• by Wendy Davis  @wendyndavis, July 6, 2011

Copyright enforcement outfit Righthaven, which once touted itself as a champion of the newspaper industry, suffered the latest in a string of defeats. A judge ordered the company to reimburse an opponent's legal team.

In a ruling issued on Tuesday, U.S. District Court Judge Gloria Navarro in Nevada ordered Righthaven to pay more than $3,800 to lawyers for Michael Leon, who was sued last September for allegedly infringing copyright of a Las Vegas Review-Journal article. Leon served as managing editor of the site veteranstoday.com, where a different Web user allegedly reposted a Review-Journal, according to Righthaven's complaint. Righthaven withdrew its lawsuit against Leon in April because it wasn't able to show that it served him with the correct legal papers. At the time, Righthaven agreed that it would retain the right to refile the case in the future, and also would pay Leon's attorneys' fees. Unlike most laws, the copyright statute says that a judge can order the losing party to pay the winner's legal fees.

But when Leon's attorney, Malcolm DeVoy IV of the Randazza Legal group, asked for his hourly rate of $275, Righthaven balked at paying. The company said that any money it was ordered to pay for "attorneys' fees" should actually go to charity because DeVoy and Randazza didn't charge Leon. The law firm, run by Marc Randazza also represents other bloggers sued by Righthaven.

Navarro disagreed with Righthaven and ruled that it "would be appropriate" to award attorneys' fees to Randazza's firm.

The loss is only one of several recent setbacks for Righthaven.

Last month, U.S. District Court Judge Roger Hunt in Nevada ruled that Righthaven never had the right to sue for infringement of Las Vegas Review-Journal articles because the newspaper's parent company, Stephens Media, hadn't granted Righthaven the ability to license the pieces.

Around two-thirds of Righthaven's 300 lawsuits have concerned material originally published in the Las Vegas Review-Journal, while most of the rest stem from alleged infringement of a photo that was originally published by The Denver Post.

Hunt additionally said he was considering imposing sanctions against Righthaven for "multiple inaccurate and likely dishonest statements," including its "brazen" failure to disclose that Stephens Media had a financial interest in the settlement. The contract between Righthaven and Stephens, which was made public earlier this year, 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.

Righthaven filed papers last week stating that its failure to disclose Stephens' interest was "an oversight by the company's former counsel."

Separately, another federal judge in Nevada, Philip Pro, dismissed a case against Web user Wayne Hoehn who allegedly reposted a Review-Journal piece. Pro ruled that Hoehn made fair use of the work, even though he posted the piece in its entirety. That ruling marked the second time that a judge found a defendant had a valid fair use defense despite posting the entire article.

Hoehn also was represented by Randazza's firm, which is seeking $34,000 attorneys' fees for its work in that case.

When Righthaven launched, the Review-Journal's then publisher Sherman Frederick boasted that the company would tackle online copyright infringement of newspapers' material. In one widely circulated column, he wrote: "So, I'm asking you nicely once again -- don't steal our content. Or, I promise you, you will meet my little friend called Righthaven."

The Electronic Frontier Foundation pointed out that the line was a variation of the quote "Say hello to my little friend" from "Scarface."

Around 100 bloggers who have been sued by Righthaven have settled the lawsuits, but it's not clear how much money Righthaven has collected. Only three lawsuit settlements were made public, and all were for between $1,000 and $6,000. If Righthaven gets hit with more attorneys' fees awards, however, the enterprise could quickly lose whatever it has garnered.