# Who Gets to Sue: DRK Photo v. McGraw-Hill and the Limits of Assigning a Copyright Claim

> The Ninth Circuit held that a stock agency cannot manufacture standing by taking an assignment of bare infringement claims without a real interest in the copyright itself.

Topic: Copyright  |  Author: Lidiia Levitska  |  Source: Intellectual Property Law (outsideipcounsel.com)
Canonical: https://outsideipcounsel.com/blog/drk-photo-v-mcgraw-hill-registration-standing/


Few questions decide a copyright case faster than the threshold one: does the plaintiff even have the right to be in court? In *DRK Photo v. McGraw-Hill Global Education Holdings, LLC*, 870 F.3d 978 (9th Cir. 2017), the Ninth Circuit answered no, and in doing so it tightened the rules on who may enforce a photographer's copyrights. A stock photography agency had tried to assemble standing on paper—gathering assignments of infringement claims from hundreds of photographers so it could sue textbook publishers that allegedly overran their print limits. The court, in an opinion by Judge Michael Daly Hawkins decided September 12, 2017, held that the agency's arrangements made it a nonexclusive licensing agent and the assignee of bare claims, neither of which confers standing under Section 501(b) of the Copyright Act.

## At a glance

- **Case:** *DRK Photo v. McGraw-Hill Global Education Holdings, LLC*, No. 15-15106, 870 F.3d 978 (9th Cir. Sept. 12, 2017).
- **Court:** U.S. Court of Appeals for the Ninth Circuit; opinion by Judge Michael Daly Hawkins, with a concurrence by Judge Marsha Berzon.
- **Posture:** Appeal from the District of Arizona's summary judgment for McGraw-Hill on standing grounds.
- **Holding:** A plaintiff with only a nonexclusive license has no standing under Section 501(b); a separate assignment of accrued infringement claims, unaccompanied by ownership of any exclusive right, does not cure that defect.
- **Significance:** Reaffirmed and extended *Silvers v. Sony*, foreclosing the stock-agency practice of using bare claim assignments to aggregate and litigate photographers' copyrights.

DRK Photo is an Arizona stock agency that licensed images to publishers including McGraw-Hill. When DRK came to believe that the publishers had exceeded the print runs and distribution limits in their licenses, it sued for infringement on a large portfolio of photographs. To position itself to sue, DRK relied on two kinds of paperwork with its contributing photographers: longstanding representation agreements, and later "assignment" agreements executed as the litigation loomed. The district court found neither sufficient and granted summary judgment to the publisher. The Ninth Circuit affirmed.

## Standing under Section 501(b) and the legal-or-beneficial-owner rule

Section 501(b) provides that "the legal or beneficial owner of an exclusive right under a copyright is entitled" to sue for infringement of that right "committed while he or she is the owner of it." The statutory key word is *exclusive*. A copyright comprises a bundle of exclusive rights—reproduction, distribution, public display, and so on—and only someone who owns one of those rights, or who is the beneficial owner of one (for example, an author who sold the copyright in exchange for royalties), can enforce it.

The court first examined DRK's representation agreements and concluded they granted DRK only a *nonexclusive* right to license the photographs. The photographers retained their copyrights and could, and did, license the same images elsewhere. A nonexclusive licensee holds nothing more than permission to use the work; it owns no exclusive right and therefore has no standing to sue. That conclusion alone defeated DRK's claims to the extent they rested on its agency relationship.

## The bare-claim assignment problem and Silvers v. Sony

DRK's fallback was the assignment agreements, which purported to transfer to DRK the accrued claims for past infringement while the photographers retained their copyrights. The Ninth Circuit had already confronted a version of this maneuver in *Silvers v. Sony Pictures Entertainment*, 402 F.3d 881 (9th Cir. 2005) (en banc), which held that the assignee of an accrued infringement claim, with no legal or beneficial ownership of any exclusive right, lacks standing to sue.

DRK argued its case was different because the assignments also conveyed some interest in the copyrights themselves. The court was unpersuaded. Reading the documents as a whole, it found the photographers retained ownership of their exclusive rights and that the assignments, in substance, transferred only the right to sue. Allowing that, the court reasoned, would let parties sever the claim from the copyright and create a market in litigation rights that *Silvers* had foreclosed. Form could not rescue what substance defeated.

## Why the structure mattered more than the labels

The decision is a lesson in looking past the labels parties attach to their deals. DRK called its later documents "assignments" and recited transfers of "all right, title, and interest," but the court read the entire relationship—including the photographers' retained ability to exploit and license their own images—and concluded the economic reality was an agency arrangement bolted to a bare claim transfer.

The practical effect is significant for stock agencies and other intermediaries. To sue in their own name, they need genuine exclusivity: an exclusive license to one or more rights, or a true assignment of the copyright (which can be paired with a license back to the author). Aggregating hundreds of photographers' grievances into one suit through claim assignments is not a workaround. The Supreme Court denied certiorari, leaving the rule in place across the circuit.

## Open questions

- **How much ownership is enough?** *DRK* does not draw a bright line for how robust an exclusive grant must be; agencies must structure deals so they actually hold an exclusive right, not a relabeled agency.
- **Do other circuits agree?** The Ninth Circuit's reading of *Silvers* is influential, but the precise treatment of accrued-claim assignments can vary, and forum choice may matter.
- **What about co-ownership solutions?** True assignment with a license-back may confer standing, but it shifts ownership and tax, indemnity, and control consequences that parties must weigh.

## Implications

- **For stock agencies:** Representation alone will not support suit. To enforce, secure an exclusive license to a specific right or a genuine copyright assignment before infringement litigation, not a bare claim transfer afterward.
- **For photographers:** Retaining your copyright while "lending" only the right to sue does not empower your agency to litigate for you; if you want an agent to enforce, transfer an actual exclusive interest.
- **For defendants:** Standing is a powerful early defense. Scrutinize the chain of title and the substance of any assignment; "all right, title, and interest" language is not conclusive.
- **For drafters:** Document the substance you intend. Courts read the whole relationship, so make exclusivity real if standing depends on it.

## Frequently asked questions

**Can a stock photo agency sue infringers on a photographer's behalf?**
Only if it holds an exclusive right under the copyright or is a beneficial owner of one. A nonexclusive licensing agent cannot sue, and it cannot fix that by taking an assignment of the right to sue while the photographer keeps the copyright.

**What is the difference between an exclusive and a nonexclusive license?**
An exclusive license transfers ownership of one of the copyright owner's exclusive rights and makes the holder a co-owner who can sue. A nonexclusive license is mere permission to use the work and confers no ownership and no standing to sue under Section 501(b).

**Why couldn't DRK just buy the right to sue?**
Because Section 501(b) ties standing to ownership of an exclusive right. The court read the Copyright Act, following *Silvers v. Sony*, to bar assignment of a bare accrued claim divorced from any ownership interest, so DRK's paperwork transferred only a right to sue, which is not enough.

## Authorities and sources

- Ninth Circuit opinion (Justia), No. 15-15106: https://law.justia.com/cases/federal/appellate-courts/ca9/15-15106/15-15106-2017-09-12.html
- FindLaw opinion text: https://caselaw.findlaw.com/court/us-9th-circuit/1873855.html
- *Silvers v. Sony Pictures Entertainment*, 402 F.3d 881 (9th Cir. 2005) (en banc): https://law.justia.com/cases/federal/appellate-courts/F3/402/881/546388/
- 17 U.S.C. § 501 (Cornell LII): https://www.law.cornell.edu/uscode/text/17/501
- SCOTUSblog case page (certiorari denied): https://www.scotusblog.com/cases/case-files/drk-photo-v-mcgraw-hill-global-education-holdings-llc/