Denver Post owner not renewing Righthaven contract after PR debacles
8 September 2011
8 Sept. 2011 10:24 a.m.
Newspaper copyright lawsuit filer Righthaven LLC of Las Vegas is losing one of its major clients, with MediaNews Group saying Righthaven’s no-warning lawsuit model "isn’t working very well for us."
MediaNews Group, owner of the Denver Post, disclosed in a Post story Wednesday it is not renewing its contract with Righthaven that expires at the end of the month.
The Righthaven lawsuit campaign over alleged infringements of material from the Las Vegas Review-Journal and the Post -- so far totaling 275 lawsuits in the past 18 months -- is stalled by legal challenges to Righthaven’s standing to sue.
Critics said Righthaven lied to federal courts in Las Vegas, Denver and Charleston, S.C., when it claimed to own the copyrights it was suing over – and the company has been hit with three fair use losses in Nevada.
Righthaven and Stephens Media LLC, owner of the Review-Journal, have said it was their intent that Righthaven control the copyrights it was suing over. MediaNews Group hasn’t weighed in on this legal debate.
For Righthaven, the loss of the MediaNews contract represents substantial potential lost revenue as the contract covered not just the Denver Post but nine other papers in the chain.
Those papers are the San Jose Mercury News, the Contra Costa Times in Northern California, the Pioneer Press in St. Paul, Minn.; the El Paso Times, the Los Angeles Daily News, the Salt Lake Tribune, the Oakland Tribune, the Long Beach Press-Telegram and the Torrance Daily Breeze in Southern California.
However, Righthaven never filed any lawsuits for MediaNews Group papers other than the Denver Post.
That’s likely because of a series of public relations debacles and legal problems that arose because of the no-warning Post lawsuits.
In one case, Righthaven sued a young blogger with diabetes, autism and hyperactive attention disorder in North Carolina who had posted a TSA pat-down photo on his website. The blogger, Brian Hill, 20 at the time he was sued, said he found the photo on the Internet after it went viral there and he had no idea it was from the Denver Post.
Hill and his mother complained that when they said they couldn’t afford Righthaven’s $6,000 settlement demand, Righthaven threatened to garnish Hill’s Social Security Disability Insurance income at the rate of $50 per month for 10 years; and the international press freedom group Reporters Without Borders went public with an appeal to the Denver Post to call off the lawsuit.
“We were surprised to witness such behavior here, in the United States, while this is generally a phenomenon Reporters Without Borders witnesses in authoritarian regimes to silence citizens and intimidate journalists, bloggers and others,’’ the group said in a March letter to the Post.
Hill was later featured in stories nationwide including reports by The Associated Press and the New York Times.
Righthaven eventually dropped its suit against Hill, though it’s fighting demands by Hill’s attorneys that it pay their legal fees.
A Righthaven lawsuit over a Denver Post column also prompted Dana Eiser, a defendant in South Carolina, to countersue Righthaven and MediaNews, charging barratry, or the improper incitement of litigation, and unfair trade practices.
A Denver-area woman sued by Righthaven in Las Vegas over a Denver Post column, Denise Nichols, also caused public relations headaches for the Post when it was revealed she was a retired combat military nurse suffering from war-related health problems – and that she spends her time advocating for veterans.
For MediaNews, its new CEO, John Paton, was an early critic of Righthaven-style no-warning lawsuits against readers.
As CEO of newspaper chain Journal Register Co., Paton was known for including readers and bloggers in the news conversation and for a digital first strategy.
“Such a bad idea for newspapers. I’m speechless,” Paton said of Righthaven on a Twitter post last year while still at Journal Register.
MediaNews Vice President of Field Operations Sara Glines told the Post for a story Wednesday that the company had decided not to renew the Righthaven contract before Paton joined the company this week.
"It's a model that isn't working very well for us," she told the Post. "It's something we felt was important to try because we are committed to protecting copyright, but it hasn't worked the way we expected."
Shawn Mangano, one of Righthaven's outside attorneys, today said the MediaNews "development has been fully expected" given the prolonged stay of Righthaven's Colorado lawsuits.
Those cases are on hold while U.S. District Judge John Kane in Denver decides if Righthaven has standing to sue over Post material.
"Righthaven still maintains ownership of any and all assigned copyright-protected works at issue in its pending cases within Colorado despite this announcement. The company will continue to await what it anticipates to be a fair and well-reasoned decision concerning its right to maintain its copyright enforcement actions within the (federal court ) District of Colorado," Mangano said.
The decision not to renew the Righthaven contract may have legal implications for 33 open Righthaven cases in Colorado and its lone case in South Carolina against Eiser.
In those cases, Righthaven has not introduced an amended lawsuit contract with MediaNews to beef up its claims that it has standing to sue.
That’s in contrast to its Review-Journal lawsuits, in which Righthaven has twice amended the Stephens Media lawsuit contract in hopes of gaining standing to sue.
Despite these amendments, two of the Nevada federal judges handling Righthaven cases have expressed doubt about whether Righthaven can be a legitimate copyright plaintiff. One of the judges, Roger Hunt, has been suggesting Righthaven has been engaged in the unauthorized practice of law – charges denied by Righthaven.
While Stephens Media has said Righthaven’s lawsuits are targeting a "parasitic" business model in which offending websites regularly steal content from newspapers, critics say the Righthaven lawsuits seem more about making money for Righthaven’s investors than about dealing with copyright infringements.
Those investors are Righthaven CEO Steven Gibson, a Las Vegas attorney; and the family of Little Rock, Ark., investment banking billionaire Warren Stephens. His family also owns Stephens Media and the Review-Journal.
Suspicions that Righthaven is merely a money-making venture arose for several reasons.
One was that instead of suing alleged infringers in their own names, the Review-Journal and Denver Post assigned copyrights to infringed material – after the fact -- to Righthaven for lawsuit purposes with the promise the newspapers would receive a 50 percent cut of lawsuit winnings after costs.
Concerns about Righthaven’s profit motive also arose because for the vast majority of the newspaper industry – other than Stephens Media and MediaNews Group – routine takedown requests in the form of emails, phone calls or letters to offending websites seem to have been effective in dealing with copyright problems.
Research by VEGAS INC and its sister publication the Las Vegas Sun, in the meantime, has found newspaper companies and Wall Street analysts have not identified the types of infringements Righthaven sues over as affecting newspaper revenue one way or the other.
That’s because Righthaven typically sues special-interest websites, message board posters and hobby bloggers as opposed to direct competitors for readers and advertising dollars of the Review-Journal and the Denver Post.
Many of the Righthaven defendants actually drove traffic to the R-J and Post websites with links – and many told VEGAS INC and the Sun they would have gladly taken down infringing content if the R-J or the Post would have asked them to do so.
Righthaven, on the other hand, is regularly accused of coercing lawsuit defendants into settling for a few thousand dollars with what critics call dubious lawsuit claims and sham copyright assignments.
Besides finding Righthaven lacked standing to sue, judges have rejected Righthaven’s standard lawsuit demand that infringing websites forfeit their Internet domain names to Righthaven – a litigation tactic that critics said isn’t authorized by the federal Copyright Act.
And Righthaven’s losses on fair use grounds seem to have weakened – rather than strengthened – copyright protections for newspapers.
In one of these cases, U.S. District Judge James Mahan in Las Vegas found Righthaven’s use of a copyright for lawsuit purposes "has a chilling effect on potential fair uses of Righthaven-owned articles, diminishes public access to the facts contained therein, and does nothing to advance the Copyright Act’s purpose of promoting artistic creation.”
That ruling found an Oregon nonprofit did not infringe on a copyright when it posted an entire 33-paragraph R-J story on its website. Righthaven is appealing that and other adverse rulings to the 9th U.S. Circuit Court of Appeals.
The Righthaven suits have turned out to potentially be a financial liability for Stephens Media, which could be on the hook for hundreds of thousands of dollars in legal fees in a Righthaven suit against the Democratic Underground. Righthaven has been removed from that case for lack of standing, but Stephens Media remains in the suit as a defendant in a counterclaim led by the digital rights group the Electronic Frontier Foundation seeking a non-infringement judgment.
Given Righthaven-created case law, it’s likely the Democratic Underground will win a fair use ruling against Righthaven and Stephens Media in the suit over the posting of the first four paragraphs of a 34-paragraph R-J story about then U.S. Senate candidate Sharron Angle – a post that credited and linked to the R-J.
Besides its struggles with standing and fair use rulings, Righthaven has been regularly criticized for blunders including suing R-J news sources and advertisers, suing the wrong parties, suing a reporter by mistake, failing to serve defendants in time and for failing to disclose Stephens Media was an interested party in its R-J lawsuits – an omission that caused Hunt to hit Righthaven with a $5,000 fine as a sanction.
One of Righthaven’s critics is copyright expert Eric Goldman, associate professor at California’s Santa Clara University School of Law and director of its High Tech Law Institute.
Goldman has long questioned whether Righthaven’s business model is economically viable.
Goldman weighed in with this statement today on the MediaNews decision to part ways with Righthaven:
I've long questioned whether participating in Righthaven's program was a good deal for newspapers. Righthaven's sales pitch to newspapers seems compelling -- no work, free money. However, nothing comes for free, and that's especially true here.
First, given the small settlements Righthaven has been producing, I imagine the financial returns have been disappointing.
Second, we've since learned that newspapers may be on the hook for any litigation errors by Righthaven or adverse litigation rulings, so participating newspapers might be obligated to pay out way more than they ever take in from Righthaven.
Third, Righthaven's lawsuits may target some of the newspapers' friends in ways that harm the newspaper's relationships with vital constituents. In this challenging environment, newspapers need more friends, not fewer, and Righthaven's litigation campaign was turning key newspaper friends into enemies.
Fourth, by participating in Righthaven's program, newspapers send the message to readers that they don't want readers talking about the newspaper's stories, and the resulting loss of links, traffic and brand awareness may end up costing the newspaper more money than they earn through Righthaven.
So it makes sense for MediaNews to drop Righthaven from a pure financial perspective. It also makes sense for MediaNews to drop Righthaven because Righthaven has shown that it is not a good business partner.
Righthaven has made a slew of embarrassingly sophomoric litigation errors that have tainted its brand -- and the brand of all those participating in its system. As a result, even if Righthaven gets favorable rulings on its appeals in the 9th Circuit, I don't expect many new newspaper customers will be interested in its services.
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