“Trolls,” or intellectual property assertion entities, refer to business entities that purchase I.P. portfolios and file infringement lawsuits. Many are familiar with this concept in the patent context, but few recognize there are also assertion entities that purchase copyright assignments.
In a recent Ninth Circuit case, Righthaven LLC v. Hoehn, 2013 WL 1908876, the panel affirmed the district court’s decision that Righthaven, a non-practicing entity that sued for the unauthorized posting of articles online, did not have standing for the copyright infringement lawsuit.
Under Title 17, Section 501, a party has standing to sue for copyright infringement only when it is “the legal or beneficial owner of an exclusive right under a copyright.” The exclusive rights include the right: to reproduce, to prepare derivative works, to distribute, to publically preform, and to publically display.
Significantly, the “exclusive rights” of a copyright owner do not include the right to sue. At issue in Righthaven, was whether the assignment between Righthaven and the Author of the Work conferred more than just an “assignment of the bare right to sue for infringement, without the transfer of an associated exclusive right.” Such an assignment does not confer standing to sue. Silvers v. Sony Pictures Entertainment, Inc., 402 F.3d 881, 890 (9th Cir. 2005).
Righthaven, of course, argued that the assignment conferred ownership of one or more exclusive rights under the Copyright Act. The agreement stated that Righthaven received “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.”
The Court disagreed with Righthaven. It emphasized “merely calling someone a copyright owner does not make is so.” The “substance and effect of the contract” did not in fact transfer any exclusive rights. The agreement between the parties stated that the Author would automatically receive an exclusive license in the Works—so that the Author could continue to exploit the Works. By doing so, Righthaven was left “without any ability to reproduce the works, distribute them, or exploit any other exclusive right…Righthaven was left only with the bare right to sue, which is insufficient for standing.”