Defendant accuses Righthaven of misusing legal system

By Steve Green

Sunday, Sept. 5, 2010 | 1:50 a.m.

Even as Righthaven LLC made headlines for suing Nevada U.S. Senate candidate Sharron Angle last week, attorneys in another Righthaven case accused the firm of misusing the legal system to carry out its copyright infringement lawsuit campaign.

Righthaven, controlled by Las Vegas attorney Steven Gibson and the family of Arkansas investment banking billionaire Warren Stephens, has contracted with the Stephens Media LLC-owned Las Vegas Review-Journal to file copyright infringement lawsuits against 117 website owners and bloggers since March.

Righthaven finds online infringements of Review-Journal stories, obtains copyrights to those stories from Stephens Media and then retroactively sues the websites based on those copyrights.

Most of its suits are against small mom 'n pop-type special interest websites, bloggers and nonprofits. In some cases, corporations have been sued and in one of those cases the corporation last week came out swinging in responding to the lawsuit.

The case involves a Righthaven lawsuit filed against Internet Brands Inc. of El Segundo, Calif. With cash on hand of $37.3 million as of June 30, second quarter revenue of $28 million and ownership of some 100 website brands, Internet Brands appears to have more than adequate financial resources to fight Righthaven.

Righthaven's Aug. 9 lawsuit against Internet Brands alleges someone posted a June 20 Review-Journal story on one of Internet Brands' websites, www.corvetteforum.com. The story covered the U.S. Senate race between Angle and Sen. Harry Reid.

The story appears to have been posted by a website user named "71stang99." Full credit was given to the R-J in the post, which included a link to the story on the R-J's website.

In answering the suit and seeking its dismissal last week, Internet Brands said Righthaven's claims are barred based on the doctrine of fair use and that an "implied license" was provided by the Review-Journal for the use of its material -- two arguments that have been made by other Righthaven defendants.

Internet Brands also said Righthaven's claims are barred based on "estoppel" (taking a position inconsistent with the previous position) and "acquiescence" -- arguments also made by other defendants who say the Review-Journal for years didn't object to online postings of its material but is now hitting such online posters with no-warning lawsuits.

Internet Brands also asserts the Righthaven claims are barred based on:

• "Copyright misuse"

• "Unclean hands"

• "Barratry," defined as the persistent incitement of litigation or as creating legal work by stirring up disputes and quarrels.

• "Champerty"

At least one attorney in another Righthaven case is using the unclean hands and barratry defenses, and Righthaven has denied those allegations.

Internet Brands' attorneys appear to be the first to use against Righthaven the defense of "champerty," which is defined by Merriam-Webster's Dictionary of Law as "an unenforceable agreement by which a person with otherwise no interest in a lawsuit agrees to aid in or carry on its litigation in consideration of a share of the subject matter of the suit."

Dictionary.law.com, however, defines it as an agreement between a plaintiff and another person who agrees to finance a suit in return for a percentage of the recovery. This definition notes such an agreement is legal and is often part of a contingent fee arrangement.

Internet Brands hasn't yet elaborated yet on the barratry or champerty allegations.

The champerty charge likely would cover the relationship between Stephens Media, Righthaven and the two limited liability companies that own Righthaven.

Those companies are Gibson's Net Sortie Systems LLC and the Stephens family's Arkansas-based SI Content Monitor LLC.

Sherman Frederick, publisher of the Review-Journal and president of Stephens Media, has previously said Stephens Media "grubstaked," or invested in; and contracted with Righthaven. Additionally, Stephens Media is involved in the litigation by agreeing to transfer the copyrights at issue to Righthaven. Gibson has declined to say whether Stephens Media shares in lawsuit revenue or otherwise comment on the financial relationship between the companies.

If the Internet Brands case isn't settled, the issues raised by its attorneys will likely be fully covered in coming months as the parties file additional competing motions for and against dismissal of the lawsuit.

Internet Brands is represented in the litigation by Manhattan Beach, Calif., attorney Wendy Evelyn Giberti of iGeneral Counsel P.C. and Lewis and Roca LLP attorneys in Las Vegas Michael McCue and Jonathan Fountain.

In other cases, Lewis and Roca attorneys have called the Righthaven suits a campaign involving frivolous lawsuits that amounts to a shakedown aimed at coercing settlements from small bloggers and website operators -- charges denied by Righthaven.

Also in recent days:

• Righthaven filed its 117th copyright infringement lawsuit, this one against the Las Vegas nonprofit Trauma Intervention Program of Southern Nevada Inc. and an official there, Gregory Robinson.

TIP of Southern Nevada arranges for volunteers to comfort distraught people at the scenes of accidents, fires, crimes, suicides and other deaths. The program has received wide praise from Metro Police, the Clark County Coroner's Office and others.

Righthaven charges in its lawsuit that numerous Review-Journal stories from as far back as 1997 and as recently as Feb. 15 of this year were posted on the TIP of Southern Nevada website without authorization.

A request for comment was placed with TIP of Southern Nevada.

A look at the group's website Saturday showed links to numerous Review-Journal and Las Vegas Sun stories, indicating the full Review-Journal postings at issue in the lawsuit have already been converted to links.

This appears to be among the group of cases in which TIP of Southern Nevada cooperated with the Review-Journal for stories by providing information and interviews as a source, but is now being sued for copyright infringement.

• Righthaven disputed arguments by attorneys in another case that the lawsuit campaign lacks merit because the Review-Journal encourages the online sharing of R-J stories -- providing an "implied license" to websites and bloggers displaying the material.

That's the argument made last month by attorneys for Jan Klerks of Chicago, who was sued May 19 after an R-J story was posted on his website www.skyscrapercity.com, a nonprofit site covering skyscrapers and urban development.

Klerks' attorneys with Lewis and Roca, McCue and Nikkya Williams, wrote in a court filing: "As with every article that Righthaven is suing on, the allegedly infringed work was available for free on the Las Vegas Review-Journal’s website and is still available for free by conducting a Google search on the title of the article. There is no harm, no damages to Righthaven ..."

Klerks may potentially "establish an implied license," his attorneys also wrote.

"The Las Vegas Review-Journal offered the allegedly infringed work to the world for free when it was originally published. It encouraged people to save links to the work or to send links to the work to others anywhere in the world at no cost and without restriction. The Las Vegas Review-Journal website also enables third parties to 'right click' and copy the text of articles on the site. Accordingly, based on this implied license, the allegedly infringing copy was, in fact, authorized by the Las Vegas Review-Journal and therefore, is not an infringement," the Lewis and Roca attorneys wrote.

Lewis and Roca's attorneys cited as precedent an implied license ruling in 2006 by U.S. District Judge Robert Jones in Las Vegas, who threw out a copyright infringement lawsuit filed against Google by Las Vegas attorney Blake A. Field. Jones found Google had an implied license to display cached links to Field's website.

Field claimed Google was infringing on his copyrights by caching material from his website and then linking to his website.

But Google charged Field had manufactured a $2.55 million copyright claim against Google by registering copyrights for 51 "literary works" and then requesting that Google's robot visit and index the pages in his website so they could be included in Google's search results.

In a filing Friday, Righthaven disputed these contentions by Klerks' attorneys, calling them "erroneous" and "highly illogical."

"The fact that a protected work (story) is made publicly available does not mean that the protected work can be freely copied and distributed amongst the public without repercussion," Righthaven attorneys J. Charles Coons and Joseph Chu wrote in their filing.

"To analogize, a person can go to the library and read a book for free, but if that person photocopies the book and publicly distributes those copies outside of the scope of fair use, this would clearly constitute copyright infringement. Stated more directly (and notwithstanding any instances protected by fair use), every person with a library card does not have an implied license to copy and distribute all of the books available in the library unless given prior authorization to do so. Shockingly, Mr. Klerks fails to understand this premise," the Righthaven attorneys said in their filing.

As for Klerks' argument that the Review-Journal encourages people to save and email links of its stories, Righthaven said: "The option to save or e-mail a hyperlink to the work (story) rightfully ensures that the user will only view the work as it is displayed by the Las Vegas Review-Journal, rather than by viewing an unauthorized copy of the work displayed on an infringing website (such as Mr. Klerks' website)."

As for the Google case in Las Vegas, Righthaven said: "Google, was not copying the plaintiff's works and reproducing said works on Google's own web page to be viewed by others. Contrarily, the court found that Google's caching of online content effected a result of benefiting website publishers because it allowed users to access their sites when the sites are otherwise unavailable."

"The court further found that caching served a variety of other beneficial purposes directed towards advancing the functionality of the Internet, such as maintaining archival copies, enabling web page comparisons and identifying search query terms," Righthaven's filing said.

"By no means can the present case be reasonably compared to the facts in (Field v. Google). Unlike Google, Mr. Klerks has willfully infringed on Righthaven-owned copyrighted content – without any indicia of an implied license to do so – and publicly displayed the Infringement on his own website for the purposes of procuring a personal benefit. Google's actions were intended to advance the technological infrastructure of the Internet as a means of assisting both online publishers and the readers of such published content. Mr. Klerks' actions were intended to supersede the work's (story's) original purpose for the personal advancement of his own website," Righthaven said.

The judge assigned to the Klerks case, Gloria Navarro, has not yet ruled on either side's arguments. The court clerk entered a default against Klerks when he failed to respond to the lawsuit by July 9. Klerks' attorneys are moving to have the default canceled so he can fight the lawsuit, arguing Klerks wasn't served with the suit. Righthaven, however, insists Klerks was served on June 14.

Several of the Righthaven cases have been settled for generally undisclosed amounts, with the highest confirmed settlement being $5,000.

None of the contested lawsuits has advanced to the point where a trial has been scheduled or even to the point that a judge can decide the issues on motions for summary judgment. Righthaven, however, prevailed in two cases last week when federal judges refused to dismiss the lawsuits against those defendants.