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Add Missouri to the list of states unfriendly to copyright trolls. And, congratulations to the Cashman Law Firm, PLLC clients who have been severed and dismissed from the Purzel Video GMBH v. Does 1-91 (Case No. 4:12-cv-02292) lawsuit!

Now what was exciting about this Purzel Video GMBH case ruling was U.S. District Judge Audrery Fleissig’s 1) refutation of the “judicial economy” justification for joinder, and 2) her clarification of the relationship between bittorrent users for joinder purposes (and similarly, what she left open for future rulings by referring to bittorrent transfers as mere “pieces”).

Courts in other federal jursidictions which allow multiple defendants to be sued together in bittorrent cases (pro-joinder jurisdictions) allow joinder of non-related defendants based on the fact that it is easier to have one “John Doe 1-500″ case with five hundred (500) defendants in it rather than to have five hundred “single John Doe” lawsuits. The defendants in these cases are all accused of violating the same copyright laws; the defendants are all accused of using bittorrent to download the same title; the courts are all deciding the same issues for each defendant — whether the court has “personal jurisdiction” over each defendant (whether the plaintiffs sued defendants in the wrong state, depriving that federal court of personal jurisdiction over each John Doe Defendant), and whether the defendants are properly joined together as co-defendants in the same lawsuit.

I suspect that Judge Flessig caught on to the extortion scheme, and she made her ruling with the understanding that everything in the above justifications for “judicial economy” is true… if the plaintiffs are running a settlement extortion scheme. However, if the plaintiffs indeed intend in good faith to move forward with their case “on the merits,” then as the judge points out, the “judicial economy” approach falls apart.

The rule now in Missouri federal courts (binding on other Missouri cases, persuasive in non-Missouri cases) is that suing multiple defendants in a “John Doe 1-X” lawsuit is improper because of the prejudice to the co-defendants and the confusion that will result *if* the plaintiffs actually have a good faith intent on pursuing their claims (e.g., if they are “not” running a settlement extortion scheme).

For example, a rule in federal courts is that every named defendant needs to be provided copies of all documents for the case in which they are accused. The judge points out that it would prejudice Defendant #2 if he started receiving motions and rulings relating to the depositions and interrogatories for Defendant #1. Multiply the confusion that would occur if there are ten defendants, or one hundred defendants, and so on. Similarly, each defendant will end up having his own lawyer. If the lawyer for Defendant #1 makes a motion and the court orders his client to a case management hearing, Defendant #2 will receive a copy of this order and may think that he has to attend the hearing.

This gets even more burdensome as soon as defendants are named and discovery begins to take place. Judge Fleissig points out that every defendant has the right to attend the depositions of the other co-defendants. Imagine the chaos that would ensue if every John Doe Defendant crowds into a small office to hear the other defendants’ depositions. My own addition — imagine if all the accused defendants and each of their lawyers try to crowd into one small courtroom for a hearing.

Lastly, we all know that the justifications for joinder in a federal lawsuit is the “same transaction or occurrence” standard. In other words, courts have ruled that defendants can be joined together in one lawsuit if they were participating in the same bittorrent swarm at the same time — this is known as the “swarm joinder theory” asserted by the plaintiffs in every bittorrent lawsuit complaint.

In plaintiff attorney Paul Lesko’s cases, it is interesting to note that he was trying to extend the definition of a bittorrent swarm to span 18 weeks — from August 5th, 2012 to December 5th, 2012. This would obviously include internet users who never uploaded or downloaded from each other, and it would place them together as being part of the same transaction [big ongoing swarm] or occurrence [the "happening" of the swarm, for as long as "it" stays "alive"].

This secondary swarm theory has no official name, but it could be described as the “temporal swarm theory,” which asserts that defendants who participate in a bittorent swarm can be sued with all other defendants who ever uploaded or downloaded to that swarm (as opposed to a more legitimate “snapshot swarm theory” which joins bittorrent users together in a lawsuit based on who is uploading and downloads to whom at a particular point in time).

However, Judge Fleissig rejected both the “swarm joinder theory” and the “temporal swarm theory” (“snapshot swarms” were not discussed) because in both cases, the bittorrent users did not download and upload from EACH OF ALL the other bittorrent users in that swarm. In other words, a bittorrent swarm consists of many small “transactions and occurrences” between multiple users, and the judge essentially ruled that association with a “bittorrent swarm” does not properly connect [for joinder purposes] one defendant with another defendant from whom or to whom he did not specifically download or upload.

Food for thought for future Missouri federal cases: I want to also mention that Judge Fleissig refers to the accused bittorrent users as merely transferring “pieces” of the copyrighted files to each other rather than the entire copyrighted title [to be found liable for copyright infringement (under the "substantial similarity" prong), courts have ruled that the entire copyrighted file needs to be transferred; not merely "pieces" of it].

I would love to interpret her words as meaning that ‘because no user transfers a complete copyrighted file to any other user (only data bits and “pieces” of the copyrighted file that the downloader’s bittorrent software pieces together into a file), no user can be found liable for copyright infringement,’ but I do not think this is what she was referring to.

Rather, by mentioning bittorrent transfers from one user to another user as mere “pieces” of a copyrighted file, Judge Fleissig leaves open the question (perhaps to be elaborated in a future ruling) whether transferring bits and “pieces” of a copyrighted file (but not the entire file) can constitute copyright infringement.

NOTE: This ruling directly affects as binding upon the following Missouri bittorrent cases* (sorted by filing date):

reFX Audio Software Inc. v. Does 1-39 (Case No. 4:13-cv-00895)
Georgia Film Fund Four, LLC v. Does 1-75 (Case No. 4:13-cv-00832)
The Bicycle Peddler, LLC v. Does 1-28 (Case No. 4:13-cv-00583)
Elf-Man, LLC v. Does 1-17 (Case No. 4:13-cv-00576)
The Thompsons Film, LLC v. Does 1-23 (Case No. 4:13-cv-00577)
PHE, Inc. v. Does 1-27 (Case No. 4:13-cv-00480)
Purzel Video GMBH v. Does 1-32 (Case No. 4:13-cv-00449)
Purzel Video GMBH v. Does 1-67 (Case No. 4:13-cv-00450)
Riding Films, Inc. v. John Does 1-11 (Case No. 4:13-cv-00430)
Bayou Pictures, LLC v. John Does 1-11 (Case No. 4:13-cv-00433)
The Good Doctor, LLC v. John Does 1-36 (Case No. 4:13-cv-00434)
Maxcon Productions, Inc. v. Does 1-88 (Case No. 4:13-cv-00428)
reFX Audio Software Inc. v. Does 1-97 (Case No. 4:13-cv-00409)
reFX Audio Software Inc. v. Does 1-53 (Case No. 4:13-cv-00408)
Breaking Glass Pictures, LLC v. Does 1-188 (Case No. 4:13-cv-00388)
Vision Films, Inc. v. Does 1-10 (Case No. 4:13-cv-00290)
Vision Films, Inc. v. Does 1-30 (Case No. 4:13-cv-00020)

*some of these may have already been dismissed on other grounds.

Much of the work that I do in copyright litigation circles not only around defending John Doe Defendants who have been implicated in some lawsuit or who have received a notice or a DMCA letter from their ISP.  Rather, a lot of what I do involves having discussions with copyright holders and their attorneys swaying them from suing individual downloaders.

I wouldn’t say that a newly minted attorney (or a seasoned veteran attorney) who chooses to fund his law firm’s coffers with tons of settlement cash by suing individual downloaders is unethical for doing so — I simply think their attempts to stop piracy by suing downloaders are simply misguided.

Many attorneys justify their attempts to sue individual downloaders by the “death of a thousand cuts” theory, which acknowledges that one “lost sale” from a download won’t hurt anyone. However, multiply that by thousands, and a copyright holder can go bankrupt from the loss of revenue from piracy. While I understand their concerns (and agree somewhat in theory), I still say that going after the direct infringers (e.g., the internet users who copied and distributed the copyrighted content via the use of bittorrent software) is the WRONG approach to solve the piracy problem.

Below is a snippet of an e-mail I sent to an attorney who has been quite proactive on the copyright infringement front. His approach was somewhat different from the Prenda / Lipscomb / Dunlap Grubb & Weaver, PLLC approach to suing internet users, and while I will keep his information private for the purposes of this article, I agree that these predatory lawyers (the “copyright trolls” we speak about on the blogs) have made a mess for the copyright holders, “poisoning the well” for copyright holders who still wish to sue downloaders. I hope reading the following snippet may sway them to pursue other avenues to solve the piracy problem.

Dear [attorney],

I agree with the “death of a thousand cuts” problem when it comes to piracy and bittorrent. I am not sure what percentage of downloaders would actually purchase the copyrighted title (or a subscription to a copyright holder’s service) if the pirated title was not readily available to be downloaded, but it would be interesting to take an unbiased study and research the issue.

I also suspect that much of piracy is a distribution problem. I’ve heard this real-world example [from a few years back] as a justification for piracy. If someone wanted to see the “Game of Thrones” HBO series and they did not have access to HBO’s online website service (e.g., no cable; not going to subscribe), then they go to rent it on Redbox, Netflix, or Amazon Prime, and it is not available, and then they even go to purchase a season online and even that is not available, then they’ll pirate the series and feel justified about it (and they’ll be angry at the company as the bittorrent software moves the files onto their hard drives). I doubt this is the same for much of the adult content litigation (which I suspect infringement is a result of “browse, click and download, then watch”), but I’ve often commented that a wholesale iTunes store-like site (“Red Light Box”) would be a good source for purchasing or renting adult content (which is the subject of many of the lawsuits, as you know).

The jist is that I understand the desire to sue individual downloaders, and I understand the justifications for doing so. I am also certainly not going to sway you from suing individual downloaders with an e-mail.

However, I have always believed that internet users are not the correct parties to sue because many of them do not appreciate the severity for the acts of infringement they commit quite regularly. In other words, they are not the correct parties on whom to put the risk and/or the burden of violating the copyright laws because there are better alternatives available to solve the piracy problem and to mitigate damages from lost revenues. In my opinion, it is better to approach the issue from the “eliminate-the-available-content” approach via DMCA takedown letters, removing links, and taking down bittorrent trackers. Suing the content hosting companies is another approach, as you have explored successfully (although I understand the frustrations of this approach as well — how many times can someone sue The Pirate Bay).

I even don’t like the CEG-TEK $200 per title infringement software system / website solution where they send letters to the infringers days after the download, however, this appears to be the most efficient way to get a quick settlement and teach the downloaders a civic lesson on the dangers of downloading copyrighted titles.

But as for “poisoning the well,” yes, I fully see your point and appreciate the damage these law firms have done with their copyright trolling lawsuits.

Warm regards,

I have been fighting with myself trying to determine whether to write this article for a problem with Warner Brothers’ $20 settlement demand letters that they are sending out to accused downloaders of their content. Yet I suspect that this is just the beginning of something larger — I fear that the MPAA might be jumping on board the “DMCA settlement letter” scheme or even worse, starting to sue defendants again en masse for copyright infringement.

Under a company named “Rightscorp, Inc.,” (Website: http://www.DigitalRightsCorp.com) Christopher Sabec is sending out “DMCA Letters” almost copying CEG-TEK’s letters accusing the internet user of copyright infringement and offering to settle the claims for a mere $20.

RightsCorp is representing, however, mega corporations such as Warner Brothers Entertainment Inc. (“Warner Bros.”) on their ABC Family teen shows such as “Pretty Little Liars” (file: “Pretty.Little.Liars.S03E05.HDTV.x264-LOL.mp4″) among other TV shows geared at teenagers who are quite savvy on the internet. The expectation is that not all of the episodes are available on their http://abcfamily.go.com website, and so naturally kids will migrate to the internet and Bittorrent to download the earlier episodes taken down from their websites.

What is bothering me, however, is that the release on their https://secure.digitalrightscorp.com/settle website (pasted below) releases the accused defendant from their claim of copyright infringement for a mere $20, but it has the defendant ADMITTING GUILT to the infringement. Thus, in legal terms, an accused internet user who pays the $20 may be released from liability for THAT instance of infringement, but the next time they catch that user downloading, they can not only sue for the full $150,000 (or ask for TENS OF THOUSANDS OF DOLLARS as a settlement), but in court, they would use the prior settlement as EVIDENCE OF GUILT that the accused defendant habitually downloads copyrighted videos and TV shows.

To be clear: EVERY settlement agreement for copyright infringement should have language stating that the accused defendant is not admitting guilt, or else the act of settling a copyright infringement claim can be construed as an “admission” of guilt in a court. Specifically, the language (e.g., taken from CEG-TEK’s settlements) would say something like “this Liability Release represents a compromise and that nothing herein is to be construed as an admission of liability on the part of RELEASEE.” This language appears to be purposefully ABSENT from the RightsCorp Settlement Agreements.

For this reason, it is difficult for me to suggest hiring a third party / attorney and paying one of us to anonymously settle a $20 matter, BUT it is my opinion that the RightsCorp settlements are simply dangerous to your legal rights.  Yet the flip side is that Warner Bros. is a MPAA member, and they have unlimited pockets to sue a defendant (they have in the past, and they could again in the future), and that not settling could later result in a second claim against you for a lot more money (it is not unlike them to ask for $20,000 as a settlement for one title).

My ThoughtsI am not sure I would want the MPAA (or any of its members) to have my client’s contact information with what is essentially an “I did it, I’m sorry, I won’t do it again, here’s $20″ settlement agreement.  And, if I settled a claim, I would probably do so anonymously and respectfully.  

I would not want to instigate a “David vs. Goliath” fight with Warner Brothers or the MPAA on behalf of my client (who would likely end up being the HARD-WORKING PARENTS of the kid who did the download).  In a court battle, we would have the uneven legal situation [yet again] where the plaintiff copyright troll has unlimited financial and legal resources and the defendant has limited means to even hire an attorney to represent them.

The MPAA has been lying dormant these past three years while the porn companies and their copyright trolls fight out the issues in the various federal courts across the U.S. My suspicion is that they are getting ready to dip their toes back into the water and start suing internet users again. I am suspicious that perhaps this $20 scheme is just their way to start getting names and contact information to gear up to sue “repeat offenders” who have already settled one of their claims. And for $20, it appears to me that this will be an easy way to lure defendants into giving over their contact information to be solicited later for something else.

Here is a sample copy of their release (noting that the “no admission of guilt” language is missing):

WB Sample Settlement Agreement
Liability Release & Settlement Receipt

IMPORTANT: Please retain this document for your records. It releases you from liability for the below mentioned infringement and serves as official notice of settlement.

Reference # TC-4ab****************************

Title Pr*******************

Filename Pr********************

Timestamp 2013-06***********

Infringement Source Torrent

Infringers IP Address 61*************

Infringers Port 4****

In consideration of the settlement payment made and the representations and agreements made in this Release & Settlement, Warner Bros. Entertainment Inc. (“WB”) for itself, for its past, present and future directors, shareholders, members, managers, officers, employees, agents, attorneys, representatives, partners, trustees, beneficiaries, family members, heirs, subsidiaries and affiliates, and for its and their predecessors, successors and assigns (collectively the “Releasor”);

Hereby finally, unconditionally, irrevocably and absolutely releases, acquits, remises and forever discharges robert steele, 3100 donald douglas loop n santa monica CA, 90405 and such person’s family members and heirs (collectively the “Releasee”);

From any and all manner of actions, suits, debts, sums of money, interest owed, charges, damages, judgments, executions, obligations, costs, expenses, fees (including attorneys’ fees and court costs), claims, demands, causes of action and liabilities, that arise under the United States Copyright Act, in each case whether known or unknown, absolute or contingent, matured or unmatured, presently existing or hereafter discovered, at law, in equity or otherwise, that the Releasor may now have or that might subsequently accrue against the Releasee arising out of or connected with the specific Infringement of copyrighted material(s) referenced above;

Provided however, that this release shall not, and shall not be deemed to, constitute a release with respect to any other past, present or future infringements by Releasee other than the specific Infringement of copyrighted material(s) referenced above.

Robert Steele agrees not to infringe any of WB’s filmed entertainment (including but not limited to films, videos, video games, animation and television programs), whether now in existence or later created, that is owned or controlled by WB. In furtherance of this agreement, Robert Steele agrees to immediately and permanently cease the unauthorized copying and/or distribution (including, but not limited to, downloading, uploading, filesharing, file “swapping,” or other similar activities) of WB filmed entertainment, including, but not limited to, those items listed in this correspondence.

Settlement Date 2013-06**********

Transaction Id 102**************

Settlement Amount ***

If you have any questions about this release, please contact rsteele@digitalrightscorp.com

6/21 UPDATE: I have been seeing lawsuits filed by Warner Bros Home Entertainment Inc. v. “named defendant” et al. I have provided a screenshot below from the http://www.rfcexpress.com website. After a quick investigation, these lawsuits are NOT RELATED to what I am referring to in this article.  Yet, it is still concerning that Warner Bros. is taking such an enthusiastic interest in the federal court system for copyright infringement lawsuits.
062113 Warner Bros Lawsuits

I try my hardest to separate out the “photo” copyright trolls from the “bittorrent” copyright trolls when writing articles on this blog, as they are a separate category of trolls with their own rules.

In sum, “photo” copyright trolls search the web for images that are used on websites, often by bloggers, without permission or license from the owner of that photograph. Essentially, a blogger writes (for example) about the topic of “red pepper” vegetables. To make their blog entry more visually appealing, they search Google Images for “red pepper,” copy the first image they see, and they paste it on the top of their blog.

Most bloggers stay away from pictures that have a watermark on it, or from images which have a copyright logo marked on it. The problem is that 99% of the pictures out there have no copyright marking, and are not sold anywhere. Unsuspecting bloggers use these photos or random pictures on their blogs, and unbenownst to them, the owner (or a third party who purchases the rights to the photo with the intention of suing bloggers) begins asserting their copyright interests in the photo. Many accused bloggers who I have spoken to have expressed that they didn’t think they needed a license for a photo for non-commercial activities, and now they are facing threats of a lawsuit for using an image on their website.

Where the waters get muddied is that now Copyright Enforcement Group (a.k.a., “CEG-TEK”, “CEG TEK”, and more recently, “CEG”) is sending out the same DMCA letters that they ordinarily send to my bittorrent clients, but now they are in the “photo trolling” business. Their letters assert that a particular website used a copyrighted photo without a license, and the copyright holder is now asserting his rights for the “theft” that happened to his intellectual property rights. Thus, they are asking for $500 per photo, which in my opinion is obscene considering all their other letters ask for $200 per video shared via bittorrent.

On a personal note, hitting website users with a threat of a lawsuit over an image pulled from a Google image search is simply obscene. I would certainly understand such a letter if the image had a watermark pointing the user to a website where they can purchase rights to the photo without the watermark, or if there was a copyright mark on the image. Yet these photos have none of these, and they are literally trolling old websites and blogs looking for photos which were copied from other websites.

What makes this so obscene is that the photo copyright owners are asserting the same copyright infringement claims as do the copyright holders for the bittorrent cases we deal with daily. Along with the same copyright claims come the same shock of having the law provide statutory damages of $150,000 to the copyright holder who can prove the infringement. $150,000 for a movie download in my mind is an obscene and disproportionate punishment for the “crime” of downloading a copyrighted title. Even moreso for a photo. AND, even moreso for an unmarked and unwatermarked photo freely available on a Google image search.

Now here are the details as they are unfolding. So far, it appears as if the “photo” copyright troll entity asserting the copyrights is a company called “AKM Images / GSI Media.” The letter CEG-TEK is sending out provides a screenshot image of the blog containing the photo (and in a number of cases, the blog is no longer in existence and is only shown in the internet archives on the “Way Back Machine” on http://archive.org). It appears as if even CEG-TEK was unsure if they wanted to go into this area, because many of the screenshots are said to be from last year (2012). And, the so-called DMCA letters are not sent by ISPs, but appear to be forwarded by the website admins who host the various blogs.

6/13 UPDATE: There is some talk about the copyrighted images being posted on the website owner’s website or blog by a third party RSS aggregator. In sum, the accused blogger or website owner in many cases didn’t even post the images themselves, yet they are still asked by CEG to pay $500 to avoid a lawsuit.

ID-100157775Image courtesy of @artur84 / FreeDigitalPhotos.net

Much of the bittorrent world is saddened by the leaked news reports of the recent “Bellwether” case in the Eastern District of Pennsylvania (Malibu Media v. John Does, Case No. 5:12-cv-02088) where at least one defendant is reported to be facing close to $112,500 in damages plus attorney fees for the peer-to-peer downloads he is said to have taken part in. The plaintiff attorneys, along with Keith Lipscomb and others who have a vested interest in seeing bittorrent cases against internet users succeed are drinking champagne and celebrating their victory.

It is both my professional belief and my personal conviction that copyright trolling lawsuits are wrong, and while there is nothing illegal in suing a defendant for copyright infringement, doing so in my opinion is unlawful and morally corrupt. These lawsuits are nothing more than a STAGE SHOW to permit a behind the scenes SHAKEDOWN of accused interent users, whether or not they actually participated in the accused infringement. For G-d’s sake, the “guilty” so-called “criminal” defendant merely clicked on a link, and downloaded a title that was openly shared with thousands of other downloaders. To hit that defendant with a shock lawsuit where they face $150,000 statutory damages for a video that could have been purchased for a few bucks is a disproportionate punishment for the “crime” of downloading copyrighted films. Rather, instead of suing downloaders and letting the piracy continue, why not just end the piracy problem by issuing a DMCA take down notice to the bittorrent tracker? The alternative of sitting in bittorrent swarms and employing tracking software to track the IP addresses of who is downloading to me just seems like an abusive step to what would otherwise be a simple problem of making the torrent files go away so that unsuspecting downloaders couldn’t click on the links.

It is my conviction that copyright infringement lawsuits are wrong because it is simply immoral to shake down EVERY John Doe Defendant (yes, each one) with the threat of having to defend a lawsuit in federal court unless they cough up tens of thousands of dollars for downloads that the John Doe Defendant often did not even take part in. I have personally seen copyright trolls such as Malibu Media, LLC take large sums of money from defendants who did not do the download, but who were pressured into settling simply to avoid being named in a lawsuit. It is no secret that defending a case is sometimes significantly more expensive than settling a case.

Yet even with the pending resolution of this lawsuit, accused defendants across the U.S. in their own lawsuits should understand that this ruling will not be binding on other federal courts in other federal districts. Each federal court makes their own rules as to what constitutes copyright infringement, and what evidence is required to prove a defendant guilty when the so-called infringement happens via a bittorrent download. This is our job as attorneys — to know which districts have rules in favor of bittorrent users, and to know which districts have ruled in favor of the copyright holders. No doubt, the Eastern District of Pennsylvania will now become a favored spot to sue internet users accross the U.S. for copyright infringement.

Lastly, on a personal note, this case does not change the way a lawyer handles copyright infringement cases. At least in our Cashman Law Firm, PLLC, there is no silver-bullet approach — some defendants choose to settle, and many do not. Considerations as always involve 1) whether the download actually happened and the circumstances surrounding the accused activities, 2) the accused defendant’s willingness to fight and defend a copyright infringement lawsuit, 3) the accused defendant’s aversion to risk of having their name become public knowledge in a court proceeding, and 4) the accused defendant’s financial ability to take each of the various pathways we suggest.

In sum, not all guilty defendants settle, and not all non-guilty defendants fight.  It is simply a calculation and a risk assessment that is based on the client’s desires, the federal district in which the lawsuit is filed (taking into consideration past bittorrent cases filed in that jurisdiction), the judge who assigned to the case (taking into consideration his past rulings), and the plaintiff attorney (or more frequently, the local counsel’s) proclivity towards naming, serving, and taking defendants to trial balanced with their willingness to negotiate an amicable settlement should we decide to go that route.

Bittorrent cases [in their current form] have now been around for three (3) years, and now we have a verdict where a case has been taken to trial — by Malibu Media, LLC surprisingly enough.  When we started, there were no cases taken to trial, and now there is one.  Before the appearance in 2010 of the bittorrent cases, all we had to go on were the old Napster and Grokster cases, combined with the various lawsuits filed by the RIAA / MPAA and miscellaneous copyright infringement files dealing with the internet. Up until now we have been developing case law surrounding peer-to-peer downloads as each case matures. Now we are starting to get some clarity as to the law surrounding bittorrent use.

Malibu Media, LLC has been filing lawsuits across the U.S. with a fervor with one change — most of them appear to be “Single John Doe” lawsuits against defendants whom they believe have deep pockets.

In other words, it appears that Malibu is looking at the geolocation data of the various IP addresses of the so-called downloaders, and they are going after defendants who live in towns which have high value residential homes. I know this because based on the individuals who call our office, a disproportionate number of them have commented that they have multi-million dollar estates, and they were wondering whether it was ethical to target high value individuals in their copyright infringement lawsuits.

To make matters worse, Malibu Media, LLC appears to have incentivized their local counsel with financial rewards for bringing in higher settlements. In the olden days, I could have called one of their contacts directly, and within a few phone calls, I knew what kind of settlement a defendant could get based on how many “titles” or alleged instances of infringement they were accused of downloading. From there, the client and I would decide whether it made more financial sense to fight the case by waiting to be named and filing an answer in court, or whether it made more financial sense to settle the case. Malibu has complicated this process in order to provide the appearance of legitimacy for the courts. Now, they are having their local counsel negotiate the settlements themselves. This would be okay, but it is my experience that local counsel are asking for higher numbers than I know Malibu would have settled for just a few months ago. “The old settlement numbers you used to have with Malibu are no longer in effect,” one local counsel told me as she pushed for higher numbers. “We are doing this ourselves now.”

To make matters worse, when Malibu Media, LLC identifies a downloader by his IP address, they track that IP address and monitor that defendant to see what other bittorrent files that defendant is downloading (wiretap?). They continue to monitor that defendant downloading non-Malibu Media titles such as “The Walking Dead,” “Homeland,” “Breaking Bad,” often creating a list multiple pages long of “other” infringing activities that defendant has taken part in. Their logic is that because a particular defendant downloaded those other titles, he is a “serial downloader” and thus it is more likely that he downloaded their titles as well. A number of us attorneys have explained to their local counsels’ deaf ears that just because a particular IP address downloaded a number of bittorrent titles does not mean that the accused defendant is that downloader. However, even the best attorney’s understanding of the law can be clouded when money influences that attorney’s understanding of it.

On a positive note, in just a few weeks, we have seen judges rule that the “other” BitTorrent activity listed in their complaints [for works not owned by Malibu Media] is inadmissible under the Federal Rules of Evidence (“FRE”), specifically Rule 404 on “Character Evidence.” The reason for this is because “Evidence of a person’s character or character trait is not admissible to prove that on a particular occasion the person acted in accordance with the character or trait.” In other words, proving that a particular defendant is a “serial downloader” is not admissible to prove that on a particular date and time, that defendant downloaded Malibu Media’s copyrighted titles. Shame on Malibu attorneys for not knowing this.

Further, judges have ruled that introducing evidence of “other” downloads is not relevant and is actually prejudicial to the defendant, and thus that so-called evidence is not admissible to prove that the defendant downloaded Malibu Media, LLC’s titles. As one example, Judge Stephen Crocker has frozen all of Malibu Media, LLC’s cases in the Western District of Wisconsin for this very purpose (link).

In sum, messing up on the Federal Rules of Evidence and doing so on each of their “Single Doe” upper-class cases was a big mistake which they might not be able to undo.  And also on a positive note, because they have filed so many “Single Doe” cases across the country, judges across the U.S. are looking deeper into their tactics and their evidence of infringement.  See @Ddragon229′s article on the FCT website, “Winds of change begin to blow on Malibu Media” for details on the character evidence issue.

Despite this, Malibu Media, LLC continues to file lawsuits across the U.S. in alarming numbers, and in each case, they continue to file this prejudicial information of “other” downloads as their “Exhibit C” in each case. A snippet of cases filed in just the last few weeks is pasted below:

Cases filed by Chris Fiore in the Pennsylvania Eastern District:
Malibu Media LLC v. John Doe (Case No. 2:13-cv-02858)
Malibu Media LLC v. John Doe (Case No. 2:13-cv-02859)
Malibu Media LLC v. John Doe (Case No. 2:13-cv-02867)
Malibu Media LLC v. John Doe (Case No. 2:13-cv-02868)
Malibu Media LLC v. John Doe (Case No. 2:13-cv-02854-JP)
Malibu Media LLC v. John Doe (Case No. 2:13-cv-02855-MMB)
Malibu Media LLC v. John Doe (Case No. 2:13-cv-02856-JD)
Malibu Media LLC v. John Doe (Case No. 2:13-cv-02857-SD)
Malibu Media LLC v. John Doe (Case No.2:13-cv-02863-PD)
Malibu Media LLC v. John Doe (Case No. 2:13-cv-02864-HB)
Malibu Media LLC v. John Doe (Case No. 2:13-cv-02765-MSG)
Malibu Media LLC v. John Doe (Case No. 2:13-cv-02766-MSG)
Malibu Media LLC v. John Doe (Case No. 2:13-cv-02767-WY)
Malibu Media LLC v. John Doe (Case No. 2:13-cv-02768-PD
Malibu Media LLC v. John Doe (Case No. 2:13-cv-02769-RB)
Malibu Media LLC v. John Doe (Case No. 2:13-cv-02770-CMR)

Cases filed by Mary Schulz of Schulz Law PC in the Illinois Northern District:
Malibu Media LLC v. John Doe (Case No. 1:13-cv-03726)
Malibu Media LLC v. John Doe (Case No. 1:13-cv-03699)
Malibu Media LLC v. John Doe (Case No. 1:13-cv-03700)
Malibu Media LLC v. John Doe (Case No. 1:13-cv-03703)
Malibu Media LLC v. John Doe (Case No. 1:13-cv-03704)
Malibu Media LLC v. John Doe (Case No. 1:13-cv-03705)
Malibu Media LLC v. John Doe (Case No. 1:13-cv-03706)
Malibu Media LLC v. John Doe (Case No. 1:13-cv-03707)
Malibu Media LLC v. John Doe (Case No. 1:13-cv-03710)
Malibu Media LLC v. John Doe (Case No. 1:13-cv-03711)

Cased filed by Paul J. Nicoletti of Nicoletti & Associates PLLC inn the Michigan Eastern District:
Malibu Media LLC v. John Doe subscriber assigned IP address 71.238.205.92 (Case No. 4:13-cv-12231-MAG-MAR)
Malibu Media LLC v. John Doe subscriber assigned IP address 68.42.185.159 (Case No. 2:13-cv-12210-RHC-MJH)
Malibu Media LLC v. John Doe subscriber assigned IP address 68.43.4.96 (Case No. 2:13-cv-12213-SFC-DRG)
Malibu Media LLC v. John Doe subscriber assigned IP address 68.43.84.236 (Case No. 2:13-cv-12214-AJT-MKM)
Malibu Media LLC v. John Doe subscriber assigned IP address 68.60.140.87 (Case No. 2:13-cv-12216-PDB-RSW)
Malibu Media LLC v. John Doe subscriber assigned IP address 68.62.41.133 (Case No. 2:13-cv-12217-VAR-RSW)
Malibu Media LLC v. John Doe subscriber assigned IP address 69.14.181.108 (Case No. 2:13-cv-12218-NGE-DRG)
Malibu Media LLC v. John Doe subscriber assigned IP address 69.246.89.172 (Case No. 2:13-cv-12220-AJT-DRG)
Malibu Media LLC v. John Doe subscriber assigned IP address 67.149.158.6 (Case No. 2:13-cv-12197-GAD-PJK)
Malibu Media LLC v. John Doe subscriber assigned IP address 67.149.89.224 (Case No. 2:13-cv-12198-PDB-MKM)
Malibu Media LLC v. John Doe subscriber assigned IP address 68.40.123.7 (Case No. 2:13-cv-12200-GER-MKM)
Malibu Media LLC v. John Doe subscriber assigned IP address 68.40.46.12 (Case No. 2:13-cv-12201-DPH-DRG)
Malibu Media LLC v. John Doe subscriber assigned IP address 68.43.35.2 (Case No. 2:13-cv-12202-PDB-DRG)
Malibu Media LLC v. John Doe subscriber assigned IP address 68.41.170.197 (Case No. 2:13-cv-12204-GAD-RSW)
Malibu Media LLC v. John Doe subscriber assigned IP address 68.41.19.221 (Case No. 2:13-cv-12206-DPH-LJM)
Malibu Media LLC v. John Doe subscriber assigned IP address 68.41.86.4 (Case No. 2:13-cv-12208-MOB-RSW)
Malibu Media LLC v. John Doe subscriber assigned IP address 68.42.172.154 (Case No. 2:13-cv-12209-SJM-MKM)

Cases filed by Paul J. Nicoletti of Nicoletti & Associates PLLC in the Indiana Northern District:
Malibu Media LLC v. John Doe 12 (Case No. 1:13-cv-00166-PPS-RBC)
Malibu Media LLC v. John Doe 5 (Case No. 1:13-cv-00164-PPS-RBC)
Malibu Media LLC v. John Doe 9 (Case No. 1:13-cv-00165-PPS-RBC)

PERSONAL NOTE: Even with all these cases, I have only listed 46 cases having 46 defendants. With the hundreds of filings, it becomes impossible to track and report on each case. The more I look at each of these cases, the more I feel as if they have succeeded in preventing attorneys like myself from tracking and reporting on each of their hundreds of cases. Obviously I am still here, and I am still reporting on these cases. My list of cases to track has just gotten a bit larger.

houstonlawy3r:

Sometimes there are no words other than silence to best express the thoughts I have about Judge Wright’s order essentially referring John Steele and the Prenda Law Inc. gang to the IRS’ Criminal Investigation Division (CID) for all the settlements on which no taxes were paid. There is one police agency that a criminal organization does not want to be contacted by, and that is the CID.

The $81K in sanctions essentially funds the lead attorneys who spent time on this case. And, the referral to the bar associations means that the principals at Prenda Law Inc. may no longer have their law licenses shortly.

In sum, there is not much for me to comment here, except to be silent, because the judge’s order itself says all it needs to. Copyright trolling may seem profitable for the attorneys filing the lawsuits, but no money can compensate for the loss of freedom that one experiences when what was once a multi-million dollar law practice lands the principles in prison for tax evasion. This should be a lesson to all other copyright trolls out there. Judge yourselves accordingly.

Originally posted on Fight Copyright Trolls:

We have been waiting for this moment for a long time. Congratulations to everyone involved, especially Morgan and Nick.

Media coverage

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