A federal appeals court has upheld a copyright infringement verdict against Hustler magazine publisher Larry Flynt’s company for publishing a partially nude photo of an Ohio television news reporter.

A three-judge panel of the U.S. Court of Appeals for the Sixth Circuit on August 16 unanimously affirmed a series of judgments by Northern District of Ohio Chief Judge Solomon Oliver Jr. in Balsley v. LFP Inc. Oliver denied the company’s motions for judgment as a matter of law, for a new trial and for attorney fees.

The judgments followed the March 2010 jury verdict for plaintiffs Catherine Balsley, also known as Catherine Bosley, and her husband, Richard Brown. They sued LFP Inc. for publishing a copyrighted photo of Bosley in a recurring “Hot News Babes” feature.

The jury awarded $135,000 in damages and Oliver ordered LFP to pay nearly $134,000 in attorney fees.

Judge Eric Clay wrote the opinion, joined by Senior Judge Ralph Guy Jr. and Eastern District of Michigan Judge Denise Page Hood, sitting by designation.

The photograph at issue was taken in March 2003 in Florida, where Bosley had entered a “wet t-shirt” contest. At the time, Bosley was a 37-year-old news anchor for a CBS television affiliate in Youngstown, Ohio.

An amateur photographer, Gontran Durocher, took photos of Bosley at the event without her knowledge and published them on a website called lenshead.com, where they appeared between May and June 2003. The couple bought the copyrights to the photos from Durocher and registered them with the U.S. Copyright Office in August 2004.

A Hustler reader nominated Bosley for the “Hot News Babes” feature and indicated that nude photographs of her were available online. LFP was aware that the Bosley photograph was copyrighted, but did not know the owner’s identity, according to the Sixth Circuit opinion.

The court wrote that Hustler’s counsel at Lipsitz Green Scime Cambria in Buffalo, N.Y., concluded that LFP could publish the photograph as “fair use” without getting permission from the copyright owner, and it appeared in Hustler’s February 2006 issue.

The couple filed suit in February 2008.

On appeal, Clay ruled that while LFP’s use of the photograph was clearly commercial and it was not transformative, it possessed “a mixed nature of fact and creativity” — factors that could weigh in the company’s favor or neutrally.

Furthermore, considering the amount of the copyrighted work used, LFP “published the entire photograph at issue less minor cropping of the background,” Clay wrote. Additionally, the publication of the photograph directly competed for a share of the market for it. All four factors favored the plaintiffs or were neutral, he said.

Finally, Clay wrote that the jury’s damages award — representing 8.5 percent of the $1.15 million in gross revenue from the February 2006 issue of Hustler — was reasonable. “This amount does not clearly exceed the maximum or shock the conscience, so it must be left intact,” he said.

In a written statement, plaintiffs’ lead counsel Andrew Kabat, a partner at Cleveland’s Haber Polk Kabat, said Bosley and her husband knew that pursuing the lawsuit meant risking additional publicity of a painful incident event.

Bosley now is an anchorwoman for station WOIO in Cleveland, he said. “She is also proud that she did not back down in the face of the corporate juggernaut created by Larry Flynt Publications. We were told by the lawyers for Larry Flynt Publications when the lawsuit was filed that Larry Flynt would fight and fight, regardless of the circumstances.”

Richard Haber, also a Haber Polk partner, argued for the plaintiffs at the Sixth Circuit.

In a written statement, Lipsitz Green associate Timothy Murphy, who argued LFP’s case before the Sixth Circuit, said, “We believe that the jury misunderstood the law on fair use and damages. We also strongly disagree with the Sixth Circuit’s determination in this regard. At the present time, Mr. Flynt is considering all of his legal options.”

Sheri Qualters can be contacted at squalters@alm.com.