Righthaven LLC v. Smith

District court dismisses plaintiff assignee’s copyright infringement complaint in this and nine other cases, holding that plaintiff had not received, by assignment, the exclusive rights necessary to confer standing, and that subsequent agreements, executed after suit was filed, could not create standing.

This case is one of 10 similar copyright infringement actions filed by plaintiff, Righthaven, against various defendants, in which plaintiff alleged that it is the owner of copyrights in works originally published in the Las Vegas Review-Journal, pursuant to an assignment made in a Strategic Alliance Agreement (SAA) between plaintiff and Stephens Media, the original owner of the copyrights in the works at issue, and that defendants infringed on Righthaven's exclusive rights in the works—specifically, the rights of reproduction, preparation of derivatives, distribution, and public display.

The court granted defendants’ motion to dismiss (in this and the nine other cases), holding that plaintiff did not have standing to sue because the SAA did not transfer to plaintiff any of the exclusive rights necessary to maintain standing in a copyright infringement action. Section 501(b) of the Copyright Act establishes that only the owner or beneficial owner of an exclusive right under a copyright law has standing to sue for infringement. Although the different exclusive rights, as defined by Section 106 of the Act, may be transferred and owned separately, the right to sue is not one of those exclusive rights, and the assignment of a bare right to sue does not confer standing on the assignee. A party can only obtain the right to sue on a copyright if that party also obtains one of the exclusive rights in the copyright. Agreeing with other courts in the district that the language of the SAA grants Righthaven only the bare right to sue and deprives Righthaven of any of the rights normally associated with ownership of an exclusive right, the court concluded that Righthaven lacked standing and dismissed the claims for lack of subject matter jurisdiction.

The court also rejected plaintiff’s argument that additional agreements conferred on Righthaven the standing to sue. Righthaven and Stephens Media executed two amendments to the SAA: a Clarification and Amendment to Strategic Alliance Agreement, executed after Righthaven's complaints were filed, and an Amended and Restated Strategic Alliance Agreement, executed after other courts in the district held that Righthaven lacked standing sue for copyright infringement based on assignments made under the original SAA. According to the court, neither of the two amendments could create standing because the existence of federal jurisdiction depended on the facts as they existed at the time the complaint was filed. “Although a court may allow parties to amend defective allegations of jurisdiction, the parties are not permitted to amend the facts themselves.“ The court ruled that it would consider only the actual assignment and language of the original agreement at the time plaintiff filed the complaint. Because the SAA did not confer standing to sue, the court dismissed all 10 cases for lack of subject-matter jurisdiction. The court also held it would disregard Righthaven’s amended complaint because plaintiff sought to add facts that did not exist at the time it commenced the actions —namely to allege standing under the amendments.