Unsealed Document Reveals 'Sham' Copyright Assignments To Righthaven

from the there-go-a-bunch-of-cases... dept

In our last post, we discussed the District Court's ruling to unseal a key document in one of the Righthaven cases, in which the court slammed Righthaven's tactics. But what was in the actual document. Well, it's quite a doozy. While Righthaven and Stephens Media resisted handing it over, the EFF was finally able to get a copy of the initial agreement between Righthaven and Stephens Media. One of the key claims that some defendants had made was that Stephens was not really assigning the copyright to Righthaven, and thus the lawsuits were a sham.

The details of the agreement certainly suggest that's the case. Despite the claims that Stephens was assigning the copyrights to Righthaven and that Righthaven had full control over the copyrights and the decisions concerning who to sue, the actual agreement between the two companies tells a very, very, very different story. Stephens only assigned the rights to sue. The agreement is pretty explicit on this point:
Righhaven shall have no right or license to Exploit or participate in the receipt of royalties from the Exploitation of the Stephens Media Assigned Copyrights other than the right to proceeds in association with a Recovery.
On top of that, it is revealed that Stephens Media gets 50% of all the money that Righthaven makes from these lawsuits, showing that it still has a substantial interest. Digging deeper, we learn that Righthaven doesn't even have the ability to decide who to sue without Stephens' approval:
Should Righthaven desire to sue, however, Stephens Media still controls whether suit will be brought through its right to send a "Declination Notice," upon receipt of which "Righthaven shall not take any Infringement Action with respect to the particular putative infringer set forth in any Declination Notice."... The bases upon which Stephens Media may stop a suit -- even after it has "assigned" the purported right to sue -- include whenever the person targeted "is a present or likely future valued business relationship of Stephens Media or otherwise would ... result in an adverse result to Stephens Media."
On top of that, even if it gives the okay to sue, it can later changes its mind. Stephens gets a "Right of Reversion," that lets it take back the copyright assignment "at any time." That doesn't look like a real copyright assignment at all. Oh, and if Righthaven decides on its own not to sue someone... Stephens Media gets the "copyright" back.

Keep digging: the idea that Righthaven and Stephens are two separate companies is called into question. As part of the investment, "one of the owners of Righthaven must be a 'Stephens Media Affiliate'."

This is effectively death for Righthaven's business model in these cases. Why? Because under Silvers vs. Sony Pictures, you can only assign one of the specific rights designated in Section 106 of the Copyright Act. You cannot simply assign "the right to sue," because that's a form of "selling lawsuits." Righthaven and Stevens had been insisting that there was a full copyright assignment here. But the agreement between the two companies makes it pretty clear that this is not at all true. I have to admit I'm curious to find out how the main Righthaven defender in our comments -- who argued that this whole line of legal attack was "intellectually dishonest" -- has to say about this now...

Effectively, this may end most, if not all, of Righthaven's current lawsuits on behalf of the LVRJ/Stephens Media. I feel bad for all the sites that already settled and paid up, because it appears that they probably didn't need to do so. It's not clear how this revelation may impact the suits on behalf of MediaNews and the Denver Post... but our next post will deal with some issues related to those cases.

Filed Under: copyright, copyright assignment, lawsuits
Companies: righthaven, stephens media

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  1. identicon
    Anon, 18 Apr 2011 @ 10:52am

    Has this been posted?

    Apparently some defendants have already used this new information in moving to dismiss their cases. According to this article, they argue that Righthaven doesn't have the right to sue them and their cases should be dismissed.

    http://www.lasvegassun.com/news/2011/apr/17/attorneys-say-new-evidence-shows-fraud-rig hthaven/

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