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					Case 1:11-cv-00830-JLK Document 21             Filed 07/19/11 USDC Colorado Page 1 of 8




                        IN THE UNITED STATES DISTRICT COURT
                           FOR THE DISTRICT OF COLORADO
                                   Judge John L. Kane

Civil Action No. 1:11-cv-00830-JLK


RIGHTHAVEN LLC, A Nevada Limited Liability Company

        Plaintiff,

                v.

LELAND WOLF, an individual, and
IT MAKES SENSE BLOG, an entity of unknown origin and nature,

        Defendants.


                 MOTION FOR LEAVE TO FILE AMICUS CURIAE BRIEF
                  OF CITIZENS AGAINST LITIGATION ABUSE, INC.



        Citizens Against Litigation Abuse, Inc. (“CALA”), not a party to this action, hereby

moves for leave to file an amicus curiae brief in the above-captioned matter. Undersigned

counsel for CALA certifies compliance with D.C.COLO.LCivR 7.1A. Undersigned counsel

contacted attorneys for each party, receiving consent from Defendants. Plaintiff‟s counsel did not

consent but did not raise an objection in the discussions. Pursuant to this Court‟s 7.1A

Admonition and holding in Visor v. Sprint, 1997 WL 796989 (D.Colo.), counsel sent an email to

attorneys for each party on the evening of Thursday, June 30, 2011. Counsel waited three weeks

before filing this motion. See Exhibit 1. The proposed amicus curiae brief is attached as Exhibit

2, with its exhibits also attached.
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                                                 I.

               EFFECT OF STAY ON COLORADO RIGHTHAVEN CASES

       CALA understands that all issues in all Righthaven cases in the District of Colorado are

stayed except one: a determination as to subject matter jurisdiction to be made in this case,

arising from questions as to the validity of Righthaven‟s assignments. 1 CALA does not believe

the stay forbids the filing of this amicus curiae brief because it goes directly to the heart of that

specific issue, providing the Court with arguments and authorities that are of central importance

given recent developments in the Righthaven lawsuits.

       Further, if the Court finds the argument in the brief persuasive and rules accordingly,

Righthaven‟s claims in Colorado will be permanently resolved. The matter of permanence is

extremely important because of Righthaven‟s litigation conduct in Nevada. In those cases,

Righthaven has indicated that where courts dismiss due to a lack of standing arising from the

Righthaven‟s assignments, Righthaven will simply rewrite its assignments over and over until it

finds the magic words that give it standing under the Copyright Act. In fact, Righthaven‟s CEO

Steve Gibson has stated during a television interview that the entire purpose of the federal

judiciary‟s investigation of the standing issue is to give guidance to Righthaven (and Righthaven

competitors) as to what their “documentation” should be in these kinds of cases.2


1
  E.g., Order of 5-19-2011, Doc. #13, Righthaven v. Buzzfeed, 1:11-cv-00811-JLK (D. Colo.)
(KANE, J.)
2
  Gibson: “The hardworking federal judges are saying: „This type of documentation needs to be
enhanced.‟” See “Face to Face” Interview with Steve Gibson of 6-22-2011 at 5:43, available at
http://www.lasvegassun.com/videos/2011/jun/22/5268/. “I think what the judges are saying is
„listen, folks, Righthaven is filing a lot of lawsuits.‟ They understand that we‟re potentially
genuine with respect to upholding copyrights. They don‟t want to see Righthaven competitors
potentially come on with not solid documentation, and they‟re giving us guidance as to what the
documentation should be.” Id. at 8:13.


                                                 2
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       Righthaven‟s conduct matches Gibson‟s statements. In Righthaven v. Democratic

Underground, Righthaven‟s complaint was dismissed because the assignment did not confer

standing under the Copyright Act. See generally Democratic Underground Dismissal, Amicus

Brief Exhibit B. So Righthaven retooled its assignments to try to get just enough of a peppercorn

of rights to provide standing under the Copyright Act. E.g., SAA Clarification, Amicus Brief

Exhibit K.

       In fact, Righthaven has now petitioned for intervention in Democratic Underground, the

very case where its own complaint was just dismissed, based on the rewritten assignment. See

generally Righthaven Intervention, Amicus Brief Exhibit C. Dismissing Righthaven based on a

lack of standing pursuant to the Copyright Act will simply cause each and every one of the

pending cases in this District to be refiled based on yet another insincere amendment of the

assignments in question.

       And if this Court found the “documentation” to be insufficient in any refiled cases, even

that won‟t be the end of it. A recent filing in Righthaven v. Pahrump Life indicates Righthaven

will just keep rewriting its agreements over and over again:

       As set forth in its previous memorandum, Righthaven believes that the original
       Assignment and SAA between Righthaven and Stephens Media were sufficient to
       give Righthaven standing to sue. But since this Court issued its Order to Show
       Cause, another court in this District has held that these agreements failed to effect
       a copyright assignment to Righthaven. While Righthaven respectfully disagrees
       with Judge Hunt‟s decision, it will not burden this Court with those arguments
       and will instead address its arguments to the Amendment. Another court in this
       District has also recently held that Righthaven lacks standing, even under the
       Amendment. Righthaven disagrees with that decision and intends to appeal.
       Nonetheless, Righthaven and Stephens Media are considering further amending
       their agreements in order to prevent other courts from erroneously concluding that
       Righthaven lacks standing. If and when the parties do so, they will promptly
       provide the Court with all amended agreements.



                                                3
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Righthaven Response to Amici, Amicus Brief Exhibit F at 5 n.1.3

       However, there is a much deeper, much more fundamental problem with Righthaven‟s

standing, one wholly unrelated to the Copyright Act. CALA‟s amicus brief presents arguments

and authorities that conclusively demonstrate—as a matter of black letter law—that

Righthaven‟s assignments are void ab initio and no amendments could ever rescue them. The

CALA brief presents a way for this Court and others to conclusively resolve these issues with

permanence, which will save Righthaven defendants from endlessly defending themselves

against rewritten agreements. It will also provide Righthaven the guidance it seeks as to how

copyright holders can vindicate their rights by using third parties to file lawsuits.

       CALA‟s amicus brief has been accepted for filing in Righthaven v. Pahrump Life, where

Judge Mahan of the Nevada District stated: “The court has reviewed the proposed brief and

agrees that it may be useful to the court in ruling on the pending order to show cause why the

case should not be dismissed for lack of standing[.]”4 The exact same standing issues are before

this Court, and CALA respectfully submits that this Court would find value in CALA‟s amicus

brief in this matter, just as Judge Mahan expects to in Pahrump Life.

       Further, in Righthaven v. Democratic Underground, Judge Hunt of the Nevada District

likewise allowed the filing and issued a ruling in part based upon the brief in the context of

sanctioning Righthaven last week.




3
  Following through on its promise, Righthaven has now “amended” the Stephens Media SAA
for a second time.
4
  Order of 6-29-2011 at 1, Doc. #54, Righthaven v. Pahrump Life, 2:10-cv-01575-JCM-PAL
(D.Nev.) (MAHAN, J.).


                                                  4
Case 1:11-cv-00830-JLK Document 21              Filed 07/19/11 USDC Colorado Page 5 of 8




                                                II.

                                    INTEREST OF AMICUS

        Citizens Against Litigation Abuse, Inc. is a South Carolina nonprofit corporation.5 As its

name implies, CALA is a public interest entity interested in preventing and opposing truly

abusive litigation. CALA‟s focus is on abusive litigation in areas relating to political speech and

strategic lawsuits against public participation, known as SLAPP lawsuits. CALA‟s undersigned

counsel is a member of the South Carolina Bar and is involved in all Righthaven litigation in

South Carolina. Undersigned counsel and his other South Carolina clients, Dana Eiser and the

Lowcountry 9/12 Project, have a financial interest in Righthaven litigation. Undersigned counsel

has since taken other Righthaven targets as clients as well.

        The Righthaven cases directly implicate freedom of speech and have an obvious chilling

effect on core political speech on the Internet. A large proportion of Righthaven cases involve

core political speech, as one would expect with lawsuits filed over material appearing in

newspapers. Righthaven has sued political speakers from all over the political spectrum. From

left to right, from radical to moderate, no group has escaped Righthaven‟s litigation campaign.

        The following politically-oriented defendants jump out from just a quick scan of a list of

Righthaven cases:

       The Democratic Party of Nevada

       The Democratic Underground website

       Free Republic LLC, a conservative website

       The Drudge Report, a major political news website
5
 There are other entities with similar names in other states. South Carolina‟s Citizens Against
Litigation Abuse is not formally or informally affiliated with any other such entity.


                                                 5
Case 1:11-cv-00830-JLK Document 21               Filed 07/19/11 USDC Colorado Page 6 of 8




      The Center for Intercultural Organizing

      Thoughts From A Conservative Mom

      Pajamas Media, a major political blogging association

      The Second Amendment Foundation

      Virginia Citizens Defense League, Inc.

      Climate Change Fraud

      The United States Marijuana Party

      Americans Against Food Taxes

      America‟s Independent Party of Iowa

      Americans for Legal Immigration Political Action Committee

      American Political Action Committee

      Second Amendment Sisters, Inc.

      Americans for Immigration Reform

      Americans for Democratic Action, Inc.

      Independent Political Report

      No Quarter, a national security and terrorism blog

      Progressive Leadership Alliance of Nevada

      Citizens for Responsibility and Ethics in Washington, Inc.

      National Organization for the Reform of Marijuana Laws

       As Judge Mahan noted in Righthaven v. Jama, “[Righthaven]‟s litigation strategy has a

chilling effect on potential fair uses of Righthaven-owned articles, diminishes public access to

the facts contained therein and does nothing to advance the Copyright Act‟s purpose of


                                                 6
Case 1:11-cv-00830-JLK Document 21                Filed 07/19/11 USDC Colorado Page 7 of 8




promoting artistic creation.” Jama Summary Judgment, Amicus Brief Exhibit E at 7. Righthaven

does not sue people who have downloaded pirated movies or music. Righthaven sues people who

are communicating their views about issues of the day and discussing important matters of public

interest. CALA submits that Righthaven‟s litigation strategy is so brutal and abusive that the

words “chilling effect” simply do not do it justice.

       The free and open exchange of ideas is fundamental to American democracy. Righthaven

jeopardizes that, and for that reason Citizens Against Litigation Abuse respectfully requests

leave to file the attached amicus curiae brief.

       Respectfully submitted this 19th day of July, 2011.

                                                    s/J. Todd Kincannon
                                                   J. TODD KINCANNON, S.C. BAR NO. 76235
                                                   THE KINCANNON FIRM
                                                   Post Office Box 7901
                                                   Columbia, South Carolina 29202
                                                   Office:    877.992.6878
                                                   Fax:       888.704.2010
                                                   Email:     Todd@TheKincannonFirm.com
                                                   Attorney for Citizens Against Litigation Abuse




                                                  7
Case 1:11-cv-00830-JLK Document 21             Filed 07/19/11 USDC Colorado Page 8 of 8




                                CERTIFICATE OF SERVICE

       On this 19th day of July, 2011, a true and correct copy of the foregoing MOTION FOR

LEAVE TO FILE AMICUS CURIAE BRIEF OF CITIZENS AGAINST LITIGATION

ABUSE, INC. was filed via the CM/ECF system and a notice of such filing sent to:

   Attorneys for Plaintiff                       Attorneys for Defendant

   STEVEN G. GANIM, ESQ.                         ANDREW J. CONTIGUGLIA
   RIGHTHAVEN LLC                                CONTIGUGLIA & FAZZONE, P.C.
   4475 South Pecos Road                         400 South Colorado Boulevard, #830
   Las Vegas, Nevada 89121                       Denver, Colorado 80246
   Office: 702.527.5900                          Office: 303.780.7333
   Fax: 702.527.5909                             Fax: 303.780.7337
   Email: sganim@righthaven.com                  Email: ajc@ajcpc.com

   SHAWN A. MANGANO, ESQ.                        MARC J.RANDAZZA
   SHAWN A. MANGANO, LTD.                        JASON A.FISCHER
   9960 WEST CHEYENNE AVENUE, SUITE 170          J. MALCOLM DEVOY IV
   LAS VEGAS, NEVADA 89129-7701                  RANDAZZA LEGAL GROUP
   Office: 702.304.0432                          7001 W. Charleston Boulevard, #1043
   Fax: 702.922.3851                             Las Vegas, Nevada 89117
   Email: shawn@manganolaw.com                   Office: 888.667.1113
                                                 Fax: 305.437.7662
                                                 Email: mjr@randazza.com
                                                 Email: jmd@randazza.com


       I hereby certify the foregoing this 19th day of July, 2011.

                                                  s/J. Todd Kincannon
                                                 J. TODD KINCANNON
                                                 THE KINCANNON FIRM




                                                8
Case 1:11-cv-00830-JLK Document 21-1   Filed 07/19/11 USDC Colorado Page 1 of 4




         Exhibit 1
  to CALA’s Amicus Motion


           Consultation Emails
        Case 1:11-cv-00830-JLK Document 21-1                                       Filed 07/19/11 USDC Colorado Page 2 of 4


Todd Kincannon
From:                                     Todd Kincannon
Sent:                                     Thursday, June 30, 2011 8:50 PM
To:                                       'shawn@manganolaw.com'
Subject:                                  Amicus Brief Filings by Citizens Against Litigation Abuse, Inc.


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Todd Kincannon




THE KINCANNON FIRM
1329 RICHLAND STREET
COLUMBIA, SC 29201
THEKINCANNONFIRM.COM
OFFICE: 877.99.COURT
FAX: 888.704.2010
                                                                                   1
        Case 1:11-cv-00830-JLK Document 21-1                                              Filed 07/19/11 USDC Colorado Page 3 of 4


Todd Kincannon
From:                                         Todd Kincannon
Sent:                                         Thursday, June 30, 2011 8:56 PM
To:                                           'jmd@randazza.com'
Subject:                                      Righthaven: Amicus Brief Filings by Citizens Against Litigation Abuse, Inc.
Attachments:                                  CALA v. Righthaven.pdf; CALA DU Amicus Brief.pdf; CALA DU Amicus Motion.pdf; CALA
                                              Pahrump Life Amicus Brief.pdf; CALA Pahrump Life Amicus Motion.pdf


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THE KINCANNON FIRM
1329 RICHLAND STREET
                                                                                          1
    Case 1:11-cv-00830-JLK Document 21-1   Filed 07/19/11 USDC Colorado Page 4 of 4

COLUMBIA, SC 29201
THEKINCANNONFIRM.COM
OFFICE: 877.99.COURT
FAX: 888.704.2010




                                           2
Case 1:11-cv-00830-JLK Document 21-2   Filed 07/19/11 USDC Colorado Page 1 of 48




         Exhibit 2
  to CALA’s Amicus Motion


                     Proposed
                   Amicus Curiae
                       Brief
Case 1:11-cv-00830-JLK Document 21-2        Filed 07/19/11 USDC Colorado Page 2 of 48




                       IN THE UNITED STATES DISTRICT COURT
                          FOR THE DISTRICT OF COLORADO
                                  Judge John L. Kane

 Civil Action No. 1:11-cv-00830-JLK


 RIGHTHAVEN LLC, A Nevada Limited Liability Company

        Plaintiff,

                v.

 LELAND WOLF, an individual, and
 IT MAKES SENSE BLOG, an entity of unknown origin and nature,

        Defendants.


                              AMICUS CURIAE BRIEF OF
                      CITIZENS AGAINST LITIGATION ABUSE, INC.



        Citizens Against Litigation Abuse, Inc. (“Amicus”) respectfully submits its Amicus

 Curiae Brief as follows:
Case 1:11-cv-00830-JLK Document 21-2                                    Filed 07/19/11 USDC Colorado Page 3 of 48




                                                     TABLE OF CONTENTS
 I.      Introduction ...........................................................................................................................6
 II.     Righthaven is not an assignee, it is a law firm in disguise .................................................8
         A.      Righthaven’s scheme has been tried before ...................................................................9
                 i.      ILLEGAL IN UTAH...................................................................................................9
                 ii.     ILLEGAL IN NEW YORK, EVEN WHEN LAWYERS FILE THE LAWSUITS ....................10
                 iii.    MICHIGAN FOLLOWS NEW YORK .........................................................................11
                 iv.     WISCONSIN REJECTS THE RIGHTHAVEN SCHEME TOO ..........................................11
                 v.      NEW MEXICO FOLLOWS SUIT ...............................................................................12
                 vi.     WEST VIRGINIA COMES TO THE SAME CONCLUSION .............................................14
                 vii. IOWA SAYS NO TO THE RIGHTHAVEN SCHEME ......................................................16
                 viii. SOUTH CAROLINA REJECTS THE SCHEME AS WELL ...............................................17
                 ix.     COLORADO LIKEWISE BARS ASSIGNMENTS OF THIS NATURE ................................17
         B.      Righthaven’s patent analogy in no way rescues its business model ............................22
         C.      How to determine the (in)validity of an assignment ....................................................24
                 i.      GENERAL PRINCIPLES ..........................................................................................25
                 ii.     A DOZEN FACTORS COURTS CONSIDER .................................................................26
                 iii.    ANALYZING THE RIGHTHAVEN OPERATION, FACTOR BY FACTOR ........................27
         D.      State law can invalidate a copyright assignment .........................................................36
         E.      Why? ............................................................................................................................37
 III. Righthaven intends to endlessly alter its assignments .....................................................39

 IV. Righthaven’s client relationships have already been found to be impermissibly
     representative ......................................................................................................................41
         A.      July 14, 2011 Sanctions Hearing in Righthaven v. Democratic Underground ...........41
         B.      Statement Made by Former Stephens Media CEO Sherman Frederick ......................42
 V.      Conclusion ...........................................................................................................................45



                                                                         2
Case 1:11-cv-00830-JLK Document 21-2                                 Filed 07/19/11 USDC Colorado Page 4 of 48




                                                 TABLE OF AUTHORITIES
                                         United States Constitutional Provisions
 Article III, Section 2 ................................................................................................................28, 34

                                           United States Supreme Court Cases
 Aronson v. Quick Point Pencil Co., 440 U.S. 257 (1979) .............................................................36
 Jacobellis v. Ohio, 378 U.S. 184 (1964) ........................................................................................26
 Secretary of State of Md. v. Joseph H. Munson Co., 467 U.S. 947 (1984).............................. 28-29
 Sprint Communications Co., L.P. v. APCC Services, Inc., 554 U.S. 269 (2008) ....................25, 27

                                         Federal Circuit Courts of Appeal Cases
 Compton v. Atwell, 207 F.2d 139 (D.C. Cir. 1953) .......................................................................26
 Fantastic Fakes, Inc. v. Pickwick Int’l, Inc., 661 F.2d 479 (5th Cir. 1981) ..................................36
 Jones v. Niagara Frontier Transp. Auth., 722 F.2d 20 (2d Cir. 1983) ..........................................28
 Palazzo v. Gulf Oil Corp., 764 F.2d 1381 (11th Cir. 1985)...........................................................28
 Rawlings v. Nat’l Molasses Co., 394 F.2d 645 (9th Cir. 1968) ...............................................23, 28
 SGS-Thomson Microelectronics, Inc. v. International Rectifier Corp., 1994
     WL 374529 (Fed. Cir. Jul. 14, 1994) ........................................................................ 22-23, 28
 Silvers v. Sony Pictures Entertainment, 402 F.3d 881 (9th Cir. 2005) ............................... 6, 28, 30
 Vaupel Textilmaschinen KG v. Meccanica Euro Italia SPA, 944 F.2d 870
     (Fed. Cir. 1991) ................................................................................................... 22, 24, 27-28

                                                         State Court Cases
 Bay County Bar Ass’n v. Fin. Sys., Inc., 76 N.W.2d 23 (Mich. 1956) ..........................................11
 Bank of Cave Spring v. Gold Kist, Inc., 327 S.E.2d 800 (Ga. Ct. App. 1985) ..............................26
 Brown v. Unauthorized Practice of Law Comm., 742 S.W.2d 34 (Tex. Ct.
     App. 1987) ........................................................................................................................... 28
 Burkhardt v. Bailey, 680 N.W.2d 453 (Mich. Ct. App. 2004).......................................................27
 Christiansen v. Melinda, 857 P.2d 345 (Alaska 1993) ..................................................................28
 Hospital Credit Exchange v. Shapiro, 59 N.Y.S.2d 812 (N.Y. Mun. Ct. 1946)................ 10-11, 27


                                                                      3
Case 1:11-cv-00830-JLK Document 21-2                                  Filed 07/19/11 USDC Colorado Page 5 of 48




 In re Unauthorized Practice of Law Rules, 422 S.E.2d 123 (S.C. 1992) ......................................26
 Iowa Supreme Court Comm’n on Unauthorized Practice of Law v. A-1
     Associates Ltd., 623 N.W.2d 803 (Iowa 2001) .....................................................................16
 Nelson v. Smith, 154 P.2d 634 (Utah 1944) ......................................................................... 9-10, 13
 People v. Adams, 243 P.3d 256 (Colo. 2010) ......................................................... 17-21, 25, 27-29
 Roberts v. Holland & Hart, 857 P.2d 492 (Colo. Ct. App. 1993) .................................................28
 Roberts v. LaConey, 650 S.E.2d 474 (S.C. 2007)....................................................................17, 27
 State ex rel. Frieson v. Isner, 285 S.E.2d 641 (W.Va. 1981) ............................................ 14-15, 17
 State ex rel. Norvell v. Credit Bureau of Albuquerque, Inc., 514 P.2d 40 (N.M.
       1973) ............................................................................................................. 12-14, 17, 25, 27
 State ex rel. State Bar of Wis. v. Bonded Collections, Inc., 154 N.W.2d 250
       (Wis. 1967) .....................................................................................................................12, 17
 Thibodeaux v. Creditors Services, Inc., 551 P.2d 714 (Colo. 1976) .............................................25

                                                Rules of Professional Conduct
 Colo. RPC 5.4(a) ............................................................................................................................37
 D.C.COLO.LCivR 83.4 .................................................................................................................37




                                                                       4
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                                     TABLE OF EXHIBITS

       Referred to as:                       Full Citation                          Exhibit
                        Order dated 4-14-2011, Doc. #93, Righthaven v.
            Order
                        Democratic Underground, 2:10-cv-01356-RLH-GWF          Exhibit A
       Unsealing SAA
                        (D. Nev.) (HUNT, J.)
         Democratic     Order dated 6-14-2011, Doc. #116, Righthaven v.
        Underground     Democratic Underground, 2:10-cv-01356-RLH-GWF          Exhibit B
          Dismissal     (D. Nev.) (HUNT, J.)
                        Righthaven‟s Application to Intervene as of Right
         Righthaven     Pursuant to Federal Rule of Civil Procedure 24(A)(2)
                                                                               Exhibit C
         Intervention   dated 6-23-2011, Doc. #120, Righthaven v. Democratic
                        Underground, 2:10-cv-01356-RLH-GWF (D. Nev.)
                        Order dated 6-20-2011, Doc. #28, Righthaven v.
       Hoehn Dismissal                                                         Exhibit D
                        Hoehn, 2:11-cv-00050-PMP-RJJ (D. Nev.) (PRO, J.)
       Jama Summary Order dated 4-22-2011, Doc. #28, Righthaven v. Jama,
                                                                               Exhibit E
          Judgment      2:10-cv-01322-JCM-LRL (D. Nev.) (MAHAN, J.)
                        Plaintiff Righthaven LLC‟s Omnibus Response to the
         Righthaven     Amicus Curiae Briefs of Democratic Underground and
          Response      Professor Jason Schultz dated 6-22-2011, Doc. #44,     Exhibit F
           to Amici     Righthaven v. Pahrump Life, 2:10-cv-01575-JCM-PAL
                        (D. Nev.)
     Arkansas Democrat- Toby Manthey, Firm Holds Websites to the Law,
                                                                               Exhibit G
        Gazette Story   Arkansas Democrat-Gazette, August 26, 2010
       New York Times Dan Frosch, Enforcing Copyrights Online, for a Profit,
                                                                               Exhibit H
             Story      New York Times, May 2, 2011
                        David Kravets, Newspaper Chain’s New Business
       Wired.com Story                                                          Exhibit I
                        Plan: Copyright Suits, Wired.com, July 22, 2010
                        “Face to Face” Interview with Steve Gibson, June 22,        Not an
       Gibson Interview                                                         2
                        2011                                                        Exhibit1
                        Righthaven‟s Strategic Alliance Agreement with
             SAA                                                                Exhibit J
                        Stephens Media, LLC dated 1-18-2010
                        Clarification and Amendment to Strategic Alliance
      SAA Clarification                                                        Exhibit K
                        Agreement dated 5-9-2011
     Righthaven Website Righthaven‟s Website at www.righthaven.com             Exhibit L
      Sherman Frederick Sherman Frederick, Angel haters: No proof, no
                                                                               Exhibit M
          Comment       reporting, Las Vegas Review-Journal, July 14, 2011


 1
     The interview is available online at www.lasvegassun.com/videos/2011/jun/22/5268/


                                                 5
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                                                   I.

                                         INTRODUCTION

        When Righthaven began its lawsuit campaign, its lawyers worked hard to accomplish

 two goals: first, to convince defendants that it was the assignee of the copyrights at issue; second,

 to keep anyone from ever seeing its contracts with its clients. That strategy worked for a while,

 but it eventually failed. Righthaven‟s so-called “Strategic Alliance Agreement” with Stephens

 Media, LLC was unsealed on April 14, 2011, and the identical-in-effect “Copyright Alliance

 Agreement” with MediaNews Group has likewise been produced and was provided to this Court

 on July 8, 2011. See Order Unsealing SAA, Ex. A at 5; Dkt. #20-2 (CAA).

        Debate over the legal effect of the SAA began as soon as it was unsealed, and flaws in

 the agreement quickly became evident. For one, it was clear that Righthaven‟s rights were purely

 illusory and that the assignments transferred only the “bare right to sue.” But, under Silvers v.

 Sony Pictures Entertainment, 402 F.3d 881 (9th Cir. 2005) and similar cases, attempting to

 assign the bare right to sue over copyright infringement actually assigns nothing, because the

 Copyright Act doesn‟t allow it. Id. at 890 (“the Copyright Act does not permit copyright holders

 to choose third parties to bring suits on their behalf.”) (quotation omitted).

        Silvers is well reasoned and most certainly forecloses Righthaven‟s strategy. Seeing the

 handwriting on the wall, Righthaven attempted to rewrite the SAA by issuing a “clarification.”

 See SAA Clarification, Ex. K. But even the clarified SAA failed to give Righthaven standing.

 See Hoehn Dismissal, Ex. D at 10; see also Democratic Underground Dismissal, Ex. B at 8 n.1

 (suggesting SAA clarification is ineffective and merely cosmetic). Righthaven has now issued

 yet another amendment and has signaled that it will endlessly tinker with the language of its



                                                   6
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 assignments until it can avoid Silvers. See Righthaven Response to Amici, Ex. F at 5 n.1

 (indicating further amendments are forthcoming). Righthaven‟s new strategy is to draw tenuous

 analogies with patent law to salvage its failing business model. See generally id.

        In addition, Righthaven has now disclosed in its Nevada cases—having failed to do so

 previously—that its clients have a financial interest in the litigation it brings. Righthaven has

 listed Stephens Media LLC, the owner of the Las Vegas Review-Journal, as a financially

 interested party in cases arising from the posting of Review-Journal material. Likewise,

 MediaNews Group, Inc., the owner of The Denver Post, has been disclosed as a financially

 interested party in those Righthaven cases. “Financially interested party” means that if

 Righthaven obtains a recovery, Righthaven‟s client gets a cut. Righthaven fought so desperately

 to avoid this disclosure that it tried to have opposing counsel held in contempt for daring to even

 ask that the SAA be unsealed. See Order Unsealing SAA, Ex. A at 3.2

        There is now a profoundly deeper problem with the Righthaven scheme, one so

 fundamental that no amount of rewriting can solve it. Righthaven‟s “assignments” are not

 assignments, they are representation agreements. Accordingly, the Righthaven cases no longer

 need to be decided according to the dictates of intellectual property law and can be decided—

 with complete permanence—using the principles of assignment law. Amicus Citizens Against

 Litigation Abuse therefore respectfully submits the following:




 2
   “Righthaven and Stephens Media accuse Defendants‟ counsel (who, they make a point of
 reminding the Court, are from out-of-town) of disingenuous gamesmanship. They demand the
 Court issue an Order to Show Cause why Defendants should not be held in contempt for
 violating the Protective Order. It is this demand that is disingenuous.” Id.


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                                                  II.

                            RIGHTHAVEN IS NOT AN ASSIGNEE,

                               IT IS A LAW FIRM IN DISGUISE

        Amicus invites the Court to ignore the Righthaven for a moment and consider a general

 proposition: Assume that a company has an actionable claim. The company wants to hire

 someone to pursue a lawsuit over the claim. The company finds a firm that employs lawyers and

 handles lawsuits to do just that. In fact, prosecuting lawsuits is all the firm does. So the company

 and the firm strike a deal: the firm will prosecute the claim, and the firm and the company will

 split any recovery, after expenses, 50/50.

        In the real world, that arrangement is called a “contingency fee representation

 agreement,” the “company” is the client, and the “firm” is a law firm. But Righthaven does not

 appear to operate in the real world. Righthaven claims this exact arrangement is actually an

 “assignment,” that it is not a law firm but a “copyright enforcer,” and that its clients are not

 clients but are “key relationships.” See Righthaven Website, Ex. L. This is nothing but corporate

 doublespeak, deployed in an attempt to camouflage an arrangement that is totally impermissible

 outside the context of a lawyer-client relationship.

        Moreover, Righthaven claims to be engaged in a novel pursuit presenting new and

 undecided issues in copyright enforcement. Those claims are accurate only so long as one does

 not consider precedents relating to the validity of assignments and the unauthorized practice of

 law. What Righthaven tries to present as some inventive new way of enforcing copyrights is

 nothing more than a copyright-specific form of a scheme that has been rejected, so far as Amicus




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  can determine, by every court that has ever examined it. When considering the following

  arguments and authorities, Amicus submits that it will be extremely useful to keep in mind this

  language from the SAA: “Assignor hereby engages Righthaven to undertake the pursuit of

  Infringement Actions.” See SAA § 3.4, Ex. J at 3 (edited for readability).

                             A. Righthaven’s scheme has been tried before.

            Righthaven is by no means the first entity to obtain an assignment in the nature of a

  representation agreement, file a lawsuit in its own name, and kick back a portion of any recovery

  to the assignor. American courts have consistently refused to allow such a scheme and have

  found assignments of this nature to be plainly illegal.

                                            i. ILLEGAL IN UTAH.

            An early leading opinion is Nelson v. Smith, 154 P.2d 634 (Utah 1944), where the Utah

  Supreme Court found such assignments to be shams designed to enable the unauthorized practice

  of law:

            When the defendants solicit the placement of claims with them for collection,
            they are asking third parties to allow them to render the service of collecting the
            claim. At that time the collection agency has absolutely no interest, either legal or
            beneficial, in the claim. The only interest they ever get comes by virtue of a
            promise to prosecute the claim. Courts cannot remain blind to the fact that the
            assignment of the claim to the defendants for collection is not made as a gratuity.
            The percentage of the amount collected which is allowed to the defendants is
            given to them for one purpose only; to compensate them for services rendered in
            the collection thereof. Where the collection practice involves the preparing of
            legal papers, furnishing legal advice and other legal services, the compensation
            allowed must be assumed to be in part allowed to pay for the legal services so
            rendered. No matter how one looks at it, this constitutes the rendering of legal
            services for others as a regular part of a business carried on for financial gain.
            This essential fact cannot be hidden by the subterfuge of an assignment. The
            assignment itself, if used to permit this practice, is for an illegal purpose. . . . The
            taking of an assignment under circumstances such as those detailed above cannot
            possibly change the essential fact that the defendants are rendering legal services
            for another for gain.


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  Id. at 639-640.

          This is exactly what Righthaven is doing. Righthaven‟s assignments are absolutely for the

  purpose of permitting it, a non-law firm, to practice law and to earn a fee for the provision of

  legal services. As the Utah Supreme Court said nearly seventy years ago, this essential fact

  cannot be hidden by the subterfuge of an assignment. Such an “assignment” is not an

  assignment; it is a contingency fee representation agreement. Again, consider the language in the

  SAA: “[Assignor] hereby engages Righthaven . . . to undertake . . . the pursuit of Infringement

  Actions.” See SAA § 3.4, Ex. J. at 3. Righthaven‟s “assignments” are representation agreements.

                ii. ILLEGAL IN NEW YORK, EVEN WHEN LAWYERS FILE THE LAWSUITS.

          The representation-agreement-in-disguise scheme did not end in Utah. Two years later,

  the City of New York had a run-in with a would-be Righthaven, dressed up as a charitable

  organization. The Hospital Credit Exchange was a collection agency that solicited causes of

  action from New York‟s charitable hospitals. Hospital Credit Exchange v. Shapiro, 59 N.Y.S.2d

  812, 813-14 (N.Y. Mun. Ct. 1946). The Credit Exchange took “assignments of these claims for

  the sole and express purpose of instituting suit thereon in its own name although in behalf of

  such hospitals.” Id. at 814. The Credit Exchange used its own lawyers to handle the claims. Id.

  The Credit Exchange would then take whatever recoveries it obtained and divide them between

  itself and the assignor. Id.

          The New York court found the Credit Exchange “engaged in the practice of law contrary

  to public policy and in violation of the Penal Law.” Id. at 814. The court refused to allow the

  sham, stating: “Not so easily is the law circumvented which prevents collection agencies from

  carrying on a legal practice.” Id. at 816. Foreshadowing Righthaven, the court went on:



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         This might be very good business for the officials of a closely managed collection
         agency, who could thus grant themselves very satisfactory compensation for
         conducting what is tantamount to a law practice. It is not necessary that such
         compensation take the form of dividends or a distribution of profits; it may be
         paid in salaries or commissions.

  Id. at 816-17.

                                iii. MICHIGAN FOLLOWS NEW YORK.

         A decade after New York‟s rejection of the representation-agreement-in-disguise scheme,

  the Michigan Supreme Court found itself faced with yet another proto-Righthaven, a collection

  agency taking assignments of claims and bringing suits in its own name in which the assignors

  retained an interest. Bay County Bar Ass’n v. Fin. Sys., Inc., 76 N.W.2d 23 (Mich. 1956). The

  Michigan Supreme Court found the scheme to be the unauthorized practice of law. Id.

         The Michigan Supreme Court could not “escape the conclusion” that the assignments

  were invalid. Id. at 29. And just as in New York, it did not matter that the assignee used licensed

  attorneys to file the suits. Id. The assignee itself had to be authorized to practice law, i.e. a

  lawyer or a law firm. Id.

         “When this is done by one not licensed as an attorney it constitutes the unauthorized

  practice of law whether done by him in person or through his agent, regardless of whether the

  latter be a laymen or a licensed attorney.” Id. “The corporate defendant has engaged in the

  unlawful practice [of law].” Id. Righthaven‟s use of lawyers is therefore no insulation to these

  arguments.

                       iv. WISCONSIN REJECTS THE RIGHTHAVEN SCHEME TOO.

         Another decade passed and someone tried the representation-agreement-in-disguise

  scheme in Wisconsin. The Wisconsin Supreme Court flatly rejected it, stating:



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         It is sheer hypocrisy to conclude that the percentage retained by the collection
         agency represents its equity or ownership share of the claim. It is its fee or charge
         for professional services rendered. Under these circumstances the property right
         of the creditor is directly affected and his recovery is dependent upon the
         litigation undertaken. There is no doubt that the client whose interests must be
         served and represented in the suit for collection under a normal and lawful
         lawyer-client relationship is the creditor.

  State ex rel. State Bar of Wis. v. Bonded Collections, Inc., 154 N.W.2d 250, 256 (Wis. 1967).

  The Wisconsin Supreme Court went on to say, in no uncertain terms: “The collection agency by

  going into court representing itself as the client perpetrates a fraud on the court.” Id.

         And the Wisconsin Supreme Court, as had its counterparts in New York and Michigan,

  found that the collection agency in that case was practicing law even though it hired a lawyer to

  go to court:

         The fact that the defendants in some instances employ a regularly licensed
         attorney to prepare necessary legal papers and conduct the trial of a suit does not
         make their conduct legal. One cannot do through an employee or an agent that
         which he cannot do by himself. If the attorney is in fact the agent or employee of
         the lay agency, his acts are the acts of his principal or master. When an attorney
         represents an individual or corporation, he acts as a servant or agent. Since he acts
         for others in a representative capacity, doing those things which are customarily
         done by an attorney, he practices law[.]

  Id. Again, Righthaven‟s use of lawyers to prosecute its claims is no defense to these arguments.

                                    v. NEW MEXICO FOLLOWS SUIT.

         Just four years later in New Mexico, the Credit Bureau of Albuquerque decided to try the

  Righthaven path to prosperity. In State ex rel. Norvell v. Credit Bureau of Albuquerque, Inc., 514

  P.2d 40 (N.M. 1973), the Credit Bureau took claims for enforcement under a contingency fee

  agreement with the creditor. Id. The agreement also “require[d] the creditor to assign his claim to

  the Credit Bureau when requested to do so.” Id.




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         If pre-suit collection failed, the Credit Bureau then obtained an “assignment of the claim

  for the purpose of allowing the Credit Bureau to file suit in its own name.” Id. The Credit Bureau

  did not pay for the assignment, it just assumed the claim in its own name with the contingency

  fee agreement still in place. Id. The Credit Bureau then filed lawsuits, and if a judgment was

  collected in such a suit, the creditor-assignor would receive the agreed percentage. Id. at 44.

         After apparently employing these tactics for some time, the Credit Bureau finally crossed

  the wrong person. One David Norvelle was targeted by the Credit Bureau, and his lawyer

  realized the scheme was not debt collection but the unauthorized practice of law. After this

  revelation, it appears victims of the Credit Bureau came out of the woodwork and tried to

  intervene, and so did the New Mexico Attorney General. Id. at 42.

         The New Mexico Supreme Court held that the Credit Bureau was engaged in the

  unauthorized practice of law: “[C]ollection agencies as a part of their business of serving others,

  clearly should not be permitted to prepare legal papers, commence suits, appear in court, prepare

  judgments and generally manage law suits for its various customers.” Id. at 45. “It does not

  matter what particular form or name they give their procedure the practice of furnishing or

  performing legal services for another is essentially the same.” Id.

         The Norvell court then quoted extensively from Nelson v. Smith before stating:

         Such a business conducted for the purpose of bringing legal actions on claims
         owned by third parties and consisting of the payment of all costs and the
         furnishing of all legal services incident to the bringing of the actions is the
         practice of law. Where, as here, the agency rendering the service is a lay agency,
         it is the illegal practice of law. Such is the almost uniform holding of the
         authorities as applied to collection agencies operating along similar lines.

  Id. at 45-46 (citations and quotations omitted).

         The New Mexico Supreme Court went on:


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          And so with the right of a plaintiff to try his own lawsuit in any court. If it is
          really his own litigation the right is unquestioned and unquestionable. But if it is
          another‟s lawsuit or action, placed in plaintiff‟s name so as to enable him to
          render service to that other under the pretext of trying his own case, it does not
          come under the protection of the rule. And if it is done by one who engages in it
          as a business and holds himself out as peculiarly qualified or equipped, it comes
          under the ban of illegal practice of law.

  Id. at 47 (quotations omitted).

          Righthaven holds itself out as “The Nation‟s Pre-Eminent Copyright Enforcer” on its

  website. See Righthaven Website, Ex. L. This would seem to satisfy the “peculiarly qualified or

  equipped” requirements. And just as in the Righthaven cases, “The assignments procured by the

  Credit Bureau were not in truth taken for the purpose of acquiring title and ownership, but rather

  to facilitate the furnishing of legal services for a consideration.” Id. at 49. The unending theme of

  these cases is that an entity pursuing the Righthaven representation-agreement-in-disguise

  scheme is entering into sham documents and committing a fraud on the court.

          Further, the courts are not as interested in the language of the assignments as in the intent

  of the parties. But here, the intent of Righthaven and its clients is made clear both by their

  conduct and by the language of the assignment: “[Assignor] hereby engages Righthaven . . . to

  undertake . . . the pursuit of Infringement Actions.” See SAA § 3.4, Ex. J at 3. This language,

  simply and plainly, evidences a fundamental intent to retain a representative—an agent—not to

  divest interest in a claim.

                        vi. WEST VIRGINIA COMES TO THE SAME CONCLUSION.

          It would appear based on studying the precedents that every few years, in some state or

  another, someone cooks up the representation-agreement-in-disguise scheme anew, and it never

  meets with success. In State ex rel. Frieson v. Isner, 285 S.E.2d 641 (W.Va. 1981), yet another



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  collection agency gave the Righthaven scheme a try. The West Virginia Supreme Court was not

  pleased:

         The operation of a collection agency, in and of itself, does not constitute the
         unauthorized practice of law. . . . Where, however, a person, association or
         corporation which collects debts as a regular business attempts to enforce the
         claims of others by resort to legal proceedings, the debt collector is extending his
         or its business to include legal representation of creditors. The collection agency
         is holding itself out not only as an entity which will collect amounts owed to
         creditors but also as an agent which will render legal services in order to recover
         debts. It sells its services as a representative in legal actions as part and parcel of
         its debt collection business. Such activity can be viewed in no other light than as
         the unauthorized practice of law.

                                                * * *

         The Associated Collection Agencies of West Virginia suggest in their amicus
         curiae brief, however, that South Charleston Adjustment Bureau was not
         rendering legal services to the petitioner‟s creditors as a part of its debt collection
         business, but rather had obtained an assignment of the claims from the creditors
         and was asserting its own claim. . . . The association argues that because the
         collection agency is asserting its own claim as assignee rather than acting as a
         representative of the creditor-assignor, it does not violate the prohibition against
         laymen engaging in the unauthorized practice of law.

         Generally an unsettled account or debt due is a chose in action which is
         assignable, and by virtue of statute the assignee may sue in his own name to
         recover the debt. . . . Where, however, a collection agency takes an assignment of
         a creditor‟s claim solely for the purpose of enabling the agency to maintain suit
         thereon, numerous jurisdictions have held that the fact that the collection agency,
         as assignee, is the real party in interest by virtue of the assignment and entitled to
         maintain suit in its own name is not determinative of the question of whether in so
         doing the collection agency is engaging in the practice of law.

  Id. at 650-51.

         Delivering the final nail in the coffin of the Righthaven scheme in West Virginia, the

  Supreme Court held: “In such instances the assignment has been held to be a sham or fraud

  perpetrated upon the court to allow the collection agency to avoid the prohibition on the

  unauthorized practice of law.” Id. at 651.


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                           vii. IOWA SAYS NO TO THE RIGHTHAVEN SCHEME.

          The Iowa Supreme Court had a run in with the Righthaven scheme just ten years ago. In

  Iowa Supreme Court Comm’n on Unauthorized Practice of Law v. A-1 Associates Ltd., 623

  N.W.2d 803 (Iowa 2001), the court found that an entity (other than a law firm) “engages in the

  unauthorized practice of law when, as a regular part of its business, it procures or takes

  assignments for collection where the creditor still retains an interest in the underlying debt and

  the collection agency institutes and maintains legal action to recover the unpaid debt.” Id. at 805.

          The Iowa Supreme Court rejected the idea that such a legal relationship between a

  creditor and a debt collector is an “assignment.” Id. at 807. “[W]e are convinced that A-1‟s

  practices are not consistent with the ordinary meaning of assignment recognized at common law

  and by statute. Id. The court went on:

          The assignment form executed by A-1‟s clients purports to transfer absolutely all
          right, title, and interest in described accounts receivable owned by A-1‟s clients.
          If such instrument actually meant what it said, it would come within the ordinary
          meaning of assignment—a transfer of the assignor‟s entire interest or rights in the
          property. And it would plainly give A-1 the right to maintain an action on the debt
          in its own name and represent itself in court on a pro se basis if it chose to do so.

  Id. at 808 (citations omitted).

          But the Iowa Supreme Court rejected the assignment as a sham. “A-1‟s claimed status as

  a bona fide assignee is defeated under this record, however, because the assignment—though

  absolute in form—is, in fact, a transfer intended primarily to secure payment for services

  rendered.” Id. Righthaven does not dispute that its right of recovery from its cases is primarily

  intended to secure payment for services rendered, i.e. “copyright enforcement.” Righthaven‟s

  clients do not enter into assignments. They enter into contingency fee representation agreements

  for legal services.


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                       viii. SOUTH CAROLINA REJECTS THE SCHEME AS WELL.

         Just four years ago, the South Carolina Supreme Court encountered the representation-

  agreement-in-disguise scheme. In Roberts v. LaConey, 650 S.E.2d 474 (S.C. 2007), a debt

  collector approached a creditor to sign an assignment of a judgment to him. Id. at 476. He would

  attempt to collect the debt for a fee of one-third of the recovery. Id. The debt collector used

  various legal mechanisms to try to compel payment, including asserting that the claim was now

  his to pursue pro se and accordingly appearing in court. See generally id.

         The South Carolina Supreme Court was as unimpressed with representation agreements

  in disguise as the rest of the courts cited above, and in fact held the assignment to be a

  contingency fee representation agreement for legal services with an individual who was not a

  lawyer. Id. at 478-79. The Roberts court approvingly cited many of the precedents above which

  describe the scheme as a “sheer hypocrisy,” a “fraud on the court,” and a “sham perpetrated on

  the court to enable unauthorized practice of law.” Id. (citing Bonded Collections, supra; Frieson

  v. Isner, supra). Finally, the South Carolina Court indicated that in such a situation, the assignee

  had no genuine title, equity, or ownership in the claim. Id. at 478 (citing Bonded Collections,

  supra; Norvell, supra).

                   ix. COLORADO LIKEWISE BARS ASSIGNMENTS OF THIS NATURE.

         Coincidentally, in November of 2010—at the height of the Righthaven enterprise—the

  Colorado Supreme Court handed down an opinion completely foreclosing Righthaven‟s

  operation in Colorado. In People v. Adams, 243 P.3d 256 (Colo. 2010), the Colorado Supreme

  Court invalidated an assignment and found unauthorized practice of law by the assignee on facts

  practically identical to the Righthaven cases.



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         For an assignee to litigate in Colorado, the assignor must permanently and totally

  extinguish all of its rights in favor of the assignee. “[A]n assignment must be complete and

  effective in order for the assignee to be become the real party in interest with the right to

  maintain an action in his own name.” Id. at 261. “The assignment of any common law or

  statutory claim must be clear and final so that defendants are protected from collateral actions by

  alleged assignors.” Id. at 263. “[T]he intent to make an assignment must be clearly reflected in

  the plain language of the parties‟ agreements.” Id.

         Righthaven‟s assignments are in no way “clear and final.” The original assignment has

  been held invalid by two federal judges in Nevada: Judge Hunt in Righthaven v. Democratic

  Underground and Judge Pro in Righthaven v. Hoehn. See Democratic Underground Dismissal,

  Ex. B at 15; Hoehn Dismissal, Ex. D at 10. The “clarified” assignment was also held invalid by

  Judge Pro, while Judge Hunt clearly indicated his belief that the new assignment was still invalid

  because the “amendments” were merely cosmetic. See Hoehn Dismissal, Ex. D at 10;

  Democratic Underground Dismissal, Ex. B at 8 n.1. Judges Mahan and Hicks in Nevada and this

  Court have all expressed concerns about the assignments as well. A “clear and final” assignment

  would not have met with this sort of reaction from the judiciary.

         While the judicial skepticism has so far been based on the Copyright Act‟s prohibition on

  right-to-sue assignments, the analysis under basic assignment law is even more revealing. As

  discussed above, the Righthaven assignments vest exclusive rights of reversion in the assignor.

  The SAA states: “[Assignor] shall have the right at any time to terminate, in good faith, any

  Copyright Assignment[.]” SAA § 8, Ex. J at 4. Ditto the clarified SAA: “[Assignor] has, in its




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  sole discretion, the option to repurchase the Copyright Assignment for a nominal amount within

  14 days[.]” See Hoehn Dismissal, Ex. D at 10; see also SAA Clarification § 8.1, Ex. K at 2.

         There is no “clear and final” assignment here, and the reason is obvious: Righthaven

  exists for the sole purpose of suing people for the copyright claims of others. Righthaven has no

  interest in obtaining assignments of copyrights otherwise. Righthaven‟s media clients fully

  intend to maintain their copyrights for all purposes other than litigation, which necessitates

  reversionary language in the assignments. That fact alone invalidates the assignments under

  Colorado law.

         Yet Righthaven claims the courts should not look to the intention of the parties, only to

  the self-serving documents they have created. Colorado law completely demolishes this

  argument. “An assignment which appears to be absolute on its face may not be completely

  effective if parol evidence demonstrates an intent departing from the terms of the assignment.”

  Adams at 263. Reams of evidence prove beyond any doubt that Righthaven‟s clients don‟t intend

  to give clear-and-final assignments but to simply “loan” their copyrights to Righthaven for

  lawsuits, then retrieve them afterwards. Colorado law absolutely forbids this.

         Even if Righthaven and its media clients entered into a permanent assignment of all right,

  title, and interest, a court could still police the intent of the parties and invalidate the assignment

  if the documents are merely self-serving shams, which, if Righthaven is involved, they always

  will be. Righthaven could show up at the courthouse with “clarified and amended” assignments

  from here to eternity, but they will never hide the true intent behind Righthaven. The intent is

  only to loan a sufficient quantum of rights to Righthaven to sneak the assignment by the federal

  judiciary‟s standing inquiry, just long enough to extract a settlement from the defendant.



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           Righthaven‟s assignment also fails because it is a mere cover for a representation

  relationship. Colorado, like every other jurisdiction, bans this:

           In this case we determine that the assignments were not final and effective.
           However, we do not base our conclusion that Adams engaged in the unauthorized
           practice of law solely upon the ineffective assignments. Instead, we rely on the
           facts in the record of this case in reaching our conclusion that Adams appeared for
           the subcontractors in a representative capacity in bankruptcy court. The
           assignments Adams based his bankruptcy court filings upon were not complete,
           final and valid assignments. The subcontractors/assignors retained a significant
           interest in their claims. The assignments at issue were not effective because they
           did not wholly divest the purported assignors of any interest in their claims as
           demonstrated by admissible parol evidence. Testimony before the [special master]
           coupled with the terms of the assignment contracts demonstrated that these
           assignments were not binding, because Adams‟ subcontractor clients maintained
           the right to reassignment of their claims. According to their testimony, the clients
           were expected to assist and cooperate in the pursuit of the claims in court, and
           they had significant influence upon and control over their claims.

  Adams at 264 (citations omitted).

           The Adams court found the assignments were actually representation agreements because

  the assignors maintained authority over their “assigned” claims. This is exactly the situation with

  Righthaven, and it always will be. Righthaven has three media clients: Stephens Media (the Las

  Vegas Review-Journal and others), MediaNews Group (The Denver Post and others), and

  WEHCO Media, Inc. (the Arkansas Democrat-Gazette and others).3 Officers of each of these

  clients have publicly stated that the media entities, not Righthaven, have the right to dictate who

  can and cannot be sued.

           Stephens Media‟s general counsel Mark Hinueber has said, “I can tell Righthaven not to

  sue somebody.” See Arkansas Democrat-Gazette Story, Ex. G at 3. In the same article, WEHCO

  Media‟s president Paul Smith is quoted as saying that if Righthaven discovers someone has


  3
      Righthaven has never filed a case for WEHCO Media, Inc., for reasons unknown to Amicus.


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  violated WEHCO‟s copyright, “it would be [WEHCO‟s] decision whether or not to move

  forward with it[.]” Id. Finally, in the New York Times, MediaNews Group‟s vice president Sara

  Glines clearly indicated that MediaNews Group had the same authority, stating that her company

  “reviewed every violation and only approved actions against sites that carried advertising and

  were not charities.” See New York Times Story, Ex. H at 3.

         The Adams court invalidated assignments because “[t]he record supports a conclusion

  that the assignments the subcontractors executed at various times created a client-collector

  relationship which included the ability of the purported assignor/subcontractors to control the

  litigation by demanding reassignment of their claims.” Adams at 265. Again, the Righthaven

  situation is identical. The SAA states:

         Stephens Media shall have the right at any time to terminate, in good faith, any
         Copyright Assignment . . . and enjoy a right of complete reversion to the
         ownership of any copyright that is the subject of a Copyright Assignment;
         provided, however, that if Righthaven shall have commenced an action to
         prosecute an infringer of the Stephens Media Assigned Copyrights, Stephens
         Media shall be exclusively responsible for effective termination of such action[.]

  SAA § 8, Ex. J at 4.

         This language doesn‟t just fail to give Righthaven standing under the principles of

  copyright law, it renders the entire assignment invalid under basic assignment law. Righthaven is

  not a bona fide assignee, it is a representative of the assignors in the claims that it brings. In fact,

  another previously-cited section of the SAA proves this contention beyond any doubt:

  “[Assignor] hereby engages Righthaven . . . to undertake . . . the pursuit of Infringement

  Actions.” See SAA § 3.4, Ex. J at 3. Righthaven‟s media associates aren‟t assignors, they are

  clients who have engaged Righthaven to pursue copyright infringement lawsuits. This invalidates

  the assignment.


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         Colorado law is crystal clear. An assignment cannot bear any hallmarks of a

  representation agreement, nor can the conduct of the parties betray such a relationship even if the

  assignment does not. For an assignment to be valid, it has to be a complete “hand-off,” both in

  word and in deed. The assignor cannot lurk in the shadows making litigation decisions (or any

  other decisions). To do so gives rise to a representative relationship wholly inconsistent with a

  legal assignment. The assignment is therefore invalid, and since Righthaven is not a bona fide

  assignee, it does not have standing to pursue this action in its own name.

              B. Righthaven’s patent analogy in no way rescues its business model.

         The previously cited cases are factually identical to the Righthaven situation. Further

  analysis is almost redundant. Each of the businesses and individuals mentioned above operated

  identically to Righthaven. Every single one of the foregoing courts would find Righthaven‟s

  assignments to be invalid because they are actually representation agreements.

         Righthaven claims there is something different about copyright law (and patent law) that

  allows it to operate the way it does. But nothing in the preceding citations in any way discloses

  that the rule should be different based on the nature of the claim. A claim is a claim, and an

  assignment that is actually a representation agreement assigns nothing.

         Righthaven argues that the purpose of a transaction is irrelevant, that the Court should

  just accept Righthaven‟s claim to title—again, backed up by self-serving documents—and move

  on. For this proposition, Righthaven‟s filings have cited an unpublished case, SGS-Thomson

  Microelectronics, Inc. v. International Rectifier Corp., 1994 WL 374529 (Fed. Cir. Jul. 14,

  1994), and Vaupel Textilmaschinen KG v. Meccanica Euro Italia SPA, 944 F.2d 870 (Fed. Cir.

  1991) (also involving American Trim Products, Inc.).



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           The first point to be made is a very simple one. Consider the names of the parties in these

  cases:    SGS-Thomson       Microelectronics,    International   Rectifier   Corporation,   Vaupel

  Textilmaschinen KG, Meccanica Euro Italia SPA, and American Trim Products. The first two

  are bona fide electronics companies and the last three are bona fide textile companies. These five

  companies are in the business of business, not the business of litigation.

           Examining each case demonstrates facts and circumstances far removed from the

  Righthaven cases. In SGS-Thomson, the court found that the assignments at issue were not shams

  because no party put in any evidence of a sham. Id. at *5. Further, the assignments were

  purchased for value—$10,000. Id. No party presented the SGS-Thomson court with the argument

  that the underlying suit was being prosecuted by a law firm in disguise. See generally id. The

  absence of this argument was not because of bad lawyering, but because it clearly was not the

  case. Both parties in SGS-Thomson were bona fide participants in the electronics business. This

  case stands as no defense to Amicus’ arguments presented above.

           The SGS-Thomson court cites Rawlings v. Nat’l Molasses Co., 394 F.2d 645, 684 (9th

  Cir. 1968), which Righthaven also points to in its filings. In that case, the Ninth Circuit

  encountered joint owners of a patent who learned of infringement. One wanted to sue, one didn‟t.

  Id. at 647-48. The owner not wishing to engage in litigation assigned the rights to the co-owner,

  who proceeded with litigation. Id. at 648.

           The assignment was not in the nature of a representation agreement, nor was the assignee

  in the business of engaging in these sorts of transactions. It was a one-time transaction made

  between bona fide owners clearly not done to enable the assignee to provide legal services. Id.

  Again, no one raised that issue in the case because it wasn‟t an issue in the case.



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         Another case Righthaven claims for support is Vaupel Textilmaschinen KG v. Meccanica

  Euro Italia SPA, 944 F.2d 870 (1991). But the Vaupel case is no better for Righthaven, as

  Vaupel was actually using a patent as a licensee when it discovered infringement. See generally

  id. The essential facts are as follows. Vaupel‟s original license contemplated enforcement of the

  patent approximately ten years before discovering any infringement. Id. The original license

  indicated the patentee and Vaupel would work together on a case-by-case basis to determine

  whether to sue over infringements that might crop up in the future. Id. at 875.

         After an infringement was discovered, the patentee and Vaupel agreed on an assignment

  so that Vaupel could pursue the litigation, with Vaupel to get a portion of the proceeds. Id.

  Again, the key difference between that case and Righthaven is this: Vaupel was not in the

  business of litigation. Vaupel and the patentee had a bona fide business relationship and arranged

  their affairs so as to defend against a mutual enemy. No one argued the Vaupel assignment was

  cover for a representation agreement. The arrangement was made for mutual business benefit,

  not so that Vaupel could represent a client in litigation.

                       C. How to determine the (in)validity of an assignment.

         Not every contingent-payment assignment is per se invalid in every jurisdiction. Where

  such an assignment is not a representation agreement in disguise, it can survive judicial scrutiny.

  And, as Colorado law makes clear, even a bought-and-paid-for, unqualified assignment can be

  struck down as a disguised representation agreement if the parties‟ true intent is not reflected in

  the assignment.




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                                       i. GENERAL PRINCIPLES.

         Courts generally investigate all the facts and circumstances surrounding an assignment to

  determine its validity. For example, where a contingent-payment assignment is not a pretext for

  legal representation, it can be upheld. The previously cited Norvell case hints at such a situation:

         [I]f it is another‟s lawsuit or action, placed in plaintiff‟s name so as to enable him
         to render service to that other under the pretext of trying his own case, it does not
         come under the protection of the rule [that a plaintiff can sue in his own name].
         And if it is done by one who engages in it as a business and holds himself out as
         peculiarly qualified or equipped, it comes under the ban of illegal practice of law.

  Id. at 47 (quotations omitted). The Norvell court clearly looked to the parties‟ intent, finding on

  those facts the contingent-payment assignments were contracts for legal services. But courts

  have upheld contingent-payment assignments on different fact patterns where there was no intent

  to provide representation. Good examples are the Righthaven-cited patent cases discussed in the

  prior section.

         As another example, some courts allow unqualified assignments of contractual debts to

  be the subject of a contingent-payment assignment, usually by analogy with promissory notes.

  For example, the United States Supreme Court and the Colorado Supreme Court have upheld

  these assignments.4 This is by no means a universal holding—many courts, including some cited

  herein, reject contingent-payment assignments on a per se basis, even over sum-certain,




  4
    E.g., Sprint Communications Co., L.P. v. APCC Services, Inc., 554 U.S. 269, 269 (2008)
  (Syllabus: “Held: An assignee of a legal claim for money owed has standing to pursue that claim
  in federal court, even when the assignee has promised to remit the proceeds of the litigation to
  the assignor.”); People v. Adams, 243 P.3d 256, 266 (Colo. 2010) (“With a valid assignment and
  counsel, a licensed collection agency that is also a corporation may recover accounts payable,
  even when those accounts are assigned on a contingency payment basis.”) (citing Thibodeaux v.
  Creditors Services, Inc., 551 P.2d 714 (Colo. 1976).


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  contractual debts.5 But the rule that an assignment cannot be cover for a representation

  agreement has no exceptions.

         American courts have not articulated a single test for determining whether an assignment

  is a representation agreement in disguise. Most courts engage in a fact-specific inquiry, looking

  at the language of the assignment, the conduct of the parties, and the totality of the circumstances

  involved. This is entirely reflective of the similarly-motivated judicial reticence to define the

  practice of law. In that regard, many jurisdictions adopt some form of the famous “I know it

  when I see it” test from Jacobellis v. Ohio, 378 U.S. 184 (1964) (STEWART, J. concurring).6 But

  in the context of representation agreements masquerading as assignments, the authorities provide

  several guideposts for courts considering the issue.

                              ii. A DOZEN FACTORS COURTS CONSIDER.7

  1.     An assignment must be an “absolute, unconditional, and completed transfer of all right,

  title, and interest in the property that is the subject of the assignment . . . with the concomitant

  total relinquishment of any control over the property.” Bank of Cave Spring v. Gold Kist, Inc.,

  327 S.E.2d 800, 802 (Ga. Ct. App. 1985). In the text of the assignment, the assignor must

  5
    Compton v. Atwell, 207 F.2d 139, 140-141 (D.C. Cir. 1953) (“[W]hether an assignee for
  collection only is the real party in interest . . . has produced a variance of judicial opinion” and
  “has so divided other courts”).
  6
     E.g., In re Unauthorized Practice of Law Rules, 422 S.E.2d 123 (S.C. 1992). “We are
  convinced, however, that it is neither practicable nor wise to attempt a comprehensive definition
  by way of a set of rules. Instead, we are convinced that the better course is to decide what is and
  what is not the unauthorized practice of law in the context of an actual case or controversy.” Id.
  at 124.
  7
    Amicus in no way suggests that the foregoing twelve factors constitute a twelve-factor test that
  is necessary for resolving the question before the Court. Complex, multi-factor tests are often
  met with criticism, and justifiably so. Rather, Amicus’ purpose in this section is to catalogue the
  various considerations courts use when deciding the fundamental question of whether an
  assignment for litigation is valid, then to analyze how the Righthaven business model compares
  to these considerations.


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  “manifest an intent to transfer and must not retain any control or any power of revocation.”

  Burkhardt v. Bailey, 680 N.W.2d 453, 463 (Mich. Ct. App. 2004).

  2.       Facts showing that the assignor-assignee relationship is really one of master-servant will

  invalidate an assignment. Id. Where litigation is involved, the assignee is exposed to liability for

  unauthorized practice of law. E.g., Roberts v. LaConey, supra.

  3.       An assignment for the express purpose of litigation raises the specter of an impermissible

  representation relationship and the unauthorized practice of law. E.g., Hospital Credit Exchange,

  supra.

  4.       Likewise, a contingent-payment assignment involving litigation raises the specter of an

  impermissible representation relationship and the unauthorized practice of law, even moreso

  when litigation is the exclusive enterprise of the assignee. E.g., Norvell, supra; Hospital Credit

  Exhange, supra.

  5.       An assignee who makes a regular business out of obtaining assignments and filing

  lawsuits over the claims is exponentially more likely to be engaged in improper transactions than

  a one-time assignee engaged in the same conduct. Compare Norvell, supra with Vaupel, supra.

  6.       An assignee-for-litigation who “holds himself out as peculiarly qualified or equipped” to

  engage in the litigation is likely committing the unauthorized practice of law. Norvell, supra, at

  47.

  7.       When an assignee litigates an assigned claim on contingency, “assignments for

  collection,” i.e. accounts payable, promissory notes, or contractual debt, are far more likely to be

  upheld than assignments of causes of action that are not for a sum-certain debt. See Sprint

  Communications, supra, at 269. (holding limited to legal claim for money owed); Adams, supra,



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  at 262 (refusing to permit assignment of claims for statutory penalties, penalties that are identical

  in nature to the $150,000 available under the Copyright Act for willful copyright infringement).

  Further, some causes of action—including copyright infringement claims—are per se

  unassignable. E.g., Silvers at 890 (“the Copyright Act does not permit copyright holders to

  choose third parties to bring suits on their behalf.”); Roberts v. Holland & Hart, 857 P.2d 492,

  495 (Colo. Ct. App. 1993) (holding legal malpractice claims unassignable).

  8.     An assignment for litigation incident to bona fide business operations of the assignee and

  assignor is likely to be upheld. E.g., SGS-Thomson, supra; Rawlings, supra; Vaupel, supra.

  9.     If the assignor‟s cooperation will be necessary or is expected in a subsequent lawsuit by

  assignee, the assignment is more likely to be held invalid. Adams at 264.

  10.    Creative attempts to use a valid-in-form assignment to accomplish a forbidden purpose

  are wholly ineffective. E.g., Palazzo v. Gulf Oil Corp., 764 F.2d 1381, 1385 (11th Cir. 1985)

  (corporation could not assign claims to an officer to bring them pro se); Jones v. Niagara

  Frontier Transp. Auth., 722 F.2d 20, 23 (2d Cir. 1983) (procedural device of an assignment

  cannot circumvent rules preventing a lay person from representing a corporation); Christiansen

  v. Melinda, 857 P.2d 345, 349 (Alaska 1993) (“A statutory power of attorney does not entitle an

  agent to appear pro se in his principal‟s place.”); Brown v. Unauthorized Practice of Law

  Comm., 742 S.W.2d 34, 42 (Tex. Ct. App. 1987) (contracts to act as plaintiffs‟ agent on a

  contingency to collect personal injury claims constituted the unauthorized practice of law).

  11.    Considerations of public policy and prudence are also relevant. E.g., Secretary of State of

  Md. v. Joseph H. Munson Co., 467 U.S. 947, 955 (1984) (“In addition to the limitations on

  standing imposed by Art. III‟s case-or-controversy requirement, there are prudential



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  considerations that limit the challenges courts are willing to hear. The plaintiff generally must

  assert his own legal rights and interests, and cannot rest his claim to relief on the legal rights or

  interests of third parties.”) (quotation omitted).

  12.     Even if the text is satisfactory, the claim is ordinarily assignable, and there are no

  unauthorized practice of law issues, courts can still go behind the language of an assignment and

  investigate the conduct and true intentions of the parties. If this investigation shows that the

  assignor retained some level of control or a power of revocation—even where the documents

  denied that power—the assignment is invalid. Adams, supra, at 263-65. Where the intent is

  lacking, the assignment fails. This appears to be, by far, the most important factor.

                 iii. ANALYZING THE RIGHTHAVEN OPERATION, FACTOR BY FACTOR.

          As to the first factor, the right of reversion in the SAA entirely defeats the idea that this is

  an “assignment” of any type. “[Assignor] shall have the right at any time to terminate, in good

  faith, any Copyright Assignment[.]” See SAA § 8, Ex. J at 4. A true assignment cannot be

  terminated, because it isn‟t a temporary condition. Assignments are permanent transfers from

  one party to another. The clear intention of Righthaven is to simply borrow rights—enough to

  sue over—and then return the copyright to the assignor after (or even during) the litigation. That

  transaction is simply not an assignment. The analysis is no different under the clarified SAA:

  “[Assignor] has, in its sole discretion, the option to repurchase the Copyright Assignment for a

  nominal amount within 14 days[.]” See Hoehn Dismissal, Ex. D at 10; see also SAA

  Clarification § 8.1, Ex. K at 2. The first factor, by itself, invalidates the assignment.

          The second factor requires that the assignor-assignee relationship not be one of master-

  servant. Righthaven cannot even come close on this factor. The SAA indicates that copyright



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  assignors “engage” Righthaven to undertake the pursuit of copyright infringement lawsuits. See

  SAA § 3.4, Ex. J at 3. Further, statements made to the media by officers of Righthaven‟s clients

  indicate that they ultimately control the litigation, not Righthaven. See Arkansas Democrat-

  Gazette Story, Ex. G at 3; New York Times Story, Ex. H at 3. Based on these facts, the second

  factor—by itself—invalidates the assignments.

         As to the third and fourth factors, the assignments in question are exclusively intended to

  enable litigation. See SAA § 3.4, Ex. J at 3. And payment for the assignments is entirely

  contingent on success in litigation. Id. at § 5, Ex. J. at 3 (remitting 50% net litigation proceeds to

  Righthaven client). The third and fourth factors weigh entirely against Righthaven.

         As to the fifth and sixth factors, all Righthaven does is file lawsuits. There is no other

  component to the Righthaven business. And Righthaven most certainly holds itself out as

  peculiarly qualified and equipped for filing lawsuits, calling itself “The Nation‟s Pre-Eminent

  Copyright Enforcer.” See Righthaven Website, Ex. L. The fifth and sixth factors also come down

  against Righthaven.

         With regard to the seventh factor, Righthaven does not file suit over contractual debt;

  these assignments are not for collection. They are assignments of copyright infringement claims,

  which are per se unassignable. The seventh factor is squarely against Righthaven.

         Under the eighth factor, where an assignment is made incident to bona fide business

  operations, it is likely to be upheld. But Righthaven engages in no bona fide business operations.

  Righthaven‟s operations are entirely limited to the prosecution of lawsuits. Righthaven‟s

  assignments are in no way incidental to some genuine mutual business, Righthaven‟s litigation

  over assignments is its business. Accordingly, the eighth factor weighs against Righthaven.



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          The ninth factor examines whether the assignor‟s cooperation with the assignee is

  needed or expected in the prosecution of a lawsuit, and if so, the assignment is more likely to be

  invalid. In this situation, Righthaven‟s SAA requires its clients to “cooperate fully and candidly

  with Righthaven with respect to the Infringement Action[.]” See SAA § 9.6, Ex. J at 6. This is

  irrefutable evidence that the relationship is not one of assignor-assignee. The ninth factor

  invalidates the assignment.

         The tenth factor examines whether a valid-in-form assignment is being used to creatively

  accomplish a forbidden purpose. While the Righthaven assignments are invalid, even if they

  somehow were valid, they are clearly intended to allow a non-law firm to engage in the practice

  of law and to allow a law-firm-in-disguise to have non-lawyer ownership and investment,

  something forbidden by the rules of professional conduct.

         In addition, and perhaps even more fundamentally, any assignment made by Righthaven

  in the future is nothing but a creative attempt to avoid the prohibition on assignments of the bare

  right to sue over copyright infringement. Righthaven‟s only purpose in life is to file copyright

  infringement claims, and any “assignment” purporting to provide any other rights is just an

  attempt to sneak past the Copyright Act‟s prohibition on right-to-sue assignments. That ipso

  facto invalidates the assignment. The tenth factor is squarely against Righthaven.

         The eleventh factor considers public policy and prudence. Judge Mahan has already held

  Righthaven‟s scheme to be offensive to public copyright policy: “[Righthaven]‟s litigation

  strategy has a chilling effect on potential fair uses of Righthaven-owned articles, diminishes

  public access to the facts contained therein and does nothing to advance the Copyright Act‟s

  purpose of promoting artistic creation.” Jama Summary Judgment, Ex. E at 7.



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         Another important policy consideration is that many if not all of Righthaven‟s lawsuits

  involve no or de minimis actual damages, and a substantial portion of them likewise involve no

  or de minimis infringement. So far as Amicus can determine, Righthaven—having sued

  approximately 500 defendants in 274 lawsuits over newspaper material—has yet to put forward a

  scintilla of evidence that either it or its clients suffered any actual damages.

         This is an astounding fact. Righthaven has demanded about $100,000 per case.8 That

  means that Righthaven has, in the aggregate, engaged the federal judiciary seeking

  approximately $50,000,000 in statutory damages without having yet shown one dime of actual

  damages. Neither the Copyright Act of 1976, as amended, nor the Judiciary Act of 1789, as

  amended, were intended to enable this sort of scheme.

         Assuming for the sake of argument that Righthaven‟s assignments are not fatally flawed,

  Amicus submits this is exactly the sort of situation where the federal judiciary should deny

  standing on prudential grounds. Righthaven‟s CEO Steve Gibson has hungrily stated his belief

  that there are millions if not billions of copyright infringements on the Internet9—and, obviously,

  he would dearly like to sue over each and every one. There is certainly a place in the world for

  copyright litigation, but Righthaven has made clear that it is institutionally incapable of

  distinguishing between real content pirates and unintentional infringement. In many cases,

  Righthaven can‟t even distinguish between infringement and obvious fair use.10



  8
     Early Righthaven cases sought $75,000 in statutory damages. Later Righthaven cases seek
  $150,000.
  9
     Gibson: “We perceive there to be millions, if not billions, of infringements out there[.]”
  Wired.com Story, Ex. I at 3.
  10
     For example, Righthaven‟s suit against the Democratic Underground website was over four
  paragraphs from a 34 paragraph story posted as part of a political discussion.


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         Righthaven‟s scheme visits real consequences on people totally disconnected from it. The

  federal judiciary does not have infinite resources to handle cases, and Righthaven‟s dime-store

  damages are, to put it bluntly, not worth this Court‟s time. The Righthaven cases have occupied

  this Court, all ten district judges in Nevada, four of the six magistrate judges in Nevada, a district

  judge and a magistrate judge in South Carolina, and two panels of the Ninth Circuit.

         How many real cases have been delayed as a result of Righthaven?11 And how many real

  cases would be delayed if Gibson‟s wish of millions or billions of copyright lawsuits comes true?

  Between active judges, senior-status judges still handling cases, and magistrate judges, there are

  at most about 2,000 individuals in the United States with the authority to adjudicate or partially

  adjudicate copyright suits. Gibson‟s plan is to saddle each of them with between a thousand and

  a million de minimis lawsuits each, all captioned “Righthaven v. . . .”

         The federal judiciary is not a national network of small claims courts. This is not to say

  the courthouse doors should ordinarily be closed to plaintiffs with small actual damages in

  federal question cases—such a decision should be reserved for the rarest of cases. But the law

  does not require the bench to turn a blind eye to Righthaven‟s special brand of nonsense. All

  Americans are equal before the law, but all lawsuits aren‟t. Denying standing to Righthaven as a

  matter of prudence is well within the sound discretion of the judiciary. Amicus submits that even

  11
     Even worse is that Righthaven‟s subterfuge regarding its assignments has caused a tremendous
  waste of judicial resources and the resources of Righthaven defendants. Righthaven defendants
  have, in the aggregate, probably spent close to a million dollars on legal fees so that their
  attorneys could defend on the traditional grounds of fair use, implied license, etc. Righthaven has
  already lost several cases on fair use. But now it turns out Righthaven never even had standing
  because its assignments are shams. It is no different than if a defendant spent a fortune defending
  a wreck case, got a defense verdict, then found out while walking out of the courtroom that the
  plaintiff had been lying the whole time about being in the other car. This is exactly what
  Righthaven has done, and Righthaven deserves the same sanction that the plaintiff in the
  hypothetical wreck case would get if that plaintiff did it to 500 different defendants.


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  if Righthaven ever managed to manufacture Article III standing—which, frankly, it cannot—a

  prudential denial would be completely appropriate.

         The twelfth factor relates to intent, and is by far the most important. No matter what an

  assignment says, if the intent of the parties is inconsistent with an absolute, unconditional, and

  complete transfer from assignor to assignee, the assignment fails. But Righthaven and its media

  clients in no way intend for Righthaven to get an absolute, unconditional, or complete transfer of

  anything. It is beyond dispute at this point that Righthaven‟s intent is not to be an assignee but

  merely to look like one to all the world—and to the federal judiciary—while, in truth, the only

  “rights” Righthaven had were merely on loan. Righthaven‟s assignments aren‟t just run-of-the-

  mill shams, they are quintessential, blue-ribbon examples. And the fact that Righthaven clients

  have reversionary rights doesn‟t just doom the original SAA and its clarification, it dooms the

  entire enterprise now and forever. Words can be changed far more easily than intent.

         Righthaven‟s next tactic is to simply rewrite its assignments until it hits upon the magic

  words that give it standing under the Copyright Act. See Righthaven Response to Amici, Ex. F at

  5 n.1. But when an assignment is the basis for standing, magic words aren‟t enough. Not only do

  the parties have to recite a permanent, unconditional transfer—they actually have to mean it. But

  Righthaven doesn‟t, and it never will.12



  12
     Actually, Righthaven likely doesn‟t care one way or another. Righthaven‟s media clients are
  almost certainly the obstacle to Righthaven obtaining genuine assignments. Righthaven‟s clients
  are newspapers who rightly value the integrity of their archives. The Denver Post and the Las
  Vegas Review-Journal don‟t want their archives compromised by permanent, piecemeal
  assignments to a third party for litigation that is ephemeral compared to the lifetime of a
  newspaper. But they can‟t have it both ways—either the archives are compromised, or the
  assignments are shams. The fundamental failure of Righthaven lies in the need of its media
  clients to have their cake and eat it too. The law of assignment simply does not allow that.


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         Even if Righthaven came to court tomorrow with an assignment of all right, title, and

  interest containing no reversionary language whatsoever, the practices of Righthaven and its

  clients for the past year and a half would be a millstone around Righthaven‟s neck that could

  never be removed. At this point, Righthaven cannot ever make a satisfactory showing that an

  assignment isn‟t a sham. Righthaven can‟t ever show13 that it doesn‟t have a backroom deal with

  its media client to transfer the copyright back after the lawsuit is over. They‟ve already done it.

  Their only mistake was that they put it in writing, and they won‟t make that mistake again.

         Regarding the twelfth factor, the intent of the parties is clear in this case. Frankly, not

  only do Righthaven and its clients lack the requisite intent to assign, they actually posses a clear

  intent to enter into sham assignments.14 Accordingly, the twelfth factor—the most important

  factor—destroys the entire Righthaven operation, now and forever.



  13
     Amicus does not intend to raise the idea of burden shifting. But it seems clear, at least as a
  practical matter, that the burden is squarely on Righthaven from this point forward to prove that
  future assignments aren‟t shams. That burden is one Righthaven can never meet.
  14
     Comparing the Righthaven enterprise with the other cases cited in this brief leads to an
  interesting conclusion: Righthaven is a rare and possibly unique example of a sham assignee who
  actively sought to suppress evidence of the sham assignment. Righthaven‟s failure to file proper
  financial disclosures coupled with its aggressive objection to releasing the original SAA show
  that Righthaven appreciated the illegality of its conduct and pressed on. In the cases cited in this
  brief, most if not all of the parties found to have gone over the line did so unintentionally and
  never made any attempt to hide what they were doing. By and large, those parties were operating
  in good faith and unknowingly and unintentionally ended up on the wrong side of the law.
  Righthaven has in no way operated in good faith, instead trying to suppress all evidence of the
  true nature of its transactions so that it could continue its sham modus operandi. Righthaven‟s
  uniqueness on this point is not enviable. See Democratic Underground Dismissal, Ex. B at 10
  (finding Righthaven breached its duty of candor to the federal judges in Nevada, and in so doing
  induced them to make procedural rulings in Righthaven‟s favor: “As the undersigned issued one
  of the orders Righthaven cites [to support its standing arguments], the undersigned is well aware
  that Righthaven led the district judges of this district to believe that it was the true owner of the
  copyright in the relevant news articles. Righthaven did not disclose the true nature of the
  transaction[.]”)


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         Out of the twelve factors courts appear to use in determining whether an assignment is a

  representation agreement in disguise, every single one is is squarely against Righthaven. Several

  of the factors are—by themselves—independently fatal to Righthaven. Accordingly, it is crystal

  clear that the Righthaven assignments are void. Righthaven is not a bona fide assignee, it is a law

  firm in disguise. Its assignors aren‟t giving up their rights, they are retaining counsel. As a result,

  Righthaven has no standing to pursue this action or any other.

                        D. State law can invalidate a copyright assignment.

         At first blush, it may seem unusual that state law plays a role in determining the validity

  of a copyright assignment. But on general matters of contract law, state law provides the rule of

  decision in copyright cases:

         The only state “laws” applied by the court below were Georgia rules of contract
         construction. While the context of copyright law in which the agreement exists
         cannot be overlooked, application of Georgia rules to determine parties‟
         contractual intent is not preempted by either copyright act nor does their
         application violate federal copyright policy. . . . Cf. Aronson v. Quick Point Pencil
         Co., 440 U.S. 257 [] (1979) (state law is not displaced merely because contract
         relates to intellectual property). It is possible to hypothesize situations where
         application of particular state rules of construction would so alter rights granted
         by the copyright statutes as to invade the scope of copyright law or violate its
         policies. We need not, however, set forth these extreme situations for it is clear
         that the application of Georgia rules of construction in the case at bar is not one of
         them.

  Fantastic Fakes, Inc. v. Pickwick Int’l, Inc., 661 F.2d 479, 483 (5th Cir. 1981).

         The law of assignment is a subset of contract law, therefore state law can most certainly

  invalidate a copyright assignment, unless the state law in question violates federal copyright

  policy. The particular “law of assignment” implicated here relates to the impropriety of

  assignments that are actually representation agreements, a matter wholly unrelated to federal

  copyright policy and squarely within the purview of traditional state authority.


                                                    36
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           Nothing in the Copyright Act or embodied in any federal copyright policy discloses an

  intention to displace state law on sham assignments or unauthorized practice. In fact, the

  Righthaven operation threatens federal copyright policy. As Judge Mahan noted, “[Righthaven]‟s

  litigation strategy has a chilling effect on potential fair uses of Righthaven-owned articles,

  diminishes public access to the facts contained therein and does nothing to advance the

  Copyright Act‟s purpose of promoting artistic creation.” Jama Summary Judgment, Ex. E at 7.

           State assignment law provides the rule of decision on the matters raised in this brief, and,

  so far as Amicus can determine, every single state invalidates sham assignments that are actually

  representation agreements. Accordingly, Righthaven‟s assignments must be declared void.

                                                E. Why?

           The Court may wonder—as have many Righthaven observers—why Righthaven could

  not simply operate as a law firm. After all, Righthaven‟s cases are not filed pro se, so why take

  the risk of the whole scheme being declared illegal? The answer is as simple as it is green:

  money.

           Righthaven is a for-profit business that needed investors to float venture capital to get it

  started. No American jurisdiction authorizes this arrangement with law firms—non-lawyers

  cannot invest in law firms, nor can lawyers split fees with non-lawyers. E.g., Colo. RPC 5.4(a)

  (“A lawyer or law firm shall not share legal fees with a nonlawyer[.]”); see also

  D.C.COLO.LCivR 83.4 and Administrative Order 2007-6 (D. Colo. 2007) (adopting Colo. RPC

  5.4 for matters in U.S. District Court for the District of Colorado).

           While these rules are sometimes criticized with free market arguments, Righthaven

  demonstrates the wisdom of those restrictions. Righthaven is a lawsuit mill, and the demands of



                                                   37
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  its investors have clearly created an environment where its attorneys have dispatched with the

  quaint notions of properly investigating lawsuits prior to filing, avoiding misrepresentations to

  courts, acting with due regard for the rights of unrepresented opponents, etc.

         The idea of professional responsibility is entirely lacking in the Righthaven enterprise,

  and understandably so, because it is not a professional company. Instead of being a respectable

  law firm, Righthaven calls itself an “enforcer.” And that is certainly what Righthaven is, in the

  most pejorative sense of the term. Righthaven‟s complaints are not requests for courts to

  remediate injustice, they are clubs used to extract settlement dollars from Righthaven targets.

         Consider a world where Righthaven‟s scheme is legitimate. Every law school in the

  country should close its doors and every state bar should begin winding up its affairs. Anyone

  who is not a licensed practitioner can strike a deal with anyone holding an actionable claim: “Has

  someone injured you? Damaged your property? Call the Abe Jackson Assignment Firm at 1-800-

  GET-CASH! Assign Abe your claims. We handle the lawsuit, and we give you two-thirds of the

  recovery. Over 20 years practicing assignment in state and federal court. We don‟t get paid

  unless you get paid!” It is not an exaggeration to say that this imaginary ad is precisely what

  Righthaven does.

         Righthaven has filed 275 lawsuits against approximately 500 defendants and promises to

  file many more, holding itself out as “The Nation‟s Pre-Eminent Copyright Enforcer.” Copyright

  is a legal right, and a business whose sole occupation is the enforcement of legal rights in court is

  necessarily either a law firm or a business engaged in the unauthorized practice of law.

  Righthaven is the latter.




                                                   38
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                                                 III.

                                  RIGHTHAVEN INTENDS TO

                           ENDLESSLY ALTER ITS ASSIGNMENTS

         In all Righthaven cases, a standing decision based exclusively in copyright law will

  simply send Righthaven back to the drawing board. Righthaven will rewrite its assignments over

  and over until it finds the magic words that give it standing under the Copyright Act. In fact,

  Righthaven‟s CEO Steve Gibson has stated during an interview that the entire purpose of the

  federal judiciary‟s investigation of the standing issue is to give guidance to Righthaven (and

  Righthaven competitors) as to what their “documentation” should be in these kinds of cases.15

         Righthaven‟s conduct matches Gibson‟s statements. In Righthaven v. Democratic

  Underground, Righthaven‟s complaint was dismissed because the assignment did not confer

  standing under the Copyright Act. See generally Democratic Underground Dismissal, Ex. B. So

  Righthaven retooled its assignments to try to get just enough of a peppercorn of rights to provide

  standing under the Copyright Act. E.g., SAA Clarification, Ex. K.

         In fact, Righthaven has now petitioned for intervention in Democratic Underground, the

  very case where its own complaint was just dismissed, based on the rewritten assignment. See

  generally Righthaven Intervention, Ex. C. Dismissing Righthaven based on a lack of standing

  pursuant to the Copyright Act will simply cause each and every one of the pending cases in this


  15
    Gibson: “The hardworking federal judges are saying: „This type of documentation needs to be
  enhanced.‟” See Gibson Interview at 5:43, available at www.lasvegassun.com/videos/2011/
  jun/22/5268/. “I think what the judges are saying is „listen, folks, Righthaven is filing a lot of
  lawsuits.‟ They understand that we‟re potentially genuine with respect to upholding copyrights.
  They don‟t want to see Righthaven competitors potentially come on with not solid
  documentation, and they‟re giving us guidance as to what the documentation should be.” Id. at
  8:13.


                                                 39
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  District to be refiled based on yet another insincere amendment of the assignments in question.

         And if this Court found the “documentation” to be insufficient in any refiled cases, even

  that won‟t be the end of it. A recent filing in Righthaven v. Pahrump Life indicates Righthaven

  will just keep rewriting its agreements over and over again:

         As set forth in its previous memorandum, Righthaven believes that the original
         Assignment and SAA between Righthaven and Stephens Media were sufficient to
         give Righthaven standing to sue. But since this Court issued its Order to Show
         Cause, another court in this District has held that these agreements failed to effect
         a copyright assignment to Righthaven. While Righthaven respectfully disagrees
         with Judge Hunt‟s decision, it will not burden this Court with those arguments
         and will instead address its arguments to the Amendment. Another court in this
         District has also recently held that Righthaven lacks standing, even under the
         Amendment. Righthaven disagrees with that decision and intends to appeal.
         Nonetheless, Righthaven and Stephens Media are considering further amending
         their agreements in order to prevent other courts from erroneously concluding that
         Righthaven lacks standing. If and when the parties do so, they will promptly
         provide the Court with all amended agreements.

  Righthaven Response to Amici, Ex. F at 5 n.1. After writing this, Righthaven has now issued a

  second amendment of the Stephens Media SAA.

         Righthaven‟s quest for the magic words won‟t stop there. If the newest version of the

  SAA fails to satisfy the dictates of copyright law, Righthaven will keep trying again and again

  until it finds some set of insincere recitations that give it standing under the Copyright Act. It‟s a

  wonder Righthaven‟s pleadings don‟t end with “abracadabra.”

         The simple truth is this: Righthaven is in an impossible situation. Its clients can‟t assign

  the bare right to sue, because the Copyright Act won‟t let them. But they are clearly unwilling to

  assign Righthaven any actual rights to the copyright, because they want to continue to exploit the

  material Righthaven sues over by leaving it on their websites, keeping it in their archives, etc.

  Righthaven and its clients cannot ever make the Righthaven scheme work.



                                                   40
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                                                   IV.

               RIGHTHAVEN’S CLIENT RELATIONSHIPS HAVE ALREADY

                     BEEN FOUND IMPERMISSIBLY REPRESENTATIVE

        A. July 14, 2011 Sanctions Hearing in Righthaven v. Democratic Underground

         In June of 2011, Judge Hunt of the District of Nevada indicated his belief that Righthaven

  had made intentional misrepresentations to the federal courts in all Righthaven cases. This

  statement was made in the context of issuing an order to show cause to Righthaven threatening

  sanctions for the conduct. That order to show cause was part of the order dismissing

  Righthaven‟s complaint in Righthaven v. Democratic Underground.

         On July 14, 2011, Judge Hunt conducted a hearing on the order to show cause. Judge

  Hunt sanctioned Righthaven and made findings that are highly relevant to all Righthaven cases.

  Judge Hunt found:

  1.     That Righthaven is an unlicensed law firm with a contingent fee agreement masquerading

  as a company.16

  2.     That Righthaven made intentional misrepresentations to the federal courts as to the nature

  of its client relationship and the rights it held under the copyright “assignments.”17

  3.     That Righthaven “claimed that it had various exclusive rights when it knew that the



  16
     Media covering the matter reported that when Judge Hunt began to issue his ruling, he stated:
  “In the court‟s view, the arrangement between Righthaven and Stephens Media is nothing more,
  nor less, than a law firm—which incidentally I don‟t think is licensed to practice law in this
  state—with a contingent fee agreement masquerading as a company.” Righthaven is not a law
  firm and does not claim to be a law firm.
  17
     Media reports also indicated that after discussing Righthaven‟s misrepresentations regarding
  its client relationships, Judge Hunt stated: “The court finds those representations are not true and
  that they are intentional.”


                                                   41
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  ability to exercise those rights were retained exclusively by [its client].”18

  4.      That “The representations about the [Righthaven-client] relationship and the rights of

  Righthaven were misrepresentations. They were misleading.”

  5.      That Righthaven‟s failure to disclose the true nature of its client relationship was “not

  negligence.”

  6.      That Righthaven‟s intentional failure to disclose the true nature of its client relationship

  was part of a “concerted effort to hide [the client‟s] role in this litigation.”

  7.      That “having looked at all this evidence, [the Court] finds that [Righthaven‟s statements]

  are intentionally untrue.”

          Judge Hunt issued a monetary sanction against Righthaven and further ordered

  Righthaven to provide certain materials to every court currently handling a Righthaven case.

  Specifically, Righthaven has been ordered to provide all courts with: (1) the order to show cause;

  (2) a complete copy of the transcript of the July 14, 2011, hearing; and (3) any written order

  subsequently issued by Judge Hunt connected with these matters.

             B. Statement Made by Former Stephens Media CEO Sherman Frederick

          Purely by coincidence, just hours before the hearing described above, former Stephens

  Media CEO Sherman Frederick made a public statement that is also extremely relevant to the

  foregoing matters. A bit more background information is necessary to paint the full picture of the

  Frederick statement.

          Many Righthaven targets are political speakers. In addition to the Democratic

  Underground website, Righthaven has sued a variety of political organizations. A

  18
    This statement and subsequent statements are as reported by other attorneys present in the
  Nevada courtroom.


                                                     42
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  disproportionate number of the earlier suits were against organizations in Nevada, which makes

  sense given Righthaven‟s home base is Las Vegas and the early lawsuits are all based on

  material appearing in the Las Vegas Review-Journal. Accordingly, in 2010, Righthaven sued the

  Progressive Leadership Alliance of Nevada,19 the Democratic Party of Nevada,20 and the

  Republican U.S. Senate nominee from Nevada, Sharron Angle.21

         All of these Righthaven cases were filed while Sherman Frederick was still CEO of

  Stephens Media. The suits were over material appearing in the Las Vegas Review-Journal, a

  newspaper owned by Stephens Media. As with each Righthaven case, Stephens Media was not a

  plaintiff—Righthaven was the sole plaintiff. About a month after the Angle suit was filed,

  Sherman Frederick vacated the position as CEO of Stephens Media and became an opinion

  columnist and blogger with the Las Vegas Review-Journal, a position he still occupies.

         Frederick‟s columns and blog posts sometimes involve political topics. In addition to

  writing the columns and blog posts, Frederick will sometimes engage in back-and-forth

  discussions with people who post comments on the blog. Unlike other commenters, Frederick‟s

  comments are highlighted on his blog with a yellow background and are designated as being

  written by “Sherm.”




  19
     Righthaven v. Progressive Leadership Alliance of Nevada, 2:10-cv-00637-RLH-RJJ (D. Nev.)
  (filed May 4, 2010).
  20
     Righthaven v. Democratic Party of Nevada, 2:10-cv-01129-KJD-PAL (D. Nev.) (filed July 9,
  2010).
  21
     Righthaven v. Angle, 2:10-cv-01511-RLH-RJJ (D. Nev.) (filed September 3, 2010).


                                                 43
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         On July 14, 2011, Frederick authored a blog post about Sharron Angle and media

  reaction to her unsuccessful Senate campaign. This post is attached as Exhibit M.22 The Angle

  posting elicited comments, and Frederick responded to several of the comments. In one of those

  responses, Frederick referenced the Righthaven lawsuit against Sharron Angle:




         Frederick‟s remark, “I even sued her for lifting our material”, is a statement that is of

  substantial relevance to Defendant‟s claims that the Righthaven-client relationship is a sham. It

  constitutes a public admission by Stephens Media‟s then-CEO that he—and by extension,

  Stephens Media—was truly in control of the Righthaven litigation. It is ironic that several hours

  before Judge Hunt‟s sanctions hearing, Sherman Frederick made a public statement confirming

  everything that Judge Hunt would find later that same day.




  22
     The yellow highlighting is imperceptible on Exhibit 1 for technical reasons, though it appears
  clearly on the Internet and in the excerpt on the next page. The post is presently available at
  http://www.lvrj.com/blogs/sherm/Angle_haters_No_proof_no_reporting.html.


                                                 44
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                                                 V.

                                          CONCLUSION

         Given Righthaven‟s publicly expressed plans to subject its targets to endless litigation

  over injuries it did not suffer for claims it does not own, Amicus respectfully submits that a

  decision on the grounds asserted in this brief would not only be a perfectly legitimate basis for

  deciding the standing issues in this case, it would provide a sorely needed permanent resolution

  to the Righthaven cases.

         Amicus requests this Court specifically find Righthaven lacks standing because the

  “assignment” is actually a representation agreement. Such an assignment is void ab initio.

  Righthaven therefore lacks standing because the agreement which purports to provide it with

  standing is void. A ruling on this basis will give clarity and finality to all parties, including

  Righthaven. Given Righthaven‟s expressed intention to keep tinkering with its assignments until

  it finds magic words that keep it in court, this sort of ruling would save inordinate amounts of

  judicial resources and the resources of the parties, again including Righthaven. And as described

  above, Righthaven has already been found to be an unauthorized law firm impermissibly—and

  secretly—representing clients under the sham that it is pursuing its own claims.

         Additionally, such a ruling would give Righthaven the guidance it claims to seek as to

  how copyright cases can be pursued by third-party copyright enforcers. Such a practice is

  perfectly legitimate when such claims are brought by bona fide law firms representing bona fide

  clients. Amicus Citizens Against Litigation Abuse respectfully requests this Honorable Court

  decide this matter on the grounds asserted in this brief—for everyone‟s benefit, including

  Righthaven‟s.



                                                 45
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       Respectfully submitted this 19th day of July, 2011.

                                                 s/J. Todd Kincannon
                                                J. TODD KINCANNON, S.C. BAR NO. 76235
                                                THE KINCANNON FIRM
                                                Post Office Box 7901
                                                Columbia, South Carolina 29202
                                                Office:    877.992.6878
                                                Fax:       888.704.2010
                                                Email:     Todd@TheKincannonFirm.com
                                                Attorney for Citizens Against Litigation Abuse




                                              46
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                                  CERTIFICATE OF SERVICE

         On this 19th day of July, 2011, a true and correct copy of the foregoing AMICUS

  CURIAE BRIEF OF CITIZENS AGAINST LITIGATION ABUSE, INC. was filed via the

  CM/ECF system and a notice of such filing sent to:

     Attorneys for Plaintiff                       Attorneys for Defendant

     STEVEN G. GANIM, ESQ.                         ANDREW J. CONTIGUGLIA
     RIGHTHAVEN LLC                                CONTIGUGLIA & FAZZONE, P.C.
     4475 South Pecos Road                         400 South Colorado Boulevard, #830
     Las Vegas, Nevada 89121                       Denver, Colorado 80246
     Office: 702.527.5900                          Office: 303.780.7333
     Fax: 702.527.5909                             Fax: 303.780.7337
     Email: sganim@righthaven.com                  Email: ajc@ajcpc.com

     SHAWN A. MANGANO, ESQ.                        MARC J.RANDAZZA
     SHAWN A. MANGANO, LTD.                        JASON A.FISCHER
     9960 WEST CHEYENNE AVENUE, SUITE 170          J. MALCOLM DEVOY IV
     LAS VEGAS, NEVADA 89129-7701                  RANDAZZA LEGAL GROUP
     Office: 702.304.0432                          7001 W. Charleston Boulevard, #1043
     Fax: 702.922.3851                             Las Vegas, Nevada 89117
     Email: shawn@manganolaw.com                   Office: 888.667.1113
                                                   Fax: 305.437.7662
                                                   Email: mjr@randazza.com
                                                   Email: jmd@randazza.com


         I hereby certify the foregoing this 19th day of July, 2011.

                                                    s/J. Todd Kincannon
                                                   J. TODD KINCANNON
                                                   THE KINCANNON FIRM




                                                  47
Case 1:11-cv-00830-JLK Document 21-3   Filed 07/19/11 USDC Colorado Page 1 of 6




           Exhibit A
     to CALA’s Amicus Brief


                     Order
                 Unsealing SAA
Case 1:11-cv-00830-JLK Document 21-3 Filed 07/19/11 USDC Colorado Page 2 of 6
     Case 2:10-cv-01356-RLH -GWF Document 93 Filed 04/14/11 Page 1 of 5




 1

 2

 3

 4                              UNITED STATES DISTRICT COURT
 5                                       DISTRICT OF NEVADA
 6                                                    ***

 7   RIGHTHAVEN LLC,                          )
                                              )
 8                         Plaintiff,         )             Case No. 2:10-cv-1356-RLH-GWF
                                              )
 9            vs.                             )                        ORDER
                                              )                   (Request to Unseal–#85)
10   DEMOCRATIC UNDERGROUND, LLC, )                               (Motion to Strike–#87)
     a District of Columbia limited-liability )
11   company, and DAVID ALLEN, an             )
     individual,                              )
12                                            )
                           Defendants.        )
13   ____________________________________)
                                              )
14   DEMOCRATIC UNDERGROUND, LLC, )
     a District of Columbia limited-liability )
15   company,                                 )
                                              )
16                         Counterclaimant,   )
                                              )
17            vs.                             )
                                              )
18   RIGHTHAVEN LLC, a Nevada Limited- )
     liability compamy; and and STEPHENS      )
19   MEDIA LLC, a Nevada limited liability    )
     company,                                 )
20                                            )
                           Counterdefendants. )
21   ____________________________________)

22                  Before the Court is Defendants Democratic Underground, LLC and David Allen’s

23   Request to Unseal Exhibit A to Pulgram Declaration and Related Filings [dkt ## 74, 79] (#85,

24   filed March 29, 2011). Plaintiff Righthaven filed a Response and Request for Order to Show Cause

25   (#88) on March 30, 2011. Defendant filed an opposition to the next motion to be discussed which the

26   Court considers to also be a reply in support of this Request (see #90).

                                                        1
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     Case 2:10-cv-01356-RLH -GWF Document 93 Filed 04/14/11 Page 2 of 5




 1                  Contemporaneous to it Response and Request identified above, and in the same

 2   document, Counter-Defendant Stephens Media filed a Motion to Strike Defendants’ Request to

 3   Unseal (#87, filed March 30, 2011). Plaintiff Righthaven filed a Joinder to the Motion (#89) on

 4   March 30, 2011. Defendants filed an Opposition to the Motion to Strike and a Response (Reply) to

 5   its Request to Unseal (#90) on March 31, 2011. Stephens Media filed a Reply (#91) on April 11,

 6   2011, which was Joined (#92) by Righthaven.

 7                  Defendant’s Request to Unseal is based on the fact that when the Court permitted the

 8   Defendants’ Supplemental Memorandum to be filed under seal, it directed the parties, within 14 days,

 9   to either file a stipulation as to which portions would remain under seal or Stephens Media and

10   Righthaven will file their justification for retaining the documents in question under seal. Defendants

11   immediately made overtures to obtain a stipulation, but were immediately rebuffed by Righthaven and

12   Stephens Media. Defendant waited 21 days, a week longer than the Court’s Order required, and then,

13   having received no justification for keeping the documents under seal made the Request presently

14   before the Court.

15                  Righthaven and Stephens Media’s Response, and the basis for their Motion to Strike,

16   is that the procedure required in this Court’s Order “subverted the terms of the Stipulated Protective

17   Order” because it provided for a different procedure for requesting that confidential documents be

18   unsealed.

19                  They argue that Paragraph 19 of the Stipulated Protective Order require:

20   1.     If the parties disagree over the designation, they are to negotiate in good faith regarding the

21          Designated Material. The uncontested facts are that Defendants tried to negotiate in good

22          faith, but Righthaven and Stevens Media refused to do so.

23   2.     The Challenging Party then objects to the designation.

24   3.     The Designating Party then modifies or refuses to modify the designation. It is noted that a

25          refusal to modify was made, suggesting that there was an “objection” to the designation as

26          required.

                                                        2
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     Case 2:10-cv-01356-RLH -GWF Document 93 Filed 04/14/11 Page 3 of 5




 1   4.     The Challenging Party then makes a motion seeking a determination of whether the designated

 2          material is entitled to protection, with the Designating Party bearing the ultimate burden of

 3          proving that the material was entitled to protection, with the documents being treated as

 4          designated until the motion is decided. In fact, the documents have continued to be treated as

 5          designated to the present.

 6                  It appears that Righthaven and Stephens Media’s objection is that the designated

 7   documents were filed, albeit in a sealed condition, with a motion where Defendants had “slip[ped] a

 8   paragraph into the proposed order,” before any attempt at negotiation or formal objection, and was

 9   followed three weeks later by a request to unseal, does not constitute a motion as required by the

10   Protective Order. Their argument puts form over substance, chronology over obligation.

11                  Righthaven and Stephens Media accuse Defendants of being underhanded by

12   proposing the 14-day response period in the Court’s Order permitting the filing under seal. There was

13   nothing underhanded done at all. The proposed order was filed. The Court’s Order was also served

14   on Righthaven and Stephens Media. Unless they confess to not reading, or ignoring, this Court’s

15   Order, their lament is not persuasive.

16                  Righthaven and Stephens Media also accuse Defendants’ counsel (who, they make a

17   point of reminding the Court, are from out-of-town) of disingenuous gamesmanship. They demand

18   the Court issue an Order to Show Cause why Defendants should not be held in contempt for violating

19   the Protective Order. It is this demand that is disingenuous. This Court entered the Protective Order.

20   This Court certainly has the authority to modify its procedures as it sees fit, which it did in establish-

21   ing provision for the filing of the Supplemental Memorandum, because of the lateness of the

22   disclosure by Righthaven and Stephens Media, and the potential imminent decision on the Motion to

23   Dismiss and the Motion for Summary Judgment.

24                  The use of phrases, in the Motion to Strike, such as “underhanded,” “a ruse,”

25   “blatantly ignored,” “brazen attempt,” “fumbling attempt,” “purposefully muddle,” and “Defendants’

26   complaint reeks of hypocrisy,” is a very unprofessional attempt to attack counsel rather than address

                                                          3
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     Case 2:10-cv-01356-RLH -GWF Document 93 Filed 04/14/11 Page 4 of 5




 1   the issues. There is an old adage in the law that, if the facts are on your side, you pound on the facts.

 2   If the law is on your side, you pound on the law. If neither the facts nor the law is on your side, you

 3   pound on the table. It appears there is a lot of table pounding going on here.

 4                  There has been presented absolutely no basis to strike the Request to Unseal, and that

 5   motion will be denied.

 6                  Addressing the issue of whether the Request to Unseal should be granted, the Court

 7   confesses that its initial evaluation caused it to lean in favor of keeping the use of the Designated

 8   Materials limited to this case, i.e., keeping them sealed, except as to those who should have access to

 9   them in the pursuit or defense of this case. As I have read these and other motions in this case, and

10   considered the multitude of cases filed by Righthaven, on the claimed basis that Righthaven owns the

11   copyrights to certain Stephens Media copy, it appears to the Court that there is certainly an interest

12   and even a right in all the other defendants sued by Plaintiff to have access to this material. Further-

13   more, because these cases have generated a great deal of public interest, particularly in the media and

14   on the internet, that there is a right of the public to this information which overrides any claimed

15   confidential commercial rights.

16                  First, Righthaven and Stephens Media fail to even attempt at a justification for

17   confidentiality in their response to the Request to Unseal. They only make a feeble attempt at

18   justification in their Replies in support of their Motion to Strike. In Stephens Media Reply it is only

19   addressed as part of one paragraph. In Righthaven’s Reply it is addressed in only one and one-half

20   paragraphs.

21                  The concerns raised are (1) it would impair Righthaven’s ability to negotiate similar

22   agreements with other clients and provide invaluable insight to Righthaven’s competitors regarding

23   the way it structures client contracts. (There is no evidence of any other potential clients.), (2) it

24   would make available to direct competitors of Righthaven the nature of its negotiated contracts and

25   give them an unfair advantage. (They allege that a defendant in another of their lawsuits “appears to

26   be based upon the Righthaven’s business model,” i.e., Hush-Hush Entertainment, Inc. As a defendant

                                                          4
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     Case 2:10-cv-01356-RLH -GWF Document 93 Filed 04/14/11 Page 5 of 5




 1   in one of their cases, Hush-Hush certainly would have the right to obtain this same information), and

 2   (3) dissemination of the information would be published by Stephens Media competitor, the Las

 3   Vegas Sun newspaper, and would be disseminated widely throughout the internet. (The Las Vegas

 4   Sun and the internet have already widely disseminated articles about Righthaven’s numerous lawsuits

 5   in this district and also the various favorable and adverse rulings that have been rendered.) This

 6   substantiates the public interest in this matter and this information, which has been generated by

 7   Righthaven and Stephens Media’s own actions.

 8                  The right of other defendants in Righthaven’s lawsuits, and of the public to understand

 9   the full facts regarding the bases for Righthaven and Stephens Media’s actions, outweighs the feeble

10   concerns noted above.

11                  IT IS THEREFORE ORDERED that Request to Unseal Exhibit A to Pulgram

12   Declaration and Related Filings [dkt ## 74, 79] (#85) is GRANTED.

13                  IT IS FURTHER ORDERED that Stephens Media’s Motion to Strike Defendants’

14   Request to Unseal (#87) and Righthaven’s Joinder (#89) thereto, are DENIED.

15                  Dated: April 14, 2011.

16

17                                                          ____________________________________
                                                            Roger L. Hunt
18                                                          Chief United States District Judge

19

20

21

22

23

24

25

26

                                                        5
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           Exhibit B
     to CALA’s Amicus Brief


                     Democratic
                    Underground
                      Dismissal
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              1
              2
              3
              4
              5
              6
              7
                                          UNITED STATES DISTRICT COURT
              8
                                                   DISTRICT OF NEVADA
              9
          10                                                    ***
          11      RIGHTHAVEN LLC, a Nevada limited-liability )        Case No.: 2:10-cv-01356-RLH-GWF
                  company,                                        )
          12                                                      )              ORDER
                                         Plaintiff,               )
          13                                                      )    (Motion for Voluntary Dismissal
                           vs.                                    )     with Prejudice–#36; Motion to
          14                                                      )     Dismiss or Strike–#38; Motion
                  DEMOCRATIC UNDERGROUND, LLC, a                  )      for Summary Judgment–#45)
          15      District of Columbia limited-liability company; )
                  and DAVID ALLEN, an individual,                 )
          16                                                      )
                                         Defendants.              )
          17      _______________________________________)
                                                                  )
          18      DEMOCRATIC UNDERGROUND, LLC, a                  )
                  District of Columbia limited-liability company, )
          19                                                      )
                                         Counterclaimant,         )
          20                                                      )
                           vs.                                    )
          21                                                      )
                  RIGHTHAVEN, LLC, a Nevada limited-              )
          22      liability company; and STEPHENS MEDIA           )
                  LLC, a Nevada limited-liability company,        )
          23                                                      )
                                         Counterdefendants.       )
          24      _______________________________________)

          25      /

          26      /


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              1                   Before the Court is Plaintiff/Counterdefendant Righthaven LLC’s Motion for
              2   Voluntary Dismissal with Prejudice (#36, filed Aug. 10, 2010). The Court has also considered
              3   Defendant/Counterclaimant Democratic Underground, LLC and David Allen’s (collectively
              4   “Democratic Underground”) Opposition (#44, filed Dec. 7, 2010), and Righthaven’s Reply (#57,
              5   filed Jan. 7, 2011).
              6                   Also before the Court is Counterdefendant Stephens Media LLC’s Motion to
              7   Dismiss or Strike (#38, filed Nov. 17, 2010). The Court has also considered the Democratic
              8   Underground’s Opposition (#46, filed Dec. 7, 2010), and Stephens Media’s Reply (#56, filed Jan.
              9   7, 2011).
          10                      Also before the Court is Democratic Underground’s Motion for Summary
          11      Judgment (#45, filed Dec. 7, 2010). The Court has also considered Righthaven’s Opposition
          12      (#58, filed Jan. 8, 2011), and Democratic Underground’s Reply (#62, filed Jan. 28, 2011).
          13                      Finally, the Court allowed and ordered supplemental briefing relevant to the three
          14      motions under consideration because of important evidence that only came to light after these
          15      motions were fully briefed. Accordingly, the Court has considered Democratic Underground’s
          16      Supplemental Memorandum Addressing Recently Produced Evidence (#79, filed Mar. 9, 2011),
          17      Stephens Media’s Response (#99, filed May 9, 2011), Righthaven’s Response (#100, filed May 9,
          18      2011), and Democratic Underground’s Replies (##107 and 108, filed May 20, 2011).
          19                                               BACKGROUND
          20                      This dispute arises out of Democratic Underground’s allegedly copyright infringing
          21      conduct. About May 13, 2010, a Democratic Underground user posted a comment on Democratic
          22      Underground’s website which included a portion of a Las Vegas Review-Journal (“LVRJ”) article
          23      about Nevada politics, particularly about the Tea Party effect on Sharon Angle’s senatorial
          24      campaign (the “Work”). The posting included a link to the full article and the LVRJ’s website.
          25      As such, Democratic Underground displayed this selection from the article on its website and
          26      Righthaven claims that this infringed on the copyright.


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              1                  Righthaven claims that after the Work was posted on Democratic Underground’s
              2   website, it purchased the copyright to the Work from Stephens Media, the owner of the LVRJ,
              3   along with the right to sue for past infringement. (Dkt. #102, Decl. of Steve Gibson, Ex. 1,
              4   Copyright Assignment (hereinafter referred to as the “Assignment”).) Righthaven then registered
              5   the copyright with the United States Copyright office. Thereafter, Righthaven sued Democratic
              6   Underground alleging copyright infringement. Democratic Underground, in turn, filed a
              7   counterclaim for a declaratory judgment of non-infringement against both Righthaven and
              8   Stephens Media, which was not originally a party to this case. Righthaven has since filed a motion
              9   for voluntary dismissal with prejudice due to an adverse fair use ruling by the Honorable Larry R.
          10      Hicks, United States District Judge for this district (Righthaven is appealing that decision),
          11      Stephens Media has filed a motion to dismiss or strike the counterclaim and a partial joinder to
          12      Righthaven’s motion, and Democratic Underground has filed a motion for summary judgment on
          13      Righthaven’s claim.
          14                     After these motions were fully briefed, Stephens Media disclosed to Democratic
          15      Underground the Strategic Alliance Agreement (“SAA”) between Stephens Media and
          16      Righthaven. The SAA defines their relationship and governs all future copyright assignments
          17      between them (including the assignment at issue here). (Dkt. #79, Supplemental Mem. Ex. 1,
          18      SAA, dated Jan. 18, 2010.) After learning the details of this agreement, Democratic Underground
          19      sought leave to file a supplemental memorandum addressing this newly discovered evidence and
          20      its effect on the outstanding motions. The Court allowed the supplemental briefing as it too
          21      considered the SAA highly relevant to Righthaven’s standing in this and a multitude of other
          22      pending Righthaven cases. After considering the supplemental brief and for the reasons discussed
          23      below, the Court dismisses Righthaven for lack of standing and, therefore, denies both
          24      Righthaven’s motion and Democratic Underground’s motion as moot. The Court also denies
          25      Stephens Media’s motion.
          26      /


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              1                                            DISCUSSION
              2   I.     Righthaven’s Standing to Assert Copyright Claims
              3                  As stated above, before the Court are two motions to dismiss and a motion for
              4   summary judgment. However, the Court must first address the supplemental briefing addressing
              5   the SAA and the question of Righthaven’s standing to pursue this copyright infringement claim.
              6   The Court will then address the outstanding motions.
              7          A.      Background - The Strategic Alliance Agreement
              8                  Months prior to purportedly assigning the Work to Righthaven, Stephens Media
              9   and Righthaven signed a Strategic Alliance Agreement governing future copyright assignments
          10      between them. (Dkt. #79, Ex. 1, SAA, dated Jan. 18, 2010.) The SAA details the relationship
          11      between Righthaven and Stephens Media, explains the rights and responsibilities of each party,
          12      and limits and defines future copyright assignments between them. (See generally, id.) As such, it
          13      limits and explains the intent behind the Assignment, which was executed in July 2010.
          14                     Critically, the SAA expressly denies Righthaven any rights from future assignments
          15      (including the Assignment of the Work) other than the bare right to bring and profit from copyright
          16      infringement actions. This conclusion is clearly expressed in Section 7.2 of the SAA:
          17                     7.2 Despite any such Copyright Assignment, Stephens Media shall
                                 retain (and is hereby granted by Righthaven) an exclusive license to
          18                     Exploit the Stephens Media Assigned Copyrights for any lawful
          19                     purpose whatsoever and Righthaven shall have no right or
                                 license to Exploit or participate in the receipt of royalties from
          20                     the Exploitation of the Stephens Media Assigned Copyrights
                                 other than the right to proceeds in association with a Recovery.
          21                     To the extent that Righthaven's maintenance of rights to pursue
          22                     infringers of the Stephens Media Assigned Copyrights in any manner
                                 would be deemed to diminish Stephens Media's right to Exploit the
          23                     Stephens Media Assigned Copyrights, Righthaven hereby grants an
                                 exclusive license to Stephens Media to the greatest extent permitted
          24                     by law so that Stephens Media shall have unfettered and exclusive
          25                     ability to Exploit the Stephens Media Assigned Copyrights. . . .

          26      /


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              1   (Id., Section 7.2 (bold emphasis added, italicization in original)). The plain and simple effect of
              2   this section was to prevent Righthaven from obtaining, having, or otherwise exercising any right
              3   other than the mere right to sue as Stephens Media retained all other rights. Even Righthaven’s
              4   right to sue is not absolute. The SAA gives Stephens Media the right to prevent Righthaven from
              5   suing an alleged copyright infringer for various specific reasons, including that the lawsuit might
              6   “result in an adverse result to Stephens Media.” (Id., Section 3.3.) Other sections also give
              7   Stephens Media a right to reversion and other rights which, collectively, destroy Righthaven’s
              8   supposed rights in the Work. (See generally, id.) Now that the SAA has shed light upon
              9   Righthaven’s true interest in the copyright to the Work, Democratic Underground asserts that
          10      Righthaven lacks standing to maintain this lawsuit.
          11             B.      Legal Standard
          12                     Pursuant to Section 501(b) of the 1976 Copyright Act, 17 U.S.C. § 101, et. seq.,
          13      (the “Act”) only the legal or beneficial owner of an exclusive right under copyright law is entitled,
          14      or has standing, to sue for infringement. Silvers v. Sony Pictures Entm't Inc., 402 F.3d 881, 884
          15      (9th Cir. 2005) (en banc). In so holding, the Ninth Circuit followed the Second Circuit’s decision
          16      in Eden Toys, Inc. v. Florelee Undergarment Co., 697 F.2d 27 (2d Cir. 1982), superseded by rule
          17      and statute on other grounds. See also, ABKCO Music, Inc. v. Harrisongs Music, Ltd., 944 F.2d
          18      971, 980 (2d Cir. 1991) (citing Eden Toys, “the Copyright Act does not permit copyright holders to
          19      choose third parties to bring suits on their behalf.”) Section 106 of the Act defines and limits the
          20      exclusive rights under copyright law. Id. at 884–85. While these exclusive rights may be
          21      transferred and owned separately, the assignment of a bare right to sue is ineffectual because it is
          22      not one of the exclusive rights. Id. Since the right to sue is not one of the exclusive rights,
          23      transfer solely of the right to sue does not confer standing on the assignee. Id. at 890. One can
          24      only obtain a right to sue on a copyright if the party also obtains one of the exclusive rights in the
          25      copyright. See id. Further, to obtain a right to sue for past infringement, that right must be
          26      expressly stated in the assignment. See generally, id.


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              1          C.      Analysis
              2                  1.      Contract Construction
              3                  Righthaven argues that the SAA’s provisions, which necessarily include Section
              4   7.2, do not alter the unambiguous language of the Assignment or limit the rights it obtained from
              5   Stephens Media in the Assignment. This conclusion is flagrantly false—to the point that the claim
              6   is disingenuous, if not outright deceitful. The entirety of the SAA was designed to prevent
              7   Righthaven from becoming “an owner of any exclusive right in the copyright. . . .,” Silvers, 402
              8   F.3d at 886 (emphasis in original), regardless of Righthaven and Stephens Media’s post hoc,
              9   explanations of the SAA’s intent or later assignments, (see generally Dkt. #101, Decl. of Mark A.
          10      Hineuber; Dkt. #102, Decl. of Steven A. Gibson). Prior to the Assignment, Stephens Media
          11      possessed all of the exclusive rights to the Work and, therefore, the right to sue. Because the SAA
          12      limited the language of the Assignment, the Assignment changed nothing save for Righthaven’s
          13      claim to have the right to sue. The companies’ current attempt to reinterpret the plain language of
          14      their agreement changes nothing. In reality, Righthaven actually left the transaction with nothing
          15      more than a fabrication since a copyright owner cannot assign a bare right to sue after Silvers. To
          16      approve of such a transaction would require the Court to disregard the clear intent of the
          17      transaction and the clear precedent set forth by the en banc Ninth Circuit in Silvers.
          18                     2.      Stephens Media and Righthaven’s Intent
          19                     Righthaven contends that the Court should construe the SAA to grant Righthaven
          20      whatever rights are necessary for it to have standing in a copyright infringement action. First,
          21      Righthaven argues that the Court should construe the contract in this manner because in situations
          22      where a contract is ambiguous, the Court should look to the parties’ intent. Sheehan & Sheehan v.
          23      Nelson Malley and Co., 117 P.3d 219, 223–24 (Nev. 2005). Accordingly, Righthaven argues that
          24      the plain intent of the SAA is to give Righthaven all rights necessary to bring a copyright
          25      infringement action. The Court, however, disagrees with Righthaven’s premise because the SAA
          26      is not ambiguous. Righthaven and Stephens Media went to great lengths in the SAA to be sure


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              1   that Righthaven did not obtain any rights other than the bare right to sue. Thus, the Court finds
              2   that the plain language of the SAA conveys the intent to deprive Righthaven of any right, save for
              3   the right to sue alleged infringers and profit from such lawsuits. As such, the SAA is not
              4   ambiguous and the Court shall not read any ambiguity into it.
              5                  Second, Righthaven argues that Section 15.1 of the SAA gives the Court authority
              6   to correct any provision of the SAA that is deemed void or unenforceable to approximate the
              7   manifest intent of the parties. The problem is that this argument requires a provision of the SAA
              8   to be void or unenforceable. However, Righthaven’s problem is not that any provision of the SAA
              9   is void or unenforceable but that the SAA simply does not grant Righthaven any of the exclusive
          10      rights defined in Section 106 of the Act required for standing. Therefore, the SAA is not void or
          11      unenforceable, it merely prevents Righthaven from obtaining standing to sue from the Assignment.
          12      Accordingly, the Court need not and shall not amend or reinterpret the SAA to suit Righthaven’s
          13      current desires.
          14                     3.      Righthaven and Stephens Media’s Amendment to the SAA
          15                     Notwithstanding the actual transaction that occurred, Righthaven argues that the
          16      amendment it executed with Stephens Media on May 9, 2011, the day that they filed their response
          17      to the supplemental memorandum validates or fixes any possible errors in the original SAA that
          18      would prevent Righthaven from having standing in this matter. (Dkt. #102, Gibson Decl. Ex. 3,
          19      Clarification and Amendment to SAA.) However, this amendment cannot create standing because
          20      “‘[t]he existence of federal jurisdiction ordinarily depends on the facts as they exist when the
          21      complaint is filed.’” Lujan v. Defenders of Wildlife, 504 U.S. 555, 571 n.4 (1992) (quoting
          22      Newman-Green, Inc. v. Alfonzo-Larrain, 490 U.S. 826, 830 (1989)) (emphasis in Lujan).
          23      Although a court may allow parties to amend defective allegations of jurisdiction, it may not allow
          24      the parties to amend the facts themselves. Newman-Green, 490 U.S. at 830. As an example, a
          25      party who misstates his domicile may amend to correctly state it. This is an amendment of the
          26      allegation. However, that party is not permitted to subsequently move in order to change his


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              1   domicile and amend accordingly. This would be an amendment of the jurisdictional facts, which
              2   is not allowed. See id. Here, Righthaven and Stephens Media attempt to impermissibly amend the
              3   facts to manufacture standing. Therefore, the Court shall not consider the amended language of
              4   the SAA, but the actual transaction that took place as of the time the complaint was filed.1
              5                     Regardless of this legal principle, Righthaven argues that courts routinely allow
              6   parties to a copyright transfer to subsequently clarify or amend their agreements in order to express
              7   their original intent to grant the assignee the right to sue for infringement. Righthaven’s assertion
              8   is not entirely wrong, but the cases Righthaven cites in support of its proposition are all
              9   distinguishable as they deal with matters significantly different than those presently before the
          10      Court. For instance, Righthaven cites multiple cases where courts allowed an oral assignment
          11      made prior to initiation of a lawsuit to be confirmed in writing after the initiation of the lawsuit.
          12      See Billy-Bob Teeth, Inc. v. Novelty, Inc., 329 F.3d 586, 591 (7th Cir. 2003) (allowing an oral
          13      assignment to be confirmed in a later writing).2 These cases are all distinguishable in that the
          14      assignor and assignee in these cases had agreements to transfer the necessary, exclusive rights
          15      prior to the initiation of a lawsuit. The only thing lacking was the written document necessary for
          16      a court to recognize the transfer. In each of these cases, the courts merely gave effect to what the
          17      parties had actually done, i.e. recognized rights already actually transferred. Here, Righthaven
          18      does not ask the Court to recognize an oral transfer with a late made written memorandum of the
          19      deal, but to fundamentally rewrite the agreement between Righthaven and Stephens Media to grant
          20      Righthaven rights that it never actually received.
          21
          22               1
                             The Court does not determine whether or not the amended SAA would transfer sufficient rights to
                  Righthaven for it to have standing in suits filed after amendment as the Court need not make that determination
          23      to rule on these motions. Nonetheless, the Court expresses doubt that these seemingly cosmetic adjustments
                  change the nature and practical effect of the SAA.
          24
                           2
                             See also, Imperial Residential Design, Inc. v. Palms Dev. Group, Inc., 70 F.3d 96, 99 (11th Cir. 1995)
          25      (“[A] copyright owner’s later execution of a writing which confirms an earlier oral agreement validates the
                  transfer ab initio.”); Arthur Rutenberg Homes, Inc. v. Drew Homes, Inc., 29 F.3d 1529, 1532 (11th Cir. 1994);
          26      Sabroso Publ’g, Inc. v. Caiman Records Am., Inc., 141 F. Supp. 2d 224, 228 (D.P.R. 2001).


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              1                   Righthaven cites three other district court cases from other circuits which deal with
              2   matters other than oral assignments later ratified by written agreements. First is a district court
              3   case, Intimo Inc. v. Briefly Stated, Inc., 948 F. Supp. 315 (S.D.N.Y. 1996), wherein the court
              4   allowed the parties to the assignment agreement to amend the agreement to include the right to sue
              5   for pre-assignment copyright violations. Notably, the plaintiff in that case would have maintained
              6   standing as not all claims were based on pre-assignment copyright violations. Id. at 318–19.
              7   Nonetheless, the Intimo court allowed amendment to correct what it found was merely an
              8   oversight on the part of the parties because the agreement was silent on pre-assignment copyright
              9   violations despite the parties intent to transfer the right to sue on those violations. Here,
          10      Righthaven and Stephens Media may have wanted Righthaven to be able to sue, but the SAA was
          11      anything but silent in making sure that Stephens Media retained complete control over the Work
          12      rather than actually effectuate the necessary transfer of rights. The entirety of the SAA is
          13      concerned with making sure that Righthaven did not obtain any rights other than the right to sue.
          14      This careful exclusion of rights made even that transfer ineffectual under Silvers.
          15                     The other two cases are also distinguishable. The second case, Infodek, Inc. v.
          16      Meredith-Webb Printing Co., Inc., 830 F. Supp. 614 (N.D. Ga. 1993), is based on facts largely
          17      similar to Intimo and the same analysis distinguishes it from the present case. The third is an
          18      unreported district court case, Gondinger Silver Art Co., Ltd. v. Int’l Silver Co., No. 95 CIV. 9199,
          19      1995 WL 702357 (S.D.N.Y. Nov. 28, 1995), that dealt with a later assignment because there was a
          20      dispute as to whether the relevant work was a work made for hire or whether the plaintiff was a co-
          21      author of the work. The Gondinger court did not expressly determine the issue, finding that it was
          22      irrelevant as there was another basis for standing. Id. at *4–5. In sum, not one of the cases cited
          23      by Righthaven persuade, much less require, the Court to find standing based on Righthaven and
          24      Stephens Media’s Amended SAA.
          25      /
          26      /


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              1                  4.      Democratic Underground’s Standing to Challenge the SAA
              2                  Righthaven also contends that Democratic Underground lacks standing to challenge
              3   the validity of the SAA. However, Democratic Underground does not actually attack the SAA’s
              4   validity, Democratic Underground only contends that the SAA prevented the Assignment from
              5   transferring the rights Righthaven and Stephens Media currently argue the Assignment transferred.
              6   In essence, Democratic Underground simply argues that, under the SAA, the Assignment only
              7   transferred one particular right, which failed to have the effect Righthaven wishes it had.
              8   Democratic Underground does not contest the SAA’s validity or argue that it should be undone in
              9   any way. Further, the Sylvers court necessarily allowed the defendant to challenge whether the
          10      necessary rights were transferred from the rights holder to the plaintiff in that action. Otherwise
          11      the Ninth Circuit would not have been able address the plaintiff’s lack of standing in Silvers and
          12      hold that a mere right to sue is insufficient to bring a copyright infringement action.
          13                     5.      Prior Rulings within this District
          14                     Finally, Righthaven contends that multiple courts within this district have already
          15      determined that Righthaven has standing to bring claims for past infringement under the Silver
          16      standard based on the plain language of the copyright assignment. At best, this argument is
          17      disingenuous. As the undersigned issued one of the orders Righthaven cites for this argument, the
          18      undersigned is well aware that Righthaven led the district judges of this district to believe that it
          19      was the true owner of the copyright in the relevant news articles. Righthaven did not disclose the
          20      true nature of the transaction by disclosing the SAA or Stephens Media’s pecuniary interests. As
          21      the SAA makes abundantly clear, Stephens Media retained the exclusive rights, never actually
          22      transferring them to Righthaven regardless of Righthaven’s and Stephens Media’s current
          23      contentions. Further, Righthaven also failed to disclose Stephens Media in its certificates of
          24      interested parties, despite Stephens Media’s right to proceeds from these lawsuits. (Dkt. #79, Ex.
          25      1, SAA Section 5 (granting Stephens Media a fifty percent interest in any recovery, minus costs).)
          26      /


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              1   Since those orders were tainted by Righthaven’s failure to disclose the SAA and Stephens Media’s
              2   true interest, those decisions are not persuasive and do not support standing here.
              3          D.      Righthaven Lacks Standing to Bring this Action
              4                  Because the SAA prevents Righthaven from obtaining any of the exclusive rights
              5   necessary to maintain standing in a copyright infringement action, the Court finds that Righthaven
              6   lacks standing in this case. Accordingly, the Court dismisses Righthaven from this case. However,
              7   Righthaven requests that upon such a finding, the Court grant it leave to join Stephens Media as a
              8   plaintiff to cure the jurisdictional defect. Adding Stephens Media, however, would not cure the
              9   jurisdictional defect as to Righthaven. Eden Toys, 697 F.2d at 32 n.3 (“While [Federal Rule of
          10      Civil Procedure] 17(a) ordinarily permits the real party in interest to ratify a suit brought by
          11      another party, the Copyright Law is quite specific in stating that only the owner of an exclusive
          12      right under a copyright may bring suit.” (internal citations and quotations omitted).) Also, as
          13      Stephens Media has already been brought into this suit as a counter-defendant to a declaratory
          14      judgment claim, the Court finds it unnecessary to join Stephens Media as a plaintiff. If Stephens
          15      Media wishes to assert claims against Democratic Underground, it may do so separately.
          16      II.    Righthaven’s Motion and Democratic Underground’s Motion are Both Moot
          17                     Because the Court has dismissed Righthaven for lack of standing, the Court denies
          18      both Righthaven’s motion for voluntary dismissal with prejudice and Democratic Underground’s
          19      motion for summary judgment on Righthaven’s claim as moot. Since Righthaven has been
          20      dismissed, its complaint is also dismissed. This, of course, does not affect Democratic
          21      Underground’s right to bring a motion for attorney fees under the Act. Also, the counterclaim
          22      against Stephens Media remains and so the Court now turns its attention to Stephens Media’s
          23      motion.
          24      /
          25      /
          26      /


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              1   III.    Stephens Media’s Motion to Dismiss or Strike
              2           A.      Legal Standard
              3                   1.      Motion to Dismiss Standard
              4                   “In this action, as in all actions before a federal court, the necessary and
              5   constitutional predicate for any decision is a determination that the court has jurisdiction—that is
              6   the power—to adjudicate the dispute.” Toumajian v. Frailey, 135 F.3d 648, 652 (9th Cir. 1998).
              7   The purpose of a complaint is two-fold: to give the defendant fair notice of the basis for the court’s
              8   jurisdiction and of the factual basis of the claim. See Fed. R. Civ. P. 8; Skaff v. Meridien North
              9   Am. Beverly Hills, LLC., 506 F.3d 832, 843 (9th Cir. 2007). Rule 12(b)(1) of the Federal Rules of
          10      Civil Procedure allows defendants to seek dismissal of a claim or action for a lack of subject
          11      matter jurisdiction. Dismissal under Rule 12(b)(1) is appropriate if the complaint, considered in
          12      its entirety, fails to allege facts on its face that are sufficient to establish subject matter jurisdiction.
          13      In re Dynamic Random Access Memory (DRAM) Antitrust Litigation, 546 F.3d 981, 984–85 (9th
          14      Cir. 2008). Although the defendant is the moving party in a motion to dismiss brought under Rule
          15      12(b)(1), the plaintiff is the party invoking the court’s jurisdiction. As a result, the plaintiff bears
          16      the burden of proving that the case is properly in federal court. McCauley v. Ford Motor Co., 264
          17      F.3d 952, 957 (9th Cir. 2001) (citing McNutt v. General Motors Acceptance Corp., 298 U.S. 178,
          18      189 (1936)).
          19                      Attacks on jurisdiction pursuant to Rule 12(b)(1) can be either facial, confining the
          20      inquiry to the allegations in the complaint, or factual, permitting the court to look beyond the
          21      complaint. See Savage v. Glendale Union High Sch., 343 F.3d 1036, 1039 n.2 (9th Cir. 2003). “In
          22      a facial attack, the challenger asserts that the allegations contained in a complaint are insufficient
          23      on their face to invoke federal jurisdiction. By contrast, in a factual attack, the challenger disputes
          24      the truth of the allegations that, by themselves, would otherwise invoke federal jurisdiction.” Safe
          25      Air for Everyone v. Myer, 373 F.3d 1035, 1039 (9th Cir. 2004). A “factual” attack made pursuant
          26      to Rule 12(b)(1) may be accompanied by extrinsic evidence. Whitethorn v. F.C.C., 235 F. Supp.


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              1   2d 1092, 1095–96 (D. Nev. 2002) (citing St. Clair v. City of Chico, 880 F.2d 199, 201 (9th Cir.
              2   1989). Dismissal for lack of subject matter jurisdiction is appropriate if the complaint, considered
              3   in its entirety, fails to allege facts that are sufficient to establish subject matter jurisdiction. In re
              4   Dynamic Random Access Memory (DRAM) Antitrust Litigation, 546 F.3d 981, 984–85 (9th Cir.
              5   2008).
              6                   2.      Motion to Strike Standard
              7                   Under Rule 12(f) a “court may strike from a pleading … any redundant, immaterial,
              8   impertinent, or scandalous matter.” Matter is “immaterial” if it has no bearing on the controversy
              9   before the court. In re 2TheMart.com, Inc Sec. Litig., 114 F. Supp. 2d 955, 965 (C.D. Cal. 2000).
          10      Allegations are “impertinent” if they are not responsive to the issues that arise in the action and
          11      that are admissible as evidence. Id. “Scandalous” matter is that which casts a cruelly derogatory
          12      light on a party or other person. Id. A court need not wait for a motion from the parties; it may act
          13      on its own to strike matter from a pleading. Fed. R. Civ. P. 12(f)(1).
          14               B.     Analysis
          15                      Stephens Media’s motion essentially relies on two separate arguments for its
          16      position that there is no justiciable case or controversy: (1) that Stephens Media assigned all of the
          17      rights in and to the Work to Righthaven, thus negating the possibility of any case or controversy
          18      between Stephens Media and Democratic Underground, and (2) that Democratic Underground’s
          19      counterclaim will necessarily be adjudicated by a decision on the original complaint and, therefore,
          20      should be stricken. The Court dispelled Stephens Media’s first argument in the analysis above.
          21      Stephens Media expressly avoided transferring the exclusive rights to the Work to Righthaven by
          22      neutering future assignments in the SAA. As to Stephens Media’s second argument, setting aside
          23      the fact that Stephens Media was never a party to Righthaven’s complaint, that argument is now
          24      moot as the Court has dismissed Righthaven’s complaint. Since the complaint has been dismissed,
          25      the issues raised by the counterclaim can only be adjudicated by litigating the counterclaim, not the
          26      now defunct complaint.


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              1                    1.       Justiciable Case or Controversy
              2                    Stephens Media’s principle contention for why there is no justiciable case or
              3   controversy between Stephens Media and Democratic Underground relied on the Assignment of
              4   rights to Righthaven. Though the Court has refuted this particular argument, the Court will,
              5   nonetheless, quickly address the case or controversy requirement for a declaratory judgment action
              6   as it still pertains to this case.
              7                    The Supreme Court has held that declaratory judgment claims must arise from
              8   disputes that are “‘definite and concrete, touching the legal relations of parties having adverse
              9   legal interests,’ . . . ‘real and substantial,’” and beget “specific relief through a decree of a
          10      conclusive character, as distinguished from an opinion advising what the law would be upon a
          11      hypothetical state of facts.’” MedImmune, Inc. v. Genentech, Inc. 549 U.S. 118, 127 (2007).
          12      Nonetheless, a party need not “bet the farm” and always actually engage in planned conduct that
          13      would result in threatened legal action before bringing a declaratory judgment suit. Id. at 133–34.
          14                       Contrary to its assertions in its moving papers, Stephens Media has threatened
          15      Democratic Underground with litigation because, according to the SAA, Stephens Media approved
          16      or consented to suit against Democratic Underground. (Dkt. #79, Ex. 1, SAA Section 3.3.)
          17      Additionally, Stephens Media’s then CEO, Sherman Frederick, generally threatened potential
          18      defendants that he would send his “little friend called Righthaven” after them. (Dkt. #13, Answer
          19      and Countercl. ¶ 33.) Here, Stephens Media actually did send Righthaven after Democratic
          20      Underground. Further, Democratic Underground desires to re-post the allegedly infringing
          21      material to maintain a full archive of prior posts on its website. This could result in new copyright
          22      infringement litigation against Democratic Underground if the Court does not declare that the post
          23      did not infringe the copyright in the first instance. This threat of suit is sufficiently real and
          24      substantial that an actual case and controversy exists between these parties and warrants a
          25      declaratory judgment suit. Accordingly, and because the Court dismissed Righthaven and its
          26      complaint, the Court denies Stephens Media’s motion.


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              1   IV.    Order to Show Cause
              2                  As shown in the preceding pages, the Court believes that Righthaven has made
              3   multiple inaccurate and likely dishonest statements to the Court. Here, however, the Court will
              4   only focus on the most factually brazen: Righthaven’s failure to disclose Stephens Media as an
              5   interested party in Righthaven’s Certificate of Interested Parties. (Dkt. #5.) Rule 7.1-1 of the
              6   Local Rules of Practice for the District of Nevada requires parties to disclose “all persons,
              7   associations of persons, firms, partnerships or corporations (including parent corporations) which
              8   have a direct, pecuniary interest in the outcome of the case.” This Local Rule requires greater
              9   disclosure than Federal Rule 7.1, which only requires non-governmental corporate parties to
          10      disclose parent corporations or corporations owning more than 10% of the party’s stock. Frankly,
          11      if receiving 50% of litigation proceeds minus costs (Dkt. #79, SAA Section 5) does not create a
          12      pecuniary interest under Local Rule 7.1-1, the Court isn’t sure what would.
          13                     Making this failure more egregious, not only did Righthaven fail to identify
          14      Stephens Media as an interested party in this suit, the Court believes that Righthaven failed to
          15      disclose Stephens Media as an interested party in any of its approximately 200 cases filed in this
          16      District. Accordingly, the Court orders Righthaven to show cause, in writing, no later than two (2)
          17      weeks from the date of this order, why it should not be sanctioned for this flagrant
          18      misrepresentation to the Court.
          19      /
          20      /
          21      /
          22      /
          23      /
          24      /
          25      /
          26      /


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              1                                            CONCLUSION
              2                  Accordingly, and for good cause appearing,
              3                  IT IS HEREBY ORDERED that Righthaven is dismissed from this case for lack of
              4   standing. As such, Righthaven’s complaint is dismissed in its entirety.
              5                  IT IS FURTHER ORDERED that Righthaven’s Motion for Voluntary Dismissal
              6   with Prejudice (#36) is DENIED as moot.
              7                  IT IS FURTHER ORDERED that Stephens Media’s Motion to Dismiss or Strike
              8   (#38) is DENIED.
              9                  IT IS FURTHER ORDERED that the Democratic Underground’s Motion for
          10      Summary Judgment (#45) is DENIED as moot.
          11                     IT IS FURTHER ORDERED that Righthaven show cause, in writing, no later than
          12      two (2) weeks from the date of this order, why it should not be sanctioned.
          13                     Dated: June 14, 2011.
          14
          15                                                           ____________________________________
                                                                       ROGER L. HUNT
          16                                                           Chief United States District Judge
          17
          18
          19
          20
          21
          22
          23
          24
          25
          26


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           Exhibit C
     to CALA’s Amicus Brief


                      Righthaven
                      Intervention
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 1   SHAWN A. MANGANO, ESQ.
     Nevada Bar No. 6730
 2   shawn@manganolaw.com
     SHAWN A. MANGANO, LTD.
 3   9960 West Cheyenne Avenue, Suite 170
     Las Vegas, Nevada 89129-7701
 4   Tel: (702) 304-0432
     Fax: (702) 922-3851
 5
 6   Attorney for Righthaven LLC
 7
 8                                 UNITED STATES DISTRICT COURT
 9                                     DISTRICT OF NEVADA
10
11
     RIGHTHAVEN LLC, a Nevada limited-liability         Case No.: 2:10-cv-01356-RLH-CWF
12   company,
              Plaintiff,                                RIGHTHAVEN LLC’S APPLICATION
13                                                      TO INTERVENE AS OF RIGHT
     v.                                                 PURSUANT TO FEDERAL RULE OF
14                                                      CIVIL PROCEDURE 24(A)(2)
     DEMOCRATIC UNDERGROUND, LLC, a District
15   of Columbia limited-liability company; and DAVID
     ALLEN, an individual,
16
                  Defendants.
17
18   DEMOCRATIC UNDERGROUND, LLC, a District
     of Columbia limited-liability company,
19                 Counterclaimant,
     v.
20
     RIGHTHAVEN LLC, a Nevada limited-liability
21   company; and STEPHENS MEDIA LLC, a Nevada
     limited-liability company,
22
                  Counterdefendants.
23
24
25
26
27
28


                                             1    1
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 1           Righthaven LLC (“Righthaven”) hereby applies to intervene in this action as of right
 2   pursuant Federal Rule of Civil Procedure 24(a)(2) (“Application”). Righthaven’s Application is
 3   based on the below Memorandum of Points and Authorities, the pleadings and papers on file in this
 4   action, any permitted oral argument, and any other matter upon which this Court takes notice. A
 5   proposed order granting Righthaven’s Application is submitted concurrently with this filing.
 6
 7                         MEMORANDUM OF POINTS AND AUTHORITIES
 8   I.      INTRODUCTION
 9           Righthaven respectfully submits this Application to intervene as of right pursuant to Rule
10   24(a)(2). On June 14, 2011, this Court found that Righthaven lacked standing to bring its copyright
11   infringement claim. (Doc. # 116, the “Order”.) The Court’s decision was expressly based upon the
12   jurisdictional facts as they existed at the time the complaint was filed—namely the form of copyright
13   assignment and the Strategic Alliance Agreement (“SAA”) between Stephens Media and Righthaven
14   that was then in existence at the time the complaint was filed. (Order at 8.) Although Righthaven
15   respectfully disagrees with the Court’s decision that Righthaven lacked standing under the original
16   SAA, it accepts as the law of the case that Righthaven lacked standing under the complaint as filed.
17   Nevertheless, subsequent to the filing of Righthaven’s complaint, Righthaven and Stephens Media
18   executed the Clarification and Amendment to Strategic License Agreement (“Amendment”), which
19   eliminated Stephens Media’s rights of reversion and converted its right to use an assigned copyright
20   to a mere non-exclusive license. As explained in detail below, under the Amendment, Righthaven is
21   the assignee and sole owner of the copyrighted work at issue in this case. Thus, intervention as of
22   right is proper.
23           Intervention is particularly warranted here, as Defendant’s declaratory judgment claim
24   against Stephens Media is still pending because the Court found that Stephens Media still owned the
25   copyrighted Work under the original SAA. (See Order at 14, 16.) Yet, under the Amendment,
26   Stephens Media is now a mere non-exclusive licensee with no ownership rights in the copyright and
27   no standing to sue for infringement. Therefore, Righthaven seeks to intervene as of right in order to
28   protect its ownership interest in the copyright since it is the only party that may presently due so.

                                                   2     2
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 1   This case cannot be resolved without Righthaven’s involvement because Righthaven is the only real
 2   party-in-interest.
 3           As set forth below, Righthaven satisfies the requirements for intervention under Rule 24.
 4   Further, intervention will conserve judicial resources and allow for the efficient resolution of all
 5   related issues in a single proceeding rather than forcing Righthaven to file a new complaint,
 6   needlessly resulting in multiple litigations regarding similar issues. In addition, intervention will not
 7   cause undue delay or prejudice to Democratic Underground. For these reasons, Righthaven
 8   respectfully requests that its Application for leave to intervene as of right be granted.
 9   II.     SUMMARY OF RELEVANT FACTS
10           Righthaven filed its complaint for copyright infringement against the defendants on August
11   10, 2010 (Doc. # 1). Defendants answered the complaint (Doc. # 13) and defendant Democratic
12   Underground asserted a counterclaim for a declaratory judgment of non-infringement against
13   Righthaven and added Stephens Media as a counterclaim -defendant. (Id. at 6-24.) Subsequent to
14   the filing of Righthaven’s complaint, Righthaven and Stephens Media executed the Amendment,
15   which remedied any previous defect in Stephens Media’s copyright assignment to Righthaven, and
16   consequently, remedied any prior defect in Righthaven’s ownership of the Work or its standing to
17   sue for infringement. (Doc. # 102, Ex. 3.)
18           On June 14, 2011, this Court issued an Order addressing several pending motions, including
19   the issue of whether Righthaven had standing. (Order.) Notwithstanding Righthaven’s present
20   copyright ownership under the Amendment, the Court held that Righthaven’s complaint must be
21   dismissed because standing did not exist at the inception of the lawsuit. (Order at 7-8.) The Court
22   did not determine whether Righthaven currently has standing to sue in view of the Amendment (id.
23   at 8 n.1) and dismissed Righthaven entirely from this action (id. at 16). Thus, the only pending
24   claim that remains in this case is Democratic Underground’s counterclaim for a declaratory
25   judgment of non-infringement against Stephens Media.
26   III.    ARGUMENT
27           Pursuant to Rule 24(a)(2) of the Federal Rules of Civil Procedure, a non-party may apply to
28   intervene in an action as of right. Fed. R. Civ. P. 24(a)(2). The Ninth Circuit applies a four-part test

                                                   3     3
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 1   to determine if intervention of right is warranted. The applicant must demonstrate that (1) the
 2   intervention is timely; (2) the applicant has a significantly protectable interest relating to the property
 3   or transaction that is the subject of the action; (3) the disposition of the action may, as a practical
 4   matter, impair or impede the applicant’s ability to protect its interest; and (4) the existing parties may
 5   not adequately represent the applicant’s interest. See Prete v. Bradbury, 438 F.3d 949, 954 (9th Cir.
 6   2006). “In evaluating whether Rule 24(a)(2)’s requirements are met, [courts] normally follow
 7   practical and equitable considerations and construe the Rule broadly in favor of proposed
 8   intervenors.” Wilderness Soc. v. U.S. Forest Serv., 630 F.3d 1173, 1179 (9th Cir. 2011).
 9           A.      Righthaven’s Application Is Timely.
10           The timeliness requirement for intervention is satisfied in light of the fact that Righthaven
11   filed this Application within days after the Court’s Order dismissing it from the case and in light of
12   the recently executed Amendment.
13           B.      As the Sole Owner of the Copyrighted Work, Righthaven Has a Significant
                     Protectable Interest in the Non-Infringement Declaratory Judgment Claim, and
14                   Its Ability to Protect Its Interest Will Necessarily be Impaired by Disposition of
                     the Action.
15
             Because Righthaven is the sole owner of the copyright at issue in Democratic Underground’s
16
     non-infringement declaratory judgment claim, it has a significantly protectable interest which will
17
     necessarily be impaired by the Court’s decision as to infringement. Thus, Righthaven satisfies the
18
     next two requirements for intervention, which entail having a significantly protectable interest which
19
     may be impaired by the disposition of the action. Prete, 438 F.3d at 954. These two requirements
20
     are interrelated given that a prospective intervenor “has a sufficient interest for intervention purposes
21
     if it will suffer a practical impairment of its interests as a result of the pending litigation.” California
22
     ex rel. Lockyer v. United States, 450 F.3d 436, 441 (9th Cir. 2006).
23
             Because the Amendment remedied the prior defects in Righthaven’s copyright ownership
24
     under the SAA, Righthaven has a protectable interest in this case.
25
                     1.      Righthaven is the sole copyright owner and sole party with standing to
26                           sue.
27           Righthaven is the current owner of the copyrighted work and would have standing to bring
28   an action for infringement. 17 U.S.C. § 501(b) (“The legal or beneficial owner of an exclusive right

                                                    4     4
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 1   under a copyright is entitled … to institute an action for any infringement of that particular right
 2   ….”). A copyright owner need not have been the author or original owner; indeed, copyright law
 3   recognizes the transferability of the rights protected by copyright. 17 U.S.C. § 101 (“A ‘transfer of
 4   copyright ownership’ is an assignment, mortgage, exclusive license, or any other conveyance,
 5   alienation, or hypothecation of a copyright or of any of the exclusive rights comprised in a copyright,
 6   whether or not it is limited in time or place of effect, but not including a nonexclusive license.”) It is
 7   also black-letter law that a non-exclusive licensee, such as Stephens Media, lacks standing to sue for
 8   infringement. See id.; Silvers v. Sony Pictures Entm’t, Inc., 402 F.3d 881, 898 n. 7 (9th Cir. 2005).
 9           Pursuant to the Amendment, there can be no question that Righthaven obtained “all right,
10   title and interest to said Work such that Righthaven shall be recognized as the copyright owner of the
11   Work, shall have the right to register said Work with the United States Copyright Office, and shall
12   have the right to pursue past, present and future infringements of the copyright in and to the Work.”
13   (Doc. # 102, Ex. 3.) As the owner of the copyright, Righthaven has the ability to exploit its
14   exclusive rights as it sees fit. Righthaven may reproduce the copyrighted work, create derivative
15   works, assign the copyright, grant licenses, receive royalty payments and sue for copyright
16   infringement. In short, Righthaven may utilize the entire bundle of exclusive rights that accompany
17   copyright ownership. Nothing in the parties’ agreements prevents Righthaven from doing so.
18   Righthaven granted a non-exclusive license back to Stephens Media to use the copyrighted work
19   (Doc. # 102, Ex. 3 at § 7.2), but that license does not divest Righthaven of its ownership rights. See
20   Silvers, 402 F.3d at 898 n. 7. As the copyright owner, Righthaven has a significant protectable
21   interest in this action.
22                   2.         Neither the purpose of the transaction nor Stephens Media’s retention of
                                certain rights invalidates the assignment.
23
             Democratic Underground has previously argued that Righthaven’s assignment is merely a
24
     “sham” because of Righthaven’s business purpose and the existence of two provisions in the
25
     Amendment: a provision giving Stephens Media 30 days written notice prior to exploiting the
26
     Infringed Work and a separate provision giving Stephens Media the option to re-purchase the
27
     copyright. (Doc. # 102, Ex. 3.) Democratic Underground is wrong.
28


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 1          Parties routinely enter into complex agreements transferring intellectual property rights. It is
 2   well-established that these transfers are not invalid simply because the original owner retains some
 3   rights. See, e.g., Vittoria N. Am., L.L.C. v. Euro-Asia Imports Inc., 278 F.3d 1076, 1082 (10th Cir.
 4   2001) (holding that a “thirty-day reassignment clause does not establish that [the trademark
 5   assignment] is a sham”) (citing Premier Dental Prods. Co. v. Darby Dental Supply Co., 794 F.2d
 6   850, 855-56 (3d Cir. 1986) (“[L]imitations in an otherwise valid assignment agreement do not
 7   invalidate it”)); Int’l Armament Corp. v. Matra Manurhin Int’l., Inc., 630 F. Supp. 741, 746 (E.D.
 8   Va. 1986) (“Plaintiff’s ownership of the marks is subject to conditions on its license agreement with
 9   Carl Walther, which make that distributorship revocable by Walther for violation of ‘essential’
10   clauses. Such limitations on an assignment do not invalidate or make it a sham, however.”)
11          Moreover, the Ninth Circuit, more than 40 years ago, rejected the argument that an
12   assignment made solely to facilitate a lawsuit is somehow improper. In Rawlings v. Nat’l Molasses
13   Co., 394 F.2d 645, 648 (9th Cir. 1968),1 the Ninth Circuit held:
14          Defendants make the further point that the arrangement between plaintiff and
            [assignor] was accomplished for the sole purpose of permitting plaintiff to bring this
15          action without joining [assignor] as a party plaintiff or defendant. We assume that to
            be true. Defendants urge that the transaction was a sham. The documents were in
16          fact executed and nothing in the record indicates that as between [assignor] and
            plaintiff they are either void or voidable. If not, then the purpose underlying their
17          execution is of no concern to the defendants.
18   Thus, the Ninth Circuit long ago rejected the argument that the purpose behind a business transaction
19   or a business itself has any bearing on the issue of standing.
20          Further, courts in numerous patent cases have rejected the argument that an otherwise valid
21   transfer of intellectual property rights made to confer standing is somehow defective, or a sham,
22   because the motivating business purpose is litigation. For example, in a highly analogous case in the
23   patent context, the Federal Circuit held that patent assignments made for the sole purpose of bringing
24   suit are nonetheless valid. SGS-Thomson Microelectronics, Inc. v. Int’l Rectifier Corp., 1994 WL
25
     1
26     Patent cases, such as Rawlings, are highly instructive here. As the Ninth Circuit held in Silvers,
     courts “should interpret the Copyright Act consistently with the requirement of the Patent Act”
27   because of the fundamental similarity between the two types of intellectual property rights. 402 F.3d
     at 888; see also Davis v. Blige, 505 F.3d 90, 104 (2nd Cir. 2007) (“Although patent and copyright
28   law function somewhat differently, courts considering one have historically looked to the other for
     guidance where precedent is lacking . . . . Licenses in patent and copyright function similarly . . . .”).

                                                   6     6
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 1   374529 (Fed. Cir. Jul. 14, 1994). There, the defendant urged the court to ignore the patent
 2   assignment between related corporate entities because, like here, the agreement was entered for the
 3   purpose of conferring standing to sue for infringement. The defendant also argued “sham” because
 4   the assignment required the plaintiff to assign the patents back at the conclusion of the litigation, a
 5   much greater restriction than that present in this case. Id. at *6. The court rejected defendant’s
 6   arguments, ruling that “[t]his court and other courts have held that an assignment that explicitly
 7   provides for possible transfer back to the assignor is nevertheless effective to give the assignee
 8   standing.” Id. The court further held that:
 9           the district court erred in granting summary judgment on the ground that the
             assignments of the … patents were shams because the sole purpose of the assignment
10           was to facilitate litigation. In so ruling, the trial court ignored the express language in
             the assignments and in effect created a new requirement, not found in any case law,
11           that a patent assignment must have an “independent business purpose.”
12   Id. Thus, the Federal Circuit explicitly ruled that the motive or purpose of an assignment is
13   irrelevant to the assignee’s standing to enforce the exclusive rights conferred and that the assignor’s
14   ability to re-acquire its rights does not deprive the assignee of its right to bring suit. Id. at *6-7. If
15   the Court were to follow this reasoning, as Silvers holds it should, Righthaven is the sole current
16   owner of the copyright, and not Stephens Media.
17           In yet another case decided by the Federal Circuit, the court held that a grant of patent rights
18   was sufficient to confer standing notwithstanding the fact that the grantor retained several rights
19   relating to the patent. See Vaupel Textilmaschinen KG v. Meccanica Euro Italia S.P.A., 944 F.2d
20   870 (Fed. Cir. 1991). In Vaupel, the grantor retained “1) a veto right on sublicensing by Vaupel; 2)
21   the right to obtain patents on the invention in other countries; 3) a reversionary right to the patent in
22   the event of bankruptcy or termination of production by Vaupel; and 4) a right to receive
23   infringement damages.” Id. at 875. Despite the grantor’s retention of these rights, the court held
24   that “none of these reserved rights was so substantial as to reduce the transfer to a mere license or
25   indicate an intent not to transfer all substantial rights.” Id. Here, as in Vaupel, the rights retained by
26   Stephens Media do not negate the exclusive rights conferred to Righthaven.
27
28


                                                    7     7
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 1                  3.      Resolution of Democratic Underground’s non-infringement claim may
                            impair Righthaven’s interest in seeking redress for copyright
 2                          infringement.
 3          As discussed above, Righthaven is the owner of the Work and has been properly conveyed

 4   the right to sue for an accrued infringement claim. Democratic Underground’s pending declaratory

 5   judgment claim seeks a finding of non-infringement of the Work based on the doctrine of fair use.

 6   (Doc. # 13 at 24-25.) Entry of such relief would undeniably affect Righthaven’s ability to protect its

 7   interest in the Work. See Arakaki v. Cayetano, 324 F.3d 1078, 1084 (9th Cir. 2003) (“The

 8   requirement of a significantly protectable interest is generally satisfied when the interest is

 9   protectable under some law, and there is a relationship between the legally protected interest and the

10   claims at issue.”); Amgen, Inc. v. F. Hoffman-Laroche Ltd., 456 F. Supp .2d 267, 280 n. 11 (D.

11   Mass. 2006) (license in technology sufficient to support intervention as of right in patent

12   infringement action). And if there is a finding of no fair use, Righthaven would not be able to obtain

13   any remedy for Democratic Underground’s infringement. Either result would be inequitable.

14          Further, the “interest” element is “primarily a practical guide to disposing of lawsuits by

15   involving as many apparently concerned persons as is compatible with efficiency and due process.”

16   In re Estate of Ferdinand E. Marcos Human Rights Litig., 536 F.3d 980, 985 (9th Cir. 2008)

17   (internal quotations omitted); California ex rel. Lockyer, 450 F.3d at 442 (“Having found that

18   appellants have a significant protectable interest, we have little difficulty concluding that the

19   disposition of this case may, as a practical matter, affect it.”); Arakaki, 324 F.3d at 1086 (“This

20   Court follows the guidance of Rule 24 advisory committee notes that state that ‘if an absentee would

21   be substantially affected in a practical sense by the determination made in an action, he should, as a

22   general rule, be entitled to intervene.’”). Thus, Righthaven’s Application should be granted because

23   allowing Righthaven to intervene makes sense as a practical matter. It would allow Righthaven to

24   bring its infringement claim in this action and avoid any duplicative litigation.

25          C.      Stephens Media May Not Adequately Represent Righthaven’s Interest.
26          The final requirement to intervene as of right requires the applicant to demonstrate that the

27   existing parties inadequately represent its interest. Prete, 438 F.3d at 954; Arakaki, 324 F.3d at

28   1083. Generally, the required showing of inadequate representation is minimal. Sagebrush


                                                   8     8
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 1   Rebellion, Inc. v. Watt, 713 F.2d 525, 528 (9th Cir. 1983). But when an applicant for intervention
 2   and an existing party have the same ultimate objective, a presumption of adequacy of representation
 3   arises. Arakaki, 324 F.3d at 1086. The presumption of adequate representation may be overcome
 4   with a “compelling showing.” Id.
 5          In considering whether an applicant meets the minimal inadequacy of representation
 6   requirement under Rule 24(a)(2), courts “‘consider several factors, including whether [a present
 7   party] will undoubtedly make all of the intervenor’s arguments, whether [a present party] is capable
 8   of and willing to make such arguments, and whether the intervenor offers a necessary element to the
 9   proceedings that would be neglected.’” Prete, 438 F.3d at 956 (quoting Sagebrush Rebellion, Inc.,
10   713 F.2d at 528).
11          Here, the existing parties would not adequately represent Righthaven’s interest. Democratic
12   Underground is clearly adverse to Righthaven’s interest. See Sagebrush Rebellion, Inc., 713 F.2d at
13   527. Thus, the only party that could potentially represent Righthaven’s interest is Stephens Media
14   through its defense of Democratic Underground’s declaratory judgment claim. And although
15   Stephens Media has an interest in seeing that the declaratory judgment claim is refuted, as discussed
16   above, it cannot presently sue for copyright infringement because it holds a non-exclusive license to
17   the Work. As a holder of a non-exclusive license, Stephens Media may seek dismissal of
18   Democratic Underground’s claim on standing grounds. Further, given Stephens Media’s lack of
19   standing to bring an infringement claim, it would not be able to bring a counterclaim against
20   Democratic Underground for infringement, and thus would not be able to recover damages or any
21   other remedy. Given this fact, Stephens Media may not advance the same arguments that
22   Righthaven would bring if it is allowed to intervene.
23
24
25
26
27
28


                                                 9     9
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 1   IV.    CONCLUSION
 2          For the foregoing reasons, Righthaven respectfully requests that the Court grant its request to

 3   intervene as of right in this action pursuant to Rule 24(a)(2).

 4   Dated this 23rd day of June, 2011.
 5                                                      SHAWN A. MANGANO, LTD.
 6
                                                        By: /s/ Shawn A. Mangano
 7                                                      SHAWN A. MANGANO, ESQ.
                                                        Nevada Bar No. 6730
 8                                                      shawn@manganolaw.com
                                                        9960 West Cheyenne Avenue, Suite 170
 9                                                      Las Vegas, Nevada 89129-7701
10                                                      Tel:       (702) 304-0432
                                                        Fax:       (702) 922-3851
11
                                                        Attorney for Righthaven LLC
12
13
14
15
16
17
18
19

20
21
22
23
24
25
26
27
28


                                                   10   10
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           Exhibit D
     to CALA’s Amicus Brief


                          Hoehn
                         Dismissal
Case 1:11-cv-00830-JLK Document 21-6         Filed 07/19/11 USDC Colorado Page 2 of 18




 1

 2

 3

 4                                 UNITED STATES DISTRICT COURT

 5                                     DISTRICT OF NEVADA

 6                                               ***
                                                 )
 7   RIGHTHAVEN, LLC,                            )
                                                 )
 8                    Plaintiff,                 )       2:11-CV-00050-PMP-RJJ
                                                 )
 9   v.                                          )
                                                 )
10                                               )        ORDER
     WAYNE HOEHN,                                )
11                                               )
                      Defendant.                 )
12                                               )

13             Presently before the Court is Defendant’s Motion to Dismiss for Lack of Subject

14   Matter Jurisdiction (Doc. #16), filed on April 17, 2011. Plaintiff filed a Response (Doc.

15   #23), on May 9, 2011. Defendant filed a Reply (Doc. #26), on May 15, 2011. Also before

16   the Court is Defendant’s Motion for Summary Judgment (Doc. #8), filed on February 11,

17   2011. Plaintiff filed a Response (Doc. #13), on March 7, 2011. Defendant filed a Reply

18   (Doc. #14), on March 24, 2011. This Court held a hearing on the Motion for Summary

19   Judgment on May 3, 2011. (Mins. of Proceedings (Doc. #19).)

20   I. BACKGROUND

21             This is a copyright infringement action brought by Plaintiff Righthaven LLC

22   (“Righthaven”) against Defendant Wayne Hoehn (“Hoehn”), who is and was at all relevant

23   times a registered user and content contributor to the website <madjacksports.com> (the

24   “Website”). (Pl.’s Resp. To Mot. For Summ. J. [“Resp.”] (Doc. #13).) Hoehn has never

25   been employed by the Website’s owner and operator. (Id.) On or about November 29,

26   2010, Hoehn displayed an unauthorized reproduction of a copyrighted literary work entitled
Case 1:11-cv-00830-JLK Document 21-6          Filed 07/19/11 USDC Colorado Page 3 of 18




 1   “Public Employee Pensions. We Can’t Afford Them” (the “Work”) as part of the content

 2   contributed by him to the Website. (Id.) In his reproduction, Hoehn attributed the source of

 3   the Work to the Las Vegas Review Journal (“LVRJ”). (Compl. (Doc. #1).) Hoehn avers

 4   that he did not post the Work for profit and that there was no mechanism for him to profit

 5   by posting the Work on the website. (Def.’s Mot. For Summ. J. [“MSJ”] (Doc. #8), Hoehn

 6   Decl., Ex. A.) Hoehn states he removed the Work from the Website on January 6, 2011.

 7   (Id.)

 8             At the time of the posting, Righthaven was not the owner of the Work, rather the

 9   Work was owned by Stephens Media. (Gibson Decl. (Doc. #24), Ex 1.) In January 2010,

10   Righthaven and Stephens Media entered into the Strategic Alliance Agreement (the

11   “SAA”), governing the ongoing relationship between Righthaven and Stephens Media

12   regarding assignment of copyrights originally owned by Stephens Media. (Gibson Decl.)

13   Section 3.3 of the SAA governs the rights and responsibilities of Righthaven and Stephens

14   Media with respect to pursuing alleged infringers and states in part:

15             If Righthaven chooses in the Remediation Option Notice to not pursue
               an Infringement Action (the “Remediation Declination”), then
16             Righthaven shall reassign the Assigned Copyright to Stephens Media
               that is the subject of the Remediation Declination . . . .
17             Notwithstanding any other provision of this Agreement, Stephens
               Media shall have the right to Notify Righthaven, within five (5)
18             Business Days after receipt of a respective Remediation Option Notice,
               that Righthaven should not take any Infringement Action with respect
19             to a particular putative infringer as indicated in any Remediation
               Option Notice (the “Declination Notice”) and upon receipt of a
20             Declination Notice, Righthaven shall not take any Infringement Action
               with respect to the particular putative infringer set forth in any
21             Declination Notice; provided, however, that Stephens Media shall only
               send any Declination Notice on a reasonable basis with the grounds of
22             reasonability being that a particular infringer is a charitable
               organization, is likely without financial resources, is affiliated with
23             Stephens Media directly or indirectly, is a present or likely future
               valued business relationship of Stephens Media or otherwise would be
24             a Person that, if the subject of an Infringement Action, would result in
               an adverse result to Stephens Media.
25

26   (Gibson Decl., Ex. 2.)
                                                   2
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 1              Section 7.2 of the SAA states in part:

 2              Despite any such Copyright Assignment, Stephens Media Shall retain
                (and is hereby granted by Righthaven) an exclusive license to Exploit
 3              the Stephens Media Assigned Copyrights for any lawful purpose
                whatsoever and Righthaven shall have no right or license to Exploit or
 4              participate in the receipt of royalties from the Exploitation of the
                Stephens Media Assigned Copyrights other than the right to proceeds
 5              in association with a Recovery. To the extent that Righthaven’s
                maintenance of rights to pursue infringers of the Stephens Media
 6              Assigned Copyrights in any manner would be deemed to diminish
                Stephens Media’s right to Exploit the Stephens Media Assigned
 7              Copyrights, Righthaven hereby grants an exclusive license to Stephens
                Media to the greatest extent permitted by law so that Stephens Media
 8              shall have unfettered and exclusive ability to Exploit the Stephens
                Media Assigned Copyrights.
 9

10   (Id.)

11              Section 8 of the SAA is titled “Stephens Media’s Right of Reversion.” Section 8

12   states in part:

13              Stephens Media shall have the right at any time to terminate, in good
                faith, any Copyright Assignment (the “Assignment Termination”) and
14              enjoy a right of complete reversion to the ownership of any copyright
                that is subject of a Copyright Assignment. . . . In order to effect
15              termination of the [sic] any Copyright Assignment, Stephens Media
                shall be required to provided Righthaven with thirty (30) days prior
16              written notice. Within thirty (30) days after receipt of termination of
                the [sic] any Copyright Assignment, Righthaven shall commence
17              documentation to effect reassignment of the Stephens Media Assigned
                Copyrights to Stephens Media.
18

19   (Id.)

20              On December 6, 2010, Stephens Media, the original owner of the Work, assigned

21   all rights, title, and interest in and to the Work, including the right to seek redress for all

22   past, present, and future infringements, to Plaintiff Righthaven (the “Assignment”).

23   (Gibson Decl.) The Assignment states in part:

24              Assignor hereby transfers, vests and assigns the work described in Exhibit A,
                attached hereto and incorporated herein by this reference (the “Work”), to
25              Righthaven, subject to the Assignor’s rights of reversion, all copyrights requisite
                to have Righthaven recognized as the copyright owner of the Work for purposes
26              of Righthaven being able to claim ownership as well as the right to seek redress
                                                      3
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 1              for past, present and future infringements of the copyright, both accrued and
                unaccrued, in and to the Work.
 2

 3   (Gibson Decl., Ex. 1.)

 4              Plaintiff Righthaven brought the present suit against Hoehn on January 11, 2011,

 5   based on Hoehn’s posting of the Work on the Website. (Compl. (Doc. #1).) The suit seeks

 6   a permanent injunction prohibiting Hoehn from posting the Work and an award of statutory

 7   damages.

 8              On April 17, 2011, Hoehn filed a Motion to Dismiss for lack of subject matter

 9   jurisdiction, arguing that Righthaven did not have the requisite standing to bring a copyright

10   infringement suit because it was not the owner of an exclusive right. On May 9, 2011,

11   Stephens Media and Righthaven entered into the Clarification and Amendment to Strategic

12   Alliance Agreement (the “Clarification”). (Gibson Decl., Ex. 3.) The Clarification states

13   that the intent of the parties when they entered into the SAA was “to grant Stephens Media

14   a license to Exploit the Stephens Media Assigned Copyrights for any lawful purpose

15   whatsoever without in any way hindering the right of Righthaven to seek redress for any

16   past, present or future infringements of such copyright.” (Id.) The Clarification amends

17   section 7.2 of the SAA and replaces it with the following:

18              Automatically upon execution of a Copyright Assignment, Stephens
                Media is granted a non-exclusive license to Exploit the Stephens
19              Media Assigned Copyright to the greatest extent permitted by law in
                consideration for payment in the amount of One Dollar and Zero Cents
20              ($1.00) per year to Righthaven as a license or royalty for each Stephens
                Media Assigned Copyright as Consideration for the license granted
21              herein (the “License Fee”). Any License Fee required under this
                amended and revised Section 7.2 shall be retroactive to the Effective
22              Date. In the event that Righthaven decides to Exploit or participate in
                receipt of royalties from Exploitation of a Stephens Media Assigned
23              Copyright other than in association with a Recovery, Righthaven shall
                give Stephens Media 30 days prior written notice. The parties
24              acknowledge that failure to provide such notice would be a material
                breach of this Agreement and would cause Stephens Media irreparable
25              harm, remediable through injunctive relief, which Righthaven and
                those asserting rights obtained from it shall have no right to oppose.
26
                                                   4
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 1   (Id.)

 2              Additionally, the Clarification amends section 8 of the SAA and replaces it with

 3   sections 8.1 and 8.2, including the following:

 4              At any time, within its sole discretion, Stephens Media shall have the
                option, within 14 days of providing notice of the exercise of such
 5              option, to purchase all right and title to the Stephens Media Assigned
                Copyright in consideration for payment in the amount of Ten Dollars
 6              and Zero Cents ($10.00) (“Exercised Option”).

 7   (Id.) The Clarification states it is to be retroactively effective to the original date of the

 8   SAA. (Id.)

 9              Also on May 9, 2011, Righthaven filed the Declarations of Steven A. Gibson

10   (“Gibson”), CEO of Righthaven, and Mark Hinueber (“Hinueber”), General Counsel of

11   Stephens Media. (Gibson Decl.; Hinueber Decl. (Doc. #25).) Both Gibson and Hinueber

12   state that it was the parties’ intent to grant all ownership rights in the Work to Righthaven

13   together with the right to sue for all past, present, and future copyright infringement. (Id.)

14   Hinueber also states that it was not the intent of Stephens Media “to divest or otherwise

15   impair Righthaven’s ability to file or otherwise maintain copyrighted infringement actions

16   based on content . . . specifically assigned to Righthaven through the license-back rights

17   described in the SAA. Rather it was [the parties’] intent in this regard to acknowledge

18   Stephens Media’s ability to continue to use the assigned content as a licensee.” (Hinueber

19   Decl.)

20              Hoehn now moves to dismiss, arguing this Court does not have subject matter

21   jurisdiction over this matter because Righthaven does not own any exclusive rights in the

22   copyright necessary to bring suit. Hoehn further contends that the May 9, 2011

23   Clarification to the SAA does not correct these deficiencies and ultimately deprives

24   Righthaven of any exclusive rights in the assigned copyright. Righthaven responds that it

25   has standing to bring this suit, and in any event, the May 9, 2011 Clarification cures any

26   alleged defect in standing. Further, Righthaven argues the SAA reflects promises made
                                                      5
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 1   between Righthaven and Stephens Media with regard to future transactions, but itself does

 2   not cause an assignment of rights. Rather, Righthaven argues, the assignment of rights is

 3   governed by the Assignment entered into on December 6, 2010.

 4             Additionally, Hoehn moves for summary judgment, arguing that his use of the

 5   Work is protected as fair use. Righthaven responds that summary judgment on fair use is

 6   premature as Plaintiff has not been permitted to engage in discovery and, in any case,

 7   Defendant fails to establish that his conduct is protected as fair use. Defendant replies that

 8   Plaintiff was given the opportunity to engage in discovery and did not do so. Additionally,

 9   Defendant states that because both parties agree as to the facts of the case, there is no

10   genuine issue of material fact and summary judgment is appropriate.

11   II. MOTION TO DISMISS FOR LACK OF JURISDICTION

12             To hear a case, a federal court must have subject matter jurisdiction over the

13   matter at hand. Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61 (1992). Central to

14   the issue of subject matter jurisdiction is the issue of standing, requiring the party invoking

15   jurisdiction to establish actual or imminent harm. Id. at 560. The invoking party bears the

16   burden of establishing standing with the same burden of proof “required at the successive

17   stages of the litigation.” Id. at 561. If a court does not set a hearing on a motion to dismiss,

18   “a plaintiff must make only a prima facie showing of jurisdictional facts through the

19   submitted materials in order to avoid a defendant’s motion to dismiss.” Data Disc, Inc. v.

20   Sys. Tech. Assocs., Inc., 557 F.2d 1280, 1285 (9th Cir. 1977).

21             “[O]nly copyright owners and exclusive licensees of copyright may enforce a

22   copyright.” Sybersound Records v. UAV Corp., 517 F.3d 1137, 1144 (9th Cir. 2008).

23   Exclusive rights in a copyright are enumerated in 17 U.S.C. § 106 and include the exclusive

24   rights:

25             (1) to reproduce the copyrighted work in copies or phonorecords;
               (2) to prepare derivative works based upon the copyrighted work; [and]
26             (3) to distribute copies or phonorecords of the copyrighted work to the public by
                                                    6
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 1                sale or other transfer of ownership, or by rental, lease, or lending.

 2   Id. “The right to sue for an accrued claim for infringement is not an exclusive right under

 3   § 106.” Silvers v. Sony Pictures Entm’t, Inc., 402 F.3d 881, 884 (2005). “Exclusive rights

 4   in a copyright may be transferred and owned separately, but . . . [there are] no exclusive

 5   rights other than those listed in §106.” Id. at 885. While the right to sue is not an exclusive

 6   right, it may be transferred to another party if accompanied with an exclusive right. Id. at

 7   890 n.1. Additionally, the right to sue for past infringement can be transferred to another

 8   party so long as it is expressly included in the assignment along with an exclusive right. Id.

 9   at 889-90.

10                Plaintiff Righthaven alleges it has presented evidence in the form of the

11   Assignment that Stephens Media transferred to Righthaven exclusive rights in the Work

12   coupled with the right to sue based on infringement of the copyrighted Work. Additionally,

13   Righthaven argues that to the extent the Court finds the Assignment ambiguous, the Court

14   should look to the parties’ intent, evidenced by the Gibson and Hinueber declarations, that

15   the parties intended to transfer the exclusive rights in the Work along with the right to sue

16   based on past, present, and future infringement of the copyrighted Work.

17                Ownership of the exclusive right to reproduce the copyrighted work is necessary

18   to bring a suit for infringement based on reproduction of the copyrighted work.

19   Sybersound, 517 F.3d at 1144. The language of the Assignment transfers “all copyrights

20   requisite to have Righthaven recognized as the copyright owner of the Work for purposes of

21   Righthaven being able to claim ownership as well as the right to seek redress for past,

22   present and future infringements of the copyright.” Additionally, Hinueber states that

23   “Stephens Media assigned all rights, title and interest in and to the Work, including the right

24   to seek redress for all past, present and future infringements of the Work to Righthaven on

25   December 6, 2010.” (Hinueber Decl.)

26   ///
                                                       7
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 1              However, the Assignment cannot be read in isolation. The SAA governs the

 2   parties’ relationship with respect to Copyright Assignments. (Gibson Decl., Ex. 2 at 7.1.)

 3   Additionally, the blank form Assignment is incorporated as an attachment to the SAA,

 4   indicating that the two documents together govern the transfer of Copyright Assignments

 5   rather than the Assignment alone. (Id., Ex. 1.) The Assignment together with the SAA are

 6   unambiguous.

 7              The Court finds the SAA in its original form qualifies the Assignment with

 8   restrictions or rights of reversion, such that in the end, Righthaven is not left with

 9   ownership of any exclusive rights. Under Section 3.3 of the SAA, Righthaven is obligated

10   to reassign the rights to the Work if it does not pursue an infringement action within 60 days

11   of the Assignment. Additionally, this section gives Stephens Media the right to direct

12   Righthaven not to pursue an action against an alleged infringer. Further, under Section 7.2,

13   Righthaven has “no right of license to Exploit or participate in the receipt of royalties from

14   the Exploitation of the Stephens Media Assigned Copyrights . . . .” Stephens Media has the

15   unilateral right, at any time, to terminate the Copyright Assignment and enjoy a complete

16   right of reversion. These carveouts deprive Righthaven of any of the rights normally

17   associated with ownership of an exclusive right necessary to bring suit for copyright

18   infringement and leave Righthaven no rights except to pursue infringement actions, a right

19   which itself is subject to Stephens Media’s veto.

20              In Nafal v. Carter, the court faced a similar disconnect between the parties’ label

21   of a transfer of exclusive rights in a copyright assignment and the reality of their transfer.

22   540 F. Supp. 2d 1128 (C.D. Cal. 2007). The Nafal court found that despite an assignment

23   purporting to give the plaintiff “an undivided one-half (50%) of [assignor’s] rights, title and

24   interest [in the work],” this label could not subvert summary judgment where the reality of

25   the assignment left the plaintiff with little to no rights in the copyrighted work. Id. at 1141-

26   42. The court found that the assignment did not make the plaintiff a “co-exclusive
                                                     8
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 1   licensee” with the right to sue for infringement because the assignment gave the plaintiff no

 2   discretion in deciding when to sue an alleged infringer; the plaintiff’s interest in the

 3   copyrighted work would be terminable if the plaintiff did not bring an infringement lawsuit

 4   within a certain time period; nearly every effort by the plaintiff to exploit the copyrighted

 5   work had to be approved in advance; and the plaintiff did not offer facts that would permit

 6   the inference that he had rights to do anything beyond negotiating “compulsory mechanical

 7   licenses, which does not confer Plaintiff with the power to exploit any exclusive rights.” 1 Id.

 8   at 1143.

 9              Although the Court is evaluating Righthaven’s standing at the dismissal stage,

10   rather than summary judgment as in Nafal, similar factors lead the Court to the same

11   conclusion. Stephens Media retains discretion over when to bring suit for infringement and

12   Righthaven’s rights will be terminated if it does not bring suit within a specified time

13   period. Righthaven has no right to exploit or profit from the work in any way other than

14   that associated with recovery from an infringement action. The Copyright Assignment is

15   fully terminable by Stephens Media at any time. Righthaven has no meaningful rights other

16   than the bare right to sue, something that is not transferable under Silvers. 402 F.3d at 884.

17              Similarly, in Lahiri v. Universal Music & Video Distrib. Corp., the Court found

18   that an assignment that used ownership language but was too restrictive to convey such a

19   right could not transfer an exclusive right. 606 F.3d 1216, 1222 (9th Cir. 2010). The

20   assignment the plaintiff relied on to establish a right in the copyrighted work transferred

21   only an interest in the recovery based on copyright infringement and no interest in the work

22   itself. Here, the rights in the copyrighted Work retained by Stephens Media deprive

23   Righthaven of everything except the right to pursue alleged infringers, a right that is still

24
            1
25              A mechanical license “grants third parties the non-exclusive right to reproduce a musical
     composition on phonorecords, provided that the copyright owner has already authorized the use of such
26   work,” during the manufacture and sale of phonorecords. Nafal, 540 F. Supp. 2d at 1143.
                                                      9
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 1   subject to Stephens Media’s oversight. Accordingly, Righthaven does not possess an

 2   exclusive right in the Work and therefore does not have standing to bring a suit for

 3   infringement.

 4              Even assuming that the May 9, 2011 Clarification can change the jurisdictional

 5   facts as they existed at the time of the filing of the suit, it still does not correct the

 6   deficiencies with respect to lack of standing. The May 9, 2011 Clarification offers recitals

 7   stating the parties’ intent “to convey all ownership rights in and to any identified Work to

 8   Righthaven . . . so that Righthaven would be the rightful owner of any identified Work and

 9   entitled to seek copyright registration.” However, it does not provide Righthaven with any

10   exclusive rights necessary to bring suit.

11              The May 9, 2011 Clarification provides Righthaven with only an illusory right to

12   exploit or profit from the Work, requiring 30 days advance notice to Stephens Media before

13   being able to exploit the Work for any purpose other than bringing an infringement action.

14   Stephens Media has, in its sole discretion, the option to repurchase the Copyright

15   Assignment for a nominal amount within 14 days, thereby retaining the ability to prevent

16   Righthaven from ever exploiting or reproducing the Work. Stephens Media’s power to

17   prevent Righthaven from exploiting the Work for any purpose other than pursuing

18   infringement actions is further bolstered by the Clarification’s provision that every

19   exploitation of the Work by Righthaven other than pursuing an infringement action without

20   first giving Stephens Media notice constitutes irreparable harm to Stephens Media.

21   Stephens Media may obtain injunctive relief against Righthaven to prevent such

22   “irreparable harm” and, pursuant to the Clarification, Righthaven has no right to oppose

23   Stephens Media’s request for injunctive relief. Accordingly, Righthaven does not have any

24   exclusive rights in the Work and thus does not have standing to bring an infringement

25   action. The Court therefore will grant Defendant’s Motion to Dismiss for lack of standing.

26   ///
                                                      10
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 1   III. SUMMARY JUDGMENT

 2             Assuming Righthaven was found to have standing to bring this action, the Court

 3   nonetheless finds Hoehn is entitled to summary judgment on the ground of fair use of the

 4   Work. Summary judgment is appropriate if the pleadings, depositions, answers to

 5   interrogatories and admissions, and affidavits demonstrate “there is no genuine dispute as to

 6   any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P.

 7   56(a). A fact is “material” if it “might affect the outcome of the suit under the governing

 8   law.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). An issue is genuine if

 9   “the evidence is such that a reasonable jury could return a verdict for the nonmoving party.”

10   Id. Where a party fails to offer evidence sufficient to establish an element essential to its

11   case, no genuine issue of material fact can exist, because “a complete failure of proof

12   concerning an essential element of the nonmoving party’s case necessarily renders all other

13   facts immaterial.” Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986).

14             The party “seeking summary judgment bears the initial responsibility of

15   informing the district court of the basis for its motion, and identifying those portions of ‘the

16   pleadings . . .’ which it believes demonstrate the absence of a genuine issue of material

17   fact.” Id. at 323. The burden then shifts to the non-moving party to go beyond the

18   pleadings and set forth specific facts demonstrating there is a genuine issue of material fact

19   for trial. Fairbank v. Wunderman Cato Johnson, 212 F.3d 528, 531 (9th Cir. 2000). The

20   Court views all evidence in the light most favorable to the non-moving party. County of

21   Tuolumne v. Sonora Cmty. Hosp., 236 F.3d 1148, 1154 (9th Cir. 2001).

22             Under Federal Rule of Civil Procedure 56(b) “a party may file a motion for

23   summary judgment at any time until 30 days after the close of all discovery.” “If a

24   nonmovant shows by affidavit or declaration that, for specified reasons, it cannot present

25   facts essential to justify its opposition, the court may” defer consideration of a motion or

26   deny it, allow the parties time to complete additional discovery, or grant other appropriate
                                                   11
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 1   relief. Fed. R. Civ. P. 56(d). The party requesting additional time to conduct discovery to

 2   oppose summary judgment must present an affidavit stating the specific facts it hopes to

 3   elicit from further discovery, that the facts exist, and that the facts are essential to oppose

 4   summary judgment. Family Home & Fin. Ctr, Inc. v. Fed. Home Loan Mortg. Corp., 525

 5   F.3d 822, 827 (9th Cir. 2008). If the nonmovant does not satisfy these requirements, the

 6   court may proceed to rule on summary judgment without granting additional discovery. Id.

 7              Fair use is a defense to use of a copyrighted work which otherwise would be

 8   copyright infringement if the work is used “for purposes such as criticism, comment, news

 9   reporting, teaching . . ., scholarship, or research.” 17 U.S.C. § 107. Factors to be

10   considered when determining fair use include-

11              (1) the purpose and character of the use, including whether such use is of
                commercial nature or is for nonprofit educational purposes;
12              (2) the nature of the copyrighted work;
                (3) the amount and substantiality of the portion used in relation to the copyrighted
13              work as a whole; and
                (4) the effect of the use upon the potential market for or value of the copyrighted
14              work.

15   Id.

16              Fair use is evaluated on a case-by-case basis. Campbell v. Acuff-Rose Music,

17   Inc., 510 U.S. 569, 577 (1994). “Fair use is a mixed question of law and fact. If there are

18   no genuine issues of material fact, . . . and a reasonable trier can reach only one conclusion,

19   a court may conclude as a matter of law whether the challenged use qualifies as a fair use of

20   the copyrighted work.” Los Angeles News Serv. v. KCAL-TV Channel 9, 108 F.3d 1119,

21   1120 (9th Cir. 1997) (quotation omitted). “Where material facts are not in dispute, fair use

22   is appropriately decided on summary judgment.” Mattel, Inc. v. Walking Mountain Prods.,

23   353 F.3d 792, 800 (9th Cir. 2003).

24              As an initial matter, Righthaven argues that summary judgment is premature

25   because Righthaven has not conducted discovery. Hoehn responds that Righthaven has had

26   the opportunity to conduct discovery and has failed to do so. Additionally, Hoehn argues
                                                    12
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 1   that all facts necessary to decide summary judgment are undisputed and before the Court.

 2             Hoehn’s motion complies with the time strictures set by Rule 56(b). Righthaven

 3   has not presented an affidavit showing the specified reasons it needs to conduct discovery to

 4   oppose summary judgment, or, the types of facts it hopes to elicit, that these facts exist, and

 5   that these facts are necessary to oppose summary judgment. Accordingly, the Court will

 6   deny additional discovery on this matter and decide Hoehn’s motion on the facts before the

 7   Court.

 8             1) The Purpose and Character of the Use

 9             The first factor of fair use is the purpose and character of the use. 17 U.S.C.

10   § 107. Noncommercial, nonprofit use is presumptively fair. Sony Corp. of Am. v.

11   Universal City Studios, Inc., 464 U.S. 417, 449 (1984). “The crux of the profit/nonprofit

12   distinction is not whether the sole motive of the use is monetary gain but whether the user

13   stands to profit from exploitation of the copyrighted material without paying the customary

14   price.” Harper & Row Publishers, Inc. v. Nation Enters., 471 U.S. 539, 562 (1985). “This

15   factor focuses on whether the new work merely replaces the object of the original creation

16   or instead adds a further purpose or different character. In other words, this factor asks

17   whether and to what extent the new work is transformative.” A & M Records, Inc. v.

18   Napster, Inc., 239 F.3d 1004, 1015 (9th Cir. 2001) (quotation omitted). If the character of

19   the use differs from the original usage, the use may be considered fair. Worldwide Church

20   of God v. Phila. Church of God, Inc., 227 F.3d 1110, 1117 (9th Cir. 2000) (duplicating a

21   church’s religious book for use by a different church was not transformative and was not

22   protected by fair use). However, mere transmission of a copyrighted work in a different

23   medium is likely not fair use. Napster, 239 F.3d at 1015.

24             It is undisputed that Hoehn did not and could not profit from posting the Work.

25   Under Sony, noncommercial/nonprofit use is presumptively fair. Additionally, this factor

26   focuses on the purpose or character of the new work. Here, Hoehn posted the Work as part
                                                   13
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 1   of an online discussion. Hoehn avers he posted the Work to foster discussion in a specific

 2   interactive website forum regarding the recent budget shortfalls facing state governments.

 3   This purpose is consistent with comment, for which 17 U.S.C. § 107 provides fair use

 4   protection. There is no genuine issue of material fact that Hoehn’s noncommercial use of

 5   the Work for comment favors a finding that the use was fair.

 6             2) The Nature of the Copyrighted Work

 7             The second factor is the nature of the copyrighted work. 17 U.S.C. § 107.

 8   Generally, “creative works are closer to the core of intended copyright protection than

 9   informational and functional works.” Dr. Seuss Enters., L.P. v. Penguin Books USA, Inc.,

10   109 F.3d 1394, 1402 (9th Cir. 1997) (quotation omitted). “The scope of fair use is greater

11   when informational as opposed to creative works are involved.” Hustler Magazine Inc. v.

12   Moral Majority Inc., 796 F.2d 1148, 1153-54 (9th Cir. 1986). The types of works deemed

13   to be creative to tilt this factor against a finding of fair use have been complete works of

14   fiction, song lyrics, and Barbie Dolls. Dr. Seuss, 109 F.3d at 1402; Leadsinger, Inc. v.

15   BMG Music Publ’g, 512 F.3d 522, 531 (9th Cir. 2008); and Mattel, 353 F.3d at 803.

16   However, “this factor [is] not terribly significant in the overall fair use balancing.” Dr.

17   Seuss, 109 F.3d at 1402.

18             The Work is an editorial originally published in the LVRJ. The Work is a

19   combination of an informational piece with some creative elements. Roughly eight of the

20   nineteen paragraphs of the Work provide purely factual data, about five are purely creative

21   opinions of the author, and the rest are a mix of factual and creative elements. While the

22   Work does have some creative or editorial elements, these elements are not enough to

23   consider the Work a purely “creative work” in the realm of fictional stories, song lyrics, or

24   Barbie dolls. Accordingly, the Work is not within “the core of intended copyright

25   protection.” Dr. Seuss, 109 F.3d at 1402. Rather, because the Work contains a significant

26   informational element, the scope of fair use is greater than it would be for a creative work,
                                                   14
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 1   but likely less than it would for a purely informational work. However, this factor is not

 2   terribly relevant in the overall fair use balancing, and the lesser creative element of the

 3   Work lessens the impact further. Accordingly, this factor must be balanced with the other

 4   fair use factors to determine if Hoehn’s use of the Work was fair.

 5             3) The Amount Used

 6             The third factor of fair use is the amount of the use of the copyrighted work. 17

 7   U.S.C. § 107. “[T]he extent of permissible copying varies with the purpose and character

 8   of the use.” Campbell, 510 U.S. at 586-87. “While wholesale copying does not preclude

 9   fair use per se, copying an entire work militates against finding a fair use.” Napster, 239

10   F.3d at 1016 (quotation omitted). However, copying of an entire copyrighted work has

11   been deemed justified where the purpose of the new work differs from the original. Kelly

12   v. Arriba Soft Corp., 336 F.3d 811, 821 (9th Cir. 2003); see also Sony, 464 U.S. at 449-50

13   (videotaping whole broadcast television programs for later private viewing constituted fair

14   use).

15             It is undisputed that Hoehn posted the entire work in his comment on the

16   Website. Posting an entire work generally “militates against finding a fair use.” Napster,

17   239 F.3d at 1016. However, while wholesale copying of the Work shifts this factor against

18   finding fair use, wholesale copying does not preclude a finding of fair use. Id. The three

19   other factors need to be balanced to determine if fair use is appropriate.

20             4) The Effect Upon the Potential Market for the Work

21             The final factor to be weighed is the effect on the potential market for or value of

22   the copyrighted work. 17 U.S.C. § 107. “Fair use, when properly applied, is limited to

23   copying by others which does not materially impair the marketability of the work which is

24   copied.” Harper, 471 U.S. 566-67 (quotation omitted). Additionally, “[a] challenge to

25   noncommercial use of a copyrighted work requires proof either that the particular use is

26   harmful, or that if it should become widespread, it would adversely affect the potential
                                                    15
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 1   market for the copyrighted work.” Napster, 239 F.3d at 1016 (quotation omitted).

 2              It is undisputed that Hoehn’s use of the Work is noncommercial. Challenges to

 3   noncommercial use require a showing that the particular use is harmful or negatively

 4   impacts the potential market for the copyrighted work. Id. Righthaven has not presented

 5   evidence raising a genuine issue of material fact that Hoehn’s use is harmful. Rather,

 6   Righthaven contends that because Hoehn replicated the entirety of the Work “[s]uch

 7   circumstances warrant the conclusion that [Hoehn’s] infringement has likely caused a

 8   substantial impairment on the potential market for the Work and that [Hoehn’s] infringing

 9   copy of the Work fulfilled the demand for the original.” (Resp. (Doc. #13) at 12-13.)

10   Additionally, Righthaven argues that the market for the Work was impacted negatively

11   because potential readers are able to read the Work on the Website and would have no

12   reason to view the Work at its original source of publication. However, Righthaven has not

13   presented any evidence of harm or negative impact from Hoehn’s use of the Work on the

14   Website between November 29, 2010 and January 6, 2011. Merely arguing that because

15   Hoehn replicated the entirety of the Work the market for the Work was diminished is not

16   sufficient to show harm. Therefore, Righthaven has not presented evidence raising a

17   genuine issue of material fact that the fourth factor favors a finding of fair use.

18              There is no genuine issue of material fact that the above factors favor a finding of

19   fair use. Of the four factors, only the fact that Hoehn replicated the entire Work weighs

20   against a finding of fair use. Hoehn used the Work for a noncommercial and nonprofit use

21   that was different from the original use. The copyrighted Work was an informational work

22   with only some creative aspects, and the Work was used for an informational purpose.

23   Righthaven did not present any evidence that the market for the Work was harmed by

24   Hoehn’s noncommercial use for the 40 days it appeared on the Website. Accordingly, there

25   is no genuine issue of material fact that Hoehn’s use of the Work was fair and summary

26   judgment is appropriate.
                                                    16
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 1   IV.      CONCLUSION

 2            IT IS THEREFORE ORDERED that Defendant’s Motion to Dismiss for Lack of

 3   Jurisdiction (Doc. #16) and Defendant’s Motion for Summary Judgment (Doc. #8) are

 4   hereby GRANTED, and Plaintiff’s Complaint is hereby DISMISSED.

 5

 6   DATED: June 20, 2011.

 7

 8
                                         _______________________________
 9                                            PHILIP M. PRO
                                              United States District Judge
10

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13

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                                               17
Case 1:11-cv-00830-JLK Document 21-7   Filed 07/19/11 USDC Colorado Page 1 of 9




           Exhibit E
     to CALA’s Amicus Brief


                 Jama Summary
                   Judgment
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                  Case 2:10-cv-01322-JCM -LRL Document 38 Filed 04/22/11 Page 1 of 8



                  1
                  2
                  3
                  4
                                                      UNITED STATES DISTRICT COURT
                  5
                                                            DISTRICT OF NEVADA
                  6
                                                                        2:10-CV-1322 JCM (LRL)
                  7        RIGHTHAVEN, LCC, a Nevada limited
                           liability company,
                  8
                                         Plaintiff,
                  9
                10         v.

                11         KAYSE JAMA, an individual, and
                           CENTER FOR INTERCULTURAL
                12         ORGANIZING, a non-profit
                13         organization,

                14                       Defendants.

                15
                16                                                   ORDER
                17              Presently before the court is the order to show cause (doc. #12) why the court should not
                18    dismiss the instant action under the 17 U.S.C. § 107 fair use exception. Plaintiff Righthaven filed
                19    a response (doc. #14) to the order to show cause, alternatively requesting a chance to conduct
                20    discovery pursuant to Federal Rule of Civil Procedure 56(f).1 The court also permitted (doc. #19)
                21    Professor Jason Schultz to file an amicus brief (doc. #21).
                22    I.        Background
                23              This dispute centers on a newspaper article, first published by the Las Vegas Review-Journal
                24    (“LVRJ”) on June 28, 2010. On July 8, 2010, defendant Center for Intercultural Organizing (“CIO”)
                25
                                1
                26             Under the recent amendments to the Federal Rules of Civil Procedure, the court notes that
                      the proper citation should be Rule 56(d), which allows the court to allow time for discovery where
                27    “a nonmovant shows by affidavit or declaration that, for specified reasons, it cannot present facts
                28    essential to justify its position. . . .”
James C. Mahan
U.S. District Judge
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                  1   posted the article in its entirety on the CIO website. Thereafter, on July 26, 2008, the LVRJ assigned
                  2   ownership of the copyright to plaintiff Righthaven, which filed suit against CIO on August 5, 2010,
                  3   alleging copyright infringement under 17 U.S.C. § 501.
                  4           The disputed article discusses whether police in the Las Vegas area were targeting minorities.
                  5   Defendants, an Oregon nonprofit organization dedicated to helping immigrants become aware of
                  6   immigration-related issues in the United States, posted the article in its entirety on their website,
                  7   purportedly to educate the public about the issues contained therein.
                  8           On December 28, 2010, this court held a show cause hearing, which was adjourned to give
                  9   plaintiff an opportunity to file a list of disputed, material facts. (Doc. #27). Thereafter, plaintiff filed
                10    a response (doc. #28), to which the defendants (doc. #29) and the amicus (doc. #30) replied. The
                11    court again held a hearing on the order to show cause on March 18, 2011, (doc. #33) and, having
                12    considered the papers and pleadings submitted, as well as the oral arguments of the parties present,
                13    now finds that there are no disputed material facts to present a genuine issue for trial. Accordingly,
                14    the defendants are entitled to judgment as a matter of law.
                15    II.     Legal Standard
                16            Summary judgment is appropriate when, viewing the facts in the light most favorable to the
                17    nonmoving party, there is no genuine issue of material fact, and the moving party is entitled to
                18    judgment as a matter of law. Bagdadi v. Nazar, 84 F.3d 1194, 1197 (9th Cir. 1996); FED . R. CIV . P.
                19    56(c). The moving party bears the burden of presenting authenticated evidence to demonstrate the
                20    absence of any genuine issue of material fact for trial. Celotex Corp. v. Catrett, 477 U.S. 317, 323
                21    (1986); see Orr v. Bank of America, 285 F.3d 764 (9th Cir. 2002) (articulating the standard for
                22    authentication of evidence on a motion for summary judgment).
                23            The court may “[a]fter giving notice and a reasonable time to respond . . . (1) grant summary
                24    judgment for a nonmovant; (2) grant the motion on grounds not raised by a party; or (3) consider
                25    summary judgment on its own after identifying for the parties material facts that may not genuinely
                26    be in dispute.” FED . R. CIV . P. 56(f). Here, the court has invoked subdivision (f) and given the parties
                27    a reasonable time to respond to the order to show cause. Although the plaintiff has requested
                28
James C. Mahan
U.S. District Judge                                                      -2-
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                  1   discovery, noting that the party against whom summary judgment is granted must be “on notice that
                  2   she had to come forward with all of her evidence,” Celotex Corp., 477 U.S. at 326, the court finds
                  3   that further discovery is unnecessary, as the court already possesses enough information to rule as
                  4   a matter of law on the issue of fair use.
                  5   III.    Fair Use Analysis
                  6           A plaintiff must satisfy two requirements to present a prima facie case of copyright
                  7   infringement: (1) ownership of the allegedly infringed material, and (2) that the alleged infringers
                  8   violated at least one exclusive right granted to copyright holders. 17 U.S.C. §§ 106, 501(a).
                  9   However, even where a plaintiff has alleged a prima facie case of copyright infringement, the
                10    defendant may refute the claim if the defendant has engaged in a fair use of the material.
                11            The fair use doctrine is an affirmative defense to a claim of infringement, which protects
                12    certain uses of a copyright. The court considers four factors to determine whether the use of a
                13    copyrighted work is fair: “(1) the purpose and character of the use, including whether such use is of
                14    a commercial nature or is for nonprofit educational purposes; (2) the nature of the copyrighted work;
                15    (3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole;
                16    and (4) the effect of the use upon the potential market for or value of the copyrighted work.” 17
                17    U.S.C. § 107. The four factors should be considered in light of the purposes of copyright to promote
                18    the progress of science and useful arts and to serve the welfare of the public. Perfect 10, Inc. v.
                19    Amazon.com, Inc., 508 F.3d 1146, 1163 (9th Cir. 2007) (internal citations omitted).
                20            “Fair use is a mixed question of law and fact. If there are no genuine issues of material fact,
                21    or if, even after resolving all issues in favor of the opposing party, a reasonable trier of fact can reach
                22    only one conclusion, a court may conclude as a matter of law whether the challenged use qualifies
                23    as a fair use of the copyrighted work.” Los Angeles News Serv. v. KCAL-TV Channel 9, 108 F.3d
                24    1119, 1120 (9th Cir. 1997) (citing Hustler Magazine, Inc. v. Moral Majority, Inc., 796 F.2d 1148,
                25    1150 (9th Cir.1986) (quoting Harper & Row Publishers, Inc. v. Nation Enterprises, 471 U.S. 539,
                26    559 (1985))). Here, weighing each of the four use factors and resolving all issues in favor of plaintiff
                27    Righthaven, the court finds that a reasonable trier of fact could only reach one conclusion – that the
                28
James C. Mahan
U.S. District Judge                                                      -3-
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                  1   alleged infringement qualifies as fair use.
                  2           (A)     Purpose and Character of the Use
                  3           “[T]he fair use of a copyrighted work . . . for purposes such as criticism, comment, news
                  4   reporting, teaching (including multiple copies for classroom use), scholarship, or research, is not an
                  5   infringement of copyright.” 17 U.S.C. § 107. This first factor addresses whether the new work
                  6   “replaces the object of the original creation or instead adds a further purpose or different character
                  7   . . . [and] is ‘transformative.’” A&M Records, Inc. v. Napster, Inc., 239 F.3d 1004, 1015 (9th Cir.
                  8   2001) (quoting Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569, 579 (1994)). This factor also
                  9   requires the court to determine whether the new use is commercial or non-commercial. Id.
                10            First, CIO’s use of the article is transformative. Although the former owner, the LVRJ, used
                11    the article for news-reporting, the court focuses on the current copyright owner’s use, which, at this
                12    juncture, has been shown to be nothing more than litigation-driven. Accordingly, CIO’s use of the
                13    article to educate the public is transformative and does not constitute a substitution of the plaintiff’s
                14    use. See Perfect 10, 508 F.3d at 1146 (discussing the effect of market substitution in relation to the
                15    first and fourth factors).
                16            Second, the court finds that the purpose of the use here was non-commercial. The parties
                17    agree that defendant CIO is a non-profit corporation with an educational mission; indeed the plaintiff
                18    has characterized the defendant as such on the face of the complaint. (See doc. #1, ¶ 4) (referring to
                19    CIO as “a not-for-profit Oregon entity”). Additionally, the declaration of defendant and CIO
                20    executive Kayse Jama (doc. #7-2) evidences CIO’s educational mission and establishes that
                21    defendants did not sell, license, or publish the work commercially. In light of this evidence, the court
                22    also concludes that defendants’ solicitation of donations on their website is immaterial, and no
                23    reasonable jury could conclude that the defendants used the disputed article for a commercial
                24    purpose. Accordingly, the first factor weighs in favor of a finding of fair use.
                25            (B)     Nature of the Copyrighted Work
                26            The second factor considers the nature of the copyrighted work. “Works that are creative in
                27    nature are ‘closer to the core of intended copyright protection’ than are more fact-based works.”
                28
James C. Mahan
U.S. District Judge                                                     -4-
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                  1   Napster, 239 F.3d at 1016 (citing Campbell, 510 U.S. at 586). Where the disputed use can be
                  2   characterized as news-reporting, this factor weighs heavily in favor of a finding of fair use. Los
                  3   Angeles News Serv., 108 F.3d at 1121.
                  4           The court concludes that a reasonable trier of fact could only reach one conclusion as to the
                  5   nature of the disputed article – it is an informational work, which readily lends itself to a productive
                  6   use by others and, thus, deserves less protection than a creative work of entertainment. Sony Corp.
                  7   Of Am. v. Universal City Studios, Inc., 464 U.S. 417, 496–97 (1984). Discovery and additional fact-
                  8   finding are unnecessary to reach this conclusion, which the court draws simply from reading the
                  9   article itself. Accordingly, this factor weighs heavily in favor of a finding of fair use.
                10            (C)     Amount/Substantiality of the Portion Used in Relation to the Work as a Whole
                11            “The third factor considers whether the amount and substantiality of the portion used in
                12    relation to the copyrighted work as a whole . . . are reasonable in relation to the purpose of the
                13    copying.” Campbell, 510 U.S. at 586. Although “wholesale copying does not preclude fair use per
                14    se, copying an entire work militates against a finding of fair use.” Napster, 239 F.3d at 1016 (internal
                15    quotations omitted). Thus, under some circumstances, a court may determine that a use is fair even
                16    where the protected work is copied in its entirety. Id. (citing Sony, 464 U.S. at 449–50).
                17            Here, the court finds that, although the defendants posted the work in its entirety, the amount
                18    used was reasonable in light of the purpose of the use, which was to educate the public about
                19    immigration issues. Because of the factual nature of the work, and to give the full flavor of the
                20    information, the defendants used the entire article rather than trying to distill it. The court finds that
                21    it would have been impracticable for defendants to cut out portions or edit the article down. See e.g,
                22    Campbell, 510 U.S. at 588–89 (noting that for a parody to be effective, it must take enough material
                23    to evoke the original).
                24            Additionally, the court finds Worldwide Church of God v. Philadelphia Church of God, Inc.,
                25    227 F.3d 110, 1118 (9th Cir. 2000), relied on heavily by the plaintiff, distinguishable. That case
                26    does not stand for the broad proposition that use of an entire work precludes a fair-use finding. Id.
                27    at 1118 (recognizing that wholesale copying does not necessarily preclude a finding of fair use). In
                28
James C. Mahan
U.S. District Judge                                                     -5-
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                  1   Worldwide Church, a church owned the copyright in a 380-page book written by its founder. 227
                  2   F.3d at 1112. The church discontinued distribution of the book, following a change in church
                  3   doctrine. Id. at 1113. However, a splinter group within the church countermanded the directive by
                  4   printing and distributing 30,000 copies of the book and ignoring a cease-and-desist letter. Id.
                  5   Ultimately, distribution of the book drew thousands to the new congregation, and those members
                  6   tithed ten-percent of the church’s income. Id. at 1118.
                  7           The instant action and Worldwide Church are distinguishable. First, the alleged infringers
                  8   here are using the work for informational purposes, rather than to garner membership in an
                  9   organization competing directly with the plaintiff. Second, the infringement in Worldwide Church
                10    was of an entire published book, rather than one news article in an online newspaper. Third, the
                11    infringers in Worldwide Church deleted the plaintiff’s copyright information from their version of
                12    the book, whereas the defendants here attributed the article to the LVRJ. Accordingly, the court finds
                13    that this factor favors neither party.
                14            (D)     Effect of the Use Upon the Potential Market
                15            The fourth factor is the effect of the allegedly infringing use upon the potential market for
                16    or value of the original, copyrighted work. Campbell, 510 U.S. at 590 (citing 17 U.S.C. § 107(4)).
                17    The rationale behind the inclusion of this factor is that “[f]air use . . . is limited to copying by others
                18    which does not materially impair the marketability of the work which is copied.” Harper & Row
                19    Publishers, 471 U.S. at 566–67.
                20            The weight given to this factor will depend on the relative strength of the showing on other
                21    factors, for example:
                22            A challenge to a noncommercial use of a copyrighted work requires proof either that
                              the particular use is harmful, or that if it should become widespread, it would
                23            adversely affect the potential market for the copyrighted work. . . . If the intended use
                              is for commercial gain, that likelihood [of market harm] may be presumed. But if it
                24            is for a noncommercial purpose, the likelihood must be demonstrated.
                25
                      Napster, 239 F.3d at 1016 (quoting Sony, 464 U.S. at 541). Here, as established under the first-factor
                26
                      analysis, the use is non-commercial; thus, no presumption of harm arises. Additionally, because the
                27
                      work is transformative under the first factor, there is no “market substitution . . . and market harm
                28
James C. Mahan
U.S. District Judge                                                      -6-
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                  1   may not be so readily inferred.” Perfect 10., 508 F.3d at 1168 (citing 17 U.S.C. §107(4)). Thus, the
                  2   burden falls on the plaintiff to demonstrate the existence of market harm. The plaintiff has not met
                  3   its burden.
                  4          First, the plaintiff has failed to allege that a “market” exists for its copyright at all, and the
                  5   court declines to simply presume the existence of a market. See e.g., Field v. Google Inc., 412 F.
                  6   Supp. 2d 1106, 1121 (D. Nev. 2006) (declining to presume a market exists where the work was
                  7   offered for free in its entirety). Second, because Righthaven cannot claim the LVRJ’s market as its
                  8   own and is not operating as a traditional newspaper, Righthaven has failed to show that there has
                  9   been any harm to the value of the copyright. Cf. eBay v. MercExchange, LLC, 547 U.S. 388 (2006)
                10    (holding that courts should not broadly presume harm when issuing preliminary injunctions in the
                11    patent context); see Salinger v. Colting, 607 F.3d 68 (2d Cir. 2010) (extending eBay to the copyright
                12    context and anchoring the irreparable harm analysis in equitable principles). Accordingly, the fourth
                13    fair use factor weighs in favor of a finding of fair use.
                14    IV.    Conclusion
                15           The court finds that the defendant’s use of the copyrighted article in this case constitutes fair
                16    use as a matter of law. The article has been removed from its original context; it is no longer owned
                17    by a newspaper; and it has been assigned to a company that uses the copyright exclusively to file
                18    infringement lawsuits. Plaintiff’s litigation strategy has a chilling effect on potential fair uses of
                19    Righthaven-owned articles, diminishes public access to the facts contained therein, and does nothing
                20    to advance the Copyright Act’s purpose of promoting artistic creation.
                21           Accordingly,
                22           IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that, in the case of Righthaven
                23    LLC v. Center For Intercultural Organizing et al. (2:10-cv-01322-JCM -LRL), summary judgment
                24    is granted in favor of the defendants;
                25    ...
                26    ...
                27    ...
                28
James C. Mahan
U.S. District Judge                                                    -7-
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                  1          IT IS FURTHER ORDERED that the defendants shall prepare an appropriate judgment for
                  2   the court’s review and signature.
                  3          DATED April 22, 2011.
                  4
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                                                          UNITED STATES DISTRICT JUDGE
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James C. Mahan
U.S. District Judge                                              -8-
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           Exhibit F
     to CALA’s Amicus Brief


                       Righthaven
                        Response
                        to Amici
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 1   SHAWN A. MANGANO, ESQ.
     Nevada Bar No. 6730
 2   shawn@manganolaw.com
     SHAWN A. MANGANO, LTD.
 3   9960 West Cheyenne Avenue, Suite 170
     Las Vegas, Nevada 89129-7701
 4   Tel: (702) 304-0432
     Fax: (702) 922-3851
 5
     DALE M. CENDALI, ESQ. (admitted pro hac vice)
 6   dale.cendali@kirkland.com
     KIRKLAND & ELLIS LLP
 7   601 Lexington Avenue
     New York, New York 10022
 8   Tel: (212) 446-4800
     Fax: (212) 446-4900
 9
     Attorneys for Plaintiff Righthaven LLC
10

11                                UNITED STATES DISTRICT COURT

12                                        DISTRICT OF NEVADA

13   RIGHTHAVEN LLC, a Nevada limited-                       Case No.: 2:10-cv-01575-JCM-PAL
     liability company,
14                                                           PLAINTIFF RIGHTHAVEN LLC’S
                    Plaintiff,                               OMNIBUS RESPONSE TO THE
15                                                           AMICUS CURIAE BRIEFS OF
            vs.                                              DEMOCRATIC UNDERGROUND AND
16                                                           PROFESSOR JASON SCHULTZ
     PAHRUMP LIFE, an entity of unknown origin
17   and nature; MAREN SCACCIA, an individual; and
     MICHAEL SCACCIA, an individual,
18
                    Defendants.
19

20

21          Pursuant to the Court’s June 17, 2011 Order (Doc. # 41), Righthaven LLC (“Righthaven”)

22   hereby responds to the Amicus Curiae briefs of Democratic Underground (Doc. # 32) and Professor

23   Jason Schultz (Doc. # 36) (collectively, the “amici”), which relate to whether Righthaven has

24   standing. The hearing for the Court’s April 28, 2011 Order to Show Cause why Righthaven’s

25   Complaint should not be dismissed for lack of standing (Doc. # 20) is currently set for June 30,

26   2011, at 10:30 a.m. (Doc. # 38.)

27

28


                                                 1
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 1                                                      TABLE OF CONTENTS
                                                                                                                                                   Page
 2
     I.     INTRODUCTION ................................................................................................................... 1
 3
     II.    ARGUMENT ........................................................................................................................... 2
 4
            A.        Righthaven Is the Sole Copyright Owner and Sole Party with Standing
 5                    to Sue. .......................................................................................................................... 2
 6          B.        Neither the Purpose of the Transaction nor Stephens Media’s
                      Retention of Certain Rights Invalidates the Assignment. ............................................ 5
 7
            C.        Righthaven’s Status as Assignee and its Standing to Sue for
 8                    Infringement Are Aligned with Longstanding Principles of Copyright
                      Law. ............................................................................................................................. 7
 9
            D.        Dismissing the Case Now Would Needlessly Exalt Form over
10                    Substance. .................................................................................................................... 8
11   III.   CONCLUSION ...................................................................................................................... 10
12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28


                                                                   2        i
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 1                                                     TABLE OF AUTHORITIES
                                                                                                                                              Page
 2   CASES
 3   Althin CD Med., Inc., v. W. Suburban Kidney Ctr., S.C.,
       874 F. Supp. 837 (N.D. Ill. 1994) ..................................................................................................... 4
 4
     Bushnell, Inc. v. Brunton Co.,
 5     659 F. Supp. 2d 1150 (D. Kan. 2009) ............................................................................................... 9
 6   Davis v. Blige,
      505 F.3d 90 (2nd Cir. 2007) .............................................................................................................. 6
 7
     Gray v. Preferred Bank,
 8    2010 WL 3895188 (S.D. Cal. Sept. 30, 2010) .................................................................................. 9
 9   Haddad Bros. Inc. v. Little Things Mean A Lot, Inc.,
      2000 WL 1099866 (S.D.N.Y. Aug. 4, 2000) .................................................................................... 9
10
     Harris v. Amgen, Inc.,
11    573 F.3d 728 (9th Cir. 2009) ........................................................................................................... 10
12   HT Litig. Trust v. Jess Rae Booth,
      2008 WL 5227300 (9th Cir. Dec. 16, 2008) ................................................................................... 10
13
     In re Movie Gallery, Inc.,
14     2010 WL 6618894 (Bkrtcy. E.D. Va. Feb. 25, 2010) ....................................................................... 3
15   In re Peregrine Entm't, Ltd.,
       116 B.R. 194 (C.D. Cal. 1990) .......................................................................................................... 3
16
     Int’l Armament Corp. v. Matra Manurhin Int’l., Inc.,
17     630 F. Supp. 741 (E.D. Va. 1986) ..................................................................................................... 5
18   Metro-Goldwyn-Mayer Studios Inc. v. Grokster, Ltd.,
      545 U.S. 913 (2005) .......................................................................................................................... 1
19
     Nafal v. Carter,
20    540 F. Supp. 2d 1128 (C.D. Cal. 2007) ......................................................................................... 4, 7
21   Northstar Fin. Advisors, Inc. v. Schwab Inv.,
      2011 WL 1312044 (N.D. Cal. Mar. 2, 2011) .................................................................................... 9
22
     Premier Dental Prods. Co. v. Darby Dental Supply Co.,
23     794 F.2d 850 (3d Cir. 1986) .............................................................................................................. 5
24   Rawlings v. Nat’l Molasses Co.,
       394 F.2d 645 (9th Cir. 1968) ............................................................................................................. 5
25
     SGS-Thomson Microelectronics, Inc. v. Int’l Rectifier Corp.,
26     1994 WL 374529 (Fed. Cir. Jul. 14, 1994) ....................................................................................... 6
27   Silvers v. Sony Pictures Entm’t, Inc.,
       402 F.3d 881 (9th Cir. 2005) ................................................................................................. 3, 4, 6, 7
28


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 1   Univ. of Pittsburgh v. Varian Med. Sys., Inc.,
      569 F.3d 1328 (Fed. Cir. 2009) ....................................................................................................... 10
 2
     Valmet Paper Mach., Inc. v. Beloit Corp.,
 3     868 F. Supp. 1085 (W.D. Wis. 1994) ................................................................................................ 9
 4   Vaupel Textilmaschinen KG v. Meccanica Euro Italia S.P.A.,
       944 F.2d 870 (Fed. Cir. 1991) ........................................................................................................... 7
 5
     Vittoria N. Am., L.L.C. v. Euro-Asia Imports Inc.,
 6     278 F.3d 1076 (10th Cir. 2001) ......................................................................................................... 5
 7   STATUTES
 8   17 U.S.C. § 101 ..................................................................................................................................... 2
 9   17 U.S.C. § 501(b) ................................................................................................................................ 2
10   CONSTITUTIONAL PROVISIONS
11   U.S. CONST. art. I, § 8 ........................................................................................................................... 1
12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28


                                                                       4       iii
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 1                         MEMORANDUM OF POINTS AND AUTHORITIES
 2   I.     INTRODUCTION
 3          Over 200 years ago, the framers of the U.S. Constitution recognized that written works and

 4   other forms of artistic expression were deserving of legal protection. U.S. CONST. art. I, § 8. These

 5   fundamental principles regarding protecting and fostering artistic creation did not disappear simply

 6   because artistic works have transitioned from tangible to digital. Metro-Goldwyn-Mayer Studios Inc.

 7   v. Grokster, Ltd., 545 U.S. 913, 928-929 (2005) (citing the concern that “digital distribution of

 8   copyrighted material threatens copyright holders as never before”). The digital age, however, has

 9   allowed infringement to occur on a massive scale. As pointed out by amici, Righthaven was created

10   precisely to stem this tide of unabashed copyright infringement on the Internet brought about by the

11   technological ease of copying. While amici go to great lengths to portray Righthaven’s business

12   purpose in a negative light, there is nothing wrong with a party focused on protecting intellectual

13   property—except, of course, from the perspective of an infringer.

14          But Righthaven’s business purpose, whether laudable or not, has nothing to do with the issue

15   the Court must decide—whether Righthaven has standing to maintain this lawsuit. Righthaven

16   undoubtedly owns the copyright under the recently executed Amendment.1 Through that agreement,

17   Righthaven obtained all right, title and interest in the infringed work, and licensed back only a non-

18   exclusive right to exploit the work. No authority cited by amici suggests that such a structure is

19   insufficient to convey standing to pursue past—or future—claims of infringement simply because

20   the assignee was created to enforce the intellectual property rights it acquired. Indeed, if that were

21   the law, countless non-practicing entities would be deprived of standing to bring patent infringement
     1
22     As set forth in its previous memorandum, Righthaven believes that the original Assignment and
     SAA between Righthaven and Stephens Media were sufficient to give Righthaven standing to sue.
23   But since this Court issued its Order to Show Cause, another court in this District has held that these
     agreements failed to effect a copyright assignment to Righthaven. Righthaven LLC v. Democratic
24   Underground, LLC, Doc. # 116, Case. No. 2:10-cv-01356-RLH-GWF (D. Nev.) (Hunt, J.). While
     Righthaven respectfully disagrees with Judge Hunt’s decision, it will not burden this Court with
25   those arguments and will instead address its arguments to the Amendment. Another court in this
     District has also recently held that Righthaven lacks standing, even under the Amendment.
26   Righthaven LLC v. Hoehn, Doc. # 28, Case. No. 2:11-CV-00050-PMP-RJJ (D. Nev.) (Pro, J.).
     Righthaven disagrees with that decision and intends to appeal. Nonetheless, Righthaven and
27   Stephens Media are considering further amending their agreements in order to prevent other courts
     from erroneously concluding that Righthaven lacks standing. If and when the parties do so, they will
28   promptly provide the Court with all amended agreements.

                                                   5    1
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 1   claims.
 2             Nor do the contingent rights retained by Stephens Media have any impact on Righthaven’s
 3   ability to bring this suit. It is well-established that limitations or restrictions do not invalidate an
 4   otherwise valid assignment. Indeed, Courts of Appeals throughout the country have rejected the
 5   very argument that amici make here, i.e., that such limitations suggest a sham.
 6             Finally, amici’s arguments that the Amendment should not be considered because standing
 7   must exist at the time the lawsuit is filed threaten to elevate form over substance at the expense of
 8   judicial resources. As explained in detail below, in situations analogous to this one, numerous courts
 9   have allowed the plaintiff to continue with the lawsuit after an original defect in standing has been
10   remedied. Here, as in those cases, allowing Righthaven to pursue its claim without having to re-file
11   its complaint promotes efficiency and judicial economy; the result urged by amici does not.2
12             Because Righthaven now unquestionably owns the copyright at issue, and because any
13   original defect in standing has been cured by the Amendment, Righthaven respectfully requests that
14   the Court not dismiss its complaint.3
15   II.       ARGUMENT
16             A.     Righthaven Is the Sole Copyright Owner and Sole Party with Standing to Sue.
17             It is black-letter law that a copyright owner has standing to bring a claim for infringement.
18   17 U.S.C. § 501(b) (“The legal or beneficial owner of an exclusive right under a copyright is entitled
19   … to institute an action for any infringement of that particular right ….”). A copyright owner need
20   not have been the author or original owner; indeed, copyright law recognizes the transferability of
21   the rights protected by copyright. 17 U.S.C. § 101 (“A ‘transfer of copyright ownership’ is an
22   assignment, mortgage, exclusive license, or any other conveyance, alienation, or hypothecation of a
23   copyright or of any of the exclusive rights comprised in a copyright, whether or not it is limited in
24
     2
25     For example, as a result of Judge Hunt’s decision to dismiss Righthaven’s complaint despite the
     fact that it presently has standing, Righthaven must now either intervene in the still-pending action
26   or re-file its complaint in an entirely new action, needlessly wasting the time and resources of both
     the parties and the court.
     3
27     Righthaven will also move this Court for leave to file an amended complaint in order to remedy
     any procedural standing defect arising under the original complaint. Righthaven intends to file its
28   motion for leave to amend in the next few days.

                                                     6    2
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 1   time or place of effect, but not including a nonexclusive license.”) It is also black-letter law that a
 2   non-exclusive licensee lacks standing to sue for infringement. See id.; Silvers v. Sony Pictures
 3   Entm’t, Inc., 402 F.3d 881, 898 n. 7 (9th Cir. 2005).
 4           Pursuant to the Amendment, there can be no question that Righthaven obtained “all right,
 5   title and interest to said Work such that Righthaven shall be recognized as the copyright owner of the
 6   Work, shall have the right to register said Work with the United States Copyright Office, and shall
 7   have the right to pursue past, present and future infringements of the copyright in and to the Work.”
 8   (Doc. # 26, Ex. 3.) As the owner of the copyright,4 Righthaven has the ability to exploit its exclusive
 9   rights as it sees fit. Righthaven may reproduce the copyrighted work, create derivative works, assign
10   the copyright, grant licenses, receive royalty payments and sue for copyright infringement. In short,
11   Righthaven may utilize the entire bundle of exclusive rights that accompany copyright ownership.
12   Nothing in the Assignment, Amendment or Operating Agreement (Doc. # 32-2) prevents Righthaven
13   from doing so. Righthaven granted a non-exclusive license back to Stephens Media to use the
14   copyrighted work (Doc. #26, Ex. 3 at § 7.2), but that license does not divest Righthaven of its rights.
15   See Silvers, 402 F.3d at 898 n. 7.
16           Nonetheless, amici argue that this valid assignment somehow failed to convey the rights
17   necessary to bring suit for past infringement. The cases on which they rely, however, are factually
18   distinguishable in all key respects. First, in Silvers, the copyright owner executed an “Assignment of
19   Claims and Causes of Action” in favor of the plaintiff, retaining ownership of the underlying
20   copyright and assigning to the plaintiff only “all right, title and interest in and to any claims and
21   causes of action.” 402 F.3d at 883 (emphasis added). The copyright owner in Silvers never
22   purported to assign the underlying work itself, or any rights protected by copyright. Thus in Silvers,
23   the only right, title and interest assigned was the right, title and interest in litigation. That is not the
24   case here.
25
     4
      To credit amici’s argument, the Court must find that ownership of the infringed work was not
26   actually transferred. No doubt, a creditor of Righthaven would seek to lien its copyrights in the
     event of a default, and no doubt, if Righthaven were ever to file bankruptcy, a bankruptcy court
27   would recognize those copyrights as assets of the debtor. See, e.g., In re Movie Gallery, Inc., 2010
     WL 6618894, at *7 (Bkrtcy. E.D. Va. Feb. 25, 2010); In re Peregrine Entm't, Ltd., 116 B.R. 194,
28   203 (C.D. Cal. 1990).

                                                     7     3
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 1          The second case relied on by amici, Nafal v. Carter, 540 F. Supp. 2d 1128 (C.D. Cal. 2007),
 2   is similarly inapposite. As a preliminary matter, Nafal was decided under the more narrow 1909
 3   Copyright Act (id. at 1138), which, in contrast to the 1976 Copyright Act, did not allow the bundle
 4   of rights protected by copyright to be separable. Silvers, 402 F.3d 881 at 896. Moreover, the
 5   plaintiff never alleged that he owned the copyright at issue. Instead he was assigned a purported
 6   one-half interest to an exclusive licensee’s rights but lacked any ability to exercise any rights under
 7   the copyright. 540 F. Supp. 2d at 1143. Moreover, in Nafal, the plaintiff was not a party to the
 8   original exclusive license agreement with the copyright owner (id. at 1141) and the plaintiff was not
 9   actually a co-exclusive licensee because he lacked any of the rights held by the other co-licensee (id.
10   at 1142). Here, by contrast, the original copyright owner, Stephens Media, assigned its entire
11   copyright directly to Righthaven, and Righthaven granted back to Stephens Media only the right to
12   exploit the copyright on a non-exclusive basis. Under these circumstances, the only party to the
13   transaction with any exclusive rights and the only party with standing to sue for copyright
14   infringement is Righthaven.
15          Finally, Democratic Underground also cites Althin CD Med., Inc., v. W. Suburban Kidney
16   Ctr., S.C., another case where standing was denied to a plaintiff that claimed to have standing not as
17   the copyright assignee, but as an exclusive licensee under a chain of prior agreements. 874 F. Supp.
18   837, 840 (N.D. Ill. 1994). Again, the facts in that case are markedly different from those at issue
19   here. There, the owner-licensor retained the sole right to determine whether or not to bring an
20   infringement action and gave virtually no right to transfer or assign the license agreement. Id. at
21   843. Thus, the licensee, who then granted a sublicense to the plaintiff, could not have granted
22   exclusive rights. Id.
23          Amici’s argument, while devoid of authority, is undeniably clever. As amici well know, the
24   assignment and non-exclusive license back structure at issue here effectively deprives the assignor,
25   Stephens Media, of standing to bring a claim for infringement. If the Court were to endorse amici’s
26   argument, it would effectively find that no party has standing to bring suit against the infringer here.
27   While certain amici—such as accused infringer Democratic Underground—would no doubt
28   welcome such a ruling, the result would not only be unprecedented, it would be directly at odds with

                                                   8    4
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 1   the Constitutionally-based system of granting copyright owners exclusive rights to their works in
 2   order to incentivize creativity.
 3          B.      Neither the Purpose of the Transaction nor Stephens Media’s Retention of
                    Certain Rights Invalidates the Assignment.
 4
            Democratic Underground argues at length that Righthaven’s assignment is merely a “sham”
 5
     because of Righthaven’s business purpose and the existence of two provisions in the Amendment: a
 6
     provision giving Stephens Media 30 days written notice prior to exploiting the Infringed Work (Doc.
 7
     #26, Ex. 3 at § 7.2) and a separate provision giving Stephens Media the option to re-purchase the
 8
     copyright (Doc. # 32-1 at 7.). Democratic Underground is wrong.
 9
            Parties routinely enter into complex agreements transferring intellectual property rights. It is
10
     well-established that these transfers are not invalid simply because the original owner retains some
11
     rights. See, e.g., Vittoria N. Am., L.L.C. v. Euro-Asia Imports Inc., 278 F.3d 1076, 1082 (10th Cir.
12
     2001) (holding that a “thirty-day reassignment clause does not establish that [the trademark
13
     assignment] is a sham”) (citing Premier Dental Prods. Co. v. Darby Dental Supply Co., 794 F.2d
14
     850, 855-56 (3d Cir. 1986) (“[L]imitations in an otherwise valid assignment do not invalidate it”));
15
     Int’l Armament Corp. v. Matra Manurhin Int’l., Inc., 630 F. Supp. 741, 746 (E.D. Va. 1986)
16
     (“Plaintiff’s ownership of the marks is subject to conditions on its license agreement with Carl
17
     Walther, which make that distributorship revocable by Walther for violation of ‘essential’ clauses.
18
     Such limitations on an assignment do not invalidate or make it a sham, however.”)
19
            Moreover, the Ninth Circuit, more than 40 years ago, rejected the argument that an
20
     assignment made solely to facilitate a lawsuit is somehow improper. In Rawlings v. Nat’l Molasses
21
     Co., 394 F.2d 645, 648 (9th Cir. 1968), the Ninth Circuit held:
22
            Defendants make the further point that the arrangement between plaintiff and
23          [assignor] was accomplished for the sole purpose of permitting plaintiff to bring this
            action without joining [assignor] as a party plaintiff or defendant. We assume that to
24          be true. Defendants urge that the transaction was a sham. The documents were in
            fact executed and nothing in the record indicates that as between [assignor] and
25          plaintiff they are either void or voidable. If not, then the purpose underlying their
            execution is of no concern to the defendants.
26
     Thus, the Ninth Circuit long ago rejected the argument that the purpose behind a business transaction
27
     or a business itself has any bearing on the issue of standing.
28


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 1          Finally, the very case on which amici most heavily rely advises the Court to reject amici’s
 2   argument. As the Ninth Circuit held in Silvers, courts “should interpret the Copyright Act
 3   consistently with the requirement of the Patent Act” because of the fundamental similarity between
 4   the two types of intellectual property rights. 402 F.3d at 888; see also Davis v. Blige, 505 F.3d 90,
 5   104 (2nd Cir. 2007) (“Although patent and copyright law function somewhat differently, courts
 6   considering one have historically looked to the other for guidance where precedent is lacking . . . .
 7   Licenses in patent and copyright function similarly . . . .”).
 8          Amici pay no heed to that aspect of Silvers and ignore that courts in numerous patent cases
 9   have rejected the argument that an otherwise valid transfer of intellectual property rights made to
10   confer standing is somehow defective, or a sham, because the motivating business purpose is
11   litigation. For example, in a highly analogous case in the patent context, the Federal Circuit held
12   that patent assignments made for the sole purpose of bringing suit are nonetheless valid. SGS-
13   Thomson Microelectronics, Inc. v. Int’l Rectifier Corp., 1994 WL 374529 (Fed. Cir. Jul. 14, 1994).
14   There, the defendant urged the court to ignore the patent assignment between related corporate
15   entities because, like here, the agreement was entered for the purpose of conferring standing to sue
16   for infringement. The defendant also argued “sham” because the assignment required the plaintiff to
17   assign the patents back at the conclusion of the litigation, a much greater restriction than that present
18   in this case. Id. at *6. The court rejected defendant’s arguments, ruling that “[t]his court and other
19   courts have held that an assignment that explicitly provides for possible transfer back to the assignor
20   is nevertheless effective to give the assignee standing.” Id. The court further held that:
21          the district court erred in granting summary judgment on the ground that the
            assignments of the … patents were shams because the sole purpose of the assignment
22          was to facilitate litigation. In so ruling, the trial court ignored the express language in
            the assignments and in effect created a new requirement, not found in any case law,
23          that a patent assignment must have an “independent business purpose.”
24   Id. Thus, in the very context that Silvers advises courts to consider, the Federal Circuit explicitly
25   ruled that the motive or purpose of an assignment is irrelevant to the assignee’s standing to enforce
26   the exclusive rights conferred and that the assignor’s ability to re-acquire its rights does not deprive
27   the assignee of its right to bring suit. Id. at *6-7. If the Court were to follow this reasoning, as
28   Silvers holds it should, amici’s arguments must be rejected.

                                                   10    6
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 1          In yet another case decided by the Federal Circuit, the court held that a grant of patent rights
 2   was sufficient to confer standing notwithstanding the fact that the grantor retained several rights
 3   relating to the patent. See Vaupel Textilmaschinen KG v. Meccanica Euro Italia S.P.A., 944 F.2d
 4   870 (Fed. Cir. 1991). In Vaupel, the grantor retained “1) a veto right on sublicensing by Vaupel; 2)
 5   the right to obtain patents on the invention in other countries; 3) a reversionary right to the patent in
 6   the event of bankruptcy or termination of production by Vaupel; and 4) a right to receive
 7   infringement damages.” Id. at 875. Despite the grantor’s retention of these rights, the court held
 8   that “none of these reserved rights was so substantial as to reduce the transfer to a mere license or
 9   indicate an intent not to transfer all substantial rights.” Id. Here, as in Vaupel, the rights retained by
10   Stephens Media do not negate the exclusive rights conferred to Righthaven; thus, Righthaven is the
11   owner of the copyright and has standing to sue for infringement.
12          C.      Righthaven’s Status as Assignee and its Standing to Sue for Infringement Are
                    Aligned with Longstanding Principles of Copyright Law.
13
            It is well-established that in copyright law, as in patent and trademark law, parties other than
14
     the original owner-creator may acquire the intellectual property rights and sue for infringement. See,
15
     e.g., Nafal, 540 F. Supp. 2d at 1132 (rights to copyrighted work, which was created in 1960, had
16
     passed from original owner to heirs by death). Nevertheless, amicus Jason Schultz claims, without
17
     citation to any authority, that “Congress recognized that if the right to sue could be severed from
18
     copyright ownership, the link between enforcement and creativity would be severed, thus negating
19
     the benefits copyright is meant to ensure.” In other words, Mr. Schultz’s argument presupposes that
20
     the right to sue inalienably lies with the creator of the work. That presupposition is demonstrably
21
     wrong: if the ability to enforce a copyright were limited only to the creator of the work, copyrights
22
     would not be assignable at all, let alone assignable as separate pieces of a bundle of exclusive rights,
23
     as contemplated by the 1976 Act. See Silvers, 402 F.3d at 886. By revising the Copyright Act to
24
     allow for the bundle of exclusive rights to be held by separate parties, Congress recognized the right
25
     to separate copyright ownership and its inherent right of enforcement from the creative aspect of the
26
     work. Indeed, it is commonplace in the entertainment industry for the original creator of the work to
27
     be far-removed from the eventual holder of the copyright. To say that only the original creator has
28


                                                   11     7
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 1   the ability to sue for enforcement of copyrights would dramatically change the way corporate
 2   intellectual property transactions occur on a daily basis.
 3           Second, and contrary to Mr. Schultz’s contention that Righthaven has “no connection to the
 4   creative or publishing process,” Righthaven was created in order to assist media organizations in
 5   pursuing the infringement of copyrighted works. Without the cooperation of these organizations,
 6   Righthaven would have no assigned copyrights to enforce. The originators of news stories invest
 7   considerable sums paying reporters to investigate and write the news stories, in addition to paying
 8   editors, copywriters and the others necessary to publishing a newspaper, only to have their propriety
 9   content illegally copied and posted elsewhere. As a result of this copyright infringement, these news
10   organizations are losing revenue, advertisers and readers. Yet, Mr. Schultz does not explain—
11   because he cannot—how this infringement or its consequences foster creation or further the purposes
12   of the Copyright Act, as opposed to free-riding copiers. Nor does he address the serious adverse
13   effects of online copyright infringement to media organizations whose existence depends upon
14   advertisements and paid subscriptions to their websites. The inconvenient truth behind amici’s
15   posturing is that if Internet infringement of content continues to go unchecked, there will be less
16   financial incentive to create content, resulting in less content available to the public. While Mr.
17   Schultz, in his ivory tower of Berkeley, sees fit to cast judgment on Righthaven’s business model,
18   the fact remains that, in the real world, it is difficult for people to stay in business without a return on
19   their investment. There are legitimate, and legal, ways of acquiring content that provide a fair return
20   to the copyright owner. Unfortunately, we have not yet reached a time where those methods are
21   utilized for most of the content posted online.
22           As the assignee of a valid copyright, Righthaven has the power to exclude others from
23   unauthorized copying—a power wholly consistent with the purposes of the Copyright Act: to foster
24   creativity.
25           D.      Dismissing the Case Now Would Needlessly Exalt Form over Substance.
26           Finally, amici’s position that the Court should disregard Righthaven’s current standing as
27   copyright owner and dismiss the case if it concludes that standing did not exist under the original
28   agreements needlessly expends the parties’ and the court’s resources. Under similar circumstances,

                                                   12     8
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 1   another district court in this Circuit recognized that requiring a dismissal of the original complaint
 2   after a standing defect was cured “elevates form over substance.” Northstar Fin. Advisors, Inc. v.
 3   Schwab Inv., 2011 WL 1312044, at *3-4 (N.D. Cal. Mar. 2, 2011). In Northstar, the Court
 4   effectively allowed the plaintiff to file an amended complaint based on a post-filing assignment in
 5   order to cure the original defect in standing. Id. (noting that the cases defendants relied upon simply
 6   recited the rule that standing is considered at the outset of the litigation but failed to address how a
 7   court should treat a post-filing assignment of claim).
 8          No doubt there are courts, including some in this District, that will simply dismiss a
 9   complaint if standing did not exist at the inception of the lawsuit. Such cases were cited by amici.
10   Nevertheless, there is a clear split of authority on this issue, and many courts have found good
11   reason to come to the opposite conclusion and have allowed a plaintiff to proceed with the lawsuit
12   once a standing defect had been cured. See, e.g., Gray v. Preferred Bank, 2010 WL 3895188, at *3
13   (S.D. Cal. Sept. 30, 2010) (“Because the defect in standing has been cured, the Court declines to
14   dismiss the [Second Amended Complaint] on this basis and proceeds to discuss Plaintiffs’ claims for
15   relief.”); Bushnell, Inc. v. Brunton Co., 659 F. Supp. 2d 1150, 1160-1161 (D. Kan. 2009) (“The
16   question remains whether the proposed amended complaint which alleges standing as of now would
17   be sufficient. The Court agrees with Randolph-Rand that forcing plaintiff to file a new suit would be
18   a waste of resources.”); Haddad Bros. Inc. v. Little Things Mean A Lot, Inc., 2000 WL 1099866, at
19   *9 (S.D.N.Y. Aug. 4, 2000) (“Initial defects in standing are remediable through an amended
20   complaint. Where an amendment cures a standing defect, nothing in the nature of that amendment
21   would prohibit it from relating back to the initial complaint.”); Valmet Paper Mach., Inc. v. Beloit
22   Corp., 868 F. Supp. 1085, 1089-1090 (W.D. Wis. 1994) (“[A] decision that the written assignment
23   did not cure the standing defect would simply lead plaintiffs to amend the complaint to add the
24   assignor and then dismiss it as an unnecessary party, or simply to reinstate the lawsuit. Either
25   alternative would result in needless delay and needless expenditure of the parties’ and the court’s
26   resources. Thus, holding that the written assignment executed only thirteen days after suit was
27   commenced did not cure plaintiffs’ standing defect would only ‘exalt form over substance.’”).
28          Given Righthaven’s current standing to sue under the Amendment, dismissal of the lawsuit at

                                                   13    9
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 1   this juncture is unwarranted.5 The parties have already been litigating this action for over one year,
 2   and the issue of standing under the Amendment should be resolved on the merits now, without
 3   further expenditure of judicial resources.
 4   III.   CONCLUSION
 5          For the foregoing reasons, Righthaven respectfully requests the Court find that Righthaven
 6
     has standing to maintain this infringement action.
 7

 8   Dated this 22nd day of June, 2011

 9                                                     SHAWN A. MANGANO, LTD.
10                                                     By: /s/ Shawn A. Mangano
11                                                     SHAWN A. MANGANO, ESQ.
                                                       Nevada Bar No. 6730
12                                                     shawn@manganolaw.com
                                                       9960 West Cheyenne Avenue, Suite 170
13                                                     Las Vegas, Nevada 89129-7701
                                                       Tel:       (702) 304-0432
14                                                     Fax:       (702) 922-3851
15
                                                       KIRKLAND & ELLIS LLP
16                                                     DALE M. CENDALI, ESQ. (admitted pro hac vice)
                                                       dale.cendali@kirkland.com
17                                                     601 Lexington Avenue
                                                       New York, New York 10022
18                                                     Tel:       (212) 446-4800
19                                                     Fax:       (212) 446-4900

20                                                     Attorneys for Righthaven LLC

21

22

23
     5
       If the Court nonetheless concludes that the lawsuit must be dismissed for lack of standing, such
24   dismissal should be without prejudice. Harris v. Amgen, Inc., 573 F.3d 728, 737 (9th Cir. 2009)
     (“Dismissal without leave to amend is improper unless it is clear that the complaint could not be
25   saved by any amendment.”); Univ. of Pittsburgh v. Varian Med. Sys., Inc., 569 F.3d 1328, 1332-
     1334 (Fed. Cir. 2009) (“A dismissal for lack of standing is jurisdictional and is not an adjudication
26   on the merits . . . . The Third Circuit and this court, as well as other regional circuit courts, have
     repeatedly emphasized that a dismissal for lack of standing should generally be without prejudice,
27   particularly when the defect is curable”); HT Litig. Trust v. Jess Rae Booth, 2008 WL 5227300, at *1
     (9th Cir. Dec. 16, 2008) (“Dismissal with prejudice and without leave to amend is not appropriate
28   unless it is clear, upon de novo review, that the complaint could not be saved by amendment.”).

                                                  14   10
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           Exhibit G
     to CALA’s Amicus Brief


          Arkansas Democrat-
             Gazette Story
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                 Arkansas Democrat-Gazette - August 26, 2010

                           Firm Holds Websites to the Law

 By Toby Manthey

 A Las Vegas company, Righthaven LLC, is using a new approach to help news organizations
 protect their news content - filing lawsuits against website owners who post copyrighted articles
 without permission.

 Media companies since the advent of the Internet have worried about others distributing and
 profiting from content without authorization, whether it be people downloading music or films,
 or reading entire articles on message boards.

 Such practices deprive creators and businesses of revenue and recognition by discouraging sales
 of authorized products, and by sapping advertising revenue by diverting Internet traffic from
 legitimate websites, such firms say.

 "There is an ongoing discussion in the United States about how to protect intellectual property
 that's produced not just by newspapers but by all content producers because the Web has
 changed the dynamic," said Mark Hinueber, vice president and general counsel for Las Vegas-
 based Stephens Media, a Righthaven client that owns several Arkansas publications, as well as
 the Las Vegas Review-Journal.

 Steve Gibson, Righthaven's chief executive, wouldn't describe how Righthaven's business model
 works, although he said the company has software, "systems" and other technology that help it
 identify copyright infringement.

 Hinueber said he assigns to Righthaven the copyright of a story that has been infringed upon.
 With ownership of the story, Righthaven files suit.

 Righthaven typically makes money from settlements, said Gibson, who added that none of the
 cases have gone to a jury trial so far.

 Righthaven often has demanded $75,000 of website owners who infringe upon a copyright and
 for the owner to transfer control of the site to Righthaven, lawsuits show. That's the approach it
 used in a July 20 suit against thearmedcitizen.com, which features stories of people who have
 been saved by using guns to defend themselves.

 Other media also have tried to protect their copyrights on the Internet by suing people who
 misappropriate content, including people who illegally download music files. The Recording
 Industry Association of America has sued more than 35,000 people over such violations, the
 Wall Street Journal has reported. The association has discontinued the lawsuit effort, which it
 says on its website was to teach fans about the law, the consequences of breaking it and about



                                                  1
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 what sites they can legally download music from.

 The association cites an estimate by the Institute for Policy Innovation, a conservative think tank
 in Lewisville, Texas, saying music piracy worldwide cost $12.5 billion in economic losses
 annually and more than 71,000 jobs in the United States.

 Gibson said the public is beginning to better understand that it can't use other people's content on
 the Internet without permission.

 "Even if you give an attribution for it or a link to it, it doesn't mean it's no longer a copyright
 infringement," Gibson said.

 Hinueber said "our folks are out there every day with blood, sweat and tears covering stories, and
 you don't have the right to take somebody else's intellectual property that they worked hard on."
 He later added: "Some guy in his bathrobe in his basement doesn't get the right to cut and paste
 our stories." WEHCO Media, which owns the Arkansas Democrat-Gazette, said it also intends to
 work with Righthaven.

 Righthaven has filed about 100 lawsuits in federal court in Nevada since March, when it began
 initiating the suits. Defendants include people and companies outside that state.

 In a July 13 request for leave to conduct discovery in one of its cases, Righthaven said "the
 public display" of copyrighted stories has the detrimental effect of diverting valuable Internet
 traffic away from "the original source of publication." Hinueber said, "We welcome people to
 take a look at it on our websites, but not to take it and sell Google ads around it." Righthaven
 touts its service as a way for newspapers to make money and protect their property. In one
 lawsuit, it cited a Pew Internet and American Life Project report that said three-quarters of news
 consumers get news "thanks to e-mails or posts on social media sites." Launce Rake, spokesman
 for the Progressive Leadership Alliance of Nevada, a liberal nonprofit, said his group and others
 weren't warned before they were sued by Righthaven.

 "We ... would have appreciated the opportunity to correct any issues that might exist, absent a
 legal proceeding," Rake said.

 Gibson has said that sending warning notices to website owners is expensive and not effective.
 The alliance ultimately reached a confidential settlement with Righthaven, Rake said.
 A rival of the Las Vegas Review-Journal, the Las Vegas Sun, whose website contains more than
 30 stories about Righthaven, wrote that Righthaven has been "widely pounded" in news stories
 and Internet forums "for suing mom-and-pop-type bloggers, nonprofit groups and special-interest
 websites." Newspapers in the past have typically requested that stories be removed from a site
 and replaced with links to a newspaper's site, the Sun noted.

 The news staff of the Sun competes with the staff of Stephens' Las Vegas Review-Journal even
 though its print edition is distributed as a package with the Review-Journal as part of a joint-
 operating agreement, a business structure that allows competing newspapers in a town to share
 advertising and other business functions. The Sun's print edition is eight pages on weekdays, and




                                                    2
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 more stories are posted online than in the print version, said Tom Gorman, the newspaper's
 senior editor for print.

 Sherman Frederick, the president of Stephens Media and publisher of the Review-Journal, in a
 column that ran in the July edition of Editor & Publisher, a trade journal for the newspaper
 industry, wrote that "it is our primary hope that Righthaven will stop people from stealing our
 stuff. It is our secondary hope, if Righthaven shows continued success, that it will find other
 clients looking for a solution to the theft of copyrighted material." Paul Smith, president of
 WEHCO Newspapers, Inc., said, "It's a pretty serious matter when someone takes your copy,
 information you've spent a lot of money to produce." He added: "I think you'll find many
 newspapers that [will] use [Righthaven] and other firms like this to try to stop people from
 pirating their information." Frederick said the Stephens "grubstaked" - advanced money to - and
 contracted with Righthaven. Hinueber said the investment in Righthaven was made by a
 company affiliated with the Stephens family.

 If Righthaven discovers someone has violated WEHCO's copyright, Smith said, "it would be
 [WEHCO's] decision whether or not to move forward with it," such as if the newspaper didn't
 want to pursue a case against a charitable organization.

 "In most cases, if someone has taken our content and put it up on their website or used it in a
 print publication without our permission, at this point I would say that there's a very good chance
 that we would tell [ Righthaven] to go forward with whatever legal action they needed to take to
 stop this," Smith said.

 Hinueber said the approach of Righthaven and Stephens is evolving.

 "We're starting to look at the individual sites a little more closely than when we first started,"
 Hinueber said. "I can tell Righthaven not to sue somebody." So far, he said, he hasn't done that
 much, "but I have to be cognizant of who the defendant is - if it's a church or a school someplace
 or some kid and his high school paper. We're getting more sensitive all the time to these issues."
 Gibson added that he'd like to think there's "a humane side to Righthaven." "We have reached
 some settlements that are significantly less in dollar amount than some others," Gibson said.
 "And we take those things into consideration as to how sophisticated they were and how culpable
 they were." Majorwager.com, Inc., of Canada, a sports-betting site sued by Righthaven for using
 Stephens Media stories, said in court documents that Righthaven's suit "is arguably frivolous and
 nothing more than a thinly disguised shakedown." Righthaven wants to "extract a settlement"
 and knows the expense of defending against the suit will "far outweigh the value of this case," it
 argued.

 Majorwager argued in court documents that the stories were posted by a third party.

 Wired.com, a technology news website, described Righthaven as "borrowing a page from patent
 trolls." A patent troll is a company or person who buys patents for the purpose of suing others
 who may be infringing upon it, rather than for using the patent to create a product.

 Smith said WEHCO would share in whatever settlement Righthaven obtains.




                                                  3
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 Smith said he knew of no previous instances in which the company had sued someone for
 posting a story online. Many violations in the past went unnoticed by the company, he said.

 "That's part of the appeal of this," Smith said. "They've got ways to track this." Gibson said
 Righthaven is "as much a technology company as anything," because it offers a solution for
 "systematically identifying" possible copyright infringement. He declined to say how the
 company does that, other than to say it is "proprietary technology" and that there are systems and
 software that do so. Hinueber said Stephens provides Righthaven with a feed of locally produced
 copy, and Righthaven scours the Web for infringements.

 So far, Gibson said, the company is profitable, but he wouldn't say what the size of any of its
 settlements have been.

 "We're not engaging in settlements in a manner that will mean that we can't continue to do what
 we're doing," Gibson said.

 Copyright law allows for the "fair use" of some copyrighted content, but that's limited to
 purposes such as news reporting, teaching and criticism. Factors used to judge whether the use is
 "fair" include the amount of content used and whether the use is for nonprofit or commercial
 purposes.

 Hinueber said, "We have a little statement that says: `We love links.' If you want to post a
 headline and the first paragraph and a link to our story, we're happy with that. You'll never hear
 from us. And if you want to take a paragraph or two from one of our stories and want to
 comment on it and criticize it, fine. ... That's fair use." Hinueber acknowledged that by suing
 people who like and post their stories, newspapers could anger their fans.

 But often, he said, "these websites are not in your marketplace. They're not really your fans.
 They're coming in on a one-time or two-time basis and taking the stories to relate to whatever it
 is they're selling Google ads around."




                                                  4
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           Exhibit H
     to CALA’s Amicus Brief


        New York Times Story
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                                 • Reprints

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 May 2, 2011



 Enforcing Copyrights Online, for a
 Profit
 By DAN FROSCH
 DENVER — When Brian Hill, a 20-year-old blogger from North Carolina, posted on his Web
 site last December a photograph of an airport security officer conducting a pat-down, a legal
 battle was the last thing he imagined.

 A month later, Mr. Hill received an e-mail from a reporter for The Las Vegas Sun who was
 looking into a Nevada company that files copyright lawsuits for newspapers. The e-mail
 informed Mr. Hill that he was one of those that the company, Righthaven, was suing.
 Though the airport photo had gone viral before Mr. Hill plucked it off the Web, it belonged
 to The Denver Post, where it first appeared on Nov. 18.

 Mr. Hill took down the photo. He was too late. A summons was delivered to his house. The
 lawsuit sought statutory damages. It did not name a figure, but accused Mr. Hill of “willful”
 infringement, and under federal copyright law up to $150,000 can be awarded in such cases.

 “I was shocked,” Mr. Hill said. “I thought maybe it was a joke or something to scare me. I
 didn’t know the picture was copyrighted.”

 Over the last year, as newspapers continue to grapple with how to protect their online
 content, Righthaven has filed more than 200 similar federal lawsuits in Colorado and
 Nevada over material posted without permission from The Denver Post or The Las Vegas
 Review-Journal.

 The company has business relationships with both newspapers. Like much of the industry,
 the papers see the appropriation of their work without permission as akin to theft and
 harmful to their business, and are frustrated by unsuccessful efforts to stem the common
 practice, whether it’s by a one-man operation like Mr. Hill’s, or an established one like Matt
 Drudge’s.




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 Sara Glines, a vice president for the MediaNews Group, which owns The Denver Post, wrote
 in an e-mail that the pat-down photo had been used on more than 300 Web sites with no
 credit to The Post or the photographer.

 “We have invested heavily in creating quality content in our markets,” Ms. Glines wrote. “To
 allow others who have not shared in that investment to reap the benefit ultimately hurts our
 ability to continue to fund that investment at the same level.”

 Mark Hinueber, general counsel for Stephens Media, owner of The Review-Journal, echoed
 Ms. Glines’s concerns, saying that cutting and pasting articles “steals the potential audience
 for our editorial material and traffic to our Web sites.”

 Some critics, however, contend that Righthaven’s tactics are draconian, and that the
 company hopes to extract swift settlements before it is clear that there is a violation of
 federal copyright law. Typically, the suits have been filed without warning. Righthaven rarely
 sends out notices telling Web sites to take down material that does not belong to them before
 seeking damages and demanding forfeiture of the Web domain name.

 Defendants in these cases run the gamut. They have included the white supremacist David
 Duke, the Democratic Party of Nevada and Mr. Drudge. But little known Web sites,
 nonprofit groups and so-called mom-and-pop bloggers — people who blog as a hobby — are
 not exempt from Righthaven’s legal actions.

 According to some Internet legal experts who have been watching the cases with growing
 interest, the way it works is simple: Righthaven finds newspaper material that has been
 republished on the Web — usually an article, excerpts or a photograph — and obtains the
 copyrights. Then, the company sues.

 Whether the defendant credits the original author or removes the material after being sued
 matters little. None of the cases have gone to trial yet, and many have been settled out of
 court. In two instances, judges have ruled against Righthaven in pretrial motions. According
 to The Las Vegas Sun, which has tracked the cases, the only two publicly disclosed
 settlements were for $2,185 and $5,000.

 In describing his company’s approach, Steve Gibson, Righthaven’s chief executive, said that
 there has been “voluminous, almost incalculable infringement” since the advent of the
 Internet and that years of warning people to take down copyrighted content had not worked.
 Newspapers, he said, needed a new way to address the problem of people appropriating their
 material without permission.



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 Eric Goldman, director of the high-tech law institute at the Santa Clara University School of
 Law, said reposting published material online could qualify as “fair use” if it didn’t diminish
 the market value of the original. Other critics of the suits contend that reposting material for
 the purposes of discussion does not constitute infringement.

 “Many of the defendants are ill-informed about copyright law,” Mr. Goldman said. “They’re
 not trying to compete with a newspaper. They just don’t know the rules.” Mr. Goldman
 informally advised a company that was sued by Righthaven and settled out of court.

 In an amicus brief filed on behalf of the Media Bloggers Association regarding a Righthaven
 suit in Nevada, Marc J. Randazza, a lawyer specializing in First Amendment issues, accused
 the company of acquiring copyrights for the sole purpose of going after defendants who
 could not afford legal help.

 “Nobody can seriously believe that Righthaven, which publishes nothing anywhere, has
 acquired the full ownership of the articles it sues upon,” wrote Mr. Randazza, whose legal
 group recently filed motions to dismiss two other Righthaven cases, accusing the company of
 making fraudulent copyright claims.

 Mr. Gibson denies that unwitting bloggers are a particular target and points to lawsuits like
 the one against Mr. Drudge. Righthaven accused Mr. Drudge of posting the airport pat-down
 photo on his Drudge Report Web site without permission. The suit was settled out of court,
 Mr. Gibson said.“The harm of viewer diversion has been achieved whether it is being shown
 on Momandpop.com or Chicagotribune.com,” he said. “If the accusation were true that we
 were just a purely greedy operation not advancing the interests of copyright law, then we
 wouldn’t be addressing viewer diversion.”

 Ms. Glines said that MediaNews “reviewed every violation and only approved actions against
 sites that carried advertising and were not charities.”

 Rachel Bjorklund wishes she had been sent a simple e-mail rather than slapped with a
 lawsuit. A stay-at-home mother in Oregon, Ms. Bjorklund was sued by Righthaven in March
 after she posted the airport pat-down photo on her blog,
 thoughtsfromaconservativemom.com.

 “My reaction was, ‘Why didn’t you just contact me and ask me to take it down?’ That would
 have been no problem,” said Ms. Bjorklund, who plans to challenge the suit.




                                                3

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 Mr. Hill, who suffers from autism and diabetes and lives on disability checks with his
 mother, said at that at one point Righthaven had offered to settle for $6,000, but he refused.
 A Colorado lawyer, David Kerr, has been defending him pro bono.

 A federal judge presiding over the case criticized Righthaven last month for using the courts
 to settle with defendants scared of the potential cost of litigation. Shortly after, Righthaven
 moved to voluntarily drop the suit, saying it had not been aware of Mr. Hill’s health
 problems. But Righthaven also stated in court filings that a dismissal did not exonerate
 others it was suing and warned Mr. Hill against continuing to use copyrighted material.

 Mr. Hill recently decided to revive his Web site, uswgo.com, where he posts links to various
 political articles and his own musings, which he had taken down after being sued. On the
 site, there is a notice explaining Mr. Hill’s belief that material posted there, even without
 permission, constitutes fair use. This time, though, Mr. Hill said he’s steering clear of any
 image or story that could cause him trouble with Righthaven.




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           Exhibit I
     to CALA’s Amicus Brief


               Wired.com Story
Newspaper Chain’s New Business Plan: Copyright Suits | Threat Level | ...
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          Threat Level
          Privacy, Crime and Security Online
          Previous post
          Next post


          Newspaper Chain’s New Business Plan: Copyright
          Suits
          By David Kravets                July 22, 2010 | 3:29 pm | Categories: The Courts, intellectual property


          Steve Gibson has a plan to save the media world’s financial crisis — and it’s not the iPad.

          Borrowing a page from patent trolls, the CEO of fledgling Las Vegas-based Righthaven has begun buying out
          the copyrights to newspaper content for the sole purpose of suing blogs and websites that re-post those
          articles without permission. And he says he’s making money.

          “We believe it’s the best solution out there,” Gibson says. “Media companies’ assets are very much their
          copyrights. These companies need to understand and appreciate that those assets have value more than
          merely the present advertising revenues.”




                                                                            1

1 of 21                                                                                                                              7/2/2011 4:26 PM
Newspaper Chain’s New Business Plan: Copyright Suits | Threat Level | ...
             Case 1:11-cv-00830-JLK Document 21-11                             http://www.wired.com/threatlevel/2010/07/copyright-trolling-for-dollars/
                                                                            Filed 07/19/11 USDC Colorado Page 3 of 5




                                                                            2

2 of 21                                                                                                                              7/2/2011 4:26 PM
Newspaper Chain’s New Business Plan: Copyright Suits | Threat Level | ...
             Case 1:11-cv-00830-JLK Document 21-11                             http://www.wired.com/threatlevel/2010/07/copyright-trolling-for-dollars/
                                                                            Filed 07/19/11 USDC Colorado Page 4 of 5

          Righthaven CEO Steve Gibson is embarking on a copyright trolling litigation campaign

          Gibson’s vision is to monetize news content on the backend, by scouring the internet for infringing copies of
          his client’s articles, then suing and relying on the harsh penalties in the Copyright Act — up to $150,000 for a
          single infringement — to compel quick settlements. Since Righthaven’s formation in March, the company has
          filed at least 80 federal lawsuits against website operators and individual bloggers who’ve re-posted articles
          from the Las Vegas Review-Journal, his first client.

          Now he’s talking expansion. The Review-Journal’s publisher, Stephens Media in Las Vegas, runs over 70
          other newspapers in nine states, and Gibson says he already has an agreement to expand his practice to cover
          those properties. (Stephens Media declined comment, and referred inquiries to Gibson.) Hundreds of lawsuits,
          he says, are already in the works by year’s end. “We perceive there to be millions, if not billions, of
          infringements out there,” he says.

          Righthaven’s lawsuits come on the heels of similar campaigns targeting music and movie infringers. The
          Recording Industry Association of America sued about 20,000 thousand file sharers over five years, before
          recently winding down its campaign. And a coalition of independent film producers called the U.S. Copyright
          Group was formed this year, already unleashing as many as 20,000 federal lawsuits against BitTorrent users
          accused of unlawfully sharing movies.


          The RIAA’s lawsuits weren’t a money maker, though — the record labels spent $64 million in legal costs, and
          recovered only $1.3 million in damages and settlements. The independent film producers say they nonetheless
          expect to turn a profit from their lawsuits.

          “People are settling with us,” says Thomas Dunlap, the head lawyer of the Copyright Group’s litigation. The
          out-of-court settlements, the number of which he declined to divulge, are ranging in value from $1,500 to
          $3,500 — about the price it would cost defendants to retain a lawyer. The RIAA’s settlements, which it
          collected in nearly every case, were for roughly the same amounts.

          But experts say that settling the Righthaven cases, many of which target bloggers or aggregation sites, might
          not be as easy. The RIAA lawsuits often accused peer-to-peer users of sharing dozens of music files, meaning
          the risk of going to trial was financially huge for the defendants.

          The same is true of the BitTorrent lawsuits. The movie file sharers are accused of leeching and seeding bits of
          movie files, contributing to the widespread and unauthorized distribution of independent movies such as Hurt
          Locker, Cry of the Wolf and others.

          But each of the Righthaven suits charge one, or a handful, of infringements. Defendants might be less willing
          to settle a lawsuit stemming from their posting of a single news article, despite the Copyright Act’s whopping
          damages. “You’d have to go after a lot of people for a relatively small amount of money,” says Jonathan
          Band, a Washington, D.C. copyright lawyer. “That is a riskier proposition.”

          Gibson claims Righthaven has already settled several lawsuits, the bulk of which are being chronicled by the
          Las Vegas Sun, for undisclosed sums.

          One defendant who is ready to settle is Fred Bouzek, a Virginia man who runs bikernews.net, a
          user-generated site about hardcore biker news. He was sued last week on allegations the site ran a Las Vegas
          Review-Journal story about police going under cover with the Hell’s Angels.

          Even if he had grounds to fight the case, he says it would be cheaper to settle. “The only choice I have is to
          try to raise money and offer a settlement,” he says.

                                                                            3

3 of 21                                                                                                                              7/2/2011 4:26 PM
Newspaper Chain’s New Business Plan: Copyright Suits | Threat Level | ...
             Case 1:11-cv-00830-JLK Document 21-11                               http://www.wired.com/threatlevel/2010/07/copyright-trolling-for-dollars/
                                                                              Filed 07/19/11 USDC Colorado Page 5 of 5




                                                         Bill Irvine of Phoenix says he is fighting infringement
          allegations targeting AboveTopSecret.com, the site he controls under The Above Network. The site is accused
          of infringing a Review-Journal article on the Gulf of Mexico oil spill. The site is a user-generated discussion
          on “conspiracies, UFO’s, paranormal, secret societies, political scandals, new world order, terrorism, and
          dozens of related topics” and gets about 5 million hits monthly, Irvine says.

          Righthaven, he says, should have sent him a takedown notice under the Digital Millennium Copyright Act,
          because the article was posted by a user, not the site itself.

          “In this case, we feel this suit does not have merit,” he says. “We are confident we will have success challenging it.”

          Gibson says he’s just getting started. Righthaven has other media clients that he won’t name until the lawsuits
          start rolling out, he says.

          “Frankly, I think we’re having tremendous success at a number of levels,” Gibson says. “We file new
          complaints every day.”

          See Also:

                 Copyright Lawsuits Plummet in Aftermath of RIAA Campaign
                 Verizon Terminating Copyright Infringers’ Internet Access
                 Happy Anniversary Pirates: 20000 Copyright Lawsuits and Counting
                 Court to Consider Breaking Up Mass BitTorrent Lawsuits
                 Lawsuit Dropped; Claimed That Copyright-Filtering Violates Copyright
                 Judge Sides With RIAA in ‘Sham’ Litigation Class Action
                 File Sharing Lawsuits at a Crossroads
                 LimeWire Crushed in RIAA Infringement Lawsuit

          David Kravets is the founder of TheYellowDailyNews.com. Technologist. Political scientist. Humorist. Dad of
          two boys. Reporter since manual typewriter days. ((There is no truth.))
          Follow @dmkravets on Twitter.

          Tags: copyright, DMCA, media, RIAA, Righthaven
          Post Comment | Permalink

                                                                             4

4 of 21                                                                                                                                7/2/2011 4:26 PM
      Exhibit J
to CALA’s Amicus Brief


        SAA
Case 2:10-cv-01356-RLH -GWF Document 79-1   Filed 03/09/11 Page 6 of 22
Case 2:10-cv-01356-RLH -GWF Document 79-1   Filed 03/09/11 Page 7 of 22
Case 2:10-cv-01356-RLH -GWF Document 79-1   Filed 03/09/11 Page 8 of 22
Case 2:10-cv-01356-RLH -GWF Document 79-1   Filed 03/09/11 Page 9 of 22
Case 2:10-cv-01356-RLH -GWF Document 79-1   Filed 03/09/11 Page 10 of 22
Case 2:10-cv-01356-RLH -GWF Document 79-1   Filed 03/09/11 Page 11 of 22
Case 2:10-cv-01356-RLH -GWF Document 79-1   Filed 03/09/11 Page 12 of 22
Case 2:10-cv-01356-RLH -GWF Document 79-1   Filed 03/09/11 Page 13 of 22
Case 2:10-cv-01356-RLH -GWF Document 79-1   Filed 03/09/11 Page 14 of 22
Case 2:10-cv-01356-RLH -GWF Document 79-1   Filed 03/09/11 Page 15 of 22
Case 2:10-cv-01356-RLH -GWF Document 79-1   Filed 03/09/11 Page 16 of 22
Case 2:10-cv-01356-RLH -GWF Document 79-1   Filed 03/09/11 Page 17 of 22
Case 2:10-cv-01356-RLH -GWF Document 79-1   Filed 03/09/11 Page 18 of 22
Case 2:10-cv-01356-RLH -GWF Document 79-1   Filed 03/09/11 Page 19 of 22
Case 2:10-cv-01356-RLH -GWF Document 79-1   Filed 03/09/11 Page 20 of 22
Case 2:10-cv-01356-RLH -GWF Document 79-1   Filed 03/09/11 Page 21 of 22
Case 2:10-cv-01356-RLH -GWF Document 79-1   Filed 03/09/11 Page 22 of 22
Case 1:11-cv-00830-JLK Document 21-13   Filed 07/19/11 USDC Colorado Page 1 of 6




           Exhibit K
     to CALA’s Amicus Brief


              SAA Clarification
Case 1:11-cv-00830-JLK Document 21-13 Filed 07/19/11 USDC Colorado Page 2 of 6
     Case 2:11-cv-00050-PMP -RJJ Document 25 Filed 05/09/11 Page 26 of 30
Case 1:11-cv-00830-JLK Document 21-13 Filed 07/19/11 USDC Colorado Page 3 of 6
     Case 2:11-cv-00050-PMP -RJJ Document 25 Filed 05/09/11 Page 27 of 30
Case 1:11-cv-00830-JLK Document 21-13 Filed 07/19/11 USDC Colorado Page 4 of 6
     Case 2:11-cv-00050-PMP -RJJ Document 25 Filed 05/09/11 Page 28 of 30
Case 1:11-cv-00830-JLK Document 21-13 Filed 07/19/11 USDC Colorado Page 5 of 6
     Case 2:11-cv-00050-PMP -RJJ Document 25 Filed 05/09/11 Page 29 of 30
Case 1:11-cv-00830-JLK Document 21-13 Filed 07/19/11 USDC Colorado Page 6 of 6
     Case 2:11-cv-00050-PMP -RJJ Document 25 Filed 05/09/11 Page 30 of 30
Case 1:11-cv-00830-JLK Document 21-14   Filed 07/19/11 USDC Colorado Page 1 of 2




           Exhibit L
     to CALA’s Amicus Brief


           Righthaven Website
RIGHTHAVEN LLC
 Case 1:11-cv-00830-JLK Document 21-14                                  Page of 2
                                         Filed 07/19/11 USDC Colorado Page 2 1 of 1




http://www.righthaven.com/                                                 7/2/2011
Case 1:11-cv-00830-JLK Document 21-15   Filed 07/19/11 USDC Colorado Page 1 of 4




           Exhibit M
     to CALA’s Amicus Brief


             Sherman Frederick
                 Comment
 Case 1:11-cv-00830-JLK Document 21-15 Las 07/19/11 USDC Colorado Page 2 1 of 3
Angle haters: No proof, no reporting - The CompleteFiledVegan - ReviewJournal.com      Page of 4
    2:10-cv-03075-RMG -JDA Date Filed 07/15/11 Entry Number 64-1                  Page 2 of 4


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                                           Angle haters: No proof, no reporting
                                           Posted by Sherman Frederick                                                                      3
                                           Thursday, Jul. 14, 2011 at 09:37 AM                                                                            2
                                           Let's get honest, shall we? A fair chunk of the Nevada media exhibits a                         Like
                                           remarkable disdain for Sharron Angle. You simply can't thumb through
                                           the record of stories, editorials and Twitter notes without coming to that                      Share
 Sherman Frederick is a columnist for      conclusion.
 Stephens Media. His column appears
 Sunday in the Opinion section of the      This is not about whether you like Angle's politics or not. This is about
 Review-Journal. In between Sundays,       how this one figure manages to bring out the worst in the state's media.
 you can find out what's on his mind
 here.                                     Take a look, for example, at the tweets sent yesterday by the media
                                           against Angle. It's hard not to look at them and conclude anything other
 Read the columns
                                           than these folks have something personal against Angle.
 Technorati Profile
                                           One guy even said that no one should report Angle's charges that Sen.
                                           Harry Reid stole the 2010 election unless Angle shows proof.
 Recent blog entries
   ◦ Angle haters: No proof, no            Proof?
     reporting
                                           That's an interesting standard, which is apparently only reserved for
   ◦ Travesty! Rosemary's closed
                                           Angle.
   ◦ Watchdog barks; raises money
         View all blog entries             Nevada contains all kinds of newsmakers who say things every day
                                           without proof. The media covers those guys like a cat laps up milk. But if
                                           a newsmaker says something the media doesn't like, well, then no one
  July 2011                                should report it unless the newsmaker can prove it.
                                                                                                                                     Recent Comments
  Mon Tue Wed Thu Fri Sat Sun              That's an unsustainable standard reserved only for Sharron Angle.
                          01 02       03                                                                                               ◦ Massachusetts casino debate delayed until
                                                                                                                                         after Labor Day
   04    05    06      07 08 09       10                This entry was posted on Thursday, Jul. 14, 2011 at 09:37 AM
                                                                                                                                         07/14/2011 10:44 AM
                                                        and is filed under The Complete Las Vegan. You can follow any
   11    12    13      14 15 16       17                                                                                                 1 Comment
                                                        responses to this entry through the RSS 2.0 feed. You can leave
   18    19    20      21 22 23       24                a response.                                                                    ◦ Angle haters: No proof, no reporting
  25 26        27      28 29 30       31                                                                                                 07/14/2011 10:33 AM
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                                                                                                                                         07/13/2011 05:38 PM
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                                             12 Responses to "Angle haters: No proof, no reporting"


                                            Sherm, I agree--when a Senate candidate, even one as dismal as Angle was,
                                            from a major party, even as insane as the GOP has been and continues to be,
                                            makes that kind of charge, there should be some reporting. In fact, if you




http://www.lvrj.com/blogs/sherm/Angle_haters_No_proof_no_reporting.html                                                                                                     7/14/2011
 Case 1:11-cv-00830-JLK Document 21-15 Las 07/19/11 USDC Colorado Page 3 2 of 3
Angle haters: No proof, no reporting - The CompleteFiledVegan - ReviewJournal.com      Page of 4
    2:10-cv-03075-RMG -JDA Date Filed 07/15/11 Entry Number 64-1                  Page 3 of 4

                       had held to even that minimal a standard during the 2010 campaign, your
                       paper might have covered Harry Reid fairly, and you and Mitch might still be
                       in charge.


                      Written by: Michael Green on Thursday, Jul. 14, 2011 at 10:33 AM -- Report abuse



                       today's fun fact: the U.S. government's share of home mortgages declined
                       sharply during the housing bubble of the last decade.


                      Written by: petenyc on Thursday, Jul. 14, 2011 at 10:53 AM -- Report abuse



                        Aside from your fantasy about my particular bit of 2010 history, Michael, your
                        comment remains unresponsive to the point at hand (no surprise) as well as
                        degrading and ignorant to the reporters at the Review-Journal who are there
                        now and who were there in 2010.


                       Written by: Sherm on Thursday, Jul. 14, 2011 at 11:23 AM -- Report abuse



                       Talk about your losers. Sherman's pathological affinity for Angle borders on
                       hysteria..Angle is an embarrassment to Nevada.
                       Naturally, her inane mouthings are music to the ears of the tone deaf
                       Sherman and his beloved tea party.
                       Harry didn't steal the election, Angle handed it to him every time she opened
                       her mouth.
                       With Harry's abysmal approval ratings, only a dolt like Angle could have
                       ceded the election
                       to the intensely disliked Reid.
                       Sherman you still are a redundant bore. The election is over. So is the tea
                       party. Do you actually get paid to be this irrelevant ?


                      Written by: Craig.Taylor on Thursday, Jul. 14, 2011 at 11:40 AM -- Report abuse



                       So, is Mr. Frederick asserting that Ms. Angle should be allowed to question
                       the results of a federal election -- i.e. undermining the entirety of our
                       democracy -- without a shred of proof?

                       Of course, his characterizations of the rest of the Nevada press is ridiculous
                       when you remember that Mr. Frederick has not once, in all the time I've read
                       his work, challenged Republican lawmakers or their statements. On the
                       contrary, he routinely takes them at face value.

                       Apparently, you can only be a partisan journalist if you're partisan in favor of
                       the Democrats.

                       I thought Mr. Frederick -- who was removed, we must remember, for his
                       shameless campaigning against Harry Reid, which brought embarrassment to
                       the Review-Journal as a publication -- had already reached his lowest point.

                       But today, it seems, is the day he jumped the shark. Amazing stuff.


                      Written by: Captain Obvious on Thursday, Jul. 14, 2011 at 11:41 AM -- Report abuse



                       Sherm, unlike your BLOG, a newspaper has SOME responsibility to report the
                       truth. Angle saying Reid STOLE the election from her without offering
                       anything other than her sour grapes can lead to a libel suit and most papers
                       don't want to even be involved. Since this is a BLOG you can say whatever
                       you want and not back anything up... Feel free to assist Angle in making up
                       reasons that she lost other than the fact she had to go so far to the right to
                       win the nomination that she locked herself out of the moderate vote. But if
                       she were such a strong viable candidate, why was she shut out of the most
                       recent nomination?? The answer is she is too far to the right for even
                       Republicans to take her seriously.


                      Written by: Justin.in.NLV on Thursday, Jul. 14, 2011 at 11:47 AM -- Report abuse



                       Believe me, the debt ceiling crisis is far more important to me than the
                       proper standards of reporting scurrilous and unsubstantiated made by
                       Sharron Angle.
                       Nevertheless, I would think the most comment-worthy aspect of Angle's
                       accusation would be whether or not it is accurate. Funny that Mr. Frederick
                       doesn't seem to care about that.


                      Written by: petenyc on Thursday, Jul. 14, 2011 at 12:05 PM -- Report abuse



                        You mean the debt ceiling Obama voted against raising when he was a
                        Senator? Hummmm?


                       Written by: Sherm on Thursday, Jul. 14, 2011 at 12:36 PM -- Report abuse



                       Yes, he certainly should not have voted against it. Quite an error. He should
                       have realized that not raising the debt ceiling when it comes due would be
                       genuinely catastrophic to our country - as Martin Wolf noted in the FT
                       yesterday, it would be one of the gravest self-inflicted economic wounds of all
                       time.




http://www.lvrj.com/blogs/sherm/Angle_haters_No_proof_no_reporting.html                                    7/14/2011
 Case 1:11-cv-00830-JLK Document 21-15 Las 07/19/11 USDC Colorado Page 4 3 of 3
Angle haters: No proof, no reporting - The CompleteFiledVegan - ReviewJournal.com      Page of 4
    2:10-cv-03075-RMG -JDA Date Filed 07/15/11 Entry Number 64-1                  Page 4 of 4

                                          Written by: petenyc on Thursday, Jul. 14, 2011 at 12:57 PM -- Report abuse



                                           Sherm, if you read my post thoroughly, you would note I said that "even"
                                           Angle's charges should be covered. As for my "fantasy," you and Mitch keep
                                           going--the reality-based community knows much, much better. I also should
                                           note that Obama has said he was wrong to vote as he did on the debt ceiling.
                                           Gee, admitting error. If you did that, you'd have nothing else to talk about,
                                           eh?


                                          Written by: Michael Green on Thursday, Jul. 14, 2011 at 1:16 PM -- Report abuse



                                             What you said was the RJ didn't do any reporting on the race. That is
                                             completely incorrect. I even sued her for lifting our material.


                                           Written by: Sherm on Thursday, Jul. 14, 2011 at 1:30 PM -- Report abuse



                                           Sherm,

                                           Here are a couple of links for your consideration:

                                           More voters would blame Republicans than Obama in absence of debt limit
                                           deal, says poll:

                                           http://www.cbsnews.com/8301-503544_162-20079483-503544.html

                                           During Bush Presidency, Current GOP Leaders Voted 19 Times To Increase
                                           Debt Limit By $4 Trillion:

                                           http://thinkprogress.org/politics/2011/04/14/158424/republican-leaders-debt
                                           -limit-hypocrisy/


                                          Written by: Diogenes of Sinope on Thursday, Jul. 14, 2011 at 1:45 PM -- Report abuse




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http://www.lvrj.com/blogs/sherm/Angle_haters_No_proof_no_reporting.html                                                                                             7/14/2011
Case 1:11-cv-00830-JLK Document 21-16   Filed 07/19/11 USDC Colorado Page 1 of 3




         Exhibit 3
  to CALA’s Amicus Motion


   Minutes of Proceedings re
    Show Cause Hearing in
   Democratic Underground
Case 1:11-cv-00830-JLK Document 21-16             Filed 07/19/11 USDC Colorado Page 2 of 3




 From: cmecf@nvd.uscourts.gov [mailto:cmecf@nvd.uscourts.gov]
 Sent: Tuesday, July 19, 2011 11:26 AM
 To: cmecfhelpdesk@nvd.uscourts.gov
 Subject: Activity in Case 2:10-cv-01356-RLH -GWF Righthaven LLC v. Democratic Underground, LLC et
 al Show Cause Hearing



 This is an automatic e-mail message generated by the CM/ECF system. Please DO NOT
 RESPOND to this e-mail because the mail box is unattended.
 ***NOTE TO PUBLIC ACCESS USERS*** Judicial Conference of the United States
 policy permits attorneys of record and parties in a case (including pro se litigants) to
 receive one free electronic copy of all documents filed electronically, if receipt is required
 by law or directed by the filer. PACER access fees apply to all other users. To avoid later
 charges, download a copy of each document during this first viewing. However, if the
 referenced document is a transcript, the free copy and 30 page limit do not apply.

                                   United States District Court

                                        District of Nevada

 Notice of Electronic Filing

 The following transaction was entered on 7/19/2011 at 11:26 AM PDT and filed on 7/14/2011
 Case Name:           Righthaven LLC v. Democratic Underground, LLC et al
 Case Number:         2:10-cv-01356-RLH -GWF
 Filer:
 Document Number: 138(No document attached)

 Docket Text:
 MINUTES OF PROCEEDINGS - Show Cause Hearing held on 7/14/2011 before
 Judge Roger L. Hunt. Crtrm Administrator: Kandy Capozzi; Pla Counsel: Shawn
 Mangano; Colby Williams; Def Counsel: Kurt Opsahl; Laurence Pulgram; Court
 Reporter/FTR #: Eileen Sterba; Time of Hearing: 9:00 AM to 9:35 AM; Courtroom:
 6C; The Court finds there is a significant amount of evidence that Righthaven
 made intentional misrepresentations to the Court and also engaged in a
 concerted effort to hide Stephens Media's role in this litigation. This conduct
 demonstrated Righthaven's bad faith, wasted judicial resources, and needlessly
 increased the costs of litigation. Therefore, now that Righthaven has had notice
 and an opportunity to respond, the Court imposes sanctions against Righthaven
 pursuant to Rule 11 of the Federal Rules of Civil Procedure and its inherent
 authority. IT IS HEREBY ORDERED that Righthaven shall provide a copy of this
 Court's decision (Dkt. #116, Order, June 14, 2011) concerning the Strategic
 Alliance Agreement between Stephens Media and Righthaven (Dkt. #79,
 Supplemental Mem. Ex. 1, dated Jan. 18, 2010) and a copy of that agreement to
 the parties in every pending case involving Stephens Media that Righthaven has
 in any jurisdiction in this country. IT IS FURTHER ORDERED Righthaven is
Case 1:11-cv-00830-JLK Document 21-16          Filed 07/19/11 USDC Colorado Page 3 of 3




 sanctioned in the amount of $5,000.00 which shall be paid to the Clerk of Court
 within two weeks. Further, Righthaven is ordered to properly comply with Local
 Rule 7.1-1 with respect to this agreement, either retrospectively or prospectively,
 in all cases filed by Righthaven within the District of Nevada. Righthaven is also
 obligated to advise the Colorado Court of this decision even though those
 actions do not involve Stephens Media. The Court will determine whether it will
 issue a written order or whether the transcript of this Court's ruling shall be
 provided in lieu of a written order.
 Note: Following these proceedings, the Court determines it is not necessary to
 issue a written order and the transcript shall stand as the Court's Order. (no
 image attached) (Copies have been distributed pursuant to the NEF - KMC)


 2:10-cv-01356-RLH -GWF Notice has been electronically mailed to:

 Chad A Bowers chadbowers@lawyer.com, bowers@lawyer.com,
 chadalbertbowers@gmail.com, jacki9103@yahoo.com

 J. Colby Williams jcw@campbellandwilliams.com

 Clyde F. DeWitt clydedewitt@earthlink.net, stacyberger@earthlink.net

 Shawn A. Mangano shawn@manganolaw.com, rgibson@righthaven.com,
 sganim@righthaven.com

 Philip R Erwin Perwin@campbellandwilliams.com

 Joseph C. Chu jchu@righthaven.com

 Kurt Opsahl kurt@eff.org, steph@eff.org

 Corynne McSherry corynne@eff.org

 Laurence F. Pulgram cwebb@fenwick.com, kmcintyre@fenwick.com, knesbit@fenwick.com

 Cliff C Webb cwebb@fenwick.com

 Jennifer J Johnson jjjohnson@fenwick.com, jjjohnson@fenwick.com

 Dale Cendali diana.torres@kirkland.com, justin.morris@kirkland.com,
 kenymanagingclerk@kirkland.com, sharre.lotfollahi@kirkland.com

 2:10-cv-01356-RLH -GWF Notice has been delivered by other means to:

				
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