The SAA provided that Stephens Media automatically received an exclusive license in any copyrighted work it assigned to Righthaven, so that Stephens Media retained “the unfettered and exclusive ability” to exploit the copyrights. Righthaven, on the other hand, had “no right or license” to exploit the work or participate in any royalties associated with the exploitation of the work. The contracts left Righthaven without any ability to reproduce the works, distribute them, or exploit any other exclusive right under the Copyright Act. See 17 U.S.C. § 106. Without any of those rights, Righthaven was left only with the bare right to sue, which is insufficient for standing under the Copyright Act and Silvers.

because we agree that Righthaven did not have standing, it is not appropriate for us to go further or for the district court’s alternative ruling to stand. We therefore vacate the portion of the district court’s order that analyzed the merits of the fair use defense and granted the motion for summary judgment.

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.

Syverson tried to argue that the deal with Stevens Media, the parent company of the Las Vegas Review-Journal, involved an actual copyright transfer. "Righthaven and Stevens Media were well aware of the Silvers case and attempted to comply," said Syverson early on in his argument.

"It looks like form over substance," said one of the judges on the three-judge panel. "It seems like an attempt that's too cute by half to get around Silvers."

Another judge noted that Stevens could take back any of the rights at any time, meaning any "transfer" of copyright wasn't very meaningful. Righthaven couldn't really have licensed the copyrights or published the articles it had the rights to, since Stevens Media could have reclaimed those rights at any time.

First of all, Hoehn's use wasn't "transformative," noted one judge on the panel. "How is the nature and character of the article changed at all, by posting it to a website?" he asked. "Have you ever seen a newspaper that didn't have space for letters to the editor, or a space for comments?"

Just the fact that he meant to inspire debate doesn't justify copying the full work, said another judge. "What if I copied Justice Sotomayor's book into a blog post and invited people to comment on it?" he asked.

When considering litigating the “swarm theory,” Malibu was faced with the prospect of dozens of defendants, joined in their common defense against the plaintiff, with an initial seeder who very well may have had a license to publish the works to BitTorrent or elsewhere. When push came to shove, Malibu decided to dismiss more than eighty percent of the defendants it initially sued, despite its prior claims that the cases were brought against unified “swarms.” Malibu apparently thought better of the swarm theory, and decided to reduce the number of defendants. However, Malibu cannot properly abandon its foundational theory and still leave the case against Doe 13 intact. The swarm theory of liability relies upon a “swarm” of defendants and renders these now-dropped defendants indispensable to the action. Without even an allegation against the initial seeder, we have no idea whether Malibu itself seeded the relevant files. As Malibu does freely distribute the relevant films, it is entirely possible, if not most likely, that the initial seeder had permission to distribute the files via BitTorrent. If he or she did not, it is entirely likely that a participant in the swarm, from whom Doe 13 received the file, may have had such permission. Malibu’s omissions speak loudly in favor of dismissal. Unless Malibu re-joins these previous defendants, including the initial seeder, the Court must dismiss the action against Doe 13, who is by Malibu’s own theory incapable of according Plaintiff full and complete relief.

In this case, the Assignment contains no provision of any exclusive rights from Field to Malibu Media. The assignment is silent as to what, if any, rights Field has within the films. Rather than transferring any discernible exclusive rights under Section 106 to Malibu Media, Mr. Field has executed what is essentially a quit-claim deed to Malibu Media, giving Plaintiff a jumble of unidentified rights (or perhaps none at all) that, on the face of the assignment, do not include the rights required to sustain an infringement action: exclusive rights under Section 106. Absent any indication that Field possessed full, undivided interest in the copyrighted works or exclusive rights therein, there is no basis on the face of the assignment for finding that Malibu Media acquired any exclusive rights and nothing in the assignment addresses past infringement.

Malibu has already recovered significant funds in connection with the infringements alleged in the Amended Complaint. Prejudice against Does #6 and #19 before this action was set for a bellwether. (Dkt. Nos. 16 and 17). Presumably, this was because Malibu received adequate settlements from these defendants. In fact, Malibu may have received doubly-adequate settlements from them – in which case Malibu is now triple-dipping by seeking damages that have already been satisfied by third parties Malibu intentionally kept out of this litigation.

Because the swarm is global in scope, and the Plaintiff has likely already been made whole by other undisclosed swarm members, nothing short of full disclosure and setoff would allow Doe #13 to evaluate Plaintiff’s ability to bring this action that it repeatedly claims to be based on the uploading and downloading the exact same file. Since the Plaintiff seeks statutory damages, if the Plaintiff has already collected the statutory maximum for this work from other defendants, then the Plaintiff must stop visiting the well. Malibu filed Notices of Voluntarily Dismissal with

Nucorp, Ltd. is not a party to this action or any other action against Doe #13, and this allegation is scandalous and impertinent. Furthermore, set forth in more detail below, adding allegation also violated two court orders forbidding Malibu from abusing its subpoena power for purposes outside of what was alleged in the Complaint. Accordingly, Paragraph 53 and Exhibit “F” of the Amended Complaint should be struck .

Even if the Receiver’s termination of me as CEO was somehow within her authority and done within the parameters of permitted procedure, the Receiver’s position that that somehow divests me of authority would be wrong. A limited liability company is ultimately governed by its members and the members have chosen Net Sortie Systems, LLC (“Net Sortie”) as its statutory manager. I am the manager of Net Sortie. While the manager manages the CEO, in the absence of a CEO, the manager would assume management of all affairs of Righthaven...

Rather, it appears that the Receiver is following the agenda of Mr. Randazza who apparently has a very serious concern that the Ninth Circuit will rule in Righthaven’s favor and unravel, finally, his vigorous press campaign, his personal attacks and any right to legal fees he currently enjoys. Unlike Mr. Randazza, Righthaven generally has made a conscious decision to not litigate matters in the press, to not engage in personal attacks either before the courts or otherwise and to address the legal arguments in a clinical fashion.

Independently, as addressed more fully, infra, I remain the manager of the manager of Righthaven and I should have the right to hire or terminate Righthaven counsel.

Your actions have caused, and continue to cause ongoing harm to Righthaven and its finances. To put an end to this damage and prevent future harm, I hereby remove any and all authority for you to act on behalf of the company, and formally place you on notice that the company will be taking legal action against you for your ultra vires acts as well as for claims of legal malpractice, which led the company to its current state.

.... Recently, it has come to my attention that you engaged the services of Miller Barondess LLP in Righthaven v. Hoehn.... I was neither informed of nor did I authorized this action, nor did I authorize any expenditure. Engaging yet another law firm and pursuing an appeal that both the Ninth Circuit and the District of Nevada have declined to find has a substantial likelihood of success is not in Righthaven's best interest...

Presently, Righthaven must satisfy more than $350,000 in judgments entered against it.... For you or anyone else acting on behalf of Righthaven to incur new fees or engage in any activity other than mitigating these liability is directly contrary to the company's best interests.

[....] To be clear, you are fully terminated from any position with Righthaven LLC. You are prohibited from taking further action on its behalf, and may not hold yourself out as an officer, employee, or representative of the company. Any further actions you purport to take on Righthaven's behalf shall be met with requests for injunctive relief and personal sanctions...

Mr. Gibson does not and has not had authority to enter new contracts and incur new expenses for the company, which presently must satisfy more than $350,000 in judgments entered against it.

I was unaware that Mr. Gibson had retained your firm until Mr. Hoehn's counsel inquired about this development and whether I had approved it. Mr. Gibson has no authority to act on behalf of Righthaven -- and even if he did, the act of pursuing this appeal would add further costs onto Righthaven's already substantial debts -- which I would not have approved... I demand that you cease all billing activity immdiately. I also demand that you provide me with a full accounting of all funds in trust for Righthaven.... All future actions taken with respect to Righthaven require my approval, as I am the only person with the authority to make decisions on Righthaven's behalf unless and until my receivership is terminated.

Instead of satisfying Righthaven's substantial judgments, Gibson has elected to allocate Righthaven funds that have been concealed from me to pursue appeals over rights that Righthaven no longer owns, and has done so in a manner that further imperils what is left of Righthaven's assets with additional attorneys' fees awards and sanctions.

In sum, although the complaints state that IP addresses are assigned to “devices” and thus by discovering the individual associated with that IP address will reveal “defendants’ true identity,” this is unlikely to be the case. Most, if not all, of the IP addresses will actually reflect a wireless router or other networking device, meaning that while the ISPs will provide the name of its subscriber, the alleged infringer could be the subscriber, a member of his or her family, an employee, invitee, neighbor or interloper

However, not all the information sought is required to advance the claim. For example, in addition to names and addresses, plaintiffs seek both the home telephone numbers and email addresses of the putative John Does... information which is clearly not required to proceed with this action. In particular, obtaining the home telephone numbers seems calculated to further plaintiffs’ settlement strategies, discussed above, rather than advancing their claims by allowing them to effect service.

Our federal court system provides litigants with some of the finest tools available to assist in resolving disputes; the courts should not, however, permit those tools to be used as a bludgeon.

The list itself is pretty amusing, apparently comprised of two porn movies and a selection of newspaper articles about sports (presumably from the Las Vegas Review Journal). Of course, as we noted originally, even though these copyrights are registered in Righthaven's name, it's likely that they aren't actually valid or enforceable, since the whole crux of the Righthaven saga is that many of the rights transfers to the company were shams, so the original copyright holders still control the works. Buying one of these registrations at auction is a way to own a piece of copyright trolling history, but it's probably not going to make you the legal owner of Ebony Amateurs Vegas Edition #10.

Also up for auction is the trademark on the name Righthaven itself. When righthaven.com sold, it was turned into a service offering "hosting with a backbone" in a somewhat ironic use of the domain. I suspect we'll see something similar happen with the Righthaven trademark, since the company's dismal reputation and long list of legal failures makes it a pretty unappealing brand for any purpose other than parody or satire.

Mr. Gibson’s claim that he has “not heard from Righthaven’s legal counsel [Mr. Mangano] since February, 2012,” and that Mr. Mangano has simply disappeared is similar to Mr. DiBiase’s experience.2 Resp. at 3. However, it is quite perplexing in light of Righthaven’s consent to the withdrawal of attorney Dale Cendali just last week in Righthaven v. Democratic Underground, Case No. 10-cv-01356-RLH-GWF (Dkt. 186) (March 21, 2012), knowingly leaving that case solely in the hands of Mr. Mangano. Presumably Mr. Gibson, as a responsible CEO, would not give that consent knowing it left Righthaven without representation.

[....]

Mr. Gibson asserts Righthaven lacks the funds to order the transcript. Resp. at 6, n.5. Mr. Gibson does not provide any evidence to support his claim of no funds (the very evidence sought by the underlying February 7 Order). To the extent that Mr. Gibson is attempting to belatedly assert an impossibility defense, he has utter failed to show “categorically and in detail” why he is unable to comply.... Even accepting that “Righthaven currently has no revenues.” ... this does not mean it has no assets or access to funds. Indeed, Mr. Gibson specifically states there is “no reason to believe that one or more of Righthaven’s parents would not continue to make capital contributions....” Mr. Gibson is obliquely referencing himself. As noted previously, Righthaven’s Bank of Nevada statements show that Mr. Gibson has been personally funding Righthaven to keep its balance just above zero.

Moreover, Mr. Gibson admits that Righthaven had access to sufficient funds to pay Mr. Mangano for months after its revenue dried up, asserting “[u]p until Mangano became totally incommunicado [mid-February 2012], Righthaven fulfilled all payment obligations to Mangano.”... Righthaven’s bank records show that Mr. Mangano was being paid regularly in installments of around $2,475.00.... The money Righthaven will now save by not paying Mr. Mangano is more than enough to pay for the transcript of a half-day debtor’s examination. Mr. Gibson’s deliberate decision not to use funds available to Righthaven does not constitute “impossibility.”

[....]

Perhaps anticipating this obvious course of action, Mr. Gibson asserts, without citation, that he “cannot represent Righthaven before the Court” and that he does not have the “capability to personally appear before the Court without legal counsel.”.... This assertion is belied by the fact that Mr. Gibson actually has represented Righthaven before this Court in this case. See Order Granting Substitution.... Indeed, three other Righthaven in-house counsel have represented Righthaven over the course of this litigation: Charles Coons, Joseph Chu and Anne Peroni. When Mr. Gibson was representing Righthaven in litigation, he often negotiated directly with opposing counsel, and has appeared in court. There is no impediment to Mr. Gibson entering an appearance, especially if that is what is required for him to comply with court orders.

Mr. Gibson has no one to blame but himself for Mangano’s inaction. Mr. Gibson “voluntarily chose this attorney as his representative in the action, and he cannot now avoid the consequences of the acts or omissions of this freely selected agent.”...

I have attempted by way of letter, telephone and electronic mail to contact Mangano in order to receive updates on the statuses of all cases to no avail. Mangano has been entirely uncommunicative. Mangano cannot complain of non-payment, as Righthaven made all required payments, until such time as Mangano became entirely uncommunicative.

As Chief Executive Officer (“CEO”) of Righthaven, I do not have any means to effect compliance with the Minute Order but stand prepared to assist within the province of the law and not in a manner that causes me to engage in personal efforts above and beyond that which the CEO of Righthaven is capable of doing with the limited resources currently available to Righthaven, assuming I receive notice of same.

Therefore, Gibson hereby respectfully requests this Court to order Mangano to appear before the Court and effect compliance with the Minute Order. Gibson further requests this Court order Mangano to reinvigorate Mangano’s representation of Righthaven until such time as this Court would find appropriate the withdrawal by Mangano.

So “convenience” allows Gibson to use his ECF account, but apparently does not allow him to use an actual law library to read the cases cited against him and respond with accurate page numbers.

When Gibson eventually defends himself in an argument over whether he should be protected by the corporate veil, his opponents will make sure each little infraction comes back to bite at his credibility. If Gibson loses, and becomes personally liable for actions of his LLC, that decision becomes reported and used as precedent in other cases. At minimum, that’s going to raise legal costs and uncertainty for LLC owners everywhere, particular in the IP arena because every patent monetization company is going to be compared to Righthaven, and even the owner of a patent who loses on a good faith argument of infringement or validity may end up having personal assets at least threatened as a result.

THE COURT HEREBY DECLARES AS FOLLOWS:

1. That Counterclaimants Democratic Underground and David Allen have committed no volitional act giving rise to a claim for direct copyright infringement. Counterclaimants neither posted the excerpt nor encouraged the posting. Nor did they have any knowledge of the posting until after this suit was filed. See Religious Tech. Ctr. v. Netcom On-line Commnc’n Servs., 907 F. Supp. 1361 (N.D. Cal. 1995) (direct copyright infringement requires “some element of volition or causation which is lacking where a defendant’s system is merely used to create a copy by a third party”); see also CoStar Group, Inc. v. LoopNet, Inc., 373 F.3d 544 (4th Cir. 2004) and Cartoon Network LP v. CSC Holdings, Inc,, 536 F.3d 121 (2d Cir. 2008).

2. That the act of posting this five-sentence excerpt of a fifty sentence news article on a political discussion forum is a fair use pursuant to 17 U.S.C. § 107, and that the fair use doctrine provides a complete defense to the claim of copyright infringement from which this suit arose. Judgment on the Counterclaim is accordingly entered in favor of Democratic Underground and against Counter Defendant Stephens Media, LLC.

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.

There are many hosting providers who maintain a "no questions asked" policy with respect to their clients and use this approach and lax, evasive or non-existent abuse handling infrastructure to effectively provide a safe-harbor for bad actors. That is not our business model.

Instead, we focus on hosting expression that has traditionally been subjected to frivolous legal threats based on its content. Our approach focuses on our team's wealth of expertise in dealing with high tech abuse and legal issues and our willingness to zealously defend our clients from frivolous, manipulative, abusive or outright fraudulent litigation. Our experience and expertise in issues ranging from fair-use to libel and whistle-blowing protections means we can often gently (and sometimes firmly) remind third parties about the many protections afforded legitimate publishers in these areas.

Often a proactive, responsive and competent abuse management team engaging in an open dialogue and discussion with copyright holders or their legal counsel is all it takes to close what might otherwise escalate into a frivolous suit.

But dialogue isn't always enough. Against this unfortunate possibility we have a second level of defense: In cooperation with our upstream providers in Switzerland we have some of the best free speech counsel in the world on retainer.

Remember us? The upstarts over at Righthaven.com? Providers of "spineful" shared, virtual private server and dedicated server hosting services from the copyright-sane environs of Switzerland?

We've enjoyed your coverage of SOPA, PIPA, ACTA (and us) and since we're launching this coming week, we'd like to give your readers the first bite at the jellyfish (so to speak).

So for the next 14 days new accounts opened by Techdirt readers get 15% off of everything except bandwidth upgrades. Readers who sign up for 3 or 6 months can lock that discount in for the duration.

Just browse on over to our order page at https://plutus.righthaven.com/ and type "dirtlaunch" when prompted for a promotion code.

Just our way of saying "Thank you" for increasing digital rights awareness.

While the Court sympathizes with Slep-Tone's claim that counterfeiting is a rampant problem that has devastated the karaoke industry, Slep-Tone has failed to direct the Court's attention to any evidence in the record tending to show either unauthorized use of the SOUND CHOICE marks, or that any of the allegedly infringing material originated with Defendants. In its response... Slep-Tone relies exclusively for evidence of unauthorized evidence of unauthorized use by Defendants on the affidavits of [two former employees of the defendant and one "purported expert"]... [None of these affidavits] establish any such facts. Instead, they provide vague and conclusory statements without foundation.

You are the most important part of the digital economy. Period.

You drive the discussion. You draw from the well of ideas, and refill it. You apply your particular character and unique vision to those ideas. You synthesize. But most importantly, you publish. That actually deserves its own line.

You publish.

But somewhere, sometime not too long ago, a large part of the global economy simply forgot about you and the importance of the simple act of clicking the "submit" button.

In retrospect this seems strange. By and large the big, flashy heroes of the digital age (and we love them, we really do) claimed their laurels for producing tools like operating systems, software, communications networks, and hardware for you. To make it easier for you to hit "submit." To extend the range your content could travel after that mouse click.

And yet, to much of the economy today and certainly to most politicians, you have become little more than a means to an end.

That is a sad state of affairs.

Righthaven.com will provide shared and dedicated server hosting services to clients who expect just a little more backbone from their provider. Well, actually a lot more backbone.

We call it "spineful hosting" and not only do we think it is a "great idea"^TM but as nearly fanatical advocates for the freedom of expression we are pretty sure it is also "the right thing to do."^TM Then again, we are prone to agree with ourselves quite often.

Recent events and the pavlovian salivating of certain legislators upon hearing the fundraising dinner bell ringing from the Beverly Hills Hotel have certainly reminded us that the internet naming system is a serious choke point for any online enterprise. In selecting our partners we wanted to make sure we teamed up with a domain registrar and DNS host who had a history of treating third party requests skeptically, but respectfully. We wanted a partner who wouldn't dissolve into incontinent fits and roll over on getting a call from United States Senator Joseph Lieberman's office intern, for instance. We found that partner in Toronto based easyDNS. easyDNS has been providing clueful and spineful DNS and registry services since 1998. Their four-continent anycast DNS cluster fits the bill. Plus, easyDNS' founder, Mark Jeftovic, is the essence of a spineful owner.

Phil Pattee, assistant Bar counsel, said the agency couldn’t disclose the nature of the grievances against the attorneys or whether they relate to complaints from outside parties or the Bar’s own review of the Righthaven cases or both. But he confirmed the grievances relate to the attorneys’ work for Righthaven.

“We’ll be asking them about Righthaven,” he said.

“I will be responding to the informational requests of the Bar and believe that after such responses and clarifications, the matter will be properly addressed. Miss Lowry indicates her concurrence,” Gibson said Thursday.

Las Vegas' role as a leader in innovation is somewhat ironic, given that Nevada Sen. Harry Reid, who has never once visited the CES, is a leader in efforts that oppose the type of innovation and technology fueling CES and other events. Unlike the rest of the pro-CES, pro-innovation Nevada delegation, Sen. Reid stands alone. The current innovation-throttling legislative fad is focused on "Internet piracy." Majority Leader Reid said he would bring the Protect IP Act (PIPA) to the Senate floor this month despite it being opposed by virtually every innovation and technology company and almost everyone who understands and uses the Internet.

It highlights how out of touch Washington has become with modern communication and use of the Internet. The goal of protecting intellectual property from digital theft is the right one, but the overreaching measure Sen. Reid is pushing swiftly through Congress will chill Internet innovation, economic progress and job growth. It's a product of copyright extremists pouring money -- more than $91 million in 2011, more than they've ever spent before -- into influencing the legislative process.

While it would be far more satisfying to see this motion defeated on substantive grounds, it fails cleanly as a matter of procedure. Rule 27-3(a) requires the movant’s counsel to make "every practicable effort" to notify opposing counsel before filing an Emergency Motion. Righthaven’s counsel failed to do so, and misled this Court about his efforts to do so. Hoehn’s counsel first learned of the Motion by receiving it through the Court’s cm/ecf system .... Only after receiving the Motion did Hoehn's counsel receive a fax from Righthaven's counsel notifying them of its intent to file this Motion