Today the 9th Circuit upheld a California District Court determination that Righthaven failed to have standing to sue on copyrights it acquired. Congrats go out to my good friends Marc Randazza and Jay DeVoy for their awesome job on this case.
The 9th Circuit determined the agreements assigning Righthaven LLC the bare right to sue for infringement of newspaper articles, without the transfer of any associated exclusive rights in the articles, did not confer standing to Righthaven to sue.
Plaintiff Righthaven LLC was founded, according to its charter, to identify copyright infringements on behalf of third parties, receive “limited, revocable assignment[s]” of those copyrights, and then sue the infringers.
Righthaven was not the original owner of the copyrights in these articles. Stephens Media LLC, the company that owns the Las Vegas Review-Journal, held them at the time defendants posted the articles. After the alleged infringements occurred, but before Righthaven filed these suits, Stephens Media and Righthaven executed a copyright assignment agreement for each article. Each copyright assignment provided that, “subject to [Stephens Media’s] rights of reversion,” Stephens Media granted to 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 . . .in and to the Work.”
Righthaven and Stephens Media had previously entered into a Strategic Alliance Agreement (“SAA”), however, that controlled what Righthaven could do with any copyrights assigned to it. After assignment of a copyright, Righthaven was to search for instances of infringement. When Righthaven found an infringement, it could pursue the infringer, but that right was subject to Stephens Media’s veto.
If Righthaven did not obtain a settlement or initiate litigation, it had to reassign the copyright to Stephens Media. Righthaven was required to split any recovery it received with Stephens Media.
The SAA also placed sharp limits on what Righthaven could do with any assigned copyright. Righthaven had no right to exploit the copyrights or participate in any royalties.
Stephens Media retained “an exclusive license” to exploit the copyrights “for any lawful purpose whatsoever,” and to the extent that Righthaven’s pursuit of infringement would “in any manner” diminish Stephens Media’s right to exploit the assigned copyrights, Righthaven granted a license to Stephens Media “to the greatest extent permitted by law so that Stephens Media shall have unfettered and exclusive ability” to exploit its copyrights. Moreover, by providing Righthaven thirty days prior notice, Stephens Media could revert the ownership of any assigned copyright back to itself.
After Righthaven filed suit against [the defendants], each defendant filed a motion to dismiss for lack of standing. Righthaven and Stephens Media subsequently executed a “Clarification and Amendment to Strategic Alliance Agreement.” The agreement purported to clarify that the parties’ intent in entering the SAA was to “convey all ownership rights in and to any identified Work to Righthaven through a Copyright Assignment so that Righthaven would be the rightful owner of the identified Work.”