Copyright Infringement. Zillow.

Copyright Infringement. Zillow.

Copyright. Lawsuit.

If someone sues you because of something on your website, what should you do? And, if you have insurance, will it cover your costs to defend a lawsuit?

This issue recently arose in the Zillow case.  VHT, Inc., a real estate photography studio sued Zillow Group Inc. for copyright infringement. A unanimous jury awarded VHT $8.3 million dollars in damages. The jury found that Zillow directly and willfully infringed 28,125 photos.

In July 2014, Zillow was notified that it was infringing copyrights belonging to VHT.  Zillow ignored the notice, and did not notified its insurance carrier.  The following year, VHT filed suit in federal court. At that time, Zillow sent the complaint to its insurance carrier.

Notice of infringement.

The insurer refused to accept the claim, because Zillow did not follow the required steps.  The insurance contract provided that a policy holder with s claim needed to contact the carrier within 45-days of receipt of notice of infringement. The reason being, the insurer could have advised Zillow to remove the infringing content. The insurance company would have also been in a better position to assess the risks to avoid liability. For those reasons, the court decided that the insurer was not obligated to cover the cost of litigation.

Some might say, “that’s unfair. Those insurance companies are always out to get the little guy.” But in truth, it was Zillow’s fault on many levels.

  1. Zillow assumed the law did not apply to it, and openly and notoriously infringed the rights of VHT.
  2. Zillow ignored the notice when first given.
  3. Zillow did not notify its insurance carrier when it was first notified.

New Verdict.

In July of this year, a new verdict was decided by Judge James L. Robart of the U.S. District Court in the Western District of Washington in Seattle. He overruled the jury’s verdict by reducing the amount owed by Zillow to $4.05 million, instead of the original $8-million. However, he agreed that Zillow “Willfully infringed thousands of VHT’s photos, possibly for its own financial benefit.”

Takeaway.

A big takeaway here is if you have insurance and diligently pay your premiums, why would you not follow the rules to get covered?  If you don’t you will likely not be covered.

I’m Attorney Francine Ward helping you protect what’s yours! Join me on my Law Facebook Page, Law Twitter Page, Google+, or on a LinkedIn conversation.

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