Viesti Associates, Inc. v. Pearson Education, Inc.
ORDER. ORDERED that defendant's Motion for Summary Judgment [52 (public entry Docket No. 53)] is GRANTED. ORDERED that defendant's Motion to Strike the Declarations of Wolfgang Kaehler 71 , Defendant's Motion for Summary Judgment 81 , and Plaintiff Viesti Associates, Inc.'s Motion for Partial Summary Judgment 82 are DENIED as moot. ORDERED that this case is dismissed and defendant may have its costs by Judge Philip A. Brimmer on 03/19/14.(jhawk, )
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Judge Philip A. Brimmer
Civil Action No. 12-cv-01431-PAB-DW
VIESTI ASSOCIATES, INC.,
PEARSON EDUCATION, INC. and
JOHN DOE PRINTERS 1-10,
This matter is before the Court on a Motion for Summary Judgment filed by
defendant Pearson Education, Inc. (“Pearson”) [Docket No. 52]. This Court has subject
matter jurisdiction to decide this motion pursuant to 28 U.S.C. § 1331.
Viesti Associates, Inc. (“Viesti”) is a stock photograph agency based in Durango,
Colorado that licenses photographs to publishers. Docket No. 58 at 4, ¶ A. Pearson
publishes educational textbooks and is incorporated in Delaware. Docket No. 50 at 1-2,
¶ 3. Between 1990 and 2009, photographer Wolfgang Kaehler granted Pearson limited
licenses to reproduce his photographs in various educational publications. Docket No.
58 at 4, ¶ B. Pearson’s compliance with the terms of those licenses forms the basis of
this suit. Docket No. 1.
The following facts are undisputed unless otherwise indicated.
Viesti became involved in copyright litigation against Houghton Mifflin Harcourt
Publishing (“Houghton”). After noticing that Mr. Kaehler licenced photographs to
Houghton, Viesti contacted Mr. Kaehler about the possibility of joining the case. Docket
No. 52 at 3, ¶ 4; Docket No. 52-4 at 5, 89:2-18.
On January 15, 2010, Mr. Kaehler signed the Copyright Assignment and
Accrued Causes of Action Agreement (the “First Assignment”) which stated:
The undersigned photographer, the sole owner of the copyrights in the
undersigned’s images (“the Images”) selected by Viesti Associates, Inc.
(“Viesti”) and now included in Viesti’s collection, hereby grants to Viesti all
copyrights and complete legal title in the Images. Viesti agrees to reassign
all copyrights and complete legal title back to the undersigned immediately
upon resolution of infringement claims brought by Viesti relating to the
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 Viesti to prosecute said
accrued or later accrued claims, causes of actions, choses in action or
lawsuits, as if it were the undersigned.
Docket No. 52-6. The sole purpose of this assignment was to allow Viesti to represent
Mr. Kaehler in a lawsuit against Houghton. Docket No. 52 at 4, ¶ 7; Docket No. 58 at 3,
¶ 7. The Assignment covered only those photographs that Mr. Kaehler licensed to
Houghton. Docket No. 58 at 4, ¶ D.2
On March 15, 2010 Mr. Kaehler and Viesti entered into the Photographers NonExclusive Agency Agreement (the “Agency Agreement”), which provided Viesti with the
On February 9, 2010, Mr. Kaehler sent Viesti an email and spreadsheet
indicating that the assignment was only for those images included in the spreadsheet.
Docket No. 52-7 at 3. These images were ones that Mr. Kaehler had licensed to
right to license and sell Mr. Kaehler’s digital files and to initiate and settle lawsuits
related to Viesti’s use of the files. Docket No. 58 at 5, ¶ E. The agreement stated that
Mr. Kaehler was the “sole and exclusive owner of all digital files delivered to [Viesti],
now and in the future.” Docket No. 52-8 at 2, ¶ 1.
Viesti claims that, upon realizing that Pearson may have infringed on Mr.
Kaehler’s copyrights to the photographs at issue in this case (the “Pearson
Photographs”), Mr. Kaehler transferred the applicable copyrights to Viesti. Docket No.
58 at 5, ¶ G. Viesti claims that this was done in a November 26 and 27, 2010 email
exchange (the “email exchange”) wherein Mr. Kaehler sent Viesti a spreadsheet
identifying the Pearson Photographs. Docket No. 58 at 5, ¶ H; see Docket No. 58-3 at
15-35. Mr. Viesti and Mr. Kaehler stated that they believed that the Pearson
Photographs would be subject to the First Assignment and Agency Agreement without
the need for additional documentation and that it was their intent to assign to Viesti
copyrights to the Pearson Photographs. Docket No. 58-1 at 2, ¶ 5; Docket No. 58-3 at
2, ¶ 8.
Pearson disputes that the November 2010 email exchange effectuated a transfer
of rights and argues that Mr. Kaehler’s statements to that effect are contradicted by his
deposition testimony. Docket No. 72 at 3, ¶¶ G, I.3 Pearson asserts that the November
2010 spreadsheet was part of the process of creating Exhibit 1 to the Complaint
[Docket No. 1-1] as evidenced by the fact that the email and spreadsheet were
Pearson filed a Motion to Strike the Declarations of Wolfgang Kaehler [Docket
No. 71], arguing that both of Mr. Kaehler’s affidavits were in conflict with his deposition
testimony. See Docket No. 58-3; Docket No. 58-4. For the reasons stated below, the
Court need not reach the issues raised in Pearson’s motion to strike.
originally withheld as work product. Id.
On January 6, 2012, Mr. Kaehler signed an “Addendum to Copyright Assignment
and Accrued Causes of Action Agreement” (the “Addendum”) which reiterated an
intention to convey “the copyrights and claims so that Viesti has legal standing to
enforce copyrights in the Images.” Docket No. 52-11. The parties disagree as to the
purpose of the Addendum. Mr. Kaehler’s affidavits state that his intent throughout was
to “transfer the necessary copyrights and claims to Viesti . . . and give Viesti legal
standing to bring copyright infringement claims, relating to the [Pearson Photographs].”
Docket No. 58-3 at 2, ¶ 8. However, in his deposition, Mr. Kaehler stated that he
understood the Addendum to clarify, but not expand, already existing rights. Docket
No. 52-2 at 16-17, 125:14-126:10.
On June 1, 2012, Viesti filed this action bringing claims against Pearson for
copyright infringement, contributory copyright infringement, and a claim for copyright
infringement against John Doe Printers 1-10. Docket No. 1. Viesti claims that Pearson
had only limited licenses for Mr. Kaehler’s photographs, and that Pearson exceeded the
terms of the limited licenses. Docket No. 58 at 1.
On March 6, 2013, Viesti and Mr. Kaehler signed a document entitled “Copyright
and Accrued Causes of Action Assignment” (the “Second Assignment”) which stated, in
relevant part, that Mr. Kaehler was assigning to Viesti “co-ownership of the copyrights in
the Images not previously assigned to Viesti.” Docket No. 52-12.
On June 25, 2012, Pearson filed a Motion to Dismiss, arguing that Viesti lacked
standing to sue for copyright infringement. Docket No. 12. The Court denied Pearson’s
Motion to Dismiss, refusing to consider documents attached to Pearson’s motion, but
granting Pearson leave to file a motion for summary judgment on the issue of standing.
Docket No. 45. Pearson filed a Motion for Summary Judgment on the issue of standing
[Docket No. 52], which is the motion now before the Court.
II. STANDARD OF REVIEW
Summary judgment is warranted under Federal Rule of Civil Procedure 56 when
the “movant shows that there is no genuine dispute as to any material fact and the
movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a); see Anderson
v. Liberty Lobby, Inc., 477 U.S. 242, 248-50 (1986). A disputed fact is “material” if
under the relevant substantive law it is essential to proper disposition of the claim.
Wright v. Abbott Labs., Inc., 259 F.3d 1226, 1231-32 (10th Cir. 2001). Only disputes
over material facts can create a genuine issue for trial and preclude summary
judgment. Faustin v. City & Cnty. of Denver, 423 F.3d 1192, 1198 (10th Cir. 2005). An
issue is “genuine” if the evidence is such that it might lead a reasonable jury to return a
verdict for the nonmoving party. Allen v. Muskogee, 119 F.3d 837, 839 (10th Cir.
However, “[w]hen, as in this case, the moving party does not bear the ultimate
burden of persuasion at trial, it may satisfy its burden at the summary judgment stage
by identifying a lack of evidence for the nonmovant on an essential element of the
nonmovant's claim.” Bausman v. Interstate Brands Corp., 252 F.3d 1111, 1115 (10th
Cir. 2001) (quoting Adler v. Wal-Mart Stores, Inc., 144 F.3d 664, 671 (10th Cir. 1998))
(internal quotation marks omitted). “To prevail at summary judgment on standing
grounds, the defendant must show that the record is devoid of evidence raising a
genuine issue of material fact that would support the plaintiff’s ultimate burden of
proving standing.” Day v. Bond, 500 F.3d 1127, 1132 (10th Cir. 2007). “Once the
moving party meets this burden, the burden shifts to the nonmoving party to
demonstrate a genuine issue for trial on a material matter.” Concrete Works of Colo.,
Inc. v. City & Cnty. of Denver, 36 F.3d 1513, 1518 (10th Cir. 1994) (citing Celotex Corp.
v. Catrett, 477 U.S. 317, 325 (1986)). The nonmoving party may not rest solely on the
allegations in the pleadings, but instead must designate “specific facts showing that
there is a genuine issue for trial.” Celotex, 477 U.S. at 324; see Fed. R. Civ. P. 56(e).
“To avoid summary judgment, the nonmovant must establish, at a minimum, an
inference of the presence of each element essential to the case.” Bausman, 252 F.3d
at 1115 (citing Hulsey v. Kmart, Inc., 43 F.3d 555, 557 (10th Cir.1994)). “In applying
this standard, we view all facts and any reasonable inferences that might be drawn from
them in the light most favorable to the nonmoving party.” Henderson v. Inter-Chem
Coal Co., Inc., 41 F.3d 567, 569 (10th Cir. 1994).
Where, as here, the issue of standing is raised on a motion for summary
judgment, “to prevail on such a motion ‘a plaintiff must establish that there exists no
genuine issue of material facts as to justiciability.’” Essence, Inc. v. City of Federal
Heights, 285 F.3d 1272, 1280 (10th Cir. 2002) (quoting Dep’t of Commerce v. U.S.
House of Representatives, 525 U.S. 316, 329 (1999)). Plaintiff must support its
allegations “with the manner and degree of evidence required at the [summary
judgment] stage of the litigation.” Lujan v. Defenders of Wildlife, 504 U.S. 555, 561
A. The Copyright Act
Under the Copyright Act of 1976, Congress granted copyright owners the specific
and exclusive rights:
(1) to reproduce the copyrighted work in copies or phonorecords;
(2) to prepare derivative works based upon the copyrighted work;
(3) to distribute copies or phonorecords of the copyrighted work to the public
by sale or other transfer of ownership, or by rental, lease, or lending;
(4) in the case of literary, musical, dramatic, and choreographic works,
pantomimes, and motion pictures and other audiovisual works, to perform
the copyrighted work publicly;
(5) in the case of literary, musical, dramatic, and choreographic works,
pantomimes, and pictorial, graphic, or sculptural works, including the
individual images of a motion picture or other audiovisual work, to display the
copyrighted work publicly; and
(6) in the case of sound recordings, to perform the copyrighted work publicly
by means of a digital audio transmission.
17 U.S.C. § 106. The list of exclusive rights is exhaustive – “[i]f a right is not ‘specified,’
then it is not one of the exclusive rights granted by Congress.” Silvers v. Sony Pictures
Entm’t, Inc., 402 F.3d 881, 886-87 (9th Cir. 2005). However, “exclusive rights may be
chopped up and owned separately, and each separate owner of a subdivided exclusive
right may sue to enforce that owned portion of an exclusive right, no matter how small.”
Section 501(b) of the Act defines under what circumstances copyright owners
have standing to bring a suit against infringing parties. For a plaintiff to assert a claim
for copyright infringement, it must be (1) the “legal or beneficial owner of an exclusive
right under a copyright” and (2) entitled “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).4
Although the Tenth Circuit has not decided this specific issue, the weight of authority
interprets § 501(b) as authorizing suit only by legal or beneficial owners. See
HyperQuest, Inc. v. N’Site Solutions, Inc., 632 F.3d 377, 381 (7th Cir. 2011) (“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”); see also Silvers, 402 F.3d at 885 (“Congress’ explicit listing of who
may sue for copyright infringement should be understood as an exclusion of others
from suing for infringement.” (emphasis original)); Bourne Co. v. Hunter Country Club,
Inc., 990 F.2d 934, 938 (7th Cir. 1993) (prohibiting licensing agent from joining
copyright infringement suit pursuant to § 501(b)).
Legal owners are those with legal title to at least one exclusive right. Silvers, 402
F.3d at 886. Beneficial owners are those without legal title, but with an interest in
royalties or licensing fees flowing from an exclusive right. Id.; see also Moran v.
London Records, Ltd., 827 F.2d 180, 183 (7th Cir. 1987) (defining beneficial owner as
one who has “the right to receive royalties from the copyright’s exploitation”) (citations
Any copyright owner bringing suit is subject to the requirements of § 411, which
provides, among other things, that “no civil action for infringement of the copyright in
any United States work shall be instituted until preregistration or registration of the
copyright claim has been made in accordance with this title.” 17 U.S.C. § 411(a). In
Reed Elsevier, Inc. v. Muchnick, 559 U.S. 154 (2010), the Supreme Court held that
§ 411(a) imposed a non-jurisdictional precondition – copyright registration – that
plaintiffs ordinarily must satisfy before filing copyright infringement claims. Id. at 157.
Pearson has filed a Motion for Summary Judgment [Docket No. 81] challenging Viesti’s
compliance with the registration requirement.
and quotations omitted). In order to bring a claim, both legal and beneficial owners
must show that they are the owners of at least one exclusive right set forth in § 106.
Hyperquest, 632 F.3d at 382. Conversely, the holder of a nonexclusive license has no
standing to bring an infringement claim. Id.; see also Granite Music Corp. v. Center St.
Smoke House, Inc., 786 F. Supp. 2d 716, 724 (W.D.N.Y. 2011) (“A non-exclusive
licensee does not have standing to commence a copyright infringement action.”);
Swarovski Am. Ltd. v. Silver Deer Ltd., 537 F. Supp. 1201, 1204 (D. Colo. 1982)
Where a plaintiff’s only legal interest in a copyright is the right to bring an
accrued claim, courts have strictly applied the standing requirements set forth in §
501(b). “The right to sue for an accrued claim for infringement is not an exclusive right
under § 106.” Silvers, 402 F.3d at 884. Therefore, “[t]he bare assignment of an
accrued cause of action” does not meet the standing requirement of § 501(b). Id. at
890. One rationale for the strict application of § 501(b), adopted in both the Second
and Ninth Circuits, is that “the Copyright Act does not permit copyright holders to
choose third parties to bring suits on their behalf.” ABKCO Music, Inc. v. Harrisongs
Music, Ltd., 944 F.2d 971, 980 (2d Cir. 1991); see also Silvers, 402 F.3d at 890 (citing
In resolving this motion, the Court need not decide under what circumstances, if
any, the assignment of accrued claims is permissible. The Tenth Circuit has not
decided this question; however, the Second and Ninth Circuits have held that the
transferee of accrued claims may bring an infringement action provided the transferee
is an owner of “both the copyright and [the] accrued claims.” Silvers, 402 F.3d at 890
(citing ABKCO, 944 F.2d at 980). Under those circumstances, accrued claims may only
be assigned if expressly included in the assignment. ABKCO, 944 F.2d at 980.
The only exclusive right at issue in this case is the right “to distribute copies . . .
of the copyrighted work to the public by sale or other transfer of ownership, or by rental,
lease, or lending.” 17 U.S.C. § 106(3). Because Pearson challenges Viesti’s standing
to bring a claim, the primary question before the Court is whether the agreements
between Mr. Kaehler and Viesti transferred legal or beneficial ownership of that
B. Challenges to Standing Pursuant to § 501(b)
Viesti argues that Pearson should not be permitted to challenge the assignments
between Mr. Kaehler and Viesti. Docket No. 58 at 12. Viesti cites to Eden Toys, Inc. v.
Florelee Undergarment Co., Inc., 697 F.2d 27 (2d Cir. 1982), superseded by statute on
other grounds, 15 U.S.C. § 1125(a), for the proposition that, where a copyright holder
and licensee have no dispute over the formality of an assignment, “it would be
anomalous to permit a third party infringer to invoke this provision against the licensee.”
Id. at 36. However, the Second Circuit’s holding in Eden Toys was limited to the issue
of whether the copyright owner and defendant engaged in the necessary procedural
formalities under 17 U.S.C. § 204(a). The Second Circuit remanded to the district court
for a determination of whether the copyright owner actually conveyed an exclusive
license. Id. at 36-37; see also Minden Pictures, Inc. v. Pearson Educ., Inc., 929 F.
Supp. 2d 962, 970 (N.D. Cal. 2013) (rejecting argument that defendant cannot
challenge the validity of copyright assignments between plaintiff and copyright owner).
Moreover, the Court “must raise the standing issue sua sponte, if necessary, in order to
determine if it has jurisdiction.” United States v. Colo. Supreme Ct., 87 F.3d 1161,
1166 (10th Cir. 1996) (citing Orr v. Orr, 440 U.S. 268, 271 (1979)). Accordingly it is
proper for the Court to consider Pearson’s arguments on the issue of standing.
C. Contract Interpretation
The Court turns to the interpretation of the agreements between Mr. Kaehler and
Viesti. See Nafal v. Carter, 540 F. Supp. 2d 1128, 1140-41 (C.D. Cal. 2007) (“the Court
must examine the interstices of the various agreements, and consider their combined
effect”). “It is the substance of the agreement, not the labels that it uses, that controls
our analysis.” HyperQuest, 632 F.3d at 383. When construing copyright agreements,
traditional rules of contract interpretation apply. Kennedy v. National Juvenile Detention
Ass’n, 187 F.3d 690, 694 (7th Cir. 1999) (applying Wisconsin law to construe copyright
agreement); see also SCO Group, Inc. v. Novell, Inc., 578 F.3d 1201, 1209-10 (10th
Cir. 2009) (applying California law and holding that agreements transferring copyrights
must be read as a whole); Righthaven LLC v. Wolf, 813 F. Supp. 2d 1265, 1272 n.6 (D.
Colo. 2011) (applying Colorado law). Pearson’s brief indicates that Colorado law
controls the interpretation of the agreements in this case [Docket No. 52 at 10], while
Viesti’s briefs are silent on the issue. Finding no compelling reason to apply the law of
another state, the Court will apply Colorado law in interpreting the agreements at issue.6
The Agency Agreement contains a choice of law provision indicating Colorado
law applies. Docket No. 52-8 at 4. Neither the First Assignment, the Addendum, nor
the Second Assignment contains a choice of law provision. Viesti is based in Colorado,
appears to be the party responsible for drafting the agreements, and the relationship
between the parties appears to be centered in Colorado; thus, where Viesti is silent on
the issue, the Court concurs with Pearson’s assessment that Colorado law applies.
See In re AE, Inc. v. Goodyear Tire & Rubber Co., 168 P.3d 507, 509 (Colo. 2007)
(holding that, under Colorado’s choice of law analysis, the state with the most
significant relationship to the occurrence and the parties for any particular issue
supplies the relevant substantive law).
Under Colorado law, “[i]nterpretation of a written contract is a question of law for
the court.” In re Marriage of Thomason, 802 P.2d 1189, 1190 (Colo. App. 1990) (citing
Pepcol Mfg. Co. v. Denver Union Corp., 687 P.2d 1310 (Colo. 1984)). The primary goal
of contract construction is to determine and effectuate the intent and reasonable
expectations of the parties. Copper Mountain Inc. v. Industrial Sys., Inc., 208 P.3d 692,
697 (Colo. 2009). Contract language must be examined and construed consistently
with the plain and generally accepted meaning of the words employed. Id.; see Pepcol
Mfg. Co., 687 P.2d at 1313-14 (“In the absence of contrary manifestation of intent in the
contract itself, contractual terms that have a generally prevailing meaning will be
interpreted according to that meaning.”). “The court should interpret a contract in its
entirety with the end in view of seeking to harmonize and to give effect to all provisions
so that none will be rendered meaningless.” Copper Mountain, Inc., 208 P.3d at 697
(internal quotation marks omitted). “Extraneous evidence is only admissible to prove
intent where there is an ambiguity in the terms of the contract.” USI Props. E., Inc. v.
Simpson, 938 P.2d 168, 173 (Colo. 1997); see also Pepcol Mfg. Co., 687 P.2d at 1314
(“It is axiomatic that in the absence of an ambiguity a written contract cannot be varied
by extrinsic evidence.”).
Ambiguity is also decided as a question of law. East Ridge of Fort Collins, LLC
v. Larimer & Weld Irrigation Co., 109 P.3d 969, 974 (Colo. 2005). “A contract is
ambiguous when it is reasonably susceptible to more than one meaning.” Public Serv.
Co. of Colo. v. Meadow Island Ditch Co. No. 2, 132 P.3d 333, 339 (Colo. 2006). Much
like standard contract interpretation, “[i]n determining whether a provision in a contract
is ambiguous, the instrument’s language must be examined and construed in harmony
with the plain and generally accepted meanings of the words used, and reference must
be made to all the agreement’s provisions.” Lake Durango Water Co., Inc. v. Public
Utilities Comm’n, 67 P.3d 12, 20 (Colo. 2003). Because “courts no longer apply a rigid
‘four corners’ rule . . . extrinsic evidence may be conditionally admitted to determine
whether the contract is ambiguous.” East Ridge of Fort Collins, 109 P.3d at 974
(citation omitted). “A mere disagreement between the parties as to the interpretation of
an agreement does not in itself create an ambiguity as a matter of law.” City of Aurora
v. ACJ P’ship, 209 P.3d 1076, 1085 (Colo. 2009).
1. First Assignment
The First Assignment was executed on January 15, 2010. Docket No. 52-6. It is
undisputed that the First Assignment pertains only to those images invoiced to
Houghton and for the purposes of resolving the dispute with Houghton. Docket No. 52
at 3, ¶ 5; Docket No. 58 at 2, ¶ 5. Moreover, Viesti no longer argues that this
assignment transferred any legal interest in the Pearson Photographs. Docket No. 58
at 9-11. Accordingly, the Court finds that the First Assignment does not transfer any
legal or beneficial ownership in copyrights to the Pearson Photographs.
2. Agency Agreement
Viesti argues that the Agency Agreement, executed on March 15, 2010, transfers
the necessary ownership interest in the copyrights to the Pearson Photographs. Docket
No. 58 at 9. Viesti characterizes the agreement as granting it “co-ownership of
exclusive rights to . . . authorize publishers to reproduce, distribute and display
Kaehler’s photographs.” Docket No. 58 at 9. Although the agreement’s title –
“Photographers Non-Exclusive Agency Agreement” – appears to indicate a contrary
intent, the Court will consider the agreement’s substance, and not simply its label. See
HyperQuest, 632 F.3d at 383. The Agency Agreement’s first paragraph states:
I, the undersigned certify and warrant that I am the sole and exclusive owner
of all digital files delivered to you, now and in the future. I appoint you as a
non-exclusive agent and representative in respect of the leasing and sale of
said materials throughout the world. All negotiations shall be at your
discretion without prior consultation with me, except when outright purchase
of originals is to be negotiated.
Docket No. 52-8 at 2, ¶ 1. The agreement goes on to state that Mr. Kaehler and Viesti
will evenly split any fees that Viesti collects [id. at 2, ¶ 2] and that the agreement shall
run for five years with an automatic renewal [id. at 3, ¶13].
The Agency Agreement does not grant Viesti exclusivity over one of the rights
identified in Section 106. To the contrary, the Agency Agreement only appoints Viesti a
“non-exclusive agent and representative” entitled to lease and sell Mr. Kaehler’s
photographs and does not indicate that Mr. Kaehler is in any way transferring his
ownership in the right to lease or sell the images. Moreover, the Court cannot accept
Viesti’s characterization of the agreement as granting “co-ownership” since that term
does not appear in the agreement and the plain meaning of the agreement does not
purport to convey to Viesti any ownership interest in a copyright. See HyperQuest, 632
F.3d at 382 (“a person holding a non-exclusive license is not entitled to complain about
any alleged infringement of the copyright); Granite Music Corp., 786 F. Supp. 2d at 724
(finding non-exclusive right to license insufficient to create standing).
Viesti argues that, because the agreement grants it 50% of “the total sum billed
and collected by [Viesti],” it “‘stand[s] to benefit from the legal dissemination of
copyrighted material’” and therefore Viesti is a beneficial owner. Docket No. 58 at 10
(quoting Righthaven LLC v. Wolf, 813 F. Supp. 2d 1265, 1271-72 (D. Colo. 2011)). The
Court declines to interpret the term “beneficial owner” so broadly. Legislative history
indicates that a “‘beneficial owner’ for this purpose would include, for example, an
author who had parted with legal title to the copyright in exchange for percentage
royalties based on sales or license fees.” H.R. Rep. No. 94-1476, at 159 (1976). While
beneficial ownership is not necessarily “restricted to those in a copyright’s legal chain of
title,” Moran, 827 F.2d at 182, a beneficial owner’s economic interests, which give rise
to standing, are “derived from the use of the copyright by its legal owner.” Fantasy, Inc.
v. Fogerty, 654 F. Supp. 1129, 1131 (N.D. Cal. 1987) (emphasis original). Viesti has no
claim, under the Agency Agreement, to royalties from Mr. Kaehler’s use of the
copyright. Because Viesti’s economic interests are derived solely from its own use of
the copyright and not from the use of the copyright by its legal owner, Mr. Kaehler,
Viesti is not a beneficial owner pursuant to § 501(b). Viesti does not reconcile its
position with the well-settled rule that nonexclusive licensees lack standing to bring an
action and cites no authority to support its claim that a nonexclusive license holder
qualifies as a beneficial owner simply because it stands to benefit generally from its
own exploitation of the copyright.
Finally, the Agency Agreement provides that: “In the event of . . . the
unauthorized use of images by [Viesti’s] client, I give [Viesti] full and complete authority
to make claims or institute suit, in [Viesti’s] name if necessary, without further
permission from me.” Docket No. 52-8 at 2, ¶ 3. To the extent Viesti argues that this
language transfers an exclusive ownership interest in the right to bring a suit against
Pearson, the Court disagrees. First, the right to bring suit is not an exclusive right set
forth in § 106 and, as such, is insufficient to provide standing. See Silvers, 402 F.3d at
884. Second, Viesti’s right to bring suit is non-exclusive because it is limited to only
those infringements committed by Viesti’s clients – Mr. Kaehler retains the right to
prosecute all other infringements, which is inconsistent with Viesti’s co-owner theory.
Accordingly, the Court finds that the Agency Agreement does not transfer to Viesti legal
or beneficial ownership of an exclusive right.
3. Email Exchange
Viesti claims that the email exchange that took place between Mr. Kaehler and
Mr. Viesti on November 26 and 27, 2010 functioned as a transfer and assignment of
the copyrights in the Pearson Photographs. Docket No. 58 at 11. Viesti states,
“Kaehler agreed to transfer to Viesti copyrights in the images he had licensed to
Pearson. That transfer was accomplished on November 27, 2010, when Kaehler emailed Viesti the Spreadsheet.” Id. This argument is problematic on many levels.
First, Viesti did not raise this argument in opposition to Pearson’s motion to dismiss for
lack of standing despite the email exchange now being claimed as the source of its
standing.7 See Docket No. 20. Second, the email exchange bears no indicia of a
Defense counsel avers that, during discovery, Viesti withheld the email
exchange between Viesti and Mr. Kaehler on privilege grounds, listing the emails in a
privilege log as a “communication between clients requesting information to assist
counsel in rendering legal advice.” Docket No. 72-1 at 1-2, ¶ 4. Defense counsel
states that the emails were first produced as an exhibit to Mr. Kaehler’s declaration,
dated March 29, 2013 – three days after the Court ruled on Pearson’s motion to
dismiss. See Docket No. 58-3; Docket No. 45.
transfer of copyrights. As a threshold matter, Viesti must show the existence of an
enforceable contract between Viesti and Mr. Kaehler. A party asserting the existence of
an agreement must show that “the parties agreed upon all essential terms.” I.M.A., Inc.
v. Rocky Mountain Airways, Inc., 713 P.2d 882, 888 (Colo. 1986). The email exchange
began on November 26, 2010, when Mr. Kaehler wrote, “I just finished putting the
Pearson info together. 666 images. Now I am adding the copyright registrations. I
hope to get it to you by Monday. Have a good weekend.” Docket No. 58-3 at 15-16.
On November 27, 2010, Mr. Viesti responded, “Thank you for your e-mail &
tremendous efforts. I hope you are taking some time to also relax & enjoy the
weekend.” Id. Later that day, Mr. Kaehler responded, “Here is the spreadsheet. I will
be leaving early Wednesday,” and went on provide his travel schedule and contact
information. Id. The spreadsheet lists Mr. Kaehler’s photographs by description,
copyright registration date, registration number, and licensing information. See Docket
No. 58-3 at 17-35. While evidence of conduct, oral statements, and writings is
admissible for the purposes of determining whether a contract exists, the emails contain
no indication as to the existence of essential contract terms or conditions. See I.M.A.,
713 P.2d at 888.
Moreover, the Copyright Act adds an additional requirement to agreements
transferring copyrights: “A transfer of copyright ownership, other than by operation of
law, is not valid unless an instrument of conveyance, or a note or memorandum of the
transfer, is in writing and signed by the owner of the rights conveyed or such owner’s
duly authorized agent.” 17 U.S.C. § 204(a). A writing purporting to transfer copyright
ownership “must evidence the transfer with reasonable clarity.” Weinstein Co. v.
Smokewood Entm’t Grp., LLC, 664 F. Supp. 2d 332, 340 (S.D.N.Y. 2009) (internal
quotation marks omitted); see also Minden Pictures, Inc. v. John Wiley & Sons, Inc.,
2014 WL 295854, at *9 (N.D. Cal. Jan. 27, 2014) (“a transfer of copyright ownership
must be express and clear”).8 In Weinstein, the plaintiff brought a breach of contract
action and argued that an email exchange between it and the defendant copyright coowner codified a prior oral agreement to transfer exclusive distribution rights and
satisfied § 204(a). 664 F. Supp. 2d at 341. Plaintiff’s representative sent two emails
indicating that the two sides had reached an agreement, but defendant’s email
responses were “noncommittal.” Id. The court found that if “a copyright owner’s
intention in writing is unclear – even deliberately so – there is no legally valid transfer.”
Id. at 341. Moreover, “a valid writing must nevertheless clearly identify the deal and its
basic parameters.” Id. at 342. Thus, because “there is no way to read [defendant’s] emails as constituting an intention to grant plaintiff an exclusive license,” the court found
that the § 204(a) writing requirement was not met and dismissed plaintiff’s breach of
contract claim. Id. at 343; see also Radio Television Espanola S.A. v. New World
The purpose of § 204(a) is to protect the creator of a work from inadvertently
transferring an interest in a copyright. Weinstein Co., 664 F. Supp. 2d at 340. Some
courts hold that, where there is no disagreement between the owner and licensee, it is
inequitable to allow a third party to invoke § 204(a) against the licensee. See, e.g.,
Eden Toys, 697 F.2d at 36. Although the concern of inadvertent transfer is not present
in this case, Congress did not expressly limit the application of § 204(a) to disputes
between the copyright owner and the transferee. Thus, § 204(a) guides the
interpretation of the agreements at issue in this case. See, e.g., Minden Pictures, Inc.
v. John Wiley & Sons, Inc., 2014 WL 295854, at *9 (N.D. Cal. Jan. 27, 2014) (“The
Court’s conclusion that the agency agreements do not convey ownership is
underscored by the fact that a transfer of copyright ownership must be express and
clear.” (citing Weinstein Co., 664 F. Supp. 2d at 338)).
Entm’t, Ltd., 183 F.3d 922, 928 (9th Cir. 1999) (holding faxes between the parties
discussing terms insufficient to satisfy § 204(a)). Although Viesti claims that the
purpose of the email exchange was to transfer copyright ownership, the emails
themselves provide no suggestion that the transfer of copyright ownership was at issue
or in any way contemplated by the parties. Mr. Kaehler did not indicate that the
spreadsheet accomplished a transfer and neither party makes reference to other
agreements, the terms of such a transfer, or any other language indicating finality. See
Radio Television, 183 F.3d at 928.
Viesti relies on Mr. Kaehler’s declarations, where Mr. Kaehler states that he
understood that providing the spreadsheet to Viesti would function as a transfer of
copyrights, accrued causes of action, and licensing rights. Docket No. 58-3 at 2, ¶ 8.
However, Mr. Kaehler’s declarations filed during litigation are insufficient to create a
disputed issue of fact to the extent his declarations are conclusory and self-serving,
Skrzypczak v. Roman Catholic Diocese of Tulsa, 611 F.3d 1238, 1244 (10th Cir. 2010),
or create a sham issue of fact. Ralston v. Smith & Nephew Richards, Inc., 275 F.3d
965, 973 (10th Cir. 2001); Franks v. Nimmo, 796 F.2d 1230, 1237 (10th Cir. 1986)
(“courts will disregard a contrary affidavit when they conclude that it constitutes an
attempt to create a sham fact issue”).9
Mr. Kaehler’s deposition was taken on March 14, 2013. See Docket No. 52-2.
A declaration cannot be disregarded merely because it conflicts with the
declarant’s prior sworn testimony; rather, courts consider: “whether the affiant was
cross-examined during his earlier testimony, whether the affiant had access to the
pertinent evidence at the time of his earlier testimony or whether the affidavit was
based on newly discovered evidence, and whether the earlier testimony reflects
confusion which the affidavit attempts to explain.” Franks, 796 F.2d at 1237.
Mr. Kaehler testified:
So you testified earlier that you were aware at that time of two to three
agreements that you’d entered into with Mr. Viesti, is that correct?
And we’ve marked [the First Assignment, the Agency Agreement, and
the Addendum] three agreements between you and Mr. Viesti,
Do you and Mr. Viesti have any other agreements regarding your
Not that I’m aware of.
Docket No. 52-2 at 28, p. 212:11-20. On March 29, 2013, Mr. Kaehler signed his
declaration, which stated that the spreadsheet was to function as an assignment of his
copyrights. Docket No. 58-3 at 2-3. The email exchange and spreadsheet were not
evidence newly discovered after the deposition; rather, Mr. Kaehler testified that he “put
the spreadsheet together with the invoice numbers” to help prepare Exhibit 1 to the
complaint. Docket No. 72-2 at 3, p. 57:10-13. Moreover, the excerpts of Mr. Kaehler’s
deposition provided by the parties do not indicate confusion on the part of Mr. Kaehler.
See Franks, 796 F.2d at 1237. Thus, Mr. Kaehler’s declaration is suspect to the extent
it contradicts his deposition testimony and attempts to create a disputed issue of fact as
to whether the parties intended that the emails and spreadsheet function as a transfer
of copyright ownership to the Pearson Photographs. See Minden Pictures, 929 F.
Supp. 2d at 969 (finding declarations intended to “backdate the contracts for 123 of the
copyrighted photographs” were “tainted by the influence of litigation” and did not show
“any intent to transfer any specific legal (or beneficial) ownership”). Moreover, Viesti
produces no evidence of the parties’ contemporaneous “conduct, their oral statements[,
or] other evidence illuminating the circumstances surrounding the making of [the
alleged] agreement” that support Mr. Kaehler’s after-the-fact statements that he
intended that the emails should function as a transfer of ownership. See I.M.A., 713
P.2d at 888.
Second, even if the Court assumes that the email exchange, the spreadsheet,
and Mr. Kaehler’s declaration construed as a memorandum of transfer, see Docket No.
58 at 11 n. 49, constitute a contract under Colorado law, the Court does not interpret
the alleged agreement as transferring to Viesti legal or beneficial ownership. Mr.
It was my intent and understanding that by providing the Spreadsheet to
Viesti, I was assigning to Viesti copyrights and claims in these additional
photographs, and including them in the [various agreements.] My intention
throughout all my dealings with Viesti . . . was and is to transfer the
necessary copyrights and claims to . . . give Viesti licensing rights . . . and
give Viesti legal standing . . . .
Docket No. 58-3 at 2, ¶ 8. Mr. Kaehler’s declaration does not indicate an intent to
assign a specific exclusive right, provide for the distribution of royalties or other
compensation, or place a duration on the assignment unrelated to litigation. See
Docket No. 58-3 at 2, ¶¶ 8-9. The declaration does not evince any intent on the part of
Mr. Kaehler to assign Viesti any interest beyond what might be necessary to bring a
claim. Moreover, as discussed above, absent any specific reference to a prior
agreement or other manifestation of finality, the act of emailing a spreadsheet, by itself,
is insufficient to satisfy § 204(a). See Radio Television, 183 F.3d at 928.
Mr. Kaehler further states that he understood that the transferred copyrights
would be subject to the First Assignment, Agency Agreement, Addendum, and Second
Assignment. Id. Docket No. 58-3 at 2, ¶ 8. Even if the emails and spreadsheet made
appropriate reference to those other agreements, see Radio Television, 183 F.3d at
928, Viesti’s argument fails. The Pearson Photographs cannot be subject to the First
Assignment because it is undisputed that the First Assignment covers only those
images related to a suit against Houghton and the First Assignment does not provide
for the subsequent transfer of additional images. See Docket No. 52-6. To the extent
the spreadsheet photos are subject to the Agency Agreement, for the above-stated
reasons, the Agency Agreement does not confer upon Viesti legal or beneficial
ownership. Finally, as discussed below, neither the Addendum nor the Second
Assignment transfers to Viesti the necessary rights and neither agreement was in
existence in November 2010.
Extrinsic evidence submitted by the parties does not create an ambiguity in the
alleged agreement. When asked if the copyright assignment was only for the purpose
of bringing suit, Mr. Kaehler answered, “Yes.” Docket No. 52-2 at 6, 109:7-12. Mr.
Kaehler stated that, to his knowledge, Viesti has neither licensed nor paid royalties for
any of the photographs at issue in this case. Docket No. 72-2 at 4-5, 92:21-93:5. Mr.
Viesti’s declaration similarly fails to aid Viesti’s argument. Mr. Viesti states that,
subsequent to the Agency Agreement, Viesti licensed Mr. Kaehler’s images to
customers. Docket No. 58-1 at 1-2, ¶ 4. This does not suggest the transfer of legal or
beneficial ownership because, as noted above, the Agency Agreement transferred only
a non-exclusive license. Mr. Viesti also states that it was his intent that the November
27, 2010 email and spreadsheet act as a transfer of all copyrights and accrued causes
of action. Like Mr. Kaehler’s declaration, Mr. Viesti’s statements are similarly “tainted
by the influence of litigation” and do not indicate that the parties’ intent was to transfer
specific exclusive rights. See Minden Pictures, 929 F. Supp. 2d at 969. Conversely, in
his deposition, Mr. Viesti states “we understood that we needed to have these forms to
have legal standing in the federal copyright cases . . . .” Docket No. 52-3 at 8-9,
251:25-252:2. When asked whether copyrights generally were assigned to Viesti for
any other purpose, other than bringing copyright claims, Mr. Viesti replied, “They were
not – they were brought just for the purposes of the present claims that we have.
Present and past claims, copyright lawsuits.” Id. at 9, 252:18-22.10
Viesti’s final argument is that Mr. Kaehler’s affidavit is a signed writing that
effectuates the transfer of the Pearson Photographs pursuant to 17 U.S.C. § 204.
Docket No. 58 at 11. Viesti cites Eden Toys, 697 F.2d at 36, for the proposition that
§ 204(a) requirements can be satisfied by a later execution of a writing that confirms the
prior agreement. However, the language contained in Mr. Kaehler’s declaration cannot
be interpreted as conveying legal or beneficial ownership in an exclusive right
regardless of whether it is viewed as evidence of the existence of an agreement or as a
fully executed written agreement. Moreover, even assuming Mr. Kaehler’s declaration
satisfied § 204(a), Viesti must show it has standing pursuant to § 501(b), and “[t]he
existence of federal jurisdiction ordinarily depends on the facts as they exist when the
complaint is filed.” Newman-Green, Inc. v. Alfonzo-Larrain, 490 U.S. 826, 830 (1989);
Because Mr. Kaehler’s declarations are insufficient to convey to Viesti the
exclusive rights necessary to create standing to bring this action, the Court need not
decide Pearson’s motion to strike Mr. Kaehler’s declarations [Docket No. 71].
accord Lujan, 504 U.S. at 598 n.4 (1992). While it may be permissible to amend a
defective allegation of jurisdiction, a party cannot amend defective jurisdictional facts as
Viesti attempts to do here. See Newman-Green, 490 U.S. at 832 (interpreting 18
U.S.C. § 1653).11 Therefore, Viesti’s argument fails and the Court finds that the
November 27, 2010 email did not transfer to Viesti legal or beneficial ownership of an
The Court turns to the Addendum, executed by Viesti and Mr. Kaehler on
January 13, 2012. The Addendum states:
The undersigned previously assigned copyrights and accrued claims in the
undersigned’s images (“the Images”) to Viesti Associates, Inc. (“Viesti”).
Viesti agreed to reassign all copyrights and complete legal title back to the
undersigned immediately upon resolution of infringement claims relating to
For avoidance of doubt, it was and is the intention of the undersigned to
convey to Viesti, fully and without reservation, the copyrights and claims so
that Viesti has legal standing to enforce copyrights in the Images. If any
provision of the previous assignment is deemed to be inconsistent with
Viesti’s standing to bring claims, such provision is void and shall have no
Docket No. 52-11. Pearson argues that the Addendum does not transfer to Viesti any
Viesti cites to Magnuson v. Video Yesteryear, 85 F.3d 1424, 1428-29 (9th Cir.
1996), for the proposition that “under some circumstances a prior oral grant that is
confirmed by a later writing becomes valid as of the time of the oral grant, even if the
writing is subsequent to the initiation of litigation on the copyright infringement.”
However, Magnuson is distinguishable. Unlike the instant case, the trial court found
that a proper transfer of copyright ownership took place. Id. The Ninth Circuit did not
disturb the trial court’s findings, but also noted that the subsequent written transfer of
copyright ownership was between two companies owned by the same person –
effectively eliminating the possibility that the transferor would be harmed by a fraudulent
new rights; rather, it simply reaffirms the transfers that already took place. It is
unnecessary to decide this issue, however, because whether the Addendum modifies
an existing transfer or transfers new rights, it does not confer on Viesti legal or
beneficial ownership over the copyrights to the Pearson Photographs. The Addendum
only speaks to the intent to give Viesti “legal standing” and is completely silent as to any
transfer of exclusive rights to the Pearson Photographs. See Silvers, 402 F.3d at 884
(“The right to sue for an accrued claim for infringement is not an exclusive right under
§ 106.”); Minden Pictures, 929 F. Supp. 2d at 968-69 (interpreting similar language and
finding “the sole function of the copyright assignment is to grant an exclusive license to
bring suit and divvy up any returns; there is no right to participate in any royalties apart
from the litigation”).
The Court finds that the Addendum is unambiguous, even when considering
extrinsic evidence. Mr. Kaehler’s declaration simply reiterates, with minor changes, the
language of the Addendum. Docket No. 58-3 at 2, ¶ 9. Mr. Kaehler’s second affidavit
[Docket No. 58-4] is similarly unavailing. Mr. Kaehler testified that his intent in signing
the Addendum was to clarify that all copyrights would revert back to him after the
conclusion of any lawsuits. Docket No. 52-2 at 16, 125:10-22.
The Addendum’s final clause purporting to void any provision of the “previous
assignment” deemed inconsistent with “Viesti’s standing to bring claims” does not aid
Viesti’s argument. The Court is under no obligation to reshape the parties’ contract.
Righthaven LLC v. Hoehn, 716 F.3d 1166, 1171 (9th Cir. 2013). “[T]he parties’
intended result was invalid” and reforming the agreements “in light of that intent could
not have saved [them].” Id.; see also Minden Pictures, 929 F. Supp. 2d at 968-69
(“Implicitly, 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).”). “Although the assignment of the bare right to sue is permissible, it is
ineffectual” when it is the only right plaintiff was assigned. Righthaven, 813 F. Supp. 2d
at 1273. Accordingly, because the only reasonable interpretation of the Addendum is
that its sole function is to convey to Viesti the bare right to bring suit, the Court finds
that the Addendum does not confer upon Viesti legal or beneficial ownership of an
5. Second Assignment
To the extent that Viesti argues that the Second Assignment, executed on March
6, 2013, is relevant to its standing argument, the Court disagrees. As stated above,
federal jurisdiction is determined based on facts as they existed at the time the
complaint was filed. Newman-Green, 490 U.S. at 830. A party cannot attempt to
amend defective jurisdictional facts once litigation has commenced. See id. at 832.
Because the Second Assignment was executed after this action was filed, it cannot be
the mechanism through which Viesti acquired the necessary rights. See also Minden
Pictures, Inc. v. John Wiley & Sons, Inc., 2013 WL 1995208, at *9 (N.D. Cal. May 13,
For the foregoing reasons, it is not necessary to reach the issue of whether,
under Colorado law, the Addendum properly modified any existing agreements. See
Colo. Inv. Servs., Inc. v. Hager, 685 P.2d 1371, 1376-77 (Colo. App. 1984) (holding that
written contract can be modified by subsequent agreement). But see Colowyo Coal Co.
v. City of Colo. Springs, 879 P.2d 438, 443 (Colo. App. 1994) (“In order to accomplish
the substitution of a new contract for an existing contract, the pre-existing obligation
must be extinguished; mere modification of certain contract terms does not suffice.”).
2013) (finding that plaintiff could not establish standing based upon assignment
executed after the commencement of litigation). Thus, the Court need not decide
whether the Second Assignment’s language transfers to Viesti the necessary copyright
ownership because it did not transfer a legal or beneficial ownership interest prior to the
filing of this action.
For the foregoing reasons, the Court finds that Viesti lacks standing to bring this
action.13 It is therefore
ORDERED that defendant’s Motion for Summary Judgment [Docket No. 52
(public entry Docket No. 53)] is GRANTED. It is further
ORDERED that defendant’s Motion to Strike the Declarations of Wolfgang
Kaehler [Docket No. 71], Defendant’s Motion for Summary Judgment [Docket No. 81],
and Plaintiff Viesti Associates, Inc.’s Motion for Partial Summary Judgment [Docket No.
82] are DENIED as moot. It is further
ORDERED that this case is dismissed and defendant may have its costs.
DATED March 19, 2014.
BY THE COURT:
s/Philip A. Brimmer
PHILIP A. BRIMMER
United States District Judge
Viesti notes that the Court can order Mr. Kaehler’s joinder “if the Court believes
Kaehler should be joined.” Docket No. 58 at 15. However, the issue raised in
Pearson’s motion for summary judgment is Viesti’s standing to bring this action and not
whether it is appropriate to order Mr. Kaehler’s joinder. The Court will not order Mr.
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