Property, intangible

I have called Righthaven the gift that keeps on giving. In Righthaven, the plaintiff tried to obscure the fact that there wasn’t a true copyright assignment by putting the relevant terms in different agreements. Righthaven, a copyright troll, eventually got whacked for it by the 9th Circuit. Now, when defendants see any kind of retained rights in an assignment agreement they challenge it as defective in light of Righthaven.

But we have a good analysis from a Massachusetts court. Non-party Sheila Wolk assigned the copyright in a number of her works to plaintiff Robert Sarvis. Sarvis found infringing copies on the defendant Polyvore’s website, sent a DMCA notice to the site, and ultimately sued.

Wolk assigned the copyrights to secure a line of credit with language that was unequivocal and complete. Wolk:

exclusively, absolutely and unconditionally and irrevocably assigns, transfers, sets over, and conveys to Robert H. Sarvis… (“Assignee”) all of Sheila Wolk’s right, title, and interest throughout the universe in and to that certain original material referred to as the Art Images listed and described in Exhibit A attached hereto, including, without limitation, the copyrights therein in the United States of America, and all copyrights and property rights therein and elsewhere throughout the universe, and further including without limitation any and all versions of said Art Images and all copyrights in such other versions…. The rights hereby granted to the Assignee include, without limitation, the right to do any and all acts or things necessary or appropriate to protect the rights granted hereunder, including the copyrights, and to institute any actions for such purpose in the name of the Assignee, Assignor, or both of them.

But the agreement also included a reversion, if “(1) The Line of Credit is paid in full including as interest due; and (2) The Line of Credit is terminated by Robert Sarvis or Sheila Wolk; and (3) A one time payment by Sheila Wolk to Robert Sarvis of $1,000.00.”

The pro se plaintiff also made some statements in his complaint and DMCA notice that weren’t in his best interest to make. In the complaint he said he had the “right to initiate copyright infringement actions to protect his collateral.” And in the DMCA notice he sometimes characterized the copyright as still owned by Wolk:

“(1) “Polyvore … and its Internet Users” continue to copy “the registered art of Sheila Wolk without authorization in violation of her copyrights”; (2) plaintiff is “authorized to act on behalf of the copyright owner, Sheila Wolk”; and (3) plaintiff “has a good faith belief that” Polyvore’s use “is not authorized by the copyright owner, Sheila Wolk.”

Polyvore moved to dismiss claiming that Sarvis didn’t have standing to bring a copyright infringement claim.

But the court disagreed. There was nothing wrong with the assignment:

“[T]he rights granted” included “without limitation” the ability to institute a lawsuit. Construing this language in its ordinary sense, the parties transferred the copyrights and property rights to plaintiff exclusively (including, but not limited to, the right to bring a lawsuit) and gave Wolk the ability to revert the transfer back to her by paying the line of credit in full or $1,000 or otherwise terminating the line of credit.* The Rule 12(c) or 12(b)(1) record therefore sufficiently establishes that plaintiff is the owner of the copyrights to the art images listed in exhibit A of the assignment.

Polyvore claimed that the right of reversion was materially indistinguishable from the language in the Righthaven agreements, but the court disagreed:

The language in the Righthaven assignments “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 LLC v. Hoehn, 716 F.3d at 1168. The assignments were, however, subject to a previous agreement between the parties stating that, “Despite any Copyright Assignment,” the assignor “shall retain… an exclusive license to Exploit the Publisher Assigned Copyrights for any lawful purpose whatsoever and Righthaven shall have no right or license to Exploit … other than the right to proceeds in association with a Recovery.” …

Here, there is no indication that Wolk and plaintiff entered into prior agreements that limited the rights granted to plaintiff under the assignment or automatically endowed Wolk with an exclusive license and ability to exploit the copyrights…. Unlike the language in the Righthaven agreements, there was no indication that the parties intended to convey only a right to sue. Moreover, the language that the “assignment will revert” if Wolk paid the line of credit, paid plaintiff $1,000 or terminated the line of credit refers to an event that takes place, if at all, after the transfer of the copyrights has already occurred. In short, under the agreement, Wolk transferred the copyrights and property rights in the art images exclusively to plaintiff. Wolk’s right to obtain a reversion of the assignment does not eviscerate the parties’ expressed intent to transfer the copyrights, but it does give her the ability to have the copyrights revert, i.e., reconveyed, back to her if she paid plaintiff $1,000, terminated the line of credit or paid the line of credit in full. Polyvore’s analogy of plaintiff to a creditor with a right to repayment and the copyrights as collateral that “does not change hands” is inapt because Wolk transferred title to the copyrights and property rights to plaintiff.

Sarvis v. Polyvore, Inc., No. 12-12233-LTS (D. Mass. Aug. 24, 2015) (Magistrate Report and Recommendation, adopted by the court in docket entry 100, Sep. 14, 2015).

* The requirements appear to be conjunctive, but that doesn’t change the analysis.

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