Righthaven, the company often referred to as a “copyright troll,” which has essentially made a business out of suing bloggers and media outlets over alleged copyright infringement, was dealt a big blow by a Las Vegas judge, who dismissed a key suit filed by the company.

That case would be Righthaven LLC vs. Democratic Underground, LLC, along with the counter-case Democratic Underground, LLC vs. Righthaven, LLC and Stephens Media LLC.

Righthaven had sued Democratic Underground in the fall, over an excerpt of a Las Vegas Review Journal (owned by Stephens Media) article that a user posted on Democratic Underground’s forum. Here’s the background as it appears in the court document:

This dispute arises out of Democratic Underground’s allegedly copyright infringing conduct. About May 13, 2010, a Democratic Underground user posted a comment on Democratic Underground’s website which included a portion of a Las Vegas Review-Journal (“LVRJ”) article about Nevada politics, particularly about the Tea Party effect on Sharon Angle’s senatorial campaign (the “Work”). The posting included a link to the full article and the LVRJ’s website.

After these motions were fully briefed, Stephens Media disclosed to Democratic Underground the Strategic Alliance Agreement (“SAA”) between Stephens Media and Righthaven. The SAA defines their relationship and governs all future copyright assignments between them (including the assignment at issue here). (Dkt. #79, Supplemental Mem. Ex. 1, SAA, dated Jan. 18, 2010.) After learning the details of this agreement, Democratic Underground sought leave to file a supplemental memorandum addressing this newly discovered evidence and its effect on the outstanding motions. The Court allowed the supplemental briefing as it too considered the SAA highly relevant to Righthaven’s standing in this and a multitude of other pending Righthaven cases. After considering the supplemental brief and for the reasons discussed below, the Court dismisses Righthaven for lack of standing and, therefore, denies both Righthaven’s motion and Democratic Underground’s motion as moot. The Court also denies Stephens Media’s motion.

You can read the whole thing in its entirety here (pdf), but I’ll jump to the conclusion of the document, which says:

Accordingly, and for good cause appearing,

IT IS FURTHER ORDERED that Righthaven show cause, in writing, no later than two (2) weeks from the date of this order, why it should not be sanctioned.

The common thinking is that the outcome of this particular case will have widespread impact on Righthaven’s success with other cases.

“We are pleased that the Court saw through Righthaven’s sham assignment of the copyright and dismissed its improper claim,” said Kurt Opsahl, EFF Senior Staff Attorney for the Electronic Frontier Foundation, who is on Democratic Underground’s defense team. “Today’s decision shows that Righthaven’s copyright litigation business model is fatally flawed, and we expect the decision to have wide effect on the over 270 other cases Righthaven has brought.”

The outcome of the case is important, as many people feel that Righthaven’s many suits are a threat to fair use. It appears that Righthaven is losing the war, though the company will no doubt continue to fight.