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Righthaven wins key ruling as new criticism leveled over suits

By Steve Green (contact)

Friday, Sept. 3, 2010 | 9:31 a.m.

Sun archives

The Las Vegas Review-Journal's online copyright enforcement partner won an important legal ruling in federal court Thursday -- just as a new round of criticism erupted over the no-warning lawsuit campaign over Review-Journal stories.

In a case pitting the Review-Journal's partner, Righthaven LLC, against a Texas law firm, Chief U.S. District Judge for Nevada Roger Hunt denied the law firm's motion to dismiss the lawsuit.

In the first ruling of its kind in the many Righthaven lawsuits involving out-of-state defendants, Hunt rejected the argument of the Dr. Shezad Malik Law Firm P.C. that the Nevada court lacks jurisdiction to hear the case since Malik doesn't do business in Nevada.

Citing precedent established by the 9th U.S. Circuit Court of Appeals, Hunt agreed with Righthaven that as an alleged willful copyright infringer of material belonging to a Nevada company, Malik had "purposely availed" itself to jurisdiction in Nevada.

"It is common knowledge that the Las Vegas Review-Journal newspaper is published and distributed in Las Vegas, Nev., by the party which assigned the copyrights together with the right to seek redress for past, present and future infringements. Accordingly, this court has jurisdiction over defendant, based upon the allegations of the complaint," Hunt ruled.

Hunt on Thursday also became the second federal judge in Las Vegas this week to at least preliminarily uphold Righthaven's right to sue even though it did not own the copyright at the time of the alleged infringement.

Righthaven is a business created by Las Vegas attorney Steven Gibson and members of the Arkansas-based Warren Stephens family, which has an investment banking business as well as media interests including the Review-Journal. Righthaven "trolls" the Internet to find online infringements of Review-Journal stories, then obtains copyrights to those stories from Stephens Media LLC and finally files no-warning copyright infringement lawsuits based on the retroactive infringements.

At least 115 suits have been filed since March, each typically demanding $75,000 in damages. Some defendants have told the Las Vegas Sun, however, that immediately after suing, Righthaven privately offers to settle for $7,500. The highest publicly-disclosed settlement has been for $5,000.

Numerous defendants have challenged Righthaven's right to sue based on the retroactive nature of the claim, but for purposes of dismissal motions Righthaven's right to sue was upheld this week by U.S. District Judge Philip Pro in a case involving Las Vegas company Tuff-N-Uff Productions, and on Thursday by Hunt in the Malik case.

"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. While courts have denied standing to bring an action on an accrued claim where just the copyright is owned or just the cause of action has been assigned, where there is an assignment of both the copyright, and any accrued causes of action, the courts have held that the assignee of both can bring an action even for infringing activities which occurred before the assignment," Hunt wrote in his ruling. "In this instance, plaintiff has standing to sue, even for an infringement which preceded the assignment, because that right was specifically assigned with the exclusive assignment of the copyright itself."

Exhibits in the Malik lawsuit indicate entire Review-Journal stories were posted without authorization and without any credit for the information given to the Review-Journal. Those stories were posted at the Dallas-Fort Worth Injury Lawyer Blog published by doctor-lawyer Dr. Shezad Malik's firm in Southlake, Texas, court records show.

Among the Malik firm's defenses not yet addressed by Hunt is that it is entitled to the Digital Millennium Copyright Act’s "safe harbor" protection because it had "insufficient notice, under the DMCA, of the particular infringements in suit."

The DMCA safe harbor provision typically covers third-party message board postings on websites. Righthaven, in disputing the Malik firm has a DMCA defense, argues it was Dr. Malik himself who posted the stories.

Separately Thursday, the online freedom of speech organization Electronic Frontier Foundation reiterated that it's looking for a Righthaven case to intervene in and issued a lengthy report critical of the Righthaven/Review-Journal copyright infringement lawsuit campaign.

Based in San Francisco, the EFF is considered to be an influential national player in online privacy and freedom of speech issues and has been critical of mass-lawsuit campaigns launched by the motion picture and music industries over unauthorized downloadings of content.

Written by EFF's designated "activist" Richard Esguerra, the report called Righthaven "just the latest group of lawyers to try to turn copyright litigation into a business model."

"What these lawyers have in common is that they seek to take advantage of copyright's draconian damages in order to bully Internet users into forking over money," the report said.

EFF said that Righthaven is:

--Going after bloggers who are interested in sharing "uncopyrightable facts" and that by "targeting news," the suits "could have a chilling effect on individuals' attempts to engage their communities in free and open discussion."

--Fighting the basic mode of Internet debate, which involves copying and pasting text before adding commentary or response. "Accurate quoting is a virtue of Internet discussion that can minimize mischaracterization and support progress in a debate."

--Demanding forfeiture of defendants' website domain names, which the EFF said is "an overreaching remedy for a single copyright infringement not validated by copyright law or any legal precedent." It also "indicates that the attorneys are willing to make overreaching claims in order to scare defendants into a fast settlement."

--Filing suits without first sending cease and desist letters or DMCA "takedown notices." The strategy is "sue first and ask questions later, which smacks of a strategy designed to churn up legal costs and intimidate defendants into paying up immediately, rather than a strategy aimed at remedying specific copyright infringements."

"Righthaven is claiming that its activities are intended to have a `deterrent effect' on the reposting of news stories online, but it's hard to resist viewing Righthaven's actions as purely business-related. In addition to the sharp legal tactics discussed above, Righthaven appears to only buy copyrights that it believes can be used for lawsuits and otherwise has no involvement in the practice of journalism," the EFF report said.

The EFF urged other newspapers not to join what it called the "sue the audience" tactic and said that in doing so, newspapers would find themselves in the same position as the music industry six years ago, "where futile lawsuits distracted them from the incorporating new technology and creating new ways to market product to fans."

Also critical of the Review-Journal and Rigthhaven on Thursday was a post by techdirt.com writer Mike Masnick.

Masnick noted that Review-Journal Publisher Sherman Frederick this week posted a blog responding to a Las Vegas Sun column in which it was explained that the Sun and other Greenspun Media Group publications don't file no-warning lawsuits against infringers. Rather, these publications request that infringing material be taken down and replaced with links.

Masnick wrote the Review-Journal is "massively abusing copyright law with its Righthaven lawsuits" and that Frederick "doesn't point out the slight conflict of interest in the fact that he helped fund Righthaven, and thus has incentives to try to get other newspapers to make the same mistake he's making."

Discussion: 12 comments so far…

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  1. By murrayburns
    Sept. 3, 2010
    10:10 a.m.
    Flag

    lisaMM: Why would you expect some brilliant enough to sue his readers and advertisers to disclose anything?

    This is all so distasteful on so many levels, if not all.

  2. By murrayburns
    Sept. 3, 2010
    10:51 a.m.
    Flag

    VegasFan: As I've said, I'm not a lawyer, but it seems to me that maybe taking the "lamest" issues first on the off chance of winning isn't a bad idea.

    I'm not sure what you mean by Righthaven going down "if someone competent represents their targets." I think there's a chance that it may get tagged for barratry. Well, I don't know, but that's what at least two "big time" attorneys have told me.

    There are a number of fine attorneys involved in this, some of whom aren't visible yet, some are. My understanding in talking to several of them is that, sure, "statutory damages" are "available," it's unlikely we'll see them awarded and that awards are likely to be very small and not include legal fees.

    But who knows? This is going to be, in my opinion, a very major First Amendment case and really interesting to follow.

  3. By murrayburns
    Sept. 3, 2010
    11:31 a.m.
    Flag

    VegasFan: Sorry for the misinterpretation. Lawyers generally try to get the "lame issues" out of the way for the reason I mentioned. It quick, easy and inexpensive with the possibility of a reasonable return, if not a win, though small possibility.

    The matter of attacking PR firms and their own sources, in my opinion, is close to suicide for a newspaper, even one that's dominant in a market. It's not that PR firms are that great, though some are I guess, it's that they are, as you know, great resources and gatekeepers.

    And, sure, all defendants should seek legal counsel, but many of them don't have the money to do so and I hope EFF will handle them.

    Here's my fantasy: An investor comes to Brian Greenspun and says "The LVRJ has so damaged itself with these lawsuits that we're going to fund you to publish a full and separate newspaper and compete in the morning market." Highly unlikely, but a nice fantasy.

  4. By SgtRock
    Sept. 3, 2010
    11:46 a.m.
    Flag

    Righthaven has strong cases.

    These people should settle.

  5. By murrayburns
    Sept. 3, 2010
    12:14 p.m.
    Flag

    I wonder when David Boies and/or Ted Olsen will get involved in this, or even Martin Garbus and wouldn't be surprised if they did. With the ACLU and EFF already taking positions, it could happen, I think anyway.

    Whether or not Righthaven has "strong cases" I don't think will be the question at all. It's already established that violations took place. The questions to me are whether or not "barratry" will become an issue; if the Federal Court will look at procedure despite what the Copyright law says, it does suggest "take down" letters first and what the awards will be, if any.

    Then there's another question: If the awards are small, and legal fees aren't awarded, how long can the RJ support Righthaven and how long can Righthaven support itself, at least in a rational sense. But I wouldn't put it past Sherm to keep throwing money at this until the RJ starts laying off its employees to pay for it.

  6. By SgtRock
    Sept. 3, 2010
    1:23 p.m.
    Flag

    Barratry would only make any legal sense if it is used against the same defendent over and over again.

    That is not even remotely the case here.

    " if the Federal Court will look at procedure despite what the Copyright law says, it does suggest "take down" letters first "

    The law is bare bone cut dry.

    If a staff member or an onwer of a website copies and pastes copyright material. They can be directly sued with any one hint of a take down letter.

    There is safe habor if a casual user posts copyright material like in a comment section. The law is cut and dry there too. That safe habor ONLY exists if the website is playing by DMCA rules which inclues the website registering contact information with the US Copyright office.

    No................there is not a law that "suggest" stuff that is opposite of the the law actual says.

  7. By SgtRock
    Sept. 3, 2010
    1:27 p.m.
    Flag

    "If the awards are small, and legal fees aren't awarded, how long can the RJ support Righthaven "

    It is very doubtful that the court will issue an award that is less than the cost of Righthaven's legal cost.

    I hope somebody does take the case to the end and does not settle.

    It will be interesting to see the outcome.

    Of course, Righthave has strong cases. So it will take somebody that has cash to blow on lawyers, experts and court cost and they will probably lose and probably have to cough up some more dough to pay the award. The cost doing all that would be $30,000 to $120,000. The award could be $75,000 plus losing the domain name.

  8. By murrayburns
    Sept. 3, 2010
    1:44 p.m.
    Flag

    Well, Sarge, we'll see won't we. A discussion with you is, as I said before, futile because you just don't allow for possibilities; for a range of different outcomes.

    There is one thing I know: Federal Judges can do just about anything they want. They can award $75,000 or a dollar; they can toss the cases, etc.

    Whether or not you're a lawyer, you're wrong about barratry, and in most discussions opposing sides often agree on some points. Your discussion is so much like that of the extreme positions taken these days by some politicians who have forgotten the art of negotiation, religious zealots who almost seem like they want to return to the days of the Inquisition and and their followers, who are at best, uninformed.

  9. By SgtRock
    Sept. 3, 2010
    6:05 p.m.
    Flag

    I think you need to at least go and look up what barratry means and it has different legal definitions in different states.

    1st, I don't that you can even find an example of a lawyer being convicted of barratry.

    Second, none of Righthaven cases are getting dimissed.

    Acts of barratry are based on groundless judicdial activity.

    An example of groundless judicial activity would be filing cases that would get dismissed.

  10. By SgtRock
    Sept. 3, 2010
    7:10 p.m.
    Flag

    "Fair warning if fair. Playing a pirate in pinstripes is not."

    Let's play your game.

    Everyday, people come to your house to steal something.

    After they steal something then you need to first give them fair warning via a letter and beg them to return the item.

    I think the word pirate better discribes the people who are copying and pasting LVRJ copyright material.

    Just a FYI, if you boycott the LVRJ then you are also boycotting the Sun.

    You might put Mr. Green out of a job.

    Oh....how ironic that would be.

  11. By murrayburns
    Sept. 3, 2010
    7:43 p.m.
    Flag

    Jlokc: "Maybe someone can enlighten me; the question I keep asking is - what is the R-J hoping to gain here?" Whatever you read here is speculation. No one really has any idea what the RJ plans to gain from this.

    Any discussion of legality here is probably guesswork, as no attorney, or defendant for that matter, would take a chance on this sort of discussion, particularly if they're involved in the case.

    TalkingMan: Boycotting the RJ doesn't make much sense to me. I read it online just because it has stories the Sun doesn't, just as the Sun scoops the RJ. It's not the reporters who are driving this, but the management, who seems, now this is just my opinion, to be either trying to make a name for itself nationally, or hasn't a clue as to the damage it's doing to its product in terms of credibility. Newspapers don't sue their sources and advertisers.

    BobbyG: I don't wish that on anyone.

    All: I'll let you figure it out, but my understanding is that there are at least two major law firms working with EFF and ACLU and a couple of defendants on a pro bono basis, both of which are known for First Amendment cases.

  12. By murrayburns
    Sept. 6, 2010
    11:08 a.m.
    Flag

    archibald: I don't think Steve Green "hatched a plan," I think he's just doing his job: Covering a continuing and growing news story, that on the verge of being picked up my larger papers.

    I hope he wins an award as well, and my guess is that he will. He's done a fine job of reporting and, oddly, scooping his competition on its own story.

    I've said this before: This is an important story with regard to the First Amendment, the Internet and Copyright laws. In my view, it's one that will continue for some time and ultimately wind up as a Supreme Court case.

    And that will really be interesting, if it occurs because it will possibly resolve the issues of copyright versus the internet and the First Amendment.

    These cases, attorneys have told me, won't end the the Federal District Court.

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