United States: Right to License Is Not The Same As Right To Sue

Last Updated: February 28 2014
Article by Monte Cooper and Cam Phan

Minden Pictures, Inc. v. John Wiley & Sons, Inc., Case No. C-12-4601 EMC (Judge Chen)

Just because you have the shared right to reproduce copyrighted works, the shared right to distribute copies of the works to the public, the shared right to display the works publically, and the exclusive agency right to license the works to third parties, does not mean that you have standing to sue others for infringement of those copyrighted works under 17 U.S.C. § 501, according to a recent opinion from Judge Chen.

Judge Chen ruled that Minden Pictures, Inc., a stock photo agency that enters into various exclusive agency agreements with photographers in order to license their photos to publishers, did not have standing to sue one of its licensors for copyright infringement, despite the fact Minden Pictures possessed the right under its exclusive agency agreements to license the photographs for certain commercial uses.  Although Minden Pictures alleged that the publisher, John Wiley & Sons, exceeded the scope of the parties' license agreement entered into as a result of Minden's appointment as exclusive agent for the photographers, Judge Chen ruled that Minden Pictures nonetheless lacked standing to assert any copyright-related claims deriving from the rights of ownership set forth in 17 U.S.C. § 106, because it was not a requisite "owner" of the copyrights involved.   Instead, the Court found that the underlying exclusive agency agreements between Minden Pictures and the photographers did not themselves confer the requisite standing from the photographers (i.e. the actual owners of the copyrights in the photographs) to Minden Pictures to sue for any claims of copyright infringement, even if one of the rights conferred through the agency agreements to Minden Pictures was a non-exclusive right to license the photographs.

The exclusive agency agreements between Minden Pictures generally indicated that the photographer appointed Minden Pictures as its "sole and exclusive agent and representative with respect to the Licensing of any and all uses of Images..."   However, the agency agreements also contained provisions whereby both Minden Pictures and the photographers could use and license others to use/reproduce the copyrighted photographs.  Moreover, the agreements stated that "all images shall at all times remain the sole and exclusive property of the Photographer, including the copyright." Judge Chen relied on this sentence to conclude that the photographers did not intend to convey to the agency any ownership interest in the copyrighted works sufficient to confer standing under 17 U.S.C. § 501 to sue for infringement.  He was especially convinced that no ownership rights passed to Minden Pictures because the parties' subsequent e-mail correspondence reflected that the parties themselves understood that the agreements were insufficient to provide the agency "legal standing in US courts to claim damages for [the photographers]."  Therefore, he concluded that the agency did not have standing to bring a copyright infringement suit, because it was not the legal owner of an exclusive right.

Judge Chen noted that a party like Minden Pictures could have standing under 17 U.S.C. § 101 if the copyright owner gives that party an exclusive license to the copyrighted works.  The agency elected not to have each agency agreement evaluated separately to ascertain if Minden Pictures had an exclusive right to license the photographs of the relevant photographer, and instead conceded that it was not an exclusive licensee under any of the agreements because the photographers retained the right to also license the photographs.  As a result, Judge Chen rejected the agency's argument that it had a co-ownership interest in the photographs because it had the mere authority to also issue licenses.  Judge Chen reasoned that since even a non-exclusive licensee may issue sublicenses, the right to license, alone, is insufficient to claim ownership.  Thus, he concluded, the right to license to others is not an enumerated, exclusive right under 17 U.S.C. § 106 to confer standing. Instead, he found that the agency was more akin to "licensing agents," which do not have any ownership rights. He specifically observed that some courts have refused to find standing under the Copyright Act even where the plaintiff appeared to be the exclusive licensing agent. Accordingly, under the facts of the case before him, Judge Chen ruled that "even if an exclusive right to issue licenses as an exclusive licensing agent were sufficient to confer ownership, Minden had no such exclusive right" because "the photographers retain the rights to issue their own licenses."

Finally, Judge Chen did not allow the photographers to "ratify" the filing of this lawsuit under Federal Rule of Civil Procedure 17 by executing "subsequent assignments" after the filing of the suit.  He noted that the Ninth Circuit has held that a copyright owner's assignment of the bare right to sue for infringement is insufficient to give a party standing.  To allow the photographers to "ratify" the filing by executing subsequent assignments would effectively allow after-the-fact-assignment of the bare right to sue, which would be inconsistent with the Ninth Circuit.  Judge Chen however left open the course for the photographers to sue the defendant themselves.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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