The revenue strategy employed by some newspapers may have just sunk itself.
Righthaven, a company that sues alleged copyright infringers on behalf of newspapers like the Las Vegas Review-Journal and papers in the MediaNews chain, has been forced to disclose its contract with Review-Journal parent company Stephens Media.
The contract spells out the legal relationship between Righthaven and Stephens. BNet explains:
1. Stephens transfers copyrights of specific articles to Righthaven.
2. Righthaven searches for unauthorized use and reports on potential cases to Stephens.
3. Stephens can veto a decision to sue if the defendant “is a charitable organization, is likely without financial resources, is affiliated with Stephens Media directly or indirectly, is a present or likely future valued business relationship of Stephens Media or otherwise would be a Person that, if the subject of an Infringement Action, would result in an adverse result to Stephens Media.”
4. Absent a veto, Righthaven files suit, though it uses some tactics not explicitly allowed under copyright law.
5. Righthaven transfers copyright back to Stephens.
Lawyers for the Electronic Frontier Foundation representing Democratic Underground, which was sued by Righthaven for excerpting five sentences from a 50-sentence article, claim that none of the things that come with a copyright—such as the right to make derivative works, or even, you know, copy it—were handed to Righthaven, making the copyright assignation a “sham.” Only the right to sue was given.
If the judge and jury accept DU’s lawyer’s arguments, paidContent says, it will undermine every lawsuit Righthaven has filed on behalf of the Review-Journal. And those sued bloggers should be eligible to recoup attorney’s fees, the EFF lawyers say. And since Stephens Media never really gave up its copyright (and was splitting proceeds from every settled lawsuit 50/50 with Righthaven), the newspapers should also be liable.
Judge Hunt, who ordered the contract made public, wrote in his opinion:
“There is an old adage in the law that, if the facts are on your side, you pound on the facts. If the law is on your side, you pound on the law. If neither the facts nor the law is on your side, you pound on the table. It appears there is a lot of table pounding going on here.”
Another interesting thing in the contract: Stephens Media has the right to veto a potential lawsuit if the defendant falls into any of the categories listed above: charities, people with no money, or people that Stephens just likes. Yet Righthaven has sued people from all of these categories: charities, impoverished hobby bloggers, other reporters and even the paper’s own sources.
This might be the end of this small and very unpopular revenue stream.