed: 12/07/16 Page 73 of 94 V. PLAINTIFFS ARE ENTITLED TO SUMMARY JUDGMENT ON THEIR CLAIM THAT THE INFRINGEMENTS WERE WILLFUL. A. Legal Standard For Finding An Infringement Is "Willful." Section 504 of the Copyright Act entitles a copyright owner to recover either of two categories of damages: "Statutory Damages" or "Actual Damages and Profits." 17 U.S.C. § 504. The copyright owner is not required to select which category of damages he is seeking at the outset of the case but instead may "elect" between these damages "any time before final judgment is rendered." 17 U.S.C. § 504(c)(1). To be entitled to seek statutory damages, a plaintiff must show that he registered his copyrights in the works at issue prior to the defendant's infringements. And where statutory damages are available, a finding that the defendant's infringements were "willful" allows the plaintiff to recover heightened statutory damage for each violation of a timely registered work. See 17 U.S.C. § 504(c)(2). Plaintiffs have pleaded claims for all copyright damages to preserve their right of election under Section 504. Plaintiffs do not need to elect their damages at this stage. Nevertheless, because willfulness is relevant to both categories of damages-requiring a limit of deductible expenses for actual damages and a heightened statutory maximum for statutory damages-Plaintiffs seek summary judgment on that issue. An infringement is willful "if the infringer knows that its conduct is an infringement or if the infringer has acted in reckless disregard of the copyright owner's right." Video Views, Inc. v. Studio 21, Ltd., 925 F.2d 1010, 1020 (7th Cir. 1991); Wildlife Exp. Corp., 18 F.3d at 511-12 (same); accord Fitzgerald Publ'g Co. v. Baylor Publ'g Co., 807 F.2d 1110, 1115 (2d Cir. 1986) (infringement is "willful" if the defendant acted "recklessly" or had "actual or constructive knowledge" that its actions constitute an infringement). Although "evidence that notice had been accorded to the alleged infringer before the specific acts found to have constituted infringement occurred is perhaps the most persuasive evidence of willfulness," Video Views, 925 F.2d at 1021, 74 Case: 3:15-cv-00379-jdp Document #: 714-2 Filed: 12/07/16 Page 74 of 94 actual notice of an infringement is not required to establish willfulness. Rather, "willful blindness counts as knowledge in copyright law, as in other areas." Boehm I, 68 F. Supp. at 978 (citing In re Aimster Copyright Litig., 334 F.3d at 650). Therefore, "[i]f Defendants avoided full knowledge concerning their infringement, they are willful infringers." Id. In Boehm I, the Court also concluded that all sports memorabilia dealers "who are after all in the business of selling reproductions of copyrighted works . . . are not entitled to stick their heads in the sand concerning rights to the works they reproduce and sell." Id. at 979. Therefore, according to the Court, sports memorabilia dealers who ignore indicia that the products that they are selling are counterfeit or who fail to take appropriate steps to ensure that all of their products are obtained from properly authorized dealers are willful infringers. Id As the Court re- emphasized in this case, "no defendant in the sports memorabilia business can credibly contend that it did not know that plaintiffs' photographs were protected by copyright. If defendants are willful infringers, their use of plaintiffs' photographs will be sufficient to show it." (Dkt. No. 367 at 2.) Accordingly, any defendant who committed an infringement did so with at least reckless disregard because any sports memorabilia dealer must know, or certainly should have known, that obtaining prints and canvases from any dealer who is not authorized to sell such products is a violation of the law. See Chi-Boy Music v. Charlie Club, Inc., 930 F.2d 1224, 1228 (7th Cir. 1991), (affirming finding of willfulness where trial court "simply did not believe that an experienced businessman ... would not suspect" that appropriate licensing was required). A defendant's habit of committing infringements (even if the infringements do not involve the plaintiffs works) also is a central factor in determining willfulness. See Chi-Boy Music, 930 F.2d at 1228 ("Evidence of past reluctance by an infringer to pay copyright fees certainly is relevant in assessing his present infringements."); Int I Korwin Corp. v. Kowalczyk, 855 F.2d 375, 75 Case: 3:15-cv-00379-jdp Document #: 714-2 Filed: 12/07/16 Page 75 of 94 381 (7th Cir. 1988) ("In relying on this pattern of conduct as evidence of the defendant's willfulness, the district court was following the approach of other district courts that have considered such evidence as relevant on the issue of willfulness."); Flyte Tyme Tunes v. Miszkiewicz, 715 F. Supp. 919, 921 (E.D. Wis. 1989) (same); see also Superior Form Builders v. Chase Taxidermy Supply Co., 74 F.3d 488, 496 (4th Cir.), cert. denied, 519 U.S. 809 (1996) (holding willfulness inquiry is not limited to infringements at issue but also involves "any evidence that the defendants have a history of copyright infringement [and] any evidence that the defendants are apparently impervious to either deterrence or rehabilitation"); Stevens v. Aeonian Press, Inc., No. 00 CIV. 6330, 2002 WL 31387224, at *3 (S.D.N.Y. Oct. 23, 2002) (upholding jury determination of willfulness based on "evidence at trial showed that Defendants have made a habit of reprinting works without permission from the copyright owners" including evidence of infringement of works owned by non-parties "as well as records of other lawsuits filed against Defendants for similar activities, and a settlement entered into with respect to one such action"); Lauratex Textile Corp. v. Allton Knitting Mills Inc., 519 F. Supp. 730, 733 (S.D.N.Y. 1981) ("Although no specific proof has been presented to show that Levine knew of the plaintiff's copyright, it is clear that, at the very least, he acted with a reckless disregard for the rights the plaintiff had in the design. In addition, the plaintiff presented at trial docket sheets in six copyright infringement cases brought within the last three years against Levine. Four of these cases have been settled. This provides one more indication that the business of encroaching upon others' copyrights is not unfamiliar to the defendant. For these reasons, the defendant appears to have infringed plaintiff's copyright willfully."). Several courts have even suggested that evidence that the defendant engaged "in a regular and uniform practice of infringing copyrights" demonstrates the sort of "conduct necessary to 76 Case: 3:15-cv-00379-jdp Document #: 714-2 Filed: 12/07/16 Page 76 of 94 permit the inference of habit" which places the burden on the defendant to rebut that the pattern of misconduct demonstrates willfulness. Loussier v. Universal Music Group, Inc., No. 02-2447, 2005 WL 5644420, at *3 (S.D.N.Y. Aug. 30, 2005) (emphasis added); accord Canopy Music Inc. v. Harbor Cities Broad, Inc., 950 F. Supp. 913, 917 (E.D. Wis. 1997) (noting that plaintiffs "offered evidence [of] ten separate infringements" in a single day and defendant "has done nothing to show that these flagrant violations of copyright law were somehow limited to that one discrete day"). Because all Defendants ignored warning signs that the products in question were infringing and/or came from suppliers who could not possibly be officially licensed by the various sports leagues for which they were producing prints and canvases; failed to take appropriate affirmative steps to confirm the products they were selling were legitimate; failed to comply with their obligations under Wisconsin law to ensure the products they were selling were not infringing; engaged in a pattern and practice of infringement; and continued to violate the law even after the filing of this lawsuit, all Defendants should be found to be willful infringers. B. The Evidence Supports Granting Plaintiffs Summary Judgment On The Issue Of Willfulness. 1. Defendants Are Experienced Merchants Charged With Knowing The Law. There is no question that Defendants' infringements are willful. Defendants are in the sports memorabilia business and thus it is a basic aspect of their daily business operations to buy and sell prints, canvases, and other sports memorabilia products that include the intellectual property of others. Defendants operate both brick-and-mortar retail stores as well their own websites, and certain Defendants also sell their products through eBay and Amazon. Given the nature of this business, it is not credible that Defendants would not be aware that the products they purchase, display, and sell must be properly licensed or purchased from a vendor authorized by the sports leagues and teams whose intellectual property is featured in the works. See, e.g., Scheels, 77 Case: 3:15-cv-00379-jdp Document #: 714-2 Filed: 12/07/16 Page 77 of 94 Dkt. No. 367 at 2 (holding that "no defendant in the sports memorabilia business can credibly contend that it did not know that plaintiffs' photographs were protected by copyright"); Boehm I, 68 F. Supp. 3d at 979 (same); accord Fitzgerald Publ 'g Co., 807 F.2d at 1115-17 (holding that parties who are "experienced" in dealing with copyrighted works "should have known" or "must have realized" that copying and publishing photos without a license is an infringement of copyright is sufficient to establish willfulness.); Fallaci v. New Gazette Literary Corp., 568 F. Supp. 1172, 1173 (S.D.N.Y. 1983) (holding that "as the publisher of a copyrighted newspaper, the defendant was or should have been aware that its unauthorized republication of [another paper's] article constituted copyright infringement"). Thus, even if Defendants could demonstrate that they did not have actual knowledge of the specific infringements committed by their suppliers-which is not a plausible claim, see infra-they still are charged either with constructive knowledge based on the fact that this was not a legitimate supplier who had the rights to create such products or with reckless disregard for failing to properly inquire. Video Views, 925 F.2d at 1020. As this Court has made clear, sports memorabilia dealers "are not entitled to sti: their heads in the sand concerning rights to the works they reproduce and sell." Boehm I, 68 F. Supp. 3d at 979; see also Video Views, 925 F.2d at 1021 ("[O]ne who undertakes a course of infringing conduct may neither sneer in the face of the copyright owner nor hide its head in the sand like an ostrich."). As experienced merchants, Defendants are held to a higher standard and their violations of copyright laws cannot be excused as mere ineptitude or innocent oversights. See Columbia Pictures, 259 F.3d at 1195 (upholding finding of willfulness where "[defendant] was an experienced businessman who understood the nature of [plaintiffs] claims"); Fitzgerald Publ'g, 807 F.2d at 1115 (finding willfulness where "as an experienced publisher [defendant] must have realized" that its conduct was infringing); Bryant v. Media Rights Prods., Inc., 603 F.3d 135, 143 78 Case: 3:15-cv-00379-jdp Document #: 714-2 Filed: 12/07/16 Page 78 of 94 (2d Cir. 2010) (finding non-willfulness because "[defendant] did not have experience marketing music owned by a third party"); Cable/Home Comm. Corp. v. Network Prods., Inc., 902 F.2d 829, 851 (11th Cir. 1990) ("Given . . . [defendant's] touted knowledge of the satellite programming industry, any assertions that he did not know that the CMS program of the U-30 chip was copyrighted are not credible."). 2. Defendants Failed To Properly Verify The Authenticity Of Goods Or Even To Properly Inquire Into The Provenance Of Their Inventory Despite Industry-Wide Notices And "Storm Warnings" Of Counterfeiting. Defendants' claims of ignorance also are not credible given the sheer scale and severity of counterfeiting that plagues the sports memorabilia industry. Although addressed most often in the context of determining when the statute of limitations begins, federal courts recognize that there may be an equitable basis for imposing a duty to investigate and even charging a party with knowledge of wrongful conduct by another where the party had "sufficient information of possible wrongdoing to place them on 'inquiry notice' or to excite 'storm warnings' of culpable activity." Benak ex rel. All. Premier Growth Fund v. All. Capital Mgmt. L.P., 435 F.3d 396, 400 (3d Cir. 2006) (internal citation omitted). Although courts in this Circuit have not addressed this duty in the specific context at issue here, numerous other courts have done so and expressly held with respect to the sale of artworks specifically that "where there are warning signs about problems in a sale,' merchants have 'an added duty of inquiry." Joseph P. Carroll Ltd v. Baker, 889 F. Supp. 2d 593, 604 (S.D.N.Y. 2012) (Quoting Brown v. Mitchell-Innes, No. 06 Civ. 7871, 2009 WL 1108526, at *7 (S.D.N.Y. April 24, 2009); accord J. Geils Band Employee Ben. Plan v. Smith Barney Shearson, Inc., 76 F.3d 1245, 1260 (1st Cir. 1996). In determining whether "storm warnings" exist that would impose this heightened duty of inquiry, courts may consider publicly available information and presume the merchant is familiar 79 Case: 3:15-cv-00379-jdp Document #: 714-2 Filed: 12/07/16 Page 79 of 94 with that information. See e.g., In re Initial Public Offering Sec. Litig., 341 F.Supp.2d ns, 345 (S.D.N.Y. 2004) ("A plaintiff in a securities fraud case 'is charged with knowledge of publicly available news articles and analyst's reports to the extent that they constitute storm warnings sufficient to trigger inquiry notice.") (citation omitted). Where there are such warnings in an industry, a merchant has a duty of inquiry that is "defined by reasonable commercial standards of the . . . business" and requires that the "forms of inquiry" undertaken be judged against what "experienced participants in that business would consider appropriate in response to the red flags at issue." Davis v. Carroll, 937 F. Supp. 2d 390, 426 (S.D.N.Y. 2013) (holding that "heightened duty" of inquiry exits). Here, there can be no dispute that more than enough "storm warnings" existed to put all Defendants on notice that they were obliged to take heightened precautions to ensure they were purchasing legitimate products from authorized retailers. It is widely known and a matter of public record that counterfeiting in the sports memorabilia market is rampant. For instance, according to reports from Federal law enforcement departments, over the last several years the number of counterfeit sports memorabilia items seized by law enforcement officials rose from 46,692 items worth $4.8 million in 2012, to 362,147 items worth 19.5 million in 2015, to 450,000 items worth $35 million in 2016, and these figures are from Super Bowl related goods alone. (See McCulloch Decl. Exs. 8-10.) The problem of counterfeit goods is so pervasive in this market that all of the Defendants in this case, as members of the sport memorabilia community, either were or should have been very well aware of it. Even more specifically, numerous news articles in the Wisconsin press demonstrate that Defendants in this case are aware of this problem in the industry. For instance, Defendant Winiecki was quoted in an article from 2004 noting that around $1 billion dollars of fake autographed sports 80 Case: 3:15-cv-00379-jdp Document #: 714-2 Filed: 12/07/16 Page 80 of 94 and celebrity memorabilia are sold each year, that he could tell just by looking at goods whether or not they were fake, and that the best way to determine whether something is counterfeit is "[s]imply the price." (Id. Ex. 29 at 43.) This is ironic, of course, given that just two years later Winiecki created an account with Getty Images so that he could purchase photos under sham "newspaper" licenses so he could get the photos at a cheaper price. Local newspaper reports also show that Defendant Thomason-who was Brett Favre's business partner until very recently (and perhaps because of this lawuit)-also is well aware of this issue given that he repeatedly has contacted law enforcement officials, including the Wisconsin Department of Justice, to report sports memorabilia dealers who were selling counterfeit Brett Favre memorabilia. (McCulloch Decl. Ex. 89.) According to one article, Thomason claimed in 2008 that: "I take a strong stance to prevent fraudulent items from entering the market place." (Id.) That the Defendants were well aware of counterfeiting problems in their industry also is evident from the fact that they actively responded to these industry-wide concerns by making a concerted effort to assuage consumers by providing guarantees of authenticity. The websites and eBay stores for Defendants Event USA, Thomason, Scheels, Gonnering, and Sports-4-Less all specifically make claims in one way or another that the goods they are selling are "authentic." (See McCulloch Decl. Exs. 11-16.) Gonnering and Sport-4-Less even make it a point to identify which of their products are "Officially Licensed." (Id. Exs. 78-79.) If these Defendants were as blind to the industry's concerns regarding counterfeiting as they claim to be, there is absolutely no reason to make these guarantees that their products are legitimate and authentic. Despite these industry-wide concerns and notwithstanding their own assurances to the public, none of the Defendants took any reasonable steps to verify that their suppliers were 81 Case: 3:15-cv-00379-jdp Document #: 714-2 Filed: 12/07/16 Page 81 of 94 officially licensed retailers or that the prints, canvases, and other products that they purchased were authentic. According to Defendant Svehla, "when [he] first began buying sports memorabilia from [Dan] Zimprich, Svehla asked [him] to confirm that the merchandise he was selling was properly licensed and free from any concern. Zimprich assured Svehla at the time that everything he sold was licensed, stating 'You have no worries.' (McCulloch Decl. Ex. 88 at 4-5, ¶ 7.) Similarly, EUSA's owner/president testified that "at one point" he asked Defendant Thomason if he "should be worried" about the legitimacy of the products he purchased, but admitted that even after this lawsuit he still continues to sell products from the Zimprichs, LOTF, and Thomason that have no proof of authenticity. (See Garrity Dep. at 144:5-13.) According to Garrity, he and Thomason "had general discussions that inspired [Garrity's] confidence that whatever [Thomason] sold [him] was legitimate." (Id. at 143:18-19.) In light of these background facts, Defendants' claim of "innocence" based on the fact that they simply trusted other dealers in the industry without making any further inquiry into the legitimacy of the products being bought and sold amounts to willful blindness under the law. See, e.g., Bosco v. Serhant, 836 F.2d 271, 276 (7th Cir. 1987) (holding defendant's infringements were willful based defendant's "deliberately clos[ing] its eyes so that it would not discover what it strongly suspected was going on"); Screen Gems-Columbia Music, Inc. v. Mark-Fi Records, Inc., 256 F. Supp. 399 (S.D.N.Y. 1966) (finding that the sale of albums for a price suspiciously below market value was sufficient to allow a reasonable trier of fact to conclude the defendant had constructive knowledge of the seller's infringing activities and noting that 101 the defendants, of course, had it within their power to require the advertiser to present proof of the authenticity of the product"). Given these indisputable background and contextual facts regarding this industry, the Court abs may conclude that any Defendant claiming ignorance of these warnings and explicit 82 Case: 3:15-cv-00379-jdp Document #: 714-2 Filed: 12/07/16 Page 82 of 94 notices is being disingenuous. See T. W. Elec. Serv., Inc. v. Pac. Elec. Contractors Ass 'n, 809 F.2d 626, 631 (9th Cir. 1987) (holding that although courts typically cannot consider witness credibility on summary judgment, courts may consider any "undisputed background or contextual facts" and draw reasonable inferences from such information). 3. Defendants Had Notice And Knowledge That They Were Required To Purchase Goods Only From Officially Licensed Dealers. Defendants' contention that they were merely naïve, ordinary customers who were duped into buying illegitimate goods by unscrupulous merchants strains belief Even if Defendants were not aware of the problems plaguing their industry-which is not credible-there can be no doubt that they were put on actual notice of the need to obtain products from officially licensed dealers given that their entire business involved buying and selling goods from sports leagues (e.g., NFL), teams (e.g., the Packers), and photo licensing companies (e.g., Photo File, Getty Images, etc.) that all have explicit and prominent notices on this point. (See McCulloch Decl. Exs. 23-27.) For instance, every one of the retail Defendants' stores are filled with prints and other inventory purchased from Photo File that include an explicit notice stating: Photo File, Inc. is a licensee of each entity designated [above/below]. Reproduction of the enclosed photograph in any form is strictly prohibited by Federal and State Law. Violators will be prosecuted. (McCulloch Decl. Ex. 26.) And any Defendant that visited the website for Getty Images to review or purchase images-including Defendants Winiecki and EUSA-was required to agree to Getty Images' terms and conditions that specifically preclude unauthorized use of photos and are explicit that a photograph may not be used for commercial use without a commercial-use license being purchased. (Id. Ex. 3.) In addition to the obligations imposed on Defendants under copyright law as retail merchants dealing in artworks owned by others, the U.C.C. and Wisconsin law also impose on 83 Case: 3:15-cv-00379-jdp Document #: 714-2 Filed: 12/07/16 Page 83 of 94 Defendants the "duty to see that no claim of infringement of a patent or trademark by a third party will mar the buyer's title." Wis. Stat. § 402.312(3), Cmt. 3. Ironically, certain Defendants contend that their infringements cannot be willful because they were entitled to rely on this implied warranty from the vendors from whom they purchased the counterfeit goods. This argument is seriously misplaced. Even if it could be believed that Defendants had no actual knowledge that the photographs and finished products that they purchased were "marred" by any claims of infringement, there is no serious doubt that Defendants knew that only officially licensed retailers can create prints featuring photos of NFL, NBA, NHL, MLB, and NCAA players and teams and that LOTF, the Zimprichs, and Winiecki were not officially licensed by these leagues. There is no evidence in the record that any Defendant had any possible basis, let alone a reasonable one, for such a belief. Defendants, therefore, cannot find any refuge in an implied warranty from a vendor that they know is not authorized to deal in such goods. Not to belabor the point too much, but once again, any claim by Defendants that they can rely on this implied warranty because they supposedly believed in good faith that the photos and prints that they were purchasing and reselling were legitimate is discredited by the well-known fact that the sports memorabilia market is plagued by rampant counterfeiting and thus Defendants had a heightened duty under the law to be certain that they were dealing with officially licensed dealers. As the Court previously noted, it is obvious that, in addition to Plaintiffs' copyright interest in the photographs themselves, the photographs being bought and sold by Defendants involve the trademarks, logos, colors, and other intellectual property of the various sports organizations and teams depicted. It is for that reason that only officially licensed companies are authorized to create prints and canvases and other commercial products featuring these photographs. Such "officially licensed" dealers pay premium licensing rights to be an authorized 84 Case: 3:15-cv-00379-jdp Document #: 714-2 Filed: 12/07/16 Page 84 of 94 dealer-a fact that EUSA is keenly aware of given that it has paid substantial sums to be able to claim that it is the "official ticket package company" for the Green Bay Packers (as well as many other teams). (See Garrity Dep. at 122:22-123:8.) In an effort to discourage counterfeiting, professional and college sports organizations and teams require that their officially licensed and authorized commercial dealers print official logos and markings on the products. (See Boehm Dec1.1112, Ex. 3.) In order to protect their licensing rights and distribution market-and to be able to assure customers that the products they are buying are not counterfeit-authorized memorabilia dealers also include their own official logos and marks on their products, as well as a unique identifying number that allows the legitimacy of the product to be verified. (Id. ¶¶ 12-14, Exs. 3-5.) Examples of such security features are set forth here: Defendants are well aware of these authenticity features given that their stores are filled with products from these authorized retailers, and each of those prints includes an explicit notice and warning advising customers of the law. (McCulloch Decl. Exs. 12-15.) It is inconceivable that the Defendants not only somehow missed all of the warning signs at the industry-wide level but also were blissfully unaware of the explicit notices that are posted on products throughout their own stores. Such notices, which are pervasive in every sports memorabilia store and website and cannot seriously be denied, precludes any claim that 85 Case: 3:15-cv-00379-jdp Document #: 714-2 Filed: 12/07/16 Page 85 of 94 86 Defendants were not on notice that they were required to purchase products from officially authorized dealers and that any other vendor was selling counterfeit goods. See, e.g., Broad Music, Inc. v. CDZ, Inc., 724 F. Supp. 2d 930, 938-39 (C.D. Ill. 2010) ("There is evidence in the record that Defendants did, at certain times, make inquiries to BMI regarding the license they were sent to sign, and that Defendants held a license with ASCAP at some point. Such things show that Defendants were certainly on notice of their need to obtain a license to prevent copyright infringement at their establishment."). 4. Defendants Continued To Publish, Display, And Sell Products From Boehm IDefendants Despite Knowledge Of Plaintiffs' Infringement Claims. Any suggestion by Defendants that they sincerely believed that the Zimprichs or LOTF were authorized by the NFL, NBA, NHL, and UW to create prints and posters and canvases is not credible. Nor is the claim that the Defendaie not laintiffs' prior lawsuit given that the Wisconsin sport memorabilia market is a relatively small and closallnitsommunity. (See C. Zimprich pEp. at 199:16-18; 234:21 ("I'm sure they knew [about Boehm I]"); id.`at 235:5- 236:6; 26Q:19-20 ("Again, it's a small community. Everybody knows of each other.").) I fact, Ciara imprich repeatedly testified that all Defendants were aware of the claims in Boehm 10'er a ye r prior to Plaintiffs bringing their claims in this case, during which time there is no evidenc tha any Defendants took any steps to either remove from their stores the products they had pu chased from the Boehm I defendants or even inquired into the authenticity of the pro ucts. (See C. Zimprich Dep. Trans. at 234:21 ("I'm sure [Defendants Miller and Svehla] Bo m I] before [the quarantine order]."); Id. at 218:13-15 ("Everybody that we sol of the [ oehm I] litigation as soon as that quarantine order went into place in February of 4."); id. at 235: 6-19 ("Jerry Miller, Scott [Svehla], David [Thomason] just as a friend w.. d have known that we h.Ø an inspection just before Thanksgiving [2014] because it wan an ideal time.").) Case: 3:15-cv-00379-jdp Document #: 714-2 Filed: 12/07/16 Page 86 of 94 It also is not credible that Defendants were not aware of Plaintiffs' prior lawsuit in Boehm I given that the filings were a matter of public record and Plaintiffs asserted claims against five prominent retailers-0) the Zimprichs; (ii) LOTF; (iii) Sports Plus; (iv) the Clearys; and (v) Moncher-who had stores spread across Wisconsin, including Madison, Milwaukee, Brookfield, Green Bay, Mequon, Greenfield, Delafield, Greendale, and Glendale. In fact, many of the Defendants in this case have stores in the very same shopping malls as the Boehm I defendants. (See C. Zimprich Dep. at 206:5-8 (testifying that Svehla owned a Scott's Brewery Collectible store in the same mall as the Zimprichs); id at 113:10-14 (testifying that Zimprichs were in business with Waukesha Sportscards).) As major vendors in such a relatively small market and business community, it is not plausible that Defendants were unaware that the Zimprichs and LOTF had been sued for copyright infringement. Nevertheless, there is no evidence in the record that any Defendant took any steps to remove products from those vendors at any point during 2013-2014, as evidenced by the fact that Plaintiffs uncovered ongoing infringements by Event USA, Svehla, Martin, Gonnering, Gameday Sports, and others well into 2015 after Boehm I was closed. (See FAC Exs. 2-9; Boehm Decl. Exs. 14-16.) Moreover, for the Joint Tortfeasor Defendants, who seek to claim benefits under the settlement agreement as intended beneficiaries, they are also bound by the duties and obligations of that agreement, particularly given that they now claim the agreement was negotiated on their behalf by a party with which they claim to be in privity. See Wolf v. Fed Republic of Germany, No. 93 C 7499, 1995 WL 263471, at *15 (N.D. Ill. May 1, 1995) ("A third-party beneficiary takes the contract as the original parties made it, and is bound by all of its provisions."), af fd, 95 F.3d 536 (7th Cir. 1996); Jones v. Poole, 579 N.W.2d 739, 741 (Wis. Ct. App. 1998) ("When a right 87 Case: 3:15-cv-00379-jdp Document #: 714-2 Filed: 12/07/16 Page 87 of 94 has been created by a contract, the third party claiming the benefit of the contract takes the right subject to all the terms and conditions of the contract creating the right."); accord Trans-Bay Eng 'rs & Builders, Inc. v. Hills, 551 F.2d 370, 378 (D.C. Cir. 1976) ("The [third-party] beneficiary cannot accept the benefits and avoid the burdens on limitations of a contract."). Thus, any post- settlement use of Plaintiffs' photos is both a violation of the agreements' terms and conditions as well as a willful infringement for which they are now jointly liable. See Salton, 391 F.3d at 877; Stifle v. Marathon Petroleum Co., 876 F.2d 552, 556 (7th Cir. 1989). 5. Defendants' Willfulness Can Be Inferred From Their Broader Pattern Of Infringement And Blatant Continuing Violations Of Copyright Law. If there was any doubt that the Defendants operate on a "catch-me-if-you-can" mentality and have in fact "stuck their heads in the sand concerning rights to the works they reproduce and sell" that was dispelled immediately in this case when Plaintiffs inspected the Defendants' premises and confirmed that nearly every Defendant continues to display and offer for sale hundreds of canvases, prints, and other products obtained from the Zimprichs and LOTF, including hundreds of products which do not include any official logos, markings, or stickers indicating that they were obtained from legitimate, authorized dealers: • Plaintiffs' inspection of the Cleary's Gameday Sports store located in the Bay Park Square Mall in Green Bay, WI on November 10, 2015 uncovered many hundreds of unauthorized and counterfeit products. (Boehm Decl. If 18.) • Plaintiffs' inspection of Martin's Sports-4-Less store located in McHenry, Illinois likewise revealed that Martin also is continuing to sell counterfeit canvases and other products that do not include any indicia of being legitimately licensed. (Boehm Decl. 13, Ex. 4.) • Plaintiffs' inspection conducted on February 22-23,2016 of defendant Svehla's various Scott's Brewery Collectibles stores located in shopping malls throughout Wisconsin and Illinois revealed that Svehla also is continuing to sell several hundred canvases and other products that do not include any indicia of being legitimately licensed. (Boehm Decl. ¶ 14; Ex. 5.) 88 Case: 3:15-cv-00379-jdp Document #: 714-2 Filed: 12/07/16 Page 88 of 94 • Garrity admitted during his deposition that Event USA continues to this day to sell products in its store and on its website that were obtained from Thomason, without having made any reasonable effort to verify the authenticity of these products. See (Garrity Dep. at 144:5-145:4.) Although Plaintiffs may not have a claim against these Defendants for continuing to sell counterfeit goods that do not involve Plaintiffs' photos, this is a clear violation of Defendants' duty under Wisconsin law to warrant and ensure that their products are not infringing or counterfeit. See Wis. Stat. 402.312(3). Defendants' continued sale of counterfeit goods also is a clear violation of Wisconsin's consumer protection laws. Wis. Stat. § 100.18(1). And it obviously is a violation of the copyrights of the photographers who do own the rights to those other photographs, which is why Defendants Svehla, Miller, and Martin are presently being sued by another photographer based on their continued sale of an Aaron Rodgers photo that these Defendants know was illegally obtained. See Robbins, Case No. 16-cv-532 (W.D. Wis.). The fact that these Defendants continued to sell goods featuring unauthorized copies of illegally-acquired photos even after this lawsuit is astonishing and demonstrates a flagrant disregard for the law that leaves no doubt that a finding of willfulness is supported and required in this case. See Chi-Boy Music, 930 F.2d at 1228; Intl Konvin Corp., 855 F.2d at 381 ("In relying on this pattern of conduct as evidence of the defendant's willfulness, the district court was following the approach of other district courts that have considered such evidence as relevant on the issue of willfulness."); Canopy Music Inc., 950 F. Supp. at 917 (noting that plaintiffs "offered evidence [of] ten separate infringements" in a single day and defendant "has done nothing to show that these flagrant violations of copyright law were somehow limited to that one discrete day"); Flyte Tyme Tunes, 715 F.Supp. at 921 (same); N.A.S. Import Corp. v. Chenson Enter., Inc., 968 F.2d 250, 252 (2d Cir. 1992) (willfulness in the copyright context "need not be proven directly" 89 Case: 3:15-cv-00379-jdp Document #: 714-2 Filed: 12/07/16 Page 89 of 94 but may be inferred from the defendant's broader misconduct or incidents of similar misconduct); U.S. Media Corp. v. Edde Entm 't Corp., No. 94-4849, 1998 WL 401532, at *18 (S.D.N.Y. July 17, 1998) (finding willful infringement based on defendant's "mode of operation" which was established by evidence of prior infringements involving works not in suit). 6. Other Evidence of Willfulness. Event USA The record already confirms that (i) EUSA directed LOTF to obtain digital photos on its behalf; (ii) LOTF obtained these photos from Getty Images and then sold the digital files to EUSA; and (iii) EUSA engaged Ileyrman to print thousands of copies of these photos. In his deposition, Dennis Garrity also acknowledged that he personally visited Getty Images' website in order to select the photographs that he wanted to acquire through LOTF, including certain of Plaintiffs' photos. (Garrity Dep. at 97:2-98:13.) And the photos that Garrity copied from Getty Images' had watermarks prominently stamped across them. And as discussed above, all of the photos downloaded by LOTF on behalf of EUSA were accompanied by a host of warnings and notices of the restrictions on commercial uses. In Boehm I, the Court held that, given such explicit warnings and notice from Getty Images, there could be no possible dispute that the Zimprichs were-or certainly should have been-on notice that commercial uses of Plaintiffs' photos obtained under "Editorial - Newspaper" licenses were not permitted, and thus the Zimprichs' infringements were willful. See Boehm 1, 68 F. Supp. 3d at 978-79. The same conclusion absolutely applies to LOTF' s infringements, for which EUSA now concedes it is jointly liable. Moreover, because Garrity acknowledged that he personally visited Getty Images' website in order to select the photographs that he wanted LOTF to acquire on his behalf (Garrity Dep. at 97:2-98:13), he is legally charged with notice and acceptance of these restrictions which are 90 Case: 3:15-cv-00379-jdp Document #: 714-2 Filed: 12/07/16 Page 90 of 94 conspicuously posted on Getty Images' website, whether or not he actually read the terms. See, e.g., E.K.D. ex rel. Dawes v. Facebook, Inc., 885 F. Supp. 2d 894, 901-02 (S.D. Ill. 2012) ("Whether or not Plaintiffs actually read Facebook's [terms of service] is irrelevant, of course, to the matter of the conspicuousness of the [terms] and thus Plaintiffs' constructive knowledge of the [terms], and Plaintiffs are bound by Facebook's [terms] whether Plaintiffs read them or not."). This evidence is conclusive that Garrity had constructive, if not actual knowledge of the restrictions on any right to use photos from Getty Images. And because Garrity undoubtedly was acting as an agent of Event USA and within the scope of his authority, his knowledge is imputed to Event USA. See United States v. One Parcel of Land Located at 7.526 Highway 45 N., Three Lakes, Oneida Cty., Wis., 965 F.2d 311, 316 (7th Cir. 1992) ("Where a corporate agent obtains knowledge while acting in the scope of his agency, he presumably reports that knowledge to his corporate principal so the court imputes such knowledge to a corporation."); Juarez v. Ameritech Mobile Commc 'ns, Inc., 957 F.2d 317, 321 (7th Cir. 1992) ("Knowledge of an agent is imputed to her corporate principal . . . if the agent receives the knowledge while acting within the scope of her authority and the knowledge concerns a matter within the scope of that authority."). Even if EUSA had not conceded that it is jointly liable for LOTF' s infringements, Garrity also testified that EUSA has an exclusive contract with the Green Bay Packers related to ticket sales and packages, and that this contract includes licensing provisions related to the use of the NFL team names, colors, logos, etc. by Event USA. (Garrity Dep. at 125:25-128:11.) This evidence is conclusive that Garrity had actual knowledge of the need to obtain prior permission from the NFL teams before EUSA could use the teams' intellectual property in products and advertisements. This evidence thus establishes that Event USA acted with actual notice and knowledge that 91 Case: 3:15-cv-00379-jdp Document #: 714-2 Filed: 12/07/16 Page 91 of 94 its use of any photos that were acquired from Getty Images by LOTF could not have been shared with or used by EUSA and that any external use constituted an infringement of copyright. Therefore, EUSA must be held liable for willful copyright infringement. Winiecki The records from Getty Images make clear that Winiecki violated the copyrights of over 100 other photographers who licensed their sports-related photos through Getty Images. These records show that Winiecki downloaded these photos under "Editorial-newspaper" licenses. (McCulloch Decl. Ex. 41.) This Court has already found identical practices to be a willful infringement of Plaintiffs' copyrights. See Boehm I, 68 F. Supp. 3d at 978-79 (describing the Getty Images licensing process and finding that "[Ole undisputed facts demonstrate that the Zimpriches were either aware of the restrictions of the Editorial-Newspaper license or that they were willfully blind to those restrictions."). Winiecki also was certainly aware of the massive counterfeiting problem in the sports memorabilia industry given that he is quoted in an article on that very subject. This evidence is conclusive that Winiecki's infringements were willful. Martin/Miller There is also no question that Defendants Martin and Miller are willful infringers of Plaintiffs' copyrights. Aside from the fact that they are commercial dealers in the sports memorabilia business, and have also admitted to being joint tortfeasors with the Zimprichs, these Defendants also had specific notice that their conduct was infringing and yet continued to do it. With respect to Martin, this Court has already imposed sanctions on him for violating the preliminary injunction order. (See Dkt. No. 242.) As Plaintiffs demonstrated in their motion for sanctions (Dkt. No. 125), Defendant Martin not only failed to quarantine infringing products, he deliberately placed these products onto his Amazon and eBay store accounts - after Plaintiffs had 92 Case: 3:15-cv-00379-jdp Document #: 714-2 Filed: 12/07/16 Page 92 of 94 sent him a cease a desist letter - in a blatant effort to sell off these items while avoiding further detection. (See PL SUF rt 156-159.) Even if Martin's conduct was not deliberate, such reckless disregard and failure to comport with the law, even after being expressly notified of infringement, is sufficient to find willfulness in the copyright context. See Video Views, 925 F.2d at 1021 ("evidence that notice had been accorded to the alleged infringer before the specific acts found to have constituted infringement occurred is perhaps the most persuasive evidence of willfulness"). As for Defendant Miller, Ciara Zimprich testified that Miller was specifically warned about items they had provided him that were now being offered for sale on eBay and Amazon through Defendant Martin, and that he was told to take those down. (C. Zimp. Dep. at 110:15-111:10.) This evidence, together with the evidence of ongoing infringements and subsequent lawsuits for infringement, leaves no doubt that Defendants Martin and Miller knew exactly what they were doing and simply didn't care to stop-or did not believe they would get caught. Svehla Like Defendant Miller, Defendant Svehla was also expressly notified of the lawsuit against the Zimprichs (id. at 134:10-12), and yet continued to offer for sale products he had obtained from the Zimprichs, including those shown in FAC Ex. 3. Moreover, even after Plaintiffs filed suit, Svehla has continued to offer for sale numerous unlicensed and infringing goods. In a discovery inspection of Svehla's stores, Plaintiff Boehm identified hundreds of prints that lacked any indicia of legitimacy and almost certainly were purchased from the Zimprichs. (See Boehm Decl. 1114.) Indeed, Svehla is involved in the same lawsuit that was just filed against Defendants Martin and Miller for offering for sale products that infringed yet another photographer's copyright. See Robbins, No. 16-cv-532. There is no question that Svehla acted willfully and continues to do so. AW Artworks 93 Case: 3:15-cv-00379-jdp Document #: 714-2 Filed: 12/07/16 Page 93 of 94 Defendant Wredberg's infringements also must be deemed willful, as he was undoubtedly aware of the lawsuit against the Zimprichs, given that he submitted evidence in that case and previously worked directly with both the Zimprichs and LOTF to print the canvases and other memorabilia products for re-sale. (See C. Zimp. Dep. at 57:8-17; C. Zimp. Aff. It 24.) The affidavits submitted by the Zimprich in Boehm I identified Wredberg as a source of photos and he was even sent a subpoena for documents in that case (McCulloch Dee!. Exs. 28-29), leaving no question that he was aware of the lawsuit and the specific claims of infringement. Ms. Zimprich also testified that Wredberg offered to print photos that he claimed to be able to get at a discounted price from "[his] guy" (C. Zimp. Dep. at 170:20-23), and that "it became obvious that those were from the Legends of the Fieldcar . gcr' 7T1.-E1-2:1L-L) Gonnerinm &- -- e evidence is also indisputable that the infringing conduct of Defendants Gonnering ooter G) and Wein (Beyond Studio) was willful. As discussed supra, documents produced by Gonnering show emails between these two Defendants as late as December 2014, in which Gonnering requested prints from Wein. (McCulloch Decl. Ex. 43.) Wein, who was previously employed by LOTF, was undoubtedly aware of the Boehm I lawsuit at that time. In none of these communications does Gonnering question Wein about the legitimacy of the photos he was purchasing. Thomason omason was also undoubtedly aware of the Boehm tlawsuit, as Clara Zimprich testified she expressly told Thomason about the claims against them. (C. Zimp. Dep. at 109:14-21.) Furthermore, Dennis Garrity of EUSA also claimed to have questioned Thomason about the legitimacy of products he had been selling to Event USA (Garrity Dep. at 144:25-145:4) and thus 94 Case: 3:15-cv-00379-jdp Document #: 714-2 Filed: 12/07/16 Page 94 of 94