Category: copyright trolls

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So, you got a copyright infringement demand letter from Higbee & Associates?

Some context

In 2018 Jake Haskell and I published an article called “Defense Against the Dark Arts of Copyright Trolling” in the Iowa Law Review. The article focused on BitTorrent related litigation that accounted for roughly half of all copyright cases filed in the United States at the time. As we described in the article, in the typical BitTorrent case,

“the plaintiff’s claims of infringement rely on a poorly substantiated form pleading and are targeted indiscriminately at non-infringers as well as infringers. This practice is a subset of the broader problem of opportunistic litigation, but it persists due to certain unique features of copyright law and the technical complexity of Internet technology. The plaintiffs bringing these cases target hundreds or thousands of defendants nationwide and seek quick settlements priced just low enough that it is less expensive for the defendant to pay rather than to defend the claim, regardless of the claim’s merits.”

Given my interest in this topic, I get a lot of emails and phone calls asking about another high volume copyright plaintiff’s lawyer, Higbee & Associates.

I am writing this post so that people have something to go on without waiting for a response from me (which can often take a while, sorry).

Is Higbee & Associates a copyright troll?

Some people call Higbee & Associates (or the clients they represent) copyright trolls. Certainly, they seem more interested in monetizing infringement than simply stopping it. After all, they could use DMCA takedowns in most of these cases and it would be just as effective.

Fair point, but even if they are looking primarily to the rewards of the courthouse rather than the market place, they would no doubt respond that litigation is required to make people understand that photography is not free for the taking. The performing rights organization, ASCAP, files a lot of lawsuits for exactly this reason.

So, in terms of motive, the copyright troll label might not be a great fit, what about methods?

Higbee & Associates are a little different to the copyright trolls Jake and I discussed in Defense Against the Dark Arts of Copyright Trolling. As far as I know, they don’t make a habit of go after obvious non-infringers. Although they don’t seem to recognize many potential fair use arguments either. Also they don’t appear to rely on dodgy technology or bogus experts to make their case — a feature that is endemic of in the BitTorrent litigation.

However, Higbee does seem to send a lot of out letters of demand without much underlying depth. These letters often fail to provide a copyright registration. They often claim to represent a copyright owner who is not the author without evidencing any assignment of rights. You don’t need a registration to make a demand, but you absolutely need one to file a claim in federal court and to get statutory damages. So that seems a bit odd. Not connecting the dots between the person who took the photo and the client they say they represent is also a bit odd.

Moreover, the copyright troll label certainly fits with the sense of being ambushed that many defendants experience. I hear from a lot of these recipients. Receiving a letter from Higbee & Associates feels like an ambush because so many people don’t really understand how copyright works. It also feels like an ambush because the settlement amounts Higbee & Associates demand in a typical letter don’t seem to reflect the value of the underlying work.

Instead of demanding some multiple of the standard license fee for the work in question, Higbee will demand a settlement amount based on what they could get in court under copyright’s rather imprecise statutory damages rules. Which makes their oft noted failure to provide proof of registration even more interesting.

Assuming the work was registered at the relevant time, the prevailing plaintiff in copyright litigation can get statutory damages in the range of $750 to $150,000 per work infringed, regardless of the amount of actual damage. This is a pretty terrifying prospect for most accused infringers. But it gets worse. The real kicker is that if you fight the infringement accusation and lose, you risk just adding to your pain because if they are the prevailing party, the plaintiff has a good chance of getting their attorneys fees as well as statutory damages!

So, what to do?

Step one: figure out whether you have a good story to tell on the merits

You might have a case on the merits. Here are some examples:

  • you paid for a license to use the photo (or you thought you did);
  • you made fair use of the photo by using it as the foundation for commentary, parody or criticism (if you made changes to the photo that reinforce this transformative purpose, the merits of your fair use defense will be even clearer);
  • the party Higbee & Associates represents does not actually own the photo;
  • the photo was not registered with the U.S. Copyright Office before you started using it;
  • you didn’t post the photo, one of your users did it. This gets complicated. You might be covered by the DMCA, but only if you jump through the right hoops including registering an agent with the Copyright Office every three years. If you are not covered by the DMCA, you still might not be responsible for infringing acts by your users, it depends on a number of issues too detailed to summarized here.

Arguments on the merits that won’t help:

  • you didn’t post the photo, one of your employees did — sorry, you are responsible for your employees in a case like this.
  • you didn’t know the photo was copyrighted — this doesn’t help as much as you might think.
  • you thought that photos on the Internet were in the public domain — they aren’t.
  • you were not making a profit on your website — this doesn’t help as much as you might think.

Step two: ask for more information

Request copy of copyright registration, the deposit material that accompanied application, and documents sufficient to show Higbee is authorized by copyright owner to act as agent.

Explain that any settlement you agree to will have to contain proposed settlement a warranty that Higbee is the duly authorized agent of the copyright owner, that their client owns the copyright asserted, and that such copyright is valid. If they won’t do this, why not?

Step two: If you realize now that you might have been infringing the photographer’s copyright

  1. Take down the photo and audit the rest of the images on your website.
  2. If the work was unregistered. Do what your conscience tells you is right. The reality is that it is not worthwhile for them to take this case to court unless they can show actual damages of more than a few hundred dollars.
  3. If the work was registered and they actually represent the copyright owner, make a reasonable settlement offer.
    • What’s a reasonable offer? Based on the cases I have seen, probably, $1000 and go up to $1250 but your individual facts may vary.
  4. If the plaintiff won’t settle, don’t contest every point in the litigation. Instead try to keep everyone’s costs as low as possible; make an “offer of judgment” and hope that you get a reasonable judge who can see that there is no virtue in awarding more than $750 minimum in statutory damages. If you make this strategy clear to them, they should agree to a reasonable offer and move on to their next target.

Do you need a lawyer?

Probably, yes.

You could try to settle (or tell them to take a hike) by yourself, but without a lawyer representing you it’s hard to know how to respond to the arguments that the Higbee are going to throw back.

If you need a referral to a lawyer with experience in these matters, I can try to provide one. I don’t handle these cases myself. You should also know that because I am not your lawyer, any emails you send me are not going to be protected by attorney client privilege.

Good luck.

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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.

 

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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)

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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 Courts—2015 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.

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(2/4) 2015 Data on Copyright Litigation in the US

2015 Update

This is the second  in a series of posts discussing the 2015 Update to the data in my forthcoming article, IP Litigation in United States District Courts: 1994 to 2014 (Iowa Law Review, forthcoming 2016). You can read the 2015 Update in serial form in the posts that follow, or you can download the entire update as a pdf file from ssrn.com. See Suggested citation, Matthew Sag, IP Litigation in United States District Courts—2015 Update (January 5, 2016). Available at SSRN: http://ssrn.com/abstract=2711326.

The previous post discussed the overall state of copyright, patent and trademark litigation, this post addresses the new data on copyright litigation and the John Doe phenomenon.

2. Copyright Litigation and the John Doe Phenomenon

Figure 2 (above), shows how the dramatic increase in copyright litigation from 2010 to 2015 is almost exclusively attributable to litigation against anonymous Internet file sharers. The figure shows the number of copyright cases including (dashed red line) and excluding (solid red line) cases filed against John Doe defendants. As discussed in Copyright Trolling, An Empirical Study, and IP Litigation in United States District Courts: 1994 to 2014, the rise of Internet filesharing has transformed copyright litigation in the United States. Federal district courts are currently inundated with copyright owner lawsuits against “John Doe” or “unknown” or otherwise unidentified defendants. Figure 3 (below) tracks the occurrence of these John Doe lawsuits from 1994 through 2015. These John Doe lawsuits are almost exclusively related to allegations of illegal filesharing, which explains why they were virtually non-existent prior to 2004.

Figure 3: Copyright Cases Filed in U.S. District Courts (1994—2015)

Figure 3

Source: Administrative Office of the U.S. Courts, PACER records, 1994—2015.

John Doe litigation has not been a static phenomenon. The current era of BitTorrent monetization began in 2010 with a handful of cases filed against large numbers—sometimes more than 5000—IP addresses. Filing suits in this way enabled plaintiffs to economize on filing fees but courts have become significantly more skeptical of the legality and desirability of mass joinder in BitTorrent cases. Based on the data from 2015, it seems that the era of mass joinder is almost completely over. As seen in Table 2 (below), in 2010 the average number of John Doe defendants per suit was over 560; by 2014 it was just over 3 and in 2015 it was barely over 2. As Table 2 also shows, although pornography still dominates John Doe litigation, the phenomenon is becoming increasingly mainstream.

Table 2 John Doe Copyright Cases 2010—2015

Screen Shot 2016-01-05 at 11.03.14 AM

John Doe and pornography cases identified by the author. In 2015 John Doe litigation made up almost 58% of the federal copyright docket (2930 cases out of 5076). One of the most interesting aspects of this phenomenon is that it is driven by such a small number of plaintiffs and— based on my random sampling of the underlying complaints—an even smaller number of lawyers.

Table 3 shows the five most prolific John Doe litigants for each year from 2011 to 2015. In 2015 Malibu Media was still the most significant individual copyright plaintiff in the US; in fact, it filed more suits than ever last year. However, Malibu Media accounted for a smaller percentage of copyright lawsuits in 2015 because other plaintiffs also ramped up their efforts. Malibu Media accounted for 41.5% of all copyright suits in the US in 2014, and just over 39% in 2015. Malibu Media is represented by Michael Keith Lipscomb of Lipscomb, Eisenberg & Baker, PL. Lipscomb also represents two of the other plaintiffs on the top five list for last year—Manny Film and Plastic The Movie Limited—as well as two of the top five from 2014—Good Man Productions, Inc. and Poplar Oaks, Inc. The filing fee for opening civil action in US district courts is now $400, so that means that plaintiffs associated with Mr Lipscomb have paid at least $936,800 in filing fees over the last year. Given the scale of this enterprise it seems reasonable to infer that Lipscomb and his clients have found a way to effectively monetize online infringement.

Table 3 Top Five Copyright John Doe Plaintiffs 2011—2015

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End of post

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(1/4) 2015 Data on IP Litigation in US District Courts

Introduction to the 2015 Update

This is the first in a series of posts discussing the 2015 Update to the data in my forthcoming article, IP Litigation in United States District Courts: 1994 to 2014 (Iowa Law Review, forthcoming 2016).

My original piece, IP Litigation in United States District Courts, undertakes a broad-based empirical review of Intellectual Property (IP) litigation in United States federal district courts from 1994 to 2014. This brief update extends that data to include the year 2015. For a detailed discussion of the data sources and methods, please refer to the original article.

This update contains new data on

  1.  the overall state of copyright, patent and trademark litigation,
  2. copyright litigation and the John Doe phenomenon,
  3. the continuation of the patent litigation explosion and
  4. the geographic distribution of copyright, patent and trademark litigation.

You can read the 2015 Update in serial form in the posts that follow, or you can download the entire update as a pdf file from ssrn.com. See Suggested citation, Matthew Sag, IP Litigation in United States District Courts—2015 Update (January 5, 2016). Available at SSRN: http://ssrn.com/abstract=2711326.

1. Copyright and Patent Litigation Increasing, Trademark Litigation Declining

The two most important trends in IP litigation over the last five years have been the extraordinary increase in patent and copyright litigation and the corresponding relative decline of federal trademark litigation. These trends continued in 2015.

Figure 1: Copyright, Patent and Trademark Filings 1994—2015 (Percent)

Figure 1

Twelve month moving average of percent of Federal IP litigation. Source: Administrative Office of the U.S. Courts, PACER records, 1994—2015.

Figure 1 (above) shows the relative proportions of copyright, patent and trademark cases filed, based on a 12 month moving average between 1994 and 2015. As the figure makes plain, the relative shares of copyright, patent and trademark have fluctuated quite significantly over the period. The proportion of cases in the federal IP docket did not change significantly from 2014 to 2015 (39% in 2014, 41% in 2015); however, copyright increased significantly from 32% to 37% and this was matched by a corresponding decline in trademark litigation from 29% to 22%. Complete year-by-year data from 1994 to 2015 are presented in Table 1 (below).

Table 1: Copyright, Patent and Trademark Filings 1994—2015

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The increase in copyright and patent litigation can be seen even more clearly in Figure 2 (below) which shows the raw number of cases filed for each type of IP (displayed as a 12 month moving average).

Figure 2 Copyright, Patent and Trademark Filings 1994—2015 (Cases)

Figure 2

Twelve month moving average of cases filed. Source: Administrative Office of the U.S. Courts, PACER records, 1994—2015.

End of post

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Some cool graphs from my paper on IP litigation in US district courts

I have just revised my article, IP Litigation in US District Courts: 1994 to 2014, which will be published in Volume 101 of the Iowa Law Review next year.  (You can download the article from ssrn now.) This post does not attempt to summarize the full article; it focuses instead on explaining some of the more interesting graphs and data visualizations in the article.

Copyright, Patent and Trademark Filings as a percentage of all IP 1994-2014

This data is presented as a 12 month moving average.

Copyright, Patent and Trademark Filings 1994—2014 (Percent)

 

Copyright, Patent and Trademark Filings (number of cases) 1994—2014

Again, this data is presented as a 12 month moving average. The difference between the dashed redline and the solid red line clearly shows the impact of lawsuits against anonymous internet file sharers.

Copyright, Patent and Trademark Filings 1994—2014 (Cases)

 

Copyright Cases 1994—2014, RIAA End-User Litigation, BitTorrent Monetization and Copyright Trolling

The impact of the current wave of copyright trolling is pretty clear.

Copyright Cases Filed in U.S. District Courts (1994—2014)

 

9 out of 10 of ‘copyright trolling’ cases are about pornography

As you can see from the table, the number of john does per suit has declined because courts have been far more skeptical of mass-joinder, but that has just led to more suits being filed.

Screen Shot 2015-08-20 at 11.03.56 AM

 

One pornography company accounts for 80% of Copyright John Doe lawsuits filed in 2014 #CopyrightTrolling

In fact, the pornography producer, Malibu Media is such a prolific litigant that in 2014 it was the plaintiff in over 41.5% of all copyright suits nationwide. John Doe litigation is not a general response to Internet piracy; it is a niche entrepreneurial activity in and of itself.

[Edited at 4:17pm. The missing * for AF Holdings has been added]

 

Screen Shot 2015-08-20 at 4.15.40 PM

1/2 The patent litigation explosion is not exactly as it appears, compare suits filed to #defendants.

At first glance it looks like the annual volume of patent litigation in the United States doubled in the 16 years from 1994 until 2010. In the three years from 2010 to 2013 it doubled again.

US Patent Litigation Filings, 1994–2014

 

2/2 The patent litigation explosion is not exactly as it appears, compare suits filed to #defendants.

The real trend in patent litigation over the past two decades can be seen in the number of defendants filed against. The bar chart at the bottom of the next figure shows the same filing data as in the figure above. The scatter plot in the figure below shows the estimated number of defendants. Although it appears that the number of patent cases filed exploded after 2010, looking at the estimated number of defendants, it becomes clear that the period from 2010 to 2013 was more or less a continuation of the existing trend.

Patent Cases Filed and Estimated Number of Defendants, 1994—2014

There is something wrong with the ED of Texas. Average Number of Patent Defendants per Filing 1994—2014

This figure shows the estimated number of defendants per suit for the nine most popular federal districts from 1994 to 2014 and also for an aggregation of all other districts. The vertical dashed line is set to 2011 to mark the passage of the America Invents Act. It is starkly apparent that the trend toward more defendants is greatest in the Eastern District of Texas. The estimated number of defendants in Eastern District of Texas climbs steeply from 1.66 in 1994 to 12.37 in 2010 and then drops precipitously down to 1.99 in 2014

Average Number of Patent Defendants per Filing 1994—2014

 

What does all this mean? To me, it suggests that there was not exactly a “Troll Fueled Patent Litigation Explosion” between 2010 and 2012. Once you take into account the procedural changes brought into effect in 2011 by the AIA and focus on the number of defendants rather the the number of suits it seem that there was a significant troll fueled increase in the rate of patent litigation; it is just that this increase started earlier and proceeded more smoothly than the simple case filing data suggests. I refer to this revised narrative as the Troll Fueled Patent Litigation Inflation.

District Rankings, Copyright Compared to Trademark (2010-2014)

This figure focuses your attention on the outliers, but the general story is that copyright and trademark litigation are highly correlated at a district court level.

District Rankings, Copyright Compared to Trademark (2010-2014)

Regional Variation in Patent Litigation – Evidence of Forum Selling

The popularity of the Eastern District of Texas as a forum for patent litigation is a well-known phenomenon. However, the data and analysis presented in this study provides a new way of looking at the astonishing ascendancy of this district and the problem of form shopping in patent law more generally. The extent of forum shopping in patent law can be seen by comparing the geographic distribution of patent litigation to that of copyright and trademark. This figure illustrates District rank in terms of patent versus a combined copyright and trademark ranking for cases filed between 2010 and 2014.

District Rank in terms of Patent versus Copyright and Trademark Combined (2010-2014)

District Court Ranks for Patent Litigation 1994-2014

This is crazy!

My paper explains how we got here and summarizes the excellent work of Jonas Anderson in a new paper titled ‘Court Competition for Patent Cases‘, and Daniel Klerman and Greg Reilly in ‘Forum Selling’ each of which go into even more detail.

District Court Ranks for Patent Litigation 1994-2014

 

The first thing to note about this figure is that, but for the Eastern District of Texas and Delaware, the geographic distribution of patent litigation over the past two decades would look remarkably stable. For most of this period, the Central District of California was the most important venue for patent litigation over the last 21 years, followed by the Northern District of California. The Northern District of Illinois has also ranked consistently somewhere between second and sixth over the same period. This relative stability contrasts markedly with the steady gains made by Delaware and the remarkable ascendancy of the Eastern District of Texas between 1994 and 2014. Notice that, were it not for the Eastern District of Texas, the scale on Figure 11 would range from 10 to 1, rather than 50 to 1. Framed accordingly, the steady ascent of Delaware from 9th in 1994 to 2nd from 2011 to the present day would be more noteworthy. However, the rise of the Eastern District of Texas from literal obscurity—it only saw 8 patent cases in 1994—to preeminence over the same period dwarfs all other changes.

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New empirical study of IP litigation in US District Courts

IP Litigation in United States District Courts: 1994 to 2014

I have just posted a new empirical study of IP litigation in US District Courts to SSRN. At the moment it has a very boring title: “IP Litigation in United States District Courts: 1994 to 2014”, but I am open to suggestions. [download it here]

What is this article about?

The article undertakes a broad-based empirical review of Intellectual Property (IP) litigation in United States federal district courts from 1994 to 2014.

Why would anyone want to read it?

Unlike the prior literature, this study analyzes federal copyright, patent and trademark litigation trends as a unified whole. It undertakes a systematic analysis of more than 190,000 individual case filings and examines the subject matter, geographical and temporal variation within federal IP litigation over the last two decades.

What is the payoff?

Well, for a start, it is full of cool graphs, figures and tables!

But if you interested in substance, I think that the article makes a number of significant contributions to our understanding of IP litigation.

  • It analyzes time trends in copyright, patent and trademark litigation filings at the national level, but it does much more than simply count the number of cases; it explores the meaning behind those numbers and shows how in some cases the observable headline data can be positively misleading.
  • Exploring the changes in the distribution of IP litigation over time and their regional distribution leads to a number of significant insights (see below).
  • Just as importantly, the article  frames the context for more fine-grained empirical studies in the future. The results demonstrate the dangers of basing empirical conclusions on narrow slices of data from selected regions or selected time periods.

Notable findings

  • The rise of Internet filesharing has transformed copyright litigation in the United States.

More specifically, to the extent that the rate of copyright litigation has increased over the last two decades, that increase appears to be entirely attributable to lawsuits against anonymous Internet file sharers. These lawsuits largely took place in two distinct phases: the first phase largely consisted of lawsuits seeking to discourage illegal downloading; the second phase largely consists lawsuits seeking to monetize online infringement.

  • In relation to patent litigation, the apparent patent litigation explosion between 2010 and 2012 is something of a mirage

However there has been a sustained patent litigation inflation over the last two decades the extent of which has not been fully recognized until now. The reason why this steady inflation was mistaken for a sudden explosion was that the true extent of patent litigation was disguised by permissive joinder.

  • The data and analysis presented in this study provides a new way of looking at the astonishing ascendancy of this district and the problem of form shopping in patent law more generally.

 In relation to the geography of IP litigation, it appears that filings in copyright, patent and trademark litigation are generally highly correlated. The major exceptions to that correlation are driven by short term idiosyncratic events in copyright and trademark litigation—these are discussed in detail—and by the dumbfounding willingness of the Eastern district Texas to engage in forum selling to attract patent litigation. The popularity of the Eastern District of Texas as a forum for patent litigation is a well-known phenomenon.

 

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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.

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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)

 

 

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Copyright Trolling Data, Updated to June 30 2014

Copyright Trolls, Pornography, Statutory Damages…

[Revised at 5:43pm to account for an idiotic mistake in Excel – Just going to show that you should not use excel for even the most simple things]

The gifts that keep on giving.

I have updated my data on copyright trolling to include cases filed up to June 30, 2014. The  data is now available to anyone interested in replication. I have also revised my paper  Copyright Trolling, An Empirical Study (download the full paper from ssrn) with the following table that shows the phenomenal influence of Malibu Media.

Bottom line: Malibu Media accounted for 10% of all copyright suits filed in 2012, 27% in 2013 and 40% in the first half of 2014.

Copyright Suits Filed in U.S. District Courts – 2001 to June 30 2014

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The top section of the table shows how many cases were filed under the 820 code for Copyright in U.S. Federal District Courts in the years 2003 to 2014. The bottom section of the table translates the same information into percentages. The “Copyright – All” category includes all copyright cases. “Copyright –John Doe” includes all copyright cases where the defendant was a John Doe, without differentiating as to the underlying subject matter of the compliant. “Copyright – John Doe (Porn)” is a subset of the previous category and includes all cases identified as relating to pornography. The final category, “Malibu Media v. Doe(s)” includes every case filed by Malibu Media against one or more John Does.