Copyright Infringement Defendants Turn the Table on RighthavenJeffrey Neuburger on PBS, December 01, 2011
Righthaven LLC, which still bills itself on its website as "the nation's preeminent copyright enforcer" is now on its way to a new title. It may soon become the nation's first copyright enforcer to be forced into bankruptcy by sanctions awarded to the targets of its copyright infringement lawsuits.
What's That They Say About Payback?
Righthaven was formed to generate revenue for itself and its newspaper clients by bringing copyright enforcement actions with respect to news articles reposted on the Internet without authorization. Righthaven's approach to monetization of online content was to file lawsuits seeking huge potential damages for copyright infringement, then settle for something around the lawsuits' nuisance value, an average of about $2,500 per case.
In the universe of potential defendants, Righthaven for the most part chose to go after those that many felt were vulnerable: individual bloggers, penniless non-profits, and local political campaigns. The defendants who were sued for material posted on their sites by third parties had failed to take advantage of the protection of the Digital Millennium Copyright Act takedown provisions, which could have shielded them from liability. And many of the lawsuits involved articles posted in a manner deemed acceptable in the blogger universe, if not to the copyright owners: a short article excerpt with a link to the original source.
These tough tactics, employed in a multiplicity of actions filed primarily in just two federal districts, generated a backlash that ultimately compromised Righthaven's ostensible goal: protection of the interests of copyright owners.
I can't help saying it: Hard cases sometimes make bad law. Whatever the merit of some of the copyright infringement claims made in Righthaven cases, those meritorious claims, as well as some larger issues of importance to online copyright owners, may be about to go under the bus with Righthaven itself.
EFF Pushes the Troll Back under the Bridge
After Righthaven was well on its way to filing more than 200 actions and had received payments to settle many of them, defendants began fighting back with the assistance of the Electronic Frontier Foundation, which branded Righthaven a "copyright troll."
With the EFF leading the way, a number of the defendants in Righthaven lawsuits convinced the courts that their use of the copyrighted articles was protected by the fair use doctrine. This much of the story I wrote about in March 2011, and then, another court concluded that a Righthaven defendant's use of the copyrighted article in question was fair. Righthaven LLC v. Hoehn, 2011 U.S. Dist. LEXIS 65830 (D. Nev. June 20, 2011) (posting of an entire copy of a newspaper article is fair where the purpose is to foster discussion).
The adverse rulings on fair use slowed down Righthaven a bit, but the EFF's body blow to the company came in its challenge to Righthaven's right to sue under copyright law.
What's So Important about Standing to Sue?
The difference between asserting the copyright fair use defense and challenging Righthaven's standing to sue, is that the entitlement to the fair use defense must be decided on a case-by-case basis. That's because fair use is a fact-sensitive evaluation that can't readily be made on a class-wide basis, where each defendant may have used different content, or used it in a different way, or have other distinguishing characteristics bearing on the applicability of fair use (posting on a non-profit versus a for-profit website, for example).
Looking at it from a practical litigation perspective, if the court rules that entitlement to the fair use defense can't be decided on a defendant's preliminary motion prior to discovery and preparation for trial, pursuing the issue can get very expensive for a copyright defendant. That's why many defendants took Righthaven's "get out cheap" settlement offers, regardless of the fact that a court might ultimately have found their use to be fair, as some courts did in Righthaven cases.
Unlike a typical copyright plaintiff that brings suit to enforce a copyright in which it has record ownership, however, Righthaven's right to sue (in law jargon, its "standing to sue") depended upon a single element common to all of the cases: the nature of the joint venture agreement between Righthaven and its clients. Quite simply, if you win against Righthaven on that issue in one case, you probably win in all of them.
Righthaven's business model was built upon the notion that it would obtain from its customers a limited right in their content that would be sufficient to support Righthaven's status as a copyright plaintiff, but would not interfere with the customers' continued exploitation of their works. After a pitched court battle, the EFF got a copy of Righthaven's agreement with its clients. The EFF argued, and the district courts have thus far agreed, that the agreement fell short of the goal of giving Righthaven standing to sue.
Under the Copyright Act, a copyright plaintiff must be asserting a right that is an exclusive right of a copyright owner. What the agreement had conferred, in essence, was merely a right to sue. As one court put it succinctly, the mere right to sue, by itself, is not an exclusive right of a copyright owner. Righthaven LLC v. Democratic Underground, (D. Nev. June 14, 2011).
The Dominoes Fall
After the first adverse ruling on Righthaven's standing in the Democratic Underground case, courts in other cases quickly followed it. In the District of Colorado, where 34 lawsuits brought with respect to articles in The Denver Post were filed, the court's ruling in Righthaven LLC v. Wolf resulted in the dismissal of all of the Righthaven cases in Colorado, as they were assigned to a single judge who applied his ruling in Wolf across the board.
The rulings set the stage for the next phase of the EFF's Righthaven takedown: the filing of motions for sanctions. Under the federal rules of procedure, a prevailing party in a lawsuit may seek an award of attorney fees under certain circumstances, such as where they can show that the filing of the suit was made without a proper basis.
As of the latest tally on the Righthaven Lawsuits website, more than $225,000 in attorney fee awards have been assessed against Righthaven. Righthaven has pleaded poverty and said that it may be forced to file for bankruptcy, but the court in the Hoehn case issued an order allowing the seizure of Righthaven's assets to satisfy the award. Proceedings in those collection efforts are continuing, with a considerable amount of drama surrounding the question of exactly what those assets are and where they can be located.
More motions for attorney fees may be filed, and a class action firm is attempting to organize a lawsuit by the Righthaven defendants that settled.
What Happens Next?
Even as Righthaven has been besieged by attorney fee judgments, one of its attorneys has said that it is not yet down for the count. The company has filed numerous appeals, on both the fair use issue and the standing issue. Those appeals currently are pending in the U.S. Court of Appeals for the Ninth Circuit. Whether Righthaven will survive as an entity long enough to pursue those appeals is an open question.
Righthaven's litigation campaign hasn't won it many admirers, to say the least. Many of its practices, while not improper, were viewed as unfair and overreaching: the filing of lawsuits without first requesting the removal of content, and the targeting of individuals and organizations with the least ability to defend themselves, among other things. Even the new CEO of its former client MediaNews Group, parent of The Denver Post, said he thought it was "a dumb idea from the start" when he announced that the company would not renew its contract with Righthaven.
But as the confetti seems ready to rain down on the celebration at the anti-Righthaven party, some of the partygoers, such as bloggers who are themselves copyright owners whose content is appropriated by others without permission, might want to stop and think about some of the aspects of the Righthaven rulings that may have gone a bit too far in favor of online reposting of content. If Righthaven is brought down before it has the opportunity to have its appeals heard, those rulings will stand, for good or ill.
I'll leave you with this point, made by Ken Paulson, president of the First Amendment Center at Vanderbilt University. He commented on the Hoehn fair use ruling, in which the court held that the reposting of an entire news article is fair use and suggested that editorial opinions are less creative, and entitled to less copyright protection, than the design of a Barbie doll:
Posting an entire editorial on a website will mean more people will see the viewpoint and may well encourage discussion and exploration. That's a good thing.
On the other hand, what becomes of a free press if virtually everything can be freely taken and used by others without compensation to the journalist or the company he works for?
Copyright symbol image by Mike Blogs via Flickr.
Jeffrey D. Neuburger is a partner in the New York office of Proskauer Rose LLP, and co-chair of the Technology, Media and Communications Practice Group. His practice focuses on technology and media-related business transactions and counseling of clients in the utilization of new media. He is an adjunct professor at Fordham University School of Law teaching E-Commerce Law and the co-author of two books, "Doing Business on the Internet" and "Emerging Technologies and the Law." He also co-writes the New Media & Technology Law Blog.