Case 2:10-cv-01066-KJD-GWF Document 34 Filed 07/13/11 Page 1 of 8
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`UNITED STATES DISTRICT COURT
`DISTRICT OF NEVADA
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`Case No. 2:10-CV-1066-KJD-GWF
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`ORDER
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`RIGHTHAVEN LLC,
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`Plaintiff,
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`v.
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`DEAN MOSTOFI,
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`Defendant.
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`Presently before the Court is Defendant Dean Mostofi’s Motion to Dismiss (#25). Plaintiff
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`filed a response in opposition (#29), to which Defendant replied (#30).
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`I. Background
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`This dispute arises out of Defendant’s alleged copyright infringing conduct. On
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`April 20, 2010, Defendant displayed a Las Vegas Review-Journal (“LVRJ”) article (“Work”), on his
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`website, <http://www.deanmostofi.com/> (“Website”), regarding a Las Vegas, Nevada based lawyer
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`who was reprimanded for false advertising by the Nevada Supreme Court. Defendant allegedly
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`changed the original title of the Work: “Court Reprimands Lawyer Over Misleading Ads,” to a
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`different title: “Las Vegas Lawyer Reprimanded for False Advertising.” (Complaint, ¶ 21). Plaintiff
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`claims that this article infringes upon the copyright.
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`Case 2:10-cv-01066-KJD-GWF Document 34 Filed 07/13/11 Page 2 of 8
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`On June 24, 2010, approximately two months after Defendant displayed the article on his
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`website, the Work was allegedly registered with the United States Copyright Office (“USCO”).
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`(Complaint, ¶ 19).
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`On or about January 18, 2010, Plaintiff and Stephens Media LLC (“Stephens Media”), the
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`original owner of the Work, entered into a Strategic Alliance Agreement (“SAA”). Plaintiff filed its
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`Complaint (#1) on June 30, 2010. Plaintiff alleges that Defendant willfully copied the Work, without
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`authorization. Defendant raises this Motion to Dismiss for lack of subject matter jurisdiction,
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`specifically asserting Plaintiff’s lack of standing to bring the claim at the time the action was filed.
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`II. Standard for Motion to Dismiss
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`In this action, “as in all actions before federal court, the necessary and constitutional predicate
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`for any decision is a determination that the court has jurisdiction- that is the power- to adjudicate the
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`dispute.” Toumajian v. Frailey, 135 F.3d 648, 652 (9th Cir. 1998). The purpose of a complaint is
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`two-fold: to give the defendant fair notice of the basis for the court’s jurisdiction and of the factual
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`basis of the claim. See Fed. R. Civ. P. 8; Skaff v. Meridien North Am. Beverly Hills, LLC, 506 F.3d
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`832, 843 (9th Cir. 2007). Rule 12(b)(1) of the Federal Rules of Civil Procedure allows defendants to
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`seek dismissal of a claim or action for a lack of subject matter jurisdiction. Dismissal under Rule
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`12(b)(1) is appropriate if the complaint, considered in its entirety, fails to allege facts on its face that
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`are sufficient to establish subject matter jurisdiction. In re Dynamic Random Access Memory
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`(DRAM) Antitrust Litigation, 546 F.3d 981, 984-85 (9th Cir. 2008). Although the defendant is the
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`moving party in a motion to dismiss brought under Rule 12(b)(1), the plaintiff is the party invoking
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`the court’s jurisdiction. As a result, the plaintiff bears the burden of proving that the case is properly
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`in federal court. McCauley v. Ford Motor Co., 264 F.3d 952, 957 (9th Cir. 2001) (citing McNutt v.
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`General Motors Acceptance Corp., 298 U.S. 178, 189 (1936)).
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`Attacks on jurisdiction pursuant to Rule 12(b)(1) can be either facial, confining the inquiry to
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`the allegations in the complaint, or factual, permitting the court to look beyond the complaint. See
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`Savage v. Glendale Union High Sch., 343 F.3d 1036, 1039 n.2 (9th Cir. 2003). In a facial attack “the
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`Case 2:10-cv-01066-KJD-GWF Document 34 Filed 07/13/11 Page 3 of 8
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`challenger asserts that the allegations contained in a complaint are insufficient on their face to invoke
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`federal jurisdiction.” Safe Air for Everyone v. Myer, 373 F.3d 1035, 1039 (9th Cir. 2004). By
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`contrast, “in a factual attack, the challenger disputes the truth of the allegations that, by themselves,
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`would otherwise invoke federal jurisdiction.” Id. A factual attack made pursuant to Rule 12(b)(1)
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`may be accompanied by extrinsic evidence. Whitehorn v. F.C.C., 235 F. Supp. 2d 1092, 1095-96 (D.
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`Nev. 2002) (citing St. Clair v. City of Chico, 880 F.2d 199, 201 (9th Cir. 1989)). Dismissal for lack
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`of subject matter jurisdiction is proper if the complaint, considered in its entirety, fails to allege facts
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`that are sufficient to establish subject matter jurisdiction. DRAM Antitrust Litigation, 546 F.3d at
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`984-85.
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`III. Analysis
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`Section 501(b) of the 1976 Copyright Act (“Act”) establishes who is legally authorized to sue
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`for infringement of a copyright:
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`The 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 an infringement of that particular right committed while he
`or she is the owner of it.
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`17 U.S.C. § 501(b). Therefore, to be entitled to sue for copyright infringement, the plaintiff must be
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`the “legal or beneficial owner of an exclusive right under a copyright.” See Silvers v. Sony Pictures
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`Entm’t, Inc., 402 F.3d 881, 884 (9th Cir. 2005). If the plaintiff “is not a proper owner of the
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`copyright rights, then it cannot invoke copyright protection stemming from the exclusive rights
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`belonging to the owner, including infringement of the copyright.” Id. (quoting 4 Business and
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`Commercial Litigation in Federal Courts, at 1062 § 65.3(a)(4) (Robert Haig ed.)). Section 106 of the
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`Act defines and limits the exclusive rights under copyright law. Id. at 884-85. While these
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`1 f
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` “[T]he owner of copyright under this title has the exclusive rights to do and to authorize any of the
`ollowing: (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
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`Case 2:10-cv-01066-KJD-GWF Document 34 Filed 07/13/11 Page 4 of 8
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`exclusive rights may be transferred and owned separately, the assignment of a bare right to sue is
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`ineffectual because it is not one of the exclusive rights. Id. Since the right to sue is not one of the
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`exclusive rights, transfer solely of the right to sue does not confer standing on the assignee. Id. at
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`890. Additionally, the “bare assignment of an accrued cause of action is impermissible under [the
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`Act].” Id. One can only obtain a right to sue on a copyright if the party also obtains one of the
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`exclusive rights in the copyright. See id.
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`A. Contract Interpretation
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`Furthermore, although the Act grants exclusive jurisdiction for infringement claims to federal
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`courts, those courts construe copyrights as contracts and turn to the relevant state law to interpret
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`them. See Automation By Design v. Raybestos Products Co., 463 F.3d 749, 753 (7th Cir. 2006). The
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`question of the interpretation of the contract is a question of law. See Shelton v. Shelton, 78 P.3d
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`507, 510 (Nev. 2003). A contract is ambiguous if it is reasonably susceptible to more than one
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`interpretation. Id. A contract may be ambiguous if the paragraphs in question are reasonably
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`susceptible to different constructions or interpretations. See Agric. Aviation Eng’g Co. v. Board of
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`Clark County Com’rs, 749 P.2d 710, 712 (Nev. 1990).
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`The SAA defines the relationship between Plaintiff and Stephens Media and governs all
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`future copyright assignments between them (including the assignment at issue here). See
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`(Defendant’s Motion to Dismiss, Doc. No. 25, p. 4 of 28). Plaintiff alleges that the SAA “envisions
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`an assignment to Plaintiff of all right, title, and interest in and to potential copyrighted works.”
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`(Plaintiff’s Opposition to Defendant’s Motion to Dismiss, Doc. No. 29, p. 8 of 14). This is an
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`inaccurate conclusion. Here, the SAA is not ambiguous. The SAA expressly denies Righthaven any
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`right from future assignments other than the bare right to bring and profit from a copyright
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`infringement action.
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`///
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`recordings, to perform the copyrighted work publicly by means of a digital audio transmission.” 17 U.S.C. §
`106.
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`Case 2:10-cv-01066-KJD-GWF Document 34 Filed 07/13/11 Page 5 of 8
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`This notion is clearly expressed in Section 7.2 of the SAA:
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`7.2 Despite any such Copyright Assignment, Stephens Media shall
`retain (and is hereby granted by Righthaven) an exclusive license to
`Exploit the Stephens Media Assigned Copyrights for any lawful
`purpose whatsoever and Righthaven shall have no right or license to
`Exploit or participate in the receipt of royalties from the
`Exploitation of the Stephens Media Assigned Copyrights other
`than the right to proceeds in association with a Recovery. To the
`extent that Right haven’s [sic] maintenance of rights to pursue
`infringers of the Stephens Media Assigned Copyrights in any manner
`would be deemed to diminish Stephens Media’s right to Exploit the
`Stephens Media Assigned Copyrights, Righthaven hereby grants an
`exclusive license to Stephens Media to the greatest extent permitted by
`law so that Stephens Media shall have unfettered and exclusive
`ability to Exploit the Stephens Media Assigned Copyrights…
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`(Defendant’s Motion to Dismiss, Doc. No. 25, Exhibit A, p. 9 of 22 (bold emphasis added,
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`italicization in original)). It is clear from this section that Plaintiff is prevented from obtaining,
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`having, or otherwise exercising any right other than the bare right to sue, which is expressly
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`forbidden pursuant to Silvers. As a result, Defendant asserts that Plaintiff lacks standing to maintain
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`this lawsuit. The Court agrees with this conclusion because it is clear that the entirety of the SAA
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`was designed to prevent Righthaven from becoming “an owner of any exclusive right in the
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`copyright…,” Silvers, 402 F.3d at 886 (emphasis in original), regardless of Righthaven and Stephens
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`Media’s post hoc, explanations of the SAA’s intent or later amendments.
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`B. Amendment to the SAA
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`Notwithstanding the actual transaction that occurred, Plaintiff argues that the amendment it
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`executed with Stephens Media on May 9, 2011 fixes any possible errors in the original SAA that
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`would prevent Plaintiff from having standing in this matter. Righthaven LLC v. Vote For The Worst,
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`LLC, et al., Case No. 2:10-cv-1045-KJD-GWF (Doc. No. 41 and 42). Specifically, Plaintiff alleges
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`that this amendment further clarifies and effectuates, “to the extent not already accomplished, what
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`has at all times been the intent of the parties - to transfer full ownership in copyright,” to Plaintiff.
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`This amendment, however, cannot create standing because “[t]he existence of federal jurisdiction
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`ordinarily depends on the facts as they exist when the complaint was filed.” Lujan v. Defenders of
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`Case 2:10-cv-01066-KJD-GWF Document 34 Filed 07/13/11 Page 6 of 8
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`Wildlife, 504 U.S. 555, 571 n.4 (1992) (quoting Newman-Green, Inc. v. Alfonzo- Larrain, 490 U.S.
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`826, 830 (1989)) (emphasis in Lujan). Although a court may allow parties to amend defective
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`allegations of jurisdiction, it may not allow the parties to amend the facts themselves. Newman-
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`Green, 490 U.S. at 830. As an example, a party who misstates his domicile may amend to correctly
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`state it. This is an amendment of the allegation. However, that party is not permitted to subsequently
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`move in order to change his domicile and amend accordingly. This would be an amendment of the
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`jurisdictional facts, which is not allowed. See id. Here, Plaintiff and Stephens Media attempt to
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`impermissibly amend the facts to manufacture standing. Therefore, the Court shall not consider the
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`amended language of the SAA, but the actual assignment and language of the SAA as it existed at
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`the time the complaint was filed.
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`B. Copyright Assignment
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`Even if the Court were to consider the amendments, these cosmetic adjustments do not alter
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`the fact that Plaintiff has failed to sufficiently allege whether or not Stephens Media assigned the
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`copyrighted Work to Righthaven pursuant to the SAA, as amended or not.
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`Pursuant to Section 3.1 of the SAA, Stephens Media retains the right to assign copyrights that
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`it owns and that it, among other things, considers a “material risk of infringement.” Once a copyright
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`is designated as such, it is assigned to Righthaven. See (Defendant’s Motion to Dismiss, Doc. No.
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`25, Exhibit A, p. 7 of 22). Section 7 of the SAA establishes how Stephens Media assigns copyright
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`content to Righthaven. Here, the SAA states:
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`Stephens Media shall effect the assignments to Righthaven of
`copyrights as required by [the SAA]…by executing a particularized
`assignment with respect to each copyright and each consistent with
`(and in form and substance the same as) the scope of assignment as set
`forth in the form of copyright assignment as embodied in Exhibit 1
`(each a “Copyright Assignment”). Stephens Media shall provide
`Notice to Righthaven of each copyright…that is required to be the
`subject of a Copyright Assignment…by no later than five (5) Business
`Days prior to the last day upon which each respective Copyright
`Assignment is required to be executed by Stephens Media as provided
`in Section 3.1.
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`(Defendant’s Motion to Dismiss, Doc. No. 25, Exhibit A, pp. 8-9 of 22) (Emphasis added).
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`Case 2:10-cv-01066-KJD-GWF Document 34 Filed 07/13/11 Page 7 of 8
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`The SAA clearly does not envision an all-encompassing assignment of all Stephens Media
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`owned copyrights, as Plaintiff alleges. The SAA sets forth guidelines for the assignment of each
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`copyright that Stephens Media identifies as a potential risk for infringement. Specifically, as stated
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`above, Exhibit 1 of the SAA is the legal memorialization of the terms set forth in Section 7. Through
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`this instrument, Stephens Media “transfers, vests and assigns,” all copyrights requisite to have
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`Righthaven “recognized as the copyright owner of the work.” Accordingly, the work must be
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`depicted as “Exhibit A,” and must be attached to Exhibit 1. Plaintiff acknowledges this fact because
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`Plaintiff directs the Court to an entire section of the Opposition devoted to a “Written Assignment,”
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`yet fails to provide a copy of the Assignment to the Work in question, pursuant to the SAA.
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`Furthermore Plaintiff’s reference to the Vote For The Worst case works against Plaintiff because it
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`provides a copy of the assignment pertaining to the work in that case. Additionally, Plaintiff
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`acknowledges that the purpose of the SAA is not to “effectuate the assignment of any work;” rather,
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`Exhibit 1 achieves this purpose. See (Plaintiff’s Opposition to Defendant’s Motion to Dismiss, Doc.
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`No. 29, p. 7 of 14).
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`C. Prior Rulings within this District
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`Finally, Plaintiff contends that multiple courts within this district have already determined
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`that Plaintiff has standing to bring claims for past infringement under the Silver standard based on
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`the plain language of the copyright assignment. Again, this Court is unable to conclude whether or
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`not the assignment confers standing upon Plaintiff because Plaintiff does not provide a copy of the
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`assignment for the Court’s consideration as it did in the prior cases within this district.
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`D. Plaintiff Lacks Standing to Bring this Action
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`Because the SAA prevents Plaintiff from obtaining any of the exclusive rights necessary to
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`maintain standing in a copyright infringement action and because Plaintiff fails to sufficiently allege
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`an assignment of rights from Stephens Media to Plaintiff, the Court finds that Plaintiff lacks standing
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`in this case. Accordingly, the Court dismisses Plaintiff’s cause of action.
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`///
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`Case 2:10-cv-01066-KJD-GWF Document 34 Filed 07/13/11 Page 8 of 8
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`IV. Conclusion
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`Accordingly, IT IS HEREBY ORDERED that Defendant Dean Mostofi’s Motion to Dismiss
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`is GRANTED.
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`DATED this 13 day of July 2011.
`TH
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`_____________________________
`Kent J. Dawson
`United States District Judge
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