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.

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Companies: righthaven, stephens media

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Comments on “Righthaven Copyrights 'Sold' Back To Stephens Media For $80k To Pay Legal Fees”

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19 Comments
Arsik Vek (profile) says:

So, to make sure I’m getting this right….

1) Stephens Media decides to get them some of that awesome copyright trolling money.
2) Stephens Media spawns Righthaven.
3) Stephens Media takes their box o’ copyright, dumps out all the contents, then sells Righthaven the empty cardboard box.
4) Righthaven brandishes the empty cardboard box in a threatening fashion demanding money.
5) Court says that’s fscking retarded, demands Righthaven pay back legal fees.
6) Righthaven puts the empty box over their head and pretends they can’t hear.
7) Court takes Righthaven away and starts auctioning it off. Realizes it has no assets except an empty cardboard box.
8) Randazza takes the empty cardboard box and sells it back to Stephens Media for $80k.

In the end, Stephens Media donates eighty thousand dollars and it’s reputation to Randazza for no appreciable gain. Well done.

Bear (profile) says:

Righthaven brought this upon themselves in so many stupid ways. I happen to know that they were offered actual, complete, unencumbered copyrights to works that were (and still are; by iTunes and B&N, no less) being infringed for profit, not just reposting by bloggers. They should have jumped at that offer for the opportunity to at least appear to be working in good faith.

Anonymous Coward says:

Re: Steve Gibson?

What happened to Steve Gibson and his claim to still control Righthaven, despite the court ordered receivorship?
I seem to recall he filed an objection or something.

The receiver told the court that she had taken over the company and fired Gibson under her supposed authority as receiver. The court did not buy the argument, telling the receiver that she did not have such a broad mandate under the court’s order making her the receiver, and Gibson remains CEO. The receiver was replaced, and rightfully so.

Anonymous Coward says:

Re: Re: Steve Gibson?

Not completely true:

Pearson was replaced as Receiver at defendant?s request because she changed law firms – probably her request.

http://www.vegasinc.com/news/2012/oct/09/fight-control-righthaven-continue/

Judge Pro allowed Gibson to remain CEO of Righthaven in order to prosecute the appeal to the 9th Circuit.

http://www.vegasinc.com/news/2012/oct/31/gibson-remains-ceo-righthaven-appeals-continue/

The 9th Circuit Court dismissed Gibson/Righthaven’s appeal to block the copyright sale in January, 2013:

http://www.vegasinc.com/news/2012/oct/31/gibson-remains-ceo-righthaven-appeals-continue/

Still no word on what rock Shawn Mangano is hiding under, and why he hasn’t been sanctioned for FTA. Nor is it clear if or when the 9th Circuit will rule on Righthaven’s appeal of the Hoehn (Randazza) victory.

Anonymous Coward says:

Re: Re: Re: Steve Gibson?

Thanks for the info about the receiver changing law firms. I didn’t know that. As far as I know, the appeals in both Hoehn and DiBiase are ongoing. Oral arguments were last month: http://www.ca9.uscourts.gov/media/view.php?pk_id=0000010281

For those interested in a different take on the Righthaven standing situation, I recommend: http://lawtheories.com/?p=46

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