Case 2:10-cv-01281-GMN-PAL Document 9 Filed 09/09/10 Page 1 of 12

1 HECTOR J. CARBAJAL II
Nevada Bar No. 6247
2 CARBAJAL & MCNUTT, LLP
625 South Eighth Street
3 Las Vegas, Nevada 89101
Telephone: (702) 384-1170
4 Facsimile: (702) 384-5529
hjc@cmlawnv.com
5
Attorneys for Defendant
6 Silver Matrix, LLC
7 UNITED STATES DISTRICT COURT
8 DISTRICT OF NEVADA
9 RIGHTHAVEN, LLC, a Nevada limited- ) CASE NO.: 2:10-cv-01281
liability company, )
10 )
Plaintiff, ) ANSWER
11 )
vs. )
12 )
SILVER MATRIX, LLC, a Delaware limited )
13 liability company; and JUSTIN BEECH, an )
individual )
14 )
Defendant. )
15 )
16 Defendant Silver Matrix LLC (“Silver Matrix”) (“Defendant”) hereby responds to
17 the Complaint brought by Plaintiff Righthaven LLC (“Plaintiff”)1 as follows:
18 NATURE OF ACTION
19 1. Defendant admits that Plaintiff has alleged claims arising under the
20 Copyright Act.
21 PARTIES
22 2. Defendant is without knowledge sufficient to form a belief as to the truth of
23 the allegations of paragraph 2 of the Complaint and, therefore, denies the same.
24
1
25 Defendant Justin Beech was never served Plaintiff’s Summons and Complaint.
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1 3. Defendant is without knowledge sufficient to form a belief as to the truth of

2 the allegations of paragraph 3 of the Complaint and, therefore, denies the same.

3 4. Defendant admits that Silver Matrix LLC is, and has been at all times

4 relevant to this lawsuit, a limited liability company of the State of Delaware.

5 5. Defendant admits that Silver Matrix LLC owns the domain name

6 www.dslreports.com and otherwise denies the allegations of paragraph 5 in the Complaint in

7 its entirety.

8 6. Defendant denies the allegations contained in paragraph 6 of the Complaint

9 but admits that Beech is an owner and Founder of Silver Matrix LLC.

10 7. Defendant denies the allegations in paragraph 7 of the Complaint, specifically

11 that it owns the copyright in all material posted by third parties. Silver Matrix is the

12 publisher of dslreports.com, a consumer news website and forum for consumer comment

13 and opinion focusing on broadband services, among other things. Copyright notices do not

14 “proclaim” or otherwise indicate that the publisher is the “owner” of all materials that

15 appear on the website.

16 JURISDICTION

17 8. Defendant admits that this Court has subject matter jurisdiction to hear

18 copyright claims, but believes that this Court should decline to exercise it in the abusive

19 circumstances of this case and other cases similarly situated. Plaintiff’s business model

20 appears to consist of filing high volumes of small claims copyright actions against numerous

21 out-of-state defendants who must retain counsel to defend them at costs that far exceed the

22 value of the claims at issue. Plaintiff does not appear to seek or even ask for the take-down

23 of their works but sue without advance notice in order to impose high transaction costs on

24 anyone who would seek to defend themselves. Whether or not there is jurisdiction and

25 whether or not there is merit to the claim or likely defenses, Plaintiff seems to rely on the

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1 cost of defense to extract settlements that exceed the fair or reasonable value of the claim.

2 The practice is abusive and the Nevada District Court should not take jurisdiction of such

3 massive and parasitical abuse of its judicial resources.

4 9. Defendant is without knowledge sufficient to form a belief as to the truth of

5 the allegations of paragraph 9 of the Complaint.

6 10. Defendant is without knowledge sufficient to form a belief as to the truth of

7 the allegations of paragraph 10 of the Complaint.

8 11. Defendant denies the allegations in paragraph 11 of the Complaint including

9 the allegations that it “willfully copied on an unauthorized basis the Work.” And Defendant

10 denies knowledge sufficient to form a belief as to the truth of the balance of the allegations

11 therein.

12 12. Defendant denies the allegations in paragraph 12 of the Complaint.

13 Defendant never posted or displayed the Work; a third party posted the Work at some point

14 without Defendant’s knowledge and Defendant removed the copy of the Work as soon as it

15 learned of Plaintiff’s claim, which is consistent with the website’s longstanding policy.

16 13. Defendant denies knowledge and information sufficient to form a belief

17 concerning the truth of the allegations contained in paragraph 13 of the Complaint.

18 14. Defendant denies the allegations in paragraph 14 of the Complaint.

19 15. Defendant denies the allegations in paragraph 15 of the Complaint.

20 16. Defendant denies the allegations in paragraph 16 of the Complaint.

21 17. Defendant denies the allegations in paragraph 17 of the Complaint. The

22 Website is not the “habitual subject of postings by others of copyright-infringing content”

23 and Plaintiff has no colorable or good faith factual basis for pleading that statement. Plaintiff

24 has no knowledge of the content of Silver Matrix website or of Silver Matrix practices. The

25 allegation is based solely on Plaintiff’s generalization about all websites that allow third

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1 party postings and is not based on any knowledge that Plaintiff has about Silver Matrix’s

2 website.

3 18. Defendant denies the allegations in paragraph 18 of the Complaint. The

4 Silver Matrix website is rarely used by third parties in ways that would reasonably appear to

5 be infringing of any third party rights in copyright. In the event that fair and well-founded

6 complaints are presented to Silver Matrix identifying potentially infringements of copyright,

7 Silver Matrix responds promptly to take such potential infringements down off the website.

8 There are numerous forums for the exchange of thoughts and opinions of forum participants.

9 It is not reasonably possible to monitor all threads on all forums at all times and

10 infringements of copyright are not always readily evident or apparent: Some uses are

11 approved or licensed or otherwise consented to, some uses are fair uses and some uses

12 involve use of public domain materials and information and materials that are not

13 copyrightable. Most postings by third parties are proper exchanges of information and

14 opinion. Moreover, the burden of policing copyright infringement—identifying the

15 potentially infringing material and adequately documenting infringement on the Internet—

16 lies squarely on the owners of the copyright, who are in the best position to identify

17 infringements. Silver Matrix’s website is a consumer news and information website in which

18 third parties exchange views and information. It is not a venue for infringers as Plaintiff

19 without support unreasonably supposes.

20 19. Defendant denies the allegations in paragraph 19 of the Complaint. The

21 Silver Matrix website is rarely used by third parties in ways that would reasonably appear to

22 be infringing of any third party rights in copyright. In the event that fair and well-founded

23 complaints are presented to Silver Matrix identifying potentially infringements of copyright,

24 Silver Matrix responds promptly to take such potential infringements down off the website.

25 There are numerous forums for the exchange of thoughts and opinions of forum participants.

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1 It is not reasonably possible to monitor all threads on all forums at all times and

2 infringements of copyright are not always readily evident or apparent: Some uses are

3 approved or licensed or otherwise consented to, some uses are fair uses and some uses

4 involve use of public domain materials and information and materials that are not

5 copyrightable. Most postings by third parties are proper exchanges of information and

6 opinion. Moreover, the burden of policing copyright infringement—identifying the

7 potentially infringing material and adequately documenting infringement on the Internet—

8 lies squarely on the owners of the copyright, who are in the best position to identify

9 infringements. Silver Matrix website is a consumer news and information website in which

10 third parties exchange views and information. It is not a venue for infringers as Plaintiff

11 without support unreasonably supposes.

12 20. Defendant denies the allegations in paragraph 20 of the Complaint. The

13 Silver Matrix website is rarely used by third parties in ways that would reasonably appear to

14 be infringing of any third party rights in copyright. In the event that fair and well-founded

15 complaints are presented to Silver Matrix identifying potentially infringements of copyright,

16 Silver Matrix responds promptly to take such potential infringements down off the website.

17 There are numerous forums for the exchange of thoughts and opinions of forum participants.

18 It is not reasonably possible to monitor all threads on all forums at all times and

19 infringements of copyright are not always readily evident or apparent: Some uses are

20 approved or licensed or otherwise consented to, some uses are fair uses and some uses

21 involve use of public domain materials and information and materials that are not

22 copyrightable. Most postings by third parties are proper exchanges of information and

23 opinion. Moreover, the burden of policing copyright infringement—identifying the

24 potentially infringing material and adequately documenting infringement on the Internet—

25 lies squarely on the owners of the copyright, who are in the best position to identify

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1 infringements. Silver Matrix website is a consumer news and information website in which

2 third parties exchange views and information. It is not a venue for infringers as Plaintiff

3 without support unreasonably supposes.

4 21. Defendant denies the allegations in paragraph 21 of the Complaint and

5 reallege their answers to paragraphs 18 through 20 above. Plaintiff’s allegations in this

6 paragraph of the Complaint are plead in willful blindness to the requirement that pleadings

7 of a complaint must be supported with reasonable investigation and good faith assertions of

8 fact rather than threadbare formulaic and unsupported conclusions of law – which Plaintiff

9 repeats in all of its form pleadings without regard for the facts.

10 VENUE

11 22. Defendant denies the allegations in paragraph 22 of the Complaint. Nevada

12 would be a particularly inappropriate venue given the undue burden and expense it would

13 impose on the Defendant to litigate this case. The Defendant’s staff and operations are

14 located in the Greater New York area. Further, the third-party poster of the Work appears to

15 be based in New Jersey, according to his published post. Finally, the eight replies to his post

16 are from states outside of Nevada or from another country, according to their postings.

17 23. Defendant denies the allegations in paragraph 23 of the Complaint. But it is

18 without sufficient first-hand information with which to form a belief concerning the truth of

19 the balance of the allegations and on that basis denies them in their entirety.

20 24. Defendant denies the allegations in paragraph 24 of the Complaint.

21 FACTS

22 25. Defendant denies knowledge sufficient to form a belief as to the truth of the

23 allegations of paragraph 25 of the Complaint.

24 26. Defendant denies knowledge sufficient to form a belief as to the truth of the

25 allegations of paragraph 26 of the Complaint.

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1 27. Defendant denies knowledge sufficient to form a belief as to the truth of the

2 allegations of paragraph 27 of the Complaint.

3 28. Defendant denies knowledge sufficient to form a belief as to the truth of the

4 allegations of paragraph 28 of the Complaint.

5 29. Defendant denies the allegations in paragraph 29 of the Complaint.

6 30. Defendant was not aware that a third party had posted the Work on the Silver

7 Matrix website until it was informed of the claim through this lawsuit (not through a notice

8 and takedown letter), at which time it removed the third party posting, which is consistent

9 with the website’s longstanding policy. To that extent, Defendant admits that it did not seek

10 permission to post the Work from Plaintiff to post the Work and it was unaware that such

11 consent might be needed.

12 31. Defendant was not aware that a third party had posted the Work on the Silver

13 Matrix website until it was informed of the claim through this lawsuit (not through a notice

14 and takedown letter), at which time it removed the third party posting. To that extent,

15 Defendant admits that it did not seek permission to post the Work from Plaintiff to post the

16 Work and it was unaware that such consent might be needed. But Defendant denies

17 knowledge sufficient to form a belief as to whether the Plaintiff had expressly or implicitly

18 provided approval or permission for use of the Work.

19 CLAIM FOR RELIEF: COPYRIGHT INFRINGEMENT

20 32. Defendant repeats and realleges its answers to all of the allegations referred

21 to in paragraph 32 of the Complaint.

22 33. Defendant denies knowledge sufficient to form a basis for belief as to the

23 truth of the allegation of paragraph 33 of the Complaint.

24 34. Defendant denies knowledge sufficient to form a basis for belief as to the

25 truth of the allegation of paragraph 34.

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1 35. Defendant denies knowledge sufficient to form a basis for belief as to the

2 truth of the allegation of paragraph 35 of the Complaint.

3 36. Defendant denies knowledge sufficient to form a basis for belief as to the

4 truth of the allegation of paragraph 36 of the Complaint.

5 37. The allegations contained in paragraph 37 set forth a legal conclusion to

6 which no response is required. To the extent a response is required, Defendant denies the

7 allegations herein. But it is without sufficient first-hand information with which to form a

8 belief concerning the truth of the balance of the allegations and on that basis denies them in

9 their entirety.

10 38. The allegations contained in paragraph 38 set forth a legal conclusion to

11 which no response is required. To the extent a response is required, Defendant denies the

12 allegations herein. But it is without sufficient first-hand information with which to form a

13 belief concerning the truth of the balance of the allegations and on that basis denies them in

14 their entirety.

15 39. The allegations contained in paragraph 39 set forth a legal conclusion to

16 which no response is required. To the extent a response is required, Defendant denies the

17 allegations herein. But it is without sufficient first-hand information with which to form a

18 belief concerning the truth of the balance of the allegations and on that basis deny them in

19 their entirety.

20 40. The allegations contained in paragraph 40 set forth a legal conclusion to

21 which no response is required. To the extent a response is required, Defendant denies the

22 allegations herein. But it is without sufficient first-hand information with which to form a

23 belief concerning the truth of the balance of the allegations and on that basis denies them in

24 their entirety.

25 41. Defendant denies the allegations contained in paragraph 41 of the Complaint.

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1 42. Defendant denies the allegations contained in paragraph 42 of the Complaint.

2 43. Defendant denies the allegations contained in paragraph 43 of the Complaint.

3 44. Defendant denies the allegations in paragraph 44 of the Complaint and notes

4 that the Work is no longer on the Silver Matrix website.

5 45. Defendant specifically denies any allegation contained in the Complaint,

6 which it has not specifically admitted herein.

7 46. Defendant specifically denies that Righthaven is entitled to any of the relief

8 called for in the Prayer for Relief.

9 AFFIRMATIVE DEFENSES

10 FIRST AFFIRMATIVE DEFENSE

11 1. This Court lacks personal jurisdiction over the Defendant. The Defendant

12 does not transact business in, nor do the Defendant’s direct activities in or to Nevada, or to

13 residents of Nevada. There is no evidence that anyone in Nevada, save Plaintiff’s counsel,

14 read or downloaded the Work from the little-read and short-lived forum thread posted by a

15 third party. Plaintiff’s allegations regarding jurisdiction are not based on reasonable inquiry

16 or good faith assertions of fact regarding this case or this Defendant but are solely the

17 formulaic boiler-plate repetitions of unsupported legal elements and conclusions.

18 SECOND AFFIRMATIVE DEFENSE

19 2. The Defendant and Justin Beech were not the Publisher of any alleged

20 infringement of Righthaven’s copyrighted work. The Defendant and Justin Beech had no

21 prior knowledge of the alleged infringement until they became aware of the Plaintiff’s claim

22 though this lawsuit, at which point it was removed, as per the website’s policy.

23 THIRD AFFIRMATIVE DEFENSE

24 3. Any alleged infringement by Defendant corporate entity, Silver Matrix LLC,

25 a limited liability company of the state of Delaware, was innocent.

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1 FOURTH AFFIRMATIVE DEFENSE

2 4. The alleged use of the Work, to the extent it was used, constitutes Fair Use.

3 FIFTH AFFIRMATIVE DEFENSE

4 5. Plaintiff’s claims are barred based on an implied license.

5 SIXTH AFFIRMATIVE DEFENSE

6 6. Plaintiff’s claims are barred based on waiver and estoppel.

7 SEVENTH AFFIRMATIVE DEFENSE

8 7. Any damages alleged to be suffered by Plaintiff have been caused by

9 Plaintiff’s own conduct, and not be any conduct attributable to Defendant.

10 EIGHTH AFFIRMATIVE DEFENSE

11 8. Plaintiff has failed to mitigate its damages, if any and delayed bringing the

12 claim to Defendant’s attention when, among other things, it knew that Defendant and other

13 like Defendants would have likely promptly removed the Work without the need of

14 litigation and upon the receipt of a simple and less costly inquiry or cease and desist letter.

15 Plaintiff’s costs and fees in initiating the action were needless and unreasonable.

16 NINTH AFFIRMATIVE DEFENSE

17 9. Any alleged infringement by Defendant was de minimis.

18 TENTH AFFIRMATIVE DEFENSE

19 10. Plaintiff’s Complaint is barred due to the doctrine of Copyright Misuse.

20 Among other things, Plaintiff is not seeking to protect its copyright or to stop infringing

21 activity. It did so to obtain money in excess of the fair and reasonable value of the claimed

22 infringement and to get compensation for its needless and punitive expenditure of legal and

23 filing fees.

24 ///

25 ///

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1 ELEVENTH AFFIRMATIVE DEFENSE

2 11. The Court lacks personal jurisdiction over Justin Beech because he has never

3 been served with any copy of the Summons and Complaint.

4 PRAYER FOR RELIEF

5 WHEREFORE, Defendant Silver Matrix LLC prays for relief as follows:

6 1. That the Court dismiss the Complaint with Prejudice.

7 2. That Defendant be awarded such other relief as this Court deems just and proper:

8 a. For attorney’s fees as provided by law;

9 b. For cost of suit as provided by law; and

10 c. For such other and further relief as the Court deems just and proper.

11 Respectfully submitted,

12 DATED this 9th day of September, 2010.

13 CARBAJAL & MCNUTT, LLP

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/s/ Hector J. Carbajal II .
15 HECTOR J. CARBAJAL II
Nevada Bar No. 6247
16 625 South Eighth Street
Las Vegas, Nevada 89101
17 hjc@cmlawnv.com
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1 CERTIFICATE OF SERVICE

2 I hereby certify that on the 9th day of September, 2010, I served a copy of the

3 foregoing ANSWER by mailing a copy by United States Postal Service, postage prepaid

4 and/or via electronic mail through the United States District Court’s CM/ECF system to the

5 following at their last known address and e-mail:

6 Steven A. Gibson, Esq.

Righthaven, LLC
7 9960 West Cheyenne Avenue, Suite 210
Las Vegas, Nevada 89129-7701
8 sgibson@righthaven.com
9 Attorneys for Plaintiff
Righthaven, LLC
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/s/ Jacky Varela
12 An Employee of Carbajal & McNutt, LLP
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