CEG-TEK’s DMCA Settlement Letters – What are my chances of being sued if I ignore?

As you can see, I am taking some time educating individuals involved in the Copyright Enforcement Group (CEG-TEK) / Ira Siegel DMCA letters being sent to thousands of individuals across the U.S. by their http://www.CopyrightSettlements.com system.

As a recap, anyone involved in receiving such a letter should read the following three articles I have written on their tactics:
1. Why CEG-TEK’s DMCA settlement system will FAIL (2/22/2013)

2. When CEG-TEK’s DMCA notices contain duplicate titles. Purposeful luring of defendants or not? (11/26/2012)

3. The trouble with Copyright Enforcement Group (CEG-TEK)’s DMCA scare letters. (11/2/2012)

Now, as far as the topic of this blog entry, the question people often ask is “what are the risks that CEG-TEK or Ira Siegel will sue me if I don’t settle?”  

While the easy answer is that so far it appears as if they are NOT suing (remember, they are soliciting their clients under the premise that they’ll make more money by making use of their DMCA settlement system rather than by suing), that answer needs to be elaborated.  I hope you will forgive me saving time in answering this way, but I have laid out my answer below in the form of an e-mail I sent to one of the individuals who called me for assistance.

LETTER SENT TO CLIENT:

It is good to hear from you. Just to reiterate, the “case” numbers are not actual lawsuits (at least not yet). If you did not settle by their due dates, their threat is that they would file a lawsuit against you [likely for only one of the titles; knowing them, in order to maximize their return, they would reserve the other titles for separate lawsuits]. Also, my opinion is that the lawsuit would be filed in the Northern District of California (where Ira Siegel is), or the Southern District of New York (where Mike Meier is). Even though you live here in [LOCATION REDACTED] and [COURT REDACTED] would be the proper location for a lawsuit, by filing in the wrong location, they know by doing so they would push you to settle rather than hire an attorney (someone like me) to fight the jurisdiction issue on your behalf.

So far as we discussed, their lawsuits are few and far in between. In fact, up until a week or so ago, I was ambivalent whether a client ignores the letter or settles it (see below article link for what has changed). If you want to see what they are doing lawsuit-wise, you’ll find them by looking for the words “Digital Sin” or any of their other clients on the http://www.rfcexpress.com website. Alternatively, you can search for “Mike Meier” since he seems to be their top guy as far as skill in suing defendants aside from Ira Siegel himself.

It is my opinion that they are not in the habit of suing at this point, which means they are trying to “milk” the settlements for all they are worth. However, they do have three (3) years from the alleged date of infringement to sue, so if you didn’t settle, you’ll be looking over your shoulder waiting for them to have a bad day when they decide to press the button and sue everyone.

I wrote an article yesterday on my http://torrentlawyer.wordpress.com website which should answer your questions as to the factors influencing the odds of whether they’ll be suing defendants in the near future, or whether they would wait the full three-years to sue everyone at once.

Once again, it drives me nuts when attorneys try to scare defendants into settling their cases.  With these DMCA “scare” letters, I am merely stating the obvious paths CEG-TEK and their attorneys can take.

For me, I think Ira Siegel and the Copyright Enforcement Group (CEG-TEK) would like to avoid suing defendants.  It didn’t seem that profitable for them the first time around, and it took incredible resources to maintain their copyright infringement lawsuits prior to the creation of their out-of-court turn-key settlement system. Then again, they are IP enforcement companies who are serving the needs of their production company clients (the copyright holders), and if the clients pay them to use their CopyrightSettlements.com system and send DMCA letters to the ISPs, they send the letters.  If the clients instruct them to sue, they sue. It is my understanding that they dislike the other copyright trolls, and that they compete for business (e.g., the production companies). Thus, if their settlement system dries up as I believe it inevitably will, they will do anything not to lose their clients to the likes of Lipscomb, Steele, or the other less credible trolls out there.

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The trouble with Copyright Enforcement Group (CEG-TEK)’s DMCA scare letters.

UPDATE: Read my note at the bottom of this article for comments about IP tracing issues when you visit CEG-TEK’s settlement website.

A troubling number of people write me who receive “DMCA scare letters” (usually in the form of an e-mail from Copyright Enforcement Group (CEG-TEK) signed by Ira Siegel), and this blog generally neglects these victims because there is no lawsuit filed against anyone — just a “we might sue you if you don’t settle” e-mail which arrives from the ISP.  In the past few days, I have found that the inquiries have spiked and I am writing the same letter to a number of people.  To save time, I am posting my e-mail response online.

The letters generally ask for $200 per infringement, and there is usually only one or two alleged instances of infringement.  The problem that appeared most recently is that now Copyright Enforcement Group is sending letters for movies which appear not to have copyright protection.

Thank you for contacting me about your DMCA issue.  I’m answering you honestly because you are correct that this DMCA letter scam appears to be just that — one more way of extorting money without having to file lawsuits against anyone.

I suspect that you are correct that there is a possibility that the films are not copyrighted, but you must take into consideration that since you are referring to a film which is decades old, there is not one copyright law to watch out for, but there were multiple versions of the Copyright Act which were in effect as the statutes transitioned into its current form.  So while under the current copyright statute there might be copyright protection for a particular kind of film or video, past statutes might give different protections for it (and note that at one time, pornography was not even copyrightable).  You also need to take into consideration that U.S. Copyright Law gives copyright protection to foreign-made films, and this might be one.

As you no doubt know, with some obvious exceptions, I charge a flat rate to handle copyright matters.  For your “DMCA scare letter” issue, included in that flat fee would be to research whether there is a copyright or not, and what their legal rights are.  But to keep this simple, we both know their extortion strategy, and we both know that their online form [@copyrightsettlements.com] provides a release from claims for $200 each.  While I have never seen anyone sued as a result of ignoring their letters, $200 x 3 is still less than having me research and argue your issue (especially where there is no lawsuit and there may never be one).  That being said, if you didn’t want to deal with their website (because of the games they play where I have heard of people being sued who went online and the site failed [whether by design or by bad luck] or they missed their deadline and they could no longer settle) or you wanted me to handle the transaction, I’m happy to handle all three transactions for one small fee.

Long story short, you have some quick decisions to make before your November 4th date.  If you want me to handle this for you, let me know and I’ll e-mail you a contract for you to sign and get back to me, and I’ll e-mail you a link that you can click on to process your payment.  I’ll also need you to e-mail me copies of each of the DMCA scare letters, and I’ll take care of the rest.  Once again, I am not advocating settling this — I think this is one more extortion tool [of many] up their sleeve — but if you wanted to dispose of it quickly, this is the cheapest and most effective way to do so.  Unlike the bittorrent lawsuits, I don’t think you need to pay me to research and fight this because you have no lawsuit yet against you.

NOTE: One more note for those who are security-minded on the topic of IP tracing and CEG’s website “which sometimes fails.”  I understand that CEG-TEK tracks IP addresses who visit their website.  As a lawyer, I think it would be a bad idea for someone facing a copyright infringement lawsuit to sign onto a website possibly with the same IP address as the person who allegedly downloaded the copyrighted materials.  I would suspect that CEG-TEK is not so evil that they have an app running that if there is an IP address match, the site fails [when you try to process your payment] and they automatically send a second scare letter for $3,500.  At the very least, however, you want a lawyer to make sure that the contract they give you will protect your interests because by logging into their website and using their “secret code” to access your “secret” settlement amount, and then by entering your full name, address, phone number, and credit card information [which means that you just identified yourself as being that downloader, and so they need no ISP subpoena to identify you], that contract better release you from liability.

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