• by Wendy Davis  @wendyndavis, June 15, 2011

Since launching last year, copyright enforcement outfit Righthaven has filed around 300 lawsuits against bloggers, nonprofits and other small publishers that allegedly reposted material that originally appeared in newspapers. So far, around one-third of the Web site operators sued by Righthaven have settled the cases rather than engage in potentially costly litigation.

This week, however, a federal judge ruled that the company never had the right to sue. Chief U.S. District Court Judge Roger Hunt in Nevada said that Righthaven lacks the ability to bring cases for infringement of Las Vegas Review-Journal articles because the newspaper's parent company, Stephens Media, never granted Righthaven the right to license the pieces.

Instead, Stephens Media assigned to Righthaven only the right to sue. But "a copyright owner cannot assign a bare right to sue," Hunt wrote in a 16-page order dismissing Righthaven's case.

Righthaven's CEO reportedly says the company intends to "reapproach" the court.

Around 200 of Righthaven's lawsuits have concerned material originally published in the Review-Journal, while most of the rest stem from alleged infringement of a photo that was originally published by The Denver Post.

The contract between Righthaven and Stephens Media was made public after the digital rights group Electronic Frontier Foundation took up the defense of Democratic Underground, a political site sued by Righthaven for allegedly reposting five sentences of a 50-sentence Review-Journal article.

The EFF argued that Righthaven's contract with Stephens Media was a "sham" and that the lawsuit should be dismissed. Hunt agreed and not only tossed the lawsuit, but also said he was considering imposing sanctions against Righthaven for "multiple inaccurate and likely dishonest statements."

Hunt particularly focused on Righthaven's "brazen" failure to disclose that Stephens Media had a financial interest in the settlement. The contract between Righthaven and Stephens called for the companies to split the lawsuit proceeds 50-50. Nevada rules require parties who sue to state whether anyone else has a financial interest in the outcome of litigation.

That omission might have had an impact on some of the small publishers that were sued by Righthaven, says Jeff Hermes, assistant director of the Citizen Media Law Project.

"It becomes difficult to strategize when you don't know who your real adversary is," Hermes says.

He adds that litigation can proceed very differently, depending on the identity of the parties. For instance, if Stephens Media had itself sued for copyright infringement, a judge might have imposed more burdens on the company regarding making evidence available, or sending employees to other states for depositions than if it was an outside party.

Hunt's ruling doesn't automatically mean that the other pending lawsuits will be thrown out, but it seems unlikely that Hunt's colleagues in Nevada will disagree with him.

It's not yet clear whether Righthaven's contract with The Denver Post differs from the one with Stephens. If not, U.S. District Court Judge John Kane in Colorado -- who is handling all of Righthaven's cases in that state -- might throw out those lawsuits for the same reason as Hunt. Last month, Kane stayed all Righthaven litigation in the state, saying he had "serious questions" about whether the company had the right to sue.

Righthaven's tactics were controversial from its first cases because the company sued small publishers, bloggers and nonprofits -- many of whom operated non-commercial sites -- without first asking them to take down the material. Many of the defendants linked back to the original work and credited the newspapers. In one case, Righthaven sued a publisher who served as the source of a Review-Journal because he reposted it on his own blog.

The other large unanswered question centers on whether any of the publishers who settled cases can now recoup their money. While most of the settlements have been confidential, two reported settlements were for four-figure sums. "Over 100 people have settled. Many of them are probably wondering what can be done about this," says EFF attorney Kurt Opsahl. "That's something that I think will require some further legal research."