Another Judge Slams Righthaven For Chilling Effects That Do Nothing To Advance Copyright Act's Purpose

from the a-lesson-in-fair-use dept

Back in March, Judge James Mahan had verbally stated that he intended to rule that the non-profit Center for Intercultural Organizing (CIO) was protected by fair use, in posting a full article from the Las Vegas Review-Journal. This was impressive, in part, because CIO hadn’t even raised a fair use defense itself. Instead, the judge brought it up in the first place. Now the official ruling has come out, and it’s a beauty. Not only does it go through why posting an entire article can still be fair use, but it slams Righthaven for its actions, noting how it has a “chilling effect” on speech, and its actions do not advance the Copyright Act’s purpose. You can read the whole thing, but the conclusion summarizes it all nicely:

The court finds that the defendant?s use of the copyrighted article in this case constitutes fair use as a matter of law. The article has been removed from its original context; it is no longer owned by a newspaper; and it has been assigned to a company that uses the copyright exclusively to file infringement lawsuits. Plaintiff’s litigation strategy has a chilling effect on potential fair uses of Righthaven-owned articles, diminishes public access to the facts contained therein, and does nothing to advance the Copyright Act?s purpose of promoting artistic creation.

Bam. It’s really great to see one judge after another condemning Righthaven, and showing that its business model strategy of using the courts to pressure people to settle isn’t fooling anyone.

Separately, I did want to dig in a bit on the fact that CIO used the entire article and yet it was still deemed fair use. Some people assume that if you use the entire work, it can never be fair use. We’ve certainly pointed to plenty of exceptions to this claim in the past, but the judge’s discussion on this particular fact is quite interesting and worth reading:

Here, the court finds that, although the defendants posted the work in its entirety, the amount used was reasonable in light of the purpose of the use, which was to educate the public about immigration issues. Because of the factual nature of the work, and to give the full flavor of the information, the defendants used the entire article rather than trying to distill it. The court finds that it would have been impracticable for defendants to cut out portions or edit the article down. See e.g, Campbell, 510 U.S. at 588?89 (noting that for a parody to be effective, it must take enough material to evoke the original).

This is really great, and hopefully similar thinking will find its way to other courts as well. “The amount used was reasonable in light of the purpose of the use.” I’ll have to remember that line the next time someone insists there’s no fair use if you use the whole thing.

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Companies: cio, righthaven

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Comments on “Another Judge Slams Righthaven For Chilling Effects That Do Nothing To Advance Copyright Act's Purpose”

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Michael (profile) says:

Purpose of Copyright

“does nothing to advance the Copyright Act?s purpose of promoting artistic creation”

If we could only find more judges that made this same consideration in their copyright rulings. It is really nice to see one of them specifically note that copyright is not about making sure artists (or copyright holders) get paid, but about promoting creation.

Capitalist Lion Tamer (profile) says:

This is good to know

See e.g, Campbell, 510 U.S. at 588?89 (noting that for a parody to be effective, it must take enough material to evoke the original).

I love a good parody so it’s nice to see that that’s protected. Not only that, but with Righthaven swiftly turning into a parody of itself, I would imagine all related Righthaven documents could be quoted pretty much in their entirety.

AJ says:

Why?

What I find confusing is; the AA?s parade around ridiculous numbers and unsupported accusations about file sharing and ?pirates? thinking they are furthering their cause, Where in reality, all they are doing is desensitizing the common person to their plight (because their propaganda is so unbelievable, the common guy can easily see through it). This type of behavior provides the ?pirates? with plenty of ammunition to ridicule the AA?s and gather sympathy by pointing out the fact that the AA?s are just a bunch of lying greedy schmucks.

Now, combine the image of the AA?s , with Righthaven?s blatant attempt to manipulate the legal system to extort the average person that can?t afford to defend themselves, and you have a complete and total P.R. failure by the industry as a whole. All they?ve managed to do is ?idolize? the pirate culture (As it appears the pirates are fighting ?for the people” Example; The Pirate Party), while simultaneously destroying their customer base from the inside by trying to sue them into submission.

The AA?s and Righthaven?s of the world need to understand that once you have reached the point that you?re suing (and possibly criminalizing) your core customer base, you?ve already lost the war. What a missed opportunity; these guys ?pirates? are the biggest users of the product, they take the time to take it apart and rebuild it, to share it, and to build an entire culture around its distribution and use. Who in their right mind, from a business standpoint, would rather ?attack? the ?pirates?, than find a way to monetize their interest in the product? I honestly don?t get it?

DannyB (profile) says:

Righthaven Defies Court, Ignores Domain Name Ruling

I found this on Slashdot.

https://www.eff.org/deeplinks/2011/04/righthaven-defies-court-ignores-domain-name-ruling

Righthaven Defies Court, Ignores Domain Name Ruling

Last Friday, the Chief Judge of the federal court in Nevada, which is overseeing more than 200 Righthaven copyright cases, dismissed Righthaven’s meritless claim to seize its victim’s domain names. . . . .

Last night, Righthaven filed a new copyright case in Nevada federal court, and – guess what? – demanded forfeiture of the domain name. Indeed, unable to take “you’re wrong as a matter of law” for an answer, Righthaven upped the ante, and asked the Court to:

Order the surrender to Righthaven of all hardware, software, electronic media and domains, including the Domain used to store, disseminate and display the unauthorized versions of any and all copyrighted works as provided for under 17 U.S.C. ? 505(b) and/or as authorized by Federal Rule of Civil Procedure 64.

They defy the court. They up the ante. They not only ask for the domain name, but all hardware, etc. Cool! This is going to be fun to watch!

FUDbuster (profile) says:

Re: Righthaven Defies Court, Ignores Domain Name Ruling

The EFF’s foot stomping seems to gloss over the issue. Righthaven admits that the Copyright Act does not explicitly say that domain names can be awarded. What Righthaven is arguing is that the domain name could be awarded as a form of equitable relief or to satisfy a judgment, powers which the Copyright Act grants the court discretion to exercise.

As Righthaven explains:

Righthaven has unquestionably asked this Court to enter equitable relief in the form of a preliminary and permanent injunction. (Doc. # 1 at 5.) Righthaven has also requested this Court enter such relief as it deems just and appropriate in this action. (Id.) Thus, it is beyond question Righthaven has asked for and alleged facts sufficient to invoke the Court?s equitable powers. More importantly for purposes of deciding the Motion, Righthaven has not sought transfer of the Website as a form of relief exclusively authorized by the Copyright Act. In fact, Righthaven acknowledges that such relief would be subject to the Court?s discretion and only upon the presentation of evidence which would justify transfer of the Website.

It cannot be disputed that federal courts are authorized to freeze assets in the aid of ultimately satisfying a judgment in a case. See FED. R. CIV. P. 64. Such action may be taken pursuant to federal law or state law. Id. The freezing or seizure of assets may be warranted where damages are sought in addition to equitable relief. See United States ex rel. Rahman v. Oncology Assocs., P.C., 198 F.3d 489, 498 (4th Cir. 1999). In fact, a district court may freeze assets before trial to secure the payment of attorney?s fees. See Commodity Futures Trading Comm?n v. Noble Metals Int?l, Inc., 67 F.3d 766, 774-75 (9th Cir. 1995). As recognized by the panel in Oncology Associates, ?when the plaintiff . . . asserts a cognizable claim . . . or seeks a remedy involving those assets, a court may in the interim preserve the status quo pending judgment . . . .? 198 F.3d at 496.

As the above cited authorities reveal, the Court is empowered to take action to preserve and marshal assets prior to entry of judgment. The obviously corollary of this is the power to take such action upon the presentation of evidence and entry of judgment.

http://www.eff.org/files/filenode/righthaven_v_dib/RH-ResponseDiBiaseMTD.pdf

This new demand from Righthaven follows from this. The same authority that could allow a court to seize and award a domain name could be used to seize and award hardware, software, and media.

In the link you provided, the EFF also makes this statement: “The new complaint also asserts that Righthaven holds the “exclusive rights” to Stephens Media news articles, despite the Strategic Alliance Agreement showing that Stephens Media retains these rights.” Righthaven does “hold” the exclusive rights because Righthaven owns those rights, i.e., Righthaven holds the legal title to those rights. You could also say that Stephens Media, as exclusive licensee, “holds” an interest in the copyright as well, but that doesn’t negate the fact that Righthaven “holds” the title to the copyrights. There’s nothing wrong with Righthaven’s claim that they “hold” the exclusive rights. They do. Copyright law often speaks of the copyright owner as the “copyright holder.” Why? Because he holds title. And who holds the title is what’s important for the standing issue here.

I don’t think the EFF’s position is nearly as strong as they seem to think, at least in regard to the issues of ownership and standing. I expect an embarrassing defeat on these specific issues. I also expect lots of spin from the usual suspects.

bordy (profile) says:

Re: Re: Righthaven Defies Court, Ignores Domain Name Ruling

What Righthaven is arguing is that the domain name could be awarded as a form of equitable relief or to satisfy a judgment, powers which the Copyright Act grants the court discretion to exercise.

If this is truly what they’re after, then the appropriate time to address this, if at all, would be after a judgment has been entered against the defendant. The defendant should be given a chance to satisfy the judgment award through statutorily prescribed means (e.g., $$ damages); and the efficacy of domain transfer in this situation might still be suspect.

Josh in CharlotteNC (profile) says:

Re: Re: Re:2 Righthaven Defies Court, Ignores Domain Name Ruling

Agreed. Righthaven throws that in for leverage, IMO. It’s not really about them wanting the domain name. But still, I don’t see anything *legally* wrong with them throwing it in.

Aren’t lawyers supposed to be held to a higher standard than what is just strictly legal? Isn’t that what the various bar associations do? Hold lawyers to certain levels of professional conduct standards, and can disbar them even if they have not done anything strictly illegal?

FUDbuster (profile) says:

Re: Re: Re:3 Righthaven Defies Court, Ignores Domain Name Ruling

Yes, of course. There’s a fundamental duty of good faith. I’d certainly agree that Righthaven is close to crossing that line with the demand for the domain name. I’m not sure I agree that they’ve crossed that line though. Since it is a remedy that could possibly happen, it’s not really bad faith to ask for it.

MrWilson says:

Re: Re: Re:4 Righthaven Defies Court, Ignores Domain Name Ruling

But once again, just because it’s possible (if you get a whacky judge), doesn’t mean it’s good faith. The request for relief doesn’t make sense if the relief isn’t related to supposed harm.

That’s like a lawyer asking that the plaintiff be awarded the defendant’s car just because the defendant yelled defaming remarks from his vehicle. Making such requests is in bad faith if it is in fact only for leverage.

bordy (profile) says:

Re: Re: Re:2 Righthaven Defies Court, Ignores Domain Name Ruling

Agreed. Righthaven throws that in for leverage, IMO. It’s not really about them wanting the domain name. But still, I don’t see anything *legally* wrong with them throwing it in.

It’s “legally” wrong in how Righthaven addresses the district court in its pleadings. They way their Complaints are drafted request outright transfer, nothing about transfer in lieu of satisfaction of $ damages award.

Not that drafting their Complaints to request domain transfer in lieu of $ damages would help the matter – its simply not relief Congress has authorized for infringement, and should still get tossed in an early motion to dismiss (furthermore, I believe there are some 9th Cir. decisions that discuss how domains as intangible personal property aren’t appropriate for satisfying a debt owed to a judgment creditor).

This is basic civil procedure and Righthaven could just be using it for what it is – a waste of time, something the defendant will have to pay his lawyer defend.

wvhillbilly (profile) says:

Re: Righthaven Defies Court, Ignores Domain Name Ruling

I hope the court not only shoots down all of Righthaven’s infringement suits, but orders it to pay all its defendants’ legal expenses, declares it to be a vexatious litigant and cites it for contempt of court if it keeps on suing and making ridiculous demands.

(Not a lawyer, but I learned a lot about law reading Groklaw.)

FUDbuster (profile) says:

The court’s first fair use factor analysis is suspect:

First, CIO?s use of the article is transformative. Although the former owner, the LVRJ, used the article for news-reporting, the court focuses on the current copyright owner?s use, which, at this juncture, has been shown to be nothing more than litigation-driven. Accordingly, CIO?s use of the article to educate the public is transformative and does not constitute a substitution of the plaintiff?s use. See Perfect 10, 508 F.3d at 1146 (discussing the effect of market substitution in relation to the first and fourth factors).

Righthaven is doing more with its ownership than just filing lawsuits. Righthaven is exercising its ownership by granting rights to its exclusive licensee, Stephens Media. Stephens Media is using the article for “news-reporting,” and CIO’s use is a market substitution of that use. In other words, CIO’s use for “news-reporting” directly conflicts with Righthaven’s use of licensing the work for “news-reporting” to Stephens Media.

It’s an interesting twist of logic from the court in a decision that I don’t think will withstand appeal.

Jeremy7600 (profile) says:

Re: Re:

Wait, what? When did righthaven become owner (outside of the right to sue) of the copyright, in order to license them to Stephens Media? I’m not sure but I think the logic twist isn’t coming from the judge. Righthven would have to have show this and I don’t recall that happening in too many (if any) cases yet.

FUDbuster (profile) says:

Re: Re: Re:

Wait, what? When did righthaven become owner (outside of the right to sue) of the copyright, in order to license them to Stephens Media?

Righthaven has repeatedly shown that they own the copyrights when challenged by producing the copyright assignment for the work in question. The judges that have looked at the copyright assignment have agreed, without exception, that Righthaven owns the copyrights.

Last week or so, the overarching contract between Righthaven and Stephens Media, styled “Strategic Alliance Agreement,” became public. This agreement states that ownership of the copyrights is transferred to Righthaven, and then Righthaven grants to Stephens Media the exclusive right to “exploit” the work. So, Righthaven is the owner of the copyright, and Stephens Media is the exclusive licensee.

What’s important for Righthaven is that ownership, i.e., title, transferred to them.

Richard (profile) says:

Re: Re: Re: Re:

Legal contortions!

and the judges are beginning to kick against them.

You can’t write just anything in a contract and have the courts agree. In normal situations the copyright IS “the right to exploit the work” and a judge is quite likely to hold that if you transfer that right then you have transferred the copyright. How can you sue on the basis of loss of revenue (which is what copyright suits are supposed to be about) when you don’t actually have the right to obtain any revenue from the work in the first place?

FUDbuster (profile) says:

Re: Re: Re:2 Re:

In normal situations the copyright IS “the right to exploit the work” and a judge is quite likely to hold that if you transfer that right then you have transferred the copyright.

Simply untrue. A copyright owner that grants an exclusive license still holds ownership of the title in the copyright. The exclusive licensee does not receive the title.

Richard (profile) says:

Re: Re: Re:3 Re:

If all of the rights are granted everywhere and forever then the owner has effectively relinquished copyright – a difference that makes no difference is no difference.

Otherwise there would be some rights retained (in some places) or some temporal limit on the assignment.

In addition one would expect, if the assignment was genuine, some monetary or equivalent transaction at each stage of the assignment process – as would surely happen if the two entities involved were genuinely independent. In this case no such transfer has taken place and the whole process can therefore only be a sham designed to create a convenient legal fiction.

FUDbuster (profile) says:

Re: Re: Re:4 Re:

There is no requirement that an exclusive license be for a fixed term. Even if the term is indeterminate, the licensor retains ownership.

The assignment does recite adequate consideration: “for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged.”

http://www.techdirt.com/articles/20110416/01084413924/unsealed-document-reveals-sham-copyright-assignments-to-righthaven.shtml#c532

Not sure what your argument is there…

bordy (profile) says:

Re: Re:

I don’t suppose this will change your view about who’s on the right side of the law here, but in light of your post, you should at least mention that the copyright originated with Stephens Media, which indicates (along with other evidence that recently surfaced) a sham transfer. It completely undercuts the basis for most of Righthaven’s claims to date.

Adam Wasserman (profile) says:

Re: Exclusive rights

@FUDbuster, you claim that “Righthaven is exercising its ownership by granting rights to its exclusive licensee, Stephens Media.”

so what is your explanation of the Strategic Alliance Agreement showing exactly the opposite: that the original copyright holder Stephens Media retains all rights and grants to Righthaven ONLY the right to sue?

Article and PDFs of relevant documents here: http://paidcontent.org/article/419-righthavens-secret-contract-is-revealedwill-its-strategy-collapse/

FUDbuster (profile) says:

Re: Re: Exclusive rights

so what is your explanation of the Strategic Alliance Agreement showing exactly the opposite: that the original copyright holder Stephens Media retains all rights and grants to Righthaven ONLY the right to sue?

Simple. What the Strategic Alliance Agreement and the individual copyright assignments done pursuant to that Agreement show is that ownership, i.e., title, to the works transferred to Righthaven. Stephens Media transferred ownership of the work to Righthaven, and then Righthaven granted to Stephens Media an exclusive license. The Agreement uses the word “retain,” but that word is used erroneously. Stephens Media is granted the rights anew from its licensor, Righthaven. Looking at the contract as a whole, it is clear that technically Stephens Media does not “retain” the rights. The net result is that they still have the rights, but important for our purposes, ownership changed hands.

Squirrel Brains (profile) says:

Re: Re: Re: Exclusive rights

The reversion clause is what really shows it as a scam. Basically, Righthaven can only sue. They must share the proceeds of a lawsuit with Stephens Media. Righthaven cannot exploit any of the exclusive rights of the copyright (only Stephens Media, the original copyright owner, can). And Stephans Media can revoke the deal and the copyright can revert to their “ownership” at their leisure (basically after the lawsuit).

FUDbuster (profile) says:

Re: Re: Re:2 Exclusive rights

The reversion clause is what really shows it as a scam.

Maybe. Contracts with reversionary rights are still contracts that convey ownership when perfected. By itself, there’s nothing wrong with this provision in the Agreement, and ownership still transfers regardless of it. The reversionary right is only relevant if it’s been exercised.

Adam Wasserman (profile) says:

Re: Re: Re: Exclusive rights

Would you agree that the Strategic Alliance Agreement provides grounds to assert that Righthaven is a straw man due to the fact that they do not have have a genuine interest in the property. That all forms of interest other than pursuing lawsuits originates with, and are retained by, Stephans Media?

For example, do we know if Stephans Media has to share with Righthaven revenues from sub-licensing of copyrighted works?

FUDbuster (profile) says:

Re: Re: Re:2 Exclusive rights

Would you agree that the Strategic Alliance Agreement provides grounds to assert that Righthaven is a straw man due to the fact that they do not have have a genuine interest in the property. That all forms of interest other than pursuing lawsuits originates with, and are retained by, Stephans Media?

No, I don’t agree. Righthaven does have a genuine interest in the work. They are the title owner of it. Acting as owner, they granted to Stephens Media an exclusive license. An owner that grants exclusive licenses doesn’t lose ownership of the title in the work.

For example, do we know if Stephans Media has to share with Righthaven revenues from sub-licensing of copyrighted works?

Whether or not Stephens Media has to share revenue from sub-licensing (if sub-licensing by Stephens Media is even allowed; unless specifically granted this right in the contract, I believe that Stephens Media by default would NOT have this right) is irrelevant to the issue of ownership. An exclusive licensee does not have to share revenue with the copyright holder, nor are they barred from doing so.

Mike Masnick (profile) says:

Re: Re: Re:3 Exclusive rights

No, I don’t agree. Righthaven does have a genuine interest in the work. They are the title owner of it. Acting as owner, they granted to Stephens Media an exclusive license. An owner that grants exclusive licenses doesn’t lose ownership of the title in the work.

Amazing. FUDbuster knows this line of reasoning was already debunked. Once again, FUDbuster is spreading FUD rather than busting it.

Righthaven never actually had any of the 106 rights. The idea that it is the copyright holder is a joke, and pretty much every lawyer who doesn’t work for Righthaven seems to agree on that point.

FUDbuster (profile) says:

Re: Re: Re:4 Exclusive rights

Amazing. FUDbuster knows this line of reasoning was already debunked. Once again, FUDbuster is spreading FUD rather than busting it.

When was it debunked? Exactly what is wrong with my statement? What precisely are the arguments?

Righthaven never actually had any of the 106 rights.

Righthaven acquired title ownership of the 106 rights when the copyright assignment was executed. What exactly is your argument to the contrary?

The idea that it is the copyright holder is a joke, and pretty much every lawyer who doesn’t work for Righthaven seems to agree on that point.

What court has ever agreed with this? None that I know of.

FUDbuster (profile) says:

Re: Re: Re:4 Exclusive rights

Amazing. FUDbuster knows this line of reasoning was already debunked.

And I’ll just add that this is another instance where you misuse the word “debunked.” You throw that word around all the time, and often without merit, as is the case here. You seem to think that as soon as one person posits a theory you agree with, all other theories to the contrary are completely “debunked.” It’s ridiculous.

Can you back up the claim that my “line of reasoning” has been definitively “debunked”? I seriously doubt it.

How are we supposed to believe you whenever you claim something is “debunked”? It doesn’t appear that you know what the word means.

The eejit (profile) says:

Re: Re: Re:9 Exclusive rights

The strategic Agreement was a contract for transferring particular rights. However, the agreement between Stephens MEdia and Righthaven could not be legally binding as it entailed the transfer of rights that cannot normally be transferred (in this case, the right to sue.)

Consider that Righthaven sued using this as evidence of ownership, in spite of it being a deliberate attempt to avoid the statutes that already exist. I’d call that being debunked with prejudice.

FUDbuster (profile) says:

Re: Re: Re:10 Exclusive rights

Ah. Your mistake is in thinking that the right to sue cannot be transferred. It can. The caselaw is perfectly clear on this point. The right to sue can be transferred as long as it is transferred along with another right–that’s what Silvers says. Here, Righthaven was assigned all of the copyrights plus the right to sue, so it’s all good.

Josh in CharlotteNC (profile) says:

Re: Re: Re:3 Exclusive rights

Righthaven does have a genuine interest in the work. They are the title owner of it.

So, as title owner of the work, what unequivocal right does RH have? Is there some right they have that they are not contractually obligated to grant Stephens Media? Can RH decide to perform any action in regards to the work without Stephens Media having veto over? Is there some situation in which Stephens Media decided to reclaim ownership that RightHaven could conceivably fight against and prevail?

FUDbuster (profile) says:

Re: Re: Re:4 Exclusive rights

So, as title owner of the work, what unequivocal right does RH have? Is there some right they have that they are not contractually obligated to grant Stephens Media? Can RH decide to perform any action in regards to the work without Stephens Media having veto over?

They can transfer their ownership interest to a third-party. Assuming they didn’t grant Stephens Media the right to sub-license the works, they can prevent Stephens Media from sub-licensing the works. They can make agreements with other parties to share in the proceeds from enforcement of their copyrights (as they did with Stephens Media). Important for our purposes, they can bring lawsuits as they are doing here.

Is there some situation in which Stephens Media decided to reclaim ownership that RightHaven could conceivably fight against and prevail?

Righthaven granted a right of reversion to Stephens Media, so probably not, unless there’s fraud or something like that.

Josh in CharlotteNC (profile) says:

Re: Re: Re:5 Exclusive rights

They can transfer their ownership interest to a third-party.

And would that “owner” actually own the work and all rights, or would they be bound with all the limitations that RightHaven is? Doesn’t sound like ownership to me.

Assuming they didn’t grant Stephens Media the right to sub-license the works, they can prevent Stephens Media from sub-licensing the works.

Yeah, so when SM wants to sub-license the work, they just shoot RightHaven an email saying ‘We’re gonna sub-license this. Let us or we take the work back.’

They can make agreements with other parties to share in the proceeds from enforcement of their copyrights (as they did with Stephens Media).

Yeah, they can do whatever they want with their half of the money. The other half already belongs to Stephens Media.

Important for our purposes, they can bring lawsuits as they are doing here.

Yes, very important. Just that Stephens Media has veto power over any lawsuit or “enforcement” action.

Righthaven granted a right of reversion to Stephens Media, so probably not, unless there’s fraud or something like that.

Interesting that you brought up fraud. That seems like a good description of RightHaven.

FUDbuster (profile) says:

Re: Re: Re:6 Exclusive rights

And would that “owner” actually own the work and all rights, or would they be bound with all the limitations that RightHaven is? Doesn’t sound like ownership to me.

Both. They’d own it, but with the same limitations. Sounds exactly like ownership to me. Ownership can be dismembered and encumbered. That doesn’t mean it’s not still ownership.

Yeah, so when SM wants to sub-license the work, they just shoot RightHaven an email saying ‘We’re gonna sub-license this. Let us or we take the work back.’

Probably so. I’m sure Righthaven won’t mind if they sub-license it.

Yeah, they can do whatever they want with their half of the money. The other half already belongs to Stephens Media.

Yep. But the profit-sharing doesn’t mean the assignment is a sham.

Yes, very important. Just that Stephens Media has veto power over any lawsuit or “enforcement” action.

Yep. But the veto power doesn’t mean the assignment is a sham.

Interesting that you brought up fraud. That seems like a good description of RightHaven.

I meant fraud as between Righthaven and Stephens Media, but point taken.

FUDbuster (profile) says:

Re: Re: Re:

Didn’t it just come out that Righthaven was not the actual owner of the copyright? (See EFF’s revelation that the assignment was a legal sham.) The right to sue is not a valid assignment of a copyright (Stephens Media retained all the exclusive rights of the copyright).

The EFF claiming something a court deciding something are two different things. So far no court has agreed with the EFF about these ownership issues.

Josh in CharlotteNC (profile) says:

Re: Re:

Righthaven is doing more with its ownership than just filing lawsuits. Righthaven is exercising its ownership by granting rights to its exclusive licensee, Stephens Media.

You are spreading FUD and lies, Mr. FUDBuster.

The only reason Righthaven “owns” the rights is because Stephens granted it to them with the express purpose of RH licensing those rights back to them. Here’s the way it works:

1) SM creates the copyrighted content.
2) RH finds someone infringing on the copyright.
3) SM transfers the ownership of the content to RH.
4) RH transfers all rights to the content except for the right to sue back to SM.
5) RH then sues the guy infringing.

It’s an interesting twist of logic from the court in a decision that I don’t think will withstand appeal.

The only thing twisted here is RightHaven’s blatantly obvious end-run around case law. And judges see right through it.

David says:

Re: In other news:

Their site is back up again. First time I’ve seen it. Just one page, which is not very impressive and the whole thing appears to be just one jpeg image.
Er…..:”The nation’s pre-eminent copyright enforcer” and: “Your key relationship for enforcing copyright infringements”. (Barely readable against the dark blue background). Modest, aren’t they? They might also add: “Purveyors of fine b*llsh*t to the nobility”.

FUDbuster (profile) says:

Re: Re: Re: RIghthaven

If I setup a corporation and transfer assets to it for the sole purpose of evading the confines of a statute, I believe that qualifies as a sham transaction.

How do you apply that to Righthaven? Is there a “sole basis” test for “sham transactions”? Is Stephens Media only trying to “evade the confines of a statute”? Is Righthaven? I think there’s an argument there, but I’m not sure what it is. The agreement between Righthaven and Stephens Media seems very real to me.

Payback Time says:

Re: Re: Re:2 RIghthaven

The argument is not that clever or difficult to comprehend. The assignment from Stephens Media to Righthaven was effectuated for the sole purpose of allowing Righthaven(as a proxy plaintiff)to file lawsuits for alleged acts of infringement. Righthaven’s sole purpose for existence is to file lawsuits, which is why the assignments are all done after an alleged infringer has been identified. The sole intent is to evade the confines of the Copyright Act and Silvers v. Sony Pictures. That certainly qualifies as a sham no matter how you try to spin it.

FUDbuster (profile) says:

Re: Re: Re:3 RIghthaven

I’d say the sole intent was to set up a situation that was beneficial to both parties, i.e., it’s a legitimate business venture.

As far as contracting around Silvers goes… Where does it say you can’t do that? Silvers simply states that more than the naked right to sue must be transferred. Righthaven was assigned more than that naked right, so it’s all good under Silvers. Silvers doesn’t say that once you have been transferred a 106 right and its accreted right to sue that you then can’t grant an exclusive license of that right.

That is not to say that I think the whole sham argument is meritless. It ties in with what I stated above, where I said that I think the champerty claim has merit. I haven’t really researched the issue yet, so I can’t speak to it intelligently. At first blush, though, I agree there’s an argument there. I’m sure the EFF will flesh out the argument in the Democratic Underground suit. I’m curious to see exactly what they say.

FUDbuster (profile) says:

Re: Re: Re: RIghthaven

I understand that there reaches a point where a transaction becomes a sham, but where is the line exactly? How do we know that Stephens Media and Righthaven crossed it?

Stephens Media can assign their copyrights to Righthaven. That’s not a sham. Righthaven can grant Stephens Media an exclusive license. That’s not a sham. Stephens Media can retain (or be granted) the right of reversion. That’s not a sham. Righthaven can agree to share profits from lawsuits with Stephens Media. That’s not a sham. Etc.

When is the line crossed? What specific part of their agreement caused them to cross the line? What is the reasoning? The authority? The argument?

Richard (profile) says:

Re: Re: Re:2 RIghthaven

When is the line crossed?

When the transaction looks like one that would never happen between two genuinely independent entities. In this case when rights are transferred without appropriate monetary compensation.

Laws of contract etc are based on the assumption that each party will effectively police the activities of the other to some extent (because it is in their own vital interest to do so).

That is why, when you are employed by a large company and you are relatively low in the hierarchy, the taxman won’t show much interest in you expense account. If, on the other hand, you are employed by you wife or parents then he will assume that all your expenses are taxable income unless you can prove otherwise.

FUDbuster (profile) says:

Re: RIghthaven

To deny that the assignment from Stephens Media to Righthaven is a sham is intellectually dishonest and doesn’t even deserve much more of a response than that already offered.

Can you back that up with bit of argument and precedent? Specifically which part of the assignment makes it a sham, and why? You haven’t really offered much in the way of an explanation.

Payback Time says:

Re: Re: RIghthaven

Again, I don’t believe this deserves much more debate because it is abundantly clear that a legitimate buyer of a copyright would not buy that right only after it has been compromised and infringed upon by a third party. This militates toward a conclusion that the assignment was effectuated for the sole purpose of facilitating a lawsuit by a proxy plaintiff. There can be no other purpose for these copyright assignments.

Righthaven obtains these copyrights for the sole purpose of filing lawsuit and its litigation strategy is in direct conflict with the intent of the Copyright Act. As Judge Mahan observed in Righthaven LLC., v. Center for Intercultural Organizing:

?[Righthaven?s] litigation strategy has a chilling effect on potential fair uses of Righthaven-owned articles, diminishes public access to the facts contained therein, and does nothing to advance the Copyright Act?s purpose of promoting artistic creation.?

A sham is a sham.

FUDbuster (profile) says:

Re: Re: Re: RIghthaven

Again, I don’t believe this deserves much more debate because it is abundantly clear that a legitimate buyer of a copyright would not buy that right only after it has been compromised and infringed upon by a third party.

What is the basis for your claim here? People buy assets all the time that have been infringed upon. The right to sue is transferable. It should be no surprise that it is indeed transferred and exercised.

This militates toward a conclusion that the assignment was effectuated for the sole purpose of facilitating a lawsuit by a proxy plaintiff. There can be no other purpose for these copyright assignments.

Do you think that any time a transferred right to sue is sued upon that it’s a sham? The whole purpose of transferring that right is so that it can be exercised. Why else would copyright law allow the right to be transferred?

Righthaven obtains these copyrights for the sole purpose of filing lawsuit and its litigation strategy is in direct conflict with the intent of the Copyright Act.

Considering that copyright law allows for the right to sue to be transferred, I don’t understand how exercising that right violates copyright law.

As Judge Mahan observed in Righthaven LLC., v. Center for Intercultural Organizing: ?[Righthaven?s] litigation strategy has a chilling effect on potential fair uses of Righthaven-owned articles, diminishes public access to the facts contained therein, and does nothing to advance the Copyright Act?s purpose of promoting artistic creation.?

Its purported chilling effect on fair use has nothing to do with the validity of the ownership transfer.

A sham is a sham.

Right. But you haven’t demonstrated exactly why this is a sham. Your argument seems to be predicated on the idea that a transferee of an accrued right to sue isn’t supposed to exercise that right. That makes no sense to me.

Payback Time says:

Re: Re: Re:2 RIghthaven

Your argument seems to be predicated on the idea that a transferee of an accrued right to sue isn’t supposed to exercise that right. That makes no sense to me.

I never said that. The assignee of an accrued right to sue may exercise that right as long as the statue has conferred upon him standing to sue. The problem only becomes evident when standing is manufactured through a sham assignment of exclusive rights for the sole purpose of “appearing” to meet the strictures of the statute, when in fact the only right assigned was a conditional right to sue.

FUDbuster (profile) says:

Re: Re: Re:3 RIghthaven

I never said that. The assignee of an accrued right to sue may exercise that right as long as the statue has conferred upon him standing to sue. The problem only becomes evident when standing is manufactured through a sham assignment of exclusive rights for the sole purpose of “appearing” to meet the strictures of the statute, when in fact the only right assigned was a conditional right to sue.

You’re just going in circles. What exactly makes it a sham? Isn’t it just as likely that the rights were assigned for the purpose of actually having standing, rather than for just appearing to? You seem to accept that in general the right to sue may be assigned and exercised. What you haven’t explained is why that general rule is being broken here.

FUDbuster (profile) says:

Re: RIghthaven

Another question to ask is how is Righthaven harmed as a result of an infringement

There is without a doubt a purpose for statutory damages but when that same statute limits standing, you can’t, with impunity, create sham assignments to evade the statutory confines that also have a purpose.

I don’t follow the argument. What part of the statutory damages statute is being evaded?

Righthaven Victims (profile) says:

FUDbuster = harassive argument tactics

Can you back that up with bit of argument and precedent? Specifically which part of the assignment makes it a sham, and why? You haven’t really offered much in the way of an explanation.

Everyone knows that the EFF has already spelled this out in public filings FUDbuster. If you have questions about these filings — which painstakingly pointed out the “sham” aspects of the Righthaven + Stephens Media agreement — why don’t you ask the EFF? You’re really reaching here FUDbuster, as well as practicing “harassive argument tactics” that can be found in any Lawyer 101 handbook.

FUDbuster (profile) says:

Re: FUDbuster = harassive argument tactics

Got a link to the filings you’re talking about? We can take a look at the arguments.

Has any court ever agreed with EFF’s “sham” arguments? Serious question. I’m not aware of any court agreeing. If that’s the case, why do you think that is?

And by the way, I’m here to discuss the legal aspects of it all. I couldn’t care less about Righthaven. Sometimes I’m playing Devil’s Advocate, yes, but that’s just because I’m trying to eke out the exact legal arguments on both sides. If what Righthaven is doing is legally wrong, I want to understand the exact legal argument why.

FUDbuster (profile) says:

Re: Re: Re: FUDbuster = harassive argument tactics

How would you know that no court has agreed with EFF’s sham argument if you haven’t read it?

I can not have read the argument and yet still know that no court has agreed with the EFF. Those things aren’t mutually exclusive. To my knowledge, not one single court has ever agreed with the EFF that the assignment is a sham. Don’t you think we would have heard about it if they did?

Looking at the EFF article: http://www.eff.org/deeplinks/2011/04/why-righthaven-s-copyright-assignment-sham-and-why

They appear to argue that it’s a sham because title to the copyrights does not pass to Righthaven. I completely disagree. The EFF’s analysis there is quite thin.

Their filing has more heft, but I disagree with much of it: http://www.eff.org/files/filenode/righthaven_v_dem/DUSuppmotion.pdf

I’m curious exactly what makes it a sham in your opinion. Sham is not a term of art, that I’m aware of, and I don’t understand exactly how you are using that word. What precisely makes it a sham?

Payback Time says:

RIghthaven

“I can not have read the argument and yet still know that no court has agreed with the EFF. Those things aren’t mutually exclusive.”

The same arguments, involving a similar set of facts, could have been accepted by another court. But you wouldn’t know because you “claim” to have never read their arguments.

FUDbuster (profile) says:

Re: RIghthaven

The same arguments, involving a similar set of facts, could have been accepted by another court. But you wouldn’t know because you “claim” to have never read their arguments.

Can you point me to one court that has agreed with Righthaven that the assignment is a sham? Nope. Trust me, the day that happens, you’ll hear about it.

I do know that the EFF and others have made the sham argument before while only looking at the individual copyright assignments. No court has ever agreed, despite all the foot-stomping by the defendants. What the EFF and others have claimed to be unclear, courts have held to be perfectly clear.

No court that I know of has ruled yet on whether the Strategic Alliance Agreement changes things. Hopefully we’ll get a ruling soon.

Payback Time says:

Re: Re: RIghthaven

Now, we all know you will continue defending Righthaven’s position regardless of what the evidence may suggest but in response to your question whether or not a court has analyzed and ruled on the Strategic Alliance Agreement below is the link to Judge Mahan’s Order to Show Cause which will, in all likelihood, be followed by his conclusion that the agreement is nothing but a sham.

I hope for your sake you are not involved in this racket. But if you are, you will soon pay the price. They are going after every lawyer who ever worked for Righthaven, including those who have left already. No one will be spared.

http://www.scribd.com/doc/54202816/Order-Denying-Summary-Judgment-and-Order-to-Show-Case

FUDbuster (profile) says:

Re: Re: Re: RIghthaven

Do you get issued a tinfoil hat when you join the Crazy Club, or do you have to fashion your own?

Look, I’ve already stated that I think Righthaven appears to have made misrepresentations to the court and that I think they should be punished accordingly. The fact that you think I’m associated with Righthaven even after I’ve said that shows that you’re a bit of a fanatic, to put it mildly.

We’ll see what the judge says. I think there are good arguments on both sides. I don’t pretend like it’s cut and dry and Righthaven loses. Unlike you, I have some perspective on the matter. I see that it’s a gray area. I’m not stuck with your tunnel vision.

Righthaven may win or they may lose. That judgment might be upheld or overturned on appeal. A judge in another case looking at this same evidence might come to a different conclusion than the judge comes to in the D.U. case. I’m just enjoying the show for the legal arguments. I find them interesting.

I know that’s hard for you to understand, but that’s all I’m in this for. I couldn’t care less if Righthaven wins or loses.

Payback Time says:

Re: Re: Re:2 RIghthaven

You can say that about any legal issue. Even when an issue is settled law it can be overturned at some point. So what? You don’t need to be a legal scholar to always argue the opposite viewpoint. But it does require a good legal mind to cut through the BS and see the facts for what they are before applying the law.

Regardless of what you or anyone else working for Righthaven may suggest, the argument that the agreement is a sham is far more persuasive and credible than Righthaven’s nonsensical proposition that they actually own the copyright, having merely licensed it back to Stephens Media. You would have to be a certified simpleton to even consider that possibility, especially in light of the fact that Righthaven was setup for one purpose – to exact settlements out of people who can’t afford to litigate. Every observer but you can see that.

The facts are not as gray as you would like them to be and certainly Judge Mahan is not seeing much gray. Wouldn’t you agree?

FUDbuster (profile) says:

Re: Re: Re:3 RIghthaven

No. I disagree. I think it’s a gray area, and neither side is clearly correct. Copyright owners may assign ownership of their copyrights to another, including expressly the accreted right to sue. That assignee, as owner, may then grant exclusive licenses of those rights to another, and in doing so, they may retain and exercise the accreted right to sue that they now own. Standing alone, I see no problem with this arrangement. Where the agreement becomes less clear, for me, is the rest of the provisions between Righthaven and Stephens Media. The reversionary right is not problematic, so much, as is the right to control future lawsuits and the fee-splitting. In the end, did Righthaven gain enough rights that they can rightfully claim to be owner of the copyright, or did they cross some line where, despite their claims otherwise, the assignment is a sham? Maybe they did. Maybe they didn’t. Looking at the parts, I see no problem. Looking at the whole, not so much. I see gray. What you won’t find–I’ve looked–is any caselaw that this squarely falls into. It’s one of those judgment calls where the judge will look at the totality of the circumstances. There’s nothing black-and-white about it.

Payback Time says:

Re: Re: Re:4 RIghthaven

When I asked if you agree that was purely a rhetorical question. I realize that even after Righthaven has been destroyed and relegated into distant memory you will insist there was nothing objectively wrong with the scheme.

Do you ever wonder why every Judge who has come into contact with these charlatans has gone out of his way to openly criticize their racket? More pointedly, how many legal scholars or independent observers can you name who have openly defended this loathsome scheme?

I am willing to bet my last dime that you have a dog in this race.

FUDbuster (profile) says:

Re: Re: Re:5 RIghthaven

I’m neither a lawyer nor associated with Righthaven, my friend. I’ve no dog in this race. I admit that there may be something objectively wrong with this scheme. Maybe so, maybe not. You’re barking up the wrong tree here. Yes, many criticize the scheme for moral reasons. Others see no problem morally. Me, I’m just interested in the legal arguments. The legal arguments are independent of the morality of it all. It’s OK if you don’t understand me. I feel no need to repeat myself as to my motives at this point.

Payback Time says:

RIghthaven

Another question you should answer for me is why would Mangano, in response to Judge Mahan’s inquiry, claim that he did not know if the work had been assigned to anyone? Why would he not know a fact so central to his client’s claim? I am certain you have read the CIO show cause hearing transcript and know how Judge Mahan chewed him up and spit him out. Mangano better get used to the abuse because he is back in front of Judge Mahan on May 12. I will be flying out to Vegas just to watch Mangano get torn to pieces by this Judge.

FUDbuster (profile) says:

Re: Re: Re: RIghthaven

Yikes. That’s one grumpy judge… and one bad job lawyering. Enjoy the show. The issue there is whether or not there’s a genuine issue of material fact that would preclude judgment at that point of the proceedings. The standing issue in the Democratic Underground case is the one I’m really interested in… Thanks for the link.

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