In an
August 15, 2013 ruling, Judge Loretta A. Preska refused to dismiss plaintiff Muench Photography, Inc.'s copyright infringement claims against defendant The McGraw-Hill Companies, Inc. Muench owns copyrights in various photographs that it licensed to McGraw-Hill (through a third party agency) for a limited, specified number of uses in McGraw-Hill publications. Muench alleged that McGraw-Hill deliberately exceeded the number of permissible copies of the licensed photographs, breaching the terms of the license and infringing Muench's copyrights. McGraw-Hill argued that under the terms of the license, it effectively had "'
carte blanche permission to use [the Photographs] any way it chose and pay later.'" Thus, according to McGraw-Hill, the plaintiff "is precluded under the covenant-condition doctrine from suing for copyright infringement." The Court rejected that argument, noting that Muench .
sets forth in the [second amended complaint] that the relevant Photographs were licensed for up to a specific number of uses, and Plaintiff explicitly claims that Defendant, without authorization, used photographs with copyrights registered to Plaintiff beyond the licenses granted both in publications identified in the [second amended complaint] and in publications not yet identified.
Judge Preska held that the allegations are sufficient at the pleading stage to state a copyright infringement claim, and ruled that "Defendant's arguments with respect to the covenant-condition doctrine amount to a dispute between the parties about contract interpretation that is beyond the purview of the Court on a motion to dismiss."
