John Wiley & Sons, Inc. v. DRK Photo, Docket No. 15-1134

• Decision Date: 16 February 2018
• Docket Number: Docket No. 15-1134,August Term, 2015
• Citation: 882 F.3d 394
• Parties: JOHN WILEY & SONS, INC., Plaintiff-Appellee, v. DRK PHOTO, Defendant-Appellant.
• Court: U.S. Court of Appeals — Second Circuit

882 F.3d 394

JOHN WILEY & SONS, INC., Plaintiff-Appellee,
v.
DRK PHOTO, Defendant-Appellant.

Docket No. 15-1134
August Term, 2015

United States Court of Appeals, Second Circuit.

Argued: February 1, 2016
Decided: February 16, 2018

Robert Penchina, Levine Sullivan Koch & Schulz, LLP, New York, NY, for Plaintiff–Appellee.

Maurice Harmon, Harmon & Seidman, LLC, (Christopher Seidman and Gregory N. Albright, on the brief), Grand Junction, CO, for Defendant–Appellant.

Before: Parker, Chin, and Carney, Circuit Judges.

Judge Parker dissents in a separate opinion.

Susan L. Carney, Circuit Judge:

In this copyright case, DRK Photo ("DRK"), an Arizona sole proprietorship and a non-exclusive agent of numerous photographers, attempts to assert infringement claims against John Wiley & Sons, Inc. ("Wiley"), a licensee of the photographers' images, for exceeding the scope of its licenses. DRK's rights with respect to the infringement claims rest on agreements between it and the photographers. These purport to assign to DRK the right to sue on accrued causes of action. The parties dispute whether they also convey any exclusive right under a copyright. The District Court granted summary judgment for Wiley, concluding that DRK did not have statutory standing under the Copyright Act, 17 U.S.C. §§ 101 et seq. , to sue Wiley for infringement. On appeal, the primary question presented is whether the Act permits DRK, as a putative assignee of the bare right to sue for infringement, and who neither has, nor has ever had, an exclusive right under copyright in any of these photographs, may pursue an infringement

882 F.3d 399

claim against Wiley. Like the District Court, we conclude that it may not.

The text of the statute directs this result. In relevant part, the Act provides that "[t]he legal or beneficial owner of an exclusive right under a copyright is entitled ... to institute an action for any infringement of that particular right while he or she is the owner of it." 17 U.S.C. § 501(b). An assignee of the bare right to sue who does not hold, and has never held, an exclusive right under a copyright, is not such an owner. The statute nowhere provides that such an assignee may sue, and we think, in view of its designation of who may sue, that the omission signals that Congress did not so intend.

Supplementing that reading, the District Court here (Failla, J. ) interpreted our 1982 decision in Eden Toys, Inc. v. Florelee Undergarment, Co. , 697 F.2d 27 (2d Cir. 1982), as requiring that any conveyance of the right to sue for infringement carry with it also an exclusive right under the copyright if it is to be effective as a basis for an infringement suit. John Wiley & Sons, Inc. v. DRK Photo , 998 F.Supp.2d 262, 280 (S.D.N.Y. 2014). We think the import of our decision in Eden Toys may not be quite so conclusive on this score as the District Court understood, but if not necessarily controlling, it is at least strongly supportive of our textual reading here.

Because we also concur with the District Court that the agreements between DRK and the photographers that it represented as a non-exclusive agent do not convey such an exclusive right, nor did DRK hold such a right when Wiley is alleged to have committed the infringing acts, we AFFIRM that court's entry of summary judgment in Wiley's favor.

BACKGROUND

The factual background of this case is largely undisputed.¹

DRK Photo is operated by Daniel Krasemann. It maintains a collection of stock photographs available for licensing, for a fee, by various users, including textbook publishers such as John Wiley & Son. Wiley, based in New York, is a global company that focuses on publishing educational materials for undergraduate and graduate students.

The parties' relationship began in 1992, when DRK first licensed Wiley to reproduce certain images for use in its educational materials. A typical DRK license granted to Wiley a one-time, non-exclusive right to use specified images not to exceed a certain number of copies, usually numbering in the tens of thousands. The cost to Wiley of a license typically ranged from approximately $80 to $500. DRK appears to have been generally open to amending a license after issuance to cover uses in larger production runs than originally authorized.

DRK does not directly employ photographers. Instead, it enters into "Representation Agreements" in which photographers grant to DRK, for a share of the licensing proceeds, the rights to include images in its collection and to license those images to third parties for a fee. The Representation Agreements relevant here establish non-exclusive agency relationships, in that they allow the photographers to enter into similar arrangements with other agents as well. In relevant part, the DRK non-exclusive

882 F.3d 400

license typically provides, "I desire that you [DRK] act as my agent with respect to the sale or leasing of the photographs or transparencies which I have delivered to you and shall deliver to you in the future." J.A. 294. DRK executed most of the Representation Agreements of concern here in the 1980s and '90s.

In 2008, DRK undertook what it called a "copyright registration program." J.A. 205. As part of the program, DRK asked its photographers to execute a single-page document entitled "Copyright Assignment, Registration, and Accrued Causes of Action Agreement" (the "Assignment Agreement"). Id . at 205; see also, e.g. , id. at 411. DRK explained in contemporaneous correspondence with the photographers that the Assignment Agreements were "necessary as DRK Photo is initiating a copyright registration program with the United States Copyright Office to officially register many of the images in its collection." Id . at 205. DRK further explained that, "with a Certificate of Registration in hand (prior to a copyright infringement) we will be in a much stronger position with much more leverage for settling copyright infringement claims." Id . at 205. "[W]ith this Agreement," it advised, "we receive the authorization necessary to initiate and settle copyright infringement claims brought against would be infringers of DRK Photo Images." Id . at 205.²

The Assignment Agreements contain two pertinent provisions. The first, the "Granting Clause," provides in relevant part:

The undersigned photographer, the sole owner of the copyrights in the undersigned's images ("the Images") selected by [DRK] and included in DRK's collection, hereby grants to DRK all copyrights and complete legal title in the Images. DRK agrees to reassign all copyrights and complete legal title back to the undersigned immediately upon completion of the registration of the Images ... and resolution of infringement claims brought by DRK relating to the Images.

J.A. 411. The second, the "Right-to-Sue Clause," provides in relevant part:

The undersigned agrees and fully transfers [to DRK] all right, title and interest in any accrued or later accrued claims, causes of action, choses in action—which is the personal right to bring a case—or lawsuits, brought to enforce copyrights in the Images ....

Id . The agreements further call for DRK to divide any recovery obtained from infringement lawsuits evenly with the affected photographer.

Approximately one hundred photographers eventually executed Assignment Agreements with DRK. And, between 2009 and 2010, DRK registered the covered images in its collection with the United States Copyright Office. The related Certificates of Registration denote the relevant photographer as the "author" and DRK as the "copyright claimant." Id . at 342–43.

In August 2011, Wiley filed the instant action for declaratory judgment in the United States District Court for the Southern District of New York, alleging that DRK threatened to bring infringement lawsuits against it for exceeding the usage limits set in its licenses. Wiley sought a declaration exonerating it from liability related to 316 particular instances of alleged infringement in which it used images in DRK's collection. (Some images were subject to multiple instances of alleged infringement.

882 F.3d 401

DRK Photo , 998 F.Supp.2d at 271. Like the District Court, we use "instances" to refer to an image's use , and not to a distinct image. Id. ) DRK counterclaimed, alleging that Wiley engaged in copyright infringement in 295 of those instances. Of those, 45 involved images for which DRK was the "sole and exclusive" agent of the photographer; the remaining 250 were subject to agreements of the non-exclusive type just described. Special App. 80–82.

The parties each moved for summary judgment. DRK prevailed with respect to images subject to its exclusive representation agreements, and Wiley does not appeal that judgment here. DRK Photo , 998 F.Supp.2d at 286–88. But, as to the images for which DRK was a non-exclusive agent, the District Court granted summary judgment to Wiley and dismissed DRK's infringement claims. It reasoned, first, that because the Representation Agreements did not render DRK the sole and exclusive agent of the photographers, section 501 of the Act did not permit DRK to prosecute the claim. Id. at 275–84. Second, the court found that the Assignment Agreements,...