Another judge threatens to dismiss Righthaven copyright suits

A fifth federal judge is threatening to dismiss newspaper copyright infringement lawsuits filed by Righthaven LLC.

Righthaven is a Las Vegas company that since March 2010 has filed 274 lawsuits alleging online infringements of material from the Las Vegas Review-Journal and the Denver Post. After many defendants settled, its litigation campaign has been interrupted this month by unfavorable court rulings over its standing to sue and a third fair-use loss.

U.S. District Judge Larry Hicks in Reno on Tuesday gave Righthaven 10 days to show cause why 10 suits he is handling should not be dismissed for lack of standing.

These cases are against Chris Brown Web Network, Fullthrottletv.net, Jeffrey L. Nelson, Hush-Hush Entertainment Inc., Wehategringos.com, Charles Coker, Gunner’s Alley LLC, Computer Services One LLC, John Kirk and Bob Sieber.

Hicks issued the order two weeks after U.S. District Judge Roger Hunt dismissed a Righthaven suit against the Democratic Underground for lack of standing.

In that case, Hunt found a copyright assignment Righthaven obtained from Las Vegas Review-Journal owner Stephens Media LLC did not assign Righthaven full ownership of the copyright — something needed for infringement lawsuits. U.S. District Judge Philip Pro later dismissed another Righthaven suit for lack of standing.

Judge James Mahan in Las Vegas is threatening to do the same thing, while Judge John Kane has put all the Righthaven cases in Colorado on hold pending resolution of the standing issue there.

“Standing to sue is an indispensable part of a federal court’s Article III (of the U.S. Constitution) jurisdiction and must be addressed by the court even if the parties fail to raise it,” Hicks wrote in his order Tuesday, noting that because of the rulings by Hunt and Pro, “substantial doubt exists as to Righthaven’s standing.”

Hicks’ order illustrates how different federal judges are dealing with the Righthaven standing issue. U.S. District Judge Gloria Navarro last week refused to dismiss a suit and noted the parties may want to explore the standing issue.

Separately involving Righthaven, a group closely associated with South Carolina attorney Todd Kincannon asked Hunt and Mahan for permission to participate as a friend of the court in key Righthaven lawsuits.

The group, formed in June 2010, is Citizens Against Litigation Abuse Inc. Earlier, it was involved in an unrelated political speech case before the South Carolina Supreme Court.

One case it wants to participate in is the Democratic Underground case being handled by Hunt, which is still alive because of a counterclaim against Stephens Media. The other is against the Pahrump Life blog, and Mahan is presiding over it.

In that case, Mahan has suggested Righthaven doesn’t have standing to sue and has ordered Righthaven to show cause why the case should not be dismissed.

A hearing on the show cause order has been pushed back to July 27.

Kincannon would represent Citizens Against Litigation Abuse in the Nevada courts if it’s allowed to participate.

Kincannon is already litigating against Righthaven in three courts. On Monday, he filed a complaint in the South Carolina Supreme Court on behalf of Citizens Against Litigation Abuse and another party, charging Righthaven is involved in the unauthorized practice of law.

In the Pahrump Life and Democratic Underground cases, Citizens Against Litigation Abuse wants to make the argument Righthaven is also practicing law without a license in Nevada.

In his Nevada filings Monday and Tuesday, Kincannon noted Righthaven potentially faces sanctions for failing to name Stephens Media as an interested party in its lawsuits — and has recently acknowledged Stephens Media is an interested party that can share lawsuit revenue.

“Based on that, the Righthaven cases no longer need to be decided according to the dictates of intellectual property law,” his filing said. “There is now a profoundly deeper problem with the Righthaven scheme, one so fundamental that no amount of rewriting (lawsuit contracts) can solve it.”

“Righthaven is an unauthorized law firm engaging in the unauthorized practice of law,” the filing said.

Kincannon also complained in his Nevada filings: “The Righthaven cases directly implicate freedom of speech and have an obvious chilling effect on core political speech on the Internet. A large proportion of Righthaven cases involve core political speech, as one would expect with lawsuits filed over material appearing in newspapers. Righthaven has sued political speakers from all over the political spectrum. From left to right, from radical to moderate; no group has escaped Righthaven’s litigation campaign.”

Righthaven through Tuesday had not responded to a request for comment to these assertions.

Also on Monday, the Democratic Underground, the defendant in a Righthaven lawsuit that’s also a friend of the court in the Pahrump Life case, made potentially related arguments about Righthaven in the Pahrump case involving “champerty” and “barratry.”

These concepts involve the unauthorized incitement, financing and prosecution of lawsuits by a party with no real interest in the dispute.

“Here, the very purpose of Righthaven violates the policy behind the doctrine of champerty: ‘that no encouragement should be given in litigation by the introduction of parties to enforce those rights which others are not disposed to enforce,’” said a filing by the Democratic Underground, citing case law.

Commenting on what he called “Righthaven’s illegal business model,” Democratic Underground attorney Laurence Pulgram wrote that Righthaven lawsuits are based on “sham” copyright assignments in which Stephens Media maintains actual control of the rights.

“Champerty has always been Righthaven’s business plan. Righthaven’s operating agreement makes clear that Righthaven has never intended to have any interest in the works it purportedly acquires, beyond obtaining a share of litigation proceeds,” wrote Pulgram, an intellectual property law expert at the San Francisco office of the law firm Fenwick & West LLP.

Pulgram also disputed arguments in a recent Righthaven filing co-signed by copyright expert attorney Dale Cendali of Kirkland & Ellis LLP in New York.

In that filing, Righthaven said its litigation is needed to combat misappropriation of news material and cited trademark and patent cases as backing up assertions its methods are legitimate.

Pulgram fired back Monday that there are substantial differences between copyright, trademark and patent law.

“The profound differences between the two areas of law (copyright and trademark) are reflected in their licensing requirements. For example, because trademark policy is intended to protect consumer interests by ensuring that consumers get the quality of good or service they expect when they purchase, ‘trademark licensing is permitted only so long as the licensor maintains adequate control over the nature and quality of goods and services sold under the mark by the licensee,’” he wrote, citing case law.

“Copyright law has no analogy to this rule because copyright is intended to protect and encourage creativity, not competition,” Pulgram wrote.

Patent law doesn’t help Righthaven, Pulgram suggested, because case law prohibits patent lawsuits involving assignments “where an assignor retains the right to terminate the assignees’ rights at will.”

(The Democratic Underground maintains that similarly, Stephens Media can terminate Righthaven’s right to sue over assigned copyrights at will).

Cendali and fellow Righthaven attorney Shawn Mangano also pointed out last week that the digital age has “allowed infringement to occur on a massive scale.”

“Righthaven was created precisely to stem this tide of unabashed copyright infringement on the Internet brought about by the technological ease of copying. While (opponents) go to great lengths to portray Righthaven’s business purpose in a negative light, there is nothing wrong with a party focused on protecting intellectual property — except, of course, from the perspective of an infringer,” they wrote.

Pulgram responded Monday that there are plenty of avenues available in the law for content owners to protect themselves without turning to Righthaven.

“Newspapers are an important part of American society. Many are rightly concerned about how to adjust their business models to the information age. To protect and encourage newspapers’ ability to write, edit, publish and distribute creative content to the public, newspapers should (and do) possess the right to sue over actual infringements of their copyrighted works, whether those infringements occur online or off,” Pulgram wrote. “They can engage an attorney to evaluate the situation, file a case if warranted, and collect whatever damages they are entitled to under the law. Dismissing Righthaven’s claim for lack of ownership, however, would do nothing to disturb that paradigm, and holding that Stephens Media is the true owner of the copyrighted work would only bolster it.”

In another Righthaven development, the anti-Righthaven group Righthaven Victims suggested that Review-Journal columnist and former Publisher Sherman Frederick, in a recent blog post about Righthaven, “may very well have his hands in the cookie jar” after posting without authorization several paragraphs from three blog posts by an attorney — more information than Righthaven has been known to sue over.

As reported by the Electronic Frontier Foundation in a post titled “Righthaven Cheerleader Wanted by Irony Police,” the information came from GametimeIP blogger Patrick Anderson.

“Frederick links to the three posts, and then copies, verbatim, from each. Five sentences from the first article, three from the second, and 10 sentences from the third,” the EFF said.

EFF staff attorney Kurt Opsahl found this all “quite ironic” as Righthaven had sued the Democratic Underground for just five sentences — or four paragraphs of a 34-paragraph RJ story about politician Sharron Angle.

“To bolster his claim that commenters are writing without thinking about the real IP (intellectual property) issues, Frederick does exactly what his company has contended was infringement. Without, apparently, thinking about it,” Opsahl wrote.

“The irony does not end there. Frederick claims that the bloggers writing about the decision ‘mischaracterize reality when it comes to newspaper attempts to control its own content,’” Opsahl wrote.

This means “he is unintentionally agreeing with the judge by admitting that the content is the newspaper’s — as opposed to Righthaven’s,” Opsahl noted.

The story took another twist when Anderson offered the three blog posts at issue for sale — giving a Righthaven-like buyer the opportunity to buy the content and then hit Frederick, the R-J and Stephens Media with a copyright infringement lawsuit.

(Another irony: Under Righthaven-created case law, particularly when a Las Vegas real estate agent was found to be protected by fair use in using part of an R-J story for commercial purposes, the potential defendants likely would have a good fair use defense if such a suit were filed.)

“It has come to my attention in the past week that the actions of numerous other organizations quite similar to the actions undertaken here have caused those organizations to encounter potential legal liability at the hands of, ultimately, the owner of the publication in the preceding link. While those organizations naturally deny any wrongdoing, the instigator of those legal actions would be adopting inconsistent legal positions to issue similar denials. Thus, targeted organizations may indeed value the rights to these three articles far above the value they hold to my personal organization,” Anderson wrote in his “for-sale” blog.

Frederick hasn’t commented on this controversy but did replace the text at issue in his blog post with links.

Also, Righthaven was due Tuesday to file its response to Hunt’s order to show cause why it should not be sanctioned for failing to disclose Stephens Media was an interested party in its lawsuits over R-J material. That response had not been docketed as of late Tuesday.

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  1. I think this unauthorized practice of law could potentially be the most damning to Righthaven. Righthaven is acting like a lawfirm and has set up a system to take a 50% contingency fee which would not be allowed even with a legitimate lawfirm as boftx has mentioned.

    What Sherman Frederick did was worse than what they claim the Righthaven Victims did. In his column he only gives a link and gives no attribution and he does not even put the lifted text in quotes so it is unclear to the reader if those are Frederick's words or the words of gametimeIP who Frederick did not even mention. The fact Frederick is not receiving disciplinary action at the LVRJ just shows how hypocritical the LVRJ and Stephens media really is and shows once again how the Righthaven arangment is not about copyright infringment but a method to profit from it.

  2. "U.S. District Judge Larry Hicks in Reno on Tuesday gave Righthaven 10 days to show cause why 10 suits he is handling should not be dismissed for lack of standing ... Charles Coker ..."

    What a GREAT article to wake up to in the morning! Today's going to be a good day; I can tell already!

  3. @Ken;

    "The fact Frederick is not receiving disciplinary action at the LVRJ just shows how hypocritical the LVRJ and Stephens media really is and shows once again how the Righthaven arangment is not about copyright infringment but a method to profit from it."...

    I sincerely hope that one day Shermy is called to task for his abbhorent behavior, as this whole shakedown cruise was devised & perpetrated by none other than.
    Sheer, unadulterated GREED.
    That's all there is to it.
    What kind of character...

  4. I have not checked other newspaper sites, but I assume they policies similar to those of Stephens Media and the Sun's.

    In the case of Stephens Media, they say you can use the headline and the first paragraph from a story. The Sun says 10% of the word count or 100 words, whichever is less. Both policies establish arbitrary limits on "fair use" that do not exist in copyright law itself.

    That is not to say that limits are not implied by copyright law. The law explicitly talks about use of copyrighted material in a face-to-face educational setting.

    There is a fundamental difference between the two in that the Sun is not limiting where the excerpt can come from. SM on the other hand, is not using a percentage or word count, and in theory, you could post a single paragraph story in its entirety without problem.

    I would have considered Sherm's usage to be covered by fair use even before he changed it given that he had taken relatively small excerpts. Though it is ironic that his usage would have been in line with the Sun's policy but not Stephens Media's.

    All of this points out the need for calm reasoning when these cases are being decided. I think that Judge Mahan and Judge Pro have done all of us a grave disservice by giving broad permission to copy entire works when there were substantial technical and ethical questions that should have been decided first.

    Beyond that, even if we grant that Righthaven has standing, they have completely failed to give arguments that are fairly obvious to me that could prove their position and result in reasonable rulings for all concerned.

  5. Its interesting that Righthaven has not yet filed a response to Judge Hunt's threat to impose sanctions. One thing for sure RIghthaven is bad at making deadlines. This is one that could prove very costly.

  6. boftx- In my view Judges Mahan and Pro have not in fact given "broad permission to copy entire works". Anyone who reads their rulings as doing so does this at their own peril. I also think that Judge Hunt was clear and thorough in his analysis of the relevant points in determining fair use by statute. Both are following established federal law which regarding fair use is clearly a case by case creation. Still it does have consistent requirements. The most obvious requirement to bring a copyright infringement action (aside from what seemingly should go without mention...ownership of the copyright) is DAMAGES.

    Pro found that Righthaven failed to prove any damages whatsoever.The defendant on that case posted the article on a message board, made no money from it, and Righthaven could not show it affected the original market. There were no substantial technical and ethical questions that should have been decided first.

    As for the various media outlets copyright 'policies' regarding word count or number of paragraphs, we should remember that these are merely 'promises' by the concerned entity that they will not sue if use follows their guidelines....it has nothing to do with the legal definition of "Fair Use".

  7. LawMed,

    I agree that Judge Hunt has done an exemplary analysis in his rulings.

    My concerns with Mahan and Pro's rulings are that they seem to be overly generous on the guidelines that deal with the nature and amount of the content used and also give too much weight to the "damage" standard. Copyright law allows for statutory damages without proof of actual damages.

    I am not defending RH by any stretch of the imagination, but I want solid rulings by the judges so all of us get a fair shake.

  8. boftx- I do understand and appreciate your position and desire for avoiding an anti-righthaven climate without reasoned legal analysis. Fair Use certainly is a concept without a strict interpretation,

    However, the four point test in Section 107 we have all heard by now directs two of its items at commercial profit, market value and inherent value....in other words, damages.:

    The purpose and character of the use, including whether such use is of commercial nature or is for nonprofit educational purposes

    The nature of the copyrighted work

    The amount and substantiality of the portion used in relation to the copyrighted work as a whole

    The effect of the use upon the potential market for, or value of, the copyrighted work

    When fair use is not an applicable defense, as found by the court, THEN and ONLY then does the court turn it's eye to determining damages. The copyright holder can elect to prove damages with particularity, or to rely on statutory damages which start at no less than $750 and are determined by the court.