Property, intangible

a blog about ownership of intellectual property rights and its licensing

Righthaven, the Gift that Keeps on Giving

I’ve written before (recursive link) about copyright registrations by photo agencies. Rather than individual photographers registering their own works, it is common practice for a photo agency to periodically register the works of many photographers en masse.

As described in a recent 9th Circuit opinion, the process was created collaboratively by a photography trade association and the Copyright Office. As described in an article written by the trade association, “the agreement must grant the agency legal title in the individual photographs contained in the catalog solely for purposes of copyright registration.” A subsequent clarification adds “the copyright can be reassigned to the photographer after registration.”

Some agencies did just that. In Bean v. McDougall Littell, the court ratified the validity of this arrangement for purposes of standing. Photographer Bean assigned his copyright to Corbis in order to register the works, and once the works were registered the copyright ownership reverted back to Bean. He then sued McDougall Littell for copyright infringement. As explained by the court:

Thus, the question becomes: was the language of the contract transferring ‘legal title in the undersigned’s images … solely for the purpose of copyright registration‘ (emphasis in original) adequate to transfer ‘all rights under the copyright’ to Corbis? The Court holds that it was.

But some agencies have riffed on the process, which brings us to the current case. In DRK Photo v. McGraw-Hill Cos., DRK Photo entered into assignment agreements with photographers. Let’s start with the difference between this case and the Bean case; in Bean the photographer was the plaintiff, but here the agency is the plaintiff. So the assignment language was tweaked to say this:

The undersigned photographer, the sole owner of the copyrights in the undersigned’s images (“the Images”) selected by DRK PHOTO (“DRK”) and included in DRK’s collection, hereby grants to DRK all copyrights and complete legal title in the Images. DRK agrees to reassign all copyrights and complete legal title back to the undersigned immediately upon completion of the registration of the Images, as evidenced by DRK’s receipt of a Certificate of Registration from the United States Copyright Office for such Images, and resolution of infringement claims brought by DRK relating to the Images.

The undersigned agrees and fully transfers all right, title and interest in any accrued or later accrued claims, causes of action, choses in action—which is the personal right to bring a case—or lawsuits, brought to enforce copyrights in the Images, appointing and permitting DRK to prosecute said accrued or later accrued claims, causes of action, choses in action or lawsuits, as if it were the undersigned.

Any proceeds obtained by settlement or judgment for said claims shall, after deducting all costs, expenses and attorney’s fees, be divided and paid 50% for the undersigned and 50% for DRK.

The court held that this language was not adequate to give DRK Photo standing, adopting the reasoning of an earlier suit involving these same assignment documents:

[I]n “substance and effect,” Righthaven, 716 F.3d at 1169, they conveyed to DRK nothing more than the “bare right to sue.” Wiley, 2014 WL 684829, at *16 (citing Minden I, 929 F.Supp.2d at 968).

I don’t buy it, and in my opinion this case is a victim of the Righthaven series of cases (p. 11). Because Righthaven was a copyright troll, its agreements were judged harshly, creating questionable precedent, and now we have the fallout.

I believe this agreement is a pretty easily read to say that DRK Photo might well be the current copyright owner. It was assigned “all copyrights and complete legal title,” not just a “bare right to sue.” The ownership reverts to the photographer “upon completion of the registration of the Images … and resolution of infringement claims brought by DRK relating to the Images.” Thus there are two conditions before the copyright reverts to the individual photographers, registration AND resolution of infringement claims.

As mentioned above, we know that one district court has blessed the concept of assigning the copyright for purposes of registration, followed by reversion upon successful registration. There is another, Alaska Stock, LLC v. Pearson Education, Inc., which held that an assignment of the copyright along with accrued claims for the purpose of bringing infringement suits, with a reversion the photographer after the suit is over, is also perfectly fine. The reasoning bears repeating:

The Ninth Circuit has never suggested that the reason an assignment is made—even if that reason is simply to facilitate litigation—or an assignment’s temporary nature will transform an otherwise effective assignment of ownership into an assignment of the bare right to sue. Rather, the problem arises where the assignor labels an assignment a transfer of ownership, but expressly reserves the exclusive rights in the copyright to itself. Those are not the facts presented here.

The DRK Photo court claims to distinguish the Alaska Stock decision but I don’t know how—it says “The court in Alaska Stock explained that standing would not be established ‘where the assignor labels an assignment a transfer of ownership, but expressly reserves the exclusive rights in the copyright to itself.’ These fact are not present here.” Yes they are; the language of the assignment agreements is exactly the same in both cases. To the extent the DRK Photo court relies on emails from DRK Photo to the photographers that talk about the purpose of the assignment (for some reason the court quotes them in the background portion but never mentions them again), it would be improper to use the emails to alter the plain meaning of the written agreement. Instead though, the court relies on Minden Pictures, a case involving the assignment of joint ownership rather than sole ownership, for its rationale.

In DRK Photo, presumably the certificates of registration have issued and the first condition met, but we don’t have any information about the second condition. The assignment agreements were executed in 2008 and early 2009, and the lawsuit filed in 2012, but we have no information about whether there were any known claims at the time of the assignment. If there were, then the second condition wasn’t met and DRK Photo still the owner. If there weren’t, then the ownership of the copyright would have reverted to the photographers upon receipt of the Certificates of Registration.

The language of the assignment agreements suggests there were known claims and the assignment was in contemplation of pursuing those claims. There’s nothing wrong with that; it’s well-settled that one can assign the copyright as well as accrued claims, which the language of these agreements did. A reversionary right on a conditions subsequent doesn’t mean that the original assignment wasn’t valid, as properly held in Alaska Stock.

But the fear of Righthaven lives on.

DRK Photo v. McGraw-Hill Cos. No. CV 12-8093-PCT-PGR (D. Ariz. June 10, 2014).

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