Righthaven files a lot of copyright lawsuits, and that’s putting it mildly. From this convenient website, it appears that they’ve filed somewhere in the ball-park of more than 260 copyright lawsuits between March of last year and today. That’s around three lawsuits every four days, give or take. That’s a lot. And during that entire time, I’ve somehow managed to remain silent about the whole matter, despite the fact that so many others are outraged.
How outraged? Ars Technica called it a “sordid operation.” Boing boing referred to it as an “extortion racket.” Joe Mulllin calls the outfit “controversial.” That’s hardly an indictment in itself, but he did specifically mention in his latest article that “Righthaven has sued charities, impoverished hobby bloggers, reporters, and the newspaper’s own sources.” These are all true facts, to be sure. But with 260 lawsuits, they can’t all fit into these categories, can they?
In fact, they don’t. Righthaven has sued other newspapers, radio stations, bookmakers (several, actually), news aggregators, and advertising specialists. Not limiting their lawsuits to those who make their living by both creating, and evidently using, original content, Righthaven has also sued conservatives, liberals, gun nuts (including the female variety), marijuana activists (any non-cash consideration in that settlement?), bootleggers, and engineers. I don’t get the impression Righthaven’s copyright enforcement campaign is based on any ideology other than the aggressive exercise of property rights.
Righthaven’s business model, and partnership with Stephens Media, seems to be fundamentally misunderstood. Stephens Media’s various employees create original content on a daily basis, and they seek to monetize that content. They do this in two ways. First, in the traditional manner, they provide that content at low (or no) cost to an interested audience, and extract value from advertisers for the attention their content draws. Second, in a less traditional manner, they pay Righthaven to closely monitor the use of their content by others, and insist on compensation by those that seek to copy. The simple message is that Righthaven owns the content and is willing enforce its rights aggressively.
Or do they? Judge Roger Hunt called Righthaven’s privacy concerns “feeble” when signing off on an order that unsealed a copy of an agreement between Righthaven and Stephens Media (parent company of 30 newspapers) apparently relevant to Righthaven’s copyright enforcement campaign. Media reports of the agreement claim that Stephens and Righthaven are to split the proceeds of any enforcement 50/50, that Stephens is largely in control of Righthaven’s litigation strategy, and that Righthaven did not actually receive an assignment of the copyrights it is enforcing.
The 50/50 split appears to be correct, and Stephens does have some specific rights to order Righthaven not to take a specific enforcement action, but the accusation that Righthaven failed to obtain valid assignments of the copyrights does not seem to hold water. At the very least, I can say that the revealed agreement alone is insufficient to draw the conclusion that Righthaven’s copyright assignments are ineffective. First, section 3.1 says that Stephens Media “shall assign” copyrights to Righthaven pursuant to procedures in section 7.1. The latter section again refers to a form assignment document in Exhibit 1 that is to be used to perfect the copyright assignments. The form agreement contains the magic language “Stephens Media hereby transfers, vests and assigns the work … to Righthaven … all copyrights requisite to have Righthaven recognized as the copyright owner …” and so on. Sure reads like a copyright assignment to me.
There’s language in the form agreement about the right to sue for past, present and future infringement which is somewhat of a “belt and suspenders” approach that is also common in most patent assignments. Further, section 7.2 contains an exclusive license for Stephens Media to continue to use and exploit the work. If anything, this cuts in favor of finding that Righthaven has obtained legitimate assignments. So, I can’t help but wonder on what basis the media reports claim that “Stephens Media didn’t actually assign any of the rights related to copyright to Righthaven except the right to sue—and that’s arguably illegal under case law.”
Ignoring the facts for a moment, what’s this notion about illegal agreements? The doctrine they’re probably referring to is an old common law doctrine called champerty. A decent legal definition (it’s not Black’s, but looks good enough) describes it as:
an agreement between the party suing in a lawsuit (plaintiff) and another person, usually an attorney, who agrees to finance and carry the lawsuit in return for a percentage of the recovery (money won and paid.) In Common Law this was illegal on the theory that it encouraged lawsuits.
Of course, today it’s not illegal. It happens all the time, under a new name: contingent fee litigation. I’ve seen this doctrine kicked around a little bit in defense to patent litigation, and it has yet to go anywhere to the best of my knowledge. Getting back to the facts, it seems like these articles are simply accepting a Righthaven opponent’s legal argument at face value, rather than obtaining an objective view of the facts.
Media reports also suggest this could signal the beginning of the end for Righthaven’s business model. (PaidContent.org’s headline reads “Righthaven’s Secret Contract Revealed: Will Its Strategy Collapse?“, Ars Technica says “Righthaven reeling: secret doc could doom a copyright troll“). As you might guess, I look at things just a little bit differently. First of all, the harm to the merits of Righthaven’s case based on this document alone is entirely overblown. But more importantly, I think these recent events might only embolden and encourage similar business models.
But first, I mentioned above that, despite all of the news and outcry, I have remained completely silent on Righthaven’s enforcement campaign. Why? Well, at first I wasn’t sure what to make of it. I didn’t (and don’t necessarily today) think that it would ultimately prove to be a financially successful business model for a variety of reasons. However, I can understand why someone would find the business model attractive, and I would hardly be quick to begrudge an IP owner from seeking to monetize their IP. At this point, the whole operation has just gotten too big to ignore, and it occurred to me that every single article and blog post I’ve read simply assumes that there’s something illegal, immoral or otherwise untoward about Righthaven’s licensing operation … as if this is the first one-sided story in the history of mankind. Well, I may not be nearly as well versed in copyright law as I am in patent law, but I do understand IP as an asset. More importantly, I understand IP licensing as a business model and it occurred to me that there are probably many similarities between Righthaven’s licensing model, and the patent licensing models I’ve become familiar with.
IP licensing generally centers around two points: intellectual assets and relative values. In the case of patents, the asset is a novel product or process. Valuable products are likely to be copied, so investment in valuable patents is reasonable since there are likely to be many possible licensing candidates. In the case of copyrights, the asset is content. Similar to products, valuable content is more likely to be copied, so investment in content is tempting. Nevertheless, there are a few reasons why I’m skeptical of the efficacy of a content-based licensing business model.
First, IP licensing deals depend on an agreement (or in the context of litigation, a compromise) factoring in the value of the asset to the IP owner and the value of using the asset to the IP user. Many of the users Righthaven has pursued likely place a relatively low value on using Righthaven’s particular content. Why? For one thing, many of them probably realize very little direct revenue from the content itself (although certainly they enjoy indirect benefits at the least. For another, primarily Righthaven’s content is factual content, available from multiple sources. If Righthaven tries to exact too high a price, users can simply look elsewhere for comparable content.
Second, the enforcement mechanism (litigation) for copyrights strikes me as being weaker, in general, than enforcement of patents. Moreover, the news industry particularly has difficulty with enforcement since so much of its original content creation is rooted in reporting un-protectable facts. Righthaven experienced this exact phenomenon when a judge ruled as a matter of law that a particular defendant’s infringement was excused under the affirmative defense of fair use, despite it being a notoriously fact-specific inquiry.
Finally, an aggressive, litigation-based copyright enforcement campaign far exceeds the prevailing “social norms” for content appropriation. Aggression is more common for patent litigation, as well as copyright infringement involving issues like bootlegged content, or unauthorized derivative works. However, in the age of digital media where the ease of copying is confused with the authority to copy, misunderstandings can usually be resolved without lawyers getting involved and without money changing hands. Thus, Righthaven should have expected that its actions would not be well-received by its contemporaries in the media.
Getting back to the point, however, rather than sound the death knell, the court’s exposure of Righthaven’s agreement will probably only encourage the business model. Thanks to the publication of this agreement, anyone even remotely interested in IP enforcement now has a blueprint for structuring a deal with content owners. After all, the 30 newspapers published by Stephens Media can’t be the only ones interested in monetizing their intellectual assets through licensing. Of course, before you go out and copy Righthaven’s “Strategic Alliance Agreement,” you may want to go ahead and contact them about licensing it …
Related Articles (again, taking Righthaven’s opponents legal arguments at face value, despite evidence to the contrary)
- EFF Exposes ‘Sham’ Copyright-Troll Legal Tactics (wired.com)
- Righthaven cases may be built on faulty legal foundation (teleread.com)
- Why Righthaven’s Copyright Assignment Is A Sham – And Why It Matters (eff.org)
- Righthaven’s Secret Contract Is Revealed – Will Its Strategy Collapse? (paidcontent.org)