The Righthaven train took another derailment recently, after being handed a substantial loss in the Ninth Circuit. The Court held that a bare assignment of the “right to sue” for copyright infringement was not enough to confer standing without the transfer or assignment of an exclusive right under the Copyright Act. Righthaven LLC v. Hoehn, Case No. 11-16751 (9th Cir. May 9, 2013) (pdf available here). Plaintiff Righthaven sued Wayne Hoehn for posting articles from the “Las Vegas Review-Journal” (“LVRJ”) online without permission. Hoehn is represented by Marc Randazza of the Randazza Legal Group in Las Vegas, NV. The district court determined that Righthaven had no standing to sue for copyright infringement because it did not own any of the exclusive rights under the Copyright Act (for example, the right to copy, the right to distribute, etc.) The lower court also determined that Hoehn was protected by fair use, and granted summary judgment on that ground. The Ninth Circuit affirmed the motions to dismiss, agreeing with the lower court that Righthaven lacked standing to sue. However, the Ninth Circuit vacated the summary judgment order on fair use.
Righthaven identifies copyright infringements on behalf of third parties (in this case, LVRJ) and receives “limited, revocable assignments” of those copyrights to sue the infringers. Hoehn had copied an opinion piece from the LVRJ into one of his comments on a discussion board website. Stephens Media LLC is the copyright owner for the LVRJ. After Hoehn posted the article, but before Righthaven filed suit, Stephens Media executed an assignment to Righthaven that granted Righthaven “all copyrights requisite to have Righthaven recognized as the copyright owner of the Work for purposes of Righthaven being able to claim ownership as well as the right to seek redress for past, present, and future infringements of the copyright[.]” Prior to this, Righthaven and Stephens Media had executed a Strategic Alliance Agreement (“SAA”), which controlled what Righthaven could do with any copyrights assigned to it. Essentially, the assignment was useless and Randazza helped to uncover the scheme being perpetuated by Righthaven.
The Copyright Act confers standing upon the legal or beneficial owners of an exclusive right. 17 U.S.C. § 501(b). The Copyright Act’s list of exclusive rights does not include the right to sue for copyright infringement. As such, “the assignment of the bare right to sue for infringement, without the transfer of an associated exclusive right, is impermissible under the
Copyright Act and does not confer standing to sue.” Righthaven, Slip Op. P. 7. Righthaven argued that its contract with Stephens Media was sufficient to confer standing. The Ninth Circuit disagreed after reviewing the contract. For example, the SSA contract language placed limits on what Righthaven could do with the copyrights.
“The SAA clearly delineated the respective rights of Righthaven and Stephens Media in any assigned works. Moreover, the contract evinced not just an intent that Righthaven receive whatever rights were necessary for it to sue, but also an intent that Stephens Media retained complete control over all exclusive rights. The problem is not that the [lower] court did not read the contract in accordance with the parties’ intent; the problem is that what the parties intended was invalid under the Copyright Act.” Righthaven, Slip Op. P. 10. The amended SSA was entered into after suit was filed. The court stated that since the intellectual property interest was acquired after filing suit, this was not sufficient to support standing to bring suit.
Turning to the defense of fair use, the Ninth Circuit found that if the plaintiff lacks standing to sue, a court does not have subject matter jurisdiction over the case. Thus, the Ninth Circuit vacated the lower court’s summary judgment of fair use.