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Posts Tagged ‘copyright infringement’

NOTE: Since there has been so much activity with the Siemens Product Lifecycle Management Software, Inc. software company (more out-of-the-court) and their lawsuits, I figured I would put all blog posts, etc. in one page for easy referencing. The original page can be found here.

SIEMENS PLM CASES (MAIN PAGE):

I have added this page for internet users who have become entangled in the Siemens Product Lifecycle Management Software, Inc. (a.k.a. “Siemens PLM Software”) cases.  The goal here is to keep up to date on this plaintiff, and to discuss their various cases.  Should you learn of any updates regarding one of their cases, please post it here using the following format — (e.g., “Siemens Product Lifecycle Management Software, Inc. v. John Does 1-100 (Case No. 4:17-cv-12345) filed in the U.S. District Court for the Southern District of Texas”).  Please also feel free to post new cases you find where Siemens Product Lifecycle Management Software, Inc. is listed as the plaintiff.

Siemens PLM has been known for suing John Doe Defendants across the US for the unauthorized use of their NX 7, NX 8, NX 8.5, NX 9, NX 10, NX 11, and Solid Edge ST9 Foundation software versions.  The lawsuits are all copyright infringement lawsuits filed in the Federal Courts, and each lawsuit sues for statutory damages of $150,000.

Remember to please exercise discretion when posting (e.g., do not post your real name or e-mail address), and as usual, avoid using vulgar or offensive language (both towards the plaintiff and towards other users).

CASE HISTORY OF THE SIEMENS PLM CASES:

Siemens Product Lifecycle Management Software, Inc., better known as “Siemens PLM Software” has been filing lawsuits against John Doe Defendants in federal courts across the US since 2011.

In 2011, Siemens PLM Software started their lawsuits in New York (NYSD) with two innocuous cases containing 50 John Doe Defendants which spanned NX 7 users living across the US. This led them to sue TWIVision Engineering Group, LLC in the Texas Eastern District Court (TXED) later in the year.

In 2012, they sued 50 John Doe Defendants in the Eastern District of Pennsylvania (PAED).

From 2012-early 2014, there was a lack of lawsuits from Siemens, but in 2014, they sued 100 John Doe Defendants AGAIN in New York (NYSD). Later, they again reached into Texas (TXED), but this time, they sued a number of engineering companies, including BTL Machine, Inc., and Mercury Metal Forming Technologies, LLC. They also initiated two John Doe lawsuits, Case Nos. 4:15-cv-00582, and 4:15-cv-00017.

2014-2015 Siemens continued its litigation strategy in the Texas Eastern District Courts for the remainder of 2015.

2016 was a busy year for Siemens PLM Software, as they filed large 100-Defendant cases against John Doe Defendants, this time in the Houston-based Texas Southern District Courts (TXSD). They also reached their individual lawsuits into both Ohio (OHSD) and Connecticut (CTD) where they sued Manufacturing Services International, Inc. and Demin, an individual defendant.

The cases of note currently in Texas are:
1) Siemens Product Lifecycle Management Software, Inc. v. Does 1-100 (Case No. 4:16-cv-01422), filed in May, 2016, and
2) Siemens Product Lifecycle Management Software Inc. v. Does 1-100 (Case No. 4:16-cv-03552), filed in December, 2016.

As of writing this page, most of the attention and controversy has been surrounding the December 4:16-cv-03552 case here in Texas.

SIEMENS PLM SOFTWARE STRATEGY:

In short, it appears as if the Siemens PLM Software strategy is as follows:
1) File a large 100+ Defendant lawsuit, encourage the court to approve early discovery allowing Siemens PLM to obtain the contact information for each of those 100+ John Doe Defendants.
2) Contact each of those defendants, convert accused defendants into paying customers (where the cost of the software can range from a few thousand dollars to tens of thousands of dollars).
3) Expand the lawsuit inquiry to the employer of the accused defendant engineer, and ascertain whether they have purchased volume licenses for their engineer employees.
4) Name and Serve and/or sue one or so defendants in a court outside the jurisdiction of the original court (this demonstrates that their reach is not limited to the courts in which they filed their original lawsuit). Unclear whether this is to obtain a $150,000 judgment for copyright infringement, or to convince that company to comply with their software licensing demands. I understand the goal of the lawsuits is to convert accused defendants into customers.
5) Proceed over the next three years contacting the various John Doe Defendants [even after the case is dismissed?]. File a new lawsuit against 100+ more John Doe Defendants, and repeat Steps 1-5.

BLOG POSTS:

How an attorney should handle a Siemens PLM Software, Inc. lawsuit, on 1/11/2017.
Siemens PLM NX-based lawsuits – converting accused engineers into loyal customers, on 1/9/2017.
Software Developers are now tracking piracy through the USE of downloaded software, on 9/9/2016.
Siemens Software Case IS a Bittorrent Case, on 6/20/2016.
What to do about the Siemens Product Lifecycle Management Software Inc. v. Does case (TX), on 1/16/2016.

LIST OF FEDERAL COURT CASES FILED (*UPDATED*):

IN THE CONNECTICUT DISTRICT COURT:
Siemens Product Lifecycle Management Software Inc. et al v. Demin (Case No. 3:16-cv-00553)

IN THE NEW YORK SOUTHERN DISTRICT COURT:
Siemens Product Lifecycle Management Software, Inc. v. Does 1 – 100 (Case No. 1:14-cv-01926)
Siemens Product Lifecycle Management Software, Inc. v. Does 1-50 (Case No. 1:11-cv-08469)

IN THE OHIO SOUTHERN DISTRICT COURT:
Siemens Product Lifecycle Management Software In v. Manufacturing Services International, Inc. (Case No. 3:16-cv-00182)

IN THE PENNSYLVANIA EASTERN DISTRICT COURT:
Siemens Product Lifecycle Management Software, Inc. v. Does 1-50 (Case No. 2:12-cv-06795)

IN THE TEXAS EASTERN DISTRICT COURT:
Siemens Product Lifecycle Management Software, Inc. v. BTL Machine, Inc. (Case No. 4:14-cv-00506)
Siemens Product Lifecycle Management Software, Inc. v. Does (Case No. 4:15-cv-00582)
Siemens Product Lifecycle Management Software, Inc. v. Mercury Metal Forming Technologies, LLC (Case No. 4:14-cv-00002)
Siemens Product Lifecycle Management Software Inc. v. Does (Case No. 4:15-cv-00017)
Siemens Product Lifecycle Management Software Inc. v. TWIVision Engineering Group, LLC (Case No. 6:11-cv-00679)

IN THE TEXAS SOUTHERN DISTRICT COURT:
Siemens Product Lifecycle Management Software Inc. v. Does (Case No. 4:16-cv-03552)
Siemens Product Lifecycle Management Software, Inc. v. Does 1-100 (Case No. 4:16-cv-01422)


CONTACT FORM: If you have a question or comment about what I have written, and you want to keep it *for my eyes only*, please feel free to use the form below. The information you post will be e-mailed to me, and I will be happy to respond.

NOTE: No attorney client relationship is established by sending this form, and while the attorney-client privilege (which keeps everything that you share confidential and private) attaches immediately when you contact me, I do not become your attorney until we sign a contract together.  That being said, please do not state anything “incriminating” about your case when using this form, or more practically, in any e-mail.

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Because software-based copyright infringement cases are especially concerning the John Doe Defendants who are accused of using pirated software (such as what is going on right now with the Siemens PLM Software v. Does [4:16-cv-03552] case in Texas), I thought it would be beneficial to take a few moments and simplify the process. That way, when you pay an attorney, you will know exactly what the attorney will be doing.

Here are the steps your attorney (us, or anyone else) should be taking on your behalf — specifically with the Siemens Product Lifecycle Management Software Inc. v. Does 1-100 (Case No. 4:16-cv-03552) case:

STEP 1) STOP PLAINTIFF FROM CONTACTING YOU OR ANYONE ELSE ON YOUR BEHALF (WORKPLACE) ABOUT THE CLAIMS AGAINST YOU.

Once your plaintiff attorney learns that you are represented by an attorney, all communication must be with that attorney alone. Phone calls or letters to client directly once a notice of representation is provided can jeopardize that attorney’s law license.

STEP 2) RESEARCH AND DISCUSS CLAIMS COMPARING PLAINTIFF ATTORNEY’S DATA OF USE VERSUS ACTUAL USE OR NON-USE.

Siemens PLM likes to research the claims, and they take their time in getting the entire picture before discussing settlement. It is important to share truthful information with your defense attorney so that claims against you can be disputed with facts and dates. And obviously, your attorney should have the common sense to discuss the claims without admitting guilt on your behalf.

STEP 3) DISCUSS AND NEGOTIATE SETTLEMENT OPTIONS WITH PLAINTIFF ATTORNEY, WHETHER A SOFTWARE PURCHASE, A LICENSE, A SETTLEMENT FEE, OR NO SETTLEMENT (PROCEED WITH LAWSUIT).

Normally the plaintiff attorneys in a copyright infringement lawsuit (or more frequently, a bittorrent-based “copyright troll” lawsuit) will immediately approach a settlement regardless of guilt or wrongdoing. This is not the case with the Siemens PLM Software lawsuits. Rather, it appears as if they are seeking to convert those using unlicensed versions of their software into paying customers. For this reason, once the investigation is completed and claims are discussed, settlement options are discussed as well. This might include purchasing software, paying a settlement, or negotiating a license based on the limited past use of the software.

The “no settlement” option is obviously the scenario where the client did not do the download. Because Siemens PLM software is expensive (costs can range from a few thousand dollars to over ten thousand dollars), there is no reason to negotiate a settlement if the accused John Doe Defendant did not download or use the software. Rather, the alternative is to provide proof that the John Doe Defendant is not the individual Siemens PLM is looking for (it is difficult to prove a negative, but it is doable), or to help Siemens PLM come to the realization that the actual software user is the engineer next door running his business from his home.

Obviously if neither side can agree on anything, then yes, it makes sense to proceed to allow the plaintiff attorney to name and serve your client, file an answer with the court, and proceed with defending your client’s interests in the courtroom.

STEP 4) NEGOTIATE PRICE (IF BENEFICIAL, CONSIDERING CLIENT’S ABILITY TO PAY). PROVIDE DOCUMENTATION OR STATEMENT IF NECESSARY TO SUBSTANTIATE CLAIMS.

Many accused defendants installed the software for educational purposes — to ‘tinker’ with the softare, to learn the software, or to become conversant with the software. While the intention of the unlicensed use is noble (e.g., that user would later be working with a licensed version of the software at their workplace or in their business), for the moment, there was folly in their initial use of the software. This is our goal — to have these specifics be relevant and useful in a negotiation with Siemens PLM to arrave at a settlement price the client can afford.

STEP 5) NEGOTIATE TERMS OF SETTLEMENT AGREEMENT. NEGOTIATE A SOFTWARE LICENSE IF NEEDED OR REQUIRED.

These are two separate steps. The settlement agreement should be specific to the claims of copyright infringement, and they should include the nuances of Texas contract law in order to ensure the agreement is enforceable. The software license also is full of nuances and words that requires an attorney who knows what terms mean in software licenses (because certain words have meanings in the context of a software license which are contrary to the plain meaning of the word), and who is forceful enough to be willing to argue for terms or clauses which protect the client’s rights. Lastly, the software license should provide the accused John Doe Defendant the right to use the software in the way the accused defendant wants or needs to use the software in the future. It makes no sense to negotiate a limited software license to cover only past use when the defendant is an engineer and will be needing to use the software again in the future.

STEP 6) HAVE PLAINTIFF ATTORNEY SIGN AGREEMENT(S), THEN HAVE CLIENT SIGN AGREEMENT(S) AND PROCESS SETTLEMENT PAYMENT.

This is self explanatory. Siemens PLM is not bound to an agreement until they sign it (or until their attorney with authority to sign signs it on their behalf as their agent). Attorneys generally try to get the John Doe Defendant to sign first and pay their settlement fee, and then ‘maybe’ the plaintiff attorney will sign it, and ‘maybe’ the attorney will accept the payment, and ‘maybe’ the attorney will release that defendant from liability once the settlement is received. These are games a plaintiff attorney may play, and for this reason, it is advisable to have the defense attorney insist that the plaintiff attorney sign the agreement first in order to bind their client to the terms of the agreement… before their client signs the agreement or pays a penny in settlement of the claims against them.

STEP 7) FOLLOW-UP WITH PLAINTIFF TO HAVE CLIENT’S “JOHN DOE” ENTITY DISMISSED FROM CASE.

Once again, this is self explanatory, but unfortunately, it must be a step. Too often, plaintiff attorneys have the clients sign first and pay first, and then when they get around to it, they’ll sign the agreement and release that defendant from liability. However, this could take weeks or months.

The reason for this is because once their client has their money, without being contract-bound to release the defendant from the lawsuit, the John Doe Defendant who paid their settlement fee becomes a lower priority to the busy plaintiff attorney (who is juggling sometimes hundreds of defendants in multiple cases) who is more worried about the due dates for their other cases, or who is more worried about extracting settlements from other defendants. This is why it is important in STEP 6) for the plaintiff attorney to sign the agreement first.

Nevertheless, even with a signed agreement, sometimes the plaintiff attorneys need ‘reminders’ to do what they are duty-bound to do. Thus, your attorney should not close the client’s file when payment is sent, but rather, the attorney should stay on top of the plaintiff attorney until the dismissal is actually filed in the court dismissing that John Doe Defendant from liability.

In sum, copyright infringement cases are all similar, but each one has its nuances. The steps described in this article apply to any John Doe Defendant in any copyright infringement lawsuit, and for this reason, I wrote this article 1) to not only give the client an understanding of the steps which are required in representing a client prior to being named and served in a John Doe lawsuit, but more importantly, 2) to allow that client to hold their lawyer’s toes to the fire and make sure they are being represented carefully and individually.

LEVERAGE:

ONE LAST THING — I wanted to discuss LEVERAGE. A copyright infringement lawsuit is in federal court, which means that out-of-state attorneys may attempt to solicit clients to engage in settlement negotiations only. However, with a client as large as Siemens PLM, especially with the financial backing of the corporation and the millions of dollars they can pour into their lawsuits, it is probably a good idea to retain an attorney who can step foot into the courtroom if something goes wrong (and things DO go wrong). The Siemens PLM attorneys can recognize an out-of-state attorney who has little leverage to negotiate versus an in-state attorney who is willing to pull the settlement off of the table and proceed with defending the case if the plaintiff is not being cooperative in resolving the claims against the client. In short, an attorney with leverage will get a better result for his client as compared to an out-of-state attorney without leverage.

OTHER ARTICLES ON THE SIEMENS PLM SOFTWARE CASES:

Siemens PLM NX-based lawsuits – converting accused engineers into loyal customers, on 1/9/2017.

Software Developers are now tracking piracy through the USE of downloaded software, on 9/9/2016.

Siemens Software Case IS a Bittorrent Case, on 6/20/2016.

What to do about the Siemens Product Lifecycle Management Software Inc. v. Does case (TX), on 1/16/2016.


CONTACT FORM: If you have a question or comment about what I have written, and you want to keep it *for my eyes only*, please feel free to use the form below. The information you post will be e-mailed to me, and I will be happy to respond.

NOTE: No attorney client relationship is established by sending this form, and while the attorney-client privilege (which keeps everything that you share confidential and private) attaches immediately when you contact me, I do not become your attorney until we sign a contract together.  That being said, please do not state anything “incriminating” about your case when using this form, or more practically, in any e-mail.

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Siemens PLM Software has been suing John Doe Defendants in federal courts for the piracy of their NX software since it was in version 7 (so far, I have seen claims against users of NX 7, NX 8, NX 8.5?, but not yet for NX 9, NX 10, or NX 11 — all of which are available on the bittorrent networks). Most recently, I have seen lawsuits focusing in on the unlawful use of the Solid Edge ST9 Foundation software.

In June, I wrote the “What to do about the Siemens Product Lifecycle Management Software Inc. v. Does case (TX)” article which provided specific information surrounding the lawsuit from information acquired from the Siemens PLM lawyers themselves. However, back then, there was much still unknown, and now (almost 6 months later), I have a much better idea of how this is happening, what Siemens PLM is doing to catch those using the software illegally, whether claims of piracy are leaking over to the employers of the engineers who use the pirated software at their workplace, and how they are handling claims against those defendants, both in and out of the courtroom.

What you need to know about these lawsuits is that the Siemens PLM lawsuits still deceptively look like “copyright troll” lawsuits, but they are not. I will get into this momentarily.

*UPDATED* LIST OF FEDERAL COURT CASES FILED:

IN THE CONNECTICUT DISTRICT COURT:
Siemens Product Lifecycle Management Software Inc. et al v. Demin (Case No. 3:16-cv-00553)

IN THE NEW YORK SOUTHERN DISTRICT COURT:
Siemens Product Lifecycle Management Software, Inc. v. Does 1 – 100 (Case No. 1:14-cv-01926)
Siemens Product Lifecycle Management Software, Inc. v. Does 1-50 (Case No. 1:11-cv-08469)

IN THE OHIO SOUTHERN DISTRICT COURT:
Siemens Product Lifecycle Management Software In v. Manufacturing Services International, Inc. (Case No. 3:16-cv-00182)

IN THE PENNSYLVANIA EASTERN DISTRICT COURT:
Siemens Product Lifecycle Management Software, Inc. v. Does 1-50 (Case No. 2:12-cv-06795)

IN THE TEXAS EASTERN DISTRICT COURT:
Siemens Product Lifecycle Management Software, Inc. v. BTL Machine, Inc. (Case No. 4:14-cv-00506)
Siemens Product Lifecycle Management Software, Inc. v. Does (Case No. 4:15-cv-00582)
Siemens Product Lifecycle Management Software, Inc. v. Mercury Metal Forming Technologies, LLC (Case No. 4:14-cv-00002)
Siemens Product Lifecycle Management Software Inc. v. Does (Case No. 4:15-cv-00017)
Siemens Product Lifecycle Management Software Inc. v. TWIVision Engineering Group, LLC (Case No. 6:11-cv-00679)

IN THE TEXAS SOUTHERN DISTRICT COURT:
Siemens Product Lifecycle Management Software Inc. v. Does (Case No. 4:16-cv-03552)
Siemens Product Lifecycle Management Software, Inc. v. Does 1-100 (Case No. 4:16-cv-01422)

JOHN DOE DEFENDANTS ARE GETTING CAUGHT THROUGH THE *USE* OF THE SOFTWARE, NOT THROUGH THE ACQUISITION OF THE SOFTWARE.

In September of 2016, I was still piecing together how a person can get caught not through the download of pirated software via BitTorrent, but through the USE of that software (that article is still available for viewing, although the picture is more clear to us now as I describe my current understanding of it here, specifically tailored to the Siemens PLM Software-based lawsuits).

As we’ve learned, most Siemens PLM NX Software available for download on the piracy websites comes with a serial number (“SN”) and an “activator” which modifies the application to allow it to accept a random password that the SN activator generated.  (Not relevant, but still interesting to know:  The serial number + details about the computer or laptop upon which it is installed creates a “Unique ID” which can be checked with valid IDs on the server; this circumvents a computer from using a “valid” registration code for a computer for which that registration code was not licensed to.  Thus, even though the serial number activator provided the software with a valid serial number, the company servers know the software is pirated.)

This application modifier is known as a “crack,” and software which is altered to accept the serial number generated by the crack thinks locally (that is, on the laptop in which it was installed) that the software was properly acquired, purchased, and lawfully registered. Most cracks also revert the executable file used to run the file back to its original unaltered state once the software has been registered.

The problem is that even cracked software connects to the internet, for example, to access libraries in the program file which are stored on the company’s servers. In other words, for economy purposes, it would take up too much hard drive space to store every piece of a large multi-gigabyte-sized program on each person’s hard drive. Thus, companies now store core components of their software on their servers. This is generally referred to as “cloud-based software,” but what exactly is stored online with the Siemens PLM software is still unknown (and they keep this purposefully undisclosed because they track the IP addresses of the computers who run the software and access these files online).

EVEN IF THE SOFTWARE HAS BEEN REGISTERED using a “SN and an activator,” (as provided on the bittorrent websites), when the software connects to Siemens PLM’s servers to access pieces of the software to run, if the registration code (or more accurately, the Unique ID, as described above) does not match a valid paid registration from their own records, that software unbeknownst to the user is flagged as being unlicensed, and the IP address is recorded.  We now understand that the software user is not made aware of this until he is implicated as a John Doe Defendant in a copyright infringement lawsuit.

EVERY TIME that user uses the NX software, another entry of unlicensed use is recorded (date, time, etc.) and the IP address of the internet connection used when accessing the software is also logged. This is how a Siemens PLM lawsuit against a John Doe engineer can leak over to his employer receiving letters for the infringement of their software, even when the software was acquired at the accused John Doe engineer’s home.

WHO IS THE TARGET OF THESE LAWSUITS.

I mentioned above that the Siemens PLM lawsuits look deceptively like “copyright troll” lawsuits, but they are not. Rather than extorting a few thousand dollars from every John Doe Defendant regardless of guilt, Siemens is looking for a particular defendant.

Siemens PLM Software wants to find the engineer who is providing “paid” engineering services, either 1) from his own laptop in his own small business, or 2) from his employer’s place of business where unbeknownst to the employer, that employee is bringing his unlicensed software to his workplace and using that pirated software at work [noting that his work does not own or pay for a license for the software].

In other words, Siemens PLM wants to find those engineers who are using their software but who are not paying a license for the use of that software, and they want to turn that enterprising engineer into a paying customer. Moreso, Siemens PLM wants to find that company (the employer of that engineer) who is benefiting from the unlicensed use of their software, and to turn that corporate entity into a “volume license” paying customer. This is where the “big bucks” are made.

WHAT IF YOU ARE A STUDENT?

Students are a different story than paid engineers. Just as law students are fed unlimited free case lookup services and are encouraged with points and free coffee mugs for using as much of services as they can [only to be hit with a multi-thousand-dollar subscription upon graduation for what a few days ago was free (think, WestLaw, LexisNexis)], engineering students are seen as the same “cash cows” for Siemens PLM as law students are seen by the WestLaw/Nexis case lookup services. A poor engineering student today is seen by Siemens as a future subscription-based customer for the rest of his working career, and if not, that engineer’s employer will be a “volume license” customer which is even more profitable for Siemens.

If you have not yet figured this out, I have found that engineering students (and those individuals who are smart enough to figure out that the NX software has specific applications for use in conjunction with their 3D printers) find themselves in the spider web of these lawsuits more than anyone else. These individuals ‘mess around’ with the software in ways which do not provide them an income (what we call “non-revenue-producing use,” or “personal use”). Rather, they use the NX software (or more recently, the Solid Edge ST9 software) to gain professional skills knowing that if and when these students do find employment, use of the Siemens PLM software will become a necessity. So the students download it, play around with it, then get sued and call me fearing that their professional lives are over.

But no attorney at Siemens PLM — not Robert Riddle, and certainly not Steven Dietz — wants to end the financial life of a future customer. Aside from the fact that a student has no assets to seize, it is my understanding that Steven Dietz would rather turn that student into a loyal customer. For this reason, I have been able to accomplish resolutions of claims with students in a way in which is simply not available to the engineer who uses Siemens PLM’s unlicensed software for profit.

That is not to say that an engineer won’t be able to “get out” of this lawsuit — it simply takes a bit more work, perhaps paying Siemens PLM a settlement fee based on their particular circumstances (read that again carefully), and based on what software was allegedly used, what module add-ons were used or needed, whether the use was for personal or business reasons, and whether use of the software is still needed in the future.

Lastly, [since I am listing scenarios I’ve seen over the past few months,] non-engineering students who have roommates or suitemates who are engineering students also have been the recipients of the subpoena letters from their ISP (most recently, Comcast). While Siemens does not see the non-engineering student or enterprising 3D printer genius as a future customer, your engineering roommate or suitemate is still seen as such, and thus involving him or her as part of the solution can easily fix a $150,000 copyright infringement lawsuit against you.

So as you see, Siemens PLM looks like a copyright troll, but they are not. Their attorneys are often not interested in merely a settlement, but in converting the accused John Doe software user into a customer (or, as a future customer). This means that settlements are accepted where there is a future benefit to Siemens PLM, as they are not looking to use the lawsuits as a means to “cash out” or to “punish pirates.” Obviously this could change, and there have been circumstances where it is more feasible to simply defend a client by representing him or her in the federal court rather than having him agree to anything he or she did not do, but for the most part, Siemens PLM seems to be straightforward on what they seek to accomplish with these lawsuits.

OTHER ARTICLES ON THE SIEMENS PLM SOFTWARE CASES:

How an attorney should handle a Siemens PLM Software, Inc. lawsuit, on 1/11/2017.

Siemens PLM NX-based lawsuits – converting accused engineers into loyal customers, on 1/9/2017.

Software Developers are now tracking piracy through the USE of downloaded software, on 9/9/2016.

Siemens Software Case IS a Bittorrent Case, on 6/20/2016.

What to do about the Siemens Product Lifecycle Management Software Inc. v. Does case (TX), on 1/16/2016.

CONTACT FORM: If you have a question or comment about what I have written, and you want to keep it *for my eyes only*, please feel free to use the form below. The information you post will be e-mailed to me, and I will be happy to respond.

NOTE: No attorney client relationship is established by sending this form, and while the attorney-client privilege (which keeps everything that you share confidential and private) attaches immediately when you contact me, I do not become your attorney until we sign a contract together.  That being said, please do not state anything “incriminating” about your case when using this form, or more practically, in any e-mail.

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So we all thought the Malibu Media, LLC lawsuits were dead this summer after Malibu Media sued their attorney Keith Lipscomb (a.k.a., the “kingpin” and “mastermind” behind the 6,800+ lawsuits filed against single “John Doe” defendants)). If you want a quick summary, here seems to be the jist of what happened.

  • Malibu Media, LLC hired Lipscomb to run their copyright infringement / settlement extortion scheme utilizing his network of attorneys spanning the federal courts across the US.
  • Lipscomb appeared to have pulled in hundreds [maybe thousands] of settlements, each settlement likely amounting to $10,000-$30,000, or more.
    (NOTE: This dwarfs the settlement monies collected by Steele & Hansmeier, now arrested for mail fraud, wire fraud, and perjury allegedly committed in the furtherance of their copyright troll scheme.)
  • Lipscomb apparently paid Malibu Media, LLC only $100,000 in commissions (the equivalent of ten settlements [10 x $10,000 = $100K]), but then never paid Malibu Media again.

The relationship between Lipscomb and Malibu became sour when Malibu Media, LLC became suspicious as to how they only earned $100K in commissions.  They demanded an accounting to determine whether they were being paid properly (this is still being litigated, but my guess is no; namely, that Malibu was being cheated by the lawyers they hired to extort others). Lipscomb claims that Malibu actually owes him money (to simplify the numbers, think — 6,800 lawsuits filed x est. $400/filing = $2.7 Million in filing fees alone). Malibu sued Lipscomb, they went to court, and in late April 2016, new Malibu Media, LLC filings stopped dead.

On April 18th, 2016, Keith Lipscomb told all of his local counsel that he is no longer representing Malibu Media, LLC (citing a lack of profitability), meaning that each of his local counsel were no longer representing Malibu Media, LLC, or so we thought. Wrong. Various local counsel continued the lawsuits already filed, but very few new suits were filed.

Here are the number of case filings since:
April 2016 Filings: 97
May 2016 Filings: ZERO!
June 2016 Filings: ZERO!
July 1- July 20 Filings: ZERO!
July 21 -> [end of month] filings: 75
August Filings: 59
September Filings: ZERO!
October Filings: 109 — FULL SPEED AHEAD? Nope.
November Filings: ZERO.
December Filings: ZERO…?

So, we are now in December (six months later), and Malibu Media LLC lawsuits are far from dead, or are they?!?

Here’s what I understand:
1) Lipscomb is no longer in charge of the Malibu Media, LLC lawsuits.
2) Individual attorneys (formerly, local counsel) appear to have taken Malibu Media, LLC as their own client, meaning that Malibu is creating relationships with each attorney, and each attorney appears to have a “territory” or a federal district court in which s/he practices.
3) I still think there is someone at Malibu Media, LLC headquarters (maybe Elizabeth Jones) still directing all of the attorneys.

In sum, Malibu Media, LLC and their lawsuits are not dead, at least not yet, but they continue to plague the federal courts and the accused downloaders with their high-ticket settlement prices, and thus they still need to be taken seriously, at least for now.

NEXT: Let’s go into the recent cases themselves to get an idea of what is going on with the last set of cases filed…

Sources:
Arstechnica: “File-sharing lawsuit numbers drop by more than half; both Malibu Media and Prenda Law have run into different roadblocks.” on 7/19/2016.

Techdirt: “Malibu Media Sues Its Former Lawyer Over Missing Funds, Breach Of Bar Rules,” on 6/29/2016.

Arstechnica: “Porn studio that sued thousands for piracy now fighting its own lawyer,” on 6/28/2016

Fight Copyright Trolls: “Malibu Media sues its former counsel Keith Lipscomb and his firm for professional negligence and breach of fiduciary duty,” on 6/28/2016


CONTACT FORM: If you have a question or comment about what I have written, and you want to keep it *for my eyes only*, please feel free to use the form below. The information you post will be e-mailed to me, and I will be happy to respond.

NOTE: No attorney client relationship is established by sending this form, and while the attorney-client privilege (which keeps everything that you share confidential and private) attaches immediately when you contact me, I do not become your attorney until we sign a contract together.  That being said, please do not state anything “incriminating” about your case when using this form, or more practically, in any e-mail.

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[NOTE: I might be accused at a later time of stating that piracy is a black market SOLUTION to the copyright problem using the URL title of this article as “proof” that my initial thought was that it was a solution, not a symptom.  Rather, this was a mistyping error (I was looking at a “Group Buying is one SOLUTION to fix the broken copyright system,” note and correspondingly used that word in the title.  Because I did not want to interrupt the publication of this blog (in which the old URL was posted to Twitter, Facebook, etc.), I left it as it is.]

This blog post is a response to the “Close to Anonymity” author who is proposing a “group buy” solution to the copyright problem. It is also a follow-up article to my “Group Buying” Through The Eyes of Piracy article written on August 24th, 2016.

[To the author:  Once again, I want to reiterate to the author that I wholeheartedly support the concept of group buying as he proposes it. It is clear to me that he has put a tremendous amount of time and effort thinking this through, specifically on how to implement it. I support him 100% and there needs to be more individuals like him to speak out to fix the broken copyright system.]

The running theme of this blog has been that the copyright advocates (MPAA / RIAA) and copyright holders are over-exerting power given to them by the copyright statutes. Further, the copyright holders are focusing their efforts not on the creation of new and useful content, but on the extreme monetization of old and recycled content, often using unethical means (unconstitutionally high [$150,000] statutory damages for copyright infringement) to achieve their financial goals. I would suggest that while piracy is a legitimate problem, it is a symptom of greed, dishonesty, and an unwillingness to make content reasonably available to the consumer at a price the consumer is willing to pay for that content.

Instead of fixing the problem, those in power have called our side names, e.g., the “copyleft,” or the “pirate party,” whereas most of us who fight copyright holders believe staunchly in copyright, but disagree in the way their enforcement has been applied, often lobbying politicians and lawmakers and asking them to increase penalties and punishments to those caught infringing their copyrighted content, while at the same time clamping down on providing avenues for those same consumers to purchase or view the content lawfully at a reasonable price.

The reality is that a media company selling a piece of software for $100 would in fact claim that [of the 9 individuals who came together to purchase that piece of software at $10 a piece,] if the “group buy” were not available, *IF at least two* would have purchased the software product at full price, they would have lost profits under the group buy model.

*THIS IS THE FALLACY WITH THE COPYRIGHT HOLDERS — THEY FALSELY BELIEVE THERE WOULD BE A MARKET FOR THEIR PRODUCT IF PIRACY (OR IN YOUR CASE, A GROUP BUY) WERE MADE IMPOSSIBLE, AND IF YOU PIRATE SOFTWARE OR IF YOU MAKE GROUP BUYING OF COPYRIGHTED MEDIA POSSIBLE, IT WOULD BE YOUR FAULT THEY HAVE LOST THE PROFITS THEY WOULD HAVE BEEN ENTITLED TO.*

Assume for a moment that you are correct in that there would not be two purchases, possibly NOT EVEN ONE at full retail price. The copyright holder would rather make ZERO sales ($0 profit) rather than risk that multiple (here, 9) individuals would group together to make ONE purchase because they would see that as a disaster for their bottom line and they would count each group buy as a loss (here, of 9 potential sales).

Realistically, the answer is that the market should determine the price of a product, and not a copyright monopoly, threats under the Digital Millennium Copyright Act (DMCA) or statutory damages for copyright infringement. The existence of a “black market” for their copyrighted products (here, through piracy) is a strong indication to the copyright owners that they are either 1) mispricing their products, or 2) that they are failing to make them adequately available to the paying public.

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It is 12:30am and I really do not have time to go into this, but I just learned that Dallas Buyers Club, LLC is suing Voltage Pictures, LLC in Montgomery County, TX for, among other things, not paying fees to Dallas Buyers Club for the licensing fees owed to them.

[Hat tip to SJD @ FightCopyrightTrolls for breaking the story.  Her link to the lawsuit can be found here.]

It appears from the TX case filing (Cause No. 15-06-06049) that Voltage Pictures, LLC approached Dallas Buyers Club, LLC and offered to pay for the license to act as Dallas Buyer’s Club’s agent so that they can sell the film abroad and… so that they can file lawsuits against John Doe Defendants across the US. Part of this agreement appears to be that Voltage Pictures was permitted to use Dallas Buyer’s Club’s name.

082516 Voltage-DBC Power of attorney

…and skipping down a bit:

082516 Voltage-DBC Exclusive Agent

Well, now we learn that Nicholas Chartier and Voltage Pictures are being sued because after making all of the sales and suing all of the John Doe defendants for copyright infringement, Voltage Pictures is accused of cheating Dallas Buyers Club out of their earned licensing fees.

I feel as if I just fell down a rabbit hole…

Thus, whenever we saw a Dallas Buyers Club, LLC lawsuit, and whenever we represented a client against Dallas Buyers Club, LLC, we were really representing them against… VOLTAGE PICTURES, LLC?!?

This brings me to the Fathers & Daughters Nevada, LLC cases.  Did Voltage Pictures, LLC make the same licensing deal with the Fathers & Daughters movie producers, and are they also not paying them the money that is due to them?  When we see a Fathers & Daughters Nevada, LLC case, are we really representing clients against the makers of the Fathers and Daughters movie? Or are we representing clients against VOLTAGE PICTURES, LLC who is parading as Fathers & Daughters Nevada, LLC and claiming that they are Fathers & Daughters Nevada, LLC, when really they are not?!?

This also makes me ask who the attorneys for the Fathers & Daughters Nevada, LLC are really representing? Are Josh Wyde and Gary Fischman suing on behalf of Fathers & Daughters Nevada, LLC? Or are they suing on behalf of Voltage Pictures, LLC pretending to be Fathers & Daughters Nevada, LLC?  I know Josh is watching this blog, so please feel free to comment.

Who is their client? Voltage or Fathers & Daughters Nevada?

Last question, and then I’m going to sleep. Will Voltage Pictures, LLC soon be sued by the real Fathers & Daughters copyright holders for failure to pay the licensing fees, proceeds, and sales from the monetization of the Fathers & Daughters movie copyright? Have the same facts that are coming out with the Dallas Buyers Club, LLC lawsuit also transpired with the Fathers & Daughters Nevada, LLC copyright holder?

One more thought — a while back, I was concerned that perhaps the shell companies that were created for various movies were not properly funded. [Well, okay, I backed away from that accusation, but that was on my mind.]  The original thought was that production companies made movies, and to limit their liability, we understood that they set up shell companies as limited liability companies so that if something went wrong or if, say, Dallas Buyers Club caused damage to someone and they were sued, fined, sanctioned, or otherwise held liable for damages from their activities, those damages would be contained to the Dallas Buyers Club, LLC limited liability entity, and they would not trickle “up” to what I thought was the Voltage Pictures, LLC production company.

However, now we see that Voltage Pictures, LLC is NOT the production company, but a LICENSEE (one who signs an agreement to acquire a license to sell or act on behalf of the copyright holder [the licensor]). Thus, this brings me back to the entity that was formed to sue John Doe Defendants in federal court. Dallas Buyers Club, LLC, and Fathers & Daughters Nevada, LLC (the two Voltage-related companies that are currently on my mind). Are they properly funded? Who owns them, and who are the real parties acting through them? Voltage Pictures or Dallas Buyers Club? Voltage Pictures or Fathers & Daughters? Who is providing the funding for them?  And did they properly notify the court of this arrangement when they filed the lawsuits against the John Doe Defendants?

Wow, when they say that there is “no honor among thieves,” they weren’t kidding.  First Keith Lipscomb is sued by Malibu Media, LLC for not paying them the royalties and/or funds received through Lipscomb’s Malibu Media, LLC v. John Doe lawsuits across the US, and now Voltage Pictures, LLC is being sued by Dallas Buyers Club, LLC for the same thing. I also want to point out that Liberty Media also sued their lawyer, Marc Randazza (although the circumstances were different, and if what Marc wrote in his defense was true (e.g., that they used his office desk to shoot adult films), both Liberty Media and Randazza are both to blame, but for different reasons). I also remember when Prenda Law Inc. stopped paying their local counsel here in Houston the fees and commissions he earned through the filing of the lawsuits.

So… in sum, is this the scenario of thieves stealing from thieves as we have seen before? Or is this an example of “copyright trolls stealing also from their own clients”?? Wow, this field of law has skeletons hidden in closets all over the place.

UPDATE: For more on this topic, SJD covered this topic in detail.  See FightCopyrightTrolls article, “How copyright trolls plunder both US citizens and… rights holders.


CONTACT FORM: If you have a question or comment about what I have written, and you want to keep it *for my eyes only*, please feel free to use the form below. The information you post will be e-mailed to me, and I will be happy to respond.

NOTE: No attorney client relationship is established by sending this form, and while the attorney-client privilege (which keeps everything that you share confidential and private) attaches immediately when you contact me, I do not become your attorney until we sign a contract together.  That being said, please do not state anything “incriminating” about your case when using this form, or more practically, in any e-mail.

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I thought that TAC’s response to my article last night deserved a spot of its own, so I am pasting it below.

In short, he’s right. As a lawyer, I get so caught up with each individual client and defending whether copyright infringement actually happened or not that I overlooked the big picture “elephant in the room” point — that if the movie production companies would actually make good content which would inspire someone to buy a movie ticket, and if they would make that good content readily available rather than blaming downloaders for a few bucks of loss of revenue, then piracy wouldn’t even be a problem.

I used to be a movie buff. I would see every movie in the theaters, and if there was something I missed, I would catch it later when it came out on DVD. However, the… pardon my language… “crap” that has been coming out of the theaters over the last ten years has lost me as a fan. I cannot remember the last time I saw a movie and felt that I got my money’s worth. More often then not, I leave the theater feeling cheated.

The internet created a problem for the movie companies where it enabled average internet users to share digital copies of movies which [by definition of being “digital”] are the identical quality as the files burned on DVDs from which they are ripped. They tried to stop the copying through creating privacy measures that blocked an individual from being able to copy videos, but individuals got around those protections.  Then they passed the Digital Millennium Copyright Act (“DMCA”) statutes and made it a crime to unblock the copy protections, but people did it anyway.  Then they sued the downloaders and claimed they were going after the lost revenue, but instead, they went after statutory damages of $150,000 per instance of infringement.  In the process of suing downloaders (rather than suing the initial uploader or working to take down the infringing videos), with the birth of the Dunlap Grubb and Weaver, LLC Voltage Pictures, Inc. “Hurt Locker” and “Expendables” lawsuits, Voltage Pictures, Millennium Films, and other production companies turned their failed b-rated movies into a money-making extortion-like shakedown scheme where they asked for tens of thousands of dollars for what was really the loss of a movie ticket or a DVD rental.

The point is that Hollywood and their production companies spend so much time trying to clamp down and stop people from getting content that if they spent those same dollars finding new ways to make content readily available, they would stop the piracy problem (or at a very minimum, they would convert many would-be pirates into paying customers).  Netflix, Amazon Prime Video, and Redbox have the right idea of trying to find ways to get movie content into consumers’ hands, but even they run into licensing problems where the Hollywood movie studios won’t let them provide content to their subscribers (and thus great movies and TV shows are commonly lost to history).

[Case in point — The Stargate TV series (Stargate SG-1, Stargate Atlantis, and Stargate Unvierse) — all AMAZING shows, but there was a point that Netflix took them down from their site citing licensing issues, and if you wanted to see them, you would have needed to either buy the DVDs on Amazon, or “look elsewhere” for them (meaning, piracy).  I would have happily paid more to Netflix to keep them available, even in a “click here to pay a bit more to see this video” fashion.  UPDATE: I am happy to share that Amazon Prime provides all seasons of these shows to their paying customers, so yes, Jeff Bezos is doing his job of making content available.]

This argument has gone around in circles for many years. Point being, the movie companies have obviously chosen that their focus will be to clamp down and spend their money to fight the losses from piracy rather than innovate and make good content that would inspire people to open their wallets and pay for a movie ticket or rent a DVD.

This is my point, this is my feeling, this is how I see things. I could be wrong, but who cares. Unless I see quality new content in the theaters (and not recycled old story lines), I’m not buying a ticket. Superman versus Batman?!? Really? Yet one more Borne Identity?!? Really? Ice Age in Space?!? Really? How many times can I hear the same story told over and over again? I’m honestly bored of all of this recycled media crap and I wish they would start looking for new and original content.

Thus, in all fairness and thanks to “That Anonymous Coward (TAC),” below is his comment to last night’s “We are winning the bittorrent piracy war against copyright holders, but what are the unintended consequences?” article which inspired this entire line of thought.

TAC from that anonymous coward :
 

And there in lies the biggest problem.
People look at Popcorn Time, and don’t understand how it works. They might assume that its just an awesome service. It works like everyone imagines we should be able to get content.

The “war” has always been pointless.
Everything done to “stop” pirates, ends up punishing paying customers… and eventually when you hassle paying customers enough they look for other ways to get the content.
We’ve missed out on technology moving forward, because of screams that it MIGHT hurt the bottom line of an industry that has its own special ‘accounting’ practices that manage to make a world wide blockbuster look like it lost money.
They aren’t honest about their books, they aren’t honest about actual harm, they aren’t honest about why they refuse to stop punishing paying customers & creating more consumers that might turn to piracy because it meets their want for the content how, where, when they want it that the industry can’t seem to understand.

When they cling to an outdated business model, ignoring the consumer demand for access, they have forgotten they are in business to sell content… not impose pointless control over people who already paid them who get treated worse for playing by the rules.

Imagine what they could have done with all of the time and money they have dumped into the anti-piracy schemes (that never pay that well or accomplish what is promised) and had used it to “fix” the horrible patchwork of laws & rules to create a unified worldwide business model that makes getting the content customers want faster & easier. But then they would be making more money they they ever imaged possible… but would still be imagining there is a dollar out there they aren’t getting & end up harming paying customers chasing the imaginary dollars.

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