BREAKING NEWS — Righthaven’s operating agreement revealed by Nevada District Court – Does the House of Cards Collapse?

Yesterday, the District of Nevada ordered evidence regarding Righthaven’s ownership of the copyrights it sues on to be unsealed.

Today, Docket # 79, which reveals heretofore unknown information about Righthaven’s business model, was unsealed.  As of right now, I don’t believe that any other source has this information.  Read the whole thing here.

For those of you lacking fluency in Copyright law, Silvers v. Sony Pictures Entertainment, 402 F.3d 881 (2005), says that you need to assign a specific right under 17 U.S.C. § 106 – and not the bare right to sue – for a copyright assignment to be valid.  Other courts, such as Sybersound, have held that you need an exclusive right in order to sue for infringement of your copyright rights.

The document, which Righthaven fought to keep sealed, seems to reveal what many observers suspected all along — that the Righthaven assignments may run afoul of Silvers v. Sony.

As many defendants in Righthaven actions have argued, Righthaven does not truly own the copyrights it sues over. Section 7.2 of the Agreement clearly states that “Righthaven shall have no right or license to Exploit or participate in the receipt of royalties from the Exploitation of the Stephens Media Assigned Copyrights other than the right to proceeds in association with a Recovery.”

Furthermore, it seems that in Section 3.3, Stephens Media, not Righthaven retains the right to determine who gets sued. Section 8 gives Stephens Media the right to terminate any Copyright Assignment and then get a complete reversion of all rights. That doesn’t sound like a valid assignment to me.

Ruh roh.

In the interest of getting this to press right away, I am publishing the information now. More analysis may be added later, but I have a funny feeling that the comments will fill up with analysis.

25 Responses to BREAKING NEWS — Righthaven’s operating agreement revealed by Nevada District Court – Does the House of Cards Collapse?

  1. Ken says:

    The filing shows that Righthaven is given absolutely no rights to the works in question. NONE ZERO NADDA.

    Stevens Media only allows them to claim copyright ownership in order to sue.

    Righthaven’s days are numbered the only question is will Gibson keep his law license and will he be hauled off to prison.

    • I doubt Steve Gibson goes to prison. I don’t see anything criminal in what he’s done.

      However, if I were him, I would be concerned about potential bar trouble now that this document has surfaced.

      • Ken says:

        There is a potential charge of perjury and misrepresenting of facts for every single case filed. Here are a list of claims Righthaven makes in all their court filings that has now been shown to be false by this document.

        “Despite any such Copyright Assignment, Stephens Media shall retain (and is hereby granted by Righthaven) an exclusive license to Exploit the Stephens Media Assigned Copyrights for any lawful purpose whatsoever and Righthaven shall have no right or license to Exploit or participate in the receipt of royalties from the Exploitation of the Stephens Media Assigned Copyrights other than the right to proceeds in association with a Recovery..”

        However in their court filings:

        7. Righthaven is the owner of the copyright in and to the Work.

        30. Righthaven holds the exclusive right to reproduce the Work, pursuant to 17

        31. Righthaven holds the exclusive right to prepare derivative works based upon the
        Work, pursuant to 17 U.S.C. 106(2).

        32. Righthaven holds the exclusive right to distribute copies of the Work, pursuant to
        17 U.S.C. 106(3).

        33. Righthaven holds the exclusive right to publicly display the Work, pursuant to 17

        • I do not think that this is perjury. However, it does seem to cry out for sanctions.

          • Ken says:

            Yes you are more versed on the law than I am but this does cry out for some very stiff penalties not to mention that Righthaven, Stevens Media, and Media News Newsgroup are now chum in the water for lawyers who will now be in feeding frenzy and feasting off the spoils of these companies.

            Oh what a delicious dish it is.

        • mal says:

          Ken,

          Just want to say thank you.

          Reading over RH’s complaint is not always fun, but you just IDed the mispresentations that will form the basis of a Rule 11 complaint.

  2. John David Galt says:

    Why would Stevens Media make such a phony “transfer” rather than simply sue in its own name using Righthaven as its legal firm? This scheme almost seems like it was designed to fall apart.

    • Well, Righthaven is not a law firm, so it could not do that.

      • Tim says:

        But Gibson is a lawyer….I don’t understand this part either. Why was it necessary for Righthaven to incorporate as its own entity instead of Gibson just representing Stephens Media? I’m sure there is some reason why, but it escapes me at the moment. Perhaps Stephens wasn’t willing to take the risk of losses from sanctions/atty fees levied against it? Other thoughts?

        • Ken says:

          Tim

          I think it is because Stevens Media and Righthaven knew they were treading on thin ice ethically and legally in this and thought this scheme might limit their liabilities.

          Stevens Media did not want the PR problems associated with suing a bunch of small time bloggers so they teamed up with Righthaven as a means to distance themselves.

          Righthaven was never set up as an actual law-firm even though they are lawyers because they could never legally operate this way. It didn’t work though and Stevens media is facing the bad PR plus the liabilities they were hoping to avoid by entering into this deal with the devil.

          • Tim says:

            You say “Righthaven was never set up as an actual law-firm even though they are lawyers because they could never legally operate this way.” What do you mean by this?

            I think they could have, it just seems like (as you pointed out) there were other, more PR related reasons why they didn’t.

            I still don’t really get this, though. It’s not like it was a secret whose copyrights Righthaven was “vindicating.” If Stephens had been able to insulate itself publicly I would understand it, but they didn’t. Just seems like a really silly, dumb mistake.

            • Ken says:

              Your right Tim, Stevens Media could have just hired a legitimate lawfirm to handle cases and paid a company to seek out and investigate copyright infringers and every would have been on the up and up but they chose to do it underhandedly because they knew the pitfalls as evidenced in the agreement. How can any paper associated with Rightahven ever be trusted again? Personally I don’t see how Stevens Media survives this and News Media Group may fall with them.

  3. [...] it sues over,” Marc John Randazza, one of the attorneys for the Media Bloggers Association, said Friday in a blog post titled in part “Does the House of Cards [...]

  4. Hasn’t been a good wwek for Righthaven. Hope it gets worse Monday.

  5. fairuser says:

    The fall out from this should truly bring uplifting music to my ears. Nice job Legal Satyricon! We’ve been waiting for this document for a long time.

    • DannyB says:

      > The fall out from this should truly
      > bring uplifting music to my ears.

      Please note that uplifting music is protected by copyright. If the music actually reaches your ears, some kind of infringement must have occurred.

  6. mal says:

    I’m no lawyer, but this does appear to be a violation of Federal Rules of Civil Procedure III. PLEADINGS AND MOTIONS; Rule 11. Signing Pleadings, (b) Representations to the Court. Someone should draw up a complaint.

    (b) Representations to the Court.

    By presenting to the court a pleading, written motion, or other paper — whether by signing, filing, submitting, or later advocating it — an attorney or unrepresented party certifies that to the best of the person’s knowledge, information, and belief, formed after an inquiry reasonable under the circumstances:

    (1) it is not being presented for any improper purpose, such as to harass, cause unnecessary delay, or needlessly increase the cost of litigation;

    (2) the claims, defenses, and other legal contentions are warranted by existing law or by a nonfrivolous argument for extending, modifying, or reversing existing law or for establishing new law;

    (3) the factual contentions have evidentiary support or, if specifically so identified, will likely have evidentiary support after a reasonable opportunity for further investigation or discovery; and

    (4) the denials of factual contentions are warranted on the evidence or, if specifically so identified, are reasonably based on belief or a lack of information.

  7. mal says:

    How about a class-action suit of all RH victims against the vermin?

    Tell me where to sign up.

    • Another RH Victim says:

      I’m sure someone will put a class-action suit together. Then we can all sign up!

  8. George Purcell says:

    So what happens to those who settled based upon false information…is there any remedy they can seek?

  9. [...] copyright infringement claims, but retained the exclusive rights to exploit the material. But, as The Legal Satyricon and TechDirt point out, you can’t just assign your right to sue for copyright infringement. [...]

  10. [...] • Righthaven must provide its Strategic Alliance Agreement with Stephens Media LLC to all defendants sued for infringement of Stephens Media LLC copyrights. (Strategic Alliance Agreement available here.) [...]

  11. ant exterminator…

    BREAKING NEWS — Righthaven’s operating agreement revealed by Nevada District Court – Does the House of Cards Collapse? « The Legal Satyricon…

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