Tag Archives: copyright trolls

Prenda is gone, but copyright trolling continues

A pattern of “brazen misconduct and relentless fraud”

Like many, I took great satisfaction from reading that John L Steele had plead guilty and acknowledged his role in the “copyright trolling” scheme that took in millions of dollars in settlements from 2010 to 2012.

For a short while, the lawyers at Prenda–Paul Duffy,John L. Steele and Paul R. Hansmeier–were the public face of copyright trolling. According to the courts, Duffy, Steele and Hansmeier engaged in “vexatious litigation designed to coerce settlement” in a pattern of “brazen misconduct and relentless fraud.” They lied to the courts, forged documents, practiced identity theft, placed their own content online so that they could sue people for stealing it, and generally behaved badly.

The scheme worked as follows: lawyers would file copyright suits alleging that some unknown person (John Doe) identified only by their IP address had infringed copyright by using BitTorrent, an online file sharing protocol. The laywers would file a case against “John Does 1- 1000” and pursuade the court to let them subpoena ISPs to get the subscriber details that matched those IP addresses. They would threaten those newly unmasked John Does and demand payment to drop the suit. Otherwise, Does alleged pornography viewing habits would be exposed to the world and he would probably end up paying tens of thousands in statutory damages.

Prenda is gone, but copyright trolling continues

Duffy died in 2015. Steele and Hansmeier were placed under federal indictment in December 2016 for “an elaborate scheme to fraudulently obtain millions of dollars in copyright lawsuit settlements by deceiving state and federal courts throughout the country.” And now that Steele has plead guilty to those charges, Hansmeier’s conviction seems like a certainty.

It is satisfying to see justice finally catch up with Steele and Hansmeier, but anyone who thinks that this is the end of copyright trolling has not been paying attention. In fact, other than a brief hiccup in early 2016, the filing of lawsuits designed to extract settlements from alleged online pirates has only increased since Prenda went out of business.

As my co-author, Jake Haskell, and I will show in a paper to be made public next week (we are proofreading right now), in the post-Prenda era, lawsuits filed against John Doe defendant made up more than 52% of all copyright cases in in the United States in 2014 and 58% in 2015. The number of suits dropped slightly after Malibu Media lost a case on summary judgment in January 2016, but the rate of filing is increasing again. Even so, between 2014 and 2016 copyright trolling accounted for 49.8% of the federal copyright docket.

Our analysis of the federal court filing records indicates that in 2016, the average number of defendants in each of the John Doe cases was 4.7 on a conservative estimate . In other words, although there were 1,362 John Doe copyright cases filed last year, 6,483 individual defendants were targeted. Without doubt, some of those people were illegally downloading movies, but a great many were not.

The new breed of plaintiffs who filled Prenda’s shoes are different to Prenda, but not different enough. The plaintiffs’ claims of infringement still rely on poorly substantiated form pleading and are targeted indiscriminately at non-infringers as well as infringers. Plaintiffs have realized that there is no need to invest in a case that could actually be proven in court, or in forensic systems that reliably identify infringement without a large ratio of false positives. Their lawsuits are filed primarily to generate a list of targets for collection; and are unlikely-in our view-to withstand the scrutiny of contested litigation.

The human cost of copyright trolling is significant. It is true that sometimes the plaintiffs get lucky and target an actual infringer who is motivated to settle. But even when the infringement has not occurred or where the infringer has been misidentified, some combination of the threat of statutory damages of up to $150,000 for a single download, tough talk, and technological doublespeak are usually enough to intimidate even innocent defendants into settling.

In our paper, titled “Defense Against the Dark Arts of Copyright Trolling” (available on ssrn.com next week, if all goes to plan), we  undertake a detailed analysis of the legal and factual underpinnings of these online file sharing cases against John Doe defendants. We analyze the weaknesses of the typical plaintiff’s case and integrate that analysis into a comprehensive strategy roadmap for defense lawyers and pro se defendants. In short, as our title suggests, we aim provide a comprehensive and useful guide to the defense against the dark arts of copyright trolling.

 

Copyright Trolling in Chicago (17980 IP addresses and counting)

WBEZ ran a story on Thursday, based in part on my research first published in the Iowa Law Review. The story, Why Are So Many People In Northern Illinois Being Sued For Downloading Porn? by Miles Bryan is an excellent overview of a complicated topic.

Focus on Chicago

Although these John Doe lawsuits are a nation-wide phenomenon, Chicago (technically, the Northern District of Illinois) is the leading destination for what many people regard as ‘copyright trolling’. The Northern District of Illinois has accounted for roughly 15% of all copyright John Doe lawsuits nationwide since 2013.

The Northern District of Illinois covers 18 counties across the northern tier of Illinois, with a population of about nine million people. The Southern District of New York which encompasses New York City and the Southern District of California which includes Los Angeles are much larger in terms of population, yet the SDNY has only had 531 John Doe cases in the same period that Chicago has seen 1603. The Southern District of California has seen a mere 165.

Since 2010 (up until June 2016) lawyers in the greater Chicago area (technically the Northern District of Illinois) have filed over 1600 John Doe copyright cases (1603 at last count). This practice is now so common in Chicago that these suits outnumber regular copyright lawsuits by a ratio of more than 4 to 1 (there were 385 regular copyright suits in the same period.)

WBEZ’s Graph based on my data

Because of the way these suits are filed, one lawsuit can sweep in a large number of IP addresses. Based on court records, my conservative estimate of the number of IP addresses involved in one of these suits in the Northern District of Illinois since 2010 is 17,980. Not all of these cases involve pornography, but the vast majority do, 73% in the Northern District of Illinois.

In 2015 alone, Chicago court saw just 48 regular copyright lawsuits filed, and 395 John Doe copyright lawsuits.

John Doe copyright lawsuits accounted for 58% of all copyright cases filed in 2015

Across the entire country, John Doe copyright lawsuits have risen from just under 4% of all copyright filings in 2010 to more than 19% in 2011, 43% in 2012, 46% in 2013, 51% in 2014 and just under 58% in 2015.

One pornography company, Malibu Media accounted for 40% of all federal copyright cases filed in 2014 and 2015. However, data collected for the first four months of 2016 shows that Malibu Media’s influence is declining (it accounts for only a quarter of all federal copyright cases filed in 2016 so far) and that there may be fewer John Doe cases filed this year if current trends continue. Last year there were 2930 cases filed, so far this year there have been only 690. John Doe cases for the year to date account for only 39.5% of all federal copyright cases.

Why Chicago?

One of the questions that Miles asked me to think about is why this phenomenon is so prevalent in Chicago?

The first thing to note is that Chicago is not alone. New Jersey actually had more of these cases in 2015 and the Southern District of New York had only slightly less. The five leading federal districts for john doe copyright cases in 2015 were

  • New Jersey – 386
  • Illinois (ND) – 395
  • New York (SD) – 248
  • Maryland – 194
  • Virginia (ED) – 153

But the Chicago cases involved many more IP addresses (almost 10 times as many!) and thus effected many more people.

Part of the answer to the question of why Chicago is that Chicago is large metro area with a lot of potential targets, so the economies of scale make it attractive to set up shop here. But that does not fully explain it. I think that another import part of the story is that judges in Chicago have not been as hostile to these suits as some judges in New York and Los Angeles.

Judges in the Northern District of Illinois are not exactly thrilled about john doe litigation, however, they has not closed the door to this kind of litigation and they are more tolerant of joining large numbers of IP addresses in a single lawsuit.

Related Publications:

Matthew Sag, IP Litigation in US District Courts: 1994 to 2014, 101 Iowa Law Review 1065-1112 (2016) (download from ssrn) Data updated for 2015  (http://ssrn.com/abstract=2711326)

Matthew Sag, Copyright Trolling, An Empirical Study, 100 Iowa Law Review 1105-1146 (2015) (download from ssrn)

Some thoughts on Malibu Media’s recent loss and its implications

(Malibu Media LLC v. Doe, Docket No. 1:13-cv-06312 (N.D. Ill. Sept 04, 2013)

Malibu Media’s case against yet another John Doe defendant was tossed out of court on February 8th by United States Magistrate Judge Geraldine Soat Brown.

Malibu v. Doe, Memorandum, Opinion and Order of Feb 8, 2016 

The defendant in this case prevailed in summary judgement because Malibu was unable to establish that he had ever used Bittorrent or that it’s films had ended up on his hard drive. Malibu had been relying on experts from its technology vendor, but it failed to follow the rules with respect to follow the rules on disclosure of expert witnesses. (See, Fed. R. Civ. P. 26(a)(2)). Malibu also tried to add vital paragraphs containing new opinions to another witness’ original declaration in a manner not permitted by the Federal Rules of Civil Procedure.

On the surface, the loss does not appear to have broad implications for Malibu Media’s campaign against illegal file sharing; after all, it should not be too hard to avoid these particular procedural slip-ups in the future.

Maybe, maybe not?

Malibu is engaged in a litigation campaign of  unprecedented scope — last year Malibu Media alone was responsible for 39% of all copyright litigation in the US. (See  Matthew Sag, IP Litigation in United States District Courts2015 Update (January 5, 2016). Available at SSRN: http://ssrn.com/abstract=2711326.)   John Doe litigation, by Malibu Media and others, made up almost 58% of the federal copyright docket (2930 cases out of 5076) in 2015. Malibu’s recent loss in the Northern District of Illinois illustrates, yet again, how ill suited federal court litigation is to resolving what should be relatively low stakes copyright disputes.

It is time for an entirely new forum to deal with the routine infringements that occur on BitTorrent and similar networks. The Copyright Office has suggested a small claims court for copyright but we probably need something far more targeted.

Copyright and Pornography — Is now the time to panic?

There were 2004 copyright lawsuits filed in federal district courts in the United States in the period from January 1st to June 30th 2014. Just under 48% of these suits were filed by copyright owners against anonymous IP addresses accused of copyright infringement online. This is not surprising given the extent of online piracy, but what is more than a little surprising is that almost all of these lawsuits relate to pornographic films. Lawsuits alleging illegal file sharing of pornography were virtually non-existent before 2010, they now (Jan-Jun 2014) account for than 41% of all copyright suits filed.

Slide03

In my talk tomorrow at the 14th Annual Intellectual Property Scholars Conference at Berkeley Law School I will address this phenomenon and answer three fundamental questions: (1) When did this happen? (2) How did it happen? and (3) Is now the time to panic?

Here are some of the slides from my talk (below), the full paper is available here (download    Copyright Trolling, An Empirical Study)

 

 

Slide05

Slide06


Slide08

Slide09

Slide10 Slide11