Federal Judge Kicks Patent Troll Righthaven to the Curb
In early 2010, a copyright holding company named Righthaven was formed. The company first purchased copyrights from Stephens Media, the parent company behind the Las Vegas Review Journal. Once it had its rights in hand, Righthaven revealed its business strategy: Suing journalists, bloggers, children, and one very angry chipmunk.
(All of the emphasis and italics in quotes below have been preserved from the court decision (PDF)).
By this past January, Righthaven had filed 205 cases--an impressive achievement for a company that wasn't even a year old at that point. The company typically demanded $75,000 and the domain name of the infringer. The lawyers on staff weren't shy about tackling big dogs and attempted to claim DailyKos had to hand over its domain over alleged infringing activity.
That chipmunk is pissed
The company also expanded its operations to tackle anyone "infringing" on the Denver Post.Thankfully, a federal decision issued today may well kill Righthaven outright. At the very least, the company isn't going to be able to carry out its vexatious lawsuit campaign the way it has. One of the most interesting aspects of Righthaven's organization is the agreement it struck with Stephens Media. It reads:
Eat Your Cake And Have It Too
The problem here is that Stephens Media attempted to create vexatious litigation firm while simultaneously doing everything it could to avoid Righthaven biting the hand that feeds it. Even RH's right to sue isn't absolute, Stephens Media can block a lawsuit if it might "result in an adverse result to Stephens Media."
Things get better for here (for a certain definition of 'better'). Previous court decisions have established that the Copyright Act does not allow companies to hire third parties to bring lawsuits. Copyright law does grant specific rights that can be transferred, but the right to sue isn't one of them. "One can only obtain a right to sue on a copyright if the party also obtains one of the exclusive rights in the copyright... to obtain a right to sue for past infringement, that right must be expressly stated in the assignment."
The judge, meanwhile, was anything but impressed with Righthaven's conduct. Righthaven's arguments are characterized as "flagrantly false--to the point that the claim is disingenuous, if not outright deceitful." Righthaven attempted to file a "Media Amendment" on May 9, 2011, claiming that it fixed all the legal issues from the original agreement. The judge smacked this down, noting that federal jurisdiction depends on the facts "as they exist when the complaint is filed." There are certain conditions and exceptions that allow for the legal application of ex post facto laws--but there aren't very many.
Artist's depiction of Righthaven's CEO
The icing on the cake in the case is that Righthaven attempted to claim that previous decisions within the court district had backed its right to bring lawsuits. The judge writes: "As the undersigned issued one of the orders Righthaven cites...[he] is well aware that Righthaven led the district judges of this district to believe that it was the true owner of the copyright in the relevant news articles... Making this failure more egregious, not only did Righthaven fail to identify Stephens Media as an interested party... the Court believes that Righthaven failed to disclose Stephens Media as an interested party in any of its approximately 200 cases filed in this district... The Court orders Righthaven to show cause, in writing... why it should not be sanctioned for this flagrant misrepresentation."
Judges really don't like it when they're lied to and misled. We won't be surprised if the court hammers Righthaven with penalties that break the company's ability to continue on its present course.
(All of the emphasis and italics in quotes below have been preserved from the court decision (PDF)).
By this past January, Righthaven had filed 205 cases--an impressive achievement for a company that wasn't even a year old at that point. The company typically demanded $75,000 and the domain name of the infringer. The lawyers on staff weren't shy about tackling big dogs and attempted to claim DailyKos had to hand over its domain over alleged infringing activity.
That chipmunk is pissed
The company also expanded its operations to tackle anyone "infringing" on the Denver Post.Thankfully, a federal decision issued today may well kill Righthaven outright. At the very least, the company isn't going to be able to carry out its vexatious lawsuit campaign the way it has. One of the most interesting aspects of Righthaven's organization is the agreement it struck with Stephens Media. It reads:
Stephens Media shall retain (and is hereby granted by Righthaven an exclusive license to exploit the Stephens Media Assigned Copyrights for any lawful purpose whatsoever...Righthaven 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 proceed in association with a recovery.Translation: Righthaven doesn't actually own the copyrights it claims to hold. The agreement between Stephens Media and itself only give it the right to pursue alleged infringers in the off chance it can obtain a settlement. If it can't, it doesn't make a cent.
Eat Your Cake And Have It Too
The problem here is that Stephens Media attempted to create vexatious litigation firm while simultaneously doing everything it could to avoid Righthaven biting the hand that feeds it. Even RH's right to sue isn't absolute, Stephens Media can block a lawsuit if it might "result in an adverse result to Stephens Media."
Things get better for here (for a certain definition of 'better'). Previous court decisions have established that the Copyright Act does not allow companies to hire third parties to bring lawsuits. Copyright law does grant specific rights that can be transferred, but the right to sue isn't one of them. "One can only obtain a right to sue on a copyright if the party also obtains one of the exclusive rights in the copyright... to obtain a right to sue for past infringement, that right must be expressly stated in the assignment."
The judge, meanwhile, was anything but impressed with Righthaven's conduct. Righthaven's arguments are characterized as "flagrantly false--to the point that the claim is disingenuous, if not outright deceitful." Righthaven attempted to file a "Media Amendment" on May 9, 2011, claiming that it fixed all the legal issues from the original agreement. The judge smacked this down, noting that federal jurisdiction depends on the facts "as they exist when the complaint is filed." There are certain conditions and exceptions that allow for the legal application of ex post facto laws--but there aren't very many.
Artist's depiction of Righthaven's CEO
The icing on the cake in the case is that Righthaven attempted to claim that previous decisions within the court district had backed its right to bring lawsuits. The judge writes: "As the undersigned issued one of the orders Righthaven cites...[he] is well aware that Righthaven led the district judges of this district to believe that it was the true owner of the copyright in the relevant news articles... Making this failure more egregious, not only did Righthaven fail to identify Stephens Media as an interested party... the Court believes that Righthaven failed to disclose Stephens Media as an interested party in any of its approximately 200 cases filed in this district... The Court orders Righthaven to show cause, in writing... why it should not be sanctioned for this flagrant misrepresentation."
Judges really don't like it when they're lied to and misled. We won't be surprised if the court hammers Righthaven with penalties that break the company's ability to continue on its present course.
