Amicus Brief Calls Into Question The Legality Of Righthaven's Entire Business Model
from the read-it-all dept
Marc Randazza was kind enough to send over the amicus brief his law firm filed on behalf of the Media Bloggers' Association in response to one of Righthaven's lawsuits. You should read the whole thing (it's embedded below). I'll repeat: you should read the whole thing. It rips apart Righthaven's entire strategy and shreds it to pieces, accusing the company of champerty among other things. Here's just a snippet:If the Las Vegas Review-Journal (hereinafter, the "LVRJ") or its parent company, Stephens Media LLC (hereinafter, "Stephens Media"), were the plaintiffs in these cases, this argument would not apply. But Righthaven's exercise in champerty seeks to make an end-run around the rule of law limiting the right to sue for copyright infringement to creators and those legitimate enterprises that make creativity possible and protectable. Nobody can seriously believe that Righthaven, which publishes nothing anywhere, has acquired the full ownership of the articles it sues upon. The assignments it secures -- only after finding "infringed" articles to sue over -- contain mysterious (and heretofore unexamined) language about a "right of reversion" which, on frank consideration, demonstrates how transparently illegitimate these "assignments" are.We've seen some of the defenses to Righthaven suits raise some of these issues, but never in such a detailed manner. And it's especially interesting in this case, where the filing comes as an amicus brief, rather than lawyers for the defendant. In fact the defendant in the case, Bill Hyatt, did not reply. As we've discussed in the past, normally when that happens, the court will make a default judgment -- basically giving the plaintiff everything requested. However, they don't have to and Randazza points out that Righthaven's claims reach far beyond reasonable. Among other things, it also challenges Righthaven's ridiculous standard demand that those sued hand over their entire domain name, noting that copyright law does not allow such a remedy.
Phony "assignments" are not the only venal and manipulative aspects of the Righthaven scheme. By design, Righthaven sues mostly retirees who, terrified of losing their retirement savings, generally settle their cases quickly and without discovery. But this Court should not restrain its own duty to inquire into the underlying law and facts on which both Righthaven’s claims and Righthaven's coerced settlements are based when considering its decision on damages in this case. This Court should hold serious doubts about the propriety of Righthaven bringing these suits with rights obtained from a third party that has no stated stake in this litigation or related cases. Either the LVRJ and Stephens Media are "selling lawsuits," which is impermissible under Silvers, 402 F. 3d at 884-85, or Righthaven is simply a law firm in disguise, engaged in champerty, which is impermissible in Nevada, as it is almost everywhere legal ethics and fundamental justice are a concern of the law. Schwartz v. Eliades, 113 Nev. 586, 589 (Nev. 1997); Lum v. Stinnett, 87 Nev. 402, 408 (Nev. 1971). Without revealing exactly what exclusive rights Righthaven has acquired in the works, if acquiring any at all, Righthaven essentially buys the bare right to sue for copyright infringement -- which purchase is banned by copyright law -- and uses it to sue small website operators by the hundreds. Left unchallenged, Righthaven's practices create a secondary commodities market for copyrights, or exclusive subsidiary rights in copyrights, to be used only in suing others who may have valid defenses, but cannot afford to raise them -- or engage counsel whatsoever, as is the situation in this case. This is inimical to the purpose of the Copyright Act, which was intended to protect the intellectual investments of creators, rather than creating lawsuit mills that use registered copyrights -- only after their infringement was discovered -- as a source of income, rather than a shield against others' misappropriation. See Silvers, 402 F.3d at 886.
There's also a very long and worthwhile section on why the demand for $150,000 is not just ridiculous, but goes against the law. I won't post that whole thing, but here's a snippet:
The Due Process clause of the U.S. Constitution has long been a source of limitation on all forms of damages awarded in judicial proceedings. Damages beyond those actually suffered by a plaintiff, awarded as a deterrent against similar unlawful acts in the future -- known as exemplary damages -- have been tightly limited by the courts under the Due Process clause. Pacific Mut. Life Ins. Co. v. Haslip, 499 U.S. 1, 42 (1992); State Farm Mut. Ins. Co. v. Campbell, 538 U.S. 408, 417 (2003). Because these exemplary damages may become detached from the harm actually caused to the plaintiff by defendant, these awards may fail to serve any legitimate purpose, and instead hold a "devastating potential for harm." Campbell, 538 U.S. at 417.The argument here is quite interesting, since we're likely to see similar arguments made in the Jammie Thomas and Joel Tenenbaum appeals on the constitutionality of the damages awards.
This due process protection is both substantive and procedural in nature. See Id. Courts analyze three figures in relation to any award of exemplary damages to determine whether any such award is grossly excessive:1) The degree of reprehensibility of the defendant’s conduct;Id. at 418; Cooper Indus., Inc. v. Leatherman Tool Group, Inc., 532 U.S. 424, 436 (2001); BMW of N. Am. v. Gore, 517 U.S. 559, 575 (1996). Though the Court has not yet awarded any damages in this case, the third factor, weighing the difference between awarded damages in this case and the penalties authorized in similar cases, should consider the damages sought by Righthaven in comparison to those authorized in other cases.
2) The disparity between the actual or potential harm suffered by the plaintiff and the punitive damages award; and
3) The difference between the punitive damages awarded by the jury and the civil penalties authorized or imposed in similar cases.
This analysis and scrutiny applies to the Copyright Act, just as it does to any federal law. Every act of Congress, including the enactment of the Copyright Act, is subject to due process limitations on account of the Fifth Amendment’s limits on Congress’ power. Nebbia v. N.Y., 291 U.S. 502, 510 (1934). These statutory damages allow by the Copyright Act serve the same purpose as punitive damages awarded by a jury (to punish and deter unlawful conduct) and therefore require the same level of constitutional scrutiny.
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Filed Under: business model, champerty, copyright, due process
Companies: righthaven
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Nonsense
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Randazza
"inimical to the purpose" is fantastically colorful and is exactly what I thought of the arsenal of John Doe and misidentified "hackers" in your case.
You are raping hacking laws as clearly as they are raping copyright.
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Just a pdf would be nice ...
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simple solution
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Joel
Whitney
Jammie Thomas
With Whitney gone, that leaves two that seem more concerned with the statutory damages clause of copyright. So the question is, will this question be answered with the other two, seeming as they'll possibly answer that exact same question.
Other than that, there really doesn't seem to be a way to question those parts of copyright law that seem rather egregious.
I'm not positive but would not the Eldred vs Ashcroft decision need to be reviewed soon as well?
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Conspiracy to Defraud
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The copyright law is very specific when it comes to damages:
http://www.copyright.gov/title17/92chap5.html
(read 504 for yourself... I won't post it all here).
They could make the argument that it isn't in line with what is in other laws, but at the same time it is pretty specific on how to figure things out, sets both minimums and maximums, and statutory damages are spelled out pretty completely, which makes the process of figuring out actual damages redundant.
There is also nothing in the law against appointing an agent or having an agent formulate claims or generate DMCA notices and other for you. There doesn't appear to be anything specifically against allowing a third party to manage your copyright for you.
It sort of seems like they are hoping the court will allow them to make new law. It is doubtful it will work, and even more likely to survive a solid appeal, even if they do get an activist judge to support them at a lower level.
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If I understand the argument correctly, the last two words of your statement are key: for you. Righthaven is not suing on behalf of someone. They have been given, temporarily (and possibly illegally), ownership of the copyright to sue on their own behalf.
That is, instead of being a law firm hired to protect someone's copyright from actual harm, they are a shell company designed to make a profit by abusing the copyright system.
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instead of being a law firm hired to protect someone's copyright from actual harm, they are a shell company designed to make a profit by abusing the copyright system
You are making it sound like the two are mutually exclusive. Do you not think that working to limit piracy of a given product isn't protecting the copyright? Instead of paying in house employees who are motivated by results (what you would call profiting from the copyright system), they are paying outsourced company to do the same?
Remember too: without piracy, there would be none of the supposed profits you talk about. Let's be clear, the whole thing doesn't start with a lawsuit, it starts with piracy.
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That is shameful, so it's up to us now to insist-demand our elected public legislators to pass as many Amendments to the Constitution as necessary to clarify these matters.
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> fairly literally
Scalia especially has ruled that way. He's made a point of noting that the phrase is "cruel AND unusual" rather than "cruel OR unusual", which, he says, means the Constitution requires that a punishment be both before it is prohibited. And he went further, saying that there are very few punishments that are actually unusual, consider the barbarity in mankind's history. Most anything you can think of has not only been done before, but been done a lot, and is therefore not unusual.
Maybe throwing someone out the airlock of a spacecraft would qualify? That's probably a punishment that's never been used before in the past.
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What makes this illegal is that Righthaven may be falsely registering themselves as the copyright holder which is a federal offense. They are not acting as "agents" of the newspapers. They are claiming ownership of the copyrights and are suing on their own behalf not the newspapers. There is a standing issue here but even above that there suggests a conspiracy between Righthaven and their media partners to set up an illegal relationship to defraud bloggers as well as the Federal Government. It is time for the FBI and Justice Department to investigate Righthaven,
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What makes this illegal is that Righthaven may be falsely registering themselves as the copyright holder which is a federal offense. They are not acting as "agents" of the newspapers. They are claiming ownership of the copyrights and are suing on their own behalf not the newspapers. There is a standing issue here but even above that there suggests a conspiracy between Righthaven and their media partners to set up an illegal relationship to defraud bloggers as well as the Federal Government. It is time for the FBI and Justice Department to investigate Righthaven,
They're claiming ownership of the copyrights because they have, in fact, been transferred the copyrights. I highly doubt DOJ's going to be investigating anything. Pure FUD.
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You know, just a point of information: calling everything with which you disagree "FUD" doesn't not actually make it so.
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That seems like a stretch. One of the filings I read in one of Righthaven's cases addressed this issue, stating that Righthaven was the assignee of all the copyright rights, expressly including the accrued right to sue.
Either the LVRJ and Stephens Media are "selling lawsuits," which is impermissible under Silvers, 402 F. 3d at 884-85, or Righthaven is simply a law firm in disguise, engaged in champerty, which is impermissible in Nevada, as it is almost everywhere legal ethics and fundamental justice are a concern of the law. Schwartz v. Eliades, 113 Nev. 586, 589 (Nev. 1997); Lum v. Stinnett, 87 Nev. 402, 408 (Nev. 1971). Without revealing exactly what exclusive rights Righthaven has acquired in the works, if acquiring any at all, Righthaven essentially buys the bare right to sue for copyright infringement -- which purchase is banned by copyright law -- and uses it to sue small website operators by the hundreds.
Your whole argument hinges on there only being the accrued right to sue being transferred, but as I said, I don't think that's the case. If only the accrued right to sue was being transferred, I'd agree that Silvers applies--but again, I don't believe that's the case. Silvers makes clear that the accrued right to sue may be transferred along with the other copyright rights. Once the right to sue is Righthaven's, they can sue for the infringement. It seems pretty straightforward to me, but maybe I'm missing something.
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One of the values of copyright is that you can assign the rights (and almost any subset of them) to anyone. Remember retail sales, theater use, PPV use, and so on are all "rights being sold or leased". Just as importantly, the control over those rights, and the rights to the full movie / product can be re-assigned or sold at any time.
It is pretty hard to say that they cannot sell the rights to represent in legal action to a third party.
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Randazza states:Mike didn't include Exhibit 1, but I pulled it off of PACER. Two problems here. First of all, that copyright assignment is for another work--not the one being sued on. So what in says in that contract is irrelevant. Second, I disagree that the assignment is not clearly for all of the rights in the copyrighted work, including the accrued right to sue.
Read it for yourself. It states:All due respect to Mr. Randazza, but I think it's a bit intellectually dishonest to state that the agreement "do[es] not identify what Rights Righthaven has purchased." What's transferred is all of the rights. I also think it's less than honest to claim that the stipulated right of reversion is at all relevant. The rights haven't reverted, so it's moot.
Randazza also attacks the claim for ownership of the domain name:Looking at CRS and Kremen, that's not at all what they say, nor are those even copyright cases.
Further, Randazza states that: "The remedy sought by Righthaven is only allowed in trademark cases . . . ." But that's not true. The very cases he cited indicate that the a court can order the turnover of a domain name in conversion cases. On top of that, the request for control of the domain name, while not listed as a remedy in the Copyright Act, is an equitable remedy that a judge could order--so there's nothing wrong with asking for that.
I think attacks on Righthaven's right to sue are bound to fail. I also think attacking Righthaven's request of statutory damages will fail because what they are asking is within the statutory damages range. This isn't champerty either since Righthaven is the registered owner of the copyright--they aren't intermeddling in lawsuits of others. They're suing in their own right.
I think this amicus brief is heavy on rhetoric, but light on law. I think it's wholly unpersuasive. The people violating the Copyright Act are the people copying Righthaven's copyrighted works without permission. Everyone seems to ignore the fact of who's doing the violating here.
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I don't think intellectually dishonest means what you think it means.
Assignor hereby transfers, vests and assigns the work . . . to Righthaven, subject to assignor's right of reversion, all copyrights requisite to have Righthaven recognized as the copyright owner of the Work for purposes of Righthaven being able to claim ownership as well as Righthaven being able to seek redress for past, present and future infringements of the copyright in and to the Work.
What I read here is that they bought the right to sue. Yes, it says they get all the other rights as well, but (1) the assignor can take back those rights at any time and (2) they explicitly spell out the right to seek redress.
I think that is intellectual dishonesty: the conscious omission of aspects of the truth known or believed to be relevant in the particular context.
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I think that is intellectual dishonesty: the conscious omission of aspects of the truth known or believed to be relevant in the particular context.
My understanding is that in the Ninth Circuit, the accrued right to sue has to be explicitly included in the contract to assign rights, or else the presumption is that the accrued right to sue wasn't transferred with the other rights. Hence, the explicit inclusion of the accrued right to sue in the contract. If the contract DIDN'T include that right explicitly, then that would be something worth mentioning. Regardless, by your reading, as by mine, all of the rights were transferred, including the right to sue, and therefore Randazza's attempt to apply Silvers is misplaced (forgetting for the moment that we're not even looking at the right contract). The intellectual dishonesty, in my opinion, is pretending like the proffered contract doesn't assign all of the rights. It clearly does. It takes an EXTREMELY strained reading of it to think otherwise.
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Not really. If Righthaven doesn't distribute, copy, promote, sell, license, or transfer the work and also allows the original assignee to revoke any of those rights I think any reasonable judge can determine intent.
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Yes, the intent to do exactly what it says on the face of the contract--to transfer all of the rights to Righthaven, with right of reversion withheld. As far as licensing goes, isn't Righthaven clearly licensing the content back to the companies who are still displaying it? I believe there is a license there, otherwise, it's infringement. Though, it'd be rather ironic infringement. :)
It's of no moment though, since there is no duty to "distribute, copy, promote, sell, license, or transfer the work" as you suggest. Simply owning the copyright and having it infringed is enough.
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You are right on: CRS and Kremen are not copyright cases, however that is not a salient issue. As I read them, those cases support the proposition that domain names are intangible personal property not available for satisfaction of a judgment creditor’s award againt its debtor. See also Palacio Del Mar Home Owners Association, Inc. v. McMahon,174 Cal. App. 1386 (holding that a domain name registration cannot be levied upon under the general turnover statute in California). Although these three cases are interpreting California law, it seems that Randazza used them as authority because no Utah case speaks directly to this specific point.
“The very cases he cited indicate that the a court can order the turnover of a domain name in conversion cases.”
You say that CRS and Kremen actually indicate that a court may order the turnover of the domain name in a conversion kits. What also needs to be said here can be better said by the CRS court:
“Second, I disagree that the assignment is not clearly for all of the rights in the copyrighted work, including the accrued right to sue.”
And here’s what I think you’re wrong. At the very least, whatever rights Righthaven acquired via its agreement with the newspaper is ambiguous. For one I think if they really acquired all of them it easily could’ve been noted in the contract (hell, §106 only lists 6 exclusive rights of the copyright owner, 3 of which don’t even apply to the work at issue here).
Furthermore, as I mentioned earlier, the article at issue here remained for sale on the newspaper’s website after Righthaven claims it acquired all the rights requisite to sue. This does not suggest that Righthaven had the entire “bundle” it needed. I do understand that the transfer agreement between Righthaven and the newspaper says “all copyrights requisite,” but it seems the newspaper still possessed its right to reproduce and distribute its work.
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If there was authority that stated that every single right being transferred has to be delineated in the contract, I might agree with you. But I think the contract in question is pretty clear that "all copyrights" are being transferred, including the accrued right to sue.
The fact that the article remained for sale after the transfer of rights is easily explained away by Righthaven licensing back the article in question to the party that assigned them the rights in the first place. What's key is that ownership of the rights did transfer to Righthaven. Righthaven's subsequent licensing is irrelevant.
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Further, Kremen ended up with the domain in question (sex.com).
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What is important: Kremen and CRS indicate what type of property California classify a web domain as ("intangible personal property"), and Randazza points out that those courts wouldn't allow a web domain to be a damage award in a copyright case.
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The Copyright Act doesn't disallow transfer of domain names, so I don't see how that equitable relief is not on the table. I know Righthaven's briefed the point in at least one of their cases that I've read. I don't remember their exact arguments, though.
I personally don't think that the transfer of the domain name is called for in any of these Righthaven cases. But I'm not convinced that that remedy is not on the table. I doubt a judge would ever exercise that power, but I do believe that that power is there. It's an interesting point, either way.
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However, Righthaven has registered themselves and only themselves as the copyright owner. So either the Denver Post is guilty of displaying a false copyright notice on the image or Righthaven has filed a false claim with the US copyright office.
Either way laws have been broken.
(c) Fraudulent Copyright Notice. — Any person who, with fraudulent intent, places on any article a notice of copyright or words of the same purport that such person knows to be false, or who, with fraudulent intent, publicly distributes or imports for public distribution any article bearing such notice or words that such person knows to be false, shall be fined not more than $2,500.
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Put up the link if you would, and we'll take a look. I'd like to check it out.
So either the Denver Post is guilty of displaying a false copyright notice on the image or Righthaven has filed a false claim with the US copyright office.
I can think of a couple other possibilities that aren't as sinister.
It's an interesting proposition though. By having the copyright certificate in their name, Righthaven has the presumption of ownership. The burden is then on the defendant to prove by a preponderance of the evidence that Righthaven does not own the copyright. Does the copyright assignor's website's copyright mark meet that burden? I don't think so. I'm not aware of any authority that says simply marking something as copyrighted trumps the presumption raised by the registration itself. I'm not real sure though. I'd have to research it.
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Again Righthaven is not "Representing" the papers in question. They are not acting on behalf of anyone but themselves so any damage considerations can only be assessed on the damages "suffered" by Righthaven. Since Righthaven publishes nothing and does not have any other financial interest in the works besides a vehicle for lawsuits then the damage to them is zero. Therefore any award should also be zero or close to it.
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Legally, or morally? What a bunch of sleezebag lawyers.
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Legally, of course. My interest is purely legal. I'll leave the morality of it for others to discuss. My legal analysis isn't tainted by whether or not I think Righthaven is distasteful. I'm not "working backwards" as it were.
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Laws derive from moral values, not the other way around.
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http://www.leg.state.nv.us/CourtRules/RPC.html
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If it was simply the paper hiring a lawfirm to file lawsuits there would not be a problem but this is not the case. There are so many conflicts of interests introduced by Righthaven's buisness model that it is the hight of irresponsibility on the Paper's part to even associate themselves with Righthaven. Why would any sane organization put themselves in a situation where the lawfirm supposedly representing your interests itself has a business model that automatically jeopardizes and ads major complecations to any case they file? Not to mention the huge liability these media conglomerates are putting themselves into with the huge potential for counter suits. The most likely scenario in all of this is that in the end courts are going to rule against Righthaven because of the many conflicts of interest and Righthaven will be taken down and what will be left is a huge liability to these media companies, and if it is found that these companies, along with Righthaven, used illegal means to file these cases this has the potential to not only bring down the media conglomerates but also see many of their executives sharing a cell with Bernard Maddoff along with Steven Gibbs.
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There was a countersuit, I believe in the Democratic Underground case. Anyone know what became of that?
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As you know very few of these cases have actually gone to court because the cost of fighting is several times higher than just settling regardless of the merits of the case which is why this is such an abuse of the legal system. You site 200+ cases but only a small handful have actually seen a court room because of the fact most defendants cannot afford to defend themselves. With the cases that have gone to court Righthaven has only won when it comes to default judgement which this one in question is one of them. For the remaining cases that a judge has heard they have yet to rule on them so until they rule you cannot use those cases as some kind of victory for Righthaven. As for the default cases it was only out of the defendants failure to appear and not on the actual merits of the case and since Righthaven purposefully files lawsuits hundreds or even thousands of miles from the defendant you can see how a defendant of little means would be unable to appear in court.
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The fact that judges are taking a lot of time formulating their rulings does not bode well for Righthaven. If Righthaven cases were as cut-and-dry as you suggest there would have been very quick rulings. These judges know that any unfavorable rulings will be appealed by Righthaven so they are making sure their arguments are iron clad. Also there are cases pending, one I know in particular who, is going to pursue criminal charges against Righthaven not just contest the lawsuit. During discovery there are going to be many more things come out against Righthaven. So far Righthaven has managed to stay low on the media's radar but that is changing. The national media as well as civil rights and Internet organizations have now been awakened to this threat and are responding just like the Media Bloggers Association.
I have also talked with Congressmen and Senators who have so far unanimously agree that Righthaven is abusing the system. It is only a matter of time before Congress acts to make it more difficult for copyright and patent trolls to operate. I believe Righthaven will be taken down by the courts before Congress acts however.
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It is only a matter of time before Congress acts to make it more difficult for copyright and patent trolls to operate.
That will only come at the time that congress makes it simpler for copyright holders to take legal action directly, knocking down the shields created by seciton 230 and other rules which make it almost impossible for a rights holder to obtain justice.
IPv6 anyone? IP for life?
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When Congress passed the DMCA that did not take into consideration or even anticipate how the web would evolve as a social media where the national debate would shift to that medium. Cutting small excerpts of stories and even displaying an image to comment directly on the image or for use in satire is now an essential part of the national discourse and to curtail it would be to curtail freedom of speech.
Rightsholders have a fair gripe when their work is posted with no attribution or link-backs or for out and out plagiarism but Righthaven lawsuits seldom meet these criteria. Even the newspapers own stated terms of use allow for a few paragraphs to be posted with link backs but Righthaven is now appealing to win the right to sue even with a few paragraphs. In other words Righthaven wants the right to sue even if the defendant was following the paper's own guidelines.
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Why don't you show some courage and tell us who you really are? If you are not with Righthaven and just an interested observer then knowing who you are would be no big deal. However,if you are in the employ of Righthaven or any of its clients and you are being paid to spin public opinion your employer's way then not disclosing that information is highly unethical.
So please tell us who you are.
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Just look at Rupert Murdock's Times of London. When he decided to divorce his paper from the Internet. Traffic fell 90% and even the dead tree addition has suffered. People won't even return the calls of Times of London reporters because who want's to waste time interviewing with a paper no one reads anymore.
Newspapers have everything to lose by following their current strategy. They believe the internet is responsible for their decline so the answer of course is to destroy the Internet and a lot of lives with it.
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