As music rights holders have eased up on legal actions against online end users for copyright infringement, a new wave of suits has been brought by agencies that secure rights in works they deem to have been infringed on websites and blogs. And relying on the leverage provided by the Copyright Act’s statutory damages provisions, such so-called copyright “trolls” have often succeeded in extracting nontrivial settlements from individuals and entities, even in situations in which limited or no damages could be established and colorable fair-use issues were present.
One such recent troll, however, has been battered by a week of adverse decisions, rejecting its claimed right to sue, holding that even the reproduction of a news article in its entirety represented fair-use, and threatening the firm with sanctions for “flagrant misrepresentations” to the court. Righthaven LLC v. Democratic Underground, LLC, 2011 WL 2378186 (D. Nev. June 14, 2011) (Roger L. Hunt, C.J.); Righthaven LLC v. Hoehn, 2011 WL 2441020 (D. Nev. June 20, 2011) (Philip M. Pro, J.); Righthaven LLC v. DiBiase, Case No. 2:10-cv-01343-RLH-PAL, Order (D. Nev. June 22, 2011) (Roger L. Hunt, C.J.).
In the first case, Righthaven LLC alleged that it took an assignment of the copyrights in an article owned by Stephens Media (publisher of the Las Vegas Review-Journal); registered the copyrights; and then sued Democratic Underground for copyright infringement based on a posting by an end user of the Democratic Underground website that included a selection from the Las Vegas Review-Journal article. However, discovery revealed a Strategic Alliance Agreement (SAA) between Righthaven and Stephens Media which indicated that the supposed copyright assignment was not what it appeared. The SAA anticipated future copyright assignments to Righthaven, but provided that notwithstanding any such “assignment,” Stephens Media would retain all exclusive rights and that Righthaven would hold no rights other than the right to sue and to receive half of the proceeds of suit. “Pursuant to Section 501(b) of the 1976 Copyright Act,” the district court held, “only the legal or beneficial owner of an exclusive right under copyright law is entitled. . . to sue for infringement. Silvers v. Sony Pictures Entm’t Inc., 402 F.3d 881, 884 (9th Cir. 2005) (en banc).”
Righthaven’s arguments notwithstanding, the court held that the SAA was unambiguous and that it purported to give Righthaven nothing but a right to sue – plainly insufficient for standing under § 501(b) and Silvers. The court therefore dismissed Righthaven’s claims. But the court allowed Democratic Underground’s counterclaim for declaratory relief of non-infringement to proceed against Stephens Media.
The court also issued an order to show cause why Righthaven “should not be sanctioned for. . . flagrant misrepresentation to the Court.” Chief Judge Hunt noted that “Righthaven [had] made multiple inaccurate and likely dishonest statements to the Court,” focusing on “the most factually brazen: Righthaven’s failure to disclose Stephens Media as an interested party in Righthaven’s Certificate of Interested Parties,” apparently in any of the more than 200 cases Righthaven had filed in the Nevada district court, when the SAA gave Stephens a 50 percent interest in the proceeds of the litigation. That order is pending as of this writing.
In the second case, Righthaven v. Hoehn, the defendant had posted the entirety of a Las Vegas Review-Journal article on an unrelated website. Another judge of the Nevada District Court dismissed the suit on the same ground as in Democratic Underground, and, in the alternative, also granted summary judgment on the ground that Hoehn’s posting constituted fair use.
“Of the four [statutory fair use] factors [under 17 U.S.C. § 107], only the fact that Hoehn replicated the entire Work weighs against a finding of fair use. Hoehn used the Work for a noncommercial and nonprofit use that was different from the original use. [i.e., to spark discussion on an online forum.] The copyrighted Work was an informational work with only some creative aspects, and the Work was used for an informational purpose. Righthaven did not present any evidence that the market for the Work was harmed by Hoehn’s noncommercial use for the 40 days it appeared on the Website. Accordingly, there is no genuine issue of material fact that Hoehn’s use of the Work was fair and summary judgment is appropriate.”
In the final case, Righthaven v. DiBiase, the court relied on the holding and analysis of Democratic Underground to dismiss for lack of subject matter jurisdiction.
In a press release, co-counsel for Democratic Underground and DiBiase, Electronic Frontier Foundation, commented that these outcomes show that “Righthaven’s copyright litigation business model is fatally flawed.” Whether all copyright-troll litigation shares the flaw uncovered in the Righthaven cases is not entirely clear. However, insofar as publishers likely prefer to retain ownership of their copyrights in order (for example) to be able to exploit databases of all of their publications, it would appear that providing authentic assignments to litigation agents would be inconsistent with that goal.