OPINION AND ORDER
On August 5, 2011, PlaintiffiCounterDefendant John Wiley & Sons, Inc. (“Plaintiff’ or “Wiley”), commenced this action against Defendant/Counter-Plaintiff DRK Photo (“Defendant” or “DRK”) under the Declaratory Judgment Act, 28 U.S.C. § 2201, seeking a declaration that Wiley had not infringed the copyrights on certain stock photographs that DRK had previously licensed to Wiley. In response, on May 31, 2012, DRK counterclaimed against Wiley for infringement under the Copyright Act of 1976, 17 U.S.C. §§ 101— 810, as to a subset of these photographs.
The parties have filed cross-motions for summary judgment. For the reasons set forth in the remainder of this Opinion, Wiley’s motion for summary judgment is granted in part and denied in part; DRK’s motion for partial summary judgment is also granted in part and denied in part.
BACKGROUND
A. DRK’s Stock Photography Business
DRK is a stock photography agency that licenses photographic images to publishers. (DRK 56.1 Statement ¶ 1). Daniel Krasemann has owned DRK as a sole proprietorship since 1981. (D. Krasemann Decl. ¶ 1). Rather than employ photographers, DRK executes agreements with photographers pursuant to which the photographers grant DRK the right to include certain of the photographers’ works in DRK’s collection of stock photographs. (DRK’s Counterstatement ¶¶ 3-4). Once
DRK employs an internal numbering system to track the images that DRK includes in its collection. (D. Krasemann Decl. ¶ 7). Using this system, DRK assigns each image an internal number when that image is received from a photographer and added into DRK’s collection. (Id.). The images are numbered sequentially from the date on which the image was received. (Id.). This number allows DRK to identify when the image was first released into its collection, and consequently, when the image is deemed published under copyright law. (Id.; Penchina Decl., Exh. 31 at 66).
This procedure was applied to all images at issue in this case, except for certain images received from Stephen Krasemann, a photographer and Daniel Krasemann’s brother. (See D. Krasemann Decl. ¶ 8). Although internal numbers were assigned to Stephen Krasemann’s images at the time DRK received them, the images were often not simultaneously released into DRK’s collection. Instead, the images were released, and thus published at later dates. (Id.).
B. DRK’s Agreements with Photographers
DRK entered into a form representation agreement (the “Representation Agreement”) with each photographer for whom DRK maintained images in its collection. (D. Krasemann Decl. ¶ 3, Exh. 1). Pursuant to the Representation Agreements for all images at issue, except those by photographers Tom Bean (“Bean”) and Peter French (“French”), DRK would serve as the photographers’ “agent with [ ] respect to the sale or leasing of the photographs or transparencies which [the photographer had] delivered to [DRK] and shall deliver to [DRK] in the future.” (Id.). In contrast, under the Bean and French Representation Agreements, DRK agreed to act as Bean’s and French’s “sole and exclusive agent with respect to the sale or leasing of the photographs or transparencies which [Bean or French had] delivered to [DRK] and shall deliver to [DRK] in the future.” (Id. (emphasis added)).
The Representation Agreements also provided, in relevant part:
I understand that the best possible care will be taken of my material and agree that you assume no liability for any loss or damage to the items so delivered to you. In the event that any transparency is lost, destroyed or damaged by others, then I give you full and complete authority to make claim or bring suit for redress or compromise said claim without my permission.
I understand that there will be a 50/50 split between DRK PHOTO and myself regarding all sales made and received. Payment is to be made within ninety (90) days of receipt. DRK PHOTO shall notify me on a regular monthly basis ifany sales activity occurred during that time.
I understand that the terms and compensation of the sales or leasing of my photographs or transparencies shall be solely in your discretion.
In the event of termination of this agreement DRK PHOTO retains the right to its normal commission on all sales which might arise from a user who has made duplicates of those transparencies, photographs, or other materials submitted to it during the terms of this agreement and then, after term hereof, the user wishes to utilize such duplicate materials. DRK PHOTO shall have the right to grant such usage and collect 50% of the net sale from usage. DRK PHOTO shall also retain the right to collect 50% of the net sale from all subsequent pick-ups or reprints on photos that were originally placed with the client during the term of this agreement, and then reprinted or picked-up after expiration of this agreement.
(Id.). Although DRK contends otherwise, the record before the Court conclusively establishes that all Representation Agreements, except those with Bean and French, granted DRK nonexclusive rights for the photographers’ images in DRK’s collection. (See, e.g., Penchina Decl., Exh. 8, 30 at 166-67, 33 at 21).
The Representation Agreement is not the only operative agreement between DRK and the photographers whose images are at issue here. In 2008, DRK initiated a program to register copyrights for the photographs in its collection. (Wiley 56.1 Statement ¶ 20). To that end, beginning in June 2008, DRK asked photographers to sign a form agreement, pursuant to which the photographers would grant DRK the right to assert copyright infringement claims for those photographs in its collection (the “Assignment Agreement”). (Id. at ¶¶21, 24). The Assignment Agreement, entitled “Copyright Assignment, Registration, and Accrued Causes of Action Agreement,” provided:
The undersigned photographer, the sole owner of the copyrights in this undersigned’s images, (the “Images”) selected by DRK PHOTO (“DRK”) and included in DRK’s collection, hereby grants to DRK all copyrights and complete legal title in the Images. DRK agrees to reassign all copyrights and complete legal title back to the undersigned immediately upon completion of the registration of the Images, as evidenced by DRK’s receipt of a Certificate of Registration from the United States Copyright Office for such Images, and resolution of infringement claims brought by DRK relating to the Images.
The undersigned agrees and fully transfers all right, title and interest in any accrued or later accrued claims, causes of action, choses in action — which is the personal right to bring a case — or lawsuits, brought to enforce copyrights in the Images, appointing and permitting DRK to prosecute said accrued or later accrued claims, causes of action, choses in action or lawsuits, as if it were the undersigned.
Any proceeds obtained by settlement or judgment for said claims shall, after deducting all costs, expenses and attorney’s fees, be divided and paid 50% for the undersigned and 50% for DRK.
(Id. at ¶ 22).
The purpose of the Assignment Agreement was to allow DRK to register photographs with the United States Copyright Office “as the copyright holder by assignment” so that DRK would have — at least as DRK understood it — -“legal standing with the courts to pursue would be infringers.” (Wiley 56.1 Statement ¶ 27). Indeed, when transmitting the Assignment Agreement to photographers, DRK informed them that the purpose of the agreement was for DRK to register the photographers’ images in its collection with the United States Copyright Office so that DRK would be “in a much stronger position with much more leverage for settling copyright infringement claims.” (Penchina Decl., Exh. 4). In those e-mails to photographers, DRK confirmed that the Assignment Agreement was “not a permanent assignment.” {Id.). Rather, and as provided for in the Assignment Agreement, DRK “agree[d] to reassign all copyrights and complete legal title back” to the photographers “immediately upon completion of the registration of the images, as evidenced by DRK’s receipt of a Certifícate of Registration from the United Stated Copyright Office for such images, and resolution of infringement claims brought by DRK relating to the images.” (Id.). When one photographer expressed his concern in signing the agreement, based on his unwillingness to allow the copyright registration to his image to be in DRK’s name, DRK “assure[d]” the photographer that there was “no rights grab going on here. We simply want to register our website/database of images so the images
C. DRK’s Relationship with Wiley
Wiley is a publisher of textbooks and other educational materials. (Wiley 56.1 Statement ¶ 1). Beginning around 1992, DRK began licensing photographs to Wiley for inclusion in textbooks and related products published by Wiley. (Id. at ¶ 9). In general, Wiley would submit a letter to DRK for each transaction that would identify which particular stock photographs from DRK’s collection Wiley desired to use. (Id. at ¶ 10). Wiley would also inform DRK which textbook or publication the photographs would be included in, and the number of print runs that Wiley intended to complete. (Id.).
Once Wiley’s request was approved, DRK would issue an invoice to Wiley that set forth the terms applicable to Wiley’s use of the licensed photographs. (Wiley 56.1 Statement ¶ 11). For example, the invoices specified the terms of the “Media Usage and Type Allowed” as follows:
One-time, non-exclusive, North American, English language reproduction and distribution rights for publication inside the print version of the copyright 1997 John Wiley’s & Sons, Inc. COLLEGE LEVEL TEXTBOOK publication titled THE SCIENCE, 2ND EDITION, by Trefil; the total number of copies to be printed is not to exceed 20,000. No other rights granted or implied. No electronic publishing rights granted.
(Second D. Krasemann Deck, Exh. 2-A, 2-B). The invoices also contained standard form language under the heading “Rights Granted” that stated:
One-time, non exclusive reproduction rights to the photographs listed below, solely for the uses and specifications indicated and limited to the individual edition, volume series, show event or the like contemplated for this specific transaction (unless otherwise indicated in writing).
(Id.).
If [Wiley] desires to reuse an image or extend previous usage, then Recipient must request and pay for additional rights prior to publication. [Wiley] agrees not to make, authorize or permit any use of an image or its derivative ... except as authorized by the invoice. In the event [Wiley] use[s] an image for any use other than that indicated on the invoice, including but not limited to the number of uses, the publication using, or the size of reproduction, DRK PHOTO agrees to forego its rights to sue for copyright infringement and breach of contract if [Wiley] pay[s], as liquidated damages, a sum equal to ten (10) times the maximum price [DRK] would havecharged for such use, within 10(ten) days of [DRK] billing such fee.
(Second Krasemann Decl., Exh. 2-B, Invoices 8795 and 9243).
In addition to the aforementioned agreements, for the period 2000 through 2001, DRK and Wiley entered into a separate pricing agreement that set forth the prices that DRK would charge Wiley for use of photos licensed by DRK (the “Pricing Agreement”). (See Wiley 56.1 Statement ¶¶ 13-14). Pursuant to the Pricing Agreement, “DRK charged Wiley $170 for the right to print and distribute in North America (with up to 10% of the distribution permitted to be sent abroad) up to 40.000 copies of a book (printed in the English language) in which DRK’s photos comprised up to half a page; and DRK charged an additional 10% [ (i.e., $17) ] to increase the permitted print run up to 80.000 copies.” (Id. at ¶ 14).
D. The Alleged Instances of Copyright Infringement
1. Background and Nomenclature
At issue in this case are a number of photographs, and an even greater number of alleged instances of copyright infringement with respect to those photographs. Certain photographs are the subject of multiple instances of alleged infringement. Consequently, when referring to “instances” of alleged infringement, the Court is not necessarily referring to different photographs. Rather, the Court is identifying particular uses of a photograph by Wiley as to which DRK has claimed copyright infringement.
To capture the instances of alleged infringement, the parties have submitted three summary charts, included as exhibits to the parties’ submissions; these charts detail information about each instance, such as the photograph used by Wiley and the publication in which it appeared. When referring to an instance of alleged infringement, the Court has adopted the parties’ convention of referring to a line on one of the summary charts where the instance is identified. There are a total of 316 instances of alleged copyright infringement for which Wiley seeks a declaration of non-infringement (the “Wiley Non-Infringement Instances”). These Instances are set forth in Exhibit A to Wiley’s amended complaint (“Wiley’s Chart”). (Dkt. # 23).
In its counterclaims against Wiley for copyright infringement, DRK isolated 295 of the 316 Wiley Non-Infringement Instances, and listed them in Exhibit 1 to DRK’s counterclaims. (Dkt. # 26-1).
2. The Stephen Krasemann Photographs
There are six photographs by Stephen Krasemann as to which the parties raise specific issues. The images are covered by two registrations that Stephen Krasemann personally obtained. (Wiley 56.1 Statement ¶ 35). The first registration, Registration No. VAu 175-200, has an effective date of February 1, 1990. (Id. at ¶ 56). The second registration, Registration No. VAu 516-002, has an effective registration date of March 13, 2001. (Id. at ¶ 44). The specific images at issue include the following: (i) Masai Livestock Tanzania, image number 902499; (ii) Wind Generators and Mountains Gorgonio Pass, California, image number 905268; (iii) Red Fox in winter leaping after mouse, image number 902839; (iv) Aerial view Cape Cod and surf, image number 904674; (v) Lunch Creek Waterfall, Montana, image number 905367; (vi) Aerial Permafrost Polygons, image number 901854 . (collectively, the “Krasemann Images”); as well as (v) image numbers 127141 to 134177; and (vi) image numbers 100001 to 112610. (See id. at ¶¶ 45-57).
3. The Tom Bean and Peter French Photographs
Separately, there are 43 instances of alleged infringement related to photographs by Tom Bean (the “Bean Instances”), and one instance related to a photograph by Peter French (the “French Instance”). DRK seeks summary judgment as to only 16 of the Bean Instances, and thus only those 16 are listed among the DRK Summary Judgment Instances.
E. The Instant Litigation
On August 5, 2011, Wiley filed suit against DRK seeking a declaratory judgment of non-infringement for any use by Wiley of any image that DRK had licensed to Wiley; these potential instances of infringement are referred to herein as the Wiley Non-Infringement Instances. (Dkt. # 1). Wiley alleged that (i) it was entitled to a declaration of non-infringement because DRK lacked copyright ownership or a valid copyright registration; (ii) many of Wiley’s Non-Infringement Instances occurred outside of the applicable statute of limitations; and (iii) the Wiley Non-Infringement Instances involved the re-use of the same images that DRK had licensed to Wiley to use in a later edition or revised version of the work. (Id.). Wiley also sought a declaration that it was not liable
A few weeks after Wiley commenced suit in this District, DRK filed a mirror-image action against Wiley in the United States District Court for the District of Arizona (the “Arizona Action”). (Dkt. #22). The Wiley Non-Infringement Instances were first identified by DRK in its complaint in the Arizona Action. (Dkt. # 23 at ¶ 21). On August 26, 2011, DRK moved to dismiss the complaint in this action, citing both alleged deficiencies in pleading and the existence of the Arizona Action. (Dkt. # 4, 5).
By order dated October 13, 2011, the Honorable George B. Daniels, the District Judge then presiding over this case, dismissed Wiley’s request for declaratory relief as to any fraud claim, and any copyright infringement claims prior to June 18, 1997, because those claims were subject to arbitration; he also dismissed Wiley’s claims for declaratory relief as to alleged instances of infringement occurring after June 18, 1997, because Wiley had failed to put DRK on notice of the photographs at issue. (Dkt. # 16, 22). Judge Daniels then denied DRK’s cross-motion to dismiss the complaint in favor of the Arizona Action pursuant to the “first filed” rule, under which a district court may dismiss an action in favor of a previously filed lawsuit “concerning the same parties and issues.” (Dkt. # 22).
On May 14, 2012, Wiley filed an amended complaint in which it sought a declaratory judgment as to the Wiley Non-Infringement Instances that were implicated by the Arizona Action. (Dkt. # 23). Specifically, Wiley sought an order declaring that:
(i) for each of the instances in which Wiley’s alleged infringement occurred more than three years prior to August 2011, declarations that DRK’s claim is barred by the statute of limitations and Wiley is not liable to DRK for copyright infringement;
(ii) for each of the instances in which DRK lacks copyright ownership or a valid copyright registration for the photograph at issue in DRK’s claim, declarations that DRK lacks standing and Wiley is not liable to DRK for copyright infringement; and
(iii) for each of the instances in which Wiley simply included the same photograph in a later edition or revised version of a work for which DRK originally licensed Wiley to use the photograph, declarations that such inclusion was permissible under Section 201(c) of the Copyright Act and Wiley is not liable to DRK for copyright infringement.
(Id.). Attached to the amended complaint was Wiley’s Chart, a summary chart that identified the 316 instances of alleged copyright infringement. (Id.).
On May 31, 2012, DRK filed an answer and asserted counterclaims for copyright infringement, contributory infringement, and vicarious infringement as to the DRK Counterclaim Instances that DRK had identified in Exhibit 1 to its Answer and Counterclaim. (Dkt. #26, 26-1). DRK further sought an order declaring that any use of DRK’s photographs by Wiley beyond the limits of the parties’ applicable license agreement constituted copyright infringement. (Id.).
On June 28, 2013, DRK moved for partial summary judgment, requesting that the Court enter judgment of liability for copyright infringement against Wiley as to the DRK Summary Judgment Instances. (Dkt. # 73). Wiley filed its opposition on July 26, 2013 (Dkt. # 89), and on August 9, 2013, the motion was fully submitted when DRK filed its reply (Dkt. # 93-2). Between August 18, 2013, and January 28, 2014, the parties submitted supplemental authority in support of their respective motions. (See Dkt. # 98,100-02,105).
DISCUSSION
A. Applicable Law
Under Federal Rule of Civil Procedure 56(c), summary judgment may be granted only if all the submissions taken together “show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.” See Celotex Corp. v. Catrett,
If the moving party meets this burden, the nonmoving party must “set forth specific facts showing a genuine issue for trial” using affidavits or otherwise, and cannot rely on the “mere allegations or denials” contained in the pleadings. Anderson,
The standard used to decide cross-motions for summary judgment, such as the motions pending before the Court, “is the same as that for individual summary judgment motions[,] and a court must consider each motion independent of the other.” Worldwide Home Products, Inc. v. Time Inc., No. 11 Civ. 3633(LTS)(MHD),
B. Analysis
1. DRK’s Motion for Partial Summary Judgment and the Issue of Standing
DRK moves the Court to enter a judgment of liability for copyright infringement against Wiley on Count I of its Counterclaims — which, as noted, pertain to the 88 DRK Summary Judgment Instances listed in DRK’s Chart. Included within the DRK Summary Judgment Instances are 16 Bean Instances for which, as discussed above, DRK was granted an exclusive license. DRK does not move with respect to the remaining 207 instances of alleged copyright infringement that it alleges in its counterclaims. Accordingly, the Court need not address those instances at the present time.
Wiley contends that DRK’s motion should be denied for three reasons: (i) the record presents a genuine issue of material fact as to whether Wiley exceeded the scope of its licenses relating to the DRK Summary Judgment Instances; (ii) DRK lacks standing to assert any copyright infringement claims; and (iii) DRK’s claims are barred by the statute of limitations. (Counter-Def. Br. 4-9). Because resolution of whether DRK has standing is dispositive of nearly all instances of infringement, except the Bean Instances, and because “federal courts are under an independent obligation to examine their own jurisdiction,” including whether standing is established, the Court will first focus on whether DRK has standing to bring its claims against Wiley. Cf. United States v. Hays,
“Copyright ... is a creature of statute, and the only rights that exist under copyright law are those granted by statute.” Silvers v. Sony Pictures Entm’t, Inc.,
Section 501(b) of the Copyright Act establishes who may sue for infringement of a copyright, authorizing:
The legal or beneficial oimer of an exclusive right under a copyright ... 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); see also Russian Entm’t Wholesale, Inc. v. Close-Up Intern., Inc.,
As it must, the Second Circuit enforces Section 501(b) by holding that “[t]he Copyright Act authorizes only two types of claimants to sue for copyright infringement: [i] owners of copyrights, and [ii] persons who have been granted exclusive licenses by owners of copyrights.” Eden Toys, Inc. v. Florelee Undergarment Co., Inc.,
the exclusive rights to do and to authorize any of the following: (1) to reproduce the copyrighted work in copies or phonorecords; (2) to prepare derivative works based upon the copyrighted work; (3) to distribute copies of phonorecords of the copyrighted work to the public by sale or other transfer of ownership, or by rental, lease, or lending ... [and] (5) in the case of ... pictorial ... works ... to display the copyrighted work publicly.17 U.S.C. § 106; Davis v. Blige, 505 F.3d 90 , 98 (2d Cir.2007) (“These rights include ‘reproducing,’ ‘preparing derivative works,’ ‘distributing,’ ‘performing,’ or ‘displaying’ a creative work.” (quoting 17 U.S.C. § 106)). Although “[t]he right to prosecute an accrued cause of action for infringement is also an incident of copyright ownership,” Davis,505 F.3d at 99 , it is “not an exclusive right under § 106,” Silvers,402 F.3d at 884 .
As discussed below, the record conclusively demonstrates that DRK is neither an owner of the copyrights at issue nor an entity that has been granted an exclusive license by the owners. For that reason, DRK does not have standing to sue for copyright infringement for the DRK Summary Judgment Instances, except for the Bean Instances. Accordingly, DRK’s motion for summary judgment as to the Non-Bean Instances is denied.
i. The Representation Agreements Do Not Confer Standing on DRK
DRK contends that the Representation Agreements between it and the photographers transferred co-ownership to DRK of three Section 106 exclusive rights, namely the rights to authorize others to reproduce, distribute, and display photographs. (Def. Opp. 10). From this premise, DRK argues that because it is the owner of those exclusive rights (even though it is not the exclusive owner of any one of those rights), it is entitled to sue Wiley for copyright infringement. (Id. at 10-11). DRK further argues that it qualifies as a beneficial owner because, under the Representation Agreement, it receives one-half of the proceeds from the licenses it issues. (Id. at 12). Wiley takes the opposite position, contending that the Representation Agreements establish that DRK is neither an “owner” nor a “beneficial owner” under the Copyright Act. (PL Br. 7).
Owners may grant a license to others to exercise Section 106 rights or assign those rights to others. Davis,
A key distinction between the rights granted by nonexclusive and exclusive licenses — and one that is critical to the claims pending before this Court — is that “[a nonexclusive] license conveys no ownership interest, and the holder of a nonexclusive license may not sue others for infringement.” Davis,
The record provides uncontroverted proof that the Representation Agreements are nonexclusive licenses. {See, e.g., Pen-china Decl., Exhs. 3, 30 at 166, 33 at 21). For starters, DRK admitted that the Representation Agreements were nonexclusive licenses. (Id., Exh. 30 at 135 (“It is a nonexclusive arrangement.”)). This is in addition to the fact that the Representation Agreement itself does not indicate that it grants DRK any exclusive rights. Considering the preeminence of exclusive rights in copyright cases, it is axiomatic that if the Representation Agreement did not specify that exclusive rights were being transferred, no such rights were in fact transferred. To further underscore this point, one need only look to the Representation Agreements with Bean and French, which were the only ones that authorized DRK to “act as [Bean’s or French’s] sole and exclusive agent.” (D. Krasemann Decl., Exh. 1 (emphasis added)).
DRK’s contention that the Representation Agreements transferred exclusive rights to it fails not only as a factual matter, but also as a legal matter. Section 101 of the Copyright Act makes clear that transfer of ownership of an exclusive right cannot be accomplished by a nonexclusive license. This section defines “transfer of copyright ownership” as an “an assignment, mortgage, exclusive license, or any other conveyance, alienation, or hypothecation of a copyright or of any of the exclusive rights comprised in a copyright, whether or not it is limited in time or place of effect, but not including a nonexclusive license.” 17 U.S.C. § 101 (emphasis added). Moreover, as Wiley notes, “DRK has not cited, and there is not, a single case finding standing based on a non-exclusive representation agreement.” (Pl. Reply 1). Not surprisingly, when presented with a similar representation agreement between Wiley and another stock photography agency, a district court in the Northern District of California rejected the agency’s argument that the nonexclusive representation agreement in that case conferred standing on the plaintiff. Minden Pictures, Inc. v. John Wiley & Sons, Inc. (“Minden I”), No. C-12-4601 EMC,
DRK argues that even if it is not the legal owner of the copyrights at issue, it is the “beneficial owner” because, under the Representation Agreements, it is entitled to one-half of the proceeds under the licenses. (Def. Br. 12). This argument is equally unavailing, and the cases on which DRK relies in support do not prove otherwise. See, e.g., Hearn v. Meyer,
The Representation Agreements make clear that DRK is a nonexclusive licensing agent for the photographers. In that capacity, and having never owned the copyrights, DRK does not have standing to maintain a copyright infringement action for the DRK Summary Judgment Instances, except the Bean Instances. See Bourne Co. v. Hunter Country Club, Inc.,
DRK alternatively argues that the Assignment Agreements convey both ownership interest in the copyright and the sole right to bring and resolve accrued, and later-accruing, claims relating to the photographs at issue. (Def. Opp. 13). Wiley responds that the Assignment Agreements are “sham” agreements that cannot confer standing because those agreements do not convey ownership, but rather only the bare right to sue. (Pl. Br. 7-8).
The Second Circuit rejected the exact argument DRK advances here in Eden Toys. The Court in Eden Toys indicated that the Copyright Act does not permit “holders of rights under copyrights to choose third parties to bring suits on their behalf.”
DRK’s parallel argument that the Assignment Agreements confer standing on DRK because they transfer to it ownership in the copyrights, albeit temporary, is also meritless. Although there is no ease in this Circuit directly on point, courts in other Circuits have held in analogous circumstances that similar — indeed, nearly identical — agreements did not confer standing. The Court finds these decisions analytically sound, and adopts their reasoning here.
When determining whether an agreement confers standing, courts look to “the substance of the agreement, not the labels it uses.” HyperQuest,
Minden Pictures, Inc. v. Pearson Educ., Inc. (“Pearson”), is particularly instructive.
Support for this holding was found in the agreement itself, which (i) granted a license to “bring suit and divvy up any return,” and (ii) did not include any duration of the license, but rather specified that it would terminate automatically upon conclusion of any litigation. Id. at 969. The court reasoned that if transfer of ownership had truly been contemplated by the agreement, plaintiff would have been granted “co-ownership in perpetuity [even] if it failed to bring suit.” Id. In short, the court recognized that “the contracting parties intended for [plaintiff] to bring the instant suit and not for it to be a genuine, potentially-permanent owner of any exclusive rights under Section 501(b).” Id. The court also relied on e-mails submitted by the parties in which the plaintiff stated to photographers, in regard to the assignment agreement:
What this amendment does is assign [plaintiff] co-ownership of copyrights of images we represent solely for actions or lawsuits brought by [plaintiff] to address unauthorized image use by our clients. My understanding is this is the sole purpose this assignment of co-ownership may be used for.
The Ninth Circuit’s decision in Righthaven provides still further support for the Court’s conclusion that the Assignment Agreement does not confer standing.
The same is unquestionably true here. DRK embarked on a campaign to register its photographers’ copyrights for the simple reason that copyrights need to be registered to bring suit. Section 411(a) of the Copyright Act makes this clear: “no civil action for infringement of the copyright in any United States work shall be instituted until pre-registration or registration of the
I have not assigned copyright to any of these images other than temporarily to DRK Photo in order for you to pursue your infringement lawsuit. I have however sold non-exclusive rights to some of these pictures. I expect re-assignment of full copyright in the very near future when your lawsuit is concluded.
(Id. at Exh. 12).
DRK directs the Court to the decision in the parallel arbitration proceeding, in which the arbitrator held that DRK had standing to sue because the Assignment Agreements did not only confer the bare right to sue. (Boyd Deck, Exh. 1). As an initial matter, the arbitrator’s decision is not binding authority on the Court. Yet even if it were, the arbitrator expressly left open the potential for the Court to come to the opposite conclusion:
Nevertheless, nothing in this Final Award should be construed to bar Wiley from attempting to develop a more complete factual record in the copyright infringement litigation between the parties currently pending in the Southern District of New York and to argue there that the assignments are a sham under Righthaven. I conclude only that the assignments are not rendered a sham under Righthaven given the record presented here, particularly in view of my hesitancy as an arbitrator to extend existing copyright law, a task which more appropriately should be within the domain of the federal courts with full appellate review.
(Id. at 3).
The arbitrator’s determination that Righthaven was inapplicable was premised on the view that critical to the decision in Righthaven was “the fact that the assignee had no real ability to monetize the copyrights except through copyright infringement actions.” (Boyd Deck, Exh. 1 at 2). The arbitrator reasoned that the same was not true with respect to DRK, because DRK had the right to license the copyrighted images to publishers without seeking the photographers’ permission. (Id.). The Court does not read Righthaven so narrowly, but rather heeds the Ninth Circuit’s admonition that courts should “consider the substance of the transaction” to determine if any exclusive rights were granted to the licensee. Righthaven,
In short, DRK’s Assignment Agreements are “no more than disguised assignments of the bare right to sue” that cannot confer standing. A contrary holding would be inconsistent with the standing limitation first recognized in Eden Toys and subsequently adopted throughout this Circuit, because such a decision would enable parties to circumvent the prohibition against allowing “holders of rights under copyrights to choose third parties to bring suits on their behalf.” Eden Toys,
b. Claims Involving the Instances Contained at Lines 8 to 56, 87, and 88 of DRK’s Chart Are Barred by the Statute of Limitations
An additional basis for denying DRK’s partial summary judgment motion (at least as to a majority of the DRK Summary Judgment Instances) is that claims involving those Instances are barred by the statute of limitations. Wiley makes just this argument with respect to the instances at lines 8 to 56, 87, and 88 of DRK’s Chart. (Counter-Def. Br. 8). This subset of the DRK Summary Judgment Instances includes instances that the Court has already dismissed on standing grounds, as well as additional Bean Instances.
A civil action under the Copyright Act must be “commenced within three years after the claim accrued.” 17 U.S.C. § 507(b) (“No civil action shall be maintained under the provisions of this title unless it is commenced within three years after the claim accrued.”). The parties dispute whether the Court should apply an “injury rule,” under which “a claim accrued at the time of each act of infringement, regardless of the copyright holder’s knowledge of the infringement,” Urbont v. Sony Music Entm’t,
“Neither the Supreme Court nor the Second Circuit has ruled on the appropriate accrual rule for federal copyright infringement claims.” Urbont,
In TRW, the Supreme Court, in determining the accrual of claims under the Fair Credit Reporting Act (“FCRA”), made clear that the discovery rule had limited application. It did so by identifying that it had recognized the discovery rule only in “two contexts, latent disease and medical malpractice cases ‘where the cry for such a rule is loudest.’ ” TRW,
In light of these considerations, two things are clear in the aftermath of TRW. First, it is uncertain whether Stone and Merchant remain good law even in the co-ownership context, as both were premised upon the automatic application of the discovery rule that the Supreme Court rejected in TRW. Second, regardless of whether Stone and Merchant continue to govern in the co-ownership context, TRW demonstrates that uncritical extension of those cases to the infringement context would be unwarranted. Instead, TRW requires examination of the statutory structure and legislative history in determining whether a discovery or injury rule should apply where, as here, the statute itself is silent on the issue.
In sum, Auscape and other decisions following TRW make clear that the Court should follow the majority rule in this District, and apply the injury rule to DRK’s infringement claims. Doing so requires that DRK’s claims as to the instances of alleged infringement at lines 8 to 56, 87, and 88 of DRK’s Chart be dismissed as untimely filed.
Accordingly, DRK’s motion for partial summary judgment as to the instances of alleged infringement at lines 8 to 56, 87, and 88 in DRK’s Chart is denied, and those claims are dismissed, with the non-Bean Instances already dismissed on standing grounds dismissed on this alternate basis.
c. Wiley Infringed on the Bean Instances at Lines 6, 7, and 75 of DRK’s Chart
Having dismissed claims for the majority of the DRK Summary Judgment Instances on standing or timeliness grounds, the Court is left to determine whether DRK is entitled to summary judgment on the Bean Instances identified at lines 6, 7, and 75 of DRK’s Chart (the “Three Bean Instances”). DRK contends that its licenses with Wiley for the images at issue
“To establish an infringement of a copyright, a plaintiff must show both ownership of a copyright and that defendant copied the protected material without authorization.” Rogers v. Koons,
“It is black-letter law that a claim for copyright infringement lies when a party’s use of copyrighted material exceeds the scope of its license.” Harrell v. Van der Plas, No. 08 Civ. 8252(GEL),
The license for the Bean Instances at lines 6 and 7 is dated January 6, 1999; it limits Wiley’s use of the Bean photographs to use in “one (1) print version of the copyright 1999 John Wiley & Sons, Inc. TEXTBOOK publication titled BLUE PLANET, 2ND EDITION, by Skinner; the total number of copies to be printed is not to exceed 30,000 copies,” and specifies that “[n]o other rights known or unknown to mankind are granted or implied,” and that “[n]o electronic publishing rights [are] granted.” (Second Krasemann Deck, Exh. 2-A). The invoice for the Bean Instance at line 75, dated March 27,
“[Determining whether a defendant’s activities fall within the scope of an existing license essentially involves a question of contract interpretation.” Reinhardt v. Wal-Mart Stores, Inc.,
The record establishes that Wiley infringed on DRK’s copyrights for the Three Bean Instances. See Gilliam v. Am. Broadcasting Co., Inc.,
Because Wiley has failed to raise any issue of material fact as to whether it exceeded the scope of its license for the Three Bean Instances, summary judgment is granted in DRK’s favor for these instances.
2. Wiley’s Motion for Summary Judgment
Turning now to Wiley’s motion for summary judgment, the company advances three principal grounds for relief. First, Wiley seeks an order dismissing with prejudice all the DRK Counterclaim Instances, except the Bean and French Instances, on the ground that DRK lacks standing. Wiley also requests that DRK’s claims as to the Krasemann Images be dismissed because DRK lacks valid copyright registrations for these images. Second, Wiley seeks a declaratory judgment of non-in
a. DRK Does Not Have Standing to Maintain Its Counterclaims as to the Non-Bean and Non-French Instances
As an initial matter, DRK seeks to voluntarily dismiss its claims for the instances of alleged infringement that were previously resolved in arbitration, as well as claims related to photographs by Michael Collier that are included in the DRK Counterclaim Instances. (Counter-Pl. Reply 1). These instances are identified at lines 1, 32, 33, 48, 49, 73, and 79 of DRK’s Chart. Voluntary dismissal of these claims, however, “is improper at this stage of the proceedings.” Muench Photography, Inc.,
Putting the Bean and French Instances aside, as discussed at length above, DRK lacks standing to maintain its counterclaims against Wiley as to the DRK Summary Judgment Instances. The parties do not dispute that the same Representation Agreements and Assignment Agreements govern the photographs at issue. Just as those two agreements could not confer standing as to the DRK Summary Judgment Instances, they similarly cannot confer standing as to the broader category of the DRK Counterclaim Instances. For that reason, Wiley’s motion for summary judgment as to the DRK Counterclaim Instances (less the French and Bean Instances) is granted.
b. Wiley’s Declaratory Judgment Claims as to the Non-Bean and Non-French Instances Must Be Dismissed
Wiley seeks a declaratory judgment under the Declaratory Judgment Act for non-infringement as to the more comprehensive group of Wiley Non-Infringement Instances, except the Bean and French Instances, arguing that DRK lacks standing as to these instances. (See Pl. Br. 6-12). Wiley also argues that it is entitled to declaratory relief for the additional reasons that DRK failed to file counterclaims as to 22 instances included in Wiley’s complaint, and that the Krasemann Images’ copyright registrations are invalid. (Id. at 12-18). In response, DRK relies on the same Representation Agreements and Assignment Agreements to argue that it has standing to sue (Def. Opp. 13-18); it claims that not opposing the 21 instances does not equate to a declaration of non-infringement in Wiley’s favor (id. at 27); and it contends that the copyright registrations for the Krasemann Images are valid (id. at 19-26).
The Declaratory Judgment Act provides:
In a case of actual controversy within its jurisdiction, ... any court of the United States, upon the filing of an appropriate pleading, may declare the rights and other legal relations of any interested party seeking such declaration, whether or not further relief is or could be sought.
28 U.S.C. § 2201(a). “[T]he phrase ‘case of actual controversy’ in the [Declaratory Judgment] Act refers to the type of ‘Cases’ and ‘Controversies’ that are justiciable under Article III.” MedImmune, Inc. v. Genentech, Inc.,
“Throughout the litigation, the party seeking relief must have suffered, or be threatened with, an actual injury traceable to the defendant and likely to be redressed by a favorable judicial decision.” Juvenile Male,
“To have standing to pursue a declaratory relief action regarding copyright
The Court’s determination that DRK lacks standing effectively moots the controversy between the parties. In light of the Court’s holding, Wiley is no longer confronted with a reasonable apprehension that it will be subject to liability to DRK for the alleged infringement, if it continues to engage in the allegedly infringing conduct. Although Wiley argues that a determination that DRK lacks standing under the copyright law equates to a declaration of non-infringement in its favor (PI. Reply 11), such a result is not tenable under Article III. DRK’s inability to sue Wiley for copyright infringement for the non-Bean and non-French Instances strips this Court of subject matter jurisdiction. Amaretto Ranch Breedables,
c. Wiley Is Not Entitled to a Declaration of Non-Infringement as to the Remaining Bean Instances
Remaining before the Court are the Bean Instances not included in DRK’s Counterclaim Instances, and identified at lines 313 and 314 of Wiley’s Chart (the “Remaining Bean Instances”). Wiley argues that a declaration of non-infringement should issue as to these Instances because DRK has “presented no evidence of infringement for [these] instances.” (Pl. Br. 18). Wiley offers neither citation to case law nor evidentiary support to establish its entitlement to a declaratory judgment. Yet it is Wiley who carries “at a minimum the risk of non-persuasion, if not the actual burden of proof’ on its motion for summary judgment. See Thompson v. Cnty. of Franklin,
“A party seeking summary judgment on a claim of non-infringement of copyright must establish that at least one element of the alleged infringement cannot be proven as a matter of law.” Bill Diodato Photography, LLC v. Kate Spade, LLC,
As for the second element, “copying] the protected material without authorization,” Rogers,
CONCLUSION
For the foregoing reasons, DRK’s motion for partial summary judgment is denied as to the DRK Summary Judgment Instances except the Three Bean Instances, and DRK’s claims as to those instances are dismissed; DRK’s motion for partial summary judgment as to the Three Bean Instances is granted; Wiley’s motion for summary judgment dismissing the non-Bean and non-French DRK Counterclaim Instances is granted, and DRK’s claims as to those instances are dismissed; Wiley’s motion for summary judgment for declaratory relief of non-infringement is denied; and its claims for declaratory relief as to the Wiley Non-Infringement Instances are dismissed except for the French and Bean instances at lines 3, 117, 120, 137, 140, 149, 150, 160, 163, 192, 210, 213, 224, 225, 233, 236, 247, 248, 265, 287, 290, 313, and 314 of Wiley’s Chart.
The Clerk of Court is directed to terminate Docket Entries 52 and 73.
A pretrial conference will be held on March 21, 2014, at 2:30 p.m. to discuss scheduling trial in this matter.
SO ORDERED.
Notes
. Rule 56.1 of the Local Civil Rules of the United States District Courts for the Southern and Eastern Districts of New York (the “Local Rules”) requires a party moving for summary judgment to submit a "separate, short and concise statement, in numbered paragraphs, of the material facts as to which the moving party contends there is no genuine issue to be tried.” Local Rule 56.1(a). The movant’s asserted facts are deemed to be admitted unless specifically controverted by the statement served by the opposing party. Local Rule 56.1(c).
The parties have submitted a considerable record in support of their cross-motions. The facts in this Opinion are drawn from Wiley’s Statement of Undisputed Material Facts ("Wiley’s 56.1 Statement”) (Dkt. # 55), DRK’s Response to Wiley’s Statement of Allegedly Undisputed Material Facts ("DRK’s 56.1 Counterstatement”) (Dkt. # 70), Wiley’s Reply Statement of Undisputed Material Facts (“Wiley's 56.1 Reply Statement”) (Dkt. # 82), DRK's Separate Statement of Facts in Support of Its Motion for Partial Summary Judgment ("DRK’s 56.1 Statement”) (Dkt. #77), Wiley's Response to DRK’s Separate Statement of Facts in Support of Its Motion for Partial Summary Judgment ("Wiley’s 56.1 Counterstatement”) (Dkt. # 90), DRK's Reply on Separate Statement of Facts in Support of Its Motion for Partial Summary Judgment ("DRK’s 56.1 Reply Statement”) (Dkt. # 94), and various declarations, which are identified using the convention "[Name] Decl.,” as well as exhibits thereto (Dkt. #54, 67-69, 75, 76, 84, 91, 92, 95, 96).
The Court will refer to the parties’ memoranda of law as follows: Wiley’s Memorandum of Law in Support of Its Motion for Summary Judgment as "PL Br.” (Dkt. # 53); DRK’s Opposition to Plaintiff John Wiley & Sons, Inc.’s Motion for Summary Judgment as “Def. Opp.” (Dkt. # 66); Wiley’s Reply Memorandum of Law in Support of Its Motion for Summary Judgment as "PI. Reply” (Dkt. # 83); DRK’s Memorandum of Law in Support of Its Motion for Partial Summary Judgment as "Counter-PL Br.” (Dkt. # 74); Wiley’s Memorandum of Law in Opposition to DRK’s Motion for Partial Summary Judgment as "Counter-Def. Opp.” (Dkt. # 89); and DRK’s Reply Brief in Support of Its Motion for Partial Summary Judgment as "Counter-Pi. Reply” (Dkt. # 99).
. DRK followed a different procedure for these images for various reasons, including the facts that (i) Stephen Krasemann would sometimes send images to DRK for storage purposes while traveling, which images he would then review and approve for publication upon his return; (ii) he may have requested first publication rights in certain images; and (iii) he may have previously promised the rights to the image to another publisher. (D. Krasemann Decl. ¶ 8).
. Wiley has submitted testimonial and documentary evidence to support its statement that "[a]ll of the photographers whose works are identified in Exhibit 1 to DRK's Counterclaims, with the exception of Tom Bean and Peter French, granted only nonexclusive rights to DRK.” (Wiley 56.1 Statement ¶ 6). DRK has offered no conflicting testimonial or documentary evidence, but rather offers (i) a conclusory statement that the Representation Agreements and other assignment agreements that it had with photographers granted DRK "exclusive rights as recognized by the Copyright Act,” coupled with (ii) an argument (ultimately unpersuasive, see infra) that "Wiley is confusing 'exclusive ownership’ with 'exclusive rights.' ” (DRK 56.1 Counterstatement ¶ 6). Because Wiley has supported its statement with testimonial and documentary evidence, and DRK has not submitted conflicting evidence, the Court accepts Wiley’s statement as true. See S.D.N.Y. Local Rule 56.1(c) ("Each numbered paragraph in the statement of material facts set forth in the statement required to be served by the moving party will be deemed to be admitted for purposes of the motion unless specifically controverted by a corresponding numbered paragraph in the statement required to be served by the opposing party.”); id. at 56.1(d) ("Each statement by the movant or opponent ... controverting any statement of material fact[ ] must be followed by citation to evidence which would be admissible, set forth as required by Fed. R.Civ.P. 56(c).”).
. All Assignment Agreements at issue in this case contain this language except for the second assignment agreement executed between DRK and Stephen Krasemann (the “Stephen Krasemann Second Assignment Agreement”), which was executed to cover certain images that Stephen Krasemann had already registered with the Copyright Office. (DRK 56.1 Counterstatement ¶ 22; D. Krasemann Decl., Exh. 2). The Court, however, may not consider the Stephen Krasemann Second Assignment Agreement because it was not produced by DRK during discovery. Instead, it was produced to Wiley for the first time in response to Wiley’s motion for summary judgment. See Melie v. EVCI/TCI Coll. Admin., No. 08 Civ. 5226(HB),
. Two invoices do not include this language, but those documents appear to be anomalies. This is purportedly because when they were produced during discovery, they were not produced on DRK’s standardized form that included the “Rights Granted” language. (Second Krasemann Deck ¶ 12, Exh. 2-A). This variance in language is immaterial to the Court's analysis.
. Exhibit A does not include the alleged instances of infringement related to certain Stephen Krasemann's photographs listed at lines 230 and 253 of Exhibit 1 to DRK’s Counterclaim. (Dkt. # 26-1). It is clear from Wiley’s complaint, however, that these instances of alleged infringement were inadvertently excluded from Wiley's Chart because Wiley moves for a declaratory judgment as to all "316 instances of infringement alleged by DRK" (Compl. ¶¶ 21-22), which necessarily includes these instances of alleged infringement. For this reason, the Court incorporates by reference lines 230 and 253 of Exhibit 1 to DRK's counterclaims into Wiley's Chart.
. DRK’s Counterclaim Instances are also identified at lines 1-292, 295, 297, and 298 of Wiley's Chart.
. The parties dispute the exact date of publication for most of Stephen Krasemann's photographs. The Court need not address this dispute.in order to resolve the pending motions.
. The 16 Bean Instances on which DRK moves for partial summary judgment are identified at lines 29, 30, 39, 41, 43, 45, 46, 53, 54, 57, 73, 76, 85, 86, 111, and 278 of Wiley’s Chart. The other instances of infringement related to Bean and French photographs are identified at lines 3, 10, 12, 13, 17, 38, 117, 120, 137, 140, 149, 150, 160, 163, 192, 210, 213, 224, 225, 233, 236, 247, 248, 265, 278, 287, 290, 298, 313, and 314 of Wiley’s Chart.
. On June 11, 2012, the Arizona Action was transferred to the Southern District of New York, and remains pending before the Court as a related case. See DRK Photo, a sole proprietorship v. John Wiley & Sons, Inc. and John Doe Printers 1-10, No. 12 Civ. 4538(KPF).
. Although Wiley styles its motion as one for "summary judgment,” it seeks less than full relief from the Court.
. In this regard, while using the term “standing” throughout this Opinion, the Court agrees with the following standing analysis offered by the Seventh Circuit:
The Copyright Act restricts the set of people who are entitled to bring a civil action for infringement to those who qualify as "[t]he legal or beneficial owner of an exclusive right under a copyright....” 17 U.S.C. § 501(b). Some courts (including this one in years past) have seen this as a limitation derived from Article Ill's standing requirement ..., but we believe that it is preferable to be more precise in our language....[O]ne could keep it simple and say that the Copyright Act spells out who has enforceable rights under the statute; someone who does may sue, and someone who does not has failed to state a claim upon which relief may be granted. Our understanding of the law as it now stands, particularly in light of the Supreme Court's decision in Reed Elsevier, Inc. v. Muchnick, 559 U.S. 154 ,130 S.Ct. 1237 ,176 L.Ed.2d 18 (2010), is that [this approach] is the correct one. HyperQuest, Inc. v. N'Site Solutions, Inc.,632 F.3d 377 , 381 (7th Cir.2011) (internal citations omitted).
. The Court's discussion excludes reference to the French Instance because DRK did not move for summary judgment with respect to that instance of alleged infringement.
. DRK acknowledged as much when it relied exclusively on the Assignment Agreements to argue that it had standing in a related arbitration (Supplemental Penchina Decl., Exh. A), while maintaining that the Representation Agreements were not "rele
. In a related case, where plaintiff sought to rely on the same assignment agreements, the court agreed with the earlier court’s decision in Pearson, stating:
In the alternative, even if collateral estoppel does not apply as to these four photographers, this Court finds Judge Alsup's reasoning [in Pearson\ on the effect of theseagreements persuasive, and follows Pearson in finding that these agreements convey nothing more than a bare right to sue, and thus cannot be the basis for standing under the Copyright Act.
Minden II,2013 WL 1995208 , at *7.
. It is for this reason that the district court’s decision in Alaska Stock, LLC v. Pearson Educ., Inc., No. 3:11-cv-00162-TMB,
. Courts in cases related to Righthaven interpreting the same assignment agreement have similarly held that such agreements did not confer standing. See, e.g., Righthaven LLC v. Eiser, No. 2:10-cv-3075-RMG-JDA,
. An arbitrator in a similar case against Wiley, Visuals Unlimited, Inc. v. John Wiley and
. DRK advances these arguments as to all of the DRK Summary Judgment Instances. Having dismissed all other DRK Summary Judgment Instances, however, the Court need only address whether DRK has established that there is no genuine issue of material fact as to whether Wiley engaged in copyright infringement with respect to the Three Bean Instances.
. Because the Court holds that the injury rule applies, it need not assess whether DRK's claims would likewise be barred under the discovery rule.
. Even if DRK had not sought to voluntarily dismiss these claims, summary judgment would still have been granted in Wiley’s favor for the reasons set forth herein.
. Because the Court resolves the issue on standing grounds, it need not determine whether the copyright registrations for the Krasemann Images are valid. Similarly, as to
. The Court’s reliance on cases concerning patent law is entirely appropriate here. See Sony Corp. of Am. v. Universal City Studios, Inc.,
. The Court's conclusion here does not conflict with its prior Opinion rejecting Defendant's argument that Plaintiff lacked standing to bring a declaratory judgment action. (Dkt. # 36). That decision was predicated on Defendant's argument that Plaintiff needed to plead ownership and, more importantly, was decided without the record now before the Court, from which it can assess whether Plaintiff lacked standing to assert a claim for copyright infringement.