                 FOR PUBLICATION

   UNITED STATES COURT OF APPEALS
        FOR THE NINTH CIRCUIT


VHT, INC., a Delaware corporation,        Nos. 17-35587
                  Plaintiff-Appellee/          17-35588
                   Cross-Appellant,

                 v.                         D.C. No.
                                         2:15-cv-01096-
ZILLOW GROUP, INC., a Washington              JLR
corporation; ZILLOW, INC., a
Washington corporation,
               Defendants-Appellants/       OPINION
                     Cross-Appellees.

       Appeal from the United States District Court
         for the Western District of Washington
     James L. Robart, Senior District Judge, Presiding

         Argued and Submitted August 28, 2018
                  Seattle, Washington

                  Filed March 15, 2019

Before: M. Margaret McKeown, William A. Fletcher, and
           Ronald M. Gould, Circuit Judges.

               Opinion by Judge McKeown
2                 VHT, INC. V. ZILLOW GROUP

                           SUMMARY *


                          Copyright Law

    The panel affirmed in part and reversed in part the
district court’s judgment after a jury trial and remanded in a
copyright infringement action brought by VHT, Inc., a real
estate photography studio, against Zillow Group, Inc., and
Zillow, Inc., an online real estate marketplace.

    VHT alleged that Zillow’s use of photos on the “Listing
Platform” and “Digs” parts of its website exceeded the scope
of VHT’s licenses to brokers, agents, and listing services that
provided those photos to Zillow. The district court granted
partial summary judgment on a limited set of claims. The
jury found in favor of VHT on most remaining claims,
awarding over $8.27 million in damages. The district court
partially granted Zillow’s post-trial motion for judgment
notwithstanding the verdict, reversing in part the jury verdict
and reducing total damages to approximately $4 million.

    The panel affirmed the district court’s summary
judgment in favor of Zillow on direct infringement of the
Listing Platform photos. The panel held that VHT failed to
establish that Zillow engaged in volitional conduct by
exercising control over the content of the Listing Platform.

    With respect to direct liability on the Digs photos, the
panel affirmed the district court’s grant in favor of Zillow of
judgment notwithstanding the verdict on 22,109 non-
displayed photos and 2,093 displayed but not searchable

    *
      This summary constitutes no part of the opinion of the court. It
has been prepared by court staff for the convenience of the reader.
                VHT, INC. V. ZILLOW GROUP                     3

photos. The panel held that VHT did not present substantial
evidence that Zillow, through the Digs platform, directly
infringed its display, reproduction, or adaption rights.

    The panel upheld summary judgment in favor of VHT
on 3,921 displayed, searchable Digs photos. The panel held
that fair use did not absolve Zillow of liability because
Zillow’s tagging of the photos for searchable functionality
was not a transformative fair use.

    The panel affirmed the district court’s grant in favor of
Zillow of judgment notwithstanding the verdict on
secondary liability, both contributory and vicarious, on the
Digs photos.

    As to damages, the panel remanded consideration of the
issue whether VHT’s photos used on Digs were part of a
compilation or were individual photos.

    The panel reversed the district court’s denial of judgment
notwithstanding the verdict on the issue of willfulness and
vacated the jury’s finding on willfulness. The panel
concluded that substantial evidence did not show that Zillow
was “actually aware” of its infringing activity, nor that
Zillow recklessly disregarded or willfully blinded itself to its
infringement.


                         COUNSEL

Ian B. Crosby (argued), Edgar G. Sargent, Genevieve Vose
Wallace, and Jenna G. Farleigh, Susman Godfrey LLP,
Seattle, Washington, for Defendants-Appellants/Cross-
Appellees.
4              VHT, INC. V. ZILLOW GROUP

Stephen M. Rummage (argued), Marcia B. Paul, Jonathan
M. Lloyd, James E. Howard, and Max B. Hensley, Davis
Wright Tremaine LLP, Seattle, Washington, for Plaintiff-
Appellee/Cross-Appellant.

Keith Kupferschmid and Terry Hart, Copyright Alliance,
Washington, D.C.; Eleanor M. Lackman and Lindsay W.
Bowen, Cowan, DeBaets, Abrahams & Sheppard LLP, New
York, New York; for Amicus Curiae Copyright Alliance.

Alicia Calzada, Alicia Wagner Calzada, PLLC, San
Antonio, Texas, for Amici Curiae The American Society of
Media Photographers, Inc., Digital Media Licensing
Association, Inc., Graphic Artist Guild, Inc., and National
Press Photographers Association, Inc.

Thomas G. Hentoff and Chanakya A. Sethi, Williams &
Connolly LLP, Washington D. C., for Amici Curiae Disney
Enterprises, Inc., Twentieth Century Fox Film Corporation,
and Recording Industry Association of America, Inc.

Mitchell L. Stoltz, Electronic Frontier Foundation, San
Francisco, California, for Amicus Curiae Electronic Frontier
Foundation.

Brian M. Willen, Wilson Sonsini Goodrich & Rosati, P.C.,
New York, New York; Ryan T. O’Hollaren, Wilson Sonsini
Goodrich & Rosati, P.C., Palo Alto, California; for Amici
Curiae Internet Association and Computer &
Communications Industry Association.
                VHT, INC. V. ZILLOW GROUP                   5

                         OPINION

McKEOWN, Circuit Judge:

    Zillow, an online real estate marketplace, has become a
popular website for homeowners and others to check
estimated valuations of their property, look for houses and
condominiums for sale and rent, and see photographs of a
wide range of properties. Thousands of those copyrighted
photos come from VHT, the largest professional real estate
photography studio in the country.

    The copyright claims on appeal concern Zillow’s use of
VHT’s photos on two parts of Zillow’s website: the “Listing
Platform” and “Digs.” The Listing Platform is the core of
the website, featuring photos and information about real
estate properties, both on and off the market. Zillow claims
that the site includes “most homes in America.” Digs
features photos of artfully-designed rooms in some of those
properties and is geared toward home improvement and
remodeling. Zillow tags photos on the Listing Platform so
that Digs users can search the database by various criteria,
like room type, style, cost, and color.

    Real estate brokers, listing services, and agents hire VHT
to take professional photos of new listings for marketing
purposes. A VHT photographer takes the photos and sends
them to the company’s studio for touch-up, where they are
saved to VHT’s electronic photo database, and then
delivered to the client for use under license. Each license
agreement between VHT and its clients differs slightly, but
each contract generally grants the requesting client the right
to use the photos in the sale or marketing of the featured
property. Zillow receives these photos and other data in
feeds from various real estate-related sources.
6                  VHT, INC. V. ZILLOW GROUP

     In 2015, VHT sued Zillow Group, Inc., and Zillow, Inc.,
(collectively “Zillow”) for copyright infringement, alleging
that Zillow’s use of photos on the Listing Platform and Digs
exceeded the scope of VHT’s licenses to brokers, agents, and
listing services who provided those photos to Zillow. The
district court granted partial summary judgment on a limited
set of claims, while other claims advanced to trial. The jury
found in favor of VHT on most remaining claims, awarding
over $8.27 million in damages. The district court partially
granted Zillow’s post-trial motion for judgment
notwithstanding the verdict, reversing in part the jury verdict
and reducing total damages to approximately $4 million.

    The parties cross-appealed issues stemming from partial
summary judgment, the jury verdict, and judgment
notwithstanding the verdict. We affirm in part and reverse
in part. 1

   To simplify and make sense of the various claims, this
opinion does not split out the appeal and cross-appeal as was
done in the briefing to the court. Instead, the opinion
separately addresses liability for each of the categories of
photos at issue, followed by a discussion of damages. In
view of the multiple theories of liability and categories of
photos, following is an overview of the opinion.




    1
       In connection with these proceedings, we received amicus curiae
briefs from a broad array of interested parties, including nonprofit groups
and associations representing a diverse set of industry, technology, and
artistic interests. The briefs were helpful to our understanding of the
implications of this case from various points of view. We thank amici
for their participation.
               VHT, INC. V. ZILLOW GROUP                   7

   I. Direct Infringement
        A. Direct Infringement—Listing Platform Photos
        B. Direct Infringement—Digs Photos
           1. Jury Verdict—Direct Infringement
           2. Summary Judgment—Fair Use re Searchable
              Photos
              a. Background on Fair Use
              b. Evolution of Search Engine Cases
              c. Application of Fair Use Principles
   II. Secondary Infringement—Digs
        A. Contributory Liability
        B. Vicarious Liability
   III. Damages
        A. Compilation
        B. Willfulness
   IV. Conclusion

                        ANALYSIS

    The heart of this dispute is Zillow’s copyright liability
for use of VHT photos. VHT argues that Zillow directly
infringed its copyrighted photos, both those on the Listing
Platform and Digs. VHT also argues that Zillow indirectly
infringed through use of the photos on Digs. These claims
pertain to different images, focus on different features of
Zillow’s website, and have different procedural postures, so
we consider the various categories of photos separately.

   I. Direct Infringement

    VHT’s key claim is that Zillow is directly liable for
infringing VHT’s copyright on photos that were posted on
the Listing Platform and Digs. To prevail on a claim of
direct copyright infringement, VHT must establish
“ownership of the allegedly infringed material” and that
Zillow “violate[d] at least one exclusive right granted to”
8                  VHT, INC. V. ZILLOW GROUP

VHT under 17 U.S.C. § 106. A&M Records, Inc. v. Napster,
Inc., 239 F.3d 1004, 1013 (9th Cir. 2001). It is undisputed
that VHT is the copyright holder of the allegedly infringed
photos and therefore has the exclusive right to reproduce,
adapt, and display them. 2 17 U.S.C. § 106.

    VHT must also establish causation, which is commonly
referred to as the “volitional-conduct requirement.” See
Perfect 10, Inc. v. Giganews, Inc., 847 F.3d 657, 666 (9th
Cir. 2017). As we set out in Giganews—decided on the first
day of the VHT/Zillow trial and the closest circuit precedent
on point—“volition in this context does not really mean an
act of willing or choosing or an act of deciding”; rather, “it
simply stands for the unremarkable proposition that
proximate causation historically underlines copyright
infringement liability no less than other torts.” Id. (internal
citations omitted). Stated differently, “direct liability must
be premised on conduct that can reasonably be described as
the direct cause of the infringement.” Id. (citation omitted).
This prerequisite takes on greater importance in cases
involving automated systems, like the Zillow website.

    In addressing this concept, Justice Scalia noted that
“[e]very Court of Appeals to have considered an automated-
service provider’s direct liability for copyright infringement
has adopted [the volitional-conduct] rule.” Am. Broad. Cos.,
Inc. v. Aereo, Inc., 573 U.S. 431, 453 (2014) (Scalia, J.,
dissenting). 3 He went on to explain that while “most direct-

    2
       VHT does not appeal the district court’s finding that there was
insufficient evidence that Zillow violated VHT’s distribution rights.
    3
       Although the majority opinion in Aereo does not reference the
volitional-conduct requirement, Justice Scalia’s dissent offers instructive
background on the doctrine. In Giganews, we embraced the principle
                  VHT, INC. V. ZILLOW GROUP                          9

infringement cases” do not present this issue, “it comes right
to the fore when a direct-infringement claim is lodged
against a defendant who does nothing more than operate an
automated, user-controlled system. . . . Most of the time that
issue will come down to who selects the copyrighted
content: the defendant or its customers.” Id. at 454–55
(internal citations omitted).

    Giganews, Aereo, and out-of-circuit precedent counsel
that direct copyright liability for website owners arises when
they are actively involved in the infringement. “‘[T]he
distinction between active and passive participation’” in the
alleged infringement is “‘central’” to the legal analysis.
Giganews, 847 F.3d at 667 (quoting Fox Broad. Co. v. Dish
Network LLC, 160 F. Supp. 3d 1139, 1160 (C.D. Cal. 2015)).

    That “direct” infringement requires “active”
involvement is hardly surprising, given the correlation
between the words “active” and “direct.” As the Fourth
Circuit held, “[t]here must be actual infringing conduct with
a nexus sufficiently close and causal to the illegal copying
that one could conclude that the machine owner himself
trespassed on the exclusive domain of the copyright owner.”
CoStar Grp., Inc. v. LoopNet, Inc., 373 F.3d 544, 550 (4th
Cir. 2004). By contrast, activities that fall on the other side
of the line, such as “‘automatic copying, storage, and
transmission of copyrighted materials, when instigated by
others, do[] not render an [Internet service provider] strictly
liable for copyright infringement[.]’” Giganews, 847 F.3d at
670 (quoting CoStar, 373 F.3d at 555).



and held that it is “consistent with the Aereo majority opinion,” which
left the requirement “intact.” 847 F.3d at 666–67.
10              VHT, INC. V. ZILLOW GROUP

    In other words, to demonstrate volitional conduct, a party
like VHT must provide some “evidence showing [the alleged
infringer] exercised control (other than by general operation
of [its website]); selected any material for upload, download,
transmission, or storage; or instigated any copying, storage,
or distribution” of its photos. Id. at 666, 670. VHT failed to
satisfy that burden with respect to either the photos on the
Listing Platform or on Digs.

       A. Direct       Infringement—Listing         Platform
          Photos

    VHT asserted that Zillow directly infringed the photos
displayed on the Listing Platform after a real estate property
was sold because VHT’s license agreements only authorized
use of those photos in relation to the sale of the property.
This claim, involving 54,257 non-searchable photos, was
resolved on summary judgment. The Listing Platform is the
core of Zillow’s online real estate marketplace. It features
photos and information about properties, which Zillow
receives through digital feeds from real estate agents,
brokerages, and multiple listing services, among others
(collectively “feed providers”).

    Zillow has agreements with its feed providers granting it
an express license to use, copy, distribute, publicly display,
and create derivative works from the feed data on its
websites. Feed providers represent that they “ha[ve] all
necessary rights and authority to enter into” the agreements,
and that “Zillow’s exercise of the rights granted [t]hereunder
will not violate the intellectual property rights, or any other
rights of any third party.”

    These agreements provide Zillow with either
“evergreen” or “deciduous” rights in the photos provided
through the feeds. An evergreen right permits use of a photo
                VHT, INC. V. ZILLOW GROUP                    11

without any time restriction, “on and in connection with the
operation, marketing and promotion of the web sites and
other properties, owned, operated or powered by Zillow or
its authorized licensees.” By contrast, a deciduous right is
temporally limited: Zillow may use the photo when the real-
estate listing for its corresponding property is active, but
once the listing is removed (for example, when the property
sells), the photo must be taken down from Zillow’s websites.
To treat each photo consistently with its deciduous or
evergreen designation, Zillow developed automated
“trumping” rules to determine which photos to display on the
Listing Platform.

    VHT argues that Zillow “designed its system to . . .
cause[] the reproduction, display, and adaptation of VHT
photographs post-sale on the Listing Platform,” and “chose
to simply ignore VHT’s notices that post-sale use was
beyond the scope of VHT’s licenses.” The district court
granted summary judgment to Zillow, concluding that it did
not engage in volitional conduct and therefore did not
directly infringe VHT’s copyrights in 54,257 photos by
displaying them on the Listing Platform after a real estate
property was sold.

   On de novo review, we agree with the district court’s
analysis and affirm. Kelly v. Arriba Soft Corp., 336 F.3d
811, 817 (9th Cir. 2003). Although the district court did not
have the benefit of Giganews at the time of summary
judgment, its careful reasoning was prescient in invoking the
same principles.

    Zillow did not engage in volitional conduct necessary to
support a finding of direct liability. The content of the
Listing Platform is populated with data submitted by third-
party sources that attested to the permissible use of that data,
12             VHT, INC. V. ZILLOW GROUP

and Zillow’s system for managing photos on the Listing
Platform was constructed in a copyright-protective way.
The feed providers themselves select and upload every
photo, along with the evergreen or deciduous designations,
that wind up on the Listing Platform. As a result, the photos
on the Listing Platform were not “selected” by Zillow. See
Giganews, 847 F.3d at 670. Nor did Zillow “exercise[]
control” over these photos beyond the “general operation of
[its website].” Id. Zillow required feed providers to certify
the extent of their rights to use each photo. Consistent with
these designations, Zillow’s system classified each photo as
deciduous or evergreen and programmed its automated
systems to treat each photo consistently with that scope of
use certified to by the third party.

    Further, when multiple versions of the same photo were
submitted through the various feeds, Zillow invoked its
copyright-protective “trumping” rules. For example, one
rule might prefer a photo provided by an agent over one
provided by a multiple listing service, and another might
prefer a local broker to an international one. Zillow used a
rule that gave preference to photos with evergreen rights
over photos with deciduous rights in the same image. As the
district court recognized, “trumping” is a reasonable way to
design a system to manage multiple versions of the same
photo when the authorized use varies across versions. These
rules, along with other features of the system, facilitate
keeping the photos with evergreen rights on the website and
removing the photos with deciduous rights once a property
has sold. Thus, Zillow actively designed its system to avoid
and eliminate copyright infringement.

    Notably, VHT’s argument is primarily cast in terms of
Zillow facilitating or enabling infringement by VHT’s
clients that are Zillow’s feed providers. But this type of
               VHT, INC. V. ZILLOW GROUP                  13

claim more properly falls in the category of secondary
infringement, a claim not advanced by VHT with respect to
the Listing Platform photos.

    VHT also asserts that Zillow failed to remove photos
once it received notice that infringing content was on the
Listing Platform, a conscious choice that amounts to
volitional conduct on Zillow’s part. This claim is unavailing
because, once VHT put Zillow on notice of claimed
infringement, Zillow took affirmative action to address the
claims. Additionally, VHT’s assertion that it “repeatedly
notified Zillow that it was infringing” is unsupported in the
record.

    In July 2014, VHT sent Zillow a takedown notice letter
with a list of thousands of allegedly infringing photos by
residential street address (but not by web address). Zillow
promptly requested all executed license agreements between
VHT and the feed providers who had provided photos to
Zillow, as well as license agreements between VHT and its
photographers, so that Zillow could evaluate whether VHT
possessed exclusive rights to the photos on the Listing
Platform. VHT responded with an unsigned form contract,
which it stated was used with many feed providers, but
which was not tied to any specific photos on Zillow’s
website. Zillow again reiterated its need to see the specific
contracts governing the contested photos. Instead of
responding with the contracts, VHT filed suit. Zillow’s
reasonable response to VHT’s single formal inquiry
(supplemented in a follow-on email) can hardly be
characterized as rising to the level of volitional conduct or
turning a blind eye.

    In sum, VHT failed to “provide[] . . . evidence showing
[Zillow] exercised control (other than by general operation
14                VHT, INC. V. ZILLOW GROUP

of [its website]); selected any material for upload, download,
transmission, or storage; or instigated any copying, storage,
or distribution” of these photos. See Giganews, 847 F.3d at
670; see also CoStar, 373 F.3d at 555. Thus, we affirm the
district court and conclude Zillow did not directly infringe
VHT’s copyrights in photos displayed on the Listing
Platform post-sale.

         B. Direct Infringement—Digs Photos

    VHT also claimed that Zillow directly infringed
thousands of photos used on Digs. The jury concluded that
Zillow directly infringed 28,125 photos and rejected its fair
use defense. Following trial, the district court granted in
substantial part Zillow’s motion for judgment
notwithstanding the verdict on the ground that insufficient
evidence supported Zillow’s direct infringement of 22,109
photos that were not displayed on Digs and 2,093 4 photos
that were displayed but not searchable on Digs.

    By contrast, the court upheld the jury’s determination
that Zillow directly infringed a set of 3,921 images that were
selected and tagged by Zillow moderators for searchable
functionality and displayed on Digs. Zillow does not appeal
this ruling. However, Zillow argues that fair use insulates it
from liability as to this subset of photos. The jury was
instructed not to consider this legal theory as to these photos
because the district court had determined pretrial that, as a
matter of law, the searchability function did not constitute
fair use. It is that summary judgment ruling that Zillow
challenges on appeal. Because we agree with the district

     4
       The displayed but non-searchable set includes 2,094 photos. The
district court affirmed the jury verdict with respect to one of those
photos, which Zillow also distributed via email.
                 VHT, INC. V. ZILLOW GROUP                    15

court that the fair use defense does not absolve Zillow of
direct liability for these searchable photos, this portion of the
jury verdict remains intact.

    The following chart clarifies the status of the Digs photos
relevant to the direct infringement claims.

    Photos       Jury Verdict       Post-Trial       Party
                                  Determination    Bringing
                                                    Appeal
22,109 not       Direct          Overturned jury VHT
displayed 5      infringement    verdict
2,094            Direct          Overturned jury VHT
displayed, not   infringement    verdict
searchable                       (except 1 email
                                 photo)
3,921            Direct          Upheld jury     Zillow:
displayed,       infringement    verdict         direct
searchable                                       infringement
                                                 not appealed;
                                                 appeals only
                                                 summary
                                                 judgment on
                                                 no fair use
1 blog post   Direct             Upheld jury     Not appealed
photo (not on infringement       verdict
Digs)




    5
      Searchable photos numbered 1,694; 20,415 photos were not
searchable.
16                 VHT, INC. V. ZILLOW GROUP

                   1. Jury Verdict—Direct Infringement

    VHT’s claim that Zillow directly infringed photos on
Digs went to the jury. The jury verdict form was framed in
general terms, asking only whether “VHT has proven its
direct copyright infringement claim as to one or more of the
VHT Photos[.]” The jury answered “yes,” and was asked to
specify how many VHT photos were directly infringed. The
jury answered “28,125”—in other words, all of them.
However, the jury was not asked to specify which copyright
rights—display,        reproduction,    or    adaption—were
           6
infringed. Following trial, Zillow moved for judgment
notwithstanding the verdict or for a new trial. The task fell
to the district court to examine the evidence as to each right.

    On de novo review, “we apply the same standard used
by the district court in evaluating the jury’s verdict” and
uphold the verdict unless “the evidence permits only one
reasonable conclusion, and that conclusion is contrary to the
jury’s verdict.” Wallace v. City of San Diego, 479 F.3d 616,
624 (9th Cir. 2007); Fed. R. Civ. P. 50(a). Specifically, we
“ask[] whether the verdict is supported by substantial
evidence,” “which is evidence adequate to support the jury’s
conclusion, even if it is also possible to draw a contrary
conclusion.” Unicolors, Inc. v. Urban Outfitters, Inc., 853
F.3d 980, 984, 991 (9th Cir. 2017) (quotation and citation
omitted). Given the sanctity of the jury process, we
undertake this review with special care and reluctance to
overturn a verdict. However, because the verdict here did
not meet this standard, we affirm the district court’s grant of
Zillow’s motion for judgment notwithstanding the verdict


     6
       As noted earlier, the distribution right was not contested and is not
an issue on appeal.
                VHT, INC. V. ZILLOW GROUP                   17

with respect to direct infringement of 22,109 non-displayed
photos and 2,093 displayed but not searchable photos.

    We first consider display rights. As background for our
analysis, it is useful to consider the direct infringement by
Zillow that the district court upheld and that Zillow did not
appeal. The district court found substantial evidence that
Zillow directly infringed VHT’s display rights in 3,921
photos displayed on Digs that Zillow moderators selected
and tagged for searchable functionality. Based on testimony,
charts, and statistics, the court found that “the jury could
have reasonably concluded that users accessed those images
through Digs’s search function.” The court went on to
reason that “the jury could have reasonably concluded that
Zillow’s moderation efforts, which rendered those images
searchable, proximately caused the copying.”              Put
differently, active conduct by Zillow met the volitional-
conduct requirement for direct infringement. Zillow does
not appeal this ruling upholding the jury’s verdict as to the
3,921 displayed, searchable photos.

    On appeal, VHT attempts to shoehorn an additional
1,694 photos into this category. This effort falls flat both as
a factual and legal matter because substantial evidence does
not support direct infringement of VHT’s display rights in
the 1,694 searchable images that were not displayed.

    VHT posits that the jury could have found that these
photos were displayed because of circumstantial evidence
and because Zillow failed to record whether they were
displayed. Not so. This argument is foreclosed by the
parties’ stipulated spreadsheet that categorized each photo.
The column labeled “DISPLAYED” included an entry for
“Y” (yes) or “N” (no). The jury was instructed to “treat
every fact on this spreadsheet as proven,” so VHT cannot
18              VHT, INC. V. ZILLOW GROUP

recast the facts retroactively and now claim that 1,694
searchable images stipulated as “N[OT] DISPLAYED”
were in fact displayed or made available for display. Up is
not down.

    VHT’s contention that the jury could have reasonably
inferred that Zillow made “available for public display” all
22,109 “N[OT] DISPLAYED” images similarly fails. This
theory presumes that the Copyright Act’s display right
encompasses an exclusive right to “make available for
display,” a position neither supported by the statute nor
embraced by this court. See Perfect 10, Inc. v. Amazon.com,
Inc., 508 F.3d 1146, 1160 (9th Cir. 2007) (“[B]ased on the
plain language of the statute, a person displays a
photographic image by using a computer to fill a computer
screen with a copy of the photographic image fixed in the
computer’s memory.”); 17 U.S.C. § 101 (“To ‘display’ a
work means to show a copy of it, either directly or by means
of a film, slide, television image, or any other device or
process or, in the case of a motion picture or other
audiovisual work, to show individual images
nonsequentially.”). To be sure, the Copyright Office notes
that the outer limits of the public display right have yet to be
defined. U.S. COPYRIGHT OFFICE, THE MAKING AVAILABLE
RIGHT IN THE UNITED STATES 47–51 (Feb. 2016),
https://www.copyright.gov/docs/making_available/making-
available-right.pdf.

    What is most important here, though, is that VHT’s
argument comes too late. The jury was never instructed on
the “made available” theory, nor did VHT raise this issue in
its proposed jury instructions or in objections to the final
instructions. See Sinclair v. Long Island R.R., 985 F.2d 74,
78 (2d Cir. 1993) (“the verdict . . . cannot be sustained on a
theory that was never presented to the jury”); Ramona Equip.
                VHT, INC. V. ZILLOW GROUP                  19

Rental, Inc. ex rel. U.S. v. Carolina Cas. Ins. Co., 755 F.3d
1063, 1070 (9th Cir. 2014) (an argument raised for first time
in a post-trial motion is waived). For these reasons,
substantial evidence did not support a finding of direct
infringement of VHT’s public display rights in these 22,109
photos.

    Zillow also did not violate VHT’s display rights in 2,093
displayed, non-searchable photos. These are photos that
Digs users copied to “personal boards” and “Implicit Digs,”
but which Zillow did not add to the searchable set.

    A “personal board” is a bespoke digital bulletin board of
images that a user saves or uploads from the Listing
Platform. Users can also upload their own images. These
boards are typically private, though users can share a link to
their boards. When a user saves a copy of an image with
evergreen rights to a personal board, that image
automatically joins a queue for review by a Zillow
moderator.     The moderator then decides whether to
designate the photo for tagging so that it can be searchable
on Digs, and thus select it for public display. Not all photos
that are in the queue for moderation are reviewed.
Additionally, in some instances, a user starts but does not
finish the process of saving an image to this board.
Beginning in 2014, Zillow programmed these “clicked to
save” images—called “Implicit Digs”—to enter the queue
for moderator review in the same manner as if the photo had
been saved to a personal board.

    According to VHT, the jury could have found that Zillow
“caused the [2,093] images to be displayed . . . by subjecting
the non-searchable VHT Photos to the potential for
moderation.” This argument defies logic because the only
display that occurred was triggered by the user. Any
20              VHT, INC. V. ZILLOW GROUP

potential for future display is purely speculative. As the
district court explained, the possibility that images might be
moderated and tagged—conduct that is volitional—is not
sufficient “to transform Zillow from a ‘passive host’ to a
‘direct[] cause’ of the display of VHT’s images.”

      Next, we consider VHT’s exclusive reproduction and
adaption rights in the 2,093 displayed, non-searchable
photos. The Copyright Act grants copyright holders the
exclusive right “to reproduce the copyrighted work in copies
or phonorecords.” 17 U.S.C. § 106(1). Direct infringement
of the reproduction right “requires copying by the defendant,
. . . which [requires] that the defendant cause the copying.”
Fox Broad. Co., Inc. v. Dish Network LLC, 747 F.3d 1060,
1067 (9th Cir. 2014) (quotation and citation omitted). The
adaptation right is the exclusive right “to prepare derivative
works based upon the copyrighted work.” 17 U.S.C.
§ 106(2). Following Giganews, we conclude that Zillow’s
automated processes storing or caching VHT’s photos are
insufficiently volitional to establish that Zillow directly
infringed VHT’s reproduction and adaption rights in these
non-searchable photos. Unlike photos that Zillow curated,
selected, and tagged for searchable functionality—activities
that amount to volitional conduct establishing direct
liability—these 2,093 photos were copied to “personal
boards” and “Implicit Digs” based on user actions, not the
conduct of Zillow or its moderators.

    Any volitional conduct with respect to these photos was
taken by the users, not Zillow. Users, not Zillow,
“selecte[d]” images to add to their personal boards and
“instigate[d]” the automatic caching process by saving a
particular image. See Giganews, 847 F.3d at 670. This
arrangement is important because courts have found no
direct liability where an online system “responds
                VHT, INC. V. ZILLOW GROUP                   21

automatically to users’ input . . . without intervening
conduct” by the website owner. CoStar, 373 F.3d at 550;
see also Giganews, 847 F.3d at 670. Under these conditions,
courts have analogized online facilities, like Internet service
providers, to a copy machine owner, who is not liable
“[w]hen a customer duplicates an infringing work.” CoStar,
373 F.3d at 550.

    Additionally, Zillow’s behind-the-scenes technical work
on Digs photos is not evidence that Zillow “selected any
material for upload, download, transmission, or storage.”
Giganews, 847 F.3d at 670. Zillow produced cached copies
of these Digs images, a process that automatically trims or
pads images whose height and width did not match the target
resolution, for the purposes of accelerating website speed.
This activity does not amount to volitional conduct. Nor can
Zillow’s promotion of Digs, including encouraging users to
share photos through its site, be seen as “instigat[ing]” user
copying. Id.

     Zillow’s conduct with respect to these photos amounts
to, at most, passive participation in the alleged infringement
of reproduction and adaption rights and is not sufficient to
cross the volitional-conduct line. As in cases involving
Internet service providers, Zillow “affords its [users] an
Internet-based facility on which to post materials, but the
materials posted are of a type and kind selected by the [user]
and at a time initiated by the [user].” CoStar, 373 F.3d at
555. Zillow did not directly infringe VHT’s reproduction
22                VHT, INC. V. ZILLOW GROUP

and adaptation rights in the 2,093 displayed, non-searchable
photos. 7

                 *                 *                 *

    In sum, VHT did not present substantial evidence that
Zillow, through the Digs platform, directly infringed its
display, reproduction, or adaption rights in 22,109 not
displayed photos and 2,093 displayed but non-searchable
photos. We affirm the district court’s grant of judgment
notwithstanding the verdict as to these photos. We now turn
to Zillow’s fair use defense to direct infringement of 3,921
displayed, searchable photos.

                  2. Summary Judgment—Fair Use re
                     Searchable Photos

    Zillow does not appeal the jury’s finding of direct
infringement with respect to the 3,921 displayed, searchable
photos, but does assert a fair use defense for those photos.
Zillow contends that Digs’ searchable functionality
constitutes fair use, which the district court rejected as a
matter of law at summary judgment.

     We recount the somewhat unusual history of the fair use
issue in the proceedings below. On summary judgment, the
district court rejected Zillow’s argument that “the images
that it has made searchable on Digs” are protected by fair use
and instead “conclude[d] as a matter of law that Digs’
searchable functionality does not constitute a fair use.” At
trial, the jury was generally instructed to consider the fair use

     7
       The same analysis applies to any potential violation of VHT’s
exclusive reproduction and adaption rights in the 22,109 photos that were
not displayed.
                VHT, INC. V. ZILLOW GROUP                    23

defense as to all VHT photos used on Digs that it found
Zillow had directly or indirectly infringed. However, this set
of photos was carved out for separate treatment. The jury
considered only whether “reproduction, cropping, and
scaling” of these photos constituted fair use because the
court instructed the jury that the court “ha[d] determined,
and you are to take as proven, that the Digs searchable
functionality does not constitute fair use.” After finding that
Zillow directly infringed all 28,125 VHT photos used on
Digs, the jury rejected Zillow’s fair use affirmative defense
for all photos.

    The district court upheld the jury’s fair use verdict,
which Zillow does not appeal. Rather, Zillow’s appeal
reaches back to the district court’s summary judgment ruling
to argue that the Digs’ searchable functionality is fair use as
a matter of law, and, as a result, Zillow bears no liability for
the 3,921 searchable and displayed photos. We review de
novo the district court’s grant of summary judgment to VHT
on this mixed question of law and fact. Kelly, 336 F.3d at
817.

               a. Background on Fair Use

    Protection of copyrighted works is not absolute. “The
fair use defense permits the use of copyrighted works
without the copyright owner’s consent under certain
situations.” Amazon, 508 F.3d at 1163. Fair use both fosters
innovation and encourages iteration on others’ ideas, “thus
providing a necessary counterbalance to the copyright law’s
goal of protecting creators’ work product.” Id.; see
Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569, 575–76
(1994). Fair use also aligns with copyright’s larger purpose
“‘[t]o promote the Progress of Science and useful Arts,’ . . .
and to serve ‘the welfare of the public.’” Amazon, 508 F.3d
24              VHT, INC. V. ZILLOW GROUP

at 1163 (quoting U.S. Const. art. I, § 8, cl. 8, and Sony Corp.
of Am. v. Universal City Studios, Inc., 464 U.S. 417, 429 n.10
(1984)).

    Fittingly enough, a case involving a biography of George
Washington serves as a foundational source of fair use in
American law. Folsom v. Marsh, 9 F. Cas. 342 (D. Mass.
1841) (No. 4901). Justice Story’s narrative description of
copyright doctrine in that case “distilled the essence of law
and methodology from the earlier cases” and provided the
conceptual basis for the judge-made fair use doctrine.
Campbell, 510 U.S. at 576. Although the 1976 Copyright
Act codified those principles, it did little to elaborate on
Justice Story’s description or to clarify application of the
factors. With minimal guidance or elucidation, Congress set
forth four factors for courts to consider when determining
whether the use of a copyrighted work is a “fair use”:

       (1) the purpose and character of the use,
           including whether such 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.

17 U.S.C. § 107.
                   VHT, INC. V. ZILLOW GROUP                            25

    Given license to apply these factors flexibly and to
consider them in their totality, courts have been bedeviled by
the fair use inquiry. See Campbell, 510 U.S. at 577–78. Fair
use has been called “the most troublesome [doctrine] in the
whole law of copyright” and commentators have criticized
the factors as “billowing white goo.” Monge v. Maya
Magazines, Inc., 688 F.3d 1164, 1170–71 (9th Cir. 2012)
(citations and quotations omitted). In a (still ongoing) effort
to adapt the fair use analysis to a myriad of circumstances,
courts have embellished and supplemented the factors. For
example, the concept of “transformativeness” is found
nowhere in the statute, but appeared for the first time in the
Supreme Court in Campbell, where the Court endeavored to
refine and crystalize the first statutory factor: the “purpose
and character of the use.” 8 510 U.S. at 579. The animating
purpose of the first factor is to determine,

         in Justice Story’s words, whether the new
         work merely ‘supersede[s] the objects’ of the
         original creation . . . or instead adds
         something new, with a further purpose or
         different character, altering the first with new
         expression, meaning, or message; it asks, in
         other words, whether and to what extent the
         new work is “transformative.”



    8
       The concept of transformative use had appeared in earlier lower
court decisions, e.g., Twin Peaks Prods., Inc. v. Publ’ns Intern., Ltd., 996
F.2d 1366, 1375 (2d Cir. 1993) (“[I]t is not uncommon for works serving
a fair use purpose to give at least a brief indication of the plot. . . . In
identifying plot, the author of the second work may or may not be said
to have made . . . a ‘transformative’ use. . . . Such use would occur, for
example, if a plot was briefly described for purposes of adding
significant criticism or comment about the author’s plotting technique.”).
26              VHT, INC. V. ZILLOW GROUP

Id. (citations omitted). Because transformation advances
copyright’s core goals, “the more transformative the new
work, the less will be the significance of other factors.” Id.
Likewise, despite the absence of a textual hook, public
purpose also has been read into the statute. See Amazon, 508
F.3d at 1166; Kelly, 336 F.3d at 820. While we can discern
certain animating principles bridging cases in this area, the
doctrine has hardly followed a straight, or even slightly
curved, line.

     The focus of the parties’ debate here is whether Zillow’s
tagging of 3,921 VHT photos for searchable functionality on
Digs was transformative and thus supported a finding of fair
use. The purpose of Digs is to permit users to search for
certain attributes or features, such as a marble countertop or
hardwood floor, and view photos of rooms with those
attributes or features. These photos are either uploaded by
users to Digs, or selected manually or electronically by
Zillow. Zillow then tags the photos to make them
searchable. Of course, tagging makes it possible for a user’s
keyword search to produce relevant results. Zillow refers to
these tagged photos as “searchable images” or components
of the “searchable set.” VHT’s 3,921 photos are in the
searchable set.

    Zillow contends that Digs is effectively a search engine,
which makes its use of VHT’s photos transformative, and
therefore fair use. VHT responds that this is not fair use
because Digs is not a search engine and the tagging for
searchable functionality is not transformative. Dueling
“search engine” characterizations do not resolve fair use
here. Instead, we step back and assess the question
holistically, as we have been instructed to do by the statute
and the Supreme Court. We consider the reality of what is
                VHT, INC. V. ZILLOW GROUP                     27

happening rather than resorting to labels. To do that, it is
helpful to recount the history of the search engine cases.

                b. Evolution of Search Engine Cases

     Over the past two decades, search engines have emerged
as a significant technology that may qualify as a
transformative fair use, making images and information that
would otherwise be protected by copyright searchable on the
web. See Amazon, 508 F.3d at 1166–67; Kelly, 336 F.3d at
818–22. In assessing fair use in the context of search
engines, courts have relied heavily on the first fair use factor,
and in particular “whether and to what extent the new work
is transformative.” Campbell, 510 U.S. at 579 (citation and
quotation omitted); see also Amazon, 508 F.3d at 1164
(explaining the Kelly court relied “primarily” on the first fair
use factor when conducting its analysis); Authors Guild v.
Google, Inc., 804 F.3d 202, 220–221, 223 (2d Cir. 2015)
(offering a relatively abbreviated consideration of the
remaining three fair use factors, all of which were informed
by its analysis of the first factor).

    In an early opinion applying fair use principles in the
digital age, we held that the now-defunct search engine
Arriba’s creation and use of thumbnail versions of a
professional photographer’s copyrighted images was fair use
because the “smaller, lower-resolution images . . . served an
entirely different function than [the] original images.” Kelly,
336 F.3d at 815, 818. The original images served an artistic
or aesthetic purpose. Id. at 819. By contrast, the thumbnail
images, which were provided in response to a user’s search
query, were incorporated into the search engine’s overall
function “to help index and improve access to images on the
internet and their related web sites.” Id. at 818. Investing
the images with a new purpose made Arriba’s use
28              VHT, INC. V. ZILLOW GROUP

transformative, not superseding. Indeed, the thumbnail
versions could not supersede the original use because the
thumbnails were grainy and low-resolution when enlarged.
Id. Additionally, Arriba’s use of the thumbnail images
“promote[d] the goals of the Copyright Act and the fair use
exception” because they “benefit[ed] the public by
enhancing information-gathering techniques on the
internet.” Id. at 820. Just as Campbell had drawn out the
principle of transformation from the first statutory factor, we
drew out the principle of public benefit.

    Building on our reasoning in Kelly, in Amazon we held
that Google’s use of thumbnail images in its search engine
is “highly transformative” and thus fair use. 508 F.3d at
1163–65. As in Kelly, we concluded that “a search engine
provides social benefit by incorporating an original work
into a new work, namely, an electronic reference tool.” Id.
at 1165. On a scale much greater than the search engine at
issue in Kelly, Google “improve[s] access to images on the
internet and their related web sites” by “index[ing]” the
internet and linking to the original source image generated
in the search results. Kelly, 336 F.3d at 815–16, 818. By
using the thumbnail images in service of the search engine,
Google “transforms the image,” which might have been
created for an “entertainment, aesthetic, or informative
function,” “into a pointer directing a user to a source of
information.” Amazon, 508 F.3d at 1165. As a result of the
new function that the image serves, Google’s use of the
entire image in its search engine results “does not diminish
the transformative nature of [its] use.” Id. And, further
developing the public benefit principle from Kelly, we
emphasized that Google’s search engine both “promotes the
purposes of copyright and serves the interests of the public,”
which significantly outweighed the superseding or
                  VHT, INC. V. ZILLOW GROUP                         29

commercial uses of the search engine, and strongly
supported finding fair use. Id. at 1166.

     More recently, the Second Circuit considered whether
fair use protected the Google Books search engine, which
employs digital, machine-readable copies of millions of
copyright-protected books scanned by Google. Authors
Guild, 804 F.3d at 207–08. 9 The Google Books search
engine enables a full text search, which makes possible
searching for a specific term, and then provides “snippets,”
or a part of a page, for users to read. Id. at 208–09, 216–17.
The court held that both functions involve a “highly
transformative purpose of identifying books of interest to the
searcher.” Id. at 218. The search function “augments public
knowledge by making available information about
Plaintiffs’ books without providing the public with a
substantial substitute.” Id. at 207. And the search engine
makes possible a new type of research known as “text
mining” or “data mining,” whereby users can search across
the corpus of books to determine the frequency of specified
terms across time. Id. at 209, 217. Additionally, the
“snippet” view provides context for users to assess if a book
is relevant to them, without providing so much context as to
supersede the original. Id. at 218. To boot, Google often
provides a link to a page where the entire book can be found
at a library or purchased. Id. at 209. Concluding that
Google’s commercial motivation did not significantly
outweigh these transformative uses, the court held that the
first factor strongly supported a finding of fair use. Id. at
219.


    9
     The Google Books search engine also featured millions of public
domain texts. For obvious reasons, fair use was not at issue with those
works.
30              VHT, INC. V. ZILLOW GROUP

   What we divine from these cases is that the label “search
engine” is not a talismanic term that serves as an on-off
switch as to fair use. Rather, these cases teach the
importance of considering the details and function of a
website’s operation in making a fair use determination. We
now examine Digs with those lessons in mind.

                c. Application of Fair Use Principles

    As noted, the first factor assesses the character of the use,
including whether it is commercial in nature, and, critically,
whether it is “transformative.” There is no dispute that
Zillow’s use is for commercial purposes, a factor we cannot
ignore. To determine if that use is transformative, we
consider whether and to what extent it “adds something new,
with a further purpose or different character, altering the first
with new expression, meaning, or message[.]” Campbell,
510 U.S. at 579. Though we agree that Digs is a type of
search engine because it offers searchable functionality, it is
qualitatively different than Google and other open-universe
search engines, as well as different than the Google Books
search engine.

    Most simply, a search engine is a software program that
enables information retrieval by helping users find
information through the use of keyword queries. But not all
search engines are created equal. The search engines
commonly used for day-to-day research are internet-wide
search engines, like Google, Yahoo, or Bing. These search
engines are programs powered by algorithms that search or
“crawl” the web. A search engine like Google then indexes
websites, stores them on a database, and runs users’ search
queries against it. Search results are typically a mix of
images and text, which include hyperlinks to sources of that
content elsewhere on the web. Amazon, 508 F.3d at 1155.
                VHT, INC. V. ZILLOW GROUP                     31

    Unlike the internet-wide search engines considered in
Amazon and Kelly, Digs is a closed-universe search engine
that does not “crawl” the web. Users can run searches on the
“searchable set” of images within Digs’ walled garden,
which includes VHT photos. The search results do not direct
users to the original sources of the photos, such as VHT’s
website. Rather, they link to other pages within Zillow’s
website and, in some cases, to third-party merchants that sell
items similar to those featured in the photo.

    That Digs makes these images searchable does not
fundamentally change their original purpose when produced
by VHT: to artfully depict rooms and properties.
Additionally, Digs displays the entire VHT image, not
merely a thumbnail. Unlike in Amazon, the new image does
not serve a “different function” than the old one. Amazon,
508 F.3d at 1165. Zillow’s use preserves the photos’
“inherent character.” Monge, 688 F.3d at 1176. And Zillow
“simply supersed[es] [VHT’s] purpose” in creating the
images in the first place. Kelly, 336 F.3d at 819–20; see
Harper & Row Publishers, Inc. v. Nation Enters., 471 U.S.
539, 550–51 (1985) (holding that if a new work
“supersede[s] the use of the original,” it is probably not a fair
use).

    Comparing Digs to the Google Books search engine
further drives home this analysis. We agree with the Second
Circuit’s observation that the copyright dispute over the
Google Books search engine “tests the boundaries of fair
use.” Authors Guild, 804 F.3d at 206. We conclude that
Digs goes one step further—and crosses the line.

    Like Digs, the Google Books search engine operates on
a closed database comprised of complete digital copies of
original works. Id. at 217. But the similarities end there.
32              VHT, INC. V. ZILLOW GROUP

The Google Books project makes it possible to search books
for “identifying information instantaneously supplied [that]
would otherwise not be obtainable in lifetimes of searching.”
Id. at 209. With this broad purpose in mind, the court
rightfully observed that this system “augments public
knowledge.” Id. at 207. This rationale bears no comparison
to Digs.

    Nor is the limited transformation present on Digs
remotely comparable to the unprecedented text mining, word
pattern, frequency of use, and other statistical analyses made
possible for the first time by Google Books. Google Books
search results provide “[a] brief description of each book,
entitled ‘About the Book,’” as well as, for some books, links
for borrowing or purchasing the book. Id. at 209.
Significantly, a Google Books search produces only a
“snippet” of the book, and sometimes it “disables snippet
view entirely.” Id. at 210. At the request of a rights holder,
Google “will exclude any book altogether from snippet
view.” Id.

    These features, in conjunction with other creative aspects
of Google Books, result in a categorically more
transformative use than Zillow’s simple tagging and query
system that displays full-size copyrighted images serving the
same purpose as the originals, with no option to opt out of
the display, and with few, if any, transformative qualities.
Any transformation by Zillow pales in comparison to the
uses upheld in prior search engine cases. Such use also does
nothing to further the use of copyrighted works for the
socially valuable purposes identified in the Copyright Act
itself, like “criticism, comment, news reporting,
teaching . . . , scholarship, or research.” 17 U.S.C. § 107;
see also 4 NIMMER ON COPYRIGHT § 13.05[A]. The lack of
transformation is especially significant because, as Kelly
                VHT, INC. V. ZILLOW GROUP                  33

teaches, “[t]he more transformative the new work, the less
important the other factors, including commercialism,
become.” 336 F.3d at 818 (citing Campbell, 510 U.S. at
579). If, as the Second Circuit suggested, Google’s use
“tests the boundaries of fair use,” Zillow’s efforts push Digs
into the outer space of fair use. Authors Guild, 804 F.3d at
206. So while Google Books may inch across the boundary
of fair use, Zillow’s use does not approach the line.

    Our decisions in Amazon and Kelly provide a roadmap
for analyzing the second factor, which focuses on the nature
of the copyrighted work. In those cases, we held that
photographers’ images are creative, especially when they are
created for public viewing. Amazon, 508 F.3d at 1167;
Kelly, 336 F.3d at 820. “Works that are creative in nature
are ‘closer to the core of intended copyright protection’ than
are more fact-based works.” Napster, 239 F.3d at 1016
(quoting Campbell, 510 U.S. at 586).

    So too here. VHT’s photos are aesthetically and
creatively shot and edited by professional photographers.
That Zillow’s curators select the most creative photos for the
Digs searchable set underscores the creative nature of the
works. But, as the district court properly noted, this factor
operates “with less force” in favor of VHT because the
photos had already been published on the Listing Platform.
See Kelly, 336 F.3d at 820 (“The fact that a work is published
or unpublished also is a critical element of its nature.
Published works are more likely to qualify as fair use
because the first appearance of the artist’s expression has
already occurred.”). Ultimately, this factor only slightly
favors VHT, further cutting against finding fair use.

    The third factor evaluates the amount and substantiality
of the copyrighted work that was used. “[C]opying an entire
34              VHT, INC. V. ZILLOW GROUP

work militates against a finding of fair use.” Worldwide
Church of God v. Phila. Church of God, Inc., 227 F.3d 1110,
1118 (9th Cir. 2000) (quotation and citation omitted).
However, this analysis is informed by the “purpose of the
copying.” Campbell, 510 U.S. at 586. In that spirit, we have
found that copying full works qualifies as fair use where “[i]t
was necessary . . . to copy the entire image to allow users to
recognize the image and decide whether to pursue more
information about the image or the originating web site.”
Kelly, 336 F.2d at 821. In contrast to Amazon and Kelly,
nothing justifies Zillow’s full copy display of VHT’s photos
on Digs.

   Finally, the fourth factor considers “the effect of the use
upon the potential market for or value of the copyrighted
work.” 17 U.S.C. § 107(4). To defeat a fair use defense,
“one need only show that if the challenged use should
become widespread, it would adversely affect the potential
market for the copyrighted work.” Harper & Row
Publishers, 471 U.S. at 568 (citation and quotation omitted).

    Although VHT had licensed only a handful of photos for
secondary uses (and none on a searchable database), that
market was more than “hypothetical.” See Amazon, 508
F.3d at 1168. Significantly, VHT was “actively exploring”
the market for licensing its photos to home design websites
like Digs—including with Zillow itself. This factor favors
VHT.

    Taken together, the nature of Zillow’s use, when
integrated with the four factors, cuts against finding fair use
by Zillow. We affirm the district court’s grant of summary
judgment to VHT with respect to fair use.
                VHT, INC. V. ZILLOW GROUP                    35

   II. Secondary Infringement—Digs

    Turning to VHT’s claim for secondary infringement, the
district court correctly concluded that Zillow did not
secondarily infringe VHT’s exclusive rights in the 28,125
photos used on Digs, aside from 114 images created on Digs
after VHT specifically identified them, which are not on
appeal. As noted before with regard to the district court’s
ruling on direct infringement, “we apply the same standard
used by the district court in evaluating the jury’s verdict” and
uphold the verdict unless “the evidence permits only one
reasonable conclusion, and that conclusion is contrary to the
jury’s verdict.” Wallace, 479 F.3d at 624; Fed. R. Civ. P.
50(a). The jury’s verdict here did not meet this standard.
We affirm the district court’s grant of Zillow’s motion for
judgment notwithstanding the verdict with respect to
secondary infringement, both contributory and vicarious
infringement.

       A. Contributory Liability

    Contributory liability requires that a party “(1) has
knowledge of another’s infringement and (2) either
(a) materially contributes to or (b) induces that
infringement.” Perfect 10, Inc. v. Visa Int’l Serv., Ass’n, 494
F.3d 788, 795 (9th Cir. 2007). Zillow’s actions do not satisfy
the second prong—material contribution or inducement—so
we do not address the first prong. See Giganews, 847 F.3d
at 671.

   In Giganews, we outlined the means of material
contribution to infringement:

       In the online context, . . . a “computer system
       operator” is liable under a material
       contribution theory of infringement “if it has
36              VHT, INC. V. ZILLOW GROUP

       actual knowledge that specific infringing
       material is available using its system, and can
       take simple measures to prevent further
       damage to copyrighted works, yet continues
       to provide access to infringing works.”

Id. at 671 (quoting Amazon, 508 F.3d at 1172); see also
Ellison v. Robertson, 357 F.3d 1072, 1078 (9th Cir. 2004)
(applying this standard in the online context); Napster, 239
F.3d at 1022 (same); Religious Tech. Ctr. v. Netcom On-Line
Comm’n Servs., Inc., 907 F. Supp. 1361, 1375 (N.D. Cal.
1995) (same). There is insufficient evidence to support the
contributory infringement verdict under the “simple
measures” standard.

    VHT’s position that “the jury could have reasonably
decided that Zillow in fact had the means to identify and
remove” the allegedly infringing images that VHT identified
by property address, as opposed to their website designation
or Uniform Resource Locator (“URL”), fails. Zillow
testified throughout trial that, in order to systematically or
swiftly take down a large number of photos, it required the
Zillow Image ID–a number that is in the URL for each
image. This stands to reason, because “Zillow receives
multiple copies of the same photograph, depicting the same
property, with the same listing agent, from different feeds.”
Merely identifying the physical property address in no way
identified the proper feed or the correct photo. Thus, Zillow
did not have appropriately “specific” information necessary
to take “simple measures” to remedy the violation.

    VHT’s argument that Zillow is liable for failing to ask
for the URLs of the allegedly infringing photos also fails.
Asking for the URLs was not Zillow’s duty under the
contributory liability standard: Zillow must have “actual
                VHT, INC. V. ZILLOW GROUP                  37

knowledge that specific infringing material is available using
its system.” Amazon, 508 F.3d at 1172 (citation and
quotation omitted). Zillow first reasonably asked to see the
licenses between VHT and the feed providers; otherwise,
Zillow could not assess ownership and rights in the
undefined images. That Zillow did not proactively request a
list of URLs before VHT filed suit does not make Zillow
contributorily liable.

    Additionally, Zillow’s failure to systematically use
watermarking technology does not show there was a “simple
measure” available that it failed to use. Even assuming there
were “reasonable and feasible means” for Zillow to employ
watermark detection technology, in practice VHT rarely
watermarked its photos. See Giganews, 847 F.3d at 672
(citation and quotation omitted).

    Nor did Zillow induce infringement. Inducement
liability requires evidence of “active steps . . . taken to
encourage direct infringement.” Metro-Goldwyn-Mayer
Studios Inc. v. Grokster, Ltd., 545 U.S. 913, 936 (2005)
(citation and quotation omitted)). Evidence of active steps
includes “advertising an infringing use or instructing how to
engage in an infringing use,” because such evidence
“show[s] an affirmative intent that the product be used to
infringe.” Id.; see also Columbia Pictures Industries, Inc. v.
Fung, 710 F.3d 1020, 1032 (9th Cir. 2013) (inducement
liability requires “an object of promoting [the product’s] use
to infringe copyright”).         The “improper object” of
infringement “must be plain and must be affirmatively
communicated through words or actions[.]” Fung, 710 F.3d
at 1034.

   In view of the evidence, “no reasonable juror could
conclude [Zillow] distributed its product with the object of
38              VHT, INC. V. ZILLOW GROUP

promoting its use to infringe copyright.” Giganews, 847
F.3d at 672 (quotation and citation omitted). For example,
Zillow’s generally applicable tools and messages for users
to save more photos from the Listing Platform to Digs does
not “promote[] the use of [Digs] specifically to infringe
copyrights.” Amazon, 508 F.3d at 1170 n.11. Nor does
evidence that Zillow sometimes makes mistakes about the
display rights in a feed plainly communicate an improper
object of infringement. Zillow corrects these inadvertent
errors when it learns of them. Because a “failure to take
affirmative steps to prevent infringement” alone cannot
trigger inducement liability, the inducement claim is a
particularly poor fit for Zillow’s real estate and home design
websites, which have “substantial noninfringing uses.”
Grokster, 545 U.S. at 939 n.12.

       B. Vicarious Liability

    Neither does the vicarious liability theory fit the Zillow
platform. To prevail on a vicarious liability claim, “[VHT]
must prove ‘[Zillow] has (1) the right and ability to supervise
the infringing conduct and (2) a direct financial interest in
the infringing activity.’” Giganews, 847 F.3d at 673
(quoting Visa, 494 F.3d at 802). The first element requires
“both a legal right to stop or limit the directly infringing
conduct, as well as the practical ability to do so.” Amazon,
508 F.3d at 1173. VHT’s vicarious infringement argument
fails because, as the district court found, “Zillow ‘lack[ed]
the practical ability to police’ its users’ infringing conduct”
on Digs.

    As discussed with respect to contributory infringement,
there was insufficient evidence that Zillow had the technical
ability to screen out or identify infringing VHT photos
among the many photos that users saved or uploaded daily
                VHT, INC. V. ZILLOW GROUP                     39

to Digs. Regardless, such allegations do not fall under the
vicarious liability rubric: Zillow’s “failure to change its
operations to avoid assisting [users] to distribute . . .
infringing content . . . is not the same as declining to exercise
a right and ability to make [third parties] stop their direct
infringement.” Amazon, 508 F.3d at 1175.

    Our conclusion is consistent with earlier dicta that “the
vicarious liability standard applied in Napster can be met by
merely having the general ability to locate infringing
material and terminate users’ access.” UMG Recordings,
Inc. v. Shelter Capital Partners LLC, 718 F.3d 1006, 1030
(9th Cir. 2013) (emphasis added). Once VHT photos were
uploaded to the Listing Platform with appropriate
certification of rights, ferreting out claimed infringement
through use on Digs was beyond hunting for a needle in a
haystack. As the district court concluded, “the trial record
lacks substantial evidence of a practical ability to limit direct
infringement for the same reasons it lacks substantial
evidence of simple measures to remove infringing material.”
And linking a claimed infringement to a feed provider was
even more of an impossibility.

    We affirm the district court’s judgment notwithstanding
the verdict concluding that substantial evidence did not
support the claim that Zillow secondarily infringed VHT’s
exclusive rights in its photos.

    III. Damages

        A. Compilation

    The size of the damages award hinges on whether VHT’s
photos used on Digs are part of a “compilation” or if they are
individual photos. This distinction makes a difference. If
the VHT photo database is a “compilation,” and therefore
40              VHT, INC. V. ZILLOW GROUP

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. 17 U.S.C.
§ 504(c)(1). But if the database is not a compilation, then
VHT could seek damages for each photo that Zillow used.

    In lieu of actual damages, a copyright holder may elect
to receive statutory damages under the Copyright Act. 17
U.S.C. § 504(c)(1). VHT did so. The Act provides for “an
award of statutory damages for all infringements involved in
the action, with respect to any one work . . . in a sum of not
less than $750 or more than $30,000.” Id. This provision
ties statutory damages to the term “work,” which is
undefined, except in a circular manner: copyright law
protects “original works of authorship.” 17 U.S.C. § 102(a).
Fortunately, there is a definition of compilation: “a work
formed by the collection and assembling of preexisting
materials or of data that are selected, coordinated, or
arranged in such a way that the resulting work as a whole
constitutes an original work of authorship.” 17 U.S.C.
§ 101. For purposes of statutory damages, “all the parts of a
compilation        . . . constitute one work.” 17 U.S.C.
§ 504(c)(1). “The question of whether a work constitutes a
‘compilation’ for the purposes of statutory damages pursuant
to Section 504(c)(1) of the Copyright Act is a mixed question
of law and fact.” Bryant v. Media Right Prods., Inc., 603
F.3d 135, 140 (2d Cir. 2010).

     Whether various VHT photo collections comprise one or
more compilations is a threshold damages question. Before
trial, Zillow asked for a legal determination on the
compilation issue. That motion was denied. However, the
district court did not make an explicit determination about
compilation and the specifics of compilation were not put
before the jury. In fairness to the district court, we might
                VHT, INC. V. ZILLOW GROUP                  41

infer from the transcript that there was an implicit
determination as to whether VHT’s photos are part of a
compilation, but we are left in doubt. Instead, the jury was
instructed that “[e]ach VHT Photo that has independent
economic value constitutes a separate work.” On the verdict
form, the jury was asked which “photographs have
independent economic value.”

    The notion of “independent economic value” derives not
from the statute, but from case law. In the Ninth Circuit, the
question of whether something—like a photo, television
episode, or so forth—has “independent economic value”
informs our analysis of whether the photo or episode is a
work, though it is not a dispositive factor. See Columbia
Pictures Television, Inc. v. Krypton Broad. of Birmingham,
Inc., 259 F.3d 1186, 1193 (9th Cir. 2001). But consideration
of the independent economic value factor does not answer
the question whether something is a compilation. That
question remains unanswered here.

    On appeal, the parties have polar opposite views on
whether there was a compilation (Zillow’s position) or
whether each photo is entitled to a separate damages award
(VHT’s position). VHT registered thousands of photos as
compilations. But the Copyright Office warns that such a
registration “may” limit the copyright holder “to claim only
one award of statutory damages in an infringement action,
even if the defendant infringed all of the component works
covered by the registration.” U.S. COPYRIGHT OFFICE,
COMPENDIUM OF U.S. COPYRIGHT OFFICE PRACTICES
§ 1104.5 (Sept. 2017), https://www.copyright.gov/comp3/
docs/compendium.pdf. Though the registration label is not
controlling, it may be considered by the court when
assessing whether a work is a compilation. See Yellow
Pages Photos, Inc. v. Ziplocal, LP, 795 F.3d 1255, 1277
42              VHT, INC. V. ZILLOW GROUP

(11th Cir. 2015) (“Although the manner of copyright
registration is not dispositive of the works issue, this Court
has previously considered it to be at least a relevant factor.”).
Ultimately, what counts is the statutory definition.

    Because there were at least ten different copyright
registrations, thousands of photos, and no explicit
determination on compilation, we decline to sort out the
compilation issue on appeal. We remand to the district court
for further proceedings as to whether the VHT photos
remaining at issue were a compilation.

        B. Willfulness

    The jury found that Zillow willfully infringed exclusive
rights to 3,373 searchable VHT photos that were eligible for
statutory damages. The district court largely upheld the
willfulness finding in its post-trial motions order. However,
the court granted Zillow judgment notwithstanding the
verdict on 673 images that were not displayed, so the court’s
final willfulness judgment applied to 2,700 searchable
photos on Digs.

     To uphold a jury’s willfulness finding, there must be
substantial evidence “(1) that the [the infringing party] was
actually aware of the infringing activity, or (2) that the
[infringing party’s] actions were the result of reckless
disregard for, or willful blindness to, the copyright holder’s
rights.” Unicolors, 853 F.3d at 991 (citation and quotation
omitted). Under the second prong, willful blindness requires
that the infringing party “(1) subjectively believed that
infringement was likely occurring on their networks and that
they (2) took deliberate actions to avoid learning about the
infringement.” Luvdarts, LLC v. AT&T Mobility, LLC, 710
F.3d 1068, 1073 (9th Cir. 2013). Reckless disregard can be
demonstrated, for example, when a party “refus[es], as a
                VHT, INC. V. ZILLOW GROUP                     43

matter of policy, to even investigate or attempt to determine
whether particular [photos] are subject to copyright
protections.” Unicolors, 853 F.3d at 992. A finding of
willfulness has significant financial consequences—the jury
may increase damages up to $150,000 per violation. See 17
U.S.C. § 504(c)(2).

    As noted with respect to infringement, we do not take
lightly the decision to reverse a jury verdict, nor do we
cavalierly set aside the district court’s thoughtful analysis.
But here, we are compelled to disagree with both because
substantial evidence does not support willfulness as to the
2,700 photos.

    The test for willfulness is in the alternative: either actual
notice or recklessness shown by reckless disregard or
turning a blind eye to infringement. We turn first to actual
notice. That VHT provided Zillow with minimal notice of
infringement does not itself establish that any subsequent
infringement was willful. Rather, “[c]ontinued use of a work
even after one has been notified of his or her alleged
infringement does not constitute willfulness so long as one
believes reasonably, and in good faith, that he or she is not
infringing.” Evergreen Safety Council v. RSA Network Inc.,
697 F.3d 1221, 1228 (9th Cir. 2012); see also Danjaq LLC
v. Sony Corp., 263 F.3d 942, 959 (9th Cir. 2001) (“It would
seem to follow that one who has been notified that his
conduct constitutes copyright infringement, but who
reasonably and in good faith believes the contrary, is not
‘willful’ for these purposes.”) (quoting 4 NIMMER ON
COPYRIGHT § 14.04[B][3]).

   Such is the case here. Zillow’s agreements with its feed
providers grant it an express license to use, copy, distribute,
publicly display, and create derivative works for each photo,
44              VHT, INC. V. ZILLOW GROUP

and the agreements include unambiguous representations by
the feed providers that they have the authority to assign such
rights. Zillow developed procedures to identify ex ante the
scope of its license for each uploaded photo and employed
automated protocols to manage the use of each photo
consistent with its evergreen or deciduous designation. At
no point during their year of communications prior to
issuance of the notice letter did VHT raise the specter of
infringement. Notably, VHT’s eventual notice was minimal:
one letter with a list of allegedly infringing photos,
designated by residential street address, not web address.

    The notion that Zillow failed to take appropriate
responsive measures after receiving this notice is belied by
the record. Zillow immediately requested information to
confirm VHT’s copyright ownership and cross-reference the
photos with licensing information.          VHT was not
forthcoming with that information. Rather, in response,
VHT offered merely an unsigned form contract. Instead of
providing helpful information, VHT then filed suit. Given
the limited information provided by VHT, Zillow could not
reasonably be expected to have promptly and unilaterally
removed each flagged photo. As the district court noted,
VHT failed to demonstrate there were simple measures
available for the removal of infringing photos or that Zillow
had any “practical ability to independently identify
infringing images.”

    Thus, we are compelled to conclude that substantial
evidence does not show Zillow was “actually aware” of its
infringing activity. See Evergreen Safety Council, 697 F.3d
at 1228. Zillow’s belief that feed providers had properly
licensed its uses and that its system effectively respected
those rights was reasonable. And, as the district court
observed, “[t]he record suggests no reason to conclude that
                VHT, INC. V. ZILLOW GROUP                  45

Zillow maintained that position in bad faith, and Zillow’s
non-infringement contention proved accurate as to most of
the images at issue in this lawsuit.”

    We reach the same conclusion as to whether Zillow
recklessly disregarded or willfully blinded itself to its
infringement. In reaching an opposite conclusion, the
district court observed that Zillow did not “perform[] further
investigation into the rights each [feed provider] possesses,”
nor did it “t[ake] responsive measures to obtain further
information” after VHT provided the minimal notice of
potential infringement. That conclusion is at odds with the
evidence, for the reasons outlined above.

    VHT’s argument that Zillow, a sophisticated business
with a robust legal team, should have known that its feed
provider license agreements were invalid is unavailing.
VHT argues that when Zillow saw the non-exclusive grant
of rights in VHT’s unsigned form contract, showing that the
feed providers did not have a right to sublicense, Zillow
should have known the licenses were invalid. Despite
requests for such information, Zillow did not have access to
VHT’s executed licenses with the feed providers who
furnished VHT’s photos to Zillow. Access to a blank form
contract (that the district court earlier found ambiguous as a
matter of law) is not enough. We conclude that substantial
evidence does not show Zillow was “reckless or willfully
blind” as to its infringement. We reverse the district court
and vacate the jury’s finding of willful infringement.

   IV. Conclusion

    We affirm the district court’s summary judgment in
favor of Zillow on direct infringement of the Listing
Platform photos. With respect to direct liability on the Digs
photos, we affirm the district court’s grant of judgment
46             VHT, INC. V. ZILLOW GROUP

notwithstanding the verdict on the 22,109 non-displayed
photos and the 2,093 displayed but not searchable photos.
We uphold summary judgment in favor of VHT on the 3,921
displayed, searchable photos.

    We affirm the district court’s judgment notwithstanding
the verdict on secondary liability, both contributory and
vicarious, on the Digs photos.

   We reverse the district court’s denial of judgment
notwithstanding the verdict on the issue of willfulness and
vacate the jury’s finding on willfulness.

    We remand consideration of the compilation issue to the
district court.

   Affirmed in part, reversed in part and remanded.
Each party shall pay its own costs on appeal.
