Righthaven, a controversial company created to sue alleged copyright infringers on behalf of newspapers, has been busy in the courts, filing hundreds of lawsuits last year alone. But, as the Legal Satyricon blog uncovered, a recent court development in one of those actions may cut the legal legs from under the company -- not to mention its publisher partners, who seem desperate for revenue no matter how they get it.
Much of Righthaven's current infamy comes from its choice of defendants: individuals, small companies, and non-profits that post some newspaper story on their sites. As IP writer Joe Mullin reported in paidContent.org, Righthaven targeted the political blog Democratic Underground last year in one of its copyright suits. Democratic Underground got some pro bono legal help through the Electronic Frontier Foundation (EFF). The lawyers successfully moved for public access to Righthaven's contract with publisher Stephens Media.
The contract describes how the relationship between Righthaven and at least its major client, Stephens Media (owner of nearly 80 publications), actually works:
- Stephens transfers copyrights of specific articles to Righthaven.
- Righthaven searches for unauthorized use and reports on potential cases to Stephens.
- Stephens can veto a decision to sue if the defendant "is a charitable organization, is likely without financial resources, is affiliated with Stephens Media directly or indirectly, is a present or likely future valued business relationship of Stephens Media or otherwise would be a Person that, if the subject of an Infringement Action, would result in an adverse result to Stephens Media."
- Absent a veto, Righthaven files suit, though it uses some tactics not explicitly allowed under copyright law.
- Righthaven transfers copyright back to Stephens.
The legal or beneficial owner of an exclusive right under a copyright is entitled, subject to the requirements of section 411, to institute an action for any infringement of that particular right committed while he or she is the owner of it.In other words, you can bring suit if you are the copyright owner or if you have licensed exclusive rights. The Democratic Underground's lawyers argue that the copyright shuffling is a "sham" and so Righthaven shouldn't have standing to sue. They point to the case Silvers v. Sony Pictures Entertainment that addressed "whether an accrued cause of action for copyright infringement may be assigned to a third party, without any other copyright rights accompanying the assignment."
Righthaven could argue that its relationship to Stephens (and, presumably, its other client, the Media News, which owns the Denver Post) is technically different. Righthaven technically becomes the copyright owner while legal action is underway. However, even if it were successful on that front, there are two other issues.
The Democratic Underground's lawyers noted that, because Righthaven must transfer all exclusive rights to its client, it cannot profit from any of the copyrighted works and, therefore, incurs no damages and so deserves no legal relief.
Another that isn't in the court paperwork is that many if not all of the Righthaven complaints claim that the company is the exclusive holder of rights that it transferred to its client. That would be a material misstatement in their paperwork. In a phone interviews, New York-based IP attorney Anthony Elia said that while something erroneous in a legal filing wouldn't necessarily put a suit into jeopardy, in this case, the claims of exclusive rights are different. "That's the pony that they're riding to the bank," he said.
A judge could conceivably toss any of the suits on the basis of the misrepresentation. Then again, any of these points has the potential to turn Righthaven's business model into a business muddle.
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