Publisher Fruitlessly Contests Stock Photo Company’s Standing to Sue

Minden Pictures is a stock photography company that also acts as a licensing agent for many photographers.  Minden considers itself “one of the world’s premium providers of wildlife and nature photos.”  Between 1993 and 2008, Minden entered into agreements with photographers that authorized Minden to act as the sole and exclusive agent and representative regarding licensing the uses of the photographers’ submitted images.  The photographers gave Minden the unrestricted, exclusive right to distribute, license and exploit their images.  At the same time, the photographers reserved some rights to themselves, but were prohibited from hiring another licensing agent.  Minden and the photographers also agreed that the photographers owned the copyrights.  Minden and the photographers later entered into agreements conveying some ownership interest to Minden and authorizing Minden to bring lawsuits for the unauthorized use of the images.

Minden sued educational publisher John Wiley & Sons for copyright infringement for exceeding the scope of the licenses Minden granted to it.  Wiley moved to dismiss the case on an FRCP 12(b)(1) motion (which the court noted should have been a 12(b)(6) motion) for failure to state a claim for relief.  Wiley argued that Minden lacked standing under the Copyright Act to bring the lawsuit, alleging Minden was not an owner and therefore could not sue for copyright infringement.  The district court agreed with Wiley and dismissed the case.  The Ninth Circuit reversed.  Minden presented evidence to the Ninth Circuit of its allegations of Wiley’s longstanding practice of copyright infringement, citing eleven other cases brought against Wiley.  The Ninth Circuit disregarded those allegations and limited its discussion to Minden’s case against Wiley.

The Ninth Circuit agreed with Minden that the agreements signed by the photographers conveyed a copyright ownership interest sufficient to permit Minden to sue for infringement. 

Only the legal owner or the beneficial owner of an exclusive copyright right is entitled to sue for copyright infringement.  17 USC §501(b).  Section 106 enumerates the exclusive bundle (six different things) of copyright rights.  The copyright owner can transfer any of these rights to other people, while still retaining rights for herself.  The copyright owner can also subdivide her interest in any of her copyright rights. 

Any party that the copyright owner transfers a subdivision of a right to has standing to bring an infringement action based on that right. 

Thus a party granted an exclusive license to display a work may bring an infringement action challenging the unauthorized display of that work by another party, even though the licensee does not hold legal title to the work.

However, a party granted a mere ‘nonexclusive license’— as, in this case, Wiley’s license to reprint a copyrighted photograph in a textbook — cannot bring an infringement suit.  Wiley argues that Minden cannot bring an infringement suit because Minden has been granted, at most, a ‘nonexclusive license’ to authorize the reproduction, distribution, and display of the photographs. We disagree.

(Opinion pdf pages 10 – 11).

The Ninth Circuit viewed it as uncontested that the photographers transferred an interest in a legally recognizable copyright right to Minden.  “The only question is what kind of interest Minden possessed.”  (Opinion pdf page 12).  The Ninth Circuit agreed with Wiley that Minden’s agreements with the photographers did not make Minden the legal owner of the copyrights. 

Wiley next argued that Minden’s agreements with the photographers were nonexclusive licenses.  The Ninth Circuit disagreed. 

The thrust of Wiley’s argument is that the Agency Agreements do not grant ‘exclusive licenses’ to Minden to grant licenses to third parties, because the photographers retain the right to issue licenses themselves. That is, Wiley argues, because Minden was not the sole party authorized to issue licenses to the photographs, it cannot have held an ‘exclusive license’ that would permit it to bring suit under the Act. This argument runs contrary to the divisibility principle embodied by the 1976 Act, and to the bulk of the caselaw and commentary in this field. Wiley’s argument is inconsistent with the notion that, under the 1976 Act, a single copyright, or right thereunder, may be divided between parties, with each co-owner entitled to sue to protect his or her interest in the right. As we recently explained in the context of copyright ownership, the word ‘exclusive’ in the Act cannot mean that only sole owners possess ‘exclusive’ rights. If an ‘exclusive right’ could only be possessed by a sole owner of a copyright, a coowner would be unable to bring an infringement action to protect his interest.

(Opinion pdf pages 12 – 13).

The Ninth Circuit continued its analysis:

We see no reason why the divisibility principle should not apply with equal force when the interest granted is an exclusive license to grant licenses to others. The reason the Act prevents a holder of a ‘nonexclusive license’ to use a copyrighted photograph from bringing an infringement action against others who use the same photograph is that such a licensee has no more than a privilege that protects him from a claim of infringement by the owner of the copyright.  That is, because such a licensee has been granted rights only vis-à-vis the licensor, not vis-à-vis the world, he or she has no legal right to exclude others from using the copyrighted work, and thus no standing to bring an infringement suit.  But when a licensee has been granted rights vis-à-vis the world — even if he or she shares those rights with another party, including the owner of the copyright — we see nothing in the Copyright Act that requires us to deem such an arrangement a mere ‘nonexclusive license’ insufficient to give rise to standing to sue.

(Opinion pdf pages 13 – 14).

The Ninth Circuit addressed Minden’s photographer agreements.

That the photographers have retained some limited degree of authority to grant licenses themselves does not eliminate Minden’s interest in the copyright as the sole entity to act as the photographers’ licensing agent. It merely means that both Minden and the photographers, under the terms of the Agreements, can prevent those third parties who have not received permission to use the photographs from using them. To hold otherwise would be inconsistent with the divisibility principle embodied by the 1976 Act.

(Opinion pdf page 15).

The Ninth Circuit stated its position on the importance of recognizing Minden’s rights:

By honoring the parties’ contracting expectations, we also remove what would otherwise be a significant practical disadvantage in seeking to protect a copyrighted work. If Minden could not bring an infringement suit on behalf of the photographers for whom it serves as a licensing agent, those photographers would have to bring suit individually, either in individual actions or in a single suit under Federal Rule of Civil Procedure 20. Both procedural alternatives have significant disadvantages. In a suit against Wiley brought by an individual photographer, alleging infringement only as to his or her own photographs, the expenses of litigation would very likely dwarf any potential recovery. And in a suit under Rule 20, both the total cost of litigation and the burdens of coordination would be significant, given the complexities of litigating on behalf of thirty-some named plaintiffs. The practical disadvantages of these two alternatives compared with the prospect of licensing agents bringing suit as sole plaintiffs are likely obvious to defendants such as Wiley, and it is not implausible that Minden’s inability to bring an infringement suit would be an incentive to engage in infringing behavior.

(Opinion pdf page 16).

This case is Minden Pictures, Inc., v. John Wiley & Sons, Inc., No. 14-15267, Ninth Circuit Court of Appeals.

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