Texas School District Violation of Copyright Law Results in $9.2 Million Liability

While we normally do not go outside of Illinois to bring you legal developments, every once in a while we break our own rule because an event serves as a timely reminder. A Texas federal court jury found Houston Independent School District, the largest public school district in Texas, liable for repeatedly violating the copyright of a company that specializes in creating study guides.

In Dynastudy, Inc. v. Houston Independent School District, the plaintiff, Dynastudy, filed a lawsuit in 2016 claiming that Houston Independent School District had violated its copyright on thirty-six separate study guides by intentionally copying, removing the copyright warning, and circulating the study guides to staff members and other school districts. Per an article published by the Houston Chronicle and facts revealed at trial, in 2013, the principal of a Houston-area high school suggested that copies be made of the Dynastudy study guides and ignored the warning from a teacher that the study guides contained a “glaring disclaimer about copyright.” When told to proceed with copying the study guides, the teacher offered no more objection, going so far to say “I’m ok with violating [the copyright] though . . . lol.” This is only one example of many efforts to ignore or hide the copyright disclaimers prominently featured on the materials.

The question of whether Houston Independent School District violated copyright was put to a jury at the conclusion of trial. The court provided special instructions informing the jury that to establish infringement, Dynastudy must have shown ownership of a valid copyright in the works, and unauthorized copying of constituent elements of the work that are original. “Original” was defined by the court as a work that was independently created by the author, as opposed to copied from other works, and that it possesses at least some minimal amount of creativity. Because the subject matter of the study guides pertained to facts and theories likely not afforded copyright protection, the court also added guidance regarding compilations. “Compilations” are works formed by the collection and assembling of preexisting materials or data that are selected, coordinated, or arranged in such a way that the resulting work as a whole may constitute an original work of authorship.

As a defense, Houston Independent School District claimed that the use of the study guides was not an infringement for reason that use qualified under “fair use.” The purpose of “fair use” is to permit limited copying from copyrighted works in specific circumstances that authors would reasonably expect and that allow productive use of the work without unfairly undermining the protection afforded by copyright. The factors to consider if something is fair use include: (1) the purpose and character of the use, including whether 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.

Ultimately, the jury did not agree that any of the school district’s use constituted “fair use” and that willful infringement was found for all thirty-six study guides. The jury determined statutory damages up to the maximum amount of $150,000 for many of the study guides and anywhere between $750 and $100,000 for others, resulting in a total liability of $9.2 million.

Although this case is not precedent-setting in Illinois, this is a reminder that not everything copied by a school district is entitled to fair use. Fair use is intended to allow schools to use relatively small portions of copyrighted works to aid in instruction. Here, Houston Independent School District was copying study guides in their entirety and then circulating the study guides to Dynastudy’s target market, thereby damaging the marketability of the product. As such, pay close attention to copyright disclaimers on materials used in schools and consult with counsel if there is a question pertaining to the use of copyrighted works.

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