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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  • icon
    Josh in CharlotteNC (profile), 18 Mar 2013 @ 6:39am

    I am in awe. To misquote someone...
    Live by your horribly twisted lawyers, pay through the nose for something you already own by your horribly twisted lawyers.

    reply to this | link to this | view in chronology ]

  • icon
    Arsik Vek (profile), 18 Mar 2013 @ 6:55am

    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.

    reply to this | link to this | view in chronology ]

  • identicon
    Wayne, 18 Mar 2013 @ 8:01am

    I wonder if Sherman Frederick's ponied up some cash to help buy back the rights? And I am still waiting for his so called ace they had up their sleeves to magically fix the whole problem Righthaven had.

    reply to this | link to this | view in chronology ]

  • identicon
    Bear, 18 Mar 2013 @ 8:08am

    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.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 18 Mar 2013 @ 8:09am

    I was literally tingling while I read this.

    I love that Randazza pushed Stephens Media into the smallest corner imaginable.

    reply to this | link to this | view in chronology ]

  • identicon
    John Doe, 18 Mar 2013 @ 8:18am

    It sux to paint yourself into a corner

    The problem with painting yourself into a corner is you get paint on your feet and mess up your paint job when you try to extricate yourself from said corner.

    reply to this | link to this | view in chronology ]

  • icon
    DannyB (profile), 18 Mar 2013 @ 8:28am

    Stephens Media should buy Prenda Law

    Stephens Media should buy Prenda Law.

    After all, if at first you don't succeed . . . use a shorter bungee. Or in Stephens Media case, a longer one.

    reply to this | link to this | view in chronology ]

  • icon
    Frankz (profile), 18 Mar 2013 @ 8:52am

    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.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 18 Mar 2013 @ 8:54am

    And strike another one for the great legacy of copyright enforcement.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 18 Mar 2013 @ 10:12am

    What's Prenda Law going to be worth?

    reply to this | link to this | view in chronology ]

  • icon
    Wally (profile), 18 Mar 2013 @ 12:48pm

    Babboons Big Red Ass of a Flag

    "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"

    My sick, dirty mind is willing to bet it was a Monroe transfer.....
    Shit was exchanged only to have the same shit returned to them.

    reply to this | link to this | view in chronology ]

  • icon
    alanbleiweiss (profile), 18 Mar 2013 @ 1:08pm

    Every once in a while throughout a lifetime, I am encouraged that good results can eventually come from utter injustice. Carreon, Righthaven... And it's now looking like just maybe Prenda will get theirs as well...

    reply to this | link to this | view in chronology ]

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