In a twist of legal fate, a federal judge has ordered Righthaven, a company that made a business out of suing online outlets on alleged copyright violations, to sell off its intellectual property to pay off its debts.
In 2010, Righthaven began entering partnerships with newspapers, securing the right to sue on their behalf websites and blogs that shared copyrighted content without permission; the company has often been referred to as a “copyright troll.” In virtually every lawsuit that went to trial, the court found that Righthaven had no standing and dismissed the cases, often resulting in Righthaven being ordered to pay the defendants’ legal fees. The suits were dismissed because Righthaven didn’t own any of the intellectual property it was suing over: it only licensed it from Stephens…and licensees cannot sue for copyright infringement.
Now that the company is facing financial trouble, U.S. District Judge Philip M. Pro in Nevada has ordered the company to turn over 278 copyrighted works currently held by Righthaven so they can be auctioned off with the proceeds going to pay off the company’s debts.
Earlier this year, the Righthaven.com domain was sold for $3,000 also to satisfy outstanding debts.
In 2010, Stephens Media of Las Vegas invested a half a million dollars in the company, and Righthaven has pursued alleged violations of the copyrights of articles published in the Las Vegas Review-Journal, owned by Stephens Media.
Righthaven has filed over 200 lawsuits and has achieved settlements with many alleged copyright infringers, who opted to handle matters out of court.
Now, however, with Judge Pro’s recent ruling, Stephens Media will likely face the situation of either having to buy back its own copyrights or remove the copyrighted pieces from its website — if they don’t do one or the other, they could be sued for copyright infringement by the new owners.
What do you think should happen to Righthaven and Stephens now? Is the judge’s solution enough to stop others from trying to game the system like they did?