By: Morgan J. Sholtis and Teige P. Sheehan, Esq., Ph.D.
A recent federal appeals court decision involving Walmart and designer Roxana Russell has created important new guidelines for how online marketplaces handle third-party sellers, with significant implications for businesses operating in the digital marketplace. The case offers crucial insights for creators of copyrightable works and for business owners about the evolving legal landscape of e-commerce platforms and copyright liability.
In Russell v. Walmart Inc., decided by the Ninth Circuit Court of Appeals in June 2025, designer Roxana Russell sued Walmart for copyright infringement involving her sculptural lamps and photographs. The case centered on products sold through Walmart.com by a third-party vendor called Sunsea Grocery, which operated as what Walmart called a “drop-ship vendor” (DSV). The court reached a split decision that reveals the nuanced legal landscape facing online platforms. Walmart was held liable for infringing Ms. Russell’s copyright in the lamp design but not for infringement of the copyright in her photograph of the lamp, with this distinction hinging on one crucial factor: the level of control the platform exercises over its third-party sellers.
The jury “found Walmart liable for infringement based on Walmart.com listings that contained Russell’s two copyrighted photographs and that sold lamps which infringed on her three copyrighted sculptural lamps.” For the physical lamps, the evidence showed Walmart exercised significant control over the transaction. The product listings “did not contain [the DSV’s] name; instead, they stated that the lamps were [s]old & shipped by Walmart.” Additionally, “Walmart’s merchandise agreement with [the DSV], which stated that Walmart assumes title to the Merchandise at the time the Merchandise is received by the shipping carrier” demonstrated the company’s deep involvement in the sales process.
Copyrighted Lamp
Infringing Lamp on *Walmart.com
A screenshot from *Walmart.com was used as Exhibit C in the initial complaint by Plaintiff’s Counsel.
The evidence further showed that “Walmart designates the shipping carrier used by third-party DSVs like Sunsea, and that those DSVs—unlike other third-party vendors who sell in their own name—ship products sold on Walmart.com using Walmart’s carrier account. Walmart also handles returns of products sold by DSVs. And buyers of those products pay Walmart directly, not the DSVs”. The court concluded that “even if the jury believed that Sunsea produced the infringing lamps, it could reasonably believe that Walmart took legal title to the lamps and actively controlled their sale, shipment, and return.”
However, the court reached the opposite conclusion regarding Ms. Russell’s copyrighted photographs used in the product listings. Here, Walmart successfully argued it was merely a passive platform. The court noted that “Russell did not carry her burden of proving that Walmart itself engaged in volitional conduct by posting or approving the listings that used her photographs.” The key distinction was that “Walmart did not play an active role in the selection and distribution of the copyrighted photographs. Much like the website owners in Zillow and Giganews, Walmart merely provided an online platform onto which Sunsea, a third-party DSV, uploaded the infringing content.”
For copyright holders, this decision provides valuable strategic guidance and strengthens their ability to enforce rights against online marketplaces. The ruling establishes clear criteria for when platforms can be held directly liable for infringement, giving rights holders specific factors to investigate when pursuing claims. Copyright owners should focus on documenting evidence of marketplace control, including whether platforms take legal title to merchandise, control shipping and payment processes, or present themselves as the seller rather than merely hosting third-party listings. The decision also demonstrates that partial victories can still be meaningful, as Ms. Russell succeeded on her lamp claims even while losing on the photograph claims, showing that comprehensive enforcement strategies targeting multiple aspects of platform involvement can yield results. Rights holders can use this precedent to argue that platforms engaging in fulfillment services, payment processing, and customer service are not merely passive intermediaries but active participants in the sale of infringing goods.
The dissenting opinion in the case highlighted the contentious nature of these determinations. Judge Desai argued that “substantial evidence supports the jury’s verdict finding Walmart liable for infringement of Russell’s copyrighted lamps” and criticized the majority for “improperly reweigh[ing] the evidence in Walmart’s favor.” This disagreement among judges suggests that similar cases may continue to produce varying results depending on specific facts and judicial interpretation.
This ruling also creates both a roadmap and a potential minefield for marketplace operators. Companies that take legal title to inventory, control shipping and logistics, handle customer payments directly, present products as sold by their company, or exercise editorial control over listings face higher risk of copyright liability. Conversely, businesses that provide purely technical hosting services, use automated systems without human review, allow third parties to ship directly to customers, or clearly attribute sales to third-party vendors may enjoy greater protection from copyright claims.
The ruling suggests that as platforms like Amazon, eBay, and others expand their fulfillment services, advertising integration, and seller support programs, they may increase their exposure to legal liability by participating in the sale of infringing goods even where third party vendors may arguably be providing the goods to consumers. The more control online vendors exercise, even if intended to help sellers, the more likely they are to be held responsible for what those sellers do. This creates a challenging balance for platform operators who must weigh the benefits of increased seller integration against potential legal risks.
Morgan J. Sholtis is a law clerk and Teige P. Sheehan, Esq., Ph.D. is a partner with Heslin Rothenberg Farley & Mesiti P.C.