Minden Pictures, Inc. v. John Wiley & Sons, Inc.

• Citation: 795 F.3d 997,115 U.S.P.Q.2d 1576
• Decision Date: 29 July 2015
• Docket Number: No. 14–15267.,14–15267.
• Parties: MINDEN PICTURES, INC., Plaintiff–Appellant, v. JOHN WILEY & SONS, INC., Defendant–Appellee.
• Court: United States Courts of Appeals. United States Court of Appeals (9th Circuit)

795 F.3d 997

115 U.S.P.Q.2d 1576

MINDEN PICTURES, INC., Plaintiff–Appellant

v.JOHN WILEY & SONS, INC., Defendant–Appellee.

No. 14–15267.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted March 13, 2015.

Filed July 29, 2015.

Maurice Harmon (argued), Christopher Seidman, Gregory N. Albright, and Alex Rice Kerr, Harmon & Seidman, LLC, Grand Junction, CO, for Plaintiff–Appellant.

Steven David Zansberg (argued), Michael Beylkin, and Christopher Beall, Levine Sullivan Koch & Schulz, LLP, Denver, CO, for Defendant–Appellee.

Appeal from the United States District Court for the Northern District of California, Edward M. Chen, District Judge, Presiding. D.C. No. 3:12–cv–04601–EMC.

Before: JOHN T. NOONAN, WILLIAM A. FLETCHER, and MORGAN CHRISTEN, Circuit Judges.

OPINION

W. FLETCHER, Circuit Judge:

Minden Pictures, Inc., is a stock photography company that serves as the licensing agent for dozens of photographers, authorizing third parties to use copyrighted photographs. Under the terms of its contracts with the photographers, Minden has the exclusive right to act as their licensing agent, but the photographers reserve their rights to use the photographs themselves and to license them to others.

Minden brought an infringement suit under the Copyright Act against John Wiley & Sons, Inc., a textbook publisher, alleging that Wiley had substantially exceeded the scope of the licenses granted by Minden by publishing far more copies of books containing the photographs than permitted under the licenses. The question in this appeal is whether Minden, as a licensing agent, has statutory standing under the Copyright Act to bring an infringement suit based on alleged violations of the terms of its licenses to Wiley. The district court held that Minden does not have standing under the Act. We disagree and reverse.

I. Background

Minden Pictures, Inc., (“Minden”) is a 26–year–old stock photography company based in Watsonville, California. According to Richard Minden, its founder and CEO, Minden is “one of the world's premium providers of wildlife and nature photos.” Minden acts as a licensing agent for individual photographers, displaying copyrighted photographs on its website and granting licenses to end users, including textbook publishers, for the limited use of the photographs. Minden receives a commission, as much as 50 percent, of the fees that end users pay to reproduce the photographs.

Until recently, Minden entered into “Agency Agreements” with the individual photographers for whom it serves as a licensing agent. The Agency Agreements at the heart of this case were executed between 1993 and 2008. The Agreements vary somewhat from photographer to photographer, but they share similar features. Each Agreement contains an “authorization” clause in which the photographers agree to “appoint[ ] [Minden] as sole and exclusive agent and representative with respect to the Licensing of any and all uses of Images” in the relevant territory. The Agreements also confer upon Minden “the unrestricted, exclusive right to distribute, License, and / or exploit the Images ... without seeking special permission to do so.” The Agreements define “Licensing” as “the marketing, grant, lease, sale, use or other exploitation of reproduction rights to an Image.”

The Agency Agreements limit in some aspects, but preserve in others, the photographers' ability to make use of their photographs themselves. The Agreements specify that the photographers “shall not issue any Licenses to any Images, except as provided under this Agreement.” But they reserve some authority for personal and, in some cases, commercial use. All of the Agreements permit the photographers to use the images “for personal promotion.” Some permit the photographers to issue licenses for the “editorial use of images in books and magazines.” A small number permit the photographers to license images for “commercial” uses, or for “advertising.” In other words, the Agreements generally permit the photographers to issue some licenses themselves, subject to the terms of the individual Agreements, but prohibit them from hiring a licensing agent other than Minden.

Finally, each Agency Agreement contains a “copyright” clause. That clause states that “[a]ll images shall at all times remain the sole and exclusive property of the Photographer, including the copyright.” Many also state that the copyright “shall be held by [Minden] solely for Licensing purposes described herein.” The Agreements provide that they shall remain in force for five years. At the end of that period, the Agreements automatically renew unless either party provides notice of termination.

One company to which Minden granted licenses is an educational publisher, John Wiley & Sons. According to its brief, Wiley is “a 206–year–old publisher of textbooks, professional and trade books, as well as other publications.” Minden alleges that Wiley substantially exceeded the scope of the limited licenses it granted Wiley—for example, by printing hundreds of thousands of copies of textbooks containing photographs licensed by Minden despite having acquired a license to print only 20,000 copies of such photographs. Minden attaches to its complaint 228 copyrighted photographs taken by 36 photographers that it alleges it licensed to Wiley. Minden alleges that Wiley has engaged in a longstanding practice of copyright infringement, citing eleven other cases brought against Wiley “alleging copyright infringement claims nearly identical to those asserted by Plaintiffs in this action.” The merits of Minden's allegations are not before us. This appeal concerns only whether Minden is permitted by the Copyright Act to bring an infringement suit against Wiley for exceeding the scope of its licenses.

Minden began to contemplate infringement litigation against Wiley in or around 2010. In March 2010, many of Minden's affiliated photographers executed an additional set of agreements (the “2010 Assignments”) that purported to convey an ownership interest in the copyrights to Minden. Under the 2010 Assignments, Minden was authorized “to present, litigate, and settle any accrued or later accruing claims, causes of action, ... or lawsuits” over “unauthorized uses of the Images.” But Minden “agree[d] to reassign its ownership of the Images back to the [photographers] immediately upon the conclusion of any such litigation.”

In November 2011, Minden brought an infringement action against another publishing company, Pearson Education, Inc., alleging, as in the case now before us, that “the licenses it sold to Pearson were limited, and that Pearson exceeded those limitations by printing tens, and in some instances, hundreds of thousands of unauthorized copies of the licensed photographs.” Minden Pictures, Inc. v. Pearson Educ., Inc., 929 F.Supp.2d 962, 964 (N.D.Cal.2013). Minden based its claim to standing under the Copyright Act on both the Agency Agreements and the 2010 Assignments. The district court struck all Minden's allegations based on the Agency Agreements as a discovery sanction, and rejected its claims based on the 2010 Assignments, concluding that they conveyed no more than a “bare right to sue.” Id. at 968. Minden appealed, but the parties later stipulated to a dismissal of the appeal with prejudice.

Minden brought the current infringement action against Wiley in September 2012. As in Pearson, Minden alleged that both the Agency Agreements and the 2010 Assignments gave it sufficient ownership interest in the photographs to allow it to bring an infringement suit. After the complaint was filed, Minden and the photographers executed an additional set of assignments (the “2013 Assignments”). These assignments conveyed to Minden “co-ownership of the copyrights in the Images not previously assigned to Minden.” Unlike the 2010 Assignments, however, the 2013 Assignments did not provide for their own termination upon the conclusion of litigation.

Wiley moved to dismiss the action under Federal Rule of Civil Procedure 12(b)(1), arguing that because Minden did not have an ownership interest in the copyrighted photographs it had licensed to Wiley, Minden lacked standing under the Copyright Act to bring an infringement suit. Wiley subsequently brought a motion for summary judgment under Rule 56 on substantially the same ground.

We note that Wiley's Rule 12 motion to dismiss should have been brought under Rule 12(b)(6) for failure to state a claim rather than under Rule 12(b)(1) for lack of jurisdiction, for the issue is statutory rather than Article III standing. See Lexmark Int'l, Inc. v. Static Control Components, Inc., ––– U.S. ––––, 134 S.Ct. 1377, 1387, 188 L.Ed.2d 392 (2014) ; Cetacean Cmty. v. Bush, 386 F.3d 1169, 1172–73 (9th Cir.2004). That is, the issue is whether Minden has a statutory right to sue for infringement under the Copyright Act, which is properly addressed in a motion under Rule 12(b)(6), not whether Minden has satisfied the requirements of Article III, which is properly addressed in a motion under Rule 12(b)(1). See Cetacean Cmty., 386 F.3d at 1173. Wiley's incorrect reliance on Rule 12(b)(1), however, does not materially affect the appeal now before us.

The district court ruled for Wiley in all respects. First, the court concluded that the Agency Agreements did not confer standing under the Copyright Act to bring an infringement suit. Minden Pictures, Inc. v. John Wiley & Sons, Inc., 10 F.Supp.3d 1117, 1120 (N.D.Cal.2014). The district court reasoned that, rather than transferring ownership of the copyrights to Minden, the Agency Agreements “appear to expressly disavow any such intent.” Id. at 1125. In the court's view, the fact that Minden was authorized, as the exclusive licensing agent for the photographers, to issue licenses to use the copyrighted photographs did not give it a sufficient property interest in the photographs to permit it to bring an infringement suit. Id. at 1129. Second, the court held that Minden could not rely on the 2010...