Ties between Stephens Media, Righthaven copyright lawsuit at issue

Attorneys for the Democratic Underground political website are fighting efforts by Las Vegas-based newspaper company Stephens Media LLC to distance itself from a copyright infringement lawsuit filed against the Democratic Underground.

Stephens Media's copyright enforcement partner, Righthaven LLC, sued the Democratic Underground on Aug. 10 for copyright infringement after a message-board user posted on the site four paragraphs from a 34-paragraph story from the Stephens Media-owned Las Vegas Review-Journal.

This was one of at least 180 copyright infringement lawsuits that Las Vegas-based Righthaven has filed since March in federal courts in Nevada and South Carolina involving material from the Review-Journal and, most recently, the Denver Post.

A Stephens Media affiliate has invested in Righthaven and Stephens Media has participated in the lawsuits over Review-Journal material by transferring to Righthaven the copyrights to the stories at issue.

The Democratic Underground, represented by attorneys with the San Francisco-based freedom of speech and privacy group the Electronic Frontier Foundation (EFF), fired back against Righthaven and Stephens Media, hitting both with a counterclaim charging the lawsuits are an abuse of copyright law.

Attorneys for Stephens Media then filed a motion asking Roger Hunt, chief federal judge for Nevada, to dismiss the claim against Stephens Media, saying Stephens Media had nothing to do with the dispute between Righthaven and the Democratic Underground.

Attorneys for the EFF responded Tuesday, saying in court papers that Stephens Media controls Righthaven and that Stephens Media should be held accountable for the Righthaven litigation campaign.

"Most companies, when considering a possible copyright infringement claim, would hire an attorney to provide counsel and, if warranted, to file a lawsuit. Instead, Stephens Media LLC, working with attorney Steven Gibson, created Righthaven LLC, a copyright litigation factory. The newspaper company invested in Righthaven, in return for a share of the profit, and controls Righthaven’s activity though agreements," the EFF attorneys wrote in their response.

"Stephens Media solicits business for Righthaven (with Stephens Media’s general counsel as the point of contact) and threatens the public with litigation by Righthaven, claiming it is pursuing a 'hard-nosed' tactic to 'aggressively' protect its content," attorneys for the EFF wrote in their filing.

The EFF attorneys also wrote that despite claims by Righthaven that it suffered economic harm when the four-paragraph story excerpt was posted on the Democratic Underground site, the story at issue remains available for viewing for free on the Review-Journal website, "with its original copyright notice showing ownership by Stephens Media, and with its invitation to the public to make copies and share the news article with others."

The EFF attorneys also pressed their challenge to what they call the Righthaven business model of filing no-warning lawsuits and then coercing defendants into settlements.

They're hoping Hunt will find "that Righthaven failed to mitigate any damages in acquiring the copyright after it knew of the alleged infringement, and then failed to give notice and an opportunity to take the down the post there."

Such a ruling, if adopted by other federal judges, would likely substantially alter the Righthaven business model.

The EFF, in seeking to rein in Righthaven and Stephens Media, said it fears Stephens Media will continue to assert "baseless" copyright claims.

The attorneys wrote that former Review-Journal Publisher Sherman Frederick's "published threat was unequivocal: 'don’t steal our content. Or, I promise you, you will meet my little friend called Righthaven."'

EFF says it's interpretation of Frederick's "little friend" statement is that it "references the 1983 film Scarface, in which gangster Tony Montana famously said, `Say hello to my little friend!' as he wields an assault rifle against a rival drug lord in the climactic shootout scene."

"This can only be construed as a threat by Stephens Media to use its partner/agent Righthaven as a weapon in suing over what he calls `our content' – notably, not 'Righthaven’s content,"' the EFF attorneys wrote in their filing.

Separately, the EFF attorneys filed papers opposing Righthaven's motion that it be allowed to drop the underlying Democratic Underground lawsuit on the condition it not have to pay the Democratic Underground's legal fees.

Righthaven moved to drop the case after a federal judge in another Righthaven lawsuit dismissed the case against a defendant on fair use grounds. In moving to drop the Democratic Underground case, Righthaven said it intended to focus its suits on entire unauthorized reproductions of news material as opposed to partial reproductions

Attorneys for the EFF, in their Tuesday court papers, disputed suggestions that the ruling dismissing the case on fair use grounds was somehow breaking new ground in copyright law.

The EFF attorneys said Righthaven should have known all along that such lawsuits wouldn't withstand a fair use challenge.

"Righthaven’s attempt to characterize Judge (Larry) Hicks’ decision as a shift in the law that has motivated its attempted dismissal tries to make a silk purse out of a sow’s ear. It was clear from the start that the use was fair, and Righthaven had no legitimate basis to claim otherwise," the attorneys wrote.

"Righthaven has not cited a single case in any court in which users of a blog or forum excerpting only 10 percent of a factual news article was found unfair," they wrote.

The EFF attorneys asked Hunt to grant them summary judgment finding the Democratic Underground post was fair use and said the Democratic Underground -- which has removed the post at issue -- would like to re-post the information once it receives such a fair use ruling.

The attorneys also asked for permission to recover the Democratic Underground's legal fees.

"Defendants agree that this case should be over—indeed, it should never have started. But it should not end until Righthaven is called to account for the cost of the defense it provoked," the EFF attorneys wrote. "This was a meritless lawsuit from the beginning, launched as part of a well-publicized business model in which Righthaven acquires interests in copyrights for the sole purpose of suing unsuspecting alleged infringers, and then seeks to leverage the cost of defending (and its own purported right to attorneys’ fees and domain name seizures) to coerce settlements. To allow Righthaven to avoid compensating those who have no choice but to defend would be unjust and unsupportable."

In arguing for a fair use ruling, the EFF attorneys said that instead of hurting the Review-Journal, the post at issue actually helped the Review-Journal by encouraging Democratic Underground users to go to the Review-Journal website to read the entire story.

"This much is all but acknowledged by Stephens Media’s own policy for the LVRJ website, which encourages users to share articles on at least 18 different third-party Internet resources and to email, save, or print the article," the filing said.

Besides seeking attorneys fees and a summary judgment against Righthaven in the main lawsuit, attorneys for the EFF asked Hunt to allow them to pursue their counterclaim against Righthaven.

The counterclaim strikes at the Righthaven business model, charging: " Righthaven does not rightfully own the copyright in question, in that the assignment was a sham designed solely to pursue litigation with rights being retained by Stephens Media," that any harm was not actionable as it was minimal and "that Righthaven and Stephens Media are engaged in 'barratry,' 'champerty' and 'maintenance' by spawning transactions designed for no purpose other than to pursue litigation."

Attorneys for Righthaven and Stephens Media have not yet responded to the new filings and there's no indication on when Hunt may rule on the various motions.