Yet Another Judge Rejects Yet Another Righthaven Case

from the and-another-one-down dept

Another day and another loss for Righthaven, as yet another judge (this makes four) says that Righthaven has no standing to bring the suit, because it did not technically hold the copyright, since its agreement with Stephens Media only really transferred the right to sue, rather than any of the listed rights under the Copyright Act. This time it's judge James Mahan, adding to judges Kent Dawson, Roger Hunt and Philip Pro, who have all come to the same conclusion. Mahan, of course, got some attention earlier this year when he was the first to rule in a Righthaven case that reposting a full article could still be fair use. Mahan also rejected Righthaven's attempt to claim that its newly amended agreement with Stephens Media should allow the case to continue, noting that the company wants to change the facts of the case in doing so.

That said, Mahan refused to make the dismissal of the case "with prejudice," meaning that Righthaven can (and probably will) refile the lawsuit, using the newly amended agreement to claim standing. Until there are conclusive rulings on that amended agreement, we may have to go through this whole process a few more times before some judge finally tells Righthaven to give up.

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

Former LVRJ Publisher Admits He Was Behind Righthaven Lawsuit

from the ooops dept

Stephens Media and Righthaven have been involved in an important legal battle (mainly in the case involving the Democratic Underground, but it's popping up in other Righthaven cases) concerning who really are the parties of interest in the Righthaven lawsuits. Plenty of the defendants (and now three different judges) have said that Righthaven is really just a Wizard of Oz style front for a legal campaign by Stephens Media and its key publication, the Las Vegas Review-Journal. In fact, the basic argument is that the whole setup of Righthaven was simply a sham to try to isolate Stephens Media from potential liability. In the Democratic Underground case, the judge has even dismissed Righthaven from the case, but is allowing DU's counterclaims against Stephens Media to move forward (Righthaven is trying to beg its way back into the lawsuit).

One of the more entertainingly clueless players in this whole charade has been Sherman Frederick, the former publisher of the LVRJ, who was a major public supporter of Righthaven from the beginning, whose own words keep coming back to haunt both Stephens Media and Righthaven. Frederick appears to have a bit of a reckless overly-confident cowboy attitude, which is the kind of thing that gets people like him into a lot of trouble. We've already noted the rather blatant hypocrisy of Frederick multiple times. Originally he insisted that copying content from the LVRJ -- even small amounts -- was no different than stealing a corvette out of his driveway. And, yet, he's been caught posting infringing content, copying content from Techdirt and other blogs -- sometimes failing to even make it clear that he was quoting someone else.

But Frederick's biggest problem with his big mouth concerning Righthaven has been his habit of occasionally talking about Righthaven as if he controls it... because that's kind of the whole key issue here. Is Righthaven really a separate company... or is it merely a pawn for Stephens Media (or, worse, a law firm that is not licensed to practice law in Nevada)? You would think that sooner or later someone higher up in the ranks of Stephens Media (who demoted Frederick from publisher to mere columnist late last year right after the election) would tell Frederick to close his trap on these things, because he's only making it worse.

No luck. Frederick wrote a blog post on July 14th, blasting critics of the failed Nevada Senate candidate Sharron Angle, of whom Frederick had been a big booster during the election. In the comments to that blog post, some commenters challenged Frederick on certain points. And in a comment at 1:30 pm, Frederick directly noted, with regard to Angle: "I even sued her for lifting our material." He is, of course, referring to the fact that Righthaven sued Angle. We actually found it amusing that Frederick's "little friend," Righthaven would sue Angle at the same time that he, as publisher, endorsed her as a candidate. Would Frederick endorse a candidate who stole the corvette out of his driveway? Apparently.

Still... in that comment he directly claims that he was the one who sued Angle. That's a pretty big problem for Stephens Media when it's trying to claim that it's not the one suing, but it's Frederick's "little friend," Righthaven. And, indeed, it took all of about a day for at least one of the defendants in a Righthaven lawsuit to point this comment out to a court. I would imagine it does not look good for Stephens Media, in these cases where it's claiming that it's not the one suing, for its former publisher, who was intimately involved in the Righthaven plan, to come out and state publicly that, yes, in fact he was responsible for one of Righthaven's most high profile cases.

Filed Under: business models, copyright, journalism, lawsuits, sherman frederick, strategy
Companies: righthaven, stephens media

Another Day, And Another Smackdown For Righthaven: Told To Pay Up For Misleading The Court

from the on-the-ropes dept

Yes, another day and another judicial smackdown for Righthaven. In the case before Judge Roger Hunt, where he dismissed Righthaven for its sham copyright assignment claims and threatened sanctions against the company, it appears that Judge Hunt was not convinced by Righthaven's grovelling, that it was all the fault of former in-house attorneys, who failed to disclose that Stephens Media had a 50% stake in the outcome of any of these lawsuits.

Hunt has gone forward with the sanctions, telling Righthaven to pay $5,000 for misleading the court. It seems that defendants in the 200+ other lawsuits now have reasons to ask for similar sanctions against Righthaven as well. In fact, part of this ruling was to get this information attached to every other Righthaven case:

Besides the $5,000, Hunt ordered Righthaven to disclose its original lawsuit contract with Stephens Media in active lawsuits over R-J material. He also ordered that a transcript of today’s hearing, in which he made several negative comments about Righthaven’s conduct, be posted on Righthaven court dockets.

Separately, Judge Hunt publicly bolstered the chances of the attempts to file racketeering charges against Righthaven, under the theory that the company was involved in the unauthorized practice of law:

“In the court’s view, the arrangement between Righthaven and Stephens Media is nothing more, nor less, than a law firm — which incidentally I don’t think is licensed to practice law in this state — with a contingent fee agreement masquerading as a company.”

The judge also blasted the arguement from Righthaven that forgetting to disclose Stephens' Media's interest in the cases was a mere oversight, by specifically calling out Righthaven CEO Steve Gibson:

Hunt noted it was Righthaven’s CEO, Las Vegas attorney Steven Gibson, who drew up the lawsuit contract between Righthaven and Stephens Media. Defense attorneys have said it was Gibson who signed off on some of the false disclosures and that Gibson is behind the entire Righthaven litigation campaign.

I wonder if Steve Gibson is still trying to peddle his line about how the judges think that Righthaven is "genuine," and that all these rulings are really about giving guidance to Righthaven copycats.

Filed Under: copyright, misrepresentation, nevada, roger hunt
Companies: righthaven, stephens media

Righthaven: Blame Our Clueless Lawyer, But Don't Sanction Us, For Failing To Name Stephens Media As An Interested Party

from the that's-not-going-to-fly dept

The flailing disaster that is Righthaven just got that much more desperate and ridiculous. As you may recall, when Judge Roger Hunt ruled that the Stephens Media/Righthaven copyright transfer was a sham, the part that he got really incensed about (and it seems he was already pretty upset about the bogus transfer), was the fact that Righthaven totally failed to name Stephens Media as having an interest in the outcome of the lawsuit, as required by the law. This is pretty basic stuff that any trial lawyer knows. Judge Hunt called this "factually brazen" and demanded that Righthaven provide an explanation why it shouldn't be sanctioned:

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.

So, now, Righthaven has filed its response, and I get the feeling it's not going to satisfy Judge Hunt at all. The response, written by Righthaven lawyer Shawn Mangano, basically throws an unnamed "former in house counsel for Righthaven" under the bus, claiming that he "failed to consider the full scope" of the rules that meant he had to disclose Stephens Media's monetary interest. This is, frankly speaking, ridiculous. The law is pretty clear:

Unless otherwise ordered, in all cases except habeas corpus cases counsel for private (non-governmental) parties shall identify in the disclosure statement required by Fed. R. Civ. P. 7.1 all persons, associations of persons, firms, partnerships or corporations (including parent corporations) which have a direct, pecuniary interest in the outcome of the case.

The filing insists that Righthaven was not willfully trying to avoid complying with the law and suggests that reasonable minds could differ over the interpretation of the above, because the monetary interest Stephens Media had in the case was "indirect" because money gets paid to Righthaven first, and then Righthaven paid Stephens Media. That may be the most tortured reading of "direct" I've ever seen:

Rather, former in house counsel for Righthaven apparently failed to consider the full scope of the "direct, pecuniary interest" language under Local Rule 7.1-1 in failing to list Stephens Media on its Certificate of Interested Parties.... Unlike its federal rule counterpart, Local Rule 7.1-1 does not define what constitutes a direct, pecuniary interest and there is an absence of case law addressing the scope of the required disclosures. While the Court has concluded otherwise, it is certainly understandable how Local Rule 7.1-1 could have arguably been reasonably construed to not require the disclosure of Stephens Media’s interest in any recovery in excess of costs under the Strategic Alliance Agreement (the "SAA").

The obligation to disclose Stephens Media as an interested party pursuant to Local Rule 7.1-1 was certainly not appreciated by Righthaven's undersigned outside counsel, who has been licensed to practice before this Court since 1998.... Counsel reasonably viewed any contingent payment to Stephens Media under the SAA as constituting an indirect interest that required a two-step payment process assuming any case resulted in a recovery.... Simply put, receipt of settlement funds through settlement or recovery by the enforcement of a judgment would be made to Righthaven.... Righthaven would then be contractually obligated under the SAA to subsequently pay Stephens Media any recovered sums over and above costs incurred.... Thus, while counsel certainly appreciates the Court's guidance and will adhere to its decision, there is certainly an arguable and reasonable basis to construe Stephens Media's pecuniary interest as indirect, and not direct, under the SAA.

Somehow, I don't think that's going to fly, at all. The filing goes on to note that the court obviously should have just known about Stephens Media's interest in the case because there was so much press coverage about it. I'm not sure the point of that. Are they implying that if something is in the news, they don't have to follow the disclosure law?

Also, as Eric Goldman notes, the filing is extremely disingenuous in that in throwing the "former in house counsel" under the bus, it ignores the fact that Righthaven CEO Steve Gibson signed the complaint in this case (against Democratic Underground), meaning he was taking responsibility for the statements. Furthermore, it doesn't address the other 270 or so cases Righthaven has filed, all of which have the same problem, and not all of which were signed by the same "former in house counsel." Indeed, many of those were signed by Mangano himself. And Judge Hunt knows this -- which is why he mentioned the other 200+ cases in the question about sanctions.

This is characteristically weak from Righthaven, and it seems likely that the company is about to get slammed hard by Judge Hunt here.

Filed Under: nevada, sanctions, shawn mangano
Companies: righthaven, stephens media

Want To Give Righthaven's Backers A Taste Of Their Own Medicine?

from the getting-meta dept

Okay, I had missed this last week, but this is absolutely hilarious. You may recall, last week we noted the utter hypocrisy of Righthaven's biggest supporter, Sherman Frederick of the Las Vegas Review Journal, defending Righthaven by blatantly copying articles from the blog GametimeIP.com -- and doing so in a manner where it was not at all clear who created the post (I mean, Frederick can't even figure out how to use quotation marks, let alone something as simple as a blockquote).

If you thought it was already convoluted and twisted enough that Frederick would copy someone else's blog to defend his support of Righthaven suing other sites for doing the exact same thing to Frederick and others at the LVRJ, it's now getting even more meta. That's because, as ken points out, the owner of GametimeIP, Patrick Anderson, who had been inundated with questions about this, has decided to put the copyrights for the three blog posts in question up for sale, so that if someone wants to sue Stephens Media and the LVRJ over Frederick's potential infringement, they can do so.

In his explanation for why he is doing so, he basically notes (in much more complicated legalese -- lawyers!) that some of the folks sued by Righthaven over LVRJ content, may find it useful to sue back, in order to highlight the "inconsistent legal positions" of the LVRJ/Stephens Media. And yes, unlike Stephens Media and Righthaven, he's apparently willing to sell all of the Section 106 rights to the buyer...

Filed Under: copyright, sherman frederick
Companies: las vegas review journal, righthaven, stephens media

Guess Who Just Lost Another Lawsuit? If You Said Righthaven...

from the down-they-go dept

Short and sweet this time. Eric Goldman points us to the news that Righthaven has had yet another case dismissed in Nevada over the lack of standing. This ruling came from Judge Roger Hunt, the same judge who ruled on the first case (Democratic Underground) that determined that Righthaven never held the copyright to the material, and thus had no standing to sue. However, he also cites the other such ruling by Judge Philip Pro. Get used to this, because there will likely be a flurry of such rulings on pretty much all of the remaining Nevada cases. The same may be true in Colorado, but we still have to wait and see there.

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

Righthaven's Biggest Fan Copies Content As Part Of His Argument Against Copying Content

from the is-this-guy-clueless? dept

Last year, we wrote about how Sherman Frederick, the former publisher (since demoted to columnist) of the Las Vegas Review Journal was caught posting an infringing video on his blog. This was particularly funny, because Frederick was the key supporter of the LVRJ's "deal" with Righthaven, and regularly mocked-by-bad-analogy anyone who disagreed with him.

A few folks had sent in Frederick's latest column -- which, of course, we won't link to, since he's made it clear he doesn't want any traffic -- in which he once again defends Righthaven, despite the fact that a court basically killed off most Righthaven lawsuits due to its sham copyright transfer from LVRJ parent Stephens Media. Frederick's post is barely comprehensible, calling those who disagree with him "the unthinking blogger" and claiming that people who disagree with him "mischaracterize reality." He also seems to ignore the fact that Righthaven lost massively, and claims instead that "they're here to stay and they intend to win the battles they've started." I hope I haven't overstepped the legal boundaries of Frederick's bizarre definition of "content theft" with those quotes.

In the same article, Frederick, hilariously, suggests that everyone should have to pay to link to one of his articles. He references a decision by Radley Balko a few months ago to remove a post that linked to an LVRJ article once someone pointed out LVRJ's Righthaven association, and rather than realize how this makes Frederick and LVRJ look clueless, he claims that Balko did the right thing, and that every blogger can decide if such linking is "worth the price."

But what makes all of this extra funny is that the meat of Frederick's post is all copied content from another blog which is not properly attributed at all. Seriously. ken points us to his own analysis of Frederick's hypocrisy:

Frederick's article contains content from three paragraphs of posts from the blog GametimeIP.com. Frederick fails to even use basic netiquette for citing other sources. The parts taken are not attributed to the author except for a link and not even set in quotation marks which could leave the reader to assume those are Frederick's words and not those of GametimeIP.

It's hilarious. Yes, Frederick links to the articles, but frankly I had no idea he was actually quoting them. From the way he wrote it, it very much looks like they're Frederick's words, defending Righthaven. So, here we have Sherman Frederick, in an article decrying "copying" of content, in which he blatantly copies someone else's content, and even worse, does not properly credit it, or quote it. I also do wonder, if he "paid the price" to GametimeIP for his use of their content. After all, it's the proper way to do things, right?

Filed Under: business models, copyright, journalism, lawsuits, sherman frederick, strategy
Companies: las vegas review journal, 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

Colorado Judge Puts All Righthaven Cases On Hold

from the oops dept

We had already pointed out that the judge in Colorado, who was handling all of Righthaven's lawsuits in that state, was not impressed by Righthaven's business model and was not interested in allowing the company to use the courts as a wedge in its business model. Righthaven's response was to somewhat petulantly go after the judge, so it's little surprise that the judge, John Kane, has now put all of Righthaven's lawsuits in that state on hold, saying that he wants to make sure Righthaven actually has standing to bring the suit.

I would imagine this comes after learning about the sham copyright assignments that were revealed in Nevada with Stephens Media. The lawsuits in Colorado aren't over Stephens Media content, but Media News content, and it's not clear if Media News also had a similar bogus copyright assignment trick going on, but it appears Judge Kane would like to find out. Righthaven has filed 57 cases in Colorado, with 22 of them being dismissed by Righthaven, meaning likely settlements in most of those (I believe at least one was dismissed because of the judge being skeptical). So, 35 cases are now on hold, but I imagine that the 20 or so people or companies who have settled may suddenly be regretting that rash decision.

Filed Under: colorado, copyright, standing
Companies: medianews, righthaven, stephens media

Righthaven Facing Class Action Lawsuit Over Its Sham Copyright Transfer And Lawsuits

from the keep-digging dept

Things keep looking worse and worse for Righthaven. After documents were unsealed that show that the transfer of copyrights from the Las Vegas Journal-Review (and its parent company, Stephens Media) to Righthaven were almost certainly a sham transfer, designed solely to pass along "the right to sue" (which is not a separately transferable right under copyright law), it seemed like Righthaven might finally have to suck it up and realize that its business model might be a disaster. Instead, it's chosen to fight on, even as other courts have publicly raised concerns about the legitimacy of Righthaven's efforts. And while the company has hired a "star" attorney with lots of case experience supporting extreme maximalist copyright positions, Righthaven is facing even more challenges. Buzzfeed.com, one of the sites sued by Righthaven, has now filed a class action counterclaim against Righthaven based on these documents. The idea is to bring together various Righthaven defendants, as a class, and have them all sue Righthaven for its faulty lawsuits. The class action effort claims not only did Buzzfeed not infringe, but that the whole legal effort by Righthaven is an "abuse of process," especially in light of the newly-exposed legal documents. I'm not sure if this kind of class action has much of a chance, really, but it's interesting to watch Righthaven getting beat up repeatedly lately. That's what happens when you try to use a legal loophole as the basis for an entire business model.

Filed Under: class action, copyright, sham, transfer
Companies: las vegas review journal, righthaven, stephens media