Won't Have Perfect 10's Silly Lawsuits Setting Precedent Anymore: Judge Appoints Receiver For Perfect 10's Assets

from the well,-there-goes-that-one dept

Welp, it looks like the quite long history of Perfect 10 filing frivolous copyright lawsuits and losing (while setting useful precedent) has finally come to a close. A court has now put Perfect 10's assets into receivership to be sold off.

We've written a ton about Perfect 10 over the years. As we've noted, while the company officially styled itself as a porn magazine company, it was an early form of copyright troll, focusing on suing basically every large company imaginable for being somehow kinda partially related to any of Perfect 10's pictures showing up online. As such, Perfect 10 was astoundingly useful in setting some really fantastic and useful precedents concerning intermediary liability protections, and making sure that third parties and platforms weren't held liable for copyright infringement. The key, frequently cited, cases include:

• Perfect 10 v. Google
• Perfect 10 v. CCBill
• Perfect 10 v. Amazon
• Perfect 10 v. Visa

All of them resulted in major losses by Perfect 10, and really useful, citable, opinions that are regularly raised in other cases. There are more such cases as well. In one famous case, a party laid out how Perfect 10 was apparently deliberately setting things up to have more companies to sue, rather than actually doing anything to limit copyright infringement.

In the most recent Perfect 10 case, we noted that Perfect 10 lost big time earlier this year. It had sued Usenet provider Giganews, but the court found that Perfect 10's legal arguments made no sense at all, and sided completely with Giganews. Most importantly, the court upheld the multimillion fee award that the court had dumped on Perfect 10 for filing such a bogus lawsuit. It turns out that Perfect 10 doesn't seem to have that kind of money, so all of its assets are now controlled by a court-appointed receiver.

Pursuant to the terms of the enclosed Order, I am hereby taking possession of all of your "intellectual property," which specifically includes but is not limited to domain names, copyrights and copyright interests, trademarks, trademark interests, and associated goodwill, and related interests, as well as all royalties, rents, issues, profits and income (including any cash) resulting from or generated by such intellectual property.

This reminds me of another famous copyright trolling case, Righthaven (the company that was spun off from newspaper company Stephens Media to shake down bloggers reposting snippets from news stories). In that case, lawyer Marc Randazza beat back Righthaven in court so many times in so many ways that it was just getting silly. Eventually, the court handed over Righthaven's IP and it was eventually "sold" back to Stephens Media as a way to pay the outstanding legal fees.

Feel free to speculate what will be done with Perfect 10's assets.

In the meantime, though, it truly is the end of an era. Perfect 10 has been filing lawsuits going back at least until 2002 (possibly longer...). And it's set so many useful precedents, even as each new filing seemed more pointless than the previous one. So long Perfect 10, and thanks for all those useful rulings in cases you lost.

Filed Under: copyright, copyright trolling, dmca, precedent, receivorship, safe harbors
Companies: giganews, perfect 10

Righthaven Copyrights 'Sold' Back To Stephens Media For $80k To Pay Legal Fees

from the is-this-finally-over-yet dept

Sure, sure, this year we've all moved on to the crazy stories about the Charles Carreons and Prenda Laws of the world, but let's not forget that last year there was just as much focus on Righthaven's copyright trolling operation collapsing after judges realized that it was all effectively a sham in which the real copyright holder (mainly newspaper publisher Stephens Media) had not really sold off its copyrights to Righthaven, meaning that Righthaven had no actual standing to sue. Technically, Stephens Media tried to give the copyright to Righthaven, but since it retained all of the listed rights under copyright law, it was clearly not an actual transfer. In one of those cases, concerning a guy named Wayne Hoehn, who fought back against a Righthaven lawsuit filed against him, Hoehn's lawyer, Marc Randazza fought for and won a request for legal fees. Righthaven stalled and complained and bullied, but the court told Righthaven to pay up.

Eventually, since Righthaven refused to cough up any money, the court granted Randazza's request to put Righthaven into receivership. That eventually led to the "sale" of various Righthaven assets, including the Righthaven.com domain name, which sold for $3,300 to a hosting company that promised to resist bogus takedown notices.

In May of last year, we noted that the receiver was now planning to sell Righthaven's copyrights, since they were the only remaining "asset" from Righthaven. Of course, this seemed fairly tricky when you thought about it. The whole reason Righthaven lost the case was because it didn't actually hold any copyrights. But, of course, it claimed it did, so in some twisted way, you could maybe sort of possibly argue that what was being sold was the possible rights to those copyrights if Righthaven ever got through its appeal and won. But that seemed highly speculative, and we couldn't figure out who would want to buy such a thing, other than for the novelty of it all.

Except... as has now come out, Randazza (somewhat brilliantly) approached Stephens Media (who started this whole thing in the first place) and asked them if they wanted to buy the copyrights (which, the court's ruling in this exact case had said they actually still owned). I don't know exactly how the conversation went, but you can think through the implications fairly quickly.

Stephens Media, who set up Righthaven, and would have liked for an appeal to go forward showing that Righthaven owned the copyrights, even though it was still using the works and retained all the control. But, suddenly, if Randazza is offering them back the copyrights and they refuse, they're somewhat screwed. Because... first, it's something of an admission that they don't actually believe Righthaven had the copyrights in the first place, which is an admission they don't want to make. Second, if those copyrights are sold to someone else, that someone else could likely sue Stephens Media for still having those stories up without a license -- and then suddenly Stephens Media could find itself in court with the most convoluted copyright case imaginable, in which any argument Stephens makes hurts them elsewhere. It's mindbogglingly amazing. Stephens was effectively tied into a pretzel with any move that doesn't involve buying back the copyrights they "already own" potentially leading Stephens to an involved and problematic court case.

Oh yeah, and also I would imagine that getting money into the receivership that "satisfies" the court's awards probably would mean that Hoehn and Randazza don't then go after Stephens Media directly for the funds, considering how much they controlled Righthaven. As such, Stephens "buying" back those copyrights was probably seen as a strategically wise move.

And so... Stephens bought back its "own" copyrights for $80,000, which Randazza and Hoehn have agreed ends the matter, even though technically they were still owed much more.

Presently, the Righthaven Receivership Estate consists of $85,000. $80,000 of this was obtained from a private sale of Righthaven’s rights back to Stephens Media LLC, the creators of the works underlying many of Righthaven’s more than 275 lawsuits. While this was not obtained at auction, prior auctions for Righthaven’s rights failed, largely due to their indefinite nature. After searching for buyers in the face of the auction’s failure, Righthaven’s rights acquired from Stephens Media were sold back to their original source in a commercially reasonable manner, as no other market existed for them. As the Receiver in this limited receivership, I am satisfied that no other method of sale could have brought a higher price.

In the end, the money was distributed with $11,600 going to the two different people who acted as receivers in the case, $18,400 going to Wayne Hoehn who brought the case, and the remaining $55,000 going to Randazza Legal Group for all the legal fees accrued. While the money to Hoehn and Randazza was less than the court had initially ordered, given the lack of any actual assets from Righthaven, the fact that they were able to get this much, out of Stephens Media, no less, is pretty impressive.

Filed Under: marc randazza, receivorship, steve gibson, wayne hoehn
Companies: righthaven, stephens media

Whatever Copyrights Righthaven Might Actually Have Owned Now Transferred To Receiver For Auction

from the and-now-what? dept

This could get interesting. The latest news in the ongoing Righthaven saga is that the judge in the Hoehn case -- who had ordered Righthaven to pay attorneys fees which it never paid -- has now ordered that all of Righthaven's "intellectual property," including the many copyrights in dispute, be turned over to the receiver for auction. As you may recall, Righthaven's domain has already been auctioned off, but now it appears the copyrights will be too.

Of course, this is a bit tricky, since it's unclear what, if anything, Righthaven actually "owns" here. Even the company (when it bothered to show up in court, which was increasingly rare) started to claim that it really only held the bare right to sue -- which is what sunk its cases, since that right cannot be separated from the other, enumerated rights under copyright law. But, as the court noted, even if there's a dispute over what rights Righthaven technically has under the agreements it made with Stephens Media's Las Vegas Review Journal, the company is registered as the copyright holder on hundreds of works. And those are all being auctioned off:

In connection with the Defendant’s judgment enforcement efforts, the Court appointed the Receiver to, among other things, seize the copyrights assigned to Righthaven by various entities (the “Copyrights”), as well as its trademarks and other intangible property, so that they could be sold at auction. (Doc. # 62, 66.) Despite the Receiver’s efforts, Righthaven has not transferred its intellectual property. (Docs. # 70, 81, 82.) The only property that the Receiver has been able to obtain and auction is Righthaven’s former domain name, <righthaven.com>, which was sold for more than $3,000 in a commercially reasonable auction (Docs. # 81, 82).

Based on the evidence submitted to the court by the Receiver (Docs. # 70, 82), Righthaven has failed to substantively participate in the orderly disposition and sale of its intangible assets as ordered on December 12, 2011. (Doc. # 66.) Moreover, Righthaven failed to appear at the originally scheduled January 5, 2012 debtor examination in this case, (Doc. # 71), and failed to appear at the March 5, 2012 hearing giving rise to this Order. (Doc. # 88.)

In light of Righthaven’s lack of participation in these proceedings, and Hoehn’s entitlement to relief (Docs. # 62, 66), this Court concludes it is appropriate to transfer such rights as Righthaven may still hold in Righthaven’s intellectual property to the Receiver, Lara Pearson. The Court deems Righthaven’s conduct in this case to constitute its consent to this Order.

This Court acknowledges that there is a dispute over what intellectual property rights Righthaven actually possesses. Nonetheless, the Court may use its powers under 17 U.S.C. § 201(d)(1) to transfer Righthaven’s copyright rights, whatever they are deemed to be, to the Receiver for auction pursuant to the Court’s December 12, 2011 order (Doc. # 66). While Righthaven has argued now that it does not have more than the bare right to sue, as this Court previously held, Righthaven does possess copyright registrations that can be assigned by operation of law. The copyright registrations to more than 275 works are in Righthaven’s name, can be transferred by this Court, and can then be auctioned by the Receiver.

The order then goes on to list out the 275 copyrights that are registered in Righthaven's name. Even if the transfers were a sham, the registrations still exist. What can actually be done with them is an open question, because the sham transfer likely means that the rights are still really Stephens Media's, and if there ever were a legal dispute that would be an issue. But, in the meantime, you may soon be able to "own" a piece of copyright troll history: one of the bogus Righthaven copyright registrations, with which you can legally do, well, absolutely nothing. Though, it could be fun to see if you could convince the Las Vegas Review Journal that it needs to pay up for continuing to host the article for which you hold the copyright registration...

Filed Under: copyright, hoehn, receivorship
Companies: las vegas review journal, righthaven, stephens media