Firm holds websites to the law

It tracks copyright theft for news groups, sues violators

— 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, 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 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 about100 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 orposts 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 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 asto how sophisticated they were and how culpable they were.”, 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., 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.

Smith said he knew of no previous instances in which the company had sued someone for posting a story online. Many violations in thepast 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.”

Business, Pages 25 on 08/26/2010

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