Righthaven now likening itself to patent enforcers
24 June 2011
As it works to continue its lawsuit campaign, Las Vegas newspaper copyright enforcement company Righthaven LLC is saying that case law in the patent field supports its litigation-driven business model.
In one of the first Righthaven court filings signed by Dale Cendali, Righthaven’s new star attorney with the law firm Kirkland & Ellis LLP in New York, Righthaven this week urged U.S. District Judge James Mahan to uphold its right to sue over Las Vegas Review-Journal material.
Righthaven faces an uphill battle, as U.S. District Judge Philip Pro this week ruled Righthaven doesn’t have standing to sue even with recent amendments to its lawsuit contract with the owner of the R-J.
The problem with the contract and copyrights assigned to Righthaven is that Righthaven still doesn’t gain an exclusive right in the copyrighted material — and that exclusive right is needed to have standing to sue, Pro ruled.
Nevada’s Chief U.S. District Judge Roger Hunt adopted Pro’s interpretation of the amended contract in dismissing two Righthaven cases this week. Last week, Hunt threw out another case based on the original lawsuit contract.
And Mahan has been openly critical of Righthaven and its policy of using copyrights for lawsuits.
Righthaven disagrees with Hunt and Pro about its standing to sue, the company’s attorneys wrote in a filing Wednesday with Mahan.
“Righthaven undoubtedly owns the copyright under the recently executed amendment,” the filing said.
“Righthaven respectfully disagrees with Judge Hunt’s decision.” About Pro’s ruling, it said, “Righthaven disagrees with that decision and intends to appeal.”
In defending Righthaven’s lawsuit-driven business model, Cendali and another Righthaven attorney, Shawn Mangano, cited case law that found patent assignments made for the sole purpose of filing lawsuits are valid; and that a patent grant for litigation was valid even with the grantor retaining several rights related to the patent.
“It is well-established that in copyright law, as in patent and trademark law, parties other than the original owner-creator may acquire the intellectual property rights and sue for infringement,” Righthaven’s filing said.
If this were not true, “countless nonpracticing entities would be deprived of standing to bring patent infringement claims,” Righthaven’s filing said.
“Nonpracticing entities” are known in the intellectual property law field as entities that use patents for licensing and litigation purposes. Although some are considered legitimate, well-capitalized companies, others are considered opportunistic “patent trolls.”
Righthaven’s likening of its business model to the patent field will no doubt be of interest to one of its main litigation foes, the Electronic Frontier Foundation in San Francisco.
The foundation has its own patent law experts and a “Patent Busting Project” aimed at fighting illegitimate patents, particularly in the software and Internet fields that target individuals and that the foundation says threaten free expression.
“More and more people are using software and Internet technology to express themselves online. Website and blogging tools are increasingly popular. Video and audio streaming technology is ubiquitous. Email and instant messaging have reached users of all ages. Yet because patents can be anywhere and everywhere in these technologies, the average user has no way of knowing whether his or her tools are subject to legal threats. Patent owners who claim control over these means of community discourse can threaten anyone who uses them, even for personal noncommercial purposes,” a foundation report says.
As for Righthaven likening its business model to “nonpracticing entities” in the patent field, one Righthaven observer was skeptical Friday.
“The invocation of patent law as a guide for a copyright case struck me as a little desperate. While courts sometime cross-pollinate between the two doctrines, the copyright statute has very specific requirements for standing to sue as well as a 9th Circuit (Court of Appeals) case directly on point. Righthaven reached for patent law analogies because the more directly applicable law wasn’t favorable,” said Associate professor Eric Goldman of the Santa Clara University School of Law in California and director of its High Tech Law Institute.
Another attorney said “nonpracticing entities” and patent trolls typically do gain full control of patents — something Righthaven is working to establish it has done with its amended lawsuit contract for Review-Journal material.
Separately involving Righthaven, an attorney representing Righthaven defendant Dana Eiser in South Carolina on Thursday filed a massive, updated answer and counterclaim in federal court against Righthaven.
The new federal filing is similar to a complaint filed on behalf of Eiser and her Tea Party group in state court in South Carolina on June 13 against Righthaven, The Denver Post and others.
The June 13 suit was the first suit or counterclaim to be filed against The Denver Post over its role in the Righthaven lawsuits.
Righthaven charged in a no-warning lawsuit against Eiser that she posted a Denver Post column on her blog, charges denied by Eiser. The column by Mike Rosen was called “A letter to the Tea Partyers.”
The new 119-page federal answer and counterclaim levels 56 charges at Righthaven covering allegations ranging from racketeering to violations of the federal Fair Debt Collection Practices Act.
The claim charges Righthaven lacked standing to sue over Review-Journal and Denver Post material, that it filed “extortionate lawsuits” to extract settlements from defendants and that these suits had a “dramatic chilling effect on expression on the Internet.”
“Righthaven conducted a pattern of racketeering activity. The racketeering activity consisted of extortion, mail fraud and wire fraud,” the new court filing says. “Specifically, Righthaven engaged in an intentional scheme to extort and defraud its targets and to obtain money or property from them through false or fraudulent pretenses, representations, threats and promises.”
“Right now, we’re just gathering evidence. We want to talk to other Righthaven victims. We are very interested in talking to them,” said one of Eiser’s attorneys, Todd Kincannon of the Kincannon Firm in Columbia, S.C.
Righthaven has not yet responded to this new court filing, but it insists it has standing to sue and in the past it has said its no-warning lawsuits are needed to thwart extensive online infringements of newspaper material.
Also, techdirt.com writer Mike Masnick commented on Righthaven CEO Steven Gibson’s appearance this week on the TV news discussion program “Face to Face With Jon Ralston.”
During the show, Gibson suggested criticism of Righthaven by some judges is, in part, guidance for future copyright cases.
“I think part of what’s happening here is that the federal judges recognize that Righthaven has hired some of the top lawyers across the country. Copyright lawyers. Harvard law professors. And they understand that we’re affiliated with an organization as reputable as Stephens Media,” Gibson said.
“I think what the judges are saying is ‘listen, folks, Righthaven is filing a lot of lawsuits.’ They understand that we’re potentially genuine with respect to upholding copyrights. They don’t want to see Righthaven competitors potentially come on with not-solid documentation, and they’re giving us guidance as to what the documentation should be,” Gibson told Ralston.
These and other comments caused Masnick to write: “Righthaven has lost badly, and it looks like Gibson hasn’t quite come to terms with how much trouble his company may be in.”
Righthaven has been ordered to file a response next week to an order by Hunt that it show cause why it should not be sanctioned.
Hunt in a June 14 order wrote that Righthaven’s failure to disclose Stephens Media LLC, the owner of the Review-Journal, as an interested party in the litigation involved a “flagrant misrepresentation.”
These disclosures are required by court rules so judges can determine if they have conflicts of interest they would need to disclose, or that would prevent them from presiding over a case.
Hunt also said he believed Righthaven had made “multiple inaccurate and likely dishonest statements to the court.”
One of these, the judge suggested, was that a certain Righthaven standing claim is “flagrantly false — to the point that the claim is disingenuous, if not downright deceitful.”
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