It may be old fashioned to say so, but what Righthaven is doing is Champerty.

There is a lot being written about Righthaven’s most recent loss in its campaign to enforce the copyrights in newspaper articles it purportedly purchased the right to enforce. I’ve pasted in a copy of the decision, Righthaven, LLC v. Hoehn,  below. What seems most significant about the decision to me is the judge’s finding that Righthaven does not have legal “standing” to pursue the copyright infringement claim for the unlicensed use of an entire Las Vegas Review Journal article. I’ve previously written about this problem with Righthaven’s “business” model.

The problem is that Righthaven does not actually buy the copyright to the articles it subsequently claims infringement of. Rather, it only buys the right to sue for infringement if infringement occurs. The copyright owner retains all the other rights that go along with the copyright. Thus, in Hoehn, as Judge Philip M. Pro explains, the agreements between Stephens Media, the owner of the Las Vegas Review Journal, and Righthaven “deprive Righthaven of any of the rights normally associated with ownership of an exclusive right necessary to bring suit for copyright infringement and leave Righthaven no rights except to pursue infringement actions, a right which itself is subject to Stephens Media’s veto.”

In his treatise on copyright, William Patry states that a plaintiff in a copyright lawsuit “must plead ownership of the right sought to be vindicated.” Patry on Copyright, Section 19:7. In short, you cannot sue for violation of a right that is not yours to enforce. To allow Righthaven to do otherwise is to allow it to engage in the common law sin of “champerty,” which is the sale of a right to sue to someone with no interest in the alleged wrong being sued on for a percentage of the amount recovered. As the Second Circuit Court of Appeals has explained, champerty is “a bargain between a stranger and a party to a lawsuit by which the stranger pursues the party’s claim in consideration of receiving part in consideration of receiving part of any judgment proceeds.” Alexander v. Unification Church of America, 634 F.2d 673, 677 n.5 (2d Cir. 1980). As Patry explains it, Righthaven seems to have fallen into the trap of engaging in Champerty:

As applied to copyright, champerty may be found only when there is an assignment of the copyright and preexisting causes of action and where the assignment of the copyright was a sham designed to disguise the real intent of conveying the chose in action. For example, if the assignment required the assignee to reconvey the copyright at the conclusion of the litigation, this would be very strong evidence of champerty. If, however, the assignor continued to exploit the work in a manner inconsistent with an assignment of rights, a claim of champerty might prove out.

Patry on Copyrght, Section 5:36 (emphasis added).
Right Haven, LLC v Hoehn (D Nevada 2011)

New force for the irreparable harm requirement in copyright preliminary injunction decisions? And might we see the Holden Caulfield sequel after all?

One week ago, the U.S. Court of Appeals for the 2d Circuit issued a very interesting ruling (inserted below)  in the case in which J.D. Salinger sued Frederik Colting, alleging that Colting’s work, 60 Years Later Coming Through the Rye, infringes Salinger’s copyright in Catcher in the Rye. First, and perhaps most importantly, the 2d Circuit stated that “we conclude that the District Court properly determined that Salinger has a likelihood of success on the merits.” In other words, the 2d Circuit concluded that based on the evidence already presented to the trial court, it is likely Salinger (who, since his death, has been replaced as the plaintiff by Coleen Salinger and Matthew Salinger as trustees of the Salinger Literary Trust) it has concluded that 60 Years Later is likely an infringement of Catcher in the Rye.

Nevertheless, the 2d Circuit vacated the trial court’s preliminary injunction forbidding U.S. publication of 60 Years Later and instructed the trial court to reconsider whether a preliminary injunction should issue because, according to the 2d Circuit, the trial court did not apply the appropriate standard in determining whether a preliminary injunction should have been issued. Most importantly, the trial court had not considered whether, assuming it prevails in the end in the case, the Salinger Trust would suffer harm that it could not be compensated for at final judgment in the absence of the preliminary injunction.

It is important to note that a preliminary injunction is an order that someone should do or not do something that is in effect only until the final verdict is rendered in a case. A preliminary injunction is intended to preserve the status quo during trial of a case in situations in which the failure of the court to ensure the preservation of the status quo would somehow damage the party seeking the injunction in a way that would prevent him from being made whole by a final judgment.

Thus, the trial court in the Salinger case only determined that Salinger’s infringement claim had a likelihood of success on the merits. That means that the court leaves open the possibility that after the parties have had a chance to fully develop their evidence and the court has had the opportunity to see witnesses testify live (rather than just via the written affidavits the court earlier considered), it might change its mind on whether Salinger in fact has successfully established an infringement.

More importantly, perhaps, the 2d Circuit made clear that the trial court also needs to consider factors other than the likelihood of the success of the infringement claim. The 2d Circuit stated that the trial court must reconsider whether to grant the preliminary injunction under the standard the U.S. Supreme Court applied in determining the legitimacy of a permanent injunction (that is, an injunction issued at the end of a case as a final judgment) a patent infringement action in eBay, Inc. v. MercExchange, L.L.C., 547 U.S. 388 (2006). That standard (the typical standard applied in most injunction cases) requires the court to consider four factors: “(1) that [the party seeking the injunction] has suffered an irreparable injury; (2) that remedies available at law, such as monetary damages, are inadequate to compensate for that injury; (3) that, considering the balance of hardships between the plaintiff and defendant, a remedy in equity is warranted; and (4) that the public interest would not be disserved by a permanent injunction.”

No single factor is dispositive, nor are the factors given equal weight and considered together in any easy formulaic way. All the factors are considered in a holistic evaluation. Interestingly, however, the right to non-monetary, injunctive relief typically requires that the availability of monetary relief be inadequate to make the party seeking the injunction whole. It may be possible for Colting to argue on remand that even should, his work be found to infringe the Salinger Trust’s copyright in Catcher in the Rye, should he be able to publish 60 Years On during the pendency of the case, the Salinger Trust can be made whole by recovering whatever profits have in the meantime been made on the book. The Salinger Trust, in the meantime, is likely to argue the mere publication of the book in the U.S. will harm the Trust in a way that cannot be remedied by money because the mere presence of the book will detract from the value of the Trust’s copyright in the character of Holden Caulfield.

William Patry, in his treatise on copyright, has noted that courts in copyright cases have in the past rarely given real consideration to the “irreparable harm” argument in issuing preliminary injunctions “The gutting is accomplished definitionally: rather than reject the requirement outright, courts define the adequacy of legal remedies in such a way that those remedies can never be considered a substitute for plaintiff’s alleged losses.” William F. Patry, Patry on Copyright, §22:12, citing Douglas Laycock, The Death of the Irreparable Injury Rule, 103 Harv. L. Rev. 687, 692 (1990). Thus, Patry writes, “Preliminary injunctions are issued far more often than they should be, at least from a review of available decisions.”

It makes me wonder whether the 2d Circuit is taking a stand here and insisting that the trial court give real consideration to the requirement that the Salinger Trust could not be made whole, even if it eventually prevails on its infringement claim, in the absence of a preliminary injunction. If so, we may yet see 60 Years On published in the U.S., even if for only a brief time.

Salinger v Colting 2d Circuit Appeal of Prelim Injunction Decision

I dont know how to tell you all just how crazy this life feels

From MSNBC:

John McCain may have lost the presidential election to Barack Obama, but his campaign seems absolutely determined not to lose to Jackson Browne. The singer/songwriter sued McCain in August after the Republican candidate for the highest office in the land used his song, “Running on Empty,” in a campaign commercial that targeted Obama’s energy plan. . . .

McCain, of course, is arguing that his use of the song was fair use, not copyright infringement (hyperlinks added):

The campaign’s fair use reading is based on the application of the standard four-factor test that includes the purpose and character of the use of the song (McCain argues it was non-commercial and transformative); the nature of the work (McCain derides the song as old, old, old, with a title that’s an acknowledged cliche); the amount and substantiality of the use of the song (McCain only used the title phrase, and cites a recent judgment against Yoko Ono, who had sought to prevent the unauthorized use of John Lennon’s “Imagine” in a film); and the effect of the use of the song (McCain says that rather than damage the song’s commercial potential, his use “will likely increase the popularity of this thirty year-old song”).

In some ways, the case is reminiscent of Master Card v. Nader 2000 Campaign Committee, in which the court dismissed Mastercard’s lawsuit against Ralph Nader’s 2000 Presidential Campaign Committee. Mastercard’s lawsuit alleged, among other things, that a Nader campaign add that borrowed heavily from Mastercard’s “priceless moments” television ads infringed on Mastercard’s copyright in those ads. The court concluded:

The Nader Ad does add something new and qualifies as a “transformative” work. Whether it “comments” on the original is the issue in question. MasterCard’s message depicted in its Priceless Advertisements is very plain and straightforward. In a series of advertisements, MasterCard presents various intangible moments that are highly valuable, yet unable to be “purchased” or are “priceless.” Hence, “there are some things that money can’t buy.”

This idea is followed by the message, that the viewer-consumer can purchase everything else with their MasterCard credit card–”for everything else, there’s MasterCard.” Ralph Nader’s Political Ad attempts to show various ways different Presidential candidates can be bought in the “big-money arena of Presidential politics” and contrasts the “priceless” truth represented by Ralph Nader as the remedy for the bought and paid for positions of others. Through this depiction, Ralph Nader argues that he not only sends across his own message, but that he wittingly comments on the craft of the original, “which cloaks its materialistic message in warm, sugar-coated imagery that purports to elevate intangible values over the monetary values it in fact hawks.” This commentary “may reasonably be perceived.” The message need not be popular nor agreed with. It may be subtle rather than obvious. It need only be reasonably perceived. Ralph Nader’s Political Ad is sufficiently a parody for the purposes of a fair use analysis, and consequently, is transformative.

William Patry, Google’s Senior Copyright Counsel, opines on typically futile efforts to use copyright to quell political speech here. There is a long history of this type of thing, as I’ve mentioned here and as you can see in the videos below, none of which was successfully blocked by the owners of the copyrighted works being used:

Ruling Imagination: Law and Creativity

The loss of an important voice: William Patry, Copyright Maven

I am saddened to report that William Patry has, after 4 years, ended his Patry Copyright Blog.  There are several reasons for my sadness.  First, Mr. Patry is a wonderful writer, a creative thinker, and one of the leading authorities, if not the leading one, in the field of copyright.  His multi-volume treatise, Patry on Copyright, has instantly become the authority in the field, not only because of his expertise, but also because it is the first comprehensive treatise on copyright in 17 years.  And no one needs to be told that the last 17 years constitute an entire epoch in copyright law.

I am also saddened because Mr. Patry is a remarkably generous soul.  When, last February, I started a blog on copyright and fair use as a class project, I took a shot in the dark and wrote him to ask what he thought of the project.  I never expected to hear from him.  After all, he is Senior Copyright Counsel to Google.  I am way out of his league on the topics I planned to cover in the new blog.  Quite plainly, too, he is a very busy man. 

 Within minutes, however, he wrote me back, praising the project and welcoming my questions.  I tried not to abuse the invitation, but I did on several occasions write him and ask him for his reactions to things I wrote.  He was without exception gracious, generous, and, most wonderful of all, endlessly encouraging to me.  As he wrote, it is our human obligation to learn every single day.  He added that, in his 26 years of working in the field, there wasn’t a day he wasn’t amazed at how much more he had to learn.

That Mr. Patry also plugged my blog on his was just icing on the cake and instantly gave me credibility and attention I could never otherwise have expected.

It is a shame that Mr. Patry became viewed by some as a shill for Google.  He had a long and illustrious career in copyright long before joining Google and he made clear that the views he expressed on his blog were his own, not his employers.  Unfortunately, as he wrote in his last post:

There is nothing I can do to stop this false implication that I am speaking on Google’s behalf. And that’s just those who do so because they are lazy. Others, for partisan purposes, insist on on misdescribing the blog as a Google blog, or in one case involving a think tank, darkly indicating also a la Senator Joe McCarthy, that in addition to funding from Google, there may be other sources of funding too.

Saddest of all, Mr. Patry is in despair of the state of copyright law, which, in his view (as well as mine) has lost its purpose: to encourage and promote creativity.  He concludes his farewell as follows:

I regard myself as a centrist. I believe very much that in proper doses copyright is essential for certain classes of works, especially commercial movies, commercial sound recordings, and commercial books, the core copyright industries.  I accept that the level of proper doses will
vary from person to person and that my recommended dose may be lower (or higher) than others. But in my view . . . we are well past the healthy dose stage and into the serious illness stage. Much like the U.S. economy, things are getting worse, not better.

Copyright law has abandoned its reason for being: to encourage learning and the creation of new works. Instead, its principal functions now are to preserve existing failed business models, to suppress new business models and technologies, and to obtain, if possible, enormous windfall profits from activity that not only causes no harm, but which is beneficial to copyright owners. Like Humpty-Dumpty, the copyright law we used to know can never be put back together again: multilateral and trade agreements have ensured that, and quite deliberately.

If Walt Disney Co. (NYSE: DIS) didn't still own the copyright to Mickey Mouse, Walt Disney (the artist, not the company) would never have had the incentive to create him, right?