In Righthaven LLC v. Hoehn, the key litigated issue before the US Court of Appeals for the Ninth Circuit was whether Righthaven had standing to sue for copyright infringement on the basis of agreements granting it the bare right to sue for infringement.

Righthaven was a company formed to identify copyright infringements for Stephens Media LLC, the publisher of the Las Vegas Review-Journal, and other third parties, and based on limited, revocable assignments from the copyright owners, sue the infringers. Beginning in 2010, Righthaven filed hundreds of copyright infringement suits against websites that re-posted all, or a portion, of copyrighted newspaper articles without permission. The suits sought injunctions, and more significantly, statutory damages, and a large number of cases settled out of court. In the instant case, Righthaven filed separate copyright infringement suits against Wayne Hoehn and Thomas DiBiase for posting articles from the Las Vegas Review-Journal online without authorization. Stephens Media held the copyrights at the time Hoehn and DiBiase posted the articles.

After the alleged infringements but before Righthaven filed suit, Stephens Media and Righthaven executed a copyright assignment for each article. Each assignment granted Righthaven "all copyrights requisite to have Righthaven recognized as the copyright owner of the Work for purposes of Righthaven being able to claim ownership as well as the right to seek redress for past, present, and future infringements of the copyright . . . in and to the Work."

Righthaven and Stephens Media also previously entered into a Strategic Alliance Agreement (SAA) that controlled what Righthaven could do with any copyrights assigned to it. Under the SAA:

After both Hoehn and DiBiase filed motions to dismiss for lack of standing, Righthaven and Stephens Media executed a Clarification and Amendment to the SAA (the Clarification and Amendment) purporting to clarify that the parties' intent in entering the SAA was to "convey all ownership rights in and to any identified Work to Righthaven through a Copyright Assignment so that Righthaven would be the rightful owner of the identified Work."

In each case, the district court granted the defendant's motion to dismiss based on Righthaven's lack of standing. In the Hoehn case, the district court also granted Hoehn's motion for summary judgment on fair use as an alternative basis. Righthaven appealed to the Ninth Circuit, and the cases were consolidated for the appeal.

In its May 9, 2013 opinion, the Ninth Circuit affirmed the district court's dismissal for lack of standing. Relying on its en banc decision in Silvers v. Sony Pictures Entertainment, Inc., the court noted that under the Copyright Act, only a party with an ownership interest has standing to sue. An ownership interest includes the exclusive right to:

(17 U.S.C. §106.)

The court found that all Righthaven was really assigned was a bare right to sue which does not provide standing to sue under the Copyright Act.

The court rejected Righthaven's argument that the assignment contracts transferred one or more exclusive rights. It noted that the language in the assignment contracts purporting to transfer ownership to Righthaven was not conclusive because the assignments were subject to the SAA's terms, which significantly limited what Righthaven could do with any assigned copyrights. Looking at the transaction's substance, the court concluded that the automatic license under the SAA giving Stephens Media the "unfettered and exclusive ability" to exploit the copyrights left Righthaven without any ability to reproduce the works, distribute them or exploit any other exclusive right.

The court also rejected Righthaven's argument that it had standing under the SAA as modified by the Clarification and Amendment entered into after the filing of the lawsuits, finding that jurisdiction is generally based on facts existing at the time of filing. The court further found that, even under the amended SAA, Righthaven lacked ownership of an exclusive right because:

However, the Ninth Circuit also vacated the district court's alternative finding in Hoehn that the fair use defense applied, noting that a federal court lacks subject matter jurisdiction over the suit in the absence of standing.

The Ninth Circuit's decision makes clear that having the bare right to sue for infringement is insufficient to provide standing to bring a copyright infringement claim. Practitioners should note that courts will look beyond the words in the purported assignment to the actual substance of the transaction to determine if an exclusive right is actually transferred.