Licensing of exclusive rights can eliminate standing to sue for copyright infringement

Published February 21, 2018

In a recent copyright case in the District of Oregon, Judge Simon granted the defendant’s motion for summary judgment that the plaintiff lacked standing to sue for copyright infringement because plaintiff had granted others most of the exclusive rights under its copyright.

The plaintiff, Fathers & Daughters (“F&D”), is the author and owner of the copyright for the screenplay and motion picture Fathers & Daughters, a 2015 film starring Russell Crowe and Amanda Seyfried. F&D entered into a sales agency agreement with Goldenrod Holdings and its subsidiary, Voltage Pictures, to license most of the rights (e.g., rights to license, rent, and display in theaters and on television) of Fathers and Daughters. Goldenrod, in turn, entered into an exclusive license with Vertical Entertainment to distribute the film. The transfer of these exclusive rights from F&D to others were found to be sufficient to establish that F&D is not the “legal owner” with standing to sue.

Key to this inquiry is whether the plaintiff is the “legal or beneficial owner of an exclusive right under a copyright.” They are only six exclusive rights:

  1. to reproduce the work,
  2. to prepare derivative works based upon the work,
  3. to distribute copies of the work,
  4. to perform the work publicly,
  5. to display the work publicly, and
  6. to record and perform the work by means of an audio transmission.

See 17 U.S.C. §106; Minden Pictures, Inc. v. John Wiley & Sons, Inc., 795 F.3d 997, 1002 (9th Cir. 2015).

Under the Copyright Act, the owner of a copyright can transfer ownership of a copyright “via an assignment or an exclusive license.” 17 U.S.C. §101. Because F&D granted an exclusive license to others, F&D cannot sue for infringement of the rights that were transferred. The court specifically noted that the rights at issue in this lawsuit, downloading Fathers and Daughters over the internet, via a computer, using BitTorrent software fell squarely within the digital rights exclusively licensed to Vertical in its distribution agreement.

The court also rejected F&D’s claims that it had standing as a “beneficial” owner and as a contractual matter. First, F&D did not establish standing as a beneficial owner because it did not establish that it receives royalties from Vertical (the distributor), which has an agreement with Goldenrod, not F&D. Second, F&D cannot establish standing based on its contractual reservation of the right to sue infringers because under the 9th Circuit’s opinion in Righthaven, assignments that transfer the bare right to sue for infringement of copyrights, without the transfer of any associated rights in the articles, are insufficient to confer standing to sue.

Posted on 2/21/2018 by Deakin Lauer