Appeals Court Agrees That Righthaven's Copyright Assignment Was A Sham, But Tosses Key Fair Use Ruling
from the good-and-bad dept
This isn’t a huge surprise, but in Righthaven’s big appeal concerning the key issue over which it lost all of its cases — whether or not it had standing — has resulted in yet another huge loss for Righthaven. The court basically agreed with every single other court that has ruled on this matter, noting that when Stephens Media “assigned” the copyrights to Righthaven, it really did no such thing. Instead, it merely assigned the bare right to sue, which you can’t do under copyright law. Considering how some of our critics insisted that Righthaven would win this point on appeal, I’m curious to see how they respond. The court basically agreed with all of the points that a bunch of district court judges had all pointed out: the Strategic Alliance Agreement (SAA) left all the power in the hands of Stephens, including ultimate control over every single one of the official rights associated with copyright law under section 106. Thus, it did not, in fact, assign the copyright, and Righthaven had no standing to sue.
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.
The appeals court walks through each one of Righthaven’s attempts to get around this basic fact and shows how none are even remotely persuasive, because all ultimately show the same basic argument, which is that the copyright was assigned to Righthaven who then handed back an exclusive license to Stephens. The fact that Righthaven retained none of the key copyright rights shows that this was all a sham. Or, as the court notes, it “emphasizes form over substance.” The court also rejects Righthaven’s claim that the agreement was later fixed, by pointing out that what matters is the standing at the time of the lawsuit.
The ruling isn’t all great, however. The court did overturn the part of the Hoehn ruling in which the court had said that his use of the Las Vegas Review-Journal article (even the entire article) was fair use. Basically, this is a bit of a procedural thing. Effectively, the court is saying that once the district court ruled that Righthaven had no standing, there are no other issues to rule on, so the fair use ruling is inappropriate. This was the part of the case that the RIAA, in particular, wanted thrown out, because it doesn’t want any ruling on the books saying that using an entire work might be fair use. And, on this front, the RIAA got its wish. While the court doesn’t say that the use was not fair use — and in fact notes that “we understand why the district court reached the fair use issue” — it also notes that, legally, the court really has no right to delve into that issue after it’s decided that Righthaven has no standing.
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.
This is not a huge surprise, but it is unfortunate, because the original Hoehn ruling on fair use was a great example of how using an entire work can be fair use. There are other such cases, but losing one of those rulings is unfortunate.
Either way, this should confirm that Righthaven is officially dead and buried. I can’t see them appealing to the Supreme Court, though stranger things have happened (just like Prenda took over the mantle of absolutely crazy copyright trolling from Righthaven a long time ago).