## Facts

- VHT, Inc. created and owned copyrights in professional real-estate photographs and licensed them to brokers, agents, and multiple listing services (MLSs) for real-estate marketing tied to the sale or rental of the depicted properties.
- Zillow Group operated an online real-estate service that displayed listing data and photos through (1) a primary Listing Platform and (2) a separate design feature called “Digs.”
- Listing Platform photos were supplied to Zillow largely through automated MLS and broker data feeds; many VHT images appeared on listing pages for active and sometimes off-market properties.
- Digs displayed full-size interior photos as a searchable design database; Zillow personnel or contractors selected certain Listing Platform photos, tagged them with design-related metadata, and made them searchable within Digs, including after the associated properties went off-market.
- VHT alleged Zillow’s off-market displays and, in particular, Digs’ archival and searchable presentation exceeded the scope of VHT’s marketing licenses and infringed VHT’s copyrights; Zillow asserted license authorization and, for Digs, a fair-use defense.
- The district court found liability for certain Digs uses, rejected fair use as to those uses, and a jury found willful infringement for a subset of Digs photos and awarded statutory damages; both sides appealed portions of the judgment.

## Issues

1. Whether Zillow directly infringed VHT’s copyrights by displaying photos on the Listing Platform, including for off-market properties, given the role of automated third-party feeds and alleged license limits.
2. Whether Zillow’s tagging, indexing, and display of photos in Digs constituted fair use under 17 U.S.C. § 107.
3. Whether Zillow was secondarily liable (contributory or vicarious) for infringement by third parties supplying images or data.
4. Whether the evidence supported the jury’s willfulness findings and how statutory damages should be recalculated after defining the actionable categories of infringement.

## Decision

- The Ninth Circuit affirmed in part, reversed in part, and remanded.
- It largely rejected direct infringement liability for Listing Platform displays where VHT failed to show sufficiently volitional conduct by Zillow beyond operating an automated system receiving third-party feeds and where uses were within, or not shown to exceed, marketing-license scope.
- It held that Zillow’s creation of a curated, searchable Digs database using tagged VHT photos was not fair use for a substantial subset of searchable, tagged images, but narrowed and remanded aspects of Digs liability based on image categories.
- It affirmed rejection of VHT’s secondary liability theories on the record presented.
- It reversed portions of the willfulness findings and remanded for statutory damages recalculation consistent with the narrowed infringement determinations.

## Legal Principles

- Direct copyright infringement requires volitional conduct by the defendant; operating an automated system that stores and displays content supplied through third-party feeds, without more, may be insufficient for direct liability.
- License scope matters: uses tied to marketing the sale or rental of a depicted property may be licensed, while continued display untethered to that purpose can exceed authorization depending on proof and attribution.
- Fair use (17 U.S.C. § 107) is assessed under four factors; tagging and indexing photos for search, without altering expressive content or adding new expression, may fail the “purpose and character” factor when the images serve the same intrinsic purpose.
- Copying and displaying entire creative photographs weighs against fair use when the use is not meaningfully transformative.
- Market harm includes harm to traditional and reasonable potential licensing markets for photography, including design-oriented licensing markets that may be displaced by a free, competing repository.
- Contributory infringement requires knowledge of specific infringing acts plus material contribution; vicarious liability requires the right and ability to supervise infringement and a direct financial interest in the infringing activity.
- Willfulness requires proof of knowing infringement or reckless disregard; statutory damages must align with the properly defined set of infringing works and actionable uses.

## Conclusion

The Ninth Circuit limited Zillow’s direct liability for automated Listing Platform displays lacking volitional conduct, rejected fair use for a major subset of Digs’ searchable tagged photo uses, rejected secondary liability on the evidentiary record, and remanded to reassess willfulness and statutory damages under the refined infringement analysis.


VHT, Inc. v. Zillow Grp., Inc., 918 F.3d 723 (9th Cir. 2019)