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Eli Whitney invented the cotton gin which revolutionized the cotton industry. But he had a hard time profiting from his invention because he tried to charge farmers a huge price (2/5 of their profits). So what did the resentful farmers do? They copied the design of his invention and pirated the machines. Competition sprang up everywhere. Lawyers were paid huge fees resulting from the massive lawsuits to try to protect and enforce the cotton gin patent, but Whitney didn't make any money from either the lawsuits or the cotton gin as a result of the legal battles.

Yet, Whitney died a rich man. How? He invented a standardization process to manufacture muskets by machine. But, this time, he didn't seek a patent and he encouraged people to pirate it. As a result, the industry grew rapidly and he made tons of money. So is the moral of the story that you don't need intellectual property (IP) rights to make you rich? After all, it worked for the Grateful Dead, too. And, in the fashion industry, there is very limited intellectual property protection and no copyright protection. Yet the economic success of the fashion industry is enormous.

Here's another, more contemporary story. Righthaven is a law firm who has been described as a copyright troll. It's business model is pretty simple: acquire a license for existing content and then "extort" money from anyone who reuses that content without paying a licensing fee. Righthaven has successfully threatened many bloggers with lawsuits and domain seizure unless they were paid. The Las Vegas Review-Journal (LVRJ) gave them their start by providing the license to their content. As the Electronic Frontier Foundation (EFF) put it, Righthaven would then "bully Internet users into paying unnecessary settlements."

But political blog Democratic Underground and the EFF have convinced a judge to unseal and reveal Righthaven's secret agreement with the LVRJ, and it doesn't look good for either Righthaven or LVRJ. It appears Righthaven is only allowed to sue on LVRJ's behalf but doesn't own the copyrights. If true, it would likely effectively destroy Righthaven's business model. As a result, the Democratic Underground is now going after Righthaven, LVRJ, and potentially others for legal fees.

Are monopolies ever a "good" thing? If someone has a monopoly on a particular idea (e.g., because they created it), should they be allowed to dictate every way that idea is used? Has copyright law gone too far? Should copyright law prevent people from sharing the ideas of others? If you take away the ability of the content producers to sue those who reuse and/or incorporate the content, what do you think will happen?

Angered at Righthaven's behavior, a Las Vegas federal judge unsealed the company's heretofore confidential agreement with the Las Vegas Review-Journal late on Friday. The contract reveals that the controversial copyright-enforcement company and LV R-J parent company Stephens Media are splitting their net earnings from suing hundreds of bloggers on a 50-50 basis. It also shows that the LV R-J is still largely in control of Righthaven's litigation strategy - a fact that could end up being ruinous for Righthaven's campaign of copyright lawsuits.

The contract shows that it was Stevens Media who had ultimate control of who to sue...

This agreement is under attack by defense lawyers - and if those attacks are successful, it will undermine Righthaven's entire business. Righthaven sued political blog Democratic Underground in August for printing an excerpt of an article from the LV R-J. DU hooked up with pro bono lawyers from the Electronic Frontier Foundation, who are now arguing that this agreement to move around copyrights and sue over them is invalid and a "sham." The problem is that Stephens Media didn't actually assign any of the rights related to copyright to Righthaven except the right to sue - and that's arguably illegal under case law...

If the lawyers representing DU are successful in this argument, it would undermine every lawsuit Righthaven has filed based on LV R-J copyrights...

DU lawyers want to go after attorneys' fees - and there is now a scenario in which it's not just Righthaven but its newspaper clients that will have to pay.

Righthaven's Secret Contract Revealed: Will Its Strategy Collapse?


Original posting by Braincrave Second Life staff on Apr 18, 2011 at http://www.braincrave.com/viewblog.php?id=531

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