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Copyright, IP, IP Asset

A ‘Bike Lesson’ From Dickinson Wright Partner (And Righthaven CEO) Steve Gibson On IP Monetization

Steven Gibson is “a licensed attorney and a partner with Dickinson Wright PLLC,” or so claims the opening footnote in a recent document filed by Gibson with the Nevada District Court.  Yet by his own admission, this part-owner in a major law firm–dating back to 1878 and home to over 300 lawyers–is not able to: (1) represent a company he owns in court, (2) order a copy of a transcript , and (3) (please sit down) find a law library that provides copies of cases with page numbers!

Gibson, CEO of copyright acquisition and enforcement company Righthaven, made a few headlines last year when he gave an interview with Face to Face and John Ralston–something notable at the time as mandatory viewing for anyone considering a career in patent monetization.  In that interview, Gibson calmly explained that the many negative outcomes of Righthaven’s court battles were merely the court’s way of providing guidance to other companies that might follow in its footsteps.

At the moment, however, the guidance Gibson and Righthaven themselves provide is reminiscent of The Bike Lesson, and ought to make a handy “how to” guide of everything NOT to do when starting your own IP monetization outfit.  For example, I would link to the company’s website, but their domain (Righthaven.com) was sold, reportedly auctioned off in an effort to satisfy a $60,000 sanction levied against it.  Righthaven is, at this point, generally without assets while, interestingly enough, the law firm Gibson is part-owner in, Dickinson Wright, reported average profits per partner of nearly half a million dollars with more than $100 Million in revenue each of the last two years.  But more on Gibson and Righthaven’s solvency later.

Lesson number one in any IP monetization business is to respect the judicial process.  Litigation is not the business model, but it will be used in many parts of the business plan execution.  Operators of patent monetization firms often explain that they prefer to work out licensing agreements directly with companies, to avoid the additional expenses of the litigation process.  Yet, the smart ones know that the courts serve an important function in resolving the un-resolvable disputes, and are respectful of that process.

But having respect for the court means more than just saying so. In Gibson’s recent filing with the Nevada District Court, he repeatedly states that he is not “legally capable” of representing Righthaven in Court and that, as CEO, he is not able to comply with an order requesting that Righthaven produce a copy of transcript and other information reportedly related to Righthaven financial information and “a transcript of a debtor’s examination that attorneys in a different case took of Gibson and his wife,” according to this recent Vegas Inc. article.

So can Steve Gibson, a “licensed attorney and a partner with Dickinson Wright PLLC” according to the footnote in his own filing, actually represent Righthaven, the company he owns and manages as CEO?  Well, he has before, appearing front and center, for example, in this lawsuit against Money Reign and even signing the pleading on behalf of Righthaven.Granted, that was two years ago.  Giving Gibson the benefit of the doubt, his statements still require the court to actually believe that the Chief Executive Officer of the company has no way to identify what financial information was produced in another case investigating the companies finances.  On top of that, Gibson evidently claims that, although he knows about a transcript of a debtors examination taken against Gibson and his wife, he has no way of obtaining it?

But not only does Gibson claim, “I simply do not have nor have I had access to the Transcript,” but he even explains that even if he knew where to go to order a copy, “Righthaven has no funds to order same.” (From Footnote 5)  Of course, while Righthaven may be penniless, Gibson explains that the real culprit is its lawyer, who apparently wants for nothing in this entire affair. From page 7:

… Righthaven fulfilled all payment obligations to Mangano. Mangano had no reason to believe that one or more of Righthaven’s parents would not continue to make capital contributions to continue to fund Righthaven’s prosecution of the its legal cases on the basis agreed to by Mangano.

So Righthaven has no funds to order a copy of a transcript, but Gibson admits in a signed pleading that Righthaven’s parent companies would gladly capitalize Righthaven to pay its lawyers.

Of course, the line that really turns Gibson’s filing into a complete laughing-stock is his explanation on why his case citations lack pin-point page numbers.  From Footnote 4:

I do not have access to page citing references and I apologize to the Court for same. I have read these cases through free legal libraries that do not have comparable page references.

While page numbers may be a minor point, Gibson does make use of his federal electronic case filing login (ECF) associated with himself and with Dickinson Wright for “convenience.” From Footnote 1:

While Gibson is a licensed attorney and a partner with Dickinson Wright PLLC, he is here in an individual capacity and Dickinson Wright PLLC is not appearing as legal counsel, although, for purposes of convenience associated with this proceeding only, Gibson accepts electronic notice by the means associated with Gibson with this Court through his CM/ECF login.

So “convenience” allows Gibson to use his ECF account, but apparently does not allow him to use an actual law library to read the cases cited against him and respond with accurate page numbers.

Granted, Gibson might have a legitimate argument against being held personally liable in the Righthaven cases, since the company is, after all, organized as a limited liability company.  However, when lawyers, and especially litigators, get involved, every action (or inaction) taken by one of the parties is magnified, and its effect is dramatized.  Infringement doesn’t just damage the rights holder, it does so “irreparably.”  Parties don’t simply “disagree,” they reach an impasse.  Your opponent doesn’t merely have a different opinion, he has willfully and intentionally misled the court with reckless disregard.  Words like gross, reckless, willful and wanton seem to invariably insert themselves into legal briefs as if litigators were paid by the adjective (and double for each adverb).

In other words, anytime you get involved in litigation, you’ll be characterized by your opponent as being deceptive, untrustworthy and dishonest even if you’ve done nothing wrong.  So imagine the result when arming your opponents with actual ammunition of inconsistent behavior, unbelievable claims, and laziness characterized as poverty.

When Gibson eventually defends himself in an argument over whether he should be protected by the corporate veil, his opponents will make sure each little infraction comes back to bite at his credibility.  If Gibson loses, and becomes personally liable for actions of his LLC, that decision becomes reported and used as precedent in other cases.  At minimum, that’s going to raise legal costs and uncertainty for LLC owners everywhere, particular in the IP arena because every patent monetization company is going to be compared to Righthaven, and even the owner of a patent who loses on a good faith argument of infringement or validity may end up having personal assets at least threatened as a result.

In any event, watch carefully to see if the Bike Lesson continues, in the meantime read below and recognize thatthis is what you shout not do. So let that be a lesson to you.

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