Other Court’s Finding of Lack of Standing Based on Faulty Assignment Means Estoppel
By Anandashankar Mazumdar
A finding by another court that a stock photo agency did not have standing to bring copyright infringement claims based on faulty assignment contracts estopped infringement claims against an educational publisher, the U.S. District Court for the Northern District of California ruled May 13 (Minden Pictures Inc. v. John Wiley & Sons Inc., N.D. Cal., No. 3:12-cv-04601-EMC, 5/13/13).
Dismissing the claims to the extent that they were based on assignment, the court, however, left open the possibility that the plaintiff might be able to establish standing on the basis of agency contracts. The execution of “corrected” assignment contracts after the filing of the claims failed to affect standing in the instant proceeding.
Stock Photo Agency Claims Infringement
Since 1987, Minden Pictures Inc. of Watsonville, Calif., has served as a stock photograph agency, specializing in nature, wildlife, and landscape images. John Wiley & Sons Inc. of Hoboken, N.J., is a publisher of educational materials, including textbooks and travel guides.
In 1997, Wiley licensed the use of about 230 Minden images. Minden sued Wiley, alleging that over a period of several years, Wiley used the images in several dozen textbooks and travel guides beyond the scope of the licenses it had purchased.
Similar claims have been made recently against publishers by holders of copyright interests in photographs, such as in Bean v. McDougal Littell, No. 07-8063-PCT-JAT (D. Ariz. July 28, 2008) (153 PTD, 8/8/08); Bean v. Houghton Mifflin Harcourt Publishing Co., 97 U.S.P.Q.2d 1983 (D. Ariz. 2010) (155 PTD, 8/13/10); Muench Photography Inc. v. Houghton Mifflin Harcourt Publishing Co., No. 09-CV-2669 (LAP) (S.D.N.Y. May 4, 2010) (87 PTD, 5/7/10); Palmer Kane L.L.C. v. Scholastic Corp., 105 U.S.P.Q.2d 1973 (S.D.N.Y. 2013) (42 PTD, 3/4/13); and Palmer Kane L.L.C. v. Scholastic Corp., 103 U.S.P.Q.2d 1632 (S.D.N.Y. 2012).
Indeed, Minden itself had brought another such claim against another publisher, Pearson Education Inc. In that proceeding, Judge William Alsup of the U.S. District Court for the Northern District of California granted summary judgment in the publisher’s favor, after finding that Minden did not have standing to bring its infringement claims. Minden Pictures Inc. v. Pearson Education Inc., 3:11-cv-05385 (N.D. Cal. Mar. 5, 2013).
Specifically, Pearson found that the purported assignments from photographers to Minden were flawed.
Wiley moved for dismissal under Fed. R. Civ. P. 12(b)(1), arguing that as a result of the ruling in the Pearson case, Minden was collaterally estopped under the doctrine of issue preclusion from bringing the instant claims. Among Wiley’s justifications was that the two cases had in common 32 photographers who held rights in the relevant photographs, and only four in the Wiley action were not involved in the Pearson action.
Collateral Estoppel Applies in This Case
Judge Edward M. Chen first determined that collateral estoppel did apply to the contracts that formed the basis of Minden’s claims of copyright ownership.
“[Minden] was a party in Pearson, it had a full and fair opportunity to litigate the effect of the copyright assignments, it did in fact present its arguments on the issue, and the order granting summary judgment was a final judgment on the merits,” the court said.
Even with respect to the four photographers whose works had not been at issue in Pearson, the court found that the assignment contracts had been identical and thus application of collateral estoppel was justified.
However, the court declined to issue judgment on the question of whether agency agreements between Minden and the photographers could form an alternative basis for standing. This issue, although raised, had not been resolved in Pearson, and, thus, the court directed further discovery regarding this issue.
Finally, the court rejected Minden’s argument that even if the assignment contracts had been insufficient to confer standing at the time the claims were filed, it had entered into new agreements with the photographers that did not suffer the same defects.
Quoting from Lujan v. Defenders of Wildlife, the court said, “Whether a plaintiff has standing to file suit is evaluated by looking to ‘the facts as they exist when the complaint is filed.’”
The court said that the instant facts were similar to those in Righthaven L.L.C. v. Mostofi, 98 U.S.P.Q.2d (D. Nev. 2011) (62 PTD, 3/31/11)), which also used Lujan as the basis to conclude that jurisdictional facts could not be amended by the parties subsequent to the filing of the claims.
Distinguished was Co-Opportunities Inc. v. National Broadcasting Co., 510 F. Supp. 43, 211 U.S.P.Q. 103 (N.D. Cal. 1981), in which there was an assignment of copyrights prior to the relevant lawsuit, but after the accrual of the infringement claims.
That case rejected standing on the basis that the contract had failed to include assignment of the already existing causes of action for infringement. However, Co-Opportunities allowed the plaintiff to cure the standing issue by executing the assignment of the claims back to the date of the complaint.
“The problem for [Minden] is that the case at bar does not involve a previous transfer of copyright that simply failed to assign the right to pursue previously accrued causes of action,” the court said. Indeed, the instant causes of action had not accrued prior to the purported assignment.
Thus, the court found that there was no standing based on the assignment contracts. The question of the effectiveness of the agency contracts was subject to further proceedings.
Minden was represented by Alexander Rice Kerr of Harmon & Seidman, San Francisco. Wiley was represented by Christopher Beall Levine of Sullivan Koch & Schulz, Denver.