Righthaven Remembered

It’s hard to believe that Righthaven, the company that was going to change the news media business by applying the patent lawsuit business model to the enforcement of copyrights, filed its first series of lawsuits five years to go.  (The events were so notable that even this trademark dedicated blog could not resist writing up a copyright related post).

To mark the anniversary, former Las Vegas Sun Reporter Steve Green (now a staff writer with the Orange County Register), who helped shine a spotlight on Righthaven as the company embarked on and went about its controversial copyright enforcement campaign, published a new article last week which looks back upon the rise and demise of Righthaven (including new quotes from Righthaven founder Steve Gibson who continues to stand by the actions taken by Righthaven).


See the photo of Steve Gibson and the infamous “bluetooth” headset. (Photo © Las Vegas Sun)



Stephens Media Wins $200,000 Default Judgment Over Alleged Trademark Infringement of “Best of Las Vegas”

[After all these years, they still have do not have a category for “Best Las Vegas Trademark Attorney Blog” – or perhaps my dearth of blog posting in 2012 took me out of the running this year]

Back in 2009 (when I had much more time to blog on a more regular basis), I wrote about the three separate trademark infringement lawsuits filed by Stephens Media LLC (“Stephens Media”), the owner of the Las Vegas newspaper The Las Vegas Review Journal, against three separate companies over their alleged use of the term “BEST OF LAS VEGAS.”   See previous blog entry here.

In the case against one of the companies, CitiHealth LLC (“CitiHealth”), on August 6, 2012, U.S. District Court Judge Miranda Du issued a decision on a motion for default judgment filed by Stephens Media.  See Stephens Media LLC v. CitiHealth LLC, 2012 U.S. Dist. LEXIS 109431 (D. Nev. August 6, 2012).  What is interesting is how long it took for the case to get to this point.

The complaint against CitiHealth was originally filed on December 2, 2009, and related to the company’s publication of a magazine in December 2008 called “Healthy Living Las Vegas” that included the phrase on the cover “Best of Las Vegas.”  When CitiHealth failed to answer the complaint, a default was entered by the Clerk on March 24, 2010.  So why didn’t Stephens Media seek a default judgment at that time?  Well, the complaint was originally filed by Steve Gibson and his former firm Gibson Lowry and Burris.  Steve Gibson is also better known as the CEO of Righthaven LLC, the copyright enforcement company established by Gibson and Stephens Media to file lawsuits against websites that infringed on copyrights associated with Las Vegas Review Journal articles.  [I certainly don’t have the time or energy to go into all of the details of the Righthaven-saga in this post and will instead defer to those websites (here and here) that have tracked all things Righthaven and which will give any interested party the necessary background to understand what may have caused Mr. Gibson to be a little distracted during 2010 and 2011 as well as what may have caused  a rift between Mr. Gibson and Stephens Media].

Over a year went by without any follow-up after the entry of default against CitiHealth.  Finally, on May 24, 2012, the Court issued a Order to Show Cause, as to why the case should not be dismissed for failure to prosecute.  Six days later, Stephens Media filed a Motion to Substitute Attorney and subsequently informed the Court that that it had retained new counsel and intended to seek a preliminary injunction and default judgment.  On July 2, 2012, through new counsel Gordon Silver, Stephens Media filed the Motion for Default Judgment.  On July 13, 2012, Kenneth Shepherd, the co-owner of CitiHealth, notified both the Court and Stephens Media’s counsel that Healthy Living no longer exists and has not existed for the past 3 years and that CitiHealth had dissolved on May 9, 2012 and that the co-owners of the company had had filed for personal bankruptcy.

The Court nevertheless proceeded to analyze Stephens Media’s motion for default judgment under the Eitel factors established by the Ninth Circuit:

"The Ninth Circuit has identified the following factors as relevant to the exercise of the court's discretion in determining whether to grant default judgment: (1) the possibility of prejudice to the plaintiff; (2) the merits of the plaintiff's substantive claims; (3) the sufficiency of the complaint; (4) the sum of money at stake in the action; (5) the possibility of a dispute concerning material facts; (6) whether the default was due to the excusable neglect; and (7) the strong policy underlying the Federal Rules of Civil Procedure favoring decisions on the merits. Eitel v. McCool, 782 F.2d 1470, 1471--72 (9th Cir. 1986); see also Trustees of Elec. Workers Health and Welfare Trust v. Campbell, No. 07-724, 2009 WL 3255169 (D. Nev. Oct. 7, 2009)."

Despite CitiHealth's dissolution, the Court found that CitiHealth's failure to appear in this action and the likelihood that it will never respond to this action creates a high possibility of prejudice to Plaintiff in the absence of a default judgment.  The Court found that the Complaint did sufficiently state claims for relief (under the Rule 8 liberal pleading standards).

With respect to the amount of money at stake, Stephens Media sought $200,000 pursuant to 15 U.S.C. § 1117(c)(1) for non-willful trademark infringement of one mark (i.e., the Trademark Act’s statutory damages provision for use of “counterfeit” marks).  Without much discussion, the Court stated that “[b]ecause Stephens demonstrates a basis for its requested monetary relief, the fourth Eitel factor favors Stephens.”   [Comment:  counterfeit use, really?  And even so, court has discretion to award statutory damages ranging  from $1000 to $200,000—did the circumstances really merit the “maximum”?]

The Court found that the sufficiency of the Complaint was such that no genuine dispute of material facts would prejudice granting the motion.  The Court also found that CitiHealth had sufficient notice of the complaint and therefore it is unlikely that CitiHealth's failure to respond and subsequent default resulted from excusable neglect.  Finally, the Court, while recognizing the preference to have cases decided on the merits, found that CitiHealth's failure to answer Stephens Media's Complaint makes a decision on the merits impractical, if not impossible.

In the end, the Court entered a default judgment  awarding $200,000 against CitiHealth as well as a permanent injunction against CitiHealth and its officers against any further use of the “Best of Las Vegas” mark.  The Court also gave Stephens Media 30 days to file a motion for attorneys fees.

While its highly unlikely that Stephens Media will be able to collect on its $200,000 default judgment, one wonders if Stephens Media, should it be able to collect such funds, would be willing to pump that money into back into Righthaven LLC so that Righthaven can pay the money that it owes to its creditors (including multiple defendants that the Nevada District Court found were wrongly sued by Righthaven for copyright infringement).   That’s probably even more highly unlikely.     

Avoiding the Wrath of Righthaven

There has been a lot of discussion in the Las Vegas area (and nationwide) about the numerous copyright infringement lawsuits filed by a Las Vegas company named Righthaven, LLC. As of August 4, 2010, Righthaven had filed approximately 86 lawsuits against various website operators claiming copyright infringement. While not immediate apparent from the lawsuits, Righthaven is essentially a company established by Stephens Media LLC, the owner of numerous newspaper including the Las Vegas Review Journal (the “RJ”), in order to go after any and all third party websites that improperly excerpt all or part of the copyrighted articles from the RJ.

Many people who post content online may be under the impression that they can lawfully post all or part of an article originally published in the RJ so long as appropriate credit to the RJ is given (as well as possibly a link back to where the article appeared on the RJ’s website). In actuality, such actions may constitute copyright infringement.

The RJ just accepted this type of copyright infringement for the longest time as an unfortunate byproduct of the Internet. However, earlier this year, the RJ apparently had a change of heart and is now aggressively going after anybody who posts any of its copyrighted content online. A blog posting by Sherman Frederick, the publisher of the RJ, posted in May 2010 explained the RJ’s new aggressive actions towards reposting of the RJ’s copyrighted content.

We grubstaked and contracted with a company called Righthaven. It's a local technology company whose only job is to protect copyrighted content. It is our primary hope that Righthaven will stop people from stealing our stuff. It is our secondary hope, if Righthaven shows continued success, that it will find other clients looking for a solution to the theft of copyrighted material.

To describe Righthaven as a “technology company” is probably a glamorization of what is essentially a company more akin to a law firm established by the RJ to be the assignee of various copyrighted articles so that Righthaven can obtain copyright registrations on such articles and then file lawsuits in federal court for copyright infringement. By establishing a separate company, not only can the RJ keep a distance from and avoid being associated directly with the aggressive tactics of Righthaven, it can also have what is (most likely) a law firm working on a contingency basis based on all of the settlement amounts obtained from the unsuspecting website operators who find themselves looking at either paying a quick nuisance settlement or spending thousands of dollars of legal fees defending what may possibly be fair use, but what is more likely than not a clear cut case of copyright infringement (albeit unintentional on the part of the person who just wanted to cite to one of the RJ’s articles). And even in those cases where the articles were posted by third parties under circumstances where the website operator may be immune under the Digital Millennium Copyright Act (“DMCA”), it still often makes more sense to just give into Righthaven’s demands than to pay the cost to prove that no liability exists.

Righthaven’s agenda to obtain quick and easy cash settlements (in addition to having its copyrighted content taken down from those posting without permission) is clear by the fact that Righthaven never contacts any of these websites and orders them to take down the infringing content nor sends any kind of cease and desist letter to takedown request against the website. Of course, Righthaven is under no obligation to do so, but at the same time, if such letters were sent out (something that apparently, rival newspaper company Greenspun Media does with much success), then Righthaven knows that the website operators are likely to quickly comply and take down the content – without Righthaven getting any “compensation” for the use of its articles (or compensation to offset the time and effort for sending out such notices). Instead, the party is immediately named as a defendant in a lawsuit (which only costs $350 to file, not including the time it might take for a paralegal to modify Righthaven’s boilerplate legal complaint to the facts and circumstances of each case), which puts the named defendant in the serious situation of having to spend time and money addressing these allegations or else face a default judgment by the court. Rather than fight against Righthaven and obtain what is at best likely to be pyrrhic victory, most defendants will choose to just settle.

Some may be asking how the RJ can claim a copyright over the news that it covers. While the RJ cannot claim copyright rights over news events, it can claim a copyright to the particular way that one of its employed writers describes a news event. Accordingly, while you can describe a particular news event on your website that you may have read about in the RJ, you cannot describe such news by using the precise copyrighted written text that the RJ used to describe the news.

And while copyright law does protect certain uses of a copyrighted work as “fair use,” such as when a work is reproduced for purposes of criticism, comment, news reporting, teaching, scholarship, and research, whether a particular use constitutes “fair use” actually involves an analysis of several factors used by courts including the purpose and character of the use (whether use is commercial or for nonprofit purposes), the nature of the copyrighted work, the amount and substantiality of the portion used in relation to the copyrighted work as a whole, and the effect of the use upon the potential market for or value of the copyrighted work. See 17 U.S.C. §107. One factor often overlooked by many website operators is the commercial nature of their websites. Think your website is non-commercial? – well, if you have pay-per-click ads being displayed on your website and you are generating some revenue from the website, then your website is more commercial than you think.

So what is a website to do in order to avoid the “wrath” of Righthaven if you want to mention an RJ news article on your website? While there is nothing clearly outlined on the RJ’s own website, Mark Hinueber, the Vice President and General Counsel for Stephens Media, recently provided some guidance for third parties regarding how to properly cite review journal articles.

Mr. Hinueber is informing interested parties that the appropriate procedure for using stories published in the RJ (and any other publication owned by Stephens Media) is to post the headline of the story and then the first paragraph with a link to the original story. Accordingly, if you wish to quote from an RJ story on your website – and you do not otherwise obtain a non-exclusive license from the RJ to post all or part of the story on your website – then you should post only the headline, the first paragraph of the story, and a link to the RJ’s website where the original story can be found.

The following example illustrates what is acceptable to the RJ:

$145 MILLION BUDGET SHORTFALL: Union proposes pay cut for all employees in Clark County School District
By JAMES HAUG
LAS VEGAS REVIEW-JOURNAL
A 1.5 percent pay cut by all 38,500 employees in the Clark County School District would prevent layoffs and resolve the budget crisis for the 2010-11 school year, according to a proposal from the union representing school principals and administrators.

The rest of the article can be viewed by clicking here.

For those website owners that are not actively involved in posting content, but which maintain a website which allows third parties to post content to online forums, then you need to confirm that you have taken the proper steps to ensure that your website is immune from any claims for damages for copyright infringement under the safe harbor provisions of the DMCA. The DMCA safe harbor provisions require a copyright owner to first give notice to the website owner that copyrighted content appears on its website and an opportunity to take down the material before proceeding with a lawsuit.

Many website owners may be under the impression that they are protected by the DMCA when in reality, there are very specific requirements must be met before a website owner can invoke the DMCA safe harbor provisions. See 17 U.S.C. §512(c).

In particular, the safe harbor only applies to service providers who have designated an agent to receive notifications of claimed infringement and providing information about the agent (name, address, phone number, and electronic mail address of the agent) to the Register of Copyrights, which maintains a directory of agents available for publication inspection. See 17 U.S.C. §512(c)(2). This list can be viewed here.

So it is not enough to just name an agent in your terms of use policy. You must go a step further and provide the name of this agent to the Copyright Office. The Copyright Office has forms available online for designating an agent – Interim Designation of Agent to Receive Notification of Claimed Infringement – and for amending the designated agent – Amended Interim Designation of Agent to Receive Notification of Claimed Infringement. The filing fee is $105 and an additional $10 for group of 30 or fewer alternative names for the service provider. The designation can be mailed to Copyright RRP, P.O. Box 71537, Washington, DC 20024. More information from the Copyright Office on the requirement of designating an agent to receive notification of claims of infringement can be viewed here.

Once you have designated the proper agent, if a user to your website posts an RJ article that infringes the RJ’s or Righthaven’s copyright rights, then the RJ or Righthaven must provide you with the proper takedown notice and allow the website owner to remove the infringing content before proceeding with litigation.

Righthaven has likely been targeting those websites where either the website owner directly posted the RJ’s article or, to the extent a third party may have posted the article, then the website did not have an agent designated to receive notification of claimed infringement, and thus cannot invoke the DMCA safe harbor. (Indeed, some of the more recent complaints filed by Righthaven include factual allegations about the Defendants not instituting any proactive policy intending to address the posting by others of copyright-infringing content).

For those that have to date flown under the Righthaven radar, you can begin taking immediate steps to avoid facing any kind of copyright infringement liability. However, if you are the unfortunate recipient of a notice that a lawsuit has been filed against you by Righthaven for copyright infringement, you should take the matter seriously and immediately consult with legal counsel familiar with copyright law and with Righthaven. If you choose not to respond to the complaint, you could face a default judgment being rendered against you by the court that could go as high as $150,000 per infringement.

[08/09/10 Update: Las Vegas Sun has an article that includes a reference to this particular blog post and other websites dedicated to the Righthaven.]

Las Vegas Sun Spotlights Righthaven Copyright Infringement Lawsuits

To date, I have not written anything on this blog about Righthaven LLC, the so-called start-up company in Las Vegas that has garnered much nationwide attention for filing a slew of copyright infringement lawsuits in Nevada U.S. District Court against websites posting Las Vegas Review Journal stories. The lack of any coverage on my part was mostly due to my deliberate choice to make this blog strictly about trademarks; but like most intellectual property attorneys in Las Vegas, I am well aware of the name Righthaven.

Nevertheless, a group of articles published today by Steve Green with the Las Vegas Sun compels me to break with my blogging tradition in order to spotlight these articles (published in the LVRJ’s competitor paper) which provide a detailed report of Righthaven’s actions from all points of view (and not just because one of the articles includes a quote from yours truly).

Main article: Legal attack dog sicked on websites accused of violating R-J copyrights

Related Articles:

• Some targets of Righthaven lawsuits fighting back
• Are website copyright violations hurting newspapers’ bottom line?
• Defendants in R-J copyright lawsuits speak out

Having taken the plunge into discussing copyrights on this blog and specifically about Righthaven, I hope to post my own article that I’ve written about Righthaven within the next day or so.