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December 18, 2014

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Commentary: Is Righthaven about to get some payback?

Did Las Vegas copyright enforcement company Righthaven LLC play a federal judge last year? And is it now payback time for the judge?

That’s the question raised by the unusually critical language about Righthaven, its copyright lawsuit partner Stephens Media LLC and their attorneys in two orders issued last week by Roger Hunt, chief United States District Court Judge for Nevada.

Here’s the background: After Righthaven and Stephens Media started their litigation spree in March 2010, some of the defendants that bothered to fight back did so with the argument that Righthaven lacked standing to sue over material from Stephens Media’s Las Vegas Review-Journal.

Their argument was based in part on the fact that Righthaven, as a so-called copyright troll, didn’t use its copyrights for anything but lawsuits. They said Righthaven spotted infringements, later obtained copyrights to infringed material and then filed suit retroactively. In order to sue, these defendants said, Righthaven needed to own the copyright on the day of the infringement. And they said it needed full ownership of the copyright – not just rights to sue over accrued infringements.

And it was Hunt who was among the first federal judges hearing Righthaven lawsuits who upheld that right to sue on a retroactive basis, based on the supposedly "exclusive" copyright assignment provided to him by Righthaven.

"The (copyright) assignment in question clearly assigns both the exclusive copyright ownership, together with accrued causes of action, i.e., infringements past, present and future," Hunt wrote in a September ruling denying a Righthaven defendant’s motion to dismiss.

That ruling was cited by Righthaven in fighting subsequent dismissal motions, and with Hunt being the chief judge in Nevada it probably carried some weight.

Fast forward to today.

Righthaven has lost two of its lawsuits on fair-use rulings, faces a judge critical of its tactics in Denver and is dealing with some politically-connected attorneys pursing a heated counterclaim against it in South Carolina. It appears that in the South, those folks are pretty adamant that it’s not the gentlemanly thing to do to hit a nonprofit blogger with a $150,000, no-warning lawsuit.

Righthaven’s biggest problem currently, though, was Hunt’s ruling Friday unsealing the copyright-transfer arrangement between Righthaven and Stephens Media.

This Strategic Alliance agreement shows some things Hunt likely wasn’t aware of in September when he allowed the Righthaven suit to go forward.

Instead of having an "exclusive" copyright, Righthaven only obtained rights to file lawsuits. Everything else – the right to display and distribute stories, the right to choose who could and could not be sued, etc. – was retained by Stephens Media. Along with a 50 percent cut of lawsuit profits.

Hunt, of course, isn’t talking -- yet -- about whether the Strategic Alliance agreement undercuts his own ruling giving Righthaven the right to sue.

But he didn’t have much nice to say about Righthaven, Stephens Media and their attorneys in two orders Friday.

In rejecting arguments by attorneys for Righthaven and Stephens Media that attorneys for the Democratic Underground had been underhanded in trying to get the Strategic Alliance unsealed, Hunt called some of their language in court briefs "very unprofessional" and wrote: " There is an old adage in the law that, if the facts are on your side, you pound on the facts. If the law is on your side, you pound on the law. If neither the facts nor the law is on your side, you pound on the table. It appears there is a lot of table pounding going on here."

In another order, it appears he was noting the irony of Righthaven trying to get out of its suit against the Democratic Underground with Righthaven paying no attorney’s fees to the Democratic Underground and the Democratic Underground not even winning a fair-use declaration – for four paragraphs of a 34-page Review-Journal story.

"Righthaven and Stephens Media have attempted to create a cottage industry of filing copyright claims, making large claims for damages and then settling claims for pennies on the dollar, with defendants who do not want to incur the costs of defending the lawsuits, (and) are now offended when someone has turned the tables on them and insisting on a judgment in their favor rather than a simple dismissal of the lawsuit," Hunt wrote.

At issue in that order was whether the Democratic Underground would be able to beef up its legal arguments against Righthaven based on the newly-discovered Strategic Alliance agreement.

Righthaven has said this newly-disclosed evidence does not undermine its lawsuits, but Hunt wrote it "goes to the very heart of this litigation."

But that wasn’t the end of the drubbing by Hunt of Righthaven. In another case last week, he threw out Righthaven's standard lawsuit demand that defendants forfeit their website domain names – widely seen as a settlement-negotiating tool – and said there may be merit to claims Righthaven doesn’t have the right to claim attorney’s fees in its lawsuits.

It’s not over yet for Righthaven, of course. Its attorneys will likely be filing briefs explaining why Hunt was right back in September to uphold its right to sue and will cite lots of case law.

But then, U.S. District Judge James Mahan commented during a hearing that attorneys can find case law to back up pretty much any argument.

That was before Mahan rejected Righthaven’s case-law citations and ruled a Portland, Ore., nonprofit was protected by fair use in posting a Las Vegas Review-Journal story for which Righthaven claimed to own through a copyright transfer.

The Electronic Frontier Foundation and its affiliated attorneys who represent the Democratic Underground are the ones who got Hunt to unseal the Strategic Alliance agreement, and they’re eager to deal with whatever arguments Righthaven makes about the contract.

Stephens Media has some explaining to do as well, EFF attorney Kurt Opsahl said in an online post Monday.

"In short, the (copyright) 'assignment' is a sham, Righthaven’s claim has been baseless from the outset. Stephens Media, which has struggled to hold the litigation at arms length, is the true and exclusive owner of the copyright and the only entity with standing to bring a copyright claim," Opsahl wrote.

"So why didn’t the public know this until now? Stephens Media and Righthaven have gone to great lengths to conceal their scheme, starting long before they challenged our request to unseal their business agreement.

"In the Nevada Federal Court, Righthaven is required to list all the entities who have a `direct, pecuniary interest’ in the outcome of lawsuit – i.e. everyone who is going to make money if Righthaven wins – right at the beginning of the lawsuit. Righthaven, however, omits to mention Stephens Media even though the agreement splits the recovery 50/50 with the publisher," Opsahl wrote.

We’ll let you know when Stephens Media and Righthaven attorneys file the next set of briefs that observers say will be critical in either salvaging Righthaven’s existing lawsuits over Review-Journal material – or seeing them dismissed on a mass basis.

In the meantime, this is far from the only issue Righthaven is facing.

It’s trying to fend off attorneys for the Media Bloggers Association and claim some lawsuit winnings from defaulting defendant Bill Hyatt. That case could be crucial in determining how much exactly a Righthaven lawsuit is really worth.

And yet another Colorado Righthaven lawsuit defendant over a Denver Post TSA photo is fighting back.

This time, the defendants, Q Communications Inc. and Don Tuthill (passportmagazine.com), represented by Denver attorney Dwight L. Pringle, are hitting Righthaven with defenses we’ve heard before: "Defendants’ use of the purported work was protected by the fair use doctrine… Plaintiff is not the exclusive owner of the purported work and may not be the real party in interest... Plaintiff is engaged in a champertous scheme and should not benefit there from."

We’ve heard the champerty charge before from, among others, attorneys for the Democratic Underground who charged in their counterclaim: "Righthaven and Stephens Media are engaged in 'barratry,' 'champerty' and 'maintenance' by spawning transactions designed for no purpose other than to pursue litigation."

Stephens Media and Righthaven, however, say their lawsuits are necessary to stop rampant online infringement of Review-Journal material.

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