In 2017, State Street Global Advisors Trust Company (SSGA) commissioned the sculptor Kristin Visbal to create a statue to promote SSGA's global campaign for greater gender diversity in corporate leadership (the SSGA Campaign). The statue, which became known as "Fearless Girl," was unveiled on International Women's Day in 2017. "Fearless Girl" was initially placed in Bowling Green in New York City across from the pre-existing "Charging Bull" statue created by the sculptor Arturo Di Modica. However, after Mr. Di Modica complained that the juxtaposition of "Fearless Girl" and "Charging Bull" distorted the message of his sculpture, the "Fearless Girl" statue was moved to a location outside the New York Stock Exchange.

As a result of the extensive promotion of "Fearless Girl" in conjunction with International Women's Day and SSGA's Campaign, and the widespread coverage of the controversy over "Fearless Girl's" initial placement, "Fearless Girl" became a media sensation, resulting in demand for replicas within the United States and abroad.

The Litigation

In 2017, SSGA and Visbal entered into three agreements concerning the promotion and use of the artwork for "Fearless Girl." Under the copyright license agreement, SSGA owns the exclusive rights to use the "Fearless Girl" artwork "in connection with financial services and with gender diversity issues in corporate governance." The license agreement prohibits Visbal from selling, licensing or distributing copies of the "Fearless Girl" artwork for (1) any corporate and/or commercial purpose (with very limited exceptions); (2) third-party use in connection with gender diversity issues in corporate governance; and (3) political use (with limited exceptions).

In 2019, "Fearless Girl" found herself enmeshed in another controversy when SSGA sued Visbal for copyright infringement, trademark infringement and breach of contract based on her direct activities within the United States. Subsequently, SSGA learned that, pursuant to licenses from Visbal, a replica and photographs of the "Fearless Girl" statue were being used in Australia for purposes explicitly prohibited by the license agreement. SSGA then moved for leave to file a Second Amended Complaint adding, inter alia, claims for contributory copyright infringement, inducement of copyright infringement, and vicarious copyright infringement (collectively, the secondary liability claims).

In the Second Amended Complaint, SSGA alleged that Visbal provided the replica and photographs of "Fearless Girl" to the Australian firms, authorized their use in Australia, and participated in the unveiling of the replica in Australia at which she promoted the campaign for gender equality in corporate leadership. The photographs were uploaded from servers in Australia to the Australian firms' websites, which were directed to their existing and potential customers in Australia, but were accessible in the United States via the worldwide web.

On Jan. 3, 2020, in State Street Global Advisors Trust Company v. Visbal, 2020 WL 71162 (S.D.N.Y. 2020), the Hon. Gregory H. Woods, U.S. District Judge for the Southern District of New York, denied the motion to add the secondary liability claims due to the extraterritorial limitation on application of the U.S. Copyright Law, 17 U.S.C. §§101, et seq. A necessary element of the secondary liability claims is an underlying infringement of U.S. Copyright Law by a third party. If activities abroad are not subject to U.S. Copyright Law due to the extraterritorial limitation on its application, the predicate direct infringement required for the imposition of secondary liability could not be established. In denying the motion to amend, Judge Woods held that the mere availability of images of the "Fearless Girl" statue on websites accessible to viewers located in the United States, when all other alleged infringing activities occurred abroad, is insufficient to constitute an infringement of U.S. Copyright Law.

Judge Woods set forth two basic principles governing his analysis: (1) all three theories of secondary copyright infringement (contributory infringement, inducement of infringement, and vicarious infringement) require a direct infringement of U.S. Copyright Law by a third party, State Street, 2020 WL 71162, at *8 (citing, inter alia, Matthew Bender & Co. v. West Publ'g Co., 158 F.3d 693, 706 (3d Cir. 1998)); and (2) U.S. Copyright Law has no extraterritorial application, and therefore does not apply to foreign activities unless they have a sufficient connection to the United States, State Street, 2020 WL 71162, at *9 (citing, inter alia, Update Art v. Modiin Publ'g, Ltd., 843 F.2d 67, 73 (2d Cir. 1988)). Although not explicitly stated in the opinion, it is implicit that the direct infringement required to form the basis for secondary liability must be an infringement of U.S. Copyright Law.

Judge Woods acknowledged that courts have applied these principles in various ways depending on the degree to which the alleged underlying infringement is connected to the United States. However, he concluded that the circumstances in State Street clearly required application of the extraterritorial limitation:

[T]he proposed amendment raises a clear question—does United States copyright law apply whenever a foreign person posts a copyrighted image to the Internet abroad, even if there is no connection to the United States other than the fact that the image is accessible here? The Court believes that the answer to this question should be no. 2020 WL 71162, at *8.

In support of this conclusion, Judge Woods emphasized that ["t]he complaint does not allege that the Australian firms do business in the United States or that they have any other connection to, or interest in, the United States"; the Australian firms uploaded the photographs of the "Fearless Girl" replica to their websites and social media accounts using servers located in Australia; these websites and social media accounts were directed to the Australian market rather than to persons or companies within the United States; and the Australian firms' use of the replica and photographs of "Fearless Girl" did not have a significant economic impact on the United States.

Judge Woods rejected the directly contrary holding in United Feature Syndicate v. Miller Features Syndicate, 216 F. Supp. 2d 198, 225 (S.D.N.Y. 2002) (U.S. Copyright Law applies to images posted abroad solely because they were accessible here on the Internet). He criticized United Feature Syndicate for failing to cite any supporting case law or to consider its "sweeping extraterritorial application of U.S. Copyright Law." 2020 WL 71162, at *9.

Judge Woods distinguished three cases in which copyrighted images posted on the Internet abroad and accessible in the United States, together with additional links between defendants' activities abroad and the United States, resulted in the application of U.S. Copyright Law. See Spanski Enters. v. Telewizja Polska, S.A., 883 F.3d 904, 916 (D.C. Cir. 2018) (direction of copyrighted materials into the United States); GB Marketing USA v. Gerolsteiner Brunnen GmbH & Co., 782 F. Supp. 763, 773 (W.D.N.Y. 1991) (acts abroad were intended to, and did, have an effect within the United States); and Shropshire v. Canning, 809 F. Supp. 2d 1139, 1146 (N.D. Cal. 2011) (uploading of copyrighted materials to servers located in the United States). None of these extra connections to the United States were present in State Street.

Conclusion

Judge Woods succinctly stated the primary reason for his holding in State Street:

The adoption of a rule that would give rise to a copyright claim against a foreign actor solely on the basis of the fact that a U.S. copyrighted image was posted on the Internet—and was therefore "accessible" within the United States would undermine the extraterritorial limitations on U.S. copyright law.

2020 WL 71162, at *9. This persuasive reasoning still leaves plenty of room for argument, in other cases, as to whether there are sufficient connections between the foreign activities and the United States, beyond mere accessibility here of an image posted abroad, to avoid the extraterritorial limitation on the application of U.S. Copyright Law.

Robert J. Bernstein practices law in New York City in The Law Office of Robert J. Bernstein. He is a frequent author and lecturer on copyright law and litigation. Robert W. Clarida is a partner in the New York law firm of Reitler, Kailas & Rosenblatt and the author of the treatise Copyright Law Deskbook (BNA).