Righthaven wins key ruling as new criticism leveled over suits

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The Las Vegas Review-Journal's online copyright enforcement partner won an important legal ruling in federal court Thursday -- just as a new round of criticism erupted over the no-warning lawsuit campaign over Review-Journal stories.

In a case pitting the Review-Journal's partner, Righthaven LLC, against a Texas law firm, Chief U.S. District Judge for Nevada Roger Hunt denied the law firm's motion to dismiss the lawsuit.

In the first ruling of its kind in the many Righthaven lawsuits involving out-of-state defendants, Hunt rejected the argument of the Dr. Shezad Malik Law Firm P.C. that the Nevada court lacks jurisdiction to hear the case since Malik doesn't do business in Nevada.

Citing precedent established by the 9th U.S. Circuit Court of Appeals, Hunt agreed with Righthaven that as an alleged willful copyright infringer of material belonging to a Nevada company, Malik had "purposely availed" itself to jurisdiction in Nevada.

"It is common knowledge that the Las Vegas Review-Journal newspaper is published and distributed in Las Vegas, Nev., by the party which assigned the copyrights together with the right to seek redress for past, present and future infringements. Accordingly, this court has jurisdiction over defendant, based upon the allegations of the complaint," Hunt ruled.

Hunt on Thursday also became the second federal judge in Las Vegas this week to at least preliminarily uphold Righthaven's right to sue even though it did not own the copyright at the time of the alleged infringement.

Righthaven is a business created by Las Vegas attorney Steven Gibson and members of the Arkansas-based Warren Stephens family, which has an investment banking business as well as media interests including the Review-Journal. Righthaven "trolls" the Internet to find online infringements of Review-Journal stories, then obtains copyrights to those stories from Stephens Media LLC and finally files no-warning copyright infringement lawsuits based on the retroactive infringements.

At least 115 suits have been filed since March, each typically demanding $75,000 in damages. Some defendants have told the Las Vegas Sun, however, that immediately after suing, Righthaven privately offers to settle for $7,500. The highest publicly-disclosed settlement has been for $5,000.

Numerous defendants have challenged Righthaven's right to sue based on the retroactive nature of the claim, but for purposes of dismissal motions Righthaven's right to sue was upheld this week by U.S. District Judge Philip Pro in a case involving Las Vegas company Tuff-N-Uff Productions, and on Thursday by Hunt in the Malik case.

"The (copyright) assignment in question clearly assigns both the exclusive copyright ownership, together with accrued causes of action, i.e., infringements past, present and future. While courts have denied standing to bring an action on an accrued claim where just the copyright is owned or just the cause of action has been assigned, where there is an assignment of both the copyright, and any accrued causes of action, the courts have held that the assignee of both can bring an action even for infringing activities which occurred before the assignment," Hunt wrote in his ruling. "In this instance, plaintiff has standing to sue, even for an infringement which preceded the assignment, because that right was specifically assigned with the exclusive assignment of the copyright itself."

Exhibits in the Malik lawsuit indicate entire Review-Journal stories were posted without authorization and without any credit for the information given to the Review-Journal. Those stories were posted at the Dallas-Fort Worth Injury Lawyer Blog published by doctor-lawyer Dr. Shezad Malik's firm in Southlake, Texas, court records show.

Among the Malik firm's defenses not yet addressed by Hunt is that it is entitled to the Digital Millennium Copyright Act’s "safe harbor" protection because it had "insufficient notice, under the DMCA, of the particular infringements in suit."

The DMCA safe harbor provision typically covers third-party message board postings on websites. Righthaven, in disputing the Malik firm has a DMCA defense, argues it was Dr. Malik himself who posted the stories.

Separately Thursday, the online freedom of speech organization Electronic Frontier Foundation reiterated that it's looking for a Righthaven case to intervene in and issued a lengthy report critical of the Righthaven/Review-Journal copyright infringement lawsuit campaign.

Based in San Francisco, the EFF is considered to be an influential national player in online privacy and freedom of speech issues and has been critical of mass-lawsuit campaigns launched by the motion picture and music industries over unauthorized downloadings of content.

Written by EFF's designated "activist" Richard Esguerra, the report called Righthaven "just the latest group of lawyers to try to turn copyright litigation into a business model."

"What these lawyers have in common is that they seek to take advantage of copyright's draconian damages in order to bully Internet users into forking over money," the report said.

EFF said that Righthaven is:

--Going after bloggers who are interested in sharing "uncopyrightable facts" and that by "targeting news," the suits "could have a chilling effect on individuals' attempts to engage their communities in free and open discussion."

--Fighting the basic mode of Internet debate, which involves copying and pasting text before adding commentary or response. "Accurate quoting is a virtue of Internet discussion that can minimize mischaracterization and support progress in a debate."

--Demanding forfeiture of defendants' website domain names, which the EFF said is "an overreaching remedy for a single copyright infringement not validated by copyright law or any legal precedent." It also "indicates that the attorneys are willing to make overreaching claims in order to scare defendants into a fast settlement."

--Filing suits without first sending cease and desist letters or DMCA "takedown notices." The strategy is "sue first and ask questions later, which smacks of a strategy designed to churn up legal costs and intimidate defendants into paying up immediately, rather than a strategy aimed at remedying specific copyright infringements."

"Righthaven is claiming that its activities are intended to have a `deterrent effect' on the reposting of news stories online, but it's hard to resist viewing Righthaven's actions as purely business-related. In addition to the sharp legal tactics discussed above, Righthaven appears to only buy copyrights that it believes can be used for lawsuits and otherwise has no involvement in the practice of journalism," the EFF report said.

The EFF urged other newspapers not to join what it called the "sue the audience" tactic and said that in doing so, newspapers would find themselves in the same position as the music industry six years ago, "where futile lawsuits distracted them from the incorporating new technology and creating new ways to market product to fans."

Also critical of the Review-Journal and Rigthhaven on Thursday was a post by techdirt.com writer Mike Masnick.

Masnick noted that Review-Journal Publisher Sherman Frederick this week posted a blog responding to a Las Vegas Sun column in which it was explained that the Sun and other Greenspun Media Group publications don't file no-warning lawsuits against infringers. Rather, these publications request that infringing material be taken down and replaced with links.

Masnick wrote the Review-Journal is "massively abusing copyright law with its Righthaven lawsuits" and that Frederick "doesn't point out the slight conflict of interest in the fact that he helped fund Righthaven, and thus has incentives to try to get other newspapers to make the same mistake he's making."