In a legal saga that began nearly six years ago over the fate of sold listing photos, real estate behemoth Zillow is headed back to court to resolve a copyright infringement suit filed by real estate photography company VHT Studios.
Judge James L. Robart of the U.S. District Court in Seattle has ordered a new trial in the case in order to decide whether Zillow’s infringement of 2,700 VHT images was innocent or not and what VHT’s award for statutory damages should be.
“We are disappointed that, after a favorable ruling last spring, the suit will be moving forward,” a Zillow spokesperson told Inman via email. “We continue to believe the underlying claims in the suit to be without merit and intend to vigorously defend ourselves in the upcoming trial.”
VHT first filed suit against Zillow in 2015, alleging the listing giant had ripped off its intellectual property by illegally using its photos on its home improvement webpage, Zillow Digs. In 2017, a jury ordered Zillow to pay more than $8 million in damages to the photo company, after finding that Zillow directly infringed on 28,125 of VHT’s images, of which 3,373 the jury said Zillow willfully infringed.
Later that year, however, Zillow successfully convinced a federal court to slash that judgement to just over $4 million and to reduce the number of “willfully infringed” images to 2,700.
In 2018, appeals from both companies sent the case to the 9th U.S. Circuit Court of Appeals. In March 2019, the 9th U.S. Circuit Court mostly sided with Zillow, vacating the jury’s finding of willful infringement of those 2,700 images. While the court did say that Zillow had misused some photos, it also argued that given the amount of notice VHT gave Zillow before filing suit, the portal “could not reasonably be expected to have promptly and unilaterally removed each flagged photo.”
Significantly, the circuit court ultimately said that willfulness on Zillow’s part was not supported by “substantial evidence,” including the feed agreements Zillow has with its listing feed providers: real estate agents, brokerages, and multiple listing services, among others.
The circuit court also opted to send the case back to a lower judge to come up with a new monetary amount for damages. In June 2019, VHT appealed to the U.S. Supreme Court to fight that ruling, but its petition was denied.
In May 2020, VHT argued that the previous damages award should stand, but Zillow requested that the court either find its infringements innocent as a matter of law or order a new trial to decide on damages for the 2,700 images.
On March 10, the court ordered a new trial to be held virtually in July or August and last four days.
“[T]the court does not agree that the Ninth Circuit’s statements mandate the conclusion that Zillow’s infringement of the 2,700 images was innocent,” Robart wrote.
“In light of the Ninth Circuit’s guidance, however, the court also cannot hold as a matter of law that the infringements were not innocent.
“Accordingly, the court concludes that it is appropriate to order a new trial in this matter, limited to the 2,700 images that the jury previously found Zillow had willfully infringed and for which the court did not enter judgment as a matter of law, on the questions of (1) whether Zillow’s infringement of the images was innocent and (2) statutory damages.”
In a subsequent filing on March 22, both VHT and Zillow said their legal teams would be unavailable in July, but would be ready for trial at any time in August.
VHT co-founder and CEO Brian Balduf did not respond to an emailed request for comment for this story.
Read the court’s order:
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