A federal appeals court largely sided with Zillow in a decision late last week involving a long-running copyright battle with real estate photography company VHT Inc. over how property photos can be used online.

The 9th U.S. Circuit Court of Appeals ruled that the Seattle real estate powerhouse did not willfully infringe on copyrights for thousands of real estate photos for its home improvement section, now known as Zillow Porchlight. The decision continues a stark turnaround in the case from when Zillow lost a jury trial in 2017 and was ordered to pay $8.3 million in damages to VHT.

“We are pleased with the results of this appeal,” Zillow said in a statement. “We take copyright protection and enforcement seriously and will continue to respect copyright permissions across our platforms.”

Zillow is still on the hook for copyright infringement damages on thousands of other photos, but the amount is in flux and will be decided at a later date. The appeals court sided with VHT when it maintained a prior ruling that several thousand tagged, searchable photos displayed on Zillow did not constitute a “fair use.”

VHT declined to comment on the appeals ruling.

We are pleased with the results of this appeal. We take copyright protection and enforcement seriously and will continue to respect copyright permissions across our platforms.

VHT, which provides photography and image management services, originally filed its complaint in July 2015, claiming that photos displayed or saved to the website then known as Zillow Digs violated the company’s copyrights. A jury in U.S. District Court in Seattle in February 2017 supported VHT’s allegations that Zillow violated copyrights of 28,000 photos.

Zillow appealed the jury’s verdict, citing insufficient evidence of copyright infringement on several counts. In June of 2017, U.S. District Judge James L. Robart ruled that “the jury had no rational basis on which to conclude” that 22,109 of those photos violated VHT’s copyright and knocked the damages down to a little over $4 million.

Both Zillow and VHT appealed portions of Robart’s 2017 ruling.

The appeals court largely agreed with Robart’s decisions, with the exception of the willful infringement argument. Robart upheld a piece of the original verdict that held Zillow liable for willfully infringing on 2,700 photographs, a key victory for VHT and the basis for keeping the damages around $4 million.

But the appeals judges argued that VHT didn’t give Zillow enough notice about the infringing photos before filing suit.

“Given the limited information provided by VHT, Zillow could not reasonably be expected to have promptly and unilaterally removed each flagged photo,” according to the ruling.

The appeals court kicked the case back to Robart to figure out a new figure for damages and to decide if the photos should be judged individually or as part of a “compilation.” Here’s why that distinction matters, according to the appeals court:

“If the VHT photo database is a ‘compilation,’ and therefore one ‘work’ for the purposes of the Copyright Act, then VHT would be limited to a single award of statutory damages for Zillow’s use of thousands of photos on Digs. But if the database is not a compilation, then VHT could seek damages for each photo that Zillow used.”

Here’s the full decision from the appeals court:

Zillow-VHT by Nat Levy on Scribd