Licensing Agent Has Standing to Bring Copyright Infringement Suit re: Stock Photography

— Article by Jacqueline Mahoney.

Addressing the issue of whether a photograph licensing agent has standing to bring an infringement suit under the Copyright Act, the U.S. Court of Appeals for the Ninth Circuit reversed a district court decision, concluding the agent’s exclusive right to sublicense photographs to third parties was sufficient to establish standing though the photographers retained the copyright. Minden Pictures, Inc. v. John Wiley & Sons, Inc., Case No. 14-15267 (9th Cir., July 29, 2015) (Fletcher, J).

Minden Pictures is a stock photography company that serves as a licensing agent for dozens of photographers. The photographers entered into “Agency Agreements” with Minden. Under the terms of the agreements, the photographers appointed Minden as the sole and exclusive agent and representative with respect to licensing of the photographs. The photographers retained the right to personally use the photographs as well as the right to some commercial use. In addition, the photographers retained the copyright to the photographs. Minden licenses the copyrighted photographs for use by third parties. John Wiley & Sons is an educational publisher. Wiley acquired a license from Minden to print 20,000 copies of certain photographs for use in textbooks.

In 2012 Minden brought an infringement suit against Wiley alleging Wiley substantially exceeded the scope of the licenses granted by Minden by publishing far more copies of the books than permitted under the licenses. Wiley moved to dismiss the suit for lack of subject-matter jurisdiction (which the court noted should have been styled as a motion for failure to state a claim). Wiley alleged Minden lacked standing to sue because Minden did not have an ownership interest in the copyrighted photographs. The district court agreed with Wiley and it granted Wiley’s motion to dismiss. Minden appealed.

Minden argued on appeal the agreements with the photographers conveyed an ownership interest in the copyright sufficient to provide standing to bring suit; the 9th Circuit agreed.

Under the Copyright Act, the “legal or beneficial owner of an exclusive right” under a copyright is entitled to institute an infringement action even though the licensee does not hold legal title to the work. The Copyright Act enumerates six “exclusive rights” of the copyright owner. Under the divisibility principle, the Copyright Act permits a copyright owner to subdivide the interest in the exclusive copyright rights. Thus, a copyright holder may split the rights between parties. Any party to whom an exclusive right has been transferred has standing to bring an infringement action based on the right transferred. However, a party granted a “non-exclusive” right does not have standing bring an infringement suit.

The 9th Circuit found the “Agency Agreements” transferred the legally cognizable right to reproduce and to authorize the reproduction of the copyrighted photographs to third parties. The divisibility principle that allows division of rights granted under the Copyright Act applies with equal force when the interest granted is an exclusive license to grant licenses to others. As the “sole and exclusive agent” to license any and all uses of the photographs, Minden has the power to reproduce, distribute and display the photographs. The 9th Circuit found that when a licensee has been granted one or more exclusive rights, even though those rights may be shared with the copyright owner, the licensee has standing to sue based on the transferor rights. Thus, both Minden and the photographers may bring an infringement suit to prevent third parties from using the photographs.

© 2015 McDermott Will & Emery. This article appeared on The National Law Review website. Reprinted with permission of the author.

Image of Jacqueline MahoneyJacqueline Mahoney is an associate in the law firm of McDermott Will & Emery LLP and is based in the firm’s Silicon Valley office. She focuses her practice on patent preparation and prosecution. Jacqueline has experience prosecuting patents in a broad range of fields, including pharmaceuticals, drug delivery and medical devices. She has prosecuted both foreign and U.S. patents. Jacqueline has also worked on infringement analyses and due diligence investigations.

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