F OR P UBLICATION



### UNIT E D ST AT E S CO URT O F APPE AL S FO R T H E NINT H CIRCUIT

M I N D E N P I C T U R

E S , I N C

. , Plaintiff-Appellant

,

v.

J O H N W I L E Y & S O N S , I

N C ., Defendant-Appellee

. No. 14-15267

D.C. No. 3:12-cv-04601-EMC

OPI NI ON

A ppeal from the United States District Court for the Northern District of California Edward M. Chen, District J u dg e, Presiding

Arg ued and Submitted March 13, 2015—San F rancisco California

F iled J uly 29, 2015

B e fore: J ohn T. Noonan, W illiam A. F letcher, and Morg an Christen, Circuit J udg es.

Opinion by

J udg e W

. F letcherM I N D E N P I C T U R

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SUMMARY *

Copyright

Reversing the district court’s judg ment , t h e panel h eld tha t Minden Pictures, I n c., a licensing ag ent for photog raphers, had statutory stand i n g under the Copy rig ht Act to bring an infring ement suit based on alleg ed violations

o f t h e terms of its licenses to J ohn W iley & Sons, I nc. , a tex tbook publisher.

The p anel held that ag ency a g reements between Minden and individual photog raphers convey ed an ownership interest in the photog raphers’ copy rig hts sufficient to permit Minden
to sue for infring ement. The a g ency a g reements transferred leg ally cog niz able rig hts to reproduce the copy rig h ted photog raphs and to authoriz e the distribution and the display of the photog raphs by g ranting licenses to third p arties. The panel held that even thoug h the photog r aphers a l s o retained the rig ht to i s sue licenses themselves, Minden h eld an “ex c lusive license” to g rant licenses to ot hers, and therefore had standing to sue.

COUNSEL

Maurice Harmon (arg

ued), Christopher Seidman, Greg ory N

. Albrig ht, and Alex Rice Kerr, Ha r m o n & Seidman, L L C, Grand J unction, Colorado, for Plaintiff-Appellant.

* T h is su m m ary co n stitu

tes n o part o f th e o p in io n o f th e co u rt. It h as b een p rep ared b y

co u rt staf

f f o r th e co n v en i en ce o f

th e read er.M I N D E N P I C T U R

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Steven David Z ansberg (arg ued), Michael B ey lkin, a nd Christopher B eall, L evine Sullivan K och & Schulz

, L L P, Denver, Colorado, for Defendant-Appellee.

OP INION

W

. F L ETCHER, Circuit J udg e:

Minden Pictures, I nc., is a stock p hotog raphy company that serves as the licensing ag ent for doz e ns of p hotog raphers, authoriz ing third parties to use copy r ig hted photog raphs. Under the terms of its contr a ct s with the p hotog raphers, Minden h as the ex clusive rig ht to act as their licensing ag ent, but the photog raphers res e r v e their rig hts to use the photog raphs themselves and to license them to others.

Minden broug ht an infring ement suit under the Copy rig ht Act ag ainst J ohn W iley & Sons, I nc., a tex tboo k p u b l i sher, alleg ing that W iley had substantially ex ceeded t h e scope o f the licenses g ranted by Minden by p ublishing f ar more copies of books containing the photog raphs than permitted under the licenses. T he question in this ap p e a l is whether Minden, a s

a licensing ag ent, h a s statutory standing under the Copy rig ht Act to bring an infring e ment suit based on alleg ed violations of the terms of its licenses to W iley

. The district court h eld that Minden does not have s t a n d ing under the Act. W e disag ree and reverse.

I . B ackg round

Minden Pictures, I nc., (“Minden”) is a 26-y ear-old stock photog raphy company based in W atsonville, California. According to Richard Minden, its founder and CEO, MindenM I N D E N P I C T U R

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is “one of the world’s premium providers o f w i l d life a nd
nature photos.” Minden acts a s a licensing ag ent for i n d i v i d u a l p h o t o g r a p h e r s , d i s p l a y i n g c o p y r i g h t e d photog raphs on its website and g r anting licenses to end users, including tex tbook publishers, for the limited use of the photog raphs. Minden receives a commission, a s much as 50
per c e n t , o f the fees that end users pay to reproduce the photog raphs.

Until recently

, Minden e n tered into “Ag ency Ag reements” w ith the individual photog raphers for whom it

serves as a licensing ag ent. The A g ency Ag ree m e n t s at the heart o f this case were ex e cuted between 1993 and 2008. The A gr e ements v a r y s o m ew h at f r o m p h o t o gr a p h e r t o photog rapher, but t h ey share similar features. Each Ag reement contains an “authoriz a tio n ” c lause in w hich the photog raphers ag ree to “ appoint[ ] [ Minden] as sole a nd

ex c lusive a g ent and representative with r e spect to the L icensing of any and all uses of I mag es ” i n the relevant territory

. The Ag reements also c o n fer upon Min d e n “the unrestricted, e x clusive r ig ht to distribute, L i c ense, and / o r

ex p loit the I mag es

. . . without seeking special permission to do so.” The Ag reements define “L icensing ” as “ the marketing

, g r ant, lease, sa l e , use or other ex ploitation o f reproduction rig hts to an I mag e.”

The Ag ency A g reements limit in s o me a spects, but preserve in others, the photog raphers’ ability to make use of their photog raphs themselves. The Ag reements specify that the photog r aphers “ shall n o t issue any L icenses to any I mag es, e x cept as provided under this Ag reement.” B ut they

r e serve some authority for personal a nd, in some cas e s , c o m mercial u se. All o f the Ag reements p e rmit t h e photog raphers to use the imag es “for personal promotion.”M I N D E N P I C T U R

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Some pe r m it the p hotog raphers to issue licenses for the

“ e d itorial use of imag es in books and mag az ines.” A sma l l number permit th e p hotog raphers to license imag es for “commercial” uses, or for “ advertising .” I n other words, the Ag reements g enerally permit the photog r aphers to issue some licenses themselves, s u b

ject to the terms of the individual Ag reements, but prohibit them from hiring a licensing ag ent other than Minden.

F inally

, each Ag e ncy A g ree m e nt contains a “copy rig ht” clause. That clause states that “[ a] ll imag es shall at all times remain the sole and ex clusive property of the Photog rapher, including the copy

rig ht.” Many also state that the copy rig ht “shall be h eld by [ Minde n ] s o l ely for L icensing purposes described h erein.” The Ag reements provide t h at they shall remain in f

orce for five y ears. At the end of that period, the Ag reements automatically renew unless either party provides notice of termination.

On e company to which Minden g r a nted licenses is an educational publisher, J ohn W iley & Sons. According to its br i ef, W iley is “a 206-y ear-old p ublisher of tex tbooks, professional and trade books, as well as other publications.” Minden a lleg es that Wiley substant i ally ex ceeded the scope of the limited licenses it g rante d Wiley — for ex ample, b y printing hu n d r eds of thousands o f c opies of tex tbooks contain i n g photog raphs licensed by Minden despite h aving

ac q u ired a license to print only 20,000 copies of such photog raphs. Minden attaches to its c omplaint 228
copy rig hted photog raphs taken by 3 6 photog r aphers that it alleg es it licensed to W iley

. Minden alleg es t h a t W iley has
eng ag ed in a long standing p ractice of copy rig ht infring ement,

c iting e leven other c ases broug ht ag ainst W iley “ all e gi n g copy rig ht infring ement claims nearly identical to thoseM I N D E N P I C T U R

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asserted by Plaintiffs in this action.” The merits of Minden’s alleg ations are not b e fo r e u s. This appeal c oncerns only whether Minden is permitted by the Copy rig ht Act to bring an infring ement suit ag ainst W iley for ex c eeding the scope of its licenses.

Minden beg an to contemplate infring ement litig ation
ag ains t W iley in or around 2 010. I n March 2010, many o f Minden’s affiliated photog raphers ex ecuted an additional set of ag reement s ( the “2010 Assig nments”) that purported to convey an o wnership interest i n t h e copy rig hts to Minden. Under the 2010 Assig n ments, Minden was autho r i z e d “to
p r esent, litig a te, and settle any accrued or later accruing claims, causes of action,

. . . o r lawsuits” over “unauthoriz ed

uses of the I mag es.” B ut Minden “ag ree[ d] t o r e a s s ig n its ownership o f the I mag es back to the [ p h o tog raphers] immediately

upon the conclusion of any such litig ation.”

I n November 2011, Minde n b r oug ht an infring ement

ac t i o n ag ainst another publishing company , Pearson Education, I nc., alleg ing

, as in the cas e n o w before u s, that “the licenses it sold to Pearson were limited, and that Pearson

ex c e eded those limitations by printing tens, and in s o m e instances, hundreds o f thousands of unauthoriz e d c opies o f the licensed photog raphs.” Minden Pictures, Inc. v. Pearson Educ., I nc. , 929 F

. Su p p

. 2d 962, 964 (N.D. Cal. 2013). Minden based its claim to standing under the Copy rig ht A ct on both the Ag ency A g reements and the 2010 Assig nments. The district court struck all Minden’s alleg ations based on the Ag ency Ag reements a s a discovery sanction, and rejected its claims based on the 2010 A ssig nments, concluding that they
convey ed no more than a “ bare rig ht to sue.” Id. a t 9 6 8

. Minden appealed, but the parties late r stipulated to a dismissal of the appeal with prejudice.M I N D E N P I C T U R

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Minden broug ht the c u rrent in f r i ng ement action ag ainst W iley in Sep t e m ber 2012. As in Pearson
, Minden alleg ed that both the Ag ency Ag reements a nd the 2010 Assig nments g ave it sufficient ownership i n terest in the photog raphs to allow it to bring an infring ement suit. After the compla i n t

was filed, Minden and the photog raphers ex ecuted an additional set of assig nments (the “2 013 Assig nments”). These assig nments c o nvey ed to Minden “ co-ownership of the
copy rig hts in the I mag es n ot previously assig ned to Minden.” U n l ike the 2010 A ssig n ments, however, the 20 1 3 Assig nments did not provide for their own termination upon the conclusion of litig ation.

W iley moved to d ismiss the action under F ederal Rule o f Civil Procedure 12(b)(1), arg uing that because Minden did

no t h a ve an ownership interest in the copy rig h ted photog raphs it had licensed to W iley

, Minden lacked standing under the Copy

rig ht A ct to bring an infring ement suit. W iley subsequently broug ht a motion for summary judg ment under Rule 56 on substantially

the same g round.

W e note that W iley ’s Rule 12 m o tion to dismiss should have b een broug ht under Rul e 1 2 (b)(6) for failure to state a claim rather than under Rule 12(b)(1) f or lack of jurisdiction, for the issue is statutory rather than Article I I I standing

. See Lexmark I

nt’l, Inc. v. Static Control Components, I n c. , 134 S. Ct. 1377, 1387 ( 2014); Cetacean Cmty. v. Bush

, 386 F .3d 1169, 1172–73 (9th Cir. 2004). That is, the issue is whether Minden has a statutory rig ht to sue for infring ement under the Copy rig ht Act, which is p roperly addressed in a motion under Rule 12(b)(6), not whether Minden has satisfied the requirements of Article I I I
, w hich is properly addressed in a motion under Rule 12(b)(1). See Cetacean Cmty.
, 3 86 F.3dM I N D E N P I C T U R

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at 1173. W iley ’s incorrect r e liance on Rule 12(b)(1), however, does not materially affect the appeal now b efore us.

The district court r

uled for W iley in all respects. F irst, the
court concluded that the Ag ency Ag reements did not confer standing under the Copy

ri gh t A ct to b ring an infring ement suit. M inden Pictures, Inc. v. J

ohn W iley & Sons, Inc.
, 10 F

. Supp. 3d 1 117, 1120 ( N.D. C a l

. 2 0 14). The district court reasoned t h at, rather than transferring ownership of the
copy rig hts to Minden, the Ag ency Ag r ee m e n t s “appear to

ex p ressly disavow any such int ent.” Id. at 1125. I n the court’s view, the fact that Min d e n was authoriz ed, as the

ex c lusive licensing ag ent for the photog raphers, to issue licenses to use the copy

rig h ted photog raphs did not g ive it a sufficient property interest in the photog raphs to permit it to br i n g a n infring ement suit. Id. at 1129. Second, the court held that Minden could not rely on the 2010 Assig nments a s a basis for its cause of action because it was issue-precluded by the judg ment in Pearson

. Third, invoking the g eneral rule that standing is evaluated by looking t o “ the facts as they exist when the complaint is filed ,” Luja n v. Defenders of W ildlife

, 504 U.S. 555, 569 n.4 (1992) (emphasis in orig inal), the cou r t h eld that Minden could not rely o n the laterex e c uted 2013 Assig nments.

Minden a ppeals. F or the reasons that follow, we r everse.

I I . Standard of Review

W e r eview de novo w hether a p arty has standing under the Copy rig ht Act to sue for infring e ment. Righthaven LLC v. Hoehn , 716 F

. 3d 1166, 1169 (9th Cir. 2013).M I N D E N P I C T U R

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I I I

. Discussion

Minden makes three a

rg uments o n appeal. F irst, it arg ues that the Ag ency Ag r eements convey e d an ownership interest i n the copy

rig hts sufficient to permit Minden to sue f o r infring ement. Second, it a r g ues that the d istrict court erred in concluding that the judg ment in Pearson had issue-preclusive effect in its action ag ainst W iley

. Third, it arg ues that the district court erred in declini n g t o consider the 2013 Ag reements on the g round that they wer e e x e cuted a fter Minden filed its complaint. Be cause w e ag ree with Minden that the Ag ency Ag reements conv e y ed a sufficient property i n t erest in the photog raphs to permit it to bring a n infring ement suit

, we d o n ot reach its second a nd third
arg uments.

Under § 501(b) of the Copy rig ht Act, only “[ t] he leg al o r beneficial owner of an ex c lusive rig ht u nder a copy rig ht is entitled

. . . to institute a

n action for any infring ement of that particular rig ht committed while he or she is the owner of it.” 17 U.S.C. § 501(b). The “ex clusive r ig hts” in a c opy rig h t a re enumerated a t § 106 of the Act. T h ey are the rig hts “to do and to authoriz e” others to do six thing s with the copy rig h ted work: to reproduce the work, to prepare derivative works based upon the work, to distribute copies of t h e w ork, to perform the work publicly

, to display the work publicly

, a nd
to record and perform the w o r k by means of an audio transmission. See id. § 106. W e have held that this list o f “ex c lusive r i gh t s ” is e x haustive. Silvers v. Sony Pictures Entm’t, Inc.
, 402 F .3d 881, 883–84 (9th Cir. 2 005) (en banc).

Until the passag e of the Copy r i gh t Act of 1976, a copy rig ht was seen as “ an indivisible ‘bundle of righ t s ,’ which were ‘incapable of assig nment in parts.’” See GardnerM I N D E N P I C T U R

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v. Nike, Inc.
, 279 F. 3 d 7 74, 778 (9th Cir. 2002) (quoting 3 M e lville B

. Nimmer & D avid Nimmer, Nimmer o n Copyright § 10.0 1 [ A ] (“ Nimmer ”)). The Copy

rig ht Act, however, “eradicated much of the doctrine of indivisibility

, ” id. , by permitting a copy

r ig ht owner to transfer “[ a] ny of the

e x c l u sive rig hts comprised in a copy rig ht, including any subdivision of any of the[ se] rig hts, ” to someone else. 17 U.S

. C

. § 2 0 1 (d)(2). Thus, an author of a novel mig ht
convey the rig ht to publish a hardcov e r e dition of the novel to one person and the rig

ht to create a movie based upon the novel to another. See Hype rQuest, Inc. v. N’Site Solutions, Inc.
, 632 F .3d 377, 383 (7th Cir. 2011); Nimme r , supra , at § 10.02[ A]

.

F urther, the Copy

ri gh t Act permits the c opy rig ht owner to subdivide his or her interest in w hat o therwise would b e a wholly owned “ex clusive rig ht” by authoriz ing the owner to
t ransfer his or her share, “in whole or in part,” to s o m e o n e

e l se. 17 U.S.C. § 201(d)(1). I t specifies that the owner can transfer a rig ht, or a share of such a rig h t, via “ an assig nment,

. . . ex c lusive license, or any other convey ance,

. . . whether

or not it is limited in time or place of effect.” Id. § 101. That is, either an assignment (w h i c h t r a nsfers leg al title to the transferee) o r an exclusive license (which transfers an

ex c lusive pe r m i s s ion to use to the transferee) qualifies as a “transfer” of a rig ht in a copy rig ht f or the purposes o f the Act. See Corbello v. DeVito
, 777 F .3d 1058, 1064 (9th Cir. 2 015); HyperQuest
, 632 F .3d at 383; Nimmer
, supra , at § 10.02[ A]

.

I t is established law under the 1976 Act that any party to whom such a rig ht has been transferred — whethe r v i a an assig nment or an ex clusive license — has standing to bring an infring ement action based o n that rig h t. See Sybersound R e c o rds, Inc. v. UAV Corp.
, 5 17 F .3d 1137, 1146 (9th C i r.M I N D E N P I C T U R

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2008); Nimmer
, supra , at § 12.02[ B ] [ 1]

. Thus a party g ranted

an ex cl u s i v e license to display a work may bring an infring ement action challeng ing the unauthoriz ed display o f that work by another party , even thoug h the licensee d oes not hold leg al title to the work. Nimmer
, supra , at § 12.02[ B ] [ 1] (“As the owner of ‘an ex clusive rig ht under a copy r i gh t,’ an

ex c lusive licensee is ‘entitled

. . . to institute an action for any infring ement . . . .’” (quoting 17 U.S.C. § 501(b))).

However, a party

g ranted a mere “nonex clusive license”

— as, in this case, W iley ’s license to reprint a copy rig h ted photog raph in a tex tbook — cannot bring an infring ement suit. See 1 7 U

. S

. C

. § 101; Eden Toys, Inc. v. Florelee Undergarment Co., Inc.
, 697 F .2d 27, 32 (2d Cir. 1982). W iley arg ues that Minden cannot b ring an infring ement suit because Minden has b een g ranted, at m o s t , a “nonex clusive license” to authoriz e the reproducti o n , distribution, a nd display of the photog raphs. W e disag r ee.

F irst, we have no doubt

— indeed, we do not understand W iley to c ontest — that the Ag ency Ag r eements transferred

an interest in a leg ally c og n iz able rig ht in the photog raphers’
copy rig hts. The Ag e n cy Ag reements ex plicitly p ermit Minden to reproduce, and to a uthor i z e t he reproduction of, the copy rig hted photog raphs. Reproduction is one o f the six “ex c lusive rig hts” described in the Act. 17 U.S.C. § 106(1) (listing

, inter alia

, the rig h t “to r e p roduce the copy rig ht ed work in c opies or phonorecords” a s an ex clusive rig ht). F urther, W i l ey does not appear to dispute that, as the photog raphers’ l i censing a g ent, Minden had the rig ht “to authoriz e” both the distribution and the displa y of the photog raphs by g ranting licenses to third parties s u c h a s W iley

. The rig ht “to authoriz e” these acts is a lso an “ex c lusive rig ht” under the A c t

. S ee id. § 1 06(3), (5).M I N D E N P I C T U R

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Minden thus had an i n terest in a leg ally cog niz able rig ht under the copy

rig hts. The only question is w h a t k ind o f interest Minden possessed.

W iley makes two arg uments reg arding why the Ag ency Ag reements did not convey a sufficient interest to Minden to permit it to bring an infring ement action. F irst, W iley arg ues that the photog raphers did not assign thei r c o p y rig hts (or a rig ht under their copy rig hts) t o Minden under the Ag reements. We ag r ee that the Ag ency Ag reements did not assig n the c opy

rig hts themselves. The Ag reements ex plicitly
state that the photog raphs shall “remain the s ole a nd

ex c lusive p roperty of the Photog rapher, including the
copy rig ht.” The Ag reements also impose certain limitations

on Minden not g enerally associated w i t h leg a l title. F o r instance, Minden must seek t he photog raphers’ approval before issuing certain kinds of l i ce n s es. F u rther, the Ag reements permit either p arty to end the licensing relationship at specified intervals. W e thus ag r ee with W iley that the Ag r eements d o not make Minden the leg al owner of the copy r ig h ts.

W iley a rg ues, second, that, read as licenses

, the Ag ency Ag reements are no more t

han “nonex clusive licenses” that a re insufficient to permit Minden to bring suit. W e disag ree. The thrust of W iley ’s argu m e n t is that the Ag ency Ag reements do not g rant “ex clusive licenses” t o M i n den to g rant licenses to third parties, because the photog raphers retain the rig ht to issue licenses t h emselves. That is, W iley
arg ues, because Minden was not the sole party authoriz e d to issue licenses to the photog r aphs, it cannot have h e ld an “ex c lusive license” that would permit it t o b ring suit under
t h e Act. This arg ument runs contrary to the divisib i l i t y principle embodied b y th e 1 9 7 6 Act, and to the bulk of theM I N D E N P I C T U R

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c a s e law and commentary in this field. W iley ’s arg u ment i s inconsistent with the notion that, under the 1976 Act, a sing le
copy rig ht, or rig ht thereunder, may be divi ded b etween parties, with e ach co-owner entitled t o s u e to protect his o r her interest in the rig ht

. As we recently ex plained in the
contex t of copy

rig ht o wnership, “the word ‘ex clusive’ in [ the Act] cannot mean that only sole owners possess ‘ex cl u s i v e’ rig hts.” Corbello

, 777 F

. 3d at 1065. “ I f an ‘ex clusive rig h t’ could only be possessed b y a sole o wner of a copy rig ht, a coowner would b e u n a ble to b ring an infring ement action to protect his interest.” Id.

W e see no reason why the divisibility principle should not apply with e q u al force w hen the interest g ranted is an

ex c lusive license to g rant licenses t o others. The reason the Act prevents a holder of a “nonex clusive l i c e nse” to use a copy rig hted p hotog r aph f

r om bring ing an infring e ment action
ag ainst others who use the same photo gr a ph is that such a licensee has no more than “a privileg e that protects him from

a claim of infring ement b y the owner” o f the copy rig ht. W

. Elec. Co. v. Pacent Reproducer Corp. , 42 F .2d 116, 119 (2d Cir. 1930); se e R o ger D. B lair & Thomas F

. Cotter, The Elusive Logic of Standing Doct r i n e in Intellectual Property Law
, 74 Tul. L

. Rev. 1323, 1347 (2000). Th a t i s , b e cause such a licensee has been g ranted r i gh ts only vis-à-vis the licensor, n ot vis-à-vis the w orld, he or she has no leg al rig ht
to ex clude others from using the copy r ig hted work, and thus

no standing to b ring an infring ement suit. See Hyperquest
, 632 F .3d at 385; B lair & Cotter, supra , at 1347. B ut w hen a licensee h a s been g ranted r ig hts vis-à-vis the world — even if he or she shar es those rig hts with another party , including the owner o f the copy rig ht — w e s e e n o thing in the Copy rig ht Act that requires us to deem such an arrang ementM I N D E N P I C T U R

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a mere “nonex clusive license” insufficient to g ive rise t o standing to sue.

Patent law, w hich has lon g r ecog niz ed the distinction between ex c lusive and nonex clu s i v e licenses, f ollows the rule

we observe h e r e

. As early as 1930, the Second Circuit rejected the arg ument that the ex istence of a residual interest in another party turns an ex clusive license into a nonex clusive

one:

The definition of an ex clusive lice n s e

. . . mig ht be t houg ht to imply that an ‘ex c lusive licensee’ is a sole licensee. B ut we do not so understand it. A bare license mig ht be
outstan d i n g in one when the patent owner g rants a license to another accompanied b y t he promise that the g rantor w ill g i v e n o further l i c enses. I n such a case, the second licensee needs the protection o f t h e rig h t o f joinder in a suit ag a inst infring ers as much a s thoug h he were so l e licensee. W e see no

reason why h e should not have it, and we think the authorities recog niz e his rig ht.

W estern Elec. Co.
, 42 F .2d at 119. More recently

, the F ederal Circuit has adopted the same p os i t i o n. See W iAV S olutions LLC v. M otorola, Inc.
, 631 F .3d 1257, 1266 (F ed. Cir. 2 010) (rejecting the arg u ment that “ that for a licensee to be an

ex c lusive licensee o f a patent, the licensee m u s t b e the only party with the ability to license the patent”); Inte l l e ctual Prop. Dev., Inc. v. T

C I Cablevision of California, Inc.
, 248 F .3d 1333, 1347 (F e d. C i r

. 2001). I n the words of o ne prominent treatise, “one who takes an ‘ex clusive’ li c ense subject to a preex isting license may lack true ex clusivity

, butM I N D E N P I C T U R

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nonetheless possesses the leg al rig ht to ex clude third parties (other than the ex isting licensee)

. . . and, thus, h a s

. . . standing to sue f

or infring ement.” 2 Rog er M. Milg ram, M ilgram on Licensing § 15.08. Put more simply

, we a gr e e with the Seventh Circuit t hat the essence of an “ex clusive” license u nder the Act is that “ the copy rig ht holder permits the licensee to use the protected material for a specific use a nd further promises that the same permission will not be g iven
to others.” I.A.E., Inc. v. Shaver

, 7 4 F .3d 768, 775 (7th Cir. 1996).

Minden has been g iven just such a promise. Un d e r the Ag ency Ag reements, Minden is the “sole and ex clusive ag ent and representative with respect to the L icensing of a ny and all uses” of the p hotog raphs. T hat is, the photog raphers have promised that Minden, and only Minden, will have the power,

as the photog raphers’ licensing ag en t , to authoriz e third parties to reproduce, distribute, and d isplay the photog raphs. That the photog raphers have retained some limited deg ree o f authority to g rant licenses themselves d oes not eliminate Minden’s interest in the copy rig h t as the sole entity

to act as the photog raphers’ licensing ag ent. I t merely means that both Min d e n and the photog raphers, under the terms o f the Ag reements, ca n p revent those third parties w ho have
not received p ermission to use the photog rap h s from using them. To hold otherwise w ould be inconsistent with the divisibility

principle embodied by the 1976 Act.

To hold otherwise would als o b e inconsistent with

common sense. I f the photogr a p h ers h ad never entered into the Ag e ncy Ag reements, b u t instead had issued licenses directly to Wiley

, there w ould be no doubt that they could bring infring ement actions over the violations Minden alleg e s i n its complaint. W e see n o r eason why

, having appoi n t e dM I N D E N P I C T U R

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N W I L E Y & S O N S 16

Minden to manag e the commercial u se of th eir photog raphs in the first instance as their licensing a g ent, the photog raphers should not also be able to rely on Minden to pr o t e ct a nd defend the licenses that it has issued on their behalf. Nothing in the tex t of the Copy rig ht Act, nor in the A ge ncy Ag reements, compels a contrary conclusion.

B y honoring the p a

r ties’ contracting ex pectations, we also

remove what would otherwise b e a sig nificant practical disadvantag e in seeking to protect a copy rig hted w o r k

. I f Minden could not b ring a n infring e ment suit on behalf of the photog raphers for whom it serves as a licensing ag ent, those photog raphers would have to bring suit individually

, either in individual a c t i o n s or in a sing le suit under F ederal Rule o f Civil Procedure 20. B o th procedural alternatives have sig nificant d isadvantag es. I n a suit ag ainst W iley broug h t b y an individual photog rapher, alleg ing infring ement only a s to his or her own photog raphs, the e x penses of litig ation would
very likely dwarf any potential recovery

. And in a suit under Rule 20, both the total cost o f litig a tion and t h e b u r dens o f coordination w ould be sig nificant, g iven the complex ities o f litig ating on behalf of thirty -some n a m e d plaintiffs. The practical disadvantag es of these tw o alternatives compared with the prospect of licens i n g ag e n ts bring ing suit as sole plaintiffs are likely obvious to defendants such as W iley

, a nd it is not implausible that Minden’s inability t o bring an infring ement suit would be a n incentive to eng a ge in infring ing behavior.

B ecause w e conclude that the Ag ency Ag reements c o n v e y the rig hts to reproduce, distribute, and display the photog raphs to Minden via a n “ex c lusive license” to gr a nt l i c e n s e s to third parties, we hold that Minden may bring an infring ement action to r e medy th e unauthoriz e d reproduction,M I N D E N P I C T U R

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distribution, and display of the p hotog raphs by those to whom it has g ranted licenses. W e do n ot reach Minden’s remaining
arg uments.

Conclusion

W e h old that Mi n d en has standing to bring an infring ement action under the Copy rig h t Act. We t h e r e fo re reverse the judg

ment of the district court.

REVERSED.