Property, intangible

a blog about ownership of intellectual property rights and its licensing

Another Copyright Troll Learns a Lesson on Standing

I don’t normally write about what some might characterize as “copyright trolls,” others cover it well enough. You know the story, though, a company is set up solely to do copyright enforcement and starts suing masses of people. The problem is that copyright law does not permit the assignment of a cause of action; the plaintiff must also own some of the exclusive rights of a copyright. The most infamous copyright troll was Righthaven, who tried three times to write an assignment that would give it standing, two were reviewed by courts, and neither withstood the challenge. As a result of the multiple Righthaven cases, we have a very high awareness of the potential for challenging a suit based on copyright ownership in the troll scenario and a significantly expanded body of law on copyright assignment too.

Which brings us to the short decision in Contra Piracy v. Does 1-2919. You probably know what the issue is just seeing that the plaintiff is “Contra Piracy,” and the first paragraph in the Background confirms it:

Plaintiff is a Swiss association that provides counter-piracy services for copyright owners that are members and part-owners of the association. (Compl.¶ 6.) These members provide Plaintiff with an “exclusive, limited assignment of the copyright or copyrights owned by the member” and direct Plaintiff to “engage in judicial and extrajudicial enforcement actions against infringements of the copyright or copyrights on an international basis.”

On an ex parte application for leave to take discovery so that Contra Piracy could identify the Does, the court sua sponte raises standing:

Plaintiff alleges little more than that it has been assigned “enforcement rights” in the work at issue, and these allegations, even if true, do not confer standing. Plaintiff alleges that it is the “exclusive assignee of all enforcement rights and interest worldwide, with the full authority to pursue and prosecute any causes of action with respect to the Work.” (Compl.¶ 5.) Plaintiff likewise alleges that it is “responsible for the enforcement of the copyright in the Work, by agreement and assignment of the enforcement rights in the Work from the copyright owner.” (Compl.¶ 16.) Plaintiff also argues in its application for discovery that “it holds the exclusive enforcement rights in the registered, copyrighted Work” and that this assignment is limited. (Dkt. 6 at 1, 8.) Plaintiff does not explain what it means by “enforcement rights,” but they appear to be nothing more than the “bare right to sue” that the Ninth Circuit held insufficient to confer standing in Silvers and Righthaven.

The remainder of Plaintiff’s ownership allegations are vague about what rights Plaintiff actually holds. Plaintiff’s allegation that it has been provided “written assignments of copyrights” does not specify what, if any, exclusive rights were transferred. (Compl.¶ 6.) Plaintiff does also allege conclusorily that it is the holder of “pertinent exclusive rights infringed by Defendants, as alleged hereunder,” but does not specify what, if any, exclusive rights it holds within the meaning of § 106. (Compl.¶ 17.)

Because there are serious questions about whether Plaintiff has standing to sue, the Court denies Plaintiff’s applications for early discovery of Doe Defendants and extension of time. Standing is a jurisdictional prerequisite, and this issue should be addressed at the outset, before any discovery or other proceedings. This Court is required to assess Plaintiff’s standing sua sponte, D’Lil v. Best W. Encina Lodge & Suites, 538 F.3d 1031, 1035 (9th Cir.2008), and may hear evidence when necessary. Roberts v. Corrothers, 812 F.2d 1173, 1177 (9th Cir.1987). Consequently, the Court orders Plaintiff to show cause why this case should not be dismissed for lack of subject matter jurisdiction.

Note that the Complaint did in fact allege that the plaintiff had some exclusive rights. I think under normal circumstances courts don’t look too hard as long as all the elements of the claim are there, but Righthaven has the courts on heightened alert. This court didn’t even wait for a defendant to challenge standing but nipped it in the bud. Tough going for copyright trolls out there.

Contra Piracy v. Does 1-2919, No. C-13-01133 EDL (N.D. Calif., May 31, 2013).

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