Colorado, issued another stinging rebuke to Righthaven. This time it was Judge Kane in Colorado, and his decision will lead to the end of all of Righthaven's pending cases in Colorado over the "TSA Pat Down" photo from the Denver Post. I assume Righthaven will appeal this ruling to the Tenth Circuit, but until then, it seems like its Colorado operations will be on hold.
Like other judges before him, Judge Kane dismisses Righthaven's case for lack of standing due to an inadequate copyright assignment. Unexpectedly, Judge Kane doesn't simply rely on the Ninth Circuit Silvers case or the other Righthaven precedent. Instead, because the case is in the 10th Circuit and not bound by the Silvers case, the court does a scholarly analysis of the standing issue from scratch. . . .
The judge orders Righthaven to pay Wolf's attorneys' fees. As I've mentioned before, with every fee award against it, Righthaven's profit meter keeps running in reverse. It wouldn't surprise me if judges eventually award more fees against it than Righthaven took in through its settlements in total. However, none of the fee awards will matter if Righthaven is inadequately capitalized and thus continues to plead poverty. . . I expect that angry defendants with sizable fee awards are going to look for other parties who might pay the fees. MediaNews, you're probably going to hear from some defendants; I hope you built that contingency into your budget. Wouldn't it be ironic if defendants started sniffing around Steve Gibson's home looking for assets to satisfy their fee awards?
As a final insult, Judge Kane makes it clear that Righthaven isn't going to win in his court, even if they can get a reversal of the standing issue on appeal (see, e.g., FN 2 of the opinion). While this opinion wasn't a flamboyant benchslap like Judge Hunt's opinion in the Democratic Underground case, it was a stern rebuke nonetheless. It's interesting how so many judges, effectively independently from each other, have each morally condemned Righthaven's campaign.
From here regarding a the linked ruling in 1:11-cv-00830-JLK (D. Colo. Sept. 27, 2011).
Footnote Two in Judge Kane's opinion states:
Although the institution of some third-party infringement suits may protect the interestof a copyright owner, not all infringement suits are meritorious or worthwhile. Divorcing the economically beneficial interest in copyright from the right to sue for infringement eliminates the exercise of “prosecutorial” discretion by the copyright owner. The party whose only interestis in the proceeds from an action for infringement has no incentive to refrain from filing suit. Furthermore, in light of the severe statutory damages for copyright infringement and the burdensome costs of litigation, a party sued for infringement, even a party with a meritorious defense, will often agree to settlement. Thus, a party with a bare right to sue may file numerous infringement actions of questionable merit with the intention of extorting settlement agreements from innocent users. This possibility becomes even more likely when the financial viability of the entity filing suit depends upon the proceeds from settlement agreements and infringement suits. Even though copyright law expressly provides for an award of costs and reasonable attorney fees to a party prevailing in its defense of a meritless infringement action, the economic realities of securing counsel and paying in advance the costs of litigation turns this remedy into a Potemkin Village. Both fundamentally and practically, the reality is at odds with the constitutional prioritization of public access to copyrighted works.
The footnote sounds a lot like the traditional tort reform analysis, but from a free speech orientation.
Few intellectual property business models have been so soundly condemned over a really rather modest failure to properly handle ownership issues related to the claims. This is in part because there is a deep underlying free speech values outrage at the enterprise of retail level petty copyright enforcement in arguably newsworth matters itself that Righthaven forced judges to aid and abet for a while that they are happy to distance themselves from and discredit.