By Marc J. Randazza
Today, in Righthaven v. Democratic Underground, Case No. 2:10-cv-01356 (D. Nev.), the court held that Righthaven does not have standing to sue Democratic Underground – and hundreds of others – based on the Strategic Alliance Agreement (“SAA”) Righthaven entered into with Stephens Media LLC – previously reported here.
As we predicted, Righthaven has no right to bring copyright infringement suits on behalf of the Las Vegas Review Journal. It’s “assignment” of rights, executed before the suits were brought, clearly shows that it had none of the rights of a copyright holder. The Court held that the clarification of the agreement – executed after litigation commenced – is ineffective because it attempts to change the facts of the agreement themselves, creating standing out of whole cloth, rather than amending or correcting facts erroneously conferring standing.
Righthaven argues that the SAA’s provisions, which necessarily include Section Righthaven from becoming “an owner of any exclusive right in the copyright. . . .,” Silvers, 402 8 F.3d at 886 (emphasis in original), regardless of Righthaven and Stephens Media’s post hoc, explanations of the SAA’s intent or later assignments, (see generally Dkt. #101, Decl. of Mark A. Hineuber; Dkt. #102, Decl. of Steven A. Gibson). Prior to the Assignment, Stephens Media possessed all of the exclusive rights to the Work and, therefore, the right to sue. Because the SAA limited the language of the Assignment, the Assignment changed nothing save for Righthaven’sclaim to have the right to sue. The companies’ current attempt to reinterpret the plain language of their agreement changes nothing. In reality, Righthaven actually left the transaction with nothing more than a fabrication since a copyright owner cannot assign a bare right to sue after Silvers. To approve of such a transaction would require the Court to disregard the clear intent of the transaction and the clear precedent set forth by the en banc Ninth Circuit in Silvers. (op. at 6)
The court goes on to identify Stephens Media, the publisher of the Las Vegas Review Journal, as the real party in interest, dressing down Righthaven as a middle-man to bring lawsuits without requiring Stephens Media to attach its name to the hundreds of actions brought against bloggers and individuals:
Accordingly, the Court dismisses Righthaven from this case. However, Righthaven requests that upon such a finding, the Court grant it leave to join Stephens Media as a plaintiff to cure the jurisdictional defect. Adding Stephens Media, however, would not cure the jurisdictional defect as to Righthaven. Eden Toys, 697 F.2d at 32 n.3 (“While [Federal Rule of Civil Procedure] 17(a) ordinarily permits the real party in interest to ratify a suit brought by 11 another party, the Copyright Law is quite specific in stating that only the owner of an exclusive right under a copyright may bring suit.” (internal citations and quotations omitted).) (op.)
The court saved its most brutal assessment for the end, however, ordering Righthaven to show cause why the Court should not sanction it for failing to identify Stephens Media as an interested party in this suit. Recall that Righthaven’s SAA with Stephens Media splits the proceeds from the infringement suits 50/50 between the parties. Yet, Righthaven apparently did not disclose this to the court. Judge Hunt, who initially issues several rulings favorable to Righthaven on the matter of personal jurisdiction, concluded the Order with the following:
Making this failure more egregious, not only did Righthaven fail to identify Stephens Media as an interested party in this suit, the Court believes that Righthaven failed to disclose Stephens Media as an interested party in any of its approximately 200 cases filed in this District. Accordingly, the Court orders Righthaven to show cause, in writing, no later than two (2) weeks from the date of this order, why it should not be sanctioned for this flagrant misrepresentation to the Court.
We predicted this, and it feels good to be on the right side not only of free expression, but of the law, and history as well. I have only one word for Righthaven at this time: PWN3D.