The Copyright Act: Standing and “Right to Sue” Assignments

Posted on Categories Intellectual Property Law, PublicLeave a comment» on The Copyright Act: Standing and “Right to Sue” Assignments

The symbol representing a copyrighted work, which is the letter "C" within a closed circle.Every now and then, plaintiffs attempt to leap into the shoes of a copyright holder by obtaining permission from the copyright owner to sue an alleged third party infringer.  But these type of bare “right to sue” assignments in many instances fall short of what is required under federal law.

Enforcement Action Rights under the Copyright Act

According to the federal Copyright Act, only “[t]he legal or beneficial owner of an exclusive right under a copyright is entitled, subject to the requirements of section 411, 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).

The Copyright Act lists the following exclusive rights of the owner of a copyright:

(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. But “a person holding a non-exclusive license is not entitled to complain about any alleged infringement of the copyright.”  HyperQuest, Inc. v. N’Site Sols., Inc., 632 F.3d 377, 382 (7th Cir. 2011).  In order words, to have the requisite standing to sue, a plaintiff must exclusively own one of the enumerated rights listed above.  Consequently, enforcement actions are limited to the specific rights exclusively owned.   For example, a plaintiff who owns the exclusive rights to perform a literary work can only sue to enforce that specific rights. Such a plaintiff, cannot go after alleged infringers making unauthorized copies of the literary work. Continue reading “The Copyright Act: Standing and “Right to Sue” Assignments”

The Rise of Benefit Corporations: Show me the Money…and the Good

Posted on Categories Business Regulation, Corporate Law, Public, Wisconsin Law & Legal SystemLeave a comment» on The Rise of Benefit Corporations: Show me the Money…and the Good

A large cardboard box with a hole in the top is labeled to accept donations for a book drive sponsored by the organization Better World Books.The “Benefit Corporation” is a new corporation class and it may be coming to a state near you (if it hasn’t already).  A benefit corporation (colloquially referred to as B-corp) is an entity type that seeks to blend profit and purpose.

In 2010, Maryland was the first state to adopt a benefit corporation law.  Since then, about 30 other states have followed suit. As of October 2017, the Wisconsin legislature had a bill under consideration to create a benefit corporation statute.

What Exactly Is a Benefit Corporation?

Benefit corporations seek to create a material positive impact on society and the environment. These companies focus beyond the entrenched corporate purpose of profit maximization.  Most states with benefit corporation statutes base these laws on the Model Benefits Corporation Legislation.  Benefit corporations are required to (a) espouse a general/specific public benefit, (b) be accountable, and (c) be transparent.

This pursuit of public benefit could take various forms, such as: providing low-income communities with beneficial services; preserving the environment; improving human health; promoting the arts; or any other nonpecuniary purpose that could be of benefit to society or the environment.

For example, Better World Books, a benefit corporation, is an online book retailer that sells used and new books.  For every book sold, it gives a percentage of its funds and unsold books to literacy foundations across the globe.  Some other famous companies who have decided to go the benefit corporation route include Kickstarter, Etsy, and Ben and Jerry’s.

Benefit corporations are usually required to have some measure of accountability. This often entails measuring the provision of the corporation’s stated public benefit goal against an independent third-party standard.

Most benefit corporation statutes also require specific disclosures. Corporations are required to provide an annual benefit report to their shareholders regarding the corporation’s success or failures in delivering the espoused public benefit.  Continue reading “The Rise of Benefit Corporations: Show me the Money…and the Good”