Judge: Righthaven in the Wrong on Copyright

In an enlightening decision, a federal judge ruled this week that Las Vegas-based copyright litigation enterprise Righthaven had no legal basis to sue one defendant, Democratic Underground, because it didn’t even own the copyright it was suing over.

Chief U.S. District Court Judge Roger Hunt was particularly peeved to learn that Righthaven was trying to engage in legal slight-of-hand by purportedly having publisher Stephens Media, LLC assign it any right to sue for copyright infringement. This was impossible, the court concluded, because copyright law forbids assigning the right to sue over alleged infringement; “only the owner of an exclusive right under a copyright may bring suit.”

Righthaven CEO and lawyer Steven Gibson attempted to build a copyright litigation enterprise with a business model of generating revenue by suing companies “for infringing copies of his clients’ articles.”

Federal law allows for up to $150,000 in damages for each act of willful copyright infringement. Accusing hundreds or thousands of defendants of copyright infringement had the potential, according to Righthaven’s business model, to generate a significant amount of money by either settling with defendants for thousands of dollars, or litigating for potentially much, much more.

Last year, Gibson told Wired magazine that he thought his company’s business model was working well. “Frankly, I think we’re having tremendous success at a number of levels,”  he explained. “We file new complaints every day.”

According to Judge Hunt, however, this business model fails if the plaintiff doesn’t own copyrights to the work that is the subject of the litigation.  Multiple Strategic Alliance Agreements (‘SAA’) written in 2010 purported to assign from Stephens Media to Righthaven the right sue for alleged copyright infringement of its works. If Righthaven doesn’t own any of the works that it is suing over, then literally all of the company’s copyright litigation could be in jeopardy.

Judge Hunt chastised Righthaven for failing to disclose these SAAs, and the underlying fact that Stephens Media is the actual copyright owner of work at issue, thereby making “multiple inaccurate and likely dishonest statements to the Court.” Because of its “flagrant misrepresentation to the court,” Righthaven now faces the possibility of sanctions for its conduct in this lawsuit, as well as “in any of its approximately 200 [other] cases filed in” Nevada.

Will this new ruling, and the potential for others like it in Righthaven’s other Nevada and Colorado copyright lawsuits, put Righthaven out of business? Bloggers who previously settled Righthaven copyright lawsuits are considering fighting back, and reopening closed cases.

You can read the new court opinion here: