R-J copyright to be auctioned following Righthaven’s collapse

Months ago, former Las Vegas Review-Journal publisher Sherman Frederick would use his column to promote lawsuits filed by the R-J's copyright enforcement partner, Righthaven LLC.

Now, one of the Frederick's columns will be the first to have its federal copyright registration auctioned after Righthaven's collapse.

The development came as U.S. District Judge Philip Pro in Las Vegas signed an order Tuesday transferring any interests Righthaven has in its 278 copyright registrations and its trademark to a receiver.

The order formalized a March 5 verbal ruling by Pro that Righthaven’s intellectual property would be transferred to a receiver so it could be sold to cover some of Righthaven’s $186,680 in debts.

Anybody can bid for the federal copyright registration. However, because of the rulings against Righthaven, the registration is merely a piece of paper that would offer nothing but memorabilia value to most people. The defendant, Wayne Hoehn, may try to buy the document to prevent Righthaven from suing him again.

The reason Frederick's column came up first is because it was at issue in the only case in which a receiver was appointed to auction the copyrights.

The debts involved are legal fees for defendants who beat back the Righthaven copyright infringement lawsuits against them. The dollar amount owed will keep rising with closure of additional Righthaven suits.

Righthaven has said it has no cash to pay creditors, but some of the creditors are probing its finances as they’re skeptical of that claim.

In an unusual legal situation, the copyrights to be auctioned likely don’t represent actual ownership interests in the material they were registered for: Content from the Review-Journal and the Denver Post.

Righthaven claimed in 275 lawsuits against alleged infringers of the material that the R-J and the Post had transferred ownership of the material to Righthaven.

But eight federal judges in three states have invalidated the copyright transfers. That’s because the newspapers maintained control of the material despite Righthaven’s claims of ownership.

Despite the copyrights not actually proving ownership of anything, attorneys expect some will attract bids at the action for memorabilia purposes.

Also, defendants who had been sued by Righthaven may want to bid for the copyrights, one attorney says.

Their purchase of the rights would ensure Righthaven can’t sue them again over the same material in the event Righthaven’s ability to file lawsuits is reinstated, said Las Vegas attorney Marc Randazza, who represents Righthaven defendants in multiple cases.

Lara Pearson, an attorney appointed by the court to auction Righthaven’s assets, has already seized and auctioned its website.

Pearson said Tuesday the first copyright to be auctioned is for a column by Frederick complaining about public employee pensions.

After learning a Kentucky man had posted the entire column on a sports betting website’s message board without authorization, Righthaven obtained the copyright for the column and hit the man, Wayne Hoehn, with one of the 275 infringement lawsuits it filed in the past two years.

Pro last summer threw out the lawsuit for two reasons: Because of Righthaven’s lack of standing and because Hoehn was protected by the fair use doctrine of copyright law in his posting the column.

Pro’s ruling caused Frederick to write another column criticizing the judge’s decision, and Righthaven appealed the court setback.

Frederick had played a key role in the Righthaven lawsuits, championing them with columns — including one in which he called the firm his ''little friend.''

Righthaven is half owned by the same Arkansas investors who own the Review-Journal.

But lately, despite Frederick’s call for Pro’s ruling to be overturned, Righthaven appears to be out of business as it has missed at least three court hearings in recent months and has missed several deadlines to file briefs in the appeals of its court setbacks.

''I will first auction off the work for which Mr. Hoehn was sued to get a feel for the market, based upon which I can structure the other auctions,'' Pearson said Tuesday, adding she hopes to launch the first auction on Monday.

Tuesday's announcement by the receiver about the copyright auction also had been expected — what is new is that the receiver has identified the first copyright to be auctioned and has set a tentative auction date.

These developments are part of a series of setbacks for Righthaven beginning with adverse court rulings last summer.

The Righthaven saga is expected to continue for months or years as defendants claiming they were wrongly sued seek redress from Righthaven's owners, Las Vegas attorney Steven Gibson and the same family that owns the Review-Journal.

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  1. This is putting the cart before the horse. The cases up for appeal need to be settled before this action is taken. It is creating a bigger legal mess than need be. Get some solid, settled law then hang Righthaven out to dry and pierce the corporate veil.

  2. boftx

    These ruling will probably never be appealed because Righthaven does not have the money nor the standing to pursue them. What needs to happen is their needs to be a judgement against the RJ that the transfer gives the new owner the actual rights free and clear.

  3. Kbingh

    How do you think the 9th Circuit might handle the cases that have been appealed? It could just dismiss them, leaving the District Court decisions as (sort of) precedent -- not exactly precedent but guides for other District Court judges who find themselves with such cases in the future. Or could the Receiver prosecute the appeals -- without rendering whatever the 9th Circuit eventually would rule an advisory opinion -- so that that Circuit-wide law is established?

  4. It would have been good if the Court of Appeals could have made a judgment so there would have been more of an iron clad precedent regarding the use of excerpts of new stories. At least there are some court cases now that bring things in the right direction as far as protecting participants and administrators of online forums and social networks from being threatened with lawsuits for simply posting an excerpt of the story that is at the topic of discussion. I do think this is much different than for instance a blog that scrapes entire news articles and re-posts them as in the case of auto-blogs.

    As for the case with the non-profit. I think as far as Fair Use goes the main test should be whether or not re-posting harms the market for the work. In the case of auto-blogs it absolutely does but for a non-profit who may post something that is of a public interest and will not cause someone to not go the the source who otherwise would have then I think it gets more into to those fuzzy areas that an appeals court decision would have been good to provide some guidance.

  5. Bet a beer that Mr. Frederick still works at the RJ despite the "appearance" of impropriety over many, many years.