Saturday, April 16, 2011 | 2:05 a.m.
Things went from bad to worse on Friday for Las Vegas copyright enforcement company Righthaven LLC when a judge rejected Righthaven’s standard copyright infringement lawsuit demand that defendants forfeit their website domain names to Righthaven.
Chief U.S. District Judge for Nevada Roger Hunt also found merit in arguments that Righthaven can’t demand attorney’s fees in its lawsuits, though he didn’t issue a final ruling on that issue.
Hunt’s ruling on those two issues came in a Righthaven lawsuit against former federal prosecutor Thomas DiBiase, who has a website covering “no body” murder investigations nationwide — cases in which a murder is suspected but no body has been located.
He was sued by Righthaven after posting without authorization a Las Vegas Review-Journal story about such a case on his website nobodycases.com.
In motions for dismissal and a counterclaim against Righthaven, attorneys for DiBiase argued the federal Copyright Act contains no provision for domain name seizures in copyright lawsuits.
Critics say this standard demand by Righthaven, along with threats of statutory damages of up to $150,000, are included in the lawsuits to coerce defendants into settling — with most defendants settling for less than five figures and keeping their website names after learning that’s cheaper than hiring attorneys to fight back.
Righthaven agreed domain name transfers are not authorized by the Copyright Act, but argued such seizures are appropriate as a matter of equity — for instance, if a defendant won’t stop infringing or can’t pay a judgment.
Hunt sided with DiBiase on that issue on Friday, citing case law that the remedies for infringements are only those prescribed by Congress.
“Congress has never expressly granted plaintiffs in copyright infringement cases the right to seize control over the defendant’s website domain. Therefore, the court finds that Righthaven’s request for such relief fails as a matter of law and is dismissed,” Hunt wrote in his ruling.
DiBiase’s attorneys with the Electronic Frontier Foundation, an online freedom group, also argued Righthaven’s request for attorney’s fees — should it win the case — be dismissed because that would require there be an independent attorney-client relationship.
DiBiase argued Righthaven’s principals are its lawyers, so there is no independent relationship with a client.
“Although the court finds merit in DiBiase’s argument, it nevertheless denies his motion because any determination on attorney’s fees at this point in the litigation is simply premature,” Hunt wrote.
Righthaven also sought dismissal of DiBiase’s counterclaim in which DiBiase sought a declaration by the court that DiBiase did not infringe on Righthaven’s copyright.
Hunt refused to dismiss the counterclaim, writing that it “serves a useful purpose because, among other things, it will guide DiBiase’s website operations (and the operations of other, similarly situated parties) in the future.”
With Righthaven losing two fair-use rulings so far, DiBiase will continue to argue his post was protected by that concept.
Hunt also found that “DiBiase has pled sufficient facts to make his request for declaratory relief a plausible claim.”
Friday’s ruling means the litigation will continue, unless it’s settled.
Also Friday, Hunt made public the Strategic Alliance Agreement between Stephens Media LLC, owner of the Review-Journal, and Righthaven. This contract covers the copyright assignments that are at the heart of Righthaven’s lawsuits over Review-Journal material.
A defense attorney familiar with Righthaven said the document could be devastating to Righthaven and Stephens Media, an affiliate of which has invested in Righthaven.
That’s because the document shows Righthaven’s interest in the copyrights is only for the right to sue, with Stephens Media retaining all other rights.
This appears to contradict Righthaven’s typical lawsuit claim that Righthaven “holds the exclusive right” to reproduce the material at issue, prepare derivative rights to it, distribute copies of it and publicly display it.
The attorney, who agreed to provide information to the Las Vegas Sun and VEGAS INC on the condition he not be identified, offered this analysis of Hunt’s ruling.
“Righthaven has always asserted that it’s the unquestioned owner of all copyrights. This agreement suggests that’s not exactly accurate. In fact, Righthaven is ‘assigned’ particular copyrights really just to sue someone. Essentially all meaningful rights under a copyright are by this agreement expressly given right back to Stephens Media.
“In fact, Stephens Media can cancel the ‘assignment’ and get back the entire copyright anytime it wants. Bottom line: this ‘assignment’ is legal doublespeak and Righthaven really doesn’t own anything.
“It may be making false assertions to the court and defendants by saying it’s the actual ‘copyright owner.’ It will be interesting to see if Righthaven defendants, including those who already settled cases, now try to raise claims of misrepresentation against Righthaven, arguing that the company really didn’t own copyrights as it asserted,” the attorney said.
Righthaven, however, has said its copyright assignments are valid for lawsuit purposes and arguments otherwise “would completely eviscerate countless years of licensing and related transactions throughout the country.”
“There is simply no basis to conclude the ‘newly discovered evidence’ demonstrates the objective unreasonableness of Righthaven’s claims,” said a filing in March by Righthaven attorney Shawn Mangano.
The unsealing of the document is just one step in the litigation of a lawsuit Righthaven filed against the Democratic Underground over a partial post of a Las Vegas Review-Journal story.
The Democratic Underground is pursing a counterclaim against Righthaven and Stephens Media, complaining they created “sham” copyright assignments.
The Democratic Underground in particular wants to be awarded its legal fees, which are likely to be hefty given the amount of work devoted to the case.
Hunt, in resolving a dispute between attorneys over whether the contract should be made public, included some harsh commentary in his order about the attorneys for Righthaven and Stephens Media.
Hunt cited their use of phrases against Democratic Underground attorneys such as “underhanded” “a ruse,” “blatantly ignored,” “brazen attempt,” “fumbling attempt,” “purposefully muddle” and “defendants’ complaint reeks of hypocrisy.”
Hunt called all of that “a very unprofessional attempt to attack counsel rather than address the issues.”
“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,” Hunt wrote.
Hunt wrote in his order he initially was inclined to keep the copyright-assignment contract secret but said Righthaven and Stephens Media cited only “feeble” reasons to keep it hidden from public view.
These included concerns Righthaven competitors would get a look at the information, that its release would harm Righthaven's ability to sign up new clients and that ``dissemination of the information would be published by Stephens Media competitor the Las Vegas Sun newspaper and would be disseminated widely throughout the Internet.''
"It appears to the court that there is certainly an interest and even a right in all the other defendants sued by plaintiff to have access to this material. Furthermore, because these cases have generated a great deal of public interest, particularly in the media and on the Internet, that there is a right of the public to this information which overrides any claimed confidential commercial rights,'' Hunt wrote in his order.
"The Las Vegas Sun and the Internet have already widely disseminated articles about Righthaven’s numerous lawsuits in this district and also the various favorable and adverse rulings that have been rendered,'' Hunt wrote. "This substantiates the public interest in this matter and this information, which has been generated by Righthaven and Stephens Media’s own actions.
"The right of other defendants in Righthaven’s lawsuits, and of the public to understand the full facts regarding the bases for Righthaven and Stephens Media’s actions, outweighs the feeble concerns noted above,'' Hunt's order said.