Copyright Troll’s Domain Name Auctioned to Pay Legal Fees

Righthaven, a copyright-troll law firm that failed in its attempt to make money for newspapers by suing people for sharing stories online, is having its domain name auctioned off to help satisfy the Las Vegas company’s debts.

As of 3 p.m. EST on Tuesday, was going for $1,250, up from $100 when the online auction started on Dec. 26. The auction, which ends Jan. 6, is to intended to recoup $63,000 in legal fees Righthaven owes after it lost a case in which a federal judge said reposting an entire news article in an online forum was fair use — an issue Righthaven has appealed.

Struggling after several courtroom setbacks, Righthaven has ceased filing new lawsuits, pending resolution of that case and others on appeal. Righthaven was also hit with a separate order in October to pay $120,000 in legal fees in another case it had lost.

Borrowing a page from patent trolls, in the spring of 2010 Righthaven was formed with the idea of suing blogs and websites that re-post newspaper articles or snippets of them without permission. Now it appears that the Righthaven saga is largely over — and it’s unclear whether it will have the financial wherewithal to maintain its appeal in a closely watched fair-use copyright case.

Righthaven initially was winning and settling dozens of cases as defendants paid a few thousand dollars each to make the cases go away. But Righthaven has never prevailed in a case that was defended in court. Ironically, Righthaven sought — as payment — the domains owned by the people it was suing, and now it has lost its own domain in the process while threatening to file for bankruptcy protection.

The domain auction is to help pay Las Vegas lawyer Marc Randazza for successfully defending Vietnam veteran Wayne Hoen against a Righthaven copyright lawsuit seeking large damages for posting the entirety of a Las Vegas Review-Journal editorial to a small online message board.

The U.S. Copyright Act allows damages of up to $150,000 per infringement, but also grants legal fees and costs to the “prevailing party.” More fee awards against Righthaven are expected.

The lawsuit against Hoehn, one of Righthaven’s roughly 275 cases, accused him of unlawfully posting all 19 paragraphs of a November 2010 editorial from the Las Vegas Review-Journal. Hoehn posted the article, and its headline, “Public Employee Pensions: We Can’t Afford Them” on to prompt discussion about the financial affairs of the nation.

Righthaven’s first client, Stephens Media of Las Vegas and operator of the Review-Journal, invested $500,000 into the Righthaven operation last year.

Righthaven’s only other client, MediaNews Group of Denver and the publisher of the Denver Post and 50 other newspapers, dropped Righthaven in September.

The other big issue Righthaven has appealed is the complicated arrangement between Righthaven and its newspaper clients.

The arrangements hit a major snag in June when Chief U.S. District Judge Roger Hunt of Nevada threw out a copyright lawsuit against the Democratic Underground blog for allegedly clipping four paragraphs from a 34-paragraph story published by the Review-Journal, Stephens Media’s flagship paper.

As it turns out, Righthaven didn’t own the copyrights it was filing suit over. Instead, Stephens Media granted Righthaven permission to sue over the newspaper chain’s content in exchange for a 50 percent cut of all the settlements and jury awards: The agreement did not grant Righthaven license to use the content in any other way. The Electronic Frontier Foundation called the arrangement a “sham,” and judges hearing Righthaven cases began to take notice.

Judge Hunt ruled in the case that a “copyright owner cannot assign a bare right to sue.”

Righthaven’s other client, MediaNews Group, had a similar relationship with Righthaven, and some three dozen Righthaven lawsuits over Denver Post content have been dismissed over the standing issue.

Steven Gibson, Righthaven’s chief executive, did not immediately respond for comment.

Photo: redtimmy/Flickr