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Righthaven LLC v. Hoehn, 2013 WL 1153979 (9th Cir. May 9, 2013) (full-text).
Factual Background Edit
Righthaven's business model is to identify purported copyright infringements on behalf of third parties with whom it has entered into contracts, obtain sufficient rights to sue for infringements from the copyright owners, and then sue the infringers. The agreements with the copyright owners are intended to convey sufficient ownership rights to Righthaven to permit Righthaven to bring suit against alleged infringers.
Stephens Media LLC granted Righthaven revocable copyright assignments for various news articles for which Righthaven had identified existing infringers and initiated copyright infringement suits. Under their agreement, if no litigation is initiated by Righthaven, it must reassign the copyright to Stephens Media, who has retained the exclusive license to exploit its copyrights for any lawful purpose. Stephens Media could, upon notice, revert the ownership of the assigned copyright back to itself. In addition, under the assignment agreement, Righthaven had no right or license to exploit the work or participate in any royalties associated with the work.
District Court Proceedings Edit
After Righthaven filed suit against the defendants, the latter brought a motion to dismiss for lack of standing. Stephens amended the assignment agreement conveying all ownership rights to Righthaven so that Righthaven would be the rightful owner and be able to sue infringers.
The District Court granted the defendants motion for lack of standing, holding that Righthaven had no standing to sue for copyright infringement. Further, the court granted summary judgment on the defendant's claim of fair use.
The court held that the assignment of the right to litigate without the transfer of any of the exclusive rights did not give Righthaven standing to sue. The court looked at the substance and the effect of the assignment agreement, not only the title used in it. It found that the assignment was subject to the terms of the agreement, which placed limits on Righthaven's use of the copyright assigned to it. The court held that these limitations were an indication that Righthaven had no exclusive rights under the Copyright Act.
Moreover, the court rejected Righthaven's argument that it was the parties' intent to convey all rights necessary for it to have standing. It noted that the parties' intent was clear from the agreement and pointed to the fact that Stephens retained complete control over all exclusive rights. The court found that even the amended agreement gave no exclusive rights to Righthaven because it gave Righthaven only a non-exclusive right — giving Righthaven no right to exploit the copyright unless permitted by Stephens.
Appellate Court Proceedings Edit
The Ninth Circuit affirmed the dismissals for lack of standing in both cases. However, it vacated the portion of the district court's order granting summary judgment in Hoehn on fair use because, after concluding that Righthaven lacked standing, the court lacked jurisdiction to reach the merits of Hoehn's fair use defense.