DRK Photo v. McGraw-Hill Global Education Holdings, LLC, 870 F.3d 978

Background

DRK Photo is a stock photography agency that licenses photographs from freelance photographers, mostly under nonexclusive "Representation Agreements."
From ~1992–2009 DRK licensed images to McGraw-Hill under one-time nonexclusive license invoices; DRK and photographers typically split sales proceeds.
In 2008 photographers executed identical "Copyright Assignment, Registration, and Accrued Causes of Action" agreements that on their face assigned copyrights and accrued claims to DRK (with an agreement to reassign after registration/claims resolution); parties continued to treat the Representation Agreements as nonexclusive.
DRK sued McGraw-Hill for copyright infringement, alleging McGraw-Hill exceeded licensed print runs; defendants moved for summary judgment arguing DRK lacked standing for photos covered by nonexclusive Representation Agreements.
The district court granted summary judgment for defendants on those claims and denied DRK’s post-deadline motion to amend to join photographers; the Ninth Circuit affirmed.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether DRK is a legal owner by virtue of nonexclusive Representation Agreements	DRK: agency agreements grant it the right "to authorize" uses and therefore confer ownership/standing	McGraw-Hill: Representation Agreements are nonexclusive licenses and do not transfer legal title or exclusive rights	Held: Nonexclusive Representation Agreements do not make DRK a legal owner; no standing on that basis (Minden distinguished)
Whether Assignment Agreements transferred legal title (including accrued claims) to DRK	DRK: Assignment Agreements conveyed full copyrights and accrued claims to permit registration and enforcement	McGraw-Hill: Assignments were, in substance, transfers of the bare right to sue and did not transfer exclusive rights	Held: Assignments, viewed with the continued nonexclusive dealings and emails, were merely transfers of the right to sue and cannot confer standing (Silvers/Righthaven controlling)
Whether DRK is a beneficial owner entitled to sue	DRK: alternatively a beneficial owner because of revenue sharing and enforcement interest	McGraw-Hill: DRK is only a nonexclusive agent and assignee of claims, which does not make it a beneficial owner	Held: DRK did not show the classic indicia of beneficial ownership; cannot rely on the same facts that fail to make it legal owner
Whether district court abused discretion denying leave to amend to join photographers after scheduling deadline	DRK: should be allowed to join photographers as plaintiffs to cure standing defect	McGraw-Hill: DRK was not diligent—standing defense was raised early and in related litigation; amendment untimely	Held: Denial affirmed—DRK lacked diligence under Rule 16(b) and district court did not abuse discretion

Key Cases Cited

Minden Pictures, Inc. v. John Wiley & Sons, Inc., 795 F.3d 997 (9th Cir. 2015) (exclusive agency can confer standing when agency has sole power to authorize third-party uses)
Silvers v. Sony Pictures Entm’t, Inc., 402 F.3d 881 (9th Cir. 2005) (assignee holding only an accrued claim but no legal/beneficial interest lacks standing)
Righthaven LLC v. Hoehn, 716 F.3d 1166 (9th Cir. 2013) (assignments that in substance transfer only the right to sue do not confer standing)
Jules Jordan Video, Inc. v. 144942 Canada Inc., 617 F.3d 1146 (9th Cir. 2010) (limits on raising §204(a) challenges by third parties where transfer is undisputed between parties)
Warren v. Fox Family Worldwide, Inc., 328 F.3d 1136 (9th Cir. 2003) (example of beneficial ownership where author retained economic interest via royalties)
Lexmark Int’l, Inc. v. Static Control Components, Inc., 134 S. Ct. 1377 (2014) (zone-of-interests discussion; does not expand Copyright Act standing beyond legal/beneficial owners)
Bourne Co. v. Hunter Country Club, Inc., 990 F.2d 934 (7th Cir. 1993) (nonexclusive licensing agent is neither legal nor beneficial owner)