Settlement reached after judge refuses to dismiss copyright suit

By Steve Green

Tuesday, Aug. 31, 2010 | 7:05 p.m.

Las Vegas copyright enforcement company Righthaven LLC won a legal victory in one of its lawsuits Tuesday when a federal judge refused to dismiss the suit.

U.S. District Judge Philip Pro rejected a defendant’s argument that the case should be dismissed because Righthaven didn’t own the copyright to the story at the time of the alleged infringement.

This was the first ruling on a contested dismissal motion by any of the federal judges assigned to the 107 Righthaven lawsuits filed in U.S. District Court for Nevada in Las Vegas since March.

Righthaven is a Las Vegas company that attempts to profit by detecting online copyright infringements of Las Vegas Review-Journal stories, buying copyrights to those stories and then suing the infringers on a retroactive basis.

Several defendants have asked that the lawsuits be dismissed because Righthaven didn’t own the copyrights at the time the Review-Journal material was re-posted on their websites.

Righthaven’s CEO, Las Vegas attorney Steven Gibson, says that in obtaining the copyrights to the stories from the Review-Journal’s owner Stephens Media LLC, Righthaven gains the right to sue for prior infringements.

Gibson told Pro on Tuesday that the right to sue over past infringements has been upheld by other courts and that attorneys for several of the Righthaven defendants have conceded that point in defending against Righthaven’s suits.

In a hearing in a Righthaven case against mixed martial arts company Tuff-N-Uff Productions Inc. of Las Vegas and company President Barry Meyer, Pro rejected Tuff-N-Uff’s motion for dismissal in which Tuff-N-Uff said Righthaven lacked standing to sue because of its lack of ownership of the copyright at the time of the infringement.

Pro noted that his ruling on this “standing issue” was only for purposes of dealing with the motion to dismiss and that the rights associated with the transfer of the copyright could be explored later in the case during discovery or other proceedings.

“I’m not bothered by the ‘standing’ issue,” Pro said.

There will be no discovery, however, as Righthaven reached a confidential settlement with Tuff-N-Uff after the hearing.

“We’re very pleased all sides were reasonable and reached a settlement,” Meyer said.

The Tuff-N-Uff case began May 27 when Righthaven filed suit over a March 2 Review-Journal story involving a Tuff-N-Uff fight that allegedly was posted on the Tuff-N-Uff website.

Tuff-N-Uff officials, who had no attorney, were told by Pro on Tuesday that Tuff-N-Uff would need to obtain an attorney if the case proceeded because companies can’t represent themselves in court.

The Tuff-N-Uff officials, in court papers filed prior to the hearing, had said they tried to settle with Righthaven this summer for $500 but were turned down.

Gibson, however, told Pro that Tuff-N-Uff’s communications to him included a demand that Gibson pay money to Tuff-N-Uff. Later, he said, Tuff-N-Uff offered to settle for $100.

Righthaven, which demands $75,000 in its lawsuits and forfeiture of the infringing defendants’ website names, usually settles for thousands of dollars and allows defendants to keep their domain names.

The settlement came despite harsh criticism Tuff-N-Uff had leveled at Righthaven in court papers prior to the hearing.

In a June 24 motion to dismiss the suit, the defendants said the story in question was not authored by Righthaven but instead “is aggregated from various sources.”

“When an entity such as Tuff-N-Uff subscribes to certain news feeds, they are provided with links from the subscribers’ website to the full text of the articles,” Tuff-N-Uff wrote, adding the version of the story on the Tuff-N-Uff website provided full credit to the Review-Journal and its reporter.

“Thus no copyright infringement occurred,” the company filing said.

In a later filing, the Tuff-N-Uff defendants said they’d offered to “cease and desist, profusely apologize and even pay $500.”

In that filing, on July 23, Tuff-N-Uff said it interviewed several attorneys who suggested “an expeditious settlement for a nominal value would be less expensive than retaining lawyers” — something many Righthaven defendants have found to be true.

After Righthaven rejected the $500, Tuff-N-Uff continued to press its arguments, charging:

“Given the nominal, insignificant and one-time publication, defendants reasonably believed that a cease and desist and $500 would suffice...Defendants believe they have meritorious defenses including the failure of plaintiffs to own the copyright and reference to the article published...

“Defendants have reason to believe that there may be a pattern of harassment or antitrust violations in trying to quash competitive enterprises, chill free speech or (there may be) other defenses,” Tuff-N-Uff wrote.

But Gibson told Pro that if the case proceeded, Tuff-N-Uff had no possibility of succeeding on the merits.

Burton Meyer, a director of Tuff-N-Uff who tried to speak for the company, said he came to the hearing not to argue but solely to achieve a reasonable settlement with the court’s help.