Stephens Media Completely Capitulates In Democratic Underground/Righthaven Case

from the fair-use,-ftw dept

The key Righthaven case, in which the details of the strategic agreement between Righthaven and Stephens Media were finally released, was Righthaven's lawsuit against the Democratic Underground. DU, with help from lawyers at the EFF and Fenwick and West, countersued Stephens Media, arguing that it, not Righthaven, was really behind the lawsuits. That resulted in the release of the agreement between the two companies, and the court dismissed Righthaven from the proceedings... while keeping Stephens Media in the case. The Democratic Underground filed a motion for summary judgment... and in its response, Stephens Media has almost totally capitulated -- admitting that the Democratic Underground's use was "fair use" (full motion embedded below):

While Stephens Media disagrees with DU's characterizations of certain facts that are not material for purposes of the present Motion, it does not contest the substantive arguments presented by DU on the issues of volitional act and fair use as applied to the material facts of this case.

In other words, Stephens Media -- who according to the strategic agreement, had to give Righthaven the green light to sue -- now admits that the use by DU was fair use.

From there, Stephens focuses on a separate issue: making sure that additional details of its business relationship with various companies stay secret. Apparently, a number of documents have been filed under seal, and Stephens wants to make sure they don't see the light of day. Basically, DU wanted details of syndication relationships that Stephens has with other parties as part of its fair use argument, but Stephens is now giving them that argument, saying they agree it's fair use... just let us keep those other deals secret. But on the major point of the lawsuit, the copyright infringement, Stephens has now flat out said that it agrees the use was fair.

I do wonder if this opens the company up to possible problems, though, considering the belief in some courts that a copyright holder must consider fair use before taking action against someone for potentially infringing. Either way, it's clear that Stephens wants no part of continuing to fight Righthaven's fight here.

Of course, this is really yet another example of why something like SOPA is such a bad idea. Imagine Righthaven in a post-SOPA era? Remember that it was already arguing in each of its lawsuits that it should get the domain names of everyone it sued (based on absolutely nothing). If SOPA had been around, Righthaven would have been able to cause even more trouble for sites like DU, potentially cutting off all funds while the issue was litigated. Is that really the future we want?

Filed Under: copyright, fair use
Companies: democratic underground, eff, righthaven, stephens media

Court Slams Righthaven (Again); Refuses To Let It Back Into Democratic Underground Case

from the another-day,-another-loss dept

Righthaven seems to be collecting legal losses like they were going out of style. I wonder if there's ever been a company that has been slapped around so many times by so many judges. No matter how often Righthaven boss Steve Gibson pretends that the courts mostly agree with him and are just "giving guidance" to others, the reality of the matter is that the company hasn't just been losing, it's been getting regularly scolded by angry judges who appear to have no patience for the company's legal strategy.

The latest involves one of the key cases here: the Democratic Underground case. This is the case where the Strategic Agreement between Righthaven and Stephens Media finally came to light, showing that the copyright transfer was a sham. That resulted in the judge dismissing Righthaven from the case. The case kept going, however, because the Democratic Underground had filed a countersuit against Stephens Media to get it into the case. Of course, part of the reason why Stephens helped set up Righthaven in the first place was to avoid having to be involved in these lawsuits. So, ever the dutiful spin-off, Righthaven keeps trying to reinsert itself into the case.

However, yet again, the judge in the case, Richard Hunt, has clearly rejected Righthaven's attempt here (pdf). Hunt says that key reason for not allowing Righthaven back in was because of the timing of everything, noting that even if it's now offering a (twice) "amended" agreement to make its case, it's too late to change things in this case:

Righthaven argues that the application to intervene is timely because it brought the motion soon after being dismissed from the case and rectifying the problems with the SAA by creating the Amended and Restated SAA. The Court disagrees. Righthaven filed this case more than ten months prior to its application to intervene. It is true that Righthaven could not have sought to intervene until it was dismissed, but this is because of the method in which Righthaven chose to pursue this litigation. Righthaven’s application is untimely because ten months have passed since filing, intervention would prejudice Democratic Underground as multiple of their discovery motions were dismissed as moot when Democratic Underground was dismissed, and the reason for delay was of Righthaven’s own making. See, e.g., Cal. Dept. of Toxic Substances Control v. Commercial Realty Projects, Inc., 309 F.3d 1113, 1119 (9th Cir. 2009) (laying out factors to consider in timeliness analysis). In fact, the reason Righthaven now seeks to intervene is to circumvent the Court’s June 14 Order by creating standing and rights after the fact. This is improper and does not make the application timely.

And that's not all:

The Court is dubious as to whether Righthaven can essentially create standing in the middle of a case so as to either prosecute the case independently or intervene. Further, the Court questions whether Righthaven can even have a legitimate interest under any agreement (no matter the rights purportedly transferred) because Stephens Media and Righthaven’s arrangement seems very much like a contingency fee arrangement with an entity unauthorized to practice law.

In other words, the court is listening to the amicus brief filed by Todd Kincannon, which we've discussed before. Kincannon has been the lead voice is arguing that Righthaven is engaged in unauthorized practice of law, so it's interesting to see a judge suggest that he agrees.

At what point do the folks at Righthaven finally realize it's time to give up?

Filed Under: copyright, standing
Companies: democratic underground, righthaven, stephens media

Righthaven Fails To Pay Sanctions; Complains A Day Late

from the wow dept

It really is quite stunning just how cavalier Righthaven appears to be concerning the absolute smackdown it has been getting repeatedly from various judges. The company was accused of trying to avoid paying legal fees owed in one case. In the first big case where it got smacked down, the one involving the Democratic Underground, which revealed Righthaven's questionable deal with Stephens Media, the court last month ordered Righthaven to pay $5,000 for misleading the court and to send the transcript of Judge Roger Hunt's explanation for the sanctions to everyone else that Righthaven is currently suing. That happened on July 14th and the company was given two weeks to comply.

Once again, it did not. Instead, a day after the deadline to pay up, Righthaven filed for an extension on paying, and said that it had come across some new "grounds to appeal the monetary sanction imposed by the court." It also complained that this research "has taken a significant period of time," which is why it was late and wanted more time. Separately, Righthaven admits that it has not lived up to the requirement to send the transcript of the hearing to all of the other cases its involved with. Here its reasoning is somewhat ridiculous. It claims that it didn't have access to the transcript until two days before it had to be given to the other cases, and at that time it was busy with some of the many other cases in which it has been smacked down.

Judge Hunt, who has the patience of a saint, actually granted a ten day extension, saying that Righthaven has to pay up by August 8th. However, he also makes it clear that he's (yet again) not at all happy about Righthaven's actions. In Righthaven's filing for an extension it also asked for "clarification" on delivering the transcript to all of the parties it had sued, asking if it was okay to just file the documents with the court, rather than deliver them to the actual parties sued. Judge Hunt, who you can almost hear sighing, points out that he "does not believe clarification is necessary," but agrees to provide it just to be crystal clear:

First, as Righthaven points out in its motion, when the Court issued the sanctions the Court and counsel referred to “parties,” not merely cases. Accordingly, it is insufficient to merely file the required documents; Righthaven must produce the documents to the parties in those cases as the Court clearly stated. The reason for this is simple: the Court is fully aware of Righthaven’s practice of filing suit against a party and then entering settlement negotiations (and frequently settling) without ever serving the party. The Court concludes that depriving those parties of the benefit of the Court’s order would be unjust.

And then he notes that while he's granting the extension, he believes he's already being "overly generous" in doing so, and won't accept more delays, and will not be happy if Righthaven does not pay up:

Finally, after reexamining the issues and counsel’s stated difficulties, the Court concludes that it was overly generous in granting the extension because counsel’s situation is largely—if not entirely—of his and Righthaven’s own making. Righthaven and its counsel should concentrate their efforts on material issues and court orders, not wishful research. Further, if counsel does not have time to do all that he needs to in Righthaven’s dozens of cases, the Court kindly suggests that he or Righthaven obtain additional help, not complain to the Court about time constraints. Righthaven also informed the Court in its motion that it plans to request a stay of the monetary sanction. The Court already granted an extension, which it will not change, and suggests Righthaven not waste its time on a motion requesting any further relief from the sanction.

What amazes me is how incredibly tone deaf Righthaven appears to be to the repeated smackdowns it is getting from judges and how weak its legal position is. I recognize some of that is posturing, but it seems to go even further than that. It seems like Righthaven still thinks that these rulings aren't that big of a deal.

Filed Under: sanctions
Companies: democratic underground, eff, righthaven, stephens media

Judge Rules That Righthaven Lawsuit Was A Sham; Threatens Sanctions

from the huge-win dept

In a huge victory against copyright trolls, a judge has thrown out the lawsuit filed by Righthaven against Democratic Underground. This was the key case where (after lots of stalling), Righthaven eventually revealed the strategic agreement between it and Stephens Media, which basically shows the copyright assignment to Righthaven was a fraud. All Stephens really transferred was a "right to sue," and that's not a transferable right under copyright law. As we had expected, the judge relies on the Silvers vs. Sony Pictures case, which notes that you can't assign just the right to sue.

Pursuant to Section 501(b) of the 1976 Copyright Act... only the legal or beneficial owner of an exclusive right under copyright law is entitled, or has standing, to sue for infringement. Silvers v. Sony Pictures Entm't Inc.... In so holding, the Ninth Circuit followed the Second Circuit’s decision in Eden Toys, Inc. v. Florelee Undergarment Co.,... superseded by rule and statute on other grounds.... Section 106 of the Act defines and limits the exclusive rights under copyright law.... While these exclusive rights may be transferred and owned separately, the assignment of a bare right to sue is ineffectual because it is not one of the exclusive rights.... Since the right to sue is not one of the exclusive rights, transfer solely of the right to sue does not confer standing on the assignee.... One can only obtain a right to sue on a copyright if the party also obtains one of the exclusive rights in the copyright... Further, to obtain a right to sue for past infringement, that right must be expressly stated in the assignment.

That's the basics. As the court digs into the details, it becomes clear that the judge is monumentally not impressed by the arguments from Righthaven and Stephens Media. A couple of choice quotes:

This conclusion is flagrantly false—to the point that the claim is disingenuous, if not outright deceitful.

The companies’ current attempt to reinterpret the plain language of their agreement changes nothing. In reality, Righthaven actually left the transaction with nothing more than a fabrication...

Righthaven argues that Section 15.1 of the SAA gives the Court authority to correct any provision of the SAA that is deemed void or unenforceable to approximate the manifest intent of the parties. The problem is that this argument requires a provision of the SAA to be void or unenforceable. However, Righthaven’s problem is not that any provision of the SAA is void or unenforceable but that the SAA simply does not grant Righthaven any of the exclusive rights defined in Section 106 of the Act required for standing. Therefore, the SAA is not void or unenforceable, it merely prevents Righthaven from obtaining standing to sue from the Assignment. Accordingly, the Court need not and shall not amend or reinterpret the SAA to suit Righthaven’s current desires...

Here, Righthaven does not ask the Court to recognize an oral transfer with a late made written memorandum of the deal, but to fundamentally rewrite the agreement between Righthaven and Stephens Media to grant Righthaven rights that it never actually received...

Towards the end, the judge unloads on Righthaven's attempt to claim that because earlier rulings by the same court had been okay with its standing, there was some sort of precedent:

Finally, Righthaven contends that multiple courts within this district have already determined that Righthaven has standing to bring claims for past infringement under the Silver standard based on the plain language of the copyright assignment. At best, this argument is disingenuous. As the undersigned issued one of the orders Righthaven cites for this argument, the undersigned is well aware that Righthaven led the district judges of this district to believe that it was the true owner of the copyright in the relevant news articles. Righthaven did not disclose the true nature of the transaction by disclosing the SAA or Stephens Media’s pecuniary interests. As the SAA makes abundantly clear, Stephens Media retained the exclusive rights, never actually transferring them to Righthaven regardless of Righthaven’s and Stephens Media’s current contentions. Further, Righthaven also failed to disclose Stephens Media in its certificates of interested parties, despite Stephens Media’s right to proceeds from these lawsuits...

As for that last point, it may open up Righthaven to a world of hurt. The judge notes that it appears Righthaven violated the law here and gives the company two weeks to explain why it shouldn't face sanctions not just for the failure to disclose in this case, but in all of its cases:

As shown in the preceding pages, the Court believes that Righthaven has made multiple inaccurate and likely dishonest statements to the Court. Here, however, the Court will only focus on the most factually brazen: Righthaven’s failure to disclose Stephens Media as an interested party in Righthaven’s Certificate of Interested Parties. (Dkt. #5.) Rule 7.1-1 of the Local Rules of Practice for the District of Nevada requires parties to disclose “all persons, associations of persons, firms, partnerships or corporations (including parent corporations) which have a direct, pecuniary interest in the outcome of the case.” This Local Rule requires greater disclosure than Federal Rule 7.1, which only requires non-governmental corporate parties to disclose parent corporations or corporations owning more than 10% of the party’s stock. Frankly, if receiving 50% of litigation proceeds minus costs (Dkt. #79, SAA Section 5) does not create a pecuniary interest under Local Rule 7.1-1, the Court isn’t sure what would.

Making this failure more egregious, not only did Righthaven fail to identify Stephens Media as an interested party in this suit, the Court believes that Righthaven failed to disclose Stephens Media as an interested party in any of its approximately 200 cases filed in this District. Accordingly, the Court orders Righthaven to show cause, in writing, no later than two (2) weeks from the date of this order, why it should not be sanctioned for this flagrant misrepresentation to the Court.

I would suggest that judge Roger Hunt is not particularly pleased with Righthaven. He's also allowing Democratic Underground lawyers to seek attorneys' fees from Righthaven and Stephens Media.

This will likely kill off most of the remaining Righthaven cases in Nevada. While not all are handled by Judge Hunt, you can be quite certain that all the other judges in the court will be aware of this. The impact on the Colorado cases isn't as certain, but all of those cases are under a single judge who is equally upset at Righthaven, and reviewing similar issues. I wouldn't be surprised to see a similar end result.

Righthaven could (and might?) appeal, but it's going to be difficult to reverse this. Furthermore, in theory Righthaven could come up with a new agreement with Stephens Media and continue suing, but the court already expressed its doubts about the weak attempt by the two companies to "amend" the existing agreement, suggesting that it was just "cosmetic adjustments" that the court did not believe would change the outcome.

What may be interesting is to see if any of the dozens of folks who already settled come after Righthaven now and demand their money back... That could make for an interesting followup legal battle. All in all, this is a huge win against copyright trolling.

Filed Under: assignment, copyright, sanctions, sham
Companies: democratic underground, eff, righthaven, stephens media

Irony? Righthaven Accuses One Of The 239 Sites It has Sued Of 'Litigation Overkill'

from the you-did-what-now? dept

It's true. With apparently no self-awareness whatsoever, Righthaven -- the highly questionable company that has sued 239 websites/companies for reposting some content from the Las Vegas Review Journal or the Denver Post -- is now claiming that one of the sites it's sued, Democratic Underground, is engaged in "litigation overkill." That's because of the EFF and Democractic Underground submitting new "key evidence," that apparently proves the copyright assignment from the newspapers in question is a "sham" and not a legitimate assignment. We've seen that charge in the past, and it hasn't stuck, so it's interesting to hear there's "new evidence" on that question. Unfortunately, for now, that evidence is hidden. Still, Righthaven isn't happy about this and is claiming the whole thing is litigation overkill. I guess it would know what litigation overkill is...

Filed Under: assignment, copyright
Companies: democratic underground, eff, righthaven