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By Jeff Neuburger of Proskauer Rose LLP
LLC is an intellectual property enforcement firm that was formed by a group of
copyright attorneys and Stephens Media,
the publisher of the Law Vegas Review-Journal. The company has been making a
name for itself; since early 2010, has brought two hundred copyright
infringement suits in the District of Nevada alone against Web site owners,
forum operators and bloggers alleged to have unauthorized copies of the
Review-Journal's articles on their sites. Recently, it has added other media
company clients and expanded its enforcement efforts to other federal
districts. Righthaven is also drawing considerable fire from critics who have
denounced the company as a copyright troll, and an attack dog. The criticism is directed at Righthaven's business
lawsuits target individuals and small, usually non-profit entities and other
Web sites that have failed to take advantage of the DMCA safe harbor protection
against liability for material posted by a third party. Righthaven makes no
takedown demands prior to filing its complaints, which seek not only damages
but transfer of the defendant's domain name. The company then presses for a
about half of the Righthaven lawsuits have settled, probably for the low four figures. Righthaven Lawsuits, a Web site that tracks the Righthaven
litigation, estimates that Righthaven has taken in about $364,000 thus far. But
some Righthaven targets are fighting back, raising defenses such as copyright
fair use and implied license, in several cases with the assistance of the
Electronic Frontier Foundation.
lawsuits in the District of Nevada have so far yielded two rulings on the
copyright fair use defense and the doctrine of implied license, and may soon yield
further rulings on those issues. These opinions should be noted by content
owners. The opinions in Righthaven v. Klerks and Righthaven v. Realty One Group
suggest a broad view of the fair use doctrine in the online context, and
perhaps a potentially even broader view of the application of the doctrine of
v. Klerks - Fair Use a "Meritorious Defense"
Klerks raised the defense of fair use after he learned from a newspaper reporter that Righthaven had brought
an action against him and was about to obtain a default judgment. Klerks, the
complaint alleged, was the registrant of a domain name at which an online forum
was hosted; the article in question had been posted by a third party user of
the forum. In Righthaven v. Klerks, in an opinion rendered on September 17,
2010, Judge Gloria Navarro agreed that Klerks's fair use defense was
"sufficiently meritorious" to warrant reopening the case.
Navarro found that the use of the entire article weighed against a finding of
fair use, but concluded that two of the other fair use factors weighed in favor
of Klerks. Regarding the purpose and character of the use, Judge Navarro
concluded that "it could be found" that the third-party user who
posted a complete copy of the news article did so "for the non-commercial
purpose of sharing information and not for making a profit for the reader or
the site." Regarding the nature of the copyrighted work, the court found
that the article was "primarily informational," and, therefore,
favored a fair use finding. The court left for future consideration, as a
question of fact, what effect the posting of the article had on the market for
or value of the copyrighted work.
Defense of Implied License
Navarro also found that Klerks had made a plausible argument that his use fell
under the doctrine of implied license, pointing to the fact that the newspaper
publisher "encouraged people to save and share the article with others
without restrictions, and permitted users to "right-click" and copy
the article from its website." Judge Navarro found that Klerks had made a
plausible argument that there was an implied license "especially in light
of the established and accepted custom of users freely and openly sharing
certain information posted on the Internet."
v. Realty One Group - Fair Use as a Matter of Law
sued Realty One Group and its agent Michael Nelson, who maintained a blog on
which he posted an eight-sentence excerpt from a thirty-sentence Las Vegas
Review-Journal article, along with a link to the source. On October 19, in Righthaven v. Realty One Group, Judge Larry Hicks dismissed
the action as to Nelson, finding that the his use of the article was fair as a
matter of law.
Hicks found that while Nelson's blog was both educational and commercial, its
underlying purpose was to promote Nelson's business, thus this factor weighed
against a finding of fair use. But the three other fair use factors weighed in
favor of Nelson. Judge Hicks found that the article contained both factual news
reporting and reporter commentary, and the broker copied only the factual
portion of the article, not the commentary. As to the amount used, the court
pointed to the fact that only eight out of thirty sentences were used.
contrast to Judge Navarro, who found that the effect of the use upon the
potential market for the work requires fact-finding, Judge Hicks concluded as a
matter of law that this factor favored Nelson. He reasoned that because Nelson
did not copy the reporter's commentary, "his use does not satisfy a
reader's desire to view and read [the entire article including] the author's
original commentary and thereby does not dilute the market for the copyrighted
work." The court also noted that Nelson had included a link to the source
of the article containing the full text.
Righthaven ultimately settled with Nelson, the company deliberately suffered
the entry of an adverse judgment with respect to Nelson's employer, Realty One,
and filed a notice of appeal to the Ninth Circuit on February 11.
v. Democratic Underground - The Copyright Troll Defense
v. Democratic Underground is one of the cases in which the EFF has become
involved. The defendants are an online political forum and its operator, David
Allen. Righthaven seeks to hold them responsible for the posting of an article
by a third party user of the forum. In addition to raising fair use and implied
license, the EFF's answer and counterclaim filed in the case challenge every
aspect of Righthaven's litigation campaign, describing is as "a
particularly abusive instance of a broad and aggressive strategy" by a
has focused on Righthaven's status as an assignee of the rights that it
asserts, alleging that it has filed multiple lawsuits, that it is in the
business of enforcing copyright rights, and that it does not otherwise exploit
the assigned rights. As to Stephens Media, the original copyright owner, the
answer and counterclaim details at length various aspects of its online
presence, including the fact that, according to the EFF, Stephens Media has not
properly filed a proper designation of agent to receive notices of infringement
under the DMCA. The legal relevance of these and other assertions going to the
conduct of Righthaven and Stevens is left unstated.
has also raised the implied license defense noted by Judge Navarro in the
Klerks case, asserting that the Law Vegas Review-Journal makes its news
articles available for copying and downloading "at least 19 different
ways," including bookmarking them on social media sites, e-mailing them,
and printing physical copies.
the ruling in the Realty One case in which Judge Hicks found fair use as a
matter of law, Righthaven sought to voluntarily dismiss the complaint in the Democratic
Underground case, which is factually similar in that it involves a
five-sentence excerpt from a 54-sentence article. Stating that it disagreed
with the Realty One ruling, Righthaven asserted that it was nevertheless moving
to dismiss "in the interest of judicial economy." The EFF objected, arguing that the action was "meritless from its
inception" and should only be dismissed on the condition that the
defendants be permitted to apply for an award of attorney fees. The respective
motions are pending.
is also involved in the representation of the defendants in Righthaven v.
Center for Intercultural Organizing, which involves the posting of an entire
article by the operator of the CIO site. On the same day that Righthaven filed
its motion to dismiss the Democratic Underground case, Judge James Mahan, who
is presiding over the CIO case as well, sua sponte ordered a hearing on whether that case should be dismissed on
grounds of fair use as well. The parties are now contesting the need for
further proceedings, with Righthaven arguing that further fact-finding is needed before the fair
use issue is decided and the EFF pressing for an immediate decision. The court has allowed the
submission of a amicus brief on the issue of whether further fact-finding is
needed to determine the fair use issue, over Righthaven's objection that the amici, Professor Jason Schultz of Boalt
Hall School of Law, is affililiated with the EFF.
motion in the CIO case is set for hearing before Judge Mahan in March.
resolution of the motions in the Democratic Underground and CIO cases are
likely set the direction of Righthaven litigation in the District of Nevada for
the foreseeable future, at least until the Ninth Circuit rules on the appeal
filed in the Realty One case.
Missing from the Righthaven Rulings
of one's position on the issues raised by the Righthaven litigation, the
opinions rendered thus far are unsatisfying and incomplete in their treatment
of the fair use and implied license doctrines. That may be understandable in
the Klerks case, where the court was determining only whether the fair use
defense was meritorious as a threshold matter. Nevertheless, some of the
statements in the opinion are troubling in that they express a less than
complete view of the jurisprudence on fair use.
example, the court in Righthaven v. Klerks found that the use of an entire work
merely weighs against a finding of fair use. But there is significant authority
that use of an entire work weighs heavily against such a finding, even where
the purpose of the use is not for profit. An example may be found in Los Angeles Times v. Free Republic, decided in the District of
California in 2000, in which the court ruled that the online posting of
full-text copies of newspaper articles for the purpose of criticism and comment
was not fair use. "There is little transformative about copying the
entirety or large portions of a work verbatim," the court in the Free
Republic case found, citing numerous opinions.
evidenced by the Free Republic ruling, fair use determinations are notoriously
fact-sensitive and require careful weighing and balancing of the fair use
factors, including the over-arching issue of whether the use is tranformative.
Yet in the Realty One opinion where fair use was found as a matter of law,
there is no discussion of whether the copying of an article excerpt was
treatment of the implied license issue in the Klerks case was also truncated by
the preliminary nature of the court's ruling. But it is nevertheless
concerning, in that it presents only one aspect of the implied license
doctrine, that is, conduct on the part of a copyright owner from which consent
to a use may be inferred. The court's preliminary treatment of the issue
suggests that any copyright owner that makes its content available on the
Internet is, by that act alone. consenting to the unrestricted copying and
dissemination of the work by third parties, in unlimited venues and contexts,
including online posting. The court's sweeping reference to the "established
and accepted custom" of information-sharing on the Internet ignores the role of
will be more to come from Righthaven, the EFF, and the courts, on the issues of
fair use and implied license. But important lessons can be taken from these
cases, even at this stage.
publishers should consider the argument the EFF is making that allowing users
to share content gives rise to a very broad implied license to distribute
publications online, and revisit the substance and presentation of their online
is prohibited may guard against a similar argument being made with respect to
their content. For example, the Las Vegas Review-Journal's online terms
includes an express license to reproduce the headline and the first paragraph
of a story, along with a link back to the source article. The effect of that
provision has yet to be addressed.
simplest lesson is for Web site owners. Those who have been sued by Righthaven
as a result of material posted by users of their site could have avoided
agent. It costs nothing, it is simple to do, and (assuming all DMCA requirements
are met), it is effective protection against copyright infringement lawsuits
resulting from third-party posting.
To ensure compliance with requirements imposed by U.S. Treasury Regulations, Proskauer Rose LLP informs you that any U.S. tax advice contained in this communication (including any attachments) was not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein.
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