Could This Mean the End of Porno-Trolling Copyright Litigation?

Posted by joseph bahgat on May 10, 2013

Earlier this week, U.S. District Judge Otis D. Wright II, from the Central District of California, delivered a shot heard round the legal world, when he issued an 11-page opinion & order condemning the four attorneys who are principally responsible for nearly all of the porno-trolling copyright infringement lawsuits in this country. If you ever wondered what was so controversial or reprehensible about this type of litigation, Judge Wright does a pretty good job of summing it all up in the very first paragraph of his order:

Plaintiffs have outmaneuvered the legal system. They’ve discovered the nexus of antiquated copyright laws, paralyzing social stigma, and unaffordable defense costs. And they exploit this anomaly by accusing individuals of illegally downloading a single pornographic video. Then they offer to settle—for a sum calculated to be just below the cost of a bare-bones [legal] defense. For these individuals, resistance is futile; most reluctantly pay rather than have their names associated with illegally downloading porn. So now, copyright laws originally designed to compensate starving artists allow, starving attorneys in this electronic-media era to plunder the citizenry.

Unfortunately, this is not news to a lot of us. But what makes it newsworthy—even to those of us who've known about it all along—is that the man behind the curtain, the Phantom of the Opera, the [insert masqued villain of your choice] has finally been revealed, and in dramatic fashion. But what did they do that was so bad? The short answer is this: Attorneys John Steele, Paul Hansmeier, Angela Van Den Hemel, and Paul Duffy developed a business plan that centered on them planting pornographic movies in places where they were likely to be downloaded using peer-to-peer file sharing protocol. Then they monitored those servers for download activity, and filed suit against the IP addresses associated with the "illegal" downloading. Since attorneys can't really file suit on their own behalves, they created several fake people to stand in the place of the plaintiffs, by stealing the identities of various individuals, one of whom just happened to be John Steele's gardener. 

Okay, so that wasn't exactly short, let me summarize my summary: Prenda Law Inc. used our federal courts to more or less blackmail or extort money out of defendants who were essentially hauled into court only because of situations that the plaintiffs themselves created. I liken it to a civil version of entrapment. Judge Wright likened it to racketeering.

In total, the judge only ordered Prenda Law to pay a little over $80,000 in sanctions, but that's not the significance of the order, or the case. Judge Wright has asked that a copy of the order be forwarded to every court in which Prenda Law or one of its affiliates has a case pending. Further, Judge Wright has asked that a copy of the order be forwarded to attorney disciplinary body of each state in which the Prenda Law attorneys are admitted to practice. That could potentially bring an end to the entire porno-trolling litigation industry.

NJ Court Rules In Favor of Copyright Trolls

Posted by joseph bahgat on April 29, 2013

For a while, it's seemed like the tides had turned on copyright trolls, as federal court judges appear to be more and more skeptical of the (lack of) merits to the concept and strategy behind mass copyright litigation. But a recent decision by a New Jersey federal court magistrate judge seems to send the opposite message—for copyright trolls not to give up, that the courthouse doors are still very much open. At least that's the message I inferred from the headline in the New Jersey Law Journal "Multiple John Doe Defendants Permitted in BitTorrent Case" (subscription required).

If the issues in this case and this latest decision weren't an ongoing focus of my practice, I probably wouldn't have taken the time to look up the case and download the opinion, which is what I did, and much to my surprise, the decision was anything but a windfall for plaintiff Malibu Media LLC, a California distributor of pornographic films. Indeed, the court went through a seemingly reasoned analysis of the legal questions involved when deciding a motion to quash a subpoena, in accordance with FRCP 45(c)(3). The primary issues the court addressed were whether joinder was proper, whether the information sought by the subpoena was relevant, and whether the plaintiff is entitled to pursue its claims for relief as stated in the lawsuit.

The court dealt with the first two issues methodically, and resolved them in favor of denying the motion to quash. When arriving at the third factor, however, the court did not engage in much, if any analysis. The court quoted a case cited in the motion to quash, and then proceeds to its conclusion:

To be clear, the Court certainly does not condone the use of this litigation, and any attendant threat of embarrassment, to coerce any defendant to settle. As noted above, the [court's prior order] requires plaintiff to ensure it has an adequate factual basis before seeking to file an Amended Complaint naming any proper defendant, and that the Court, by granting plaintiff’s request for expedited discovery, has not authorized plaintiff to rely solely on the subscriber’s association with the IP address to supply that basis.

It seemed like the court didn't give much thought to the final argument raised in the motion to quash, and so I went back to re-read from the beginning of the opinion, which is when it occurred to me that the motion had been filed pro se (i.e. by the John Doe defendant himself, rather than by an attorney). A bad idea.

Most attorneys (myself included) take cases like these on a fixed fee basis, usually for less than what the copyright trolls are offering to settle for. The attorneys on the plaintiffs' side know what they're doing. They're familiar with the process, having done it numerous times before, and they have their arguments, briefs, and motions already prepared and ready to file. On top of that, the statutory penalties for copyright infringement are obscene (no pun intended), up to $150,000 for willful infringement, plus attorney's fees. All of that adds up to a less than desirable situation for someone to attempt to represent themselves in court.

But I digress. Regardless of the fact that it's a bad idea to try to defend yourself in a copyright infringement lawsuit, I wonder whether the outcome would have been the same if the motion had been properly drafted and filed by an Internet law or copyright attorney. The bigger problem is this, however: This most recent decision appears to be one of the few that sides with the plaintiff–copyright trolls; it therefore could have a negative precedential effect on future motions to quash filed against copyright trolls. Fortunately, the court's decision is marked "not for publication," but seeing as how the New Jersey Law Journal wrote about it, and I found the decision at the U.S. Court's website in less than 60 seconds, I'm not confident that the decision won't have any lingering effect.

11917746183 Hammer Opinion Denying Mtq_malibu Media

SDNY Ruling is Step Backwards for Fair Use Jurisprudence

Posted by joseph bahgat on March 22, 2013

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Not to beat a dead horse, but yesterday's ruling by a U.S. District Judge Denise Cote is a great example of why the fair use doctrine is so complicated, and widely misunderstood. The case is Associated Press v. Meltwater News, No. 1:12-cv-01087-DLC (S.D.N.Y. Mar. 21, 2013). Meltwater provides a private subscription service, which involves the scanning of news sites for stories relevant to their clients, and then delivering the results in the form of short excerpts from—and with links to—the original articles. The AP claimed the search results infringed its copyrights in the news articles, while Meltwater argued that the service was a non-infringing fair use. The court granted summary judgment for the AP.

The primary reason that this decision gives pause is that the subject matter of the alleged infringing content is largely factual. (NB: As a general rule, facts are not copyrightable.) Indeed, EFF called the ruling "troubling," and referred to the court's fair use analysis as "worrisome in at least three respects." EFF's blog provides a great (and brief) analysis of the substance of the ruling, which is worth reading if you have any interest in copyright law. According to the EFF article, Meltwater is considering an appeal to the Second Circuit, which in my opinion is a good idea. The court's 91-page decision is here (PDF).

Who Knew this was Copyright Infringement?

Posted by joseph bahgat on May 27, 2012

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Today on CBS Sunday Morning, they did a piece on rock-n-roll photographer Bob Gruen, who has apparently photographed every significant mainstream musical artist in the last half century. What, you've never heard of him? Neither had I. But you're undoubtedly familiar with his work.

During his tenure as John Lennon's personal photographer, Gruen shot this iconic 1974 picture of Lennon atop a NYC apartment building. Sure, it's a cool shot, but that's not what caught my attention. During the interview, Gruen revealed that this photo has been used (reproduced and sold) all these years without his permission—i.e. that it's copyright infringement! Gruen went on to say that he's more or less flattered that people have been ripping off his work this time.

So the infringers are apparently off the hook for the stiff penalties: statutory damages of up to $150,000 per act for willful infringement, plus the amount of actual damages (disgorgement of all profits), and attorneys' fees.

I suppose it's possible that the rights to the photo don't even belong to Gruen himself; if he was indeed Lennon's personal photographer at the time, then the photo could be a "work for hire," which would mean that Lennon (or his estate) actually owns the rights. (I'd like to assume that if that were the case, Gruen would've said that in the interview, because not saying it fairly implies the contrary.)

Can Gruen sue for copyright infringement now, after all these years? That's a difficult question. The statute of limitations for copyright infringement is only 3 years (from the date of discovery; 5 years for criminal liability), however, as the Second Circuit Court of Appeals held in Stone v. Williams, 970 F.2d 1043, 1049 (1992):

Each act of infringement is a distinct harm giving rise to an independent claim for relief.

But even though a new limitation period begins to run each time someone rips off Gruen's photo, the fact that he's allowed the photo to be ripped off for all these years implies his consent. Any defendant would logically argue that Gruen has waived any claims for infringement, and should be estopped from bring suit.