Another Blow Is Struck Against Monetization of Copyright Enforcement Claims

righthaven deletedIn a decision issued earlier this month, the Ninth Circuit held that the right to bring copyright claims cannot be transferred without an accompanying transfer of copyright ownership itself.

The ruling came in consolidated cases which had been brought in the District of Nevada by Righthaven, LLC, an entity which had been founded for the purpose of receiving assignments of the ability to enforce copyrights.  The problem was that under the Copyright Act, only a “legal or beneficial owner of an exclusive right under a copyright” can sue, and Righhaven’s assignments from the original owner (Stephens Media LLC, the owner of the Las Vegas Review-Journal) had never transferred actual ownership.  Instead, Stephens Media had signed a pair of convoluted agreements containing a good deal of window dressing, but no outright transfer of ownership to Righthaven.  The district court accordingly dismissed Righthaven’s suit for lack of standing, and the Ninth Circuit affirmed this ruling.

As noted earlier in this blog, a district court in Massachusetts has allowed a class action to proceed against a copyright holder and its law firm, who had set up a different “monetization” scheme in which demand letters were sent en masse to alleged infringers, most of whom were never sued.  At least from these cases, the trend in the law seems to be against aggregation of rights holders or alleged infringers, and in favor of individual enforcement by original owners.