• Nevada Court Deals Righthaven a Serious Setback
  • June 30, 2011 | Author: Joseph M. DiCioccio
  • Law Firm: Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. - New York Office
  • Righthaven, the copyright holding company that has been making headlines lately for its aggressive copyright infringement tactics, was dealt a serious setback last week in Nevada’s federal district court, where more than 200 of Righthaven’s copyright infringement suits have been filed during the past fourteen months. In connection with one of those suits, Righthaven v. Democratic Underground, LLC (Case No. 2:10-cv-01356), Chief District Court Judge Roger L. Hunt dismissed Righthaven’s copyright infringement complaint for lack of standing. A copy of the decision is available from the Electronic Frontier Foundation.

    For over a year, Righthaven has been filing copyright infringement suits against a wide variety of websites including the Drudge Report, Citadel Broadcasting and small news and political commentary blogs and websites. Righthaven typically files suit without warning, alleging the defendant has infringed copyrights it owns by assignment from one of several newspapers, including the Denver Post and the Las Vegas Review-Journal. One suit, filed in Nevada, was against the Democratic Underground (www.democraticunderground.com), a political commentary website that Righthaven alleged infringed a copyright it owned in an article about Sharron Angle, a 2009 Republican candidate for U.S. Senate in Nevada. A user of the Democratic Underground’s website posted five sentences from the allegedly Righthaven-owned article, along with a link to a full copy of the article located on the Las Vegas Review-Journal’s own website.

    The Democratic Underground filed a motion to dismiss for lack of standing, alleging that the copyright assignment from Stephens Media (the owner of the Las Vegas Review-Journal) to Righthaven for the article at issue was invalid. In his ruling Judge Hunt held that the plain language of the assignment “conveys the intent to deprive Righthaven of any right, save for the right to sue alleged infringers and profit from such lawsuits.” Judge Hunt continued: “[t]he plain and simple effect [of a section of the assignment] was to prevent Righthaven from obtaining, having, or otherwise exercising any right other than the mere right to sue....” It is well established that a copyright assignment is invalid if it does not assign at least of one of the exclusive rights statutorily reserved for copyright owners (e.g. reproduction, display, performance, etc.). Assigning the right to sue alone is insufficient to constitute a valid assignment.

    Although Judge Hunt dismissed Righthaven’s complaint against the Democratic Underground, Democratic Underground’s counterclaim against both Righthaven and Stephens Media can proceed. Democratic Underground’s counterclaim seeks to prove the use of the copyright on its website was not an infringement.

    Most significantly, Judge Hunt ordered Righthaven to prove to the court within two weeks why it should not be sanctioned for its failure to report to the court that the purported assignor of the copyrights at issue, Stephens Media, has a significant financial interest (50% of the proceeds less costs) in the outcome of all of the Righthaven cases filed in Nevada. Court rules require that such financial interests be disclosed, and Righthaven may have failed to make this required disclosure in the 200+ copyright infringement cases that it has filed in Nevada.

    While this decision directly affects only the pending action against Democratic Underground, it may have implications for all pending Righthaven suits in Nevada, where many other similar Righthaven suits are currently being decided. This is because the same copyright assignment that the Nevada court rejected provided the basis for standing in the pending Righthaven cases in that jurisdiction. Further, it might portend the outcome of several dozen pending Righthaven suits in Colorado where District Judge John Kane has stayed them all pending his review of the standing issue.

    Moreover, media reports suggest that bloggers and other defendants who have previously settled claims brought by Righthaven are reviewing Judge Hunt’s decision and considering their options, such as whether a class action claim could be brought against Righthaven.

    This recent decision may have the effect of slowing the rapid flow of Righthaven-filed suits.