Appeals Court Agrees That Righthaven's Copyright Assignment Was A Sham, But Tosses Key Fair Use Ruling

from the good-and-bad dept

This isn't a huge surprise, but in Righthaven's big appeal concerning the key issue over which it lost all of its cases -- whether or not it had standing -- has resulted in yet another huge loss for Righthaven. The court basically agreed with every single other court that has ruled on this matter, noting that when Stephens Media "assigned" the copyrights to Righthaven, it really did no such thing. Instead, it merely assigned the bare right to sue, which you can't do under copyright law. Considering how some of our critics insisted that Righthaven would win this point on appeal, I'm curious to see how they respond. The court basically agreed with all of the points that a bunch of district court judges had all pointed out: the Strategic Alliance Agreement (SAA) left all the power in the hands of Stephens, including ultimate control over every single one of the official rights associated with copyright law under section 106. Thus, it did not, in fact, assign the copyright, and Righthaven had no standing to sue.
The SAA provided that Stephens Media automatically received an exclusive license in any copyrighted work it assigned to Righthaven, so that Stephens Media retained “the unfettered and exclusive ability” to exploit the copyrights. Righthaven, on the other hand, had “no right or license” to exploit the work or participate in any royalties associated with the exploitation of the work. The contracts left Righthaven without any ability to reproduce the works, distribute them, or exploit any other exclusive right under the Copyright Act. See 17 U.S.C. § 106. Without any of those rights, Righthaven was left only with the bare right to sue, which is insufficient for standing under the Copyright Act and Silvers.
The appeals court walks through each one of Righthaven's attempts to get around this basic fact and shows how none are even remotely persuasive, because all ultimately show the same basic argument, which is that the copyright was assigned to Righthaven who then handed back an exclusive license to Stephens. The fact that Righthaven retained none of the key copyright rights shows that this was all a sham. Or, as the court notes, it "emphasizes form over substance." The court also rejects Righthaven's claim that the agreement was later fixed, by pointing out that what matters is the standing at the time of the lawsuit.

The ruling isn't all great, however. The court did overturn the part of the Hoehn ruling in which the court had said that his use of the Las Vegas Review-Journal article (even the entire article) was fair use. Basically, this is a bit of a procedural thing. Effectively, the court is saying that once the district court ruled that Righthaven had no standing, there are no other issues to rule on, so the fair use ruling is inappropriate. This was the part of the case that the RIAA, in particular, wanted thrown out, because it doesn't want any ruling on the books saying that using an entire work might be fair use. And, on this front, the RIAA got its wish. While the court doesn't say that the use was not fair use -- and in fact notes that "we understand why the district court reached the fair use issue" -- it also notes that, legally, the court really has no right to delve into that issue after it's decided that Righthaven has no standing.
because we agree that Righthaven did not have standing, it is not appropriate for us to go further or for the district court’s alternative ruling to stand. We therefore vacate the portion of the district court’s order that analyzed the merits of the fair use defense and granted the motion for summary judgment.
This is not a huge surprise, but it is unfortunate, because the original Hoehn ruling on fair use was a great example of how using an entire work can be fair use. There are other such cases, but losing one of those rulings is unfortunate.

Either way, this should confirm that Righthaven is officially dead and buried. I can't see them appealing to the Supreme Court, though stranger things have happened (just like Prenda took over the mantle of absolutely crazy copyright trolling from Righthaven a long time ago).


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  1.  
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    Wally (profile), May 9th, 2013 @ 1:25pm

    "merits of the fair use defense and granted the motion for summary judgment."

    On the bright side this current ruling DOES prevent Righthaven from seeking a summary judgment.

     

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    Anonymous Coward, May 9th, 2013 @ 1:30pm

    So in other words, we have to waste a bunch of time and money on another totally different lawsuit to answer one fair use question?

     

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    out_of_the_blue, May 9th, 2013 @ 1:43pm

    Mike wishes a ruling to stand without standing!

    "it also notes that, legally, the court really has no right to delve into that issue after it's decided that Righthaven has no standing." To which Mike sez "it is unfortunate, because the original Hoehn ruling on fair use was a great example of how using an entire work can be fair use."

    "... an entire work might be fair use. And, on this front, the RIAA got its wish." -- Actually, WE ALL got a reasonable lawful decision confirming common sense.

    "Considering how some of our critics insisted that Righthaven would win this [assigned right to sue] point on appeal, I'm curious to see how they respond." -- I'd be surprised if any do! Because I'd be surprised if any "critic" actually said that. Since I'm not going on a likely wild goose chase based on Mike's assertions, that's for him to reference.

     

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    DannyB (profile), May 9th, 2013 @ 1:51pm

    Re: Mike wishes a ruling to stand without standing!

    The Appeals Court said they understood why the lower court had ruled fair use.

    Perhaps in a future case, a lower court will similarly recognize the plain fact that use of an entire work can, in the right circumstances, be fair use. And it will become precedent because there won't be an issue of standing.

    The issue of standing was simply due to your Righthaven buddies being clowns. Too bad they didn't copyright their clown performance as art.

     

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    Anonymous Coward, May 9th, 2013 @ 1:59pm

    Considering how some of our critics insisted that Righthaven would win this point on appeal, I'm curious to see how they respond.

    The opinion is all sorts of wrong. The reasoning is terrible. It mangles the doctrine. But congratulations, you won. I'm happy for you.

     

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    Anonymous Coward, May 9th, 2013 @ 2:19pm

    Re:

    Which doctrine is that? Care to elaborate?

     

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    Chosen Reject (profile), May 9th, 2013 @ 2:36pm

    Re:

    LAW IS LAW!

     

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    Anonymous Coward, May 9th, 2013 @ 3:00pm

    Re:

    What a convincing argument! I'm sure judges will be falling all over themselves to hear you.

     

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    Mike Masnick (profile), May 9th, 2013 @ 3:46pm

    Re:

    The opinion is all sorts of wrong. The reasoning is terrible. It mangles the doctrine. But congratulations, you won. I'm happy for you.

    This confuses me. Whenever I point out that I think a court got something wrong, you just focus on what the courts said as if they're pure gospel. And once, in talking about the Betamax ruling you bizarrely added up all the judges across all levels who said it was copyright infringement, and argued that showed what a strong argument it was.

    And yet here, where probably half a dozen district court judges all said this was a sham transfer, and now 3 appeals court judges agree, you claim that they've all gotten it wrong?

    Really?

     

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    Anonymous Coward, May 9th, 2013 @ 4:18pm

    Re: Re:

    This confuses me. Whenever I point out that I think a court got something wrong, you just focus on what the courts said as if they're pure gospel.

    I do no such thing. Some courts apply the doctrine correctly and some do not. When they don't, I say they don't, and when they do, I say they do. I don't start with the result I want and work backwards, like you do. I start with the doctrine and apply it to the facts.

    And once, in talking about the Betamax ruling you bizarrely added up all the judges across all levels who said it was copyright infringement, and argued that showed what a strong argument it was.

    The Sony case dealt with the issue of whether certain time-shifting was fair use. That requires, as you well know, a balancing of factors. There were contrary views that were both reasonable, namely, that it was fair use and that it wasn't. You were claiming that the MPAA's view that it wasn't fair use was wrong on its face and that it was ridiculous for them to think what they thought. I was pointing out that when it comes to something like an equitable balancing under fair use, differing opinions can both be reasonable. And the fact that more judges said it was not fair use than said it was showed that their argument was meritorious--contrary to your view that it had no merit.

    And yet here, where probably half a dozen district court judges all said this was a sham transfer, and now 3 appeals court judges agree, you claim that they've all gotten it wrong?

    Yes, because they are misapplying the doctrine. I know you like the result, so you think it's brilliant, but I only care about the law--not the result. Just like how you're upset that the fair use part of Hoehn was vacated. You don't care that the court decided it didn't have jurisdiction and then issued the opinion anyway. You want that opinion to be upheld because you like the result. I don't care as much about that fair use opinion--which was terrible reasoning, by the way--as much as I care about the court not deciding the merits of a claim that it has already said it has no jurisdiction over. It doesn't work that way, and the fact that the court knew this yet issued the opinion anyway shows you how much the courts just didn't like Righthaven. I don't care for Righthaven either. I care about the law being applied properly. This opinion muddies the water of copyright ownership. Had the facts been different, i.e., had it not involved a despicable appellant who poorly briefed the law, I think it might have been decided differently.

     

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    Anonymous Coward, May 9th, 2013 @ 4:26pm

    Re: Re:

    I wasn't making an argument.

     

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    Anonymous Coward, May 9th, 2013 @ 4:40pm

    Re: Re:

    The court equated an exclusive license with an assignment. The Ninth Circuit in Gardner v. Nike differentiated the two: http://scholar.google.com/scholar_case?q=gardner+v.+nike&hl=en&as_sdt=2,19&case=16430892 822564929132&scilh=0

    That opinion binds this panel. A licensor has an ownership interest in the copyright during the existence of the license; an exclusive license does not divest the licensor of his entire interest in the copyright. Gardner demonstrates this. The court here is saying that an exclusive license is the same thing as an assignment. That's hogwash. That's butchering the doctrine.

     

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    That One Guy (profile), May 9th, 2013 @ 5:03pm

    Re: Re: Re:

    So in other words, the judges are right when you agree with them, and wrong when you don't.

    Ah, classic AJ...

     

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    Zem, May 9th, 2013 @ 5:47pm

    Heard a rumour

    So like can someone confirm this.

    Is Prenda suing anyone yet for downloading the porn version of the Righthaven saga?

     

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    Anonymous, May 9th, 2013 @ 6:30pm

    Re: Heard a rumour

    There's a porn version of EVERYTHING these days.

     

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    Karl (profile), May 9th, 2013 @ 6:41pm

    Re: Re: Re:

    Big surprise. Here's an organization that abused the law for its own ends, but because it's supposedly "infringement," you'll defend them no matter what.

    And, big surprise again, you twist the case law to do it:

    The court equated an exclusive license with an assignment. The Ninth Circuit in Gardner v. Nike differentiated the two[...] That opinion binds this panel.

    This is exactly the same court that decided the Nike case, so it's doesn't "bind" this panel. A court can overturn or vacate its earlier decisions. That's assuming, of course, that there's a conflict between the two rulings... which there isn't.

    This is the part you don't like:
    It follows that if a copyright owner grants an exclusive license of particular rights, only the exclusive licensee and not the original owner can sue for infringement of those rights. 3 M. Nimmer & D. Nimmer, Nimmer on Copyright § 12.02[C] (2012).

    Unfortunately for you, nothing in Gardner v. Nike contradicts this.

    Gardner v. Nike was focused on the very narrow question of whether the right to resell or sublicense the exclusive license is automatically transferred. And because it was a question of first impression due to the 1976 Act, and not explicitly addressed in that Act, they went with the case law as it currently stood from the 1909 Act onwards.

    But the court did not say that the licensor retained the right to sue for infringement on the rights that were transferred by exclusive license. Only that, absent written consent, the "resale right" was not automatically transferred as well.

    Indeed, this same court held that an "exclusive license" was in fact a transfer of ownership, in Campbell v. Bd. of Trs. of Leland Stanford Junior Univ.: "Because we conclude that the grant of an exclusive license to CPP of some of the exclusive copyright rights constitutes a prohibited transfer under the Stanford-Campbell contract, we reverse the district court's contrary holding." But I assume you don't consider that ruling "binding" over Gardner v. Nike.

    The Nike court certainly did not contemplate a situation where the "licensor" never, at any point, held a single one of the rights granted to copyright holders in 17 USC 106.

    And that - not the phony label of an "exclusive license" - is what determined this case:
    That some language in the contract described Righthaven as the owner, however, does not itself prove that Righthaven owned any exclusive rights.

    When determining whether a contract has transferred exclusive rights, we look not just at the labels parties use but also at the substance and effect of the contract. [...]

    Therefore, that the assignment agreements used language purporting to transfer ownership to Righthaven is not conclusive. We must consider the substance of the transaction. The SAA provided that any copyrights transferred to Righthaven were subject to the terms of the SAA, and many of these terms placed limits on what Righthaven could do with anycopyright assigned to it. Those limits lead us to conclude that Righthaven did not actually possess any exclusive rights under the Copyright Act.

    The SAA provided that Stephens Media automatically received an exclusive license in any copyrighted work it assigned to Righthaven, so that Stephens Media retained "the unfettered and exclusive ability" to exploit the copyrights. Righthaven, on the other hand, had "no right or license" to exploit the work or participate in any royalties associated with the exploitation of the work. The contracts left Righthaven without any ability to reproduce the works, distribute them, or exploit any other exclusive right under the Copyright Act. See 17 U.S.C. § 106. Without any of those rights, Righthaven was left only with the bare right to sue, which is insufficient for standing under the Copyright Act and Silvers.

    They then go on to say that the amended SAA is still invalid, even though the "license" granted to Stephens was nominally a "nonexclusive license."

    As the court (amusingly) said:
    Abraham Lincoln told a storyabout a lawyer who tried to establish that a calf had five legs by calling its tail a leg. But the calf had only four legs, Lincoln observed, because calling a tail a leg does not make it so. [...] Heeding Lincoln’s wisdom, and the requirements of the Copyright Act, we conclude that merely calling someone a copyright owner does not make it so.

    You should really heed Lincoln's wisdom as well.

     

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    Edward Teach, May 9th, 2013 @ 6:43pm

    Any hint of anti-copyright is a taint!?!

    If some pro-copyright finding had gone along with a case where the appeals court ruled "no standing", I would not be surprised to see that pro-copyright finding left standing, despite the lack of standing of the plaintiff.

    It's like when judges with any faint hint of maybe, possibly not being 110% radically pro-copyright recuse themselves, but insane, "you can patent anything!" judges get a pass. You know, like in Sweden, for the Pirate Bay trial.

     

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  18.  
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    Anonymous Coward, May 9th, 2013 @ 7:10pm

    Re: Re: Re:

    The court does not equate an assignment with an exclusive license for all purposes, but just for the question of whether the purported owner/licensor has standing to sue.

    I don't see anything in Gardner that's relevant to whether a titular copyright owner who has licensed away all exclusive rights has standing to sue for infringement. Am I missing it?

    On the other hand, Silver is right on point, requires ownership of an exclusive 106 right (which Righthaven did not have), and also binds this panel.

     

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  19.  
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    Anonymous Coward, May 9th, 2013 @ 7:12pm

    Re: Re: Re: Re:

    "This is exactly the same court that decided the Nike case, so it's doesn't "bind" this panel. A court can overturn or vacate its earlier decisions. That's assuming, of course, that there's a conflict between the two rulings... which there isn't."

    Earlier Ninth Circuit panel decisions are binding on later Ninth Circuit panels (at least I read one Ninth Circuit panel decision unequivocally stating this). You need en banc review to overturn a prior panel decision.

     

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  20.  
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    Anonymous Coward, May 9th, 2013 @ 7:17pm

    Re: Re: Re:

    I see two possibilities here.

    First, you are subconsiously doing the exact thing you accuse Mike of doing (I happen to agree with that charge against Mr. Masnick, by the way).

    Second, you are not very adept at applying the legal doctrines applicable to this case. Sorry, bro, but that's the way I see it.

     

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  21.  
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    Anonymous Coward, May 9th, 2013 @ 7:59pm

    Re: Re: Re:

    I don't blame you. There's no convincing argument you can make. Gnashing your teeth and screaming "Curse you, Otis Wriiiiiiiiight!" is the best you've ever been able to manage.

     

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  22.  
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    Karl (profile), May 9th, 2013 @ 10:14pm

    Re: Re: Re: Re:

    The court does not equate an assignment with an exclusive license for all purposes, but just for the question of whether the purported owner/licensor has standing to sue.

    Do you mean the court in this ruling (on Righthaven)? Here's the entire relevant section:
    This argument again emphasizes form over substance. But even analyzing it on its own formalistic terms, the argument still fails because once Righthaven granted Stephens Media an exclusive license, Righthaven was no longer the owner of exclusive rights under the Copyright Act. The Copyright Act does not distinguish between transferring a copyright via an assignment or an exclusive license. Both, unlike an assignment of a non-exclusive license, constitute a “transfer ofcopyright ownership.” 17 U.S.C. § 101; see also Campbell, 817 F.2d at 504 (relying on this section of the Copyright Act to construe a contract as transferring the ownership of a copyright, even though the contract used the term “exclusive license”). It follows that if a copyright owner grants an exclusive license of particular rights, only the exclusive licensee and not the original owner can sue for infringement of those rights. 3 M. Nimmer & D. Nimmer, Nimmer on Copyright § 12.02[C] (2012).

    That's where I got the connection to Gardner, by the way.

    I don't see anything in Gardner that's relevant to whether a titular copyright owner who has licensed away all exclusive rights has standing to sue for infringement. Am I missing it?

    That's not precisely the point. The point was that Gardner did say, explicitly, that an "exclusive license" is a transfer of ownership.

    Average Joe (the original handle of the A.C.) is claiming that Nike ruled that it wasn't; but if he were right, the Nike court would have had to overturn Gardner, which it never claimed to do. It just shows that his interpretation of Nike is wrong.

    On the other hand, Silver is right on point, requires ownership of an exclusive 106 right (which Righthaven did not have), and also binds this panel.

    Average Joe doesn't believe Silver applies in this case.

    He is simply repeating Righthaven's argument: they actually were the "owner" of the 106 rights - even though they never at any point had any right, power, or privilege to exploit those rights. In Joe's mind, Righthaven was the "title owner," and Stephens the "exclusive licensee," so he trots out largely-irrelevant case law to attempt to show that an exclusive license is not a transfer of ownership.

    Of course it's nonsense, but Average Joe is a recent law grad. So he thinks he knows more about the law than, say, every single judge who ruled against Righthaven (which is all of them).

    Or - more likely - he cares more about attacking "piracy" than he does about justice, and will twist the judges' words to pretend that case law agrees with him. See also: his insistence that Arcara v. Cloud Books (alone!) allows the government to seize websites without notice.

     

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  23.  
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    horse with no name, May 9th, 2013 @ 11:19pm

    Re: Re: Re:

    The Sony case is a perfect way to understand that fair use is a balance. You have to remember that both sides had a valid argument, and the fair use decision was down to a single item on a fairly long list, which otherwise cut both ways. Essentially, if the product hadn't had significant non-infringing uses, the ruling would have been the other way.

    Fair use just isn't an absolute. It is a relative thing.

    The most important think he is that this ruling pretty much sums up what most people said at the time: If Righthaven didn't have standing, then the rest of the judgement is meaningless and without basis in law. So whatever logic was used was faulty from the word go, because one side didn't even have the right to argue. So not only is the ruling tossed out, the lack of standing also making is a very poor example to cite in future cases.

     

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    Anonymous Coward, May 10th, 2013 @ 4:07am

    Re: Re: Re: Re:

    The court does not equate an assignment with an exclusive license for all purposes, but just for the question of whether the purported owner/licensor has standing to sue.

    I don't see anything in Gardner that's relevant to whether a titular copyright owner who has licensed away all exclusive rights has standing to sue for infringement. Am I missing it?


    The court here does equate assignment and exclusive license: "The Copyright Act does not distinguish between transferring a copyright via an assignment or an exclusive license." The court is saying that even if the assignment from Stephens Media to Righthaven transferred the entire ownership interest, when Righthaven granted an exclusive license back it was divested of whatever ownership interest it may have received. This is based on the false premise that assignment = exclusive license. Gardner explains that a licensor still has an ownership interest once an exclusive license has been granted. If an exclusive license = assignment, then an exclusive licensee would be able to subsequently transfer his ownership interest without the need to seek permission of his licensor. But since it doesn't, Gardner says such permission is needed.

    On the other hand, Silver is right on point, requires ownership of an exclusive 106 right (which Righthaven did not have), and also binds this panel.

    Yes, Silvers binds this panel as does Gardner. Silvers just says the transfer of the right to sue for prior infringements must be accompanied by an ownership interest in the exclusive rights. That happened here. The court's mistake is in thinking that the exclusive license back divested Righthaven of any ownership interest in the rights. Gardner shows that as a licensor, Righthaven wasn't divested of its entire ownership interest.

     

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    Anonymous Coward, May 10th, 2013 @ 4:24am

    Re: Re: Re: Re:

    This is exactly the same court that decided the Nike case, so it's doesn't "bind" this panel. A court can overturn or vacate its earlier decisions.

    Wow. Um, wrong. It takes an en banc opinion to do that. It amazes you state these things with such certainty when you truly have no basis for making the claim.

    This is the part you don't like: It follows that if a copyright owner grants an exclusive license of particular rights, only the exclusive licensee and not the original owner can sue for infringement of those rights. 3 M. Nimmer & D. Nimmer, Nimmer on Copyright § 12.02[C] (2012). Unfortunately for you, nothing in Gardner v. Nike contradicts this.

    That is referring to later-occurring infringements. Righthaven is about past infringements that have already accrued. That section is inapplicable, and it shows just how confused the panel here was.

    Gardner v. Nike was focused on the very narrow question of whether the right to resell or sublicense the exclusive license is automatically transferred. And because it was a question of first impression due to the 1976 Act, and not explicitly addressed in that Act, they went with the case law as it currently stood from the 1909 Act onwards. But the court did not say that the licensor retained the right to sue for infringement on the rights that were transferred by exclusive license. Only that, absent written consent, the "resale right" was not automatically transferred as well.

    The point of Gardner that I'm referring to is the notion that a licensor retains an ownership interest in the copyright during the existence of the exclusive license. I'm not using that case for its discussion of the right to sue since that wasn't the issue in that case.

    Indeed, this same court held that an "exclusive license" was in fact a transfer of ownership, in Campbell v. Bd. of Trs. of Leland Stanford Junior Univ.: "Because we conclude that the grant of an exclusive license to CPP of some of the exclusive copyright rights constitutes a prohibited transfer under the Stanford-Campbell contract, we reverse the district court's contrary holding." But I assume you don't consider that ruling "binding" over Gardner v. Nike.

    They're easily distinguishable. The issue in Campbell was whether Stanford had transferred an interest in the copyright. Stanford had granted an exclusive license, which is an interest, so it violated its contract with Campbell. The issue there was not whether a licensor completely divests its ownership interest by granting an exclusive license. The issue was whether an exclusive license grants any ownership to the licensee. It does.

    And that - not the phony label of an "exclusive license" - is what determined this case: *** The SAA provided that Stephens Media automatically received an exclusive license in any copyrighted work it assigned to Righthaven, so that Stephens Media retained "the unfettered and exclusive ability" to exploit the copyrights. Righthaven, on the other hand, had "no right or license" to exploit the work or participate in any royalties associated with the exploitation of the work. The contracts left Righthaven without any ability to reproduce the works, distribute them, or exploit any other exclusive right under the Copyright Act. See 17 U.S.C. § 106. Without any of those rights, Righthaven was left only with the bare right to sue, which is insufficient for standing under the Copyright Act and Silvers.

    And the court cites no authority whatsoever for its claim that unless a party has an ownership interest that permits him to exercise the exclusive rights, then he has no ownership interest at all. This is simply untrue. A licensor has an ownership interest in the copyright despite not being able to exercise the rights he has exclusively granted to another as per Gardner.

     

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    Anonymous Coward, May 10th, 2013 @ 4:35am

    Re: Re: Re: Re: Re:

    Average Joe doesn't believe Silver applies in this case.

    I hate responding to you because you're so confused (yet somehow so very confident), but I know that Silvers controls the issue here.

    Of course it's nonsense, but Average Joe is a recent law grad. So he thinks he knows more about the law than, say, every single judge who ruled against Righthaven (which is all of them).

    I know a lot more than you, that's for sure. I think that every single federal judge knows far more about the law than I do. But on this particular issue, I think they're confused.

     

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    Anonymous Coward, May 10th, 2013 @ 4:42am

    Re: Re: Re: Re:

    I'm glad Judge Wright is serving Prenda its comeuppance for (allegedly) perpetrating a fraud on the court. I hope they are prosecuted by the DOJ/IRS. Not sure what you're getting at. I dislike all people who break the law, even pro-copyright lawyers.

     

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  28.  
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    Anonymous Coward, May 10th, 2013 @ 4:45am

    Re: Re: Re: Re:

    No, Mike will latch onto whatever argument is bad for Righthaven, regardless of the reasoning. I don't care if Righthaven has standing or not, nor do I care if that fair use opinion is published in the Federal Supplement. But if they do have standing based on the doctrine, then that should be acknowledged, and if that court doesn't have jurisdiction, then its opinion on the merits of Hoehn's affirmative defense should be vacated.

     

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  29.  
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    Anonymous Coward, May 10th, 2013 @ 4:51am

    Re: Re: Re: Re: Re: Re:

    They're always right ... except when they disagree with you.

    Your combination of arrogance and stupidity is astounding. You should apply for a job a Prenda.

     

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    Anonymous Coward, May 10th, 2013 @ 5:01am

    Wheres Sherman Fredericks Ace that was going to show Righthaven was going to win at the last moment?

     

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    Anonymous Coward, May 10th, 2013 @ 5:51am

    Re: Re: Re: Re: Re: Re: Re:

    Sometimes they're right, and sometimes they're wrong. Some things get upheld on appeal, and some things get overturned. Sometimes Congress will not agree with the Supreme Court's interpretation of the law, and they rewrite the law to make their intentions clear. Not sure what your point is, but I can see how important it is for you to attack me personally since you can't discuss these issues on the merits. If I'm so stupid, then debate me on the merits. It should be simple for you, given how stupid you think I am. Yet, you aren't discussing the merits. Hmm. Wonder why.

     

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    That One Guy (profile), May 10th, 2013 @ 6:13am

    Re: Re: Re: Re: Re: Re:

    ' I think that every single federal judge knows far more about the law than I do. But on this particular issue, I think they're confused.'

    Are you even reading what you're typing before you post it?

    In two back to back sentences, you first say that 'every single federal judge' knows more about the law than you do, but in the very next sentence you claim that they are all wrong/confused. Did you ever stop to think that with all that knowledge you claim that have, that maybe they got it right and you got it wrong?

     

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  33.  
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    Anonymous Coward, May 10th, 2013 @ 6:30am

    Re: Re: Re: Re: Re: Re: Re:

    In two back to back sentences, you first say that 'every single federal judge' knows more about the law than you do, but in the very next sentence you claim that they are all wrong/confused.

    Yes, they have all sorts of practical experience I don't have and they understand general concepts better than me. No doubt. Federal judges are very, very smart people, in my experience. Some understand areas of law I have no experience with, such as negotiable instruments. But on the particular issue of copyright ownership, I think I have a deeper understanding than most because I've put in countless hours researching and thinking about it. It's one of the few areas of law where I would say this.

    Did you ever stop to think that with all that knowledge you claim that have, that maybe they got it right and you got it wrong?

    Of course. I get stuff wrong all the time. But this opinion is very thin, makes bold pronouncements that ignore nuances in the doctrine, and arrives at what I can only think was a foregone conclusion given the distaste for the particular appellant.

     

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    Anonymous Coward, May 10th, 2013 @ 7:24am

    Re: Re: Re: Re: Re:

    And the court cites no authority whatsoever for its claim that unless a party has an ownership interest that permits him to exercise the exclusive rights, then he has no ownership interest at all. This is simply untrue. A licensor has an ownership interest in the copyright despite not being able to exercise the rights he has exclusively granted to another as per Gardner.

    Now, I'm not a lawyer, so please be patient with my ignorance.

    Can a copyright owner revoke exclusive rights unilaterally? Even if such revocation were to constitute a breach of contract, would the end result be that the owner revokes the exclusive license but is then liable for breach of contract?

    If not, then what is the meaning of "ownership" in this case?

    Furthermore, if an owner were to grant exclusive rights "in perpetuity," the implications would be (as I understand):

    1) The owner is unable to exercise the rights granted (as they are exclusive)

    2) The owner cannot revoke this exclusive grant

    3) The exclusive rights will not be compulsorily returned (barring contractual provisions, of course)

    So, for all intents and purposes, the owner "owns" the rights in name only. What interest does this owner actually have in the copyright? If he cannot exercise any rights, and he cannot revoke the exclusive license, and he has no expectation of the license expiring, what harm is inflicted upon him if the copyright is infringed?

     

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    Anonymous Coward, May 10th, 2013 @ 9:33am

    Re: Re: Re: Re: Re: Re:

    Can a copyright owner revoke exclusive rights unilaterally? Even if such revocation were to constitute a breach of contract, would the end result be that the owner revokes the exclusive license but is then liable for breach of contract?

    Great question. It's a complicated issue, and I can't really catch all the nuances without writing what amounts to a law review article—but I'll give you the broad strokes. Licenses can be either revocable or irrevocable. Irrevocability can be created through either contract law or property law. Contractual irrevocability creates in the licensor a duty not to revoke. The licensor still has the power to revoke, but he also has the duty not to exercise that power. A violation of that duty is a breach of contract. Irrevocability via property law creates in the licensee an immunity from revocation. The licensor in this case has no power to revoke, and he instead has a disability preventing revocation. Since this immunity is a function of property law (and not contract law), there is no breach of duty. There is only the inability of the licensor to revoke at all. The differences here are academic to a large extent, but both types of irrevocability are possible. I’m using duty, power, immunity, and disability in their Hohfeldian sense. See, e.g., http://en.wikisource.org/wiki/The_Hohfeld_System_of_Fundamental_Legal_Concepts

    License are presumptively revocable at will. Nimmer and several courts state that a license can only become irrevocable if there's consideration (such as money) given by the licensee to the licensor. See, e.g., Avtec Sys., Inc. v. Peiffer, 21 F.3d 568, 574 n.12 (4th Cir. 1994) ("[A]n implied license is necessarily nonexclusive and revocable absent consideration.") (citing Nimmer); Keane Dealer Servs., Inc. v. Harts, 968 F. Supp. 944, 947 (S.D.N.Y. 1997) ("An implied license is revocable, however, where no consideration has been given for the license."). In other words, this view holds that a license is revocable at will by the licensor unless there's a contract supported by consideration from the licensee wherein the licensor takes on the duty not to revoke the license. For proponents of Creative Commons licenses, this view should be alarming for it means that such licenses are revocable at will absent consideration (since the licensee has paid no consideration).

    Irrevocability via property law requires no consideration—but it does require a written deed wherein the licensor unilaterally grants an irrevocable use privilege to the licensee. This need not be supported by consideration. While under property law a revocable license can be granted orally or implied from conduct, an irrevocable license requires a signed writing to be effective. See Christopher M. Newman, A License Is Not A "Contract Not to Sue": Disentangling Property and Contract in the Law of Copyright Licenses, 98 Iowa L. Rev. 1101, 1124 (2013) ("To create an irrevocable use-privilege, the parties must adhere to the formality of a written deed. Execution of such a deed is sufficient to create the privilege and render it irrevocable, which means that the titleholder now lacks any power to revoke unless and until the occurrence of any triggering conditions that were expressly incorporated into the grant."). For proponents of Creative Commons licenses, this view is also alarming since such licenses are not typically granted via a signed writing.

    The difference between the contract method and the property method is that the former acts merely in personam, meaning that it only operates between the licensor and the licensee. If the licensor thereafter transfers his ownership interest to another, the licensee’s contractual irrevocability will not create in the new owner a duty not to revoke. The new owner can then revoke the license at will since he is not bound by the prior licensor’s in personam obligations. Irrevocability via property law creates instead in rem rights that travel with the copyright. A new owner takes ownership of the copyright subject to whatever irrevocable in rem interests have been created. The new owner of the license is bound by the licensee’s immunity from revocation because the immunity attaches to the copyright itself and not to the parties. Thus the new owner has the same disability preventing revocation as the old owner did. But for such in rem irrevocability to take hold, it must be evidenced in a signed writing. See, e.g., 17 U.S.C. § 205(e) ("A nonexclusive license, whether recorded or not, prevails over a conflicting transfer of copyright ownership if the license is evidenced by a written instrument signed by the owner of the rights licensed or such owner's duly authorized agent . . . .");

    To answer your question, if the license is irrevocable via contract law and the licensor nevertheless revokes, that would give rise to a breach of contract claim. The court could either award damages or enforce the contract via specific performance, i.e., force the licensor to honor the license. Typically courts award damages instead of enforcing the broken promise, so the former seems more likely to occur. If, on the other hand, the license is irrevocable under property law because the licensor has a disability to revoke, then the license cannot be revoked at all. There is no breach of contract here since the license sounds in property and not contract. But the reality is that courts are sloppy with the theoretical stuff, and most will just quote Nimmer (much like the Ninth Circuit did here with Righthaven, unfortunately) for the contractual view and then treat the license as one of contract—even though the privilege contracted for sounds exclusively in property. Like I said, it’s complicated (but I love this stuff!).

    The rest of your questions are interesting too, but I’m pressed for time at the moment, and it took me an hour just to write this. If I have time this weekend, I'll answer those questions too.

     

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  36.  
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    Anonymous Coward, May 10th, 2013 @ 10:13am

    Re: Re: Re:

    Yes, I know. You were just throwing your usual tantrums. Judges will love those, too.

     

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    Anonymous Coward, May 10th, 2013 @ 11:04am

    Re: Re: Re: Re: Re:

    You keep talking about "an ownership interest" in the abstract, but that is not the controlling issue regarding standing. The controlling issue, as stated in Silver, is whether the plaintiff has an exclusive 106 right.

    Is there any argument that Righthaven did? I have seen nothing, nada, zilch, suggesting that Righthaven had any right to copy, distribute, prepare derivative works, etc.

     

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    Anonymous Coward, May 10th, 2013 @ 11:06am

    Re: Re: Re: Re: Re:

    You say "no" then write something in agreement with what I wrote. This is not convincing me that you are adept as parsing these issues.

     

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    Anonymous Coward, May 10th, 2013 @ 11:30am

    Re: Re: Re: Re: Re: Re:

    You keep talking about "an ownership interest" in the abstract, but that is not the controlling issue regarding standing. The controlling issue, as stated in Silver, is whether the plaintiff has an exclusive 106 right.

    The controlling issue, as per Silvers, is whether they hold a "legal or beneficial interest in the copyright itself." Silvers v. Sony Pictures Entm't, Inc., 402 F.3d 881, 883 (9th Cir. 2005). A "legal or beneficial interest" is an ownership interest. So I don't get your point.

    Is there any argument that Righthaven did? I have seen nothing, nada, zilch, suggesting that Righthaven had any right to copy, distribute, prepare derivative works, etc.

    There are ownership interests other than the right to use the exclusive right. A licensor holds an ownership interest in the right licensed even though he cannot exercise the right.

     

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    Anonymous Coward, May 10th, 2013 @ 11:35am

    Re: Re: Re: Re: Re: Re:

    I said "no" because I am not "doing the exact thing you accuse Mike of doing." That's me expressing a DISAGREEMENT with what you said. Mike starts with his conclusion (Righthaven loses) and then works backwards (whatever anybody says is great so long as it ends with Righthaven losing). I work forwards. I don't care if Righthaven has standing or not. I apply the law to the facts and make a determination based on that, not on my foregone conclusion. If you think I'm not adept at applying doctrine, then explain your arguments. Whatever this post of yours is meant to be, it's not productive and it certainly doesn't show you being adept at much of anything.

     

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    Anonymous Coward, May 10th, 2013 @ 11:37am

    Re: Re: Re: Re:

    Yeah, I'm throwing such a tantrum with my logic and backed-up arguments. Great dig. You really burned me.

     

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    Karl (profile), May 10th, 2013 @ 1:48pm

    Re: Re: Re: Re: Re:

    You're all over the place in the comments, so I'm going to just reply to your points here in one go.

    I think that every single federal judge knows far more about the law than I do. But on this particular issue, I think they're confused.

    You'll note that not one single judge who saw the SAA thought the transfers were valid. Not a single one. Nor did any actual lawyer who wasn't on Righthaven's staff.

    I think it's pretty clear who's confused.

    Wow. Um, wrong. It takes an en banc opinion to do that. It amazes you state these things with such certainty when you truly have no basis for making the claim.

    Fair enough. I'm neither a lawyer nor a law student, so I don't know the procedural rules for a court overturning its own decision.

    But that's still immaterial, as this court does not overturn or contradict Gardner. Unless, of course, you believe Gardner contradicted Campbell, which it does not. Campbell is controlling, both here and in Gardner. If Gardner claimed what you say it claimed, then Gardner would have necessitated (as you say) an en banc opinion. It did not. And the fact that there's no contradiction between any of these cases means that your analysis is wrong.

    Furthermore, your claim is directly and explicitly contradicted by Silvers (which, incidentally, was an en banc opinion). So, even if Gardner said what you claim it says (which it doesn't), it would have been superceded by Silvers.

    That is referring to later-occurring infringements. Righthaven is about past infringements that have already accrued. That section is inapplicable, and it shows just how confused the panel here was.

    And, now, you're bring up yet another legal distraction. You can't be transferred the right to sue - for any infringements - without being transferred the exclusive right "to do or to authorize" any of the 106 rights. Whether those were past infringements or not is completely immaterial. (And, incidentally, the Righthaven court was not referring to later-occurring infringements.)

    The point of Gardner that I'm referring to is the notion that a licensor retains an ownership interest in the copyright during the existence of the exclusive license.

    That's not quite how the court in Gardner puts it:
    Despite the explicit changes in the 1976 Act, this case presents the issue of whether the 1976 Act eliminates the limitation on an exclusive licensee's right to re-sell or sublicense under our interpretation of the 1909 Act.

    As discussed by the District Court, the crux of this case is the appropriate interpretation of 17 U.S.C. 201. Gardner, 110 F.Supp.2d at 1284. The District Court rejected Appellants' argument, finding that 201(d)(1) did not apply to the present case and that 201(d)(2) only conferred the "protections and remedies" explicitly included in the 1976 Act, but not the rights. Gardner, 110 F.Supp.2d at 1286±87. We agree with the conclusions reached by the District Court for the reasons discussed below. [...]

    The District Court correctly determined that 201(d)(1) addresses the apportionability of the copyright owner's interest in the totality of the copyright. Section 201(d)(1) enables the owner to transfer any fraction of his or her ownership interest to another party, thereby making that party a whole or joint owner. [...] However, the limiting language in 201(d)(2), as discussed next, indicates that this section does not, in fact, cover transfers by exclusive licensees or owners of a particular exclusive right.

    The plain language of 201(d)(2) limits the rights of [the owner of any particular exclusive right] to those "protections and remedies" afforded in the 1976 Act. [...]

    Appellants' argument ignores the plain language of 201(d)(2), which states that the owner of such exclusive rights is entitled only to "the protection and remedies" accorded the copyright owner under the 1976 Act. This explicit language limits the rights afforded to an owner of exclusive rights.

    The court in Gardner was talking about any transfer of ownership that was not total - that is, any transfer of ownership of "any particular exclusive right" or "subdivision of any of the [106] rights" allowed under 201(d)(2). If that is the case, then what is transferred are "only" the "protections and remedies" under copyright law. Because the resale privilege is not part of the "protections and remedies" granted by statute, it is not transferred. But they did not say that an exclusive license was not any kind of transfer of ownership at all.

    It doesn't contradict this case in any way. Even if Righthaven owned the copyright in the works, then they transferred ownership of all of the rights, not just a "particular exclusive right" or "subdivision of any of the rights" in 106. In this case they transferred ownership of the copyright completely (not just the "protections and remedies" under copyright law), and Gardner does not apply. On the other hand, if they transferred ownership of one or more "particular exclusive rights" via 201(d)(2), then Gardner does apply - and says that they transferred the "protections and remedies" afforded a copyright owner.

    Either way, the Gardner court would agree that Righthaven would have no standing to sue, having transferred all "protections and remedies" afforded by copyright law to Stephens. There is no contradiction whatsoever between Gardner and this case.

    Of course, that assumes Righthaven ever owned any of the rights in the first place, which they did not.

    And the court cites no authority whatsoever for its claim that unless a party has an ownership interest that permits him to exercise the exclusive rights, then he has no ownership interest at all.

    They're not exactly saying that the original owner "has no ownership interest at all," just that an exclusive license is equivalent to an assignment in terms of ownership. Just as someone who assigned a copyright has no standing to sue (in general), the licensor has no standing to sue (in general).

    Whether they have an "ownership interest" depends on the actual license itself. If the license divests the licensor of the exclusive right to do or to authorize a 106 right, then it divests him of legal ownership of that right. If the license divests the licensor of all interest in the legal owner's right to do or to authorize a 106 right, then it also divests him of beneficial ownership in that right.

    Silvers just says the transfer of the right to sue for prior infringements must be accompanied by an ownership interest in the exclusive rights.

    That is not the extent of what Silvers says. Silvers says that unless a party has an interest that permits him to exercise the exclusive rights, or retains an interest in the legal owner's exercise of the exclusive rights, they have no ownership interest at all for the purposes of bringing an infringement suit:

    Article I, section 8, clause 8, of the Constitution states: "The Congress shall have Power ... To promote the Progress of Science and useful Arts by securing for limited Times to Authors ... the exclusive Right to their ... Writings ... ." As is clear from its text, that clause of the Constitution grants no substantive protections to authors. Rather, Congress is empowered to provide copyright protection.

    Copyright, therefore, is a creature of statute, and the only rights that exist under copyright law are those granted by statute. [...]

    Section 501(b) of the 1976 Copyright Act establishes who is legally authorized to sue for infringement of a copyright:
    The legal or beneficial owner of an exclusive right under a copyright is entitled, subject to the requirements of section 411, to institute an action for any infringement of that particular right committed while he or she is the owner of it.

    17 U.S.C. 501(b) (emphasis added). The meaning of that provision appears clear. To be entitled to sue for copyright infringement, the plaintiff must be the "legal or beneficial owner of an exclusive right under a copyright." See 4 Business and Commercial Litigation in Federal Courts, at 1062, 65.3(a)(4) (Robert L. Haig ed.) (West Group & ABA 1998) ("If a claimant is not a proper owner of copyright rights, then it cannot invoke copyright protection stemming from the exclusive rights belonging to the owner, including infringement of the copyright.").

    Section 106 of the 1976 Copyright Act, in turn, defines "exclusive rights": [...] The right to sue for an accrued claim for
    infringement is not an exclusive right under 106. Section 201(d) refers to exclusive rights [...] Exclusive rights in a copyright may be transferred and owned separately, but 201(d) creates no exclusive rights other than those listed in 106, nor does it create an exception to 501(b).

    Section 501(b) must also be read in conjunction with 501(a), which provides that one who "violates any of the exclusive rights of the copyright owner as provided by sections 106 through 122 ... is an infringer." The definition of an infringer in subsection (a) is parallel to the definition of a proper plaintiff in subsection (b). Common to both subsections is an exclusive copyright interest. [...]

    [On the legislative history:] The House Report suggests strongly that Congress intended to limit the class of persons who may sue for infringement: [...] Although Congress allowed for divisibility of ownership interests under a copyright, it did not alter the requirement that only owners of an exclusive right in the copyright could bring suit.

    The legislative history makes clear, too, that the list of exclusive rights found in 106 is exhaustive. The House Report states:
    The exclusive rights accorded to a copyright owner under section 106 are "to do and to authorize" any of the activities specified in the five numbered clauses.

    H.R. Rep. No. 94-1476, at 61, reprinted in 1976 U.S.C.C.A.N. at 5674.

    (Bold emphasis is mine; italic emphasis is the court's.)

    That's explicit: unless you were transferred the exclusive right "to do and to authorize" a 106 right, you were not transferred any kind of ownership interest whatsoever. And the moment you divest yourself of all interest in the exclusive right "to do and to authorize" all 106 rights, you divested yourself of copyright ownership entirely - whether through assignment, mortgage, exclusive license, or any other transfer of ownership.

    Righthaven was never transferred any exclusive right to do or authorize any 106 right, so they were never at any point a copyright owner.

    But even if they had been, the SAA divested Righthaven of all interest in the exclusive right to do or authorize any of the 106 rights, so they divested themselves of all ownership interest, whether they called it an "exclusive license" or not (or even if, as in the revised SAA, they called it a "non-exclusive license").

    Since the SAA covered all supposed copyright transfers, the transfers were a complete sham.

     

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    Anonymous Coward, May 10th, 2013 @ 2:29pm

    Re: Re: Re: Re: Re: Re: Re:

    Let's look at this another way.

    Other than the bare right to sue, what did Righthaven have after the transfer that it did not have prior to the transfer.

    Using magic words like "I grant you an ownership interest" is not necessarily effective, when there is no actual change in a party's legal rights (or do you disagree with that substance over form characterization)?

     

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    Anonymous Coward, May 10th, 2013 @ 2:38pm

    Re: Re: Re: Re: Re: Re: Re:

    Did you not read the part where I agreed with your charge against Masnick? You said "no" and then went into detail about something I already agreed with you about.

    Are you clerking? I seem to remember you saying you were going to clerk. Jesus, every once in a while you get some wacko opinion from a judge and wonder where it comes from. I may be gaining insight into the origins of such opinions.

     

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    Anonymous Coward, May 10th, 2013 @ 2:51pm

    Re: Re: Re: Re: Re: Re: Re: Re:

    I understand that you think Mike is doing it. My disagreement is with your claim that I'm doing it too. I did not go "into detail about something [you] already agreed with [me] about." I went into detail about my disagreement with your claim that I do the same thing as Mike, i.e., working backwards. As far as your claim that I'm "not very adept at applying the legal doctrines applicable to this case," I'm still waiting for you break out some doctrine and prove me wrong. I'm glad you think that you're super-smart and all that, but we could all bask in the glow of your awesomeness if you actually made some arguments on the merits and shared them with us.

     

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    Anonymous Coward, May 10th, 2013 @ 2:52pm

    Re: Re: Re: Re: Re: Re: Re: Re:

    Other than the bare right to sue, what did Righthaven have after the transfer that it did not have prior to the transfer.

    Righthaven became the legal owner.

     

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    Karl (profile), May 10th, 2013 @ 3:29pm

    Re: Re: Re: Re: Re: Re: Re:

    The controlling issue, as per Silvers, is whether they hold a "legal or beneficial interest in the copyright itself."

    Actually, that's not quite what Silvers said:
    The meaning of that provision appears clear. To be entitled to sue for copyright infringement, the plaintiff must be the "legal or beneficial owner of an exclusive right under a copyright."

    The Silvers court is quoting the actual statute, 17 USC 501(b).

    Furthermore, the definition of an infringer is "anyone who violates any of the exclusive rights of the copyright owner." That's from 17 USC 501(a).

    And, as Silver again makes clear, those exclusive rights are nothing other than the exclusive right "to do and to authorize" any of the activities specified in 17 USC 106.

    So unless your "legal or beneficial interest" is in the exclusive right to do or to authorize one of the activities enumerated in 17 USC 106, you're not a "legal or beneficial owner" at all.

    That is what Silvers said. Explicitly.

    There are ownership interests other than the right to use the exclusive right. A licensor holds an ownership interest in the right licensed even though he cannot exercise the right.

    According to Gardner, that only applies if the right was transferred "in part," as allowed by 17 USC 201(d)(2). If they were transferred wholesale (not as in 201(d)(2)), Gardner is silent on the issue.

    And that holds for any type of "transfer of ownership" (Gardner's words) specified in 201(d)(2), whether exclusive license (as in Gardner), assignment, or other.

    And the Gardner court explicitly said that a transfer of ownership allowed in 201(d)(2) also transferred "all of the protection and remedies" accorded by law.

    So even if Righthaven was the rightful copyright owner at some point, whatever "protections and remedies" Righthaven once held were transferred to Stephens through the exclusive license. Even Gardner would hold that Righthaven had no standing to sue.

     

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    Karl (profile), May 10th, 2013 @ 3:32pm

    Re: Re: Re: Re: Re: Re: Re: Re: Re:

    Righthaven became the legal owner.

    Of what exclusive right under 106?

    Because you can't be the legal owner of anything else.

     

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    Anonymous Coward, May 10th, 2013 @ 3:52pm

    Re: Re: Re: Re: Re: Re:

    Fair enough. I'm neither a lawyer nor a law student, so I don't know the procedural rules for a court overturning its own decision. But that's still immaterial . . . .

    You had no idea what you were talking about (as you now admit), and yet you stated it without any equivocation and as if you knew it to be a fact: "This is exactly the same court that decided the Nike case, so it's doesn't 'bind' this panel. A court can overturn or vacate its earlier decisions." That's the problem. Even when you have no idea what the rule is, nothing stops you from pretending like you're an expert who speaks with 100% certainty about it. I think that's very material to your discussion of these issues.

     

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    Karl (profile), May 10th, 2013 @ 5:03pm

    Re: Re: Re: Re: Re: Re: Re:

    You had no idea what you were talking about (as you now admit), and yet you stated it without any equivocation and as if you knew it to be a fact

    I guess I've been arguing with you for so long, I picked up some of your bad habits.

    On the plus side, I at least admitted I was wrong. That's one habit I haven't picked up from you yet.

     

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    Anonymous Coward, May 10th, 2013 @ 6:03pm

    Re: Re: Re: Re: Re: Re: Re: Re:

    It's great you admitted you were wrong, but it's not so great that you stated it as a fact in the first place. Trying to play it off as something you picked up from me is cute, but it's not very productive. I know you think I'm wrong here. I don't really see the point in running through all of your lengthy post line by line and rebutting everything you said. It's a waste of time, and I get nothing out of it. However, if you have any argument that I'm wrong here that you think is particularly strong, go ahead and make your point (and please keep it short) and I'll respond.

     

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    Anonymous Coward, May 10th, 2013 @ 7:57pm

    Re: Re: Re: Re: Re: Re: Re: Re: Re:

    Those are words that don't mean anything if no exclusive rights go along with it.

    I can call you the "legal owner" of my laptop, but without any rights that the concept of ownership entails, but that doesn't actually make you the legal owner.

     

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    Anonymous Coward, May 10th, 2013 @ 7:58pm

    Re: Re: Re: Re: Re: Re: Re: Re: Re: Re:

    Bingo.

    The legal owner of what? The copyright? The copyright is a bundle of 106 rights. Which 106 rights did they own?

     

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    Anonymous Coward, May 10th, 2013 @ 8:10pm

    Re: Re: Re: Re: Re: Re: Re: Re: Re:

    I claimed that you are *either* doing it, *or* you're not doing it. That what "I see two possibilities here" means.

    When I say "I agree Mike does X" and you say "No, Mike does X", it's confusing.

    When I say, you either do X or do not do X, and you say you are disagreeing with my assertion that you do X, it is confusing.

    It suggests to me that you are confused (although if you are confused about my language, then I must bear some responsibility).

    Anyway, since it seems impossible to have a clear conversation with you in this little threadlet, I'm going to bow out.

    But I've been discussing the merits in other posts. Feel free to bask in their glow.

     

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    Karl (profile), May 10th, 2013 @ 9:51pm

    Re: Re: Re: Re: Re: Re: Re: Re: Re:

    I don't really see the point in running through all of your lengthy post line by line and rebutting everything you said. It's a waste of time, and I get nothing out of it. However, if you have any argument that I'm wrong here that you think is particularly strong, go ahead and make your point (and please keep it short) and I'll respond.

    Oh, there's lots of things you've said that I think are wrong, but I'll keep it brief.

    1. You're misrepresenting Silvers, in order to directly contradict it. That case said, explicitly, that unless you are transferred the exclusive right to do or to authorize one of the enumerated activities in 106, you are not transferred any kind of copyright ownership; and unless you legally possess the exclusive right to do or authorize one of the 106 activities, you are not the legal owner of that right.

    Righthaven was never transferred the exclusive right to do or to authorize any of the activities in 106, so they were never the copyright holders.

    2. You're also misrepresenting Gardner v. Nike. They were not talking about exclusive licenses per se, but about any transfer of ownership under 17 USC 201(d)(2). Furthermore, they explicitly say that an exclusive licensee owns "all of the protection and remedies" accorded by law. The only issue they decided was whether the right to transfer licenses is a "protection" or "remedy" under 201(d)(2), and they held that it wasn't. (There's more that makes Gardner a bad fit - like the policy decisions underlying the ruling - but I said I'd keep it brief.)

    So, even if you assume Righthaven ever held the rights, then:

    a. Gardner doesn't apply to Righthaven's "exclusive license," since the exclusive rights were not "subdivided" or "owned separately" as in 201(2)(d), but transferred to Stephens Media in toto.

    b. But even if Righthaven transferred the rights via 201(2)(d), Gardner says that Righthaven transferred "all of the protection and remedies accorded to the copyright owner by this title" to Stephens Media when they granted the "exclusive license." So, Righthaven would still lack standing to sue.

    So, nothing in Gardner contradicts this case. Righthaven's "ownership" is still a sham, even applying Gardner.

     

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    Karl (profile), May 10th, 2013 @ 9:52pm

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    ...Well, it looked brief when I was typing it. Really!

     

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    Anonymous Coward, May 11th, 2013 @ 6:16am

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    I can call you the "legal owner" of my laptop, but without any rights that the concept of ownership entails, but that doesn't actually make you the legal owner.

    You can transfer legal title to your laptop to me, and then I can transfer you back the right to use it via a lease agreement. Once leased, I can't use it since only you, the lessee, can use it. But I still hold legal title.

     

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    Anonymous Coward, May 11th, 2013 @ 6:18am

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    The legal owner of what? The copyright? The copyright is a bundle of 106 rights. Which 106 rights did they own?

    Righthaven was the legal owner of the 106 rights. Stephens Media was the beneficial owner of them. It's simple.

     

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    Anonymous Coward, May 11th, 2013 @ 6:23am

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    But I've been discussing the merits in other posts. Feel free to bask in their glow.

    You've just been asking me questions and pretending like you're so smart (you have to suffer through terrible court opinions and my inept discussion of the doctrine). Instead of telling us how awesome you are, why not actually demonstrate some knowledge of the doctrine? As is apparent from your questions, you don't even seem to understand the difference between legal and beneficial ownership in a copyright. That's OK, the Ninth Circuit didn't understand it either. I've yet to see you post even one sentence demonstrating your superior grasp of the doctrine so that I may bask in it. I'm happy to discuss this on the merits, but give me a break with the attitude.

     

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    Anonymous Coward, May 11th, 2013 @ 6:46am

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    1. You're misrepresenting Silvers, in order to directly contradict it. That case said, explicitly, that unless you are transferred the exclusive right to do or to authorize one of the enumerated activities in 106, you are not transferred any kind of copyright ownership; and unless you legally possess the exclusive right to do or authorize one of the 106 activities, you are not the legal owner of that right.

    Righthaven was never transferred the exclusive right to do or to authorize any of the activities in 106, so they were never the copyright holders.


    I'm not misrepresenting Silvers. Silvers says the transferee of the right to sue who has not also been transferred a legal or beneficial ownership interest in the copyright has no standing to sue. The case does not say that that such a transferee has to be able "to do or to authorize" the exclusive rights. You added that. It says that they have to have a legal or beneficial ownership interest in those rights. That comes from Section 501(b), which says that the legal or beneficial owner has standing to sue. But there are lots of parties who have standing to sue yet who cannot exercise the exclusive rights. The one that's applicable here is a licensor who has granted an exclusive license. The licensor cannot exercise the right granted, despite being the legal owner of it, and if the licensor does exercise it he is an infringer. Yet, this licensor is the legal owner, and under Section 501(b), has standing to sue for prior infringements. Now, I know there's the line in the case about only the exclusive licensee having standing to sue for infringement. The court doesn't quote the actual text from Nimmer, which (1) in fact refers only to LATER occurring infringements (not past infringements, which is what's relevant here with Righthaven), and (2) is just wrong anyway (since legal owners have standing to sue as per Section 501(b)). I think your mistake is the same mistake made by the court here, and that's in thinking that the only type of ownership interest that counts for standing purposes is the one that permits the holder to exercise the rights. But the doctrine identifies different parties that are legal or beneficial owners who have standing to sue yet cannot actually exploit the exclusive rights. Another example is a person who parts with legal title in exchange for royalties. Such a person cannot exercise the exclusive rights, but they have standing to sue for its infringement under Section 501(b) (as demonstrated in the case law). Such a party cannot exercise the right, and if they do, it's infringement, yet they have standing to sue others who infringe the right (so they are just like a licensor, except they are a beneficial owner while a licensor is a legal owner). The Silvers opinion doesn't say that the party has to be able to exercise the right. It says that they have to be the legal or beneficial owner of it. Long story short: Righthaven = legal owner; Stephens Media = beneficial owner. Both have an ownership interest. I'm out the door for the day. Later.

     

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    Anonymous Coward, May 11th, 2013 @ 5:16pm

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    Is it?

    What authority says titular ownership without any actual legal effect (i.e., you can't actually *do* anything) counts as "legal ownership" and that having all the actual rights and power through a titular exclusive license is "beneficial ownership."

    I mean, that *would* be one simple conception of this issue, I just don't think it's based in any authority, and seems to contradict Silver.

     

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    Anonymous Coward, May 11th, 2013 @ 5:18pm

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    If it were just use, or just this, or just that, that would be one thing.

    But if the rights being "granted back" are in fact everything associated with ownership except the words on paper, then that is the very definition of a sham transfer.

     

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    Anonymous Coward, May 11th, 2013 @ 5:23pm

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    Your attitude comment is ironic. I hope you realize that.

     

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    Karl (profile), May 11th, 2013 @ 8:21pm

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    The case does not say that that such a transferee has to be able "to do or to authorize" the exclusive rights.

    Yes, they do say exactly that. In order to be transferred ownership, you must have been transferred the rights - not a "title" to the rights, but the actual rights themselves. A sampling: "By contrast, the recording statute does not contemplate a transfer of anything other than an ownership interest in the copyright, along with the concomitant exclusive rights."

    The statutes also say, explicitly, that only "the owner of copyright under this title has the exclusive rights to do and to authorize" the 106 activities. If you hold those exclusive rights, then you are clearly the legal owner.

    But there are lots of parties who have standing to sue yet who cannot exercise the exclusive rights.

    They are called "beneficial owners." They must have a beneficial interest in the legal owner's exploitation of the works. If they have no such interest, they are not beneficial owners either, and do not have standing to sue.

    The licensor cannot exercise the right granted, despite being the legal owner of it

    The licensor is not the legal owner of the exclusively-licensed rights. They are usually a beneficial owner, and thus have standing to sue, but they are not the legal owner. No court that I'm aware of (including Gardner) has ever said otherwise.

    I think your mistake is the same mistake made by the court here, and that's in thinking that the only type of ownership interest that counts for standing purposes is the one that permits the holder to exercise the rights.

    I think your mistake here (as it always has been) is believing that there is some form of legal ownership of a copyright, that is distinct from the exclusive right to do or authorize the 106 activities. There is not. They are synonymous.

    Another example is a person who parts with legal title in exchange for royalties.

    Right, and such a person is called a beneficial owner, and is not the legal owner of the copyright. Furthermore, if he parted with legal title wihtout retaining any beneficial interest at all, he wouldn't be an owner in any way, shape, or form, and would not have standing to sue. At least, no court that I'm aware of has ever said differently.

    Long story short: Righthaven = legal owner; Stephens Media = beneficial owner

    Righthaven is not the legal owner. Only the legal owner has the legal power to exploit the exclusive rights under 106. If you don't have the power to do so, you are not the legal owner. That is clear from Silvers, and it's clear from the statutes.

    You would be better off arguing that Stephens Media is the legal owner, and Righthaven is a beneficial owner. But even that argument would fail, since Righthaven has absolutely no beneficial interest in Stephens Media's exploitation of their rights.

    The truth is that Righthaven never held any interest whatsoever in the exploitation of the copyrights, so they were never any kind of owner - nether beneficial, nor legal.

    I'm not sure why you're having such a hard time with this. What you're saying is directly contradicted by multiple courts in multiple jurisdictions - not just those dealing with Righthaven. Silvers doesn't agree with you, Nike v. Gardner doesn't agree with you, Campbell doesn't agree with you. You have not cited one case that actually supports your viewpoint. No copyright lawyer, anywhere, who was not hired by Righthaven, has agreed with you. Clearly, you are wrong.

    Furthermore, the only people who might benefit from this wrong belief are scammers like Righthaven. I know you are driven by irrational hatred for anything you think is remotely piratey, but is that hatred really so strong that you are willing to disregard the law and side with scammers like Righthaven to satisfy it?

     

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    Anonymous Coward, May 11th, 2013 @ 10:44pm

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    What authority says titular ownership without any actual legal effect (i.e., you can't actually *do* anything) counts as "legal ownership" and that having all the actual rights and power through a titular exclusive license is "beneficial ownership."

    Dismemberment of copyright ownership into legal and equitable interests has been a part of copyright law since the beginning.

    See, e.g.,
    Under section 4964 [of the 1870 Copyright Act], a license in writing, by instrument duly witnessed, may be given by the proprietor to any other person to the extent described in such license; and there is no restriction upon the power of the proprietor to assign or transfer, in equity, an exclusive right to use the copyrighted book in a particular manner or for particular purposes upon such terms and conditions as may be agreed upon. In such case the legal title remains in the proprietor; and a beneficial interest, to the extent which is agreed upon, vests in the other party, who has acquired an equitable right in the copyright, and who will be properly styled an ‘assignee of an equitable interest.‘ Curt. Copyr. 225.
    Black v. Henry G. Allen Co., 42 F. 618, 621 (C.C.S.D.N.Y. 1890).
    While the terms, “assignment,” “exclusive license,” and “license” are frequently used by courts and practitioners interchangeably, the differences are significant. An assignment passes legal and equitable title to the property while a license is mere permission to use. Assignment is the transfer of the whole of the interest in the right while in a license the owner retains the legal ownership of the property.
    Presley's Estate v. Russen, 513 F. Supp. 1339, 1350 (D.N.J. 1981).

    Thus, the licensee has an equitable or beneficial interest (equitable and beneficial mean the same thing and are interchangeable terms), and the licensor holds legal title. The rule, up until the 1976 Copyright Act, was that only the legal titleholder could sue in his own name. The licensee had to sue in the name of his licensor since only the licensor had standing.

    See, e.g.,
    In this present suit, the Goldwyn Pictures Corporation, hereafter referred to as Goldwyn, and Stephens are made plaintiffs in Goldwyn's effort to overcome the former defect of the absence of Stephens, the owner of the copyright, as a plaintiff, which is necessary because such a licensee cannot bring suit for infringement of the copyright under which he holds his license in his own name; this for the reason that the copyright is, technically speaking, indivisible, the legal title remaining in the licensor and the licensee having merely an equitable title.
    Stephens v. Howells Sales Co., 16 F.2d 805, 806 (S.D.N.Y. 1926).

    The 1976 Copyright Act changed this rule, and now both legal and beneficial owners have standing to sue. An equitable owner, such as a licensee, no longer needs to join his licensor in order to institute an infringement action. So you're looking at this the wrong way. The rule has always been that the legal titleholder may bring suit, even when the right infringed was held by an exclusive licensee. The rule that the exclusive licensee can bring suit in his own name is of recent origin.

    Patents have always worked the same way as copyright did up until the 1976 Copyright Act, namely, only the legal titleholder can bring suit. For example, under the 1836 Patent Act, an exclusive licensee had to bring suit in the name of the patentee as the nominal plaintiff for the benefit of the exclusive licensee. See, e.g., Goodyear v. McBurney, 10 F.Cas. 699 (C.C.S.D.N.Y. 1853). To this day, an equitable owner in a patent such as an exclusive licensee does not have statutory standing to sue in his own name and must join the legal titleholder to the action.

    See, e.g.,
    The general rule is that one seeking to recover money damages for infringement of a United States patent (an action “at law”) must have held the legal title to the patent during the time of the infringement. As stated by the Supreme Court in Crown Die:The law as to who should bring a suit at law for damages by infringement of a patent is clearly and correctly stated in III Robinson on Patents, § 937 [1890], as follows: “With a single exception [when the patentee is the infringer] the plaintiff in an action at law must be the person or persons in whom the legal title to the patent resided at the time of the infringement. An infringement is an invasion of the monopoly created by the patent, and the law which defines and authorizes this monopoly confers only upon its legal owners the right to institute proceedings for its violation. These owners are the patentee, his assignee, his grantee, or his personal representatives; and none but these are able to maintain an action for infringement in a court of law....”261 U.S. at 40-41, 43 S.Ct. at 258-259 (emphasis added)
    Arachnid, Inc. v. Merit Indus., Inc., 939 F.2d 1574, 1579 (Fed. Cir. 1991).
    The right to sue for infringement is ordinarily an incident of legal title to the patent. A licensee may obtain sufficient rights in the patent to be entitled to seek relief from infringement, but to do so, it ordinarily must join the patent owner.
    Abbott Laboratories v. Diamedix Corp., 47 F.3d 1128, 1131 (Fed. Cir. 1995).

    So with patents since the first Patent Act and copyrights up until the 1976 Copyright Act, only the legal owner had standing to sue. Exclusive licensees had to sue in the name of their licensor (with the exception of when the licensor was himself the infringer, in which case the licensee could bring a suit in equity). The 1976 Copyright Act changed things to allow exclusive licensees to be able to sue in their own name, but it didn't divest legal owners of the right to sue. Section 501(b) permits both "legal" or "beneficial" owners to sue. Legal owners had always been able to sue, and the addition of allowing beneficial owners to sue was new.

    The Patent Act has never been changed to allow exclusive licensees to sue in their own name for the simple reason that patent actions are often defended by attacking the validity of the patent itself. Given that a loss could mean the loss of the patent, Congress wants the legal owner to be involved in the suit. Copyright cases are rarely won by striking down the copyright, so that danger of invalidation is not there. Besides, Section 501(b) permits notice and joinder to the legal owner should the court think it necessary to protect the copyright.

     

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    Anonymous Coward, May 11th, 2013 @ 10:55pm

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    It's your attitude that's appalling in saying I'm "inept" and wondering like a jackass whether some terrible opinions you've read were the result of me clerking. I'm demonstrating my grasp of the doctrine in these comments. See above where I explained to the other guy the difference between irrevocability of licenses via contract and property law. Does that post strike you as coming from one who is "inept" in discussing the doctrine of copyright ownership? I should hope not. That's advanced stuff.

    And I have yet to see you even discuss the doctrine that you think I'm so "inept" at. All you're doing is asking a few questions. I'm explaining myself in full, backing up what I say with citations and reasoning. Where's your discussion of the doctrine? Look, I'm happy to explain what I think to you, and I've got tons more case law and arguments to back up what I'm saying, but calling me "inept" in this discussion just makes you look bad. I'm anything but.

     

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    Anonymous Coward, May 11th, 2013 @ 10:57pm

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    Let's see you pull out some law to demonstrate that assigning legal title to another is a "sham." Your conclusory statement here is not convincing. Here's your chance to school me, being that I'm so "inept" and all.

     

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    Karl (profile), May 12th, 2013 @ 12:19pm

    Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re:

    An equitable owner, such as a licensee, no longer needs to join his licensor in order to institute an infringement action. [...] The 1976 Copyright Act changed things to allow exclusive licensees to be able to sue in their own name, but it didn't divest legal owners of the right to sue.

    This is simply wrong.

    Along with allowing both legal and beneficial owners to sue, the 1976 Copyright Act explicitly said that an exclusive license is a "transfer of ownership" under 201(d)(2).

    The exclusive licensee is not an "equitable owner," they are the full, legal title owner of the licensed rights. The licensor may be (and usually is) a beneficial owner, but they are no longer the legal owner of the licensed rights.

    On the other hand, a non-exclusive licensee cannot bring suit under copyright law. That's because they're neither a legal or beneficial owner under copyright law. This is the type of "licensee" whose standing did not change between 1909 and 1976.

    You need to make that distinction. Exclusive license = legal ownership. Non-exclusive license = no ownership.

    Besides, in any real sense, the "exclusive license" in the SAA was a full assignment of all copyright rights. (As was the supposed "non-exclusive license" in the revised SAA, according to the court.)

    And you're still missing the most important part in all of this: you cannot be transferred ownership of a copyrighted work ("title," "equitable," or otherwise) without being transferred the exclusive right to do or authorize one of the 106 activities.

    Thus Righthaven is not the "title owner," since they never held the "title" in the first place.

    If you want to put in terms of a "legal title"/"equitable title" distinction (as far as I understand the terms), think of it this way: In order to transfer the "legal title" of a copyright, you must transfer the "equitable title" as well.

    But that distinction is merely for your benefit, since the Copyright Act does not talk about "legal title" and "equitable title" at all - only about "legal ownership" and "beneficial ownership," which are not synonymous. For example, a "beneficial owner" under copyright law holds neither the "equitable title" nor the "legal title" - or, again, not as I understand those terms.

    In fact, there does not appear to be any equivalent under copyright law to a distinct "legal title" under property law. You must have "equitable title" to be the legal owner, and "beneficial owners" hold neither equitable nor legal title. Those are the only two forms of ownership contemplated by the Copyright Act.

     

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    Anonymous Coward, May 12th, 2013 @ 3:28pm

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    How about Righthaven LLC v. Hoehn? That one seems right on point.

    At any rate, I never said assigning legal title is a sham. You *have* to know that that's not what I said, right? You can't *actually* believe you're accurately descriving what I said, right?

    It's just hamfisted obfuscation. I realize that's what passes for advocacy amongst many attorneys, but you're not playing advocate here, right? You're just giving your honest analysis, right?

    Why don't you point out the difference between " assigning legal title to another is a 'sham.'" and "if the rights being 'granted back' are in fact everything associated with ownership except the words on paper, then that is the very definition of a sham transfer.'"?

    If you can't, then I have no reason to think you are capable of having this conversation. If you won't, then I have no reason to believe you are interested in an honest conversation.

     

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    Anonymous Coward, May 12th, 2013 @ 3:32pm

    Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re:

    Quotes are supposed to go around words that someone used.

     

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    Karl (profile), May 12th, 2013 @ 3:50pm

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    Okay. I realize you wanted me to keep it simple, so you probably didn't even read my last reply.

    Putting it simply, in copyright law:

    "Legal title" = the exclusive right to do and/or authorize any of the activities specified in 17 USC 106; that is, the exclusive right to exploit the 106 rights.

    "Legal owner" = holder of the legal title; that is, one who holds the exclusive right to exploit the 106 rights.

    "Beneficial owner" = someone who retains a beneficial interest in the legal owner's exploitation of the 106 rights. They may, but often do not, hold "equitable title" in the copyright. (An equitable title "gives the holder the right to acquire formal legal title," according to Black's, and the majority of beneficial owners lack this right).

    With a copyright assignment:
    Assignor = beneficial owner. Usually does not hold equitable title.
    Assignee = legal owner, and holds the legal title.
    What is transferred to assignee = the exclusive right to exploit all 106 rights.

    With an exclusive license:
    Licensor = beneficial owner. Usually holds equitable title.
    Licensee = legal owner, and holds the legal title.
    What is transferred to licensee = the exclusive right to exploit some 106 rights (under 17 USC 201(d)(2)), but not all of them.

    With a non-exclusive license:
    Licensor = legal owner, and holds the legal title.
    Licensee = neither legal nor beneficial owner.
    What is transferred to licensee = nothing.

    As this makes clear, Righthaven was never assigned the copyrights. But even if they were, then the supposed "exclusive license" was in reality an assignment back to Stephens Media.

     

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    Anonymous Coward, May 12th, 2013 @ 5:20pm

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    That is not correct. I posted two quotes evidencing the actual law, yet, as you have an amazing ability to do (I have never seen anyone who can do this quite like you do), you ignored that evidence and just made up what you thought the answer is.

    Here's the quotes again:

    See, e.g.,

    Under section 4964 [of the 1870 Copyright Act], a license in writing, by instrument duly witnessed, may be given by the proprietor to any other person to the extent described in such license; and there is no restriction upon the power of the proprietor to assign or transfer, in equity, an exclusive right to use the copyrighted book in a particular manner or for particular purposes upon such terms and conditions as may be agreed upon. In such case the legal title remains in the proprietor; and a beneficial interest, to the extent which is agreed upon, vests in the other party, who has acquired an equitable right in the copyright, and who will be properly styled an ‘assignee of an equitable interest.‘ Curt. Copyr. 225.
    Black v. Henry G. Allen Co., 42 F. 618, 621 (C.C.S.D.N.Y. 1890).
    While the terms, “assignment,” “exclusive license,” and “license” are frequently used by courts and practitioners interchangeably, the differences are significant. An assignment passes legal and equitable title to the property while a license is mere permission to use. Assignment is the transfer of the whole of the interest in the right while in a license the owner retains the legal ownership of the property.
    Presley's Estate v. Russen, 513 F. Supp. 1339, 1350 (D.N.J. 1981).

    I'm going to tell you the right answer, which I know you won't believe no matter how much more evidence I provide. I know you won't like it. I know you think I'm wrong. I know that any amount of time I spend responding to you is just wasted. But, here ya go:

    (1) With an assignment:

    Assignor = before the assignment, holds full legal and full equitable ownership interests; after the assignment, holds nothing

    Assignee = before the assignment, holds nothing; after the assignment, holds full legal and full equitable ownership interests

    (2) With an exclusive license:

    Licensor = before the exclusive license, holds full legal and full equitable ownership interests; after the exclusive license, holds full legal and residual equitable ownership interests (residual means whatever equitable ownership interests are not transferred to the exclusive licensee)

    Exclusive licensee = before the exclusive license, holds nothing; after the exclusive license, holds partial equitable ownership interest

    (3) With a nonexclusive license:

    Licensor = before the nonexclusive license, holds full legal and full equitable ownership interests; after the nonexclusive license, holds full legal and full equitable ownership interests

    Nonexclusive licensee = before the nonexclusive license, holds nothing; after nonexclusive license, holds nothing (a nonexclusive licensee only has a privilege; a nonexclusive license is not a conveyance of an ownership interest in the copyright)

     

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    Anonymous Coward, May 12th, 2013 @ 5:22pm

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    Yes, I see that you said "adept," not "inept." The meanings are similar, so my point stands. Perhaps you could address the substance of my post? Or are you only capable of nitpicking?

     

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    Anonymous Coward, May 12th, 2013 @ 5:31pm

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    Why don't you point out the difference between " assigning legal title to another is a 'sham.'" and "if the rights being 'granted back' are in fact everything associated with ownership except the words on paper, then that is the very definition of a sham transfer.'"?

    Wow. Really? You're the one making the claim that this is a sham. Back it up. Why is this transfer of legal title a sham? Trying to put me down for "hamfisted obfuscation" is cute, but you're not making an actual legal argument. How can we tell when a transfer is a sham and when it's not? Show me that superior intellect I keep hearing about. I've yet to see you actually make an argument and back it up. You just ask questions. Where's your arguments?

    And you're the one saying I'm not "adept" at the doctrine, yet I haven't seen you demonstrate your ability to discuss the doctrine. When are you going to discuss the doctrine that you're so "adept" at? I'm the one giving honest analysis, applying the doctrine to the facts. You're the one avoiding a discussion of the doctrine on the merits while making conclusory statements that you haven't backed up. I'll be here in case you decide to actually explain yourself or make an argument. I look forward to it.

     

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    Karl (profile), May 12th, 2013 @ 5:56pm

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    That is not correct. I posted two quotes evidencing the actual law

    ...one of which (Black) was from a time in which copyright rights were indivisible; and one of which (Presley) was talking about trademark law, not copyright law.

    Regarding copyrights, every case I've seen has held that an exclusive license is a transfer of ownership. Even Gardner said, flat out, that an exclusive license was a "transfer of ownership."

    The licensee is the legal owner of the transferred rights. The licensor is a beneficial owner of the transferred rights, and the legal owner of the residual interests.

    I know you're wrong, because under copyright law, beneficial owners cannot exploit any exclusive rights. The exclusive rights to do and to authorize the 106 activities belong solely to the legal owner; beneficial owners may have an interest in the exploitation of the rights, but cannot exploit any of the rights themselves without the legal owner's permission.

     

    reply to this | link to this | view in thread ]

  76.  
    identicon
    Anonymous Coward, May 12th, 2013 @ 6:58pm

    Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re:

    Probably my last post to you on this...

    ...one of which (Black) was from a time in which copyright rights were indivisible; and one of which (Presley) was talking about trademark law, not copyright law.

    Yes, but the concepts are the same. An assignment passes full legal and equitable title whether copyright, trademark, or patent. An licensor holds legal title whether copyright, trademark, or patent.

    Regarding copyrights, every case I've seen has held that an exclusive license is a transfer of ownership. Even Gardner said, flat out, that an exclusive license was a "transfer of ownership."

    Yes, an ownership interest is transferred in an exclusive license. But not the complete ownership interest. As the Copyright Act reflects, there are legal and beneficial ownership interests. An assignment is a transfer of legal and beneficial ownership interests. An exclusive license is a transfer of partial beneficial ownership interest. Both are transfers of ownership interests. But they are not both the transfers of the SAME ownership interests. You need to get past the fact that both transfer an ownership interest, and you need to look at what kind of ownership interests are transferred by each.

    The licensee is the legal owner of the transferred rights. The licensor is a beneficial owner of the transferred rights, and the legal owner of the residual interests.

    Nope. As Black says, "the legal title remains in the proprietor." This is why, since the Copyright Act of 1790, the licensor has always had standing to sue. The 1976 Act changed it so the beneficial owner, such as an exclusive licensee, could also sue. But the fact remains that whether copyright, trademark, or patent, the licensor holds legal title. This is why in Gardner the exclusive licensee could not transfer his ownership interest to another. The holder of legal title, i.e., the licensor, can alienate his ownership interest freely. The exclusive licensee, not holding legal title, cannot. The exclusive licensee's ownership interest is derivative of the legal owner's interest.

    I know you're wrong, because under copyright law, beneficial owners cannot exploit any exclusive rights. The exclusive rights to do and to authorize the 106 activities belong solely to the legal owner; beneficial owners may have an interest in the exploitation of the rights, but cannot exploit any of the rights themselves without the legal owner's permission.

    On the contrary, it is only a beneficial owner who can exploit the copyright. Not all beneficial owners can, though. It depends on the type of beneficial ownership interest. An exclusive licensee, who holds one type of beneficial ownership interest, can exploit the rights. A person who is entitled to only royalties, which is another type of beneficial ownership interest, cannot exploit the copyright. On the other hand, a party that holds only legal title, such as a licensor who has conveyed all beneficial interests to another, cannot exploit the copyright. It's not the legal ownership interest that permits the rights to be exploited. If a party has both full legal and equitable ownership interests, then that party can exploit the copyright because of his equitable ownership interest. If that party grants an exclusive license to another, then only that exclusive licensee can exploit the copyright. The licensor cannot. The reason is because the ability to exploit the copyright is a function of a beneficial ownership interest. The licensor, having granted that beneficial ownership interest to another, cannot exploit the copyright.

    So you have it backwards. You think the licensor cannot exploit the copyright because he has given legal title to another. But the reality is that he can't exploit the copyright because he has given that equitable interest to another. And you think that since one type of beneficial ownership interest cannot exploit the rights, namely, a party that has the right to royalties, then that means that the ability to exploit the copyright is not a beneficial ownership interest. But the reality is that the ability to exploit the copyright and the right to receive royalties are just two different types of beneficial ownership interests.

    Before you fire off another post about how wrong I am, I suggest that you consider the possibility that maybe I'm right, and then do tons of research on this stuff like I have. Keep in mind that there's more than one type of beneficial ownership interest, and just because one can't exploit the copyright, that doesn't mean that none can. I'd be happy to discuss this stuff further with you if you put in the time first doing your own research on the subject. And I'd appreciate it if you'd have a bit more of an open mind that maybe I might know what I'm talking about. I'm not just stating what I hope to be the law. I've researched this stuff extensively and I'm explaining to you what I've discovered to be true. Have a good one, Karl. I do appreciate the fact that you're at least willing to dive into the doctrine on the merits.

     

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  77.  
    icon
    Karl (profile), May 12th, 2013 @ 7:45pm

    Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re:

    By the way, here's another case that makes it clear that when you grant an exclusive license, you lose ownership of the rights:
    A company claiming to be the licensee of exclusive rights under the copyright to a popular song [Essex Music] sues a company claiming to be the owner of the copyright [ABKCO] for copyright infringement and violations of the Lanham Act. [...]

    In Fantasy v. Fogerty, the composer of a song, who had granted exclusive rights in the copyright to the song to the plaintiff's predecessor in interest in return for a sales percentage and other royalties, authorized the distribution of copies of an allegedly identical song. The composer, like ABKCO, argued that his interest in the copyright immunized him from an infringement suit. The Court articulated the general principle that "[a] copyright owner can infringe upon any exclusive right which he transfers or grants to another," and held that since the composer had "no independent right to use or license the copyright" to the song, he had infringed upon the licensee's exclusive rights.

    Defendants seek to distinguish Fantasy v. Fogerty by pointing out that the composer transferred the entirety of his interest in the copyright and then created a derivative work which was in direct competition with plaintiff's work. As Nimmer and the Fogerty Court point out, however, the 1978 Act is concerned with the transfer not only of entire copyrights but also of specific "rights" under the copyrights; indeed, "[o]nce the copyright owner grants an exclusive license of particular rights, only the exclusive licensee and not his grantor may sue for later occurring infringements of such rights." Nimmer, supra, § 12.02 at 12-29 & n. 13 (emphasis added). ABKCO is not alleged to have infringed its own rights, as defendants suggest, because it has allegedly transferred the specific rights which it now exercises.
    - Essex Music v. ABKCO

     

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  78.  
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    Karl (profile), May 12th, 2013 @ 8:53pm

    Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re:

    Sorry, didn't see this before posting. Keeping it simple, again:

    Yes, but the concepts are the same.

    Not since the 1976 Copyright Act, they're not. Since then, copyright ownership is very different from either patent or trademark ownership.

    Yes, an ownership interest is transferred in an exclusive license. But not the complete ownership interest.

    The "ownership interest" that is transferred is legal ownership.

    But whatever you call it, "all of the protection and remedies accorded to the copyright owner by this title" are transferred to the exclusive licensee, and are no longer held by the licensor. That was the entire reason the Gardner court ruled as it did.

    An assignment is a transfer of legal and beneficial ownership interests. An exclusive license is a transfer of partial beneficial ownership interest.

    Now you're just making stuff up. Nearly every person who assigns a copyright retains some form of beneficial ownership. If the assignment also assigned beneficial ownership, then the assignor would have no ownership interest at all, and no standing to sue.

    As Black says, "the legal title remains in the proprietor."

    Since 1976, there is no such thing as a copyright proprietor.

    On the contrary, it is only a beneficial owner who can exploit the copyright.

    What the hell are you talking about? As Congress said, "a 'beneficial owner' [...] would include, for example, an author who had parted with legal title to the copyright in exchange for percentage royalties based on sales or license fees." An author who has parted with legal title to the copyright cannot exploit the copyright, precisely because he is not the legal owner.

    You bring up - again - the notion that an exclusive licensee is a "beneficial owner," but they are the legal owner of those rights. You're trying to prove that an exclusive licensee is a beneficial owner by showing that only beneficial owners can exploit the copyright, and then using the idea that only beneficial owners can exploit the copyright to prove that an exclusive licensee is a beneficial owner. That's just circular reasoning - otherwise known as begging the question.

    You think the licensor cannot exploit the copyright because he has given legal title to another.

    As does every single court case that I've read, including the Essex case I just posted, and including the ones you've cited.

     

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  79.  
    identicon
    Anonymous Coward, May 13th, 2013 @ 5:44am

    Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re:

    Essex Music v. ABKCO only proves my point. Plaintiff Essex Music was an exclusive licensee and defendant ABKCO was the copyright owner. The issue was whether the exclusive licensee had standing to sue under the 1976 Act. Under the 1909 Act, such an exclusive licensee could not sue unless he joined his licensor to the action. The licensor’s legal title was needed for the court to have jurisdiction. But the 1976 Act changed this by permitting those with a beneficial interest, such as an exclusive licensee, to bring an action in its own name. The court cites the legislative history of the 1976 Act: “It is thus clear, for example, that a local broadcasting station holding an exclusive license to transmit a particular work . . . could sue, in its own name as copyright owner, someone who infringed that particular exclusive right.” H.R. Rep. No. 94-1476, 94th Cong., 2d Sess. at 123 (1977). The point of the 1976 Act was make it so that exclusive licensees could sue in their own name, without the need to join their licensor, the legal owner. The 1976 Act does this by granting "legal" and "beneficial" owners the right to sue. Under the 1909 Act, only the legal owner, i.e., the proprietor, had standing. The 1976 Act does away with the term "proprietor," but it does not do away with the notion of a legal titleholder.

    The court says, “There is similarly no merit to defendants claim that defendant ABKCO, as the copyright owner, cannot infringe its own copyright.” That’s true because the copyright owner, i.e., the legal titleholder, has granted the right to exploit the copyright to the exclusive licensee. Note how the court DOES NOT say that the licensor is NO LONGER THE OWNER after having granted an exclusive license. The court refers to a such a licensor as the “copyright owner.” Your theory is that a licensor no longer owns the copyright. The reality is that the licensor holds legal title and the exclusive licensee has a beneficial ownership interest. Both are owners of the copyright, but their respective ownership interests are different. The fact is that a licensor can infringe his own copyright by exploiting the copyright if he has granted the right to exploit the copyright to an exclusive licensee. The licensor still has legal title, but without the equitable right to use the copyright, he himself can be an infringer. This works the same way in patent and trademark law, and property law generally. If I lease you my apartment, I can’t live in the apartment even though I hold legal title. Your possessory rights to the apartment give only you the right to live there. My legal title does not.

     

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  80.  
    icon
    Karl (profile), May 13th, 2013 @ 10:13am

    Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re:

    You've really reached a new low for ridiculousness with this post.

    The 1976 Act does away with the term "proprietor," but it does not do away with the notion of a legal titleholder.

    It does away with the notion of a singule legal titleholder. Every case we've discussed makes this absolutely clear.

    Note how the court DOES NOT say that the licensor is NO LONGER THE OWNER after having granted an exclusive license.

    They say exactly that, using almost exaclty those words! In the court's words, the rights it transferred are not "its own rights." They have "transferred the specific rights" via the exclusive license. The rights are no longer "its own." The original copyright holder no longer owns them.

    It amazes me how you are so desperate to hold on to a flawed argument, you try to twist the court's words to mean exactly the opposite of what it actually meant. This isn't the first time you've done this, either.

    Your theory is that a licensor no longer owns the copyright.

    The fact (not "my theory") is that the licensor is no longer the legal owner of those specific rights. I did not say that an exclusive license necessarily divests the licensor of all rights. They are still the legal owner of any residual exclusive rights. They may be (and usually are) beneficial owners of the licensed rights - exactly like an artist who has assigned the legal title to a publisher or label.

    But if a "licensor" grants an exclusive right to all the 106 rights, and does not retain any beneficial interest in those rights, then they do no longer own the copyright. The court in this case explicitly said so, and no court has disagreed.

    In reality, of course, such an "exclusive license" would be an outright assignment, no matter what the terminology used in the contract.

    The court refers to a such a licensor as the "copyright owner."

    That's because 1. they are the former copyright owner of those rights, and 2. they are still the copyright owner of the residual exclusive rights. In other words, it's a convenient shorthand, nothing more. On the contrary, they say, explicitly, that ABKCO was no longer the owner of the rights transferred by exclusive license.

    Oh, and remember that false dichotomy between an assignment and an exclusive license? As this court (among others) makes clear, there is no material differece between the two. The exclusive license in ABKCO is the same transfer of ownership as the assignment in Fogerty.

    On that subject (but not relating to ABKCO), you characterized an assignment as also transferring beneficial ownership. But remember the example the court gave of beneficial ownership? "An author who had parted with legal title to the copyright in exchange for percentage royalties?" The congressional record was clearly talking about an assignment, not an exclusive license. That's the way artists' contracts worked under the 1909 law (Moran v. London called it "the classic example of a beneficial owner in the cases deciding standing to sue under the 1909 Act"). And it's still the way most copyright transfers happen today. Furthermore, the example called it "the" title.

    Clearly, an assignment does not automatically transfer "beneficial ownership," or the author in that example would not be a "beneficial owner." An assignment - like an exclusive license - automatically transfers only the "legal title."

    This works the same way in patent and trademark law, and property law generally.

    I don't know about trademark law (which is very different than copyright law). From what little I know, it is not the way it works in other areas of property law. In a trust relationship, for example, only the trust - the legal owner - has the sole legal right to administer the trust. The trustees - the equitable owners - do not have that right. (That's usually why trusts are set up in the first place.) You're saying, in essence, that only the beneficial owners have the legal right to administer a piece of property. That's completely nonsensical.

    Your lease analogy is the equivalent of a non-exclusive license in copyright law. An exclusive license would be more analogous to buying a condominium. Of course, this is only an analogy; a piece of real property is physically exclusive, while the activities in 106 are not.

    But the point is moot, because you're still - still! - glossing over the fact that Righthaven was never assigned any of the 106 rights. As this ruling, Silvers, and many other cases make absolutely clear, you cannot transfer ownership of a copyright without also transferring the exclusive rights. And, in the words of the House Report, "the exclusive rights [...] are 'to do and to authorize' any of the activities specified in the five numbered clauses." That is what must be transferred for the assignment to be valid.

    The whole discussion is stupid. All you have to do is look at what rights Righthaven was actually transferred. Were the transferred any right to do any of the activities in 106? No. Were they transferred any right to authorize any of the activities in 106? No. At a bare minimum, did they even have any beneficial interest in the exploitation of these rights? No.

    They never held any rights that they could grant to anyone else, whether through "exclusive license" or not.

    The intent - clearly, and without any doubt whatsoever - was to transfer only the bare right to sue. You can dress it up with whatever terminology you want, but that doesn't make the transfers any less of a sham.

     

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