Righthaven hit with third fair use loss over R-J material

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A Kentucky man did not infringe on a copyright when he posted an entire Las Vegas Review-Journal column on a message board without authorization, a federal judge ruled today.

The ruling by U.S. District Judge Philip Pro in Las Vegas on fair use grounds is the third fair use loss for Righthaven LLC, which sues over Las Vegas Review-Journal and Denver Post material. Earlier losses over Review-Journal material involved entire and partial R-J stories.

Pro today dismissed a Righthaven lawsuit against Wayne Hoehn on grounds that Righthaven lacks standing to sue over Review-Journal material, as already determined by another federal judge in Las Vegas.

Perhaps just as significantly, Pro’s ruling found Hoehn’s post of the column on the madjacksports.com site was protected by fair use as Hoehn did not profit from the post, the column was largely informational as opposed to being creative and that Righthaven presented no evidence that Hoehn’s posting of the column harmed the market for the column.

The Review-Journal column at issue, by then R-J Publisher Sherman Frederick, was called "Public employee pensions – we can’t afford them."

"Righthaven argues that the market for the work (column) was impacted negatively because potential readers are able to read the work on the website (where it was posted) and would have no reason to view the work at its original source of publication. However, Righthaven has not presented any evidence of harm or negative impact from Hoehn’s use of the work on the website between Nov. 29, 2010, and Jan. 6, 2011," Pro wrote in his ruling.

Hoehn's attorneys, including J. Malcolm DeVoy IV and Marc Randazza of Randazza Legal Group in Las Vegas, had argued that the Righthaven lawsuit was filed "to wrest a quick settlement from Mr. Hoehn on shaky copyright infringement grounds, based upon questionable rights -- rights it purchased from the author only after Righthaven discovered Hoehn’s post, for the sole purpose of filing suit against Hoehn."

"Like other Righthaven targets, Hoehn is not a large business or well-funded entity, but an individual who posted content from the Las Vegas Review-Journal to a website in order to foster an online discussion about the article itself," their filing for Hoehn said. "This commonplace conduct permeates the Internet to a degree where Righthaven would have to file lawsuits in perpetuity to make it halt – if the law gave it a right to make it halt."

Hoehn’s attorneys suggested that far from being a rogue copyright law violator, he is "a decorated veteran of the Vietnam War" with the Silver Star, Bronze Star Medal and the Purple Heart among his awards. He's also the proprietor of Mid-States Insurance Services in Bowling Green, Ky., which has an A+ rating from the Better Business Bureau, Hoehn's filing said.

Despite last week's ruling by Judge Roger Hunt that Righthaven lacks standing to sue over Review-Journal material, Righthaven says amendments of May 9 to its lawsuit contract with Review-Journal owner Stephens Media LLC give it the definitive right to sue.

Pro, however, rejected that argument today and ruled Righthaven still lacks standing.

Pro noted Righthaven CEO Steven Gibson and Mark Hinueber, general counsel of Stephens Media, had filed court declarations May 9.

"Both Gibson and Hinueber state that it was the parties’ intent to grant all ownership rights in the work to Righthaven together with the right to sue for all past, present, and future copyright infringement," Pro wrote in his ruling.

But Pro, in looking at the details in the amended lawsuit contract, found Righthaven still lacks standing as Stephens Media still maintains too much control over the copyrights it assigns to Righthaven. Under case law, a party filing copyright infringement suits has to have exclusive ownership of copyrights and Righthaven still doesn't have that, Pro found.

"Even assuming that the May 9, 2011, clarification (to the contract) can change the jurisdictional facts as they existed at the time of the filing of the suit, it still does not correct the deficiencies with respect to lack of standing," his ruling said. "It does not provide Righthaven with any exclusive rights necessary to bring suit."

"The May 9, 2011, clarification provides Righthaven with only an illusory right to exploit or profit from the work, requiring 30 days advance notice to Stephens Media before being able to exploit the work for any purpose other than bringing an infringement action. Stephens Media has, in its sole discretion, the option to repurchase the copyright assignment for a nominal amount within 14 days, thereby retaining the ability to prevent Righthaven from ever exploiting or reproducing the work. Stephens Media’s power to prevent Righthaven from exploiting the work for any purpose other than pursuing infringement actions is further bolstered by the clarification’s provision that every exploitation of the work by Righthaven other than pursuing an infringement action without first giving Stephens Media notice constitutes irreparable harm to Stephens Media," Pro's ruling said.

"Stephens Media may obtain injunctive relief against Righthaven to prevent such `irreparable harm' and, pursuant to the clarification, Righthaven has no right to oppose Stephens Media’s request for injunctive relief. Accordingly, Righthaven does not have any exclusive rights in the work and thus does not have standing to bring an infringement action," Pro wrote.

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  1. Why did Judge Pro talk about "fair use" when he dismissed the case on lack of standing? That is just bad practice, in my opinion. With any luck the commentary regarding "fair use" will be moot and not useable by others as precedent.

    Again, Righthaven (and by extension Stephens Media) are having the exact opposite effect on copyright protection than that they (allegedly) sought to achieve.

    If Stephens Media wants to have any hope of salvaging value from this mess it needs to direct Righthaven to drop all remaining cases, then file on its own behalf against those who are not borderline cases.

  2. Righthaven LLC is just a giant parasite made up of greedy lawyers. Righthaven LLC doesn't write any articles for the paper but evidently has an agreement with R-J Publisher Sherman Frederick, that if they find that someone has published something from the R-J they can copyright it for the sole purpose to make a quick buck and split it with Frederick. If you come upon a snake and a lawyer at the same time, you better shoot the lawyer first.

  3. Given all the facts - I think one thing is clear - Righthaven and Stephens Media engaged in scheme that was intended to force people into settlements with threats of litigation.

    The idea that Stephens Media has standing to sue if they hire independent counsel will result with more bad news.

    Lets put things in perspective. The idea behind copyright is to protect against infringements. The general practice in these cases involves a first step before litigation - Cease and Desist letter to the alleged infringing party to stop the infringement - this usually works.

    Here, Stephen Media did not do what is generally practiced. Instead, Stephen Media hired a firm, drafted an agreement where the firm had an interest in the litigation and they failed to disclose this agreement. In fact, Stephen Media and Righthaven, through their counsel of record, made flagrant misrepresentations to the court that Righthaven had exclusive rights to the alleged infringed copyright.

    In other words, Stephen Media, instead of hiring a firm, or inside counsel, to sue the alleged infringes - concocted this scheme where they would transfer their rights to Righthaven so that Righthaven can sue. However, because Stepehn Media was a party in interest, as described in their agreement, and Righthaven failed to disclose this fact, they mislead the court that Righthaven was the exclusive owner of the copyright material.

    Again, for those claiming that Stephen Media still has a legitimate claim undermine what is really going on here. This was a scheme to milk people for settlements with threats of lawsuits where the party suing didn't have sole interest in the copyright. aka Champerty and barratry.

  4. Righthaven, the best defender of fair use ever.

  5. Hey Steve, since Judge Po has issued commentary about the amended agreement, can you post the SAA as amended now?

    You've put up a story in the past that gave some of the information about the amendment setting prices for licensing and buy-backs ($1/yr and $10 respectively) but Po seems to allude to provisions that weren't talked about before (if my memory is correct.)

  6. This was a DOUBLE WHAMY! Not only did the Judge write this SECOND opinion (in addition to Judge Hunt in the Underground Democrat case...he did not just say 'see Righthaven v Underground' for ruling on lack of standing) spelling out under the law why Righthaven lacks standing. he ALSO made a clear ruling on why Hoehn's use constituted "Fair Use".

    He was able to accomplish all of this because 2 well plead and answered motions were before him...one to dismiss on lack of standing and one for summary judgment based on Fair Use of the material in question. Summary judgment is granted when there are not material issues of fact in controversy and a jury could not find but one way based on the facts before the court.

    Even though the judge found lack of standing he could also rule on the summary judgement since both sides had pleaded it extensively. Should righthaven somehow resurrect its standing the court has already made final judgment against them. And the courts well reasoned and referenced Fair Use ruling can assist other defendants. It seems the Judge knew it was an important issue and he found it important enough in the interest of justice to take it to completion, even though he could have passed.

  7. Thanks, Steve!

  8. I would think that paragraph 3.3 of the SAA would need to be changed as well since that states that SM has final say on who will be subject to litigation. I don't see how RH can say it has exclusive ownership and control if SM can veto any action taken.

    Again, I really don't see the need for SM to transfer ownership of a copyright in order for it to pursue an infringement action. There has to be some interesting financial or bookkeeping reasons behind this.

    Of the rulings we have seen so far, I like Judge Hunt's reasoning the best. I think Judge Po's reasoning on "fair use" in this instance is somewhat weak, like that of Judge Mahan.

  9. Boftx,

    Wayne won a dismissal of subject matter jurisdiction; as well as a summary judgement RE: "Why did Judge Pro talk about "fair use" when he dismissed the case on lack of standing."

    Mike

  10. And on July 19, Righthaven filed a notice of appeal in the Hohen case.