Probably not. But it is likely that two high profile trolls (Prenda and Righthaven) are dead.
Urban Dictionary defines a troll as someone "who posts deliberately provocative message to a newsgroup or message board with the intention of causing maximum disruption and argument." The term copyright troll is now common amongst legal circles, and generally refers to someone who abuses copyright law for profit. Several high profile trolls and repeated bench slaps have helped bring attention to the copyright troll.
Although a variety of copyright trolls exist, two recent cases likely spell the end for the Prenda and Righthaven business model. For starters, Prenda may be headed to criminal and/or tax court courtesy of United States District Court Judge Otis Wright. Prenda, one of the first trolls to the game, used the social stigma attached to pornography and the high statutory damages associated with copyright infringement—up to $150,000—to force individuals into settlement. Prenda filed suits against "John Does," claiming that the persons downloaded online porn illegally, in order to subpoena the names of the owners of the IP address. Once armed with a person's name, Prenda contacted the person and offered to make it all go away if the person would settle. At first, all seemed well: the guys behind Prenda were making millions. But things quickly disintegrated once people stopped and asked questions. On May 6th, Judge Wright gave an impressive(ly nerdy) bench slap, complete with Star Trek references, that ordered Prenda to pay monetary sanctions and referred the case to the United States Attorney's Office and the Criminal Investigative Division of the IRS.
Then, three days later, the Ninth Circuit Court of Appeals issued an opinion concluding that Righthaven lacks standing to enforce copyright claims under the Copyright Act, making it the first court of appeals to decide the issue. The court's opinion is in line with almost every other district court that has looked at it. Righthaven's exploits have also been the subject of much online criticism. Righthaven's sole purpose was to acquire revocable rights to copyrights in order to sue copyright infringers. In theory, Righthaven's goal sounds almost noble. But in reality, it used the high statutory damages to scare unsuspecting bloggers into quick settlement, even if the bloggers would be entitled to fair use. But after more than three years of Righthaven's online reign of terror, the 9th Circuit decision makes it clear that Righthaven's business model does not work.
But even if these particular business models are dead, it doesn't mean that the copyright troll is dead. Copyright law, with the high statutory damages and little oversight, is still ripe for abuse.
Ingenuity 13 v. John Doe
As mentioned above, Prenda gamed the copyright system to sue people who may have (Prenda didn't do the appropriate investigation to confirm they were the right people) illegally downloaded porn. The system worked swell for years; Prenda made millions. But when a defendant fought back, pointing out irregularities, the plaintiffs dismissed the lawsuit. Despite dismissal, the court took the opportunity to investigate Prenda's behavior. Judge Wright ordered the plaintiffs to appear in court on March 11, 2013, to justify their behavior.
Ingenuity 13 is the result of that order. Almost all of the people involved refused to testify under the 5th Amendment. To say that Judge Wright was unimpressed with the plaintiffs' conduct would be an understatement.
Plaintiffs have outmaneuvered the legal system. They've discovered the nexus of antiquated copyright laws, paralyzing social stigma, and unaffordable defense costs. And they exploit this anomaly by accusing individuals of illegally downloading a single pornographic video. Then they offer to settle—for a sum calculated to be just below the cost of a bare-bones
Judge Wright made specific, brutal findings of fact: the plaintiffs sought easy money; they engaged in vexatious litigation designed to coerce settlement; they stole someone's identity; they ordered an attorney to prosecute copyright claims without investigating; and their representations about their operations, relationships, and financial varied from feigned ignorance to misstatements to outright lies.
The court determined that sanctions under Rule 11 were inappropriate because of the stage of litigation—the case was already dismissed. However, the court imposed sanctions under its inherent authority.
[I]t is clear that the Principals' enterprise relies on deception. Part of that ploy requires cooperation from the courts, which could only be achieved through deception. In other words, if the Principals assigned the copyright to themselves, brought suit in their own names, and disclosed that they had the sole financial interest in the suit, a court would scrutinize their conduct from the outset. But by being less than forthcoming, they defrauded the Court. - Ingenuity 13 v. John Doe
First, the court awarded attorney's fees to Defendant's attorneys. In the end, the monetary sanction only amounted to $81,319.7—"this punitive portion [was] calculated to be just below the cost of an effective appeal." The court declined to impose a larger sanction, noting that the attorneys probably wouldn't pay it.
Second, the court referred all of the attorneys' conduct to their respective bars.
Finally, and most importantly, the court referred the case to the United States Attorney's Office and the Criminal Investigative Division of the IRS.
Although the plaintiffs may appeal the attorney's fees, it is hard to stop a criminal investigation. It seems unlikely anyone else will try emulating this business model. But who knows?
Righthaven v. Hoehn
Righthaven involved two separate copyright infringement suits that were consolidated on appeal. The district courts dismissed both cases after concluding that Righthaven lacked standing to sue for infringement. In one case, the district court held in the alternative that the defendant's use was covered by the fair use defense and also granted summary judgment on that ground.
Under established 9th Circuit precedent, the legal owner of a copyright is the only person with standing to sue for infringement. In Silvers v. Sony Pictures Entertainment, the court concluded that an assignment of the bare right to sue for infringement does not confer standing. Thus, in order for Righthaven to have standing, it was required to argue that it had more than the bare right to sue.
Righthaven argued that the contract granted it "exclusive rights" because the contract "recognized" Righthaven as "the copyright owner of the Work for purposes of Righthaven being able to claim ownership." The court disagreed. The court recognized that the contract granting the rights to Righthaven was not the only agreement between Righthaven and the owner (Stephens Media). The two had a previous agreement, the Strategic Alliance Agreement (SAA), that controlled what Righthaven could do with any copyrights assigned to it. Under the SAA, Stephens media had a license granting it the exclusive right to exploit the copyright. Righthaven could not exploit the work.
Although Righthaven argued that it was the owner and Stephens Media was a licensee, the court found that the argument "emphasize[d] form over substance." In addition to discounting the argument, the court found that the argument failed because "only the exclusive licensee and not the original owner can sue for infringement."
The court also found that the SAA was not ambiguous: it "clearly delineated the respective rights of Righthaven and Stephens." And Righthaven's only right was to sue, which is an invalid transfer under the Copyright Act.
Abraham Lincoln told a story about a lawyer who tried to establish that a calf had five legs by calling its tail a leg. But the calf had only four legs, Lincoln observed, because calling a tail a leg does not make it so. Before us is a case about a lawyer who tried to establish that a company owned a copyright by drafting a contract calling the company the copyright owner, even though the company lacked the right's associated with copyright ownership. - Righthaven v. Hoehn
Attempting to fix any problems with the SAA, Righthaven amended it after the defendants filed a motion to dismiss for lack of standing. The court noted that it was not required to look at the amendments, but went on to find that, even if it did look at the amendments, the amendments still did not grant Righthaven any exclusive right. Although the rights in the amendments allowed Righthaven to exploit the work and granted Stephens Media a non-exclusive license, the practical effect of the amendments remained the same.
The amendments still required Righthaven to give Stephens Media thirty days prior notice before using the work, and Stephens Media retained a unilateral right to repurchase all rights and title back from Righthaven after notice and payment of a nominal sum. So in reality, Righthaven was required to ask Stephens Media for permission in order to exploit a work that Righthaven claimed it owned. The court reasoned, "A hypothetical possibility that Righthaven might be able to exercise exclusive rights if Stephens Media decided to allow it at the time is not sufficient for standing."
After concluding that Righthaven lacked standing, the court went on to overrule the district court's fair use finding. The district court had previously concluded that defendant's use was fair when he had copied the entire work. Righthaven did not want this ruling left on the books, so it argued that, if it did not have standing, the ruling needed to be overturned. And the court agreed. The court reasoned that "it [wa]s not appropriate for [it] to go further or for the district court's alternative ruling to stand."
But this ruling is mostly procedural and does not preclude a later case from finding that copying an entire work is fair use.
About this Blog
I was once a licensed attorney (in Washington), but my license is now inactive. I like to geek out about entertainment,
internet, and privacy law. This blog is a place for me to do that. All of the views expressed are my own and should not be considered legal advice.
My personal blog is located under the tab Pax's Page.
Rachel is a typer of words.