As famously said by Kenny Rogers, “ya gotta know when to hold ‘em, know when to fold ‘em, know when to walk away…”. (Righthaven, LLC. V. Buzzfeed Inc. et al.)
As all of our loyal readers know, Righthaven is the first of a new breed – the copyright troll. Heretofore, Righthaven had been doing reasonably well financially, filing hundreds of copyright infringement lawsuits and collecting nuisance settlements. Then it brought a suit against the Center for Intercultural Organizing (“CIO”), a particularly sympathetic defendant. The judge in the CIO case granted summary judgment to the defendants, holding that their unauthorized reprinting of the ENTIRETY of a copyrighted article was a legally permitted “fair use.” This decision came on the heels of a little noticed but potentially more significant decision of another court, which called into question Righthaven’s standing to sue. The second court had looked at the Strategic Alliance Agreement (“SAA”) between Righthaven and the copyright owners. Yes indeed folks, it turns out that Righthaven may not have actually owned the copyrights which it sued to enforce. Righthaven had received an “assignment” of the copyrights, along with a contractual obligation to enforce them against infringers in exchange for half of any net recovery. The other half of the recovery went to the original copyright owner, which also retained an “exclusive license to continue to display or otherwise use” the allegedly assigned copyrighted works.
Undeterred by these two decisions, Righthaven filed suit against Buzzfeed, “an international, informational and interactive news site that keeps track of the viral web in real time and highlights the news as it emerges on the Internet.” As it turned out, this action was ill-advised.
Buzzfeed apparently had been keeping track of the viral web and news highlights. It filed an Answer incorporating the most effective arguments raised by previous defendants; namely, that the use by Buzzfeed was a legally-permitted fair use and that Righthaven was not the “real party in interest” and lacked standing to sue. For good measure, Buzzfeed also maintained that Righthaven’s claims were barred by copyright misuse and that Righthaven’s action violated Buzzfeed’s constitutional First Amendment rights (for those readers who flunked civics, that’s freedom of speech). Buzzfeed further maintained that Righthaven had not suffered any damages by the alleged infringement and if it had suffered any damages, it had failed to take action to mitigate them.
All of the foregoing was bad enough, but the real shocker came in the form of Buzzfeed’s counterclaim. Buzzfeed claims, on behalf of itself and others similarly situated, that “Righthaven brought suit in the State of Colorado not to seek the relief requested in the lawsuit, but for the ulterior motive of requiring the Class Plaintiffs to spend money litigating in an inconvenient forum and in the expectation that the Class Plaintiffs would abandon their defenses.” Righthaven, in fact, has brought 57 suits in Colorado. Buzzfeed now seeks recovery of damages suffered by itself and the 57 others.
Meanwhile, back in Nevada, Righthaven – which is seemingly incapable of learning from experience – had also filed suit against yet another ill-chosen defendant. (Righthaven LLC v. Democratic Underground, LLC et al.)
The Democratic Underground hosts a website where users may post comments. One user posted a comment which included a portion of a Las Vegas Review-Journal (“LVRJ”) article about Nevada politics. The posting included a link to the full article and the LVRJ website. The LVRJ is one of the publications which has entered into a business relation with Righthaven. On the basis of this relation, Righthaven brought suit against the Democratic Underground.
Being a combative organization, the Democratic Underground responded aggressively to the lawsuit. In particular, it raised the question of standing to sue. The Nevada court found this argument convincing. “The plain and simple effect of [the Strategic Alliance Agreement] was to prevent Righthaven from obtaining, having, or otherwise exercising any right other than the mere right to sue as [the original copyright owner] retained all other rights…[the Copyright Act] defines and limits the exclusive rights under copyright law. While these exclusive rights may be transferred and owned separately, the assignment of a bare right to sue is ineffectual because it is not one of the exclusive rights. Since the right to sue is not one of the exclusive rights, transfer solely of the right to sue does not confer standing on the assignee.” Righthaven’s case was summarily dismissed. That, however, was not the end of the matter.
In his decision, the Nevada judge noted 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…[and] Righthaven also failed to disclose [the identity of the original copyright owner] in its certificates of interested parties, despite [that party’s] right to proceeds from these lawsuits.” This last omission, which the Court characterized as “brazen,” applied to approximately 200 cases filed in Nevada. “Accordingly, the Court orders Righthaven to show cause…why it should not be sanctioned for this flagrant misrepresentation to the Court.”
Yes indeed, folks, Righthaven is in deep doo-doo in both Colorado and Nevada. It would not surprise us if it wound up paying out all of its ill-gotten gains – and then some.
The Lesson To Be Learned: All good things come to an end; accept that fact and don’t push your luck.