Posts Tagged ‘CEG-TEK International’

Copyright Enforcement Group (CEG-TEK) has sent possibly hundreds of thousands of letters to internet users accused of downloading copyrighted content via bittorrent. In their letters, they invoke the Digital Millenium Copyright Act (DMCA) as the justification for their “intellectual property (IP) enforcement” activities. They claim to be the good guys, but are they?  Are they “naughty or nice”?

CEG-TEK claims to be the good guys — they stop piracy, and as a result of their efforts, fewer people download on the ISPs’s networks (a social “good” and a “win” for the copyright holders). They have stopped the copyright troll lawsuits, for the moment. And, although they are charging $300 per title for each downloaded movie (sometimes higher) for what is often an accidental “click of the mouse,” they claim that they are not “bad” or “vindictive” like their Rightscorp competitor, which charges only $20 per title, but then sues the accused downloaders in federal courts, and then even go so far as contacting the ISPs in order to attempt to shut down the internet accounts of those accused of downloading their clients’ copyrighted titles via bittorrent.

But then again, CEG-TEK is a business. While I have had success negotiating away cases against veterans, the elderly, and in many cases, college kids, CEG-TEK has taken a number of steps which at best would be questionable.

Most relevant is the “admission of guilt” clause in their settlement agreements, which at the time of writing this article has flipped back to the version which does not include this clause. Months ago, when CEG-TEK expanded into Canada and then Australia, the settlement agreements which released those who have settled from liability included the following clause:

111715 Admission of Guilt in CEG-TEK Settlement Agreement

[For those of you who cannot see the image, it says, “…in the event of a (i) failure to clear, (ii) chargeback, (iii) cancellation, (iv) failure to complete…this Release shall be considered admissible and conclusive evidence of RELEASEE’s infringement of the copyright in the Work and that RELEASEE will be liable to CONTENT COPYRIGHT OWNER for all damages, statutory and/or otherwise, for such infringement plus attorney fees plus costs as of the Settlement Date…” (emphasis added)]

[Now as a side note, for those who are particular about formatting and details, note that CEG-TEK placed that inflammatory clause at the bottom of Page 2, and they split it up where half of it is at the bottom of the page, and the other half is at the top of the next page, where even a careful individual might not read the clause in its entirety because the inflammatory clause is separated by being on different pages.]

The problem with such a clause admitting guilt is that it is binding on an unsuspecting individual who tries to settle the claims against him by paying with a credit card. How?  These contracts are available to the individual paying the settlement fee on the CopyrightSettlements.com website to review, and upon processing the credit card payment, they agree to the terms contained within the contract.

Then, when their credit card transaction fails (either because their card is not accepted by CEG-TEK’s website, or because the transaction is declined, or, if through no fault of their own, because of the website itself the bank flags the transaction as suspicious (fraud alert for a large online charge) and fails to approve the transaction), at that point, the individual has admitted guilt to copyright infringement, which carries a $150,000 statutory fine for each title downloaded. Assume for the moment that the individual has five (5) cases.  Multiply this $150,000 amount by five separate copyright holders, and the individual could be looking at 5 x $150,000 lawsuits (= $750,000 in statutory damages separated into multiple lawsuits filed by different copyright holders all of whom hired CEG-TEK as their agent to enforce their copyrights) where the internet user has already admitted guilt.

Then, when the confused internet user who tried to settle calls CEG-TEK on the phone already having admitted guilt, what sort of leverage does the individual have if they are asked for more than $300 per title? Legally, they likely have no defense because according to the terms of the agreement, they already admitted guilt — even if the credit card transaction failing was not their fault.

So… Copyright Enforcement Group may be the “good guys” because they let attorneys negotiate away cases for vets, old ladies, and elderly gentlemen who don’t realize that they should be using a VPN when they download adult content, and CEG-TEK may serve the public good by demonstrating that piracy has gone down because of their efforts. While this is all true, remember: watch their contract, because caveat emptor still applies.

I don’t want to make this into a “you should have hired an attorney for your $300 matter” blog entry, but really, this is but one example of how even the “good guys” need to be approached with caution, and better yet, through a proxy by using an attorney. [I won’t even go into the conspiracy theories about CEG-TEK trying to get more than the $300 per title that is listed on the website.] Let’s stick to the facts and look at their contract to judge them on whether they are truly “naughty or nice.”

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Copyright Enforcement Group’s (“CEG-TEK Int’l”) DMCA letters have been sent out to thousands of would-be “John Doe” copyright infringement defendants to date for the alleged downloading of pornographic films. The problem is that they often ask for MULTIPLE SETTLEMENTS FOR THE SAME DOWNLOADED TITLE.

BACKGROUND: Just in case you did not read my first article on Ira Siegel’s / CEG-TEK’s DMCA Scare LettersI’m including these next two paragraphs to bring you up to speed.

Instead of CEG-TEK’s failed methods of suing hundreds of John Doe Defendants in one bittorrent lawsuit, CEG-TEK has concocted a turnkey method of scaring a would-be internet user into settling their case BEFORE THE PLAINTIFF EVEN FILES A LAWSUIT. Instead of a copyright troll paying a $350 filing fee and proving copyright infringement in front of a judge, and in lieu of hiring plaintiff attorneys to fight the ISPs in order to obtain the names, the addresses, and the phone numbers of would-be defendants (and noting that ISPs are no longer cooperating as easily as they used to), Ira Siegel and CEG-TEK have found a way using the Digital Millennium Copyright Act (DMCA) to have the ISP send letters to the alleged infringers, doing CEG-TEK’s dirty work for them.

The notice an ISP subscriber would receive would say something such as “Notice of Unauthorized Use of Registered Copyrights Owned by so-and-so,” followed by a Case #, a password, and CEG TEK International’s long and confusing “scare” letter threatening that if the defendant didn’t settle the claims against them online via their http://www.copyrightsettlements.com website (I am not including the link for obvious reasons of protecting your privacy; read my other article for details relating to IP address tracking, website failures, etc.), then Ira M. Siegel or one on CEG-TEK’s legal counsel would sue for violation of the U.S. Copyright Act, 17 U.S.C. 106.

The problem is that even though they are only asking for a settlement of $200 for each title [UPDATE: $500 per infringed title (prices per title for some production companies have gone up)], CEG-TEK IS NOT FILTERING OUT DUPLICATE DOWNLOAD ATTEMPTS.  So, a downloader who downloads a title such as Media Products, Inc. DBA Devil’s Film’s “It’s Okay! She’s my Step-Daughter” or Digital Sin Inc.’s “Fresh Outta Highschool” using bittorrent, and their bittorrent software attempts to connect to these files multiple times, -OR- if CEG-TEK monitors that you have downloaded various pieces of the same title multiple times (even when the IP address is the same), YOU WILL GET MULTIPLE LETTERS FROM YOUR ISP.

The problem I ask is — how does an accused downloader call up Ira Siegel — a KNOWN COPYRIGHT TROLL who has sued thousands of defendants for $150,000 per title, and who has sent out countless “scare” letters demanding thousands of dollars per title — how do you call up Ira Siegel and say, “yeah, I downloaded it,” ***ADMISSION OF GUILT*** “but I only did it once, not three times”???

Thinking with my jaded lawyer mind, part of me wonders whether CEG-TEK Int’l have purposefully left the duplicate titles on their DMCA notices to lure would-be defendants to call them up, admit guilt [that they have done the download, “but only once,” and then CEG-TEK and Ira Siegel would have all the ammunition that they would need to sue that downloader in federal court.

Anyway, I don’t need to say that an attorney (our firm or any other firm) could negotiate down the duplicate downloads without admitting guilt or incriminating you as you might do on your own if you called them yourself.

PERSONAL NOTE: I still hold the opinion that if they really have a claim against you than they should present their claim in the form of a lawsuit in federal court where a judge will make them prove their claims against you (and quite frankly, I am even more of the opinion that they should not be suing downloaders AT ALL [and that they should focus their efforts on taking down infringing content using the DMCA remedies given to them by the law]), but I also understand the economics involved with someone wanting to just make this go away at the early stages.

Once again, if you have not already done so, go back and read my initial article on CEG-TEK Int’l’s DMCA letters and what I think of them.

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