In a decision with likely wide-ranging impact, a judge in Las Vegas today dismissed as a sham an infringement case filed by copyright troll Righthaven LLC. The judge ruled that Righthaven did not have the legal authorization to bring a copyright lawsuit against the political forum Democratic Underground, because it had never owned the copyright in the first place. The Electronic Frontier Foundation (EFF), Fenwick & West LLP, and Las Vegas attorney Chad Bowers are defending Democratic Underground.
"We are pleased that the Court saw through Righthaven's sham assignment of the copyright and dismissed its improper claim," said EFF Senior Staff Attorney Kurt Opsahl. "Today's decision shows that Righthaven's copyright litigation business model is fatally flawed, and we expect the decision to have wide effect on the over 270 other cases Righthaven has brought."
Righthaven sued Democratic Underground last fall over an excerpt of a Las Vegas Review Journal news story that a user posted on the forum, claiming that the newspaper had transferred copyright to Righthaven before it filed the suit. However, a document unearthed in this litigation showed that the copyright assignment was a sham and that Righthaven was merely agreeing to undertake the newspaper's case at its own expense in exchange for a cut of the recovery.
"In dismissing Righthaven's claim in its entirety, Chief Judge Hunt's ruling decisively rejected the Righthaven business model of conveying rights to sue, alone, as a means to enforce copyrights," said Laurence Pulgram, Chair of the Copyright Litigation Group of Fenwick & West in San Francisco. "The ruling speaks for itself. The court rejected Righthaven's claim that it owned sufficient rights in the copyright, stating that claim was 'flagrantly false--to the point that the claim is disingenuous if not outright deceitful."
Judge Hunt also noted that "Righthaven has made multiple inaccurate and likely dishonest statements to the Court" and rejected Righthaven's efforts to fix things after the fact with a May 9, 2011, amendment to the original assignment agreement. The judge expressed "doubt that these seemingly cosmetic adjustments change the nature and practical effect" of the invalid assignment.
As part of his ruling today, the judge ordered Righthaven to show why it should not be sanctioned for misrepresentations to the court. The Court permitted Democratic Underground's counterclaim to continue against Stephens Media -- the publisher of the Review Journal -- allowing Democratic Underground to show that it did nothing wrong in allowing a user to post a five-sentence excerpt of a 50-sentence article.
"This kind of copyright trolling from Righthaven and Stephens Media has undermined free and open discussion on the Internet, scaring people out of sharing information and discussing the news of the day," said Opsahl. "We hope this is the beginning of the end of this shameful litigation campaign."
"To Righthaven and Stephens Media, the Court has issued a stinging rebuke," added Pulgram. "For those desiring to resist the bullying of claims brought by pseudo-claimants of copyright interests, the ruling today represents a dramatic and far reaching victory."
The Fenwick team representing Democratic Underground was led by Laurence Pulgram and included Jennifer Johnson, Clifford Webb and David Marty.
For the judge's full order: https://www.eff.org/files/filenode/righthaven_v_dem/order6-14-11.pdf
Fenwick & West attorneys have handled some of the most prominent IP litigation over the past two decades, including securing one of the largest IP litigation settlements of 2005—a $400M settlement for its client Compuware against IBM—and one of the largest patent verdicts of the past eighteen months, a $74.7M patent litigation verdict for client Asyst Technologies against Jenoptik. The firm is ranked by Managing Intellectual Property as one of the top five West coast firms for IP litigation, by IP Worldwide as one of the top dozen firms that Fortune 500 companies relied on for IP litigation, and was recently awarded "Most Innovative Use of Technology by a Law Firm" by American Lawyer Media for the firm's proprietary electronic discovery tools.