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)

Loyola is hosting the Society for Economic Research on Copyright Issues Annual Meeting Today

The SERCI Annual Congress 2016 is being held at Loyola University Chicago School of Law, Chicago, 7-8th July and is co-hosted by University of Illinois College of Law.

The Society for Economic Research on Copyright Issues or SERCI was established in 2001 to provide a solid academic platform for the application of economic theory to copyright policy.

The complete program is posted online at http://www.serci.org/congress.htm.

My slides for my presentation on empirical studies of copyright litigation are available here.

Getty’s high-resolution competition law complaint against Google in the EU

Getty Images has filed a competition law complaint against Google

I have some initial thoughts as follows:

Image Search vs. High-Resolution Image Search

Google’s rationale for image search in general is that displaying the image is necessary for the user to assess how well the image corresponds to their search. This practice has been litigated at least twice in the U.S. in relation to thumbnail images and has easily passed the test of fair use.

Getty’s complaint is directed more specifically to the creation of high-resolution galleries. Although Google could make a similar argument that you need to see the image in high resolution to properly evaluate it, my view is that this argument is not nearly so compelling. The high resolution display is more expressive and less informational and the potential adverse effect on the copyright owner is greater for that reason and because, as Getty points out once consumers see an image on the Web, they aren’t likely to go to the source and look at it again. Getty argues that Google Images’ creation of high-res galleries of copyrighted content is thus impacting Getty’s own image licensing business; promoting piracy and copyright infringement; and bolstering Google’s monopoly over site traffic, engagement data and ad spend.

[Update: It is worth noting that other design changes may have reduced the flow on traffic from Google Image search see this 2013 Search Engine Land story]

Basically, Getty is worried that it is far too easy to right-click and copy image from Google Image Search and that as a result people won’t click down to Getty’s now site.

Illustration: Right-Click Options On Getty’s Own Press Release

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Is there a copyright case?

Getty is an American company complaining about another American company’s treatment of its copyrighted properties and so it is less than obvious that the complaint would be dealt with in the EU under antitrust law rather than in the US under copyright law. I would need to understand the technology behind the high resolution image display to say whether Getty has a strong case for copyright infringement under U.S. law, but I think there are clear differences between the fair use status of low-resolution thumbnails and the high resolution images available on Google image search today.

Is there a competition law case?

It seems to me that providing high resolution galleries makes it at least marginally less likely that users will click through to the original site. This in turn makes it marginally more likely that users will copy and paste without authorization. But I would note that Google is under no obligation to design its information services in a way that drives traffic to a particular website, or external websites in general. The design of Google image search would make a poor antitrust case in the US but it might go further in the EU because they take a broader view of “abuse of dominance”. The main problem I see is that even if Google image search increases the unauthorized use of images, it probably does not affect the market for licensed images. I think that people looking to license stock footage will go to stock photo sites, but this is an empirical question so we would need to look at how the market actually works.

 

Getty Images says that, when it first raised concerns about this with Google, it was told to accept Google’s presenting of images in high-res format or opt out of image search. Since its founding, Google has relied on the fact that people can opt out of search to address complaints about the way search is run. Participation in Google image search is voluntary – on an opt out basis – but that does not give Getty, or anyone else, the right to say exactly how they would like the search engine to run. In 2013 Google agreed with the FTC to make changes to the way it scrapes the content of rivals like Yelp. Sites like Yelp can now opt out of having their content scraped without opting out of search entirely. This is probably what Getty is looking for. But the issue for Getty is that it does not compete with Google they way Yelp does, so their case is not as strong.

It’s hard to say how might EU regulators will view Getty’s complaint. It depends on some facts that we don’t have access to at the moment — I have only seen the press release, not the complaint itself. It also depends on whether the EU case against Google has more to do with politics and protectionism than it does with the merits of competition law. If Google settles with the European commission, the settlement might include modifications to the way image search works and that would be a significant win for Getty. From Google’s point of view the worst case scenario is that it would be forced to make a change to image display within the EU. I don’t think Google will change image search in the US unless it thought Getty had a case under American copyright or antitrust law.

CREATIVE DIGITAL ARTS — Event Announcement

CREATIVE DIGITAL ARTS FREE PUBLIC EVENT

“CREATIVE DIGITAL ARTS: Copyrights and Pathways to Success” is a free public event that has organized by faculty at Loyola Law School Chicago, Northwestern Law School and Columbia College and a group of Chicago lawyers and business leaders. The event is on Tuesday, April 26, 2016 from 5-8pm at Columbia College.
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The CREATIVE DIGITAL ARTS event will feature photographers, digital strategists, intellectual property attorneys and law professors. Our speakers will address the essentials of copyright law for today’s artists and lessons from working artists and professionals in creative industries. The event will conclude with a pizza reception and a chance for one-on-one Q&A with the speakers.
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A link to the online registration and further details are included in the attached flyer (Creative Digital Arts (World IP Day)). Email WorldIPDayChicago@gmail.com with questions.

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.

Shrinking Linking? GS Media BV v Sanoma Media Netherlands

GS Media BV v Sanoma Media Netherlands BV and Others (Case C-160/15) CJEU

In 2014 the European Court of Justice took the opportunity not to break the Internet, but it left open the possibility that it might choose to do so in the future. That future has arrived.

Background

The CJEU addressed the legality of hyperlinking in 2014 in Svensson v. Retriever Sverige AB, Case C‑466/12 (13 February 2014). That case concerned a link to a newspaper article which was in itself was perfectly lawful. The article was in fact posted by the news publisher on its own website.

How could a link to a newspaper article on the newspaper’s own website amount to copyright infringement? The plaintiffs, journalist who wrote the articles and licensed them to the newspaper, argued that a link to a piece of content “communicates” that work “to the public.” Under European copyright law – see Article 3(1) of Directive 2001/29 – “communication to the public” is one of the exclusive rights that belongs to the rightsholder.

The CJEU held in Svensson that “for there to be an ‘act of communication’, it is sufficient … that a work is made available to a public in such a way that the persons forming that public may access it, irrespective of whether they avail themselves of that opportunity.” On that loose definition the provision of clickable links makes a work ‘available’ and, therefore, is an ‘act of communication’.

But not all communications are created equal. The court reasoned that the link was not a communication was not “to the public,” because the hyperlinks provided by Retriever Sverige did not communicate the articles to a “new public.” Specifically the court said that users who navigate to the original newspaper site via the link “must be deemed to be potential recipients of the initial communication”—i.e., the newspaper websites initial voluntary communication to the public— and, therefore, users who follow a link to an open site are “part of the public taken into account by the copyright holders when they authorised the initial communication.”

Svensson v. Retriever Sverige AB, Case C‑466/12 (13 February 2014) Para 26-28

 The public targeted by the initial communication consisted of all potential visitors to the site concerned, since, given that access to the works on that site was not subject to any restrictive measures, all Internet users could therefore have free access to them.

 In those circumstances, it must be held that, where all the users of another site to whom the works at issue have been communicated by means of a clickable link could access those works directly on the site on which they were initially communicated, without the involvement of the manager of that other site, the users of the site managed by the latter must be deemed to be potential recipients of the initial communication and, therefore, as being part of the public taken into account by the copyright holders when they authorised the initial communication.

Therefore, since there is no new public, the authorisation of the copyright holders is not required for a communication to the public such as that in the main proceedings.

In Svensson the European Court of Justice took the opportunity not to break the Internet, but it left open the possibility that it might choose to do so in the future. That future has arrived.

GS Media BV v Sanoma Media Netherlands BV and Others (Case C-160/15)

GS Media BV v Sanoma turns on some fairly simple facts. Playboy magazine in Europe had arranged to take photos of a popular Dutch TV personality. Before the photos appeared in the magazine (in December 2011) they were illegally leaked online. The defendant was not the leaker, it did not host the infringing material, it simply linked to that material. Thus the main question in the case is

GS Media BV v Sanoma Media Netherlands BV and Others (Case C-160/15)

Questions referred. 1(a)   If anyone other than the copyright holder refers by means of a hyperlink on a website controlled by him to a website which is managed by a third party and is accessible to the general internet public, on which the work has been made available without the consent of the rightholder, does that constitute a ‘communication to the public’ within the meaning of Article 3(1) of Directive 2001/29

Depending on the court’s decision, the legality of linking in the European Union may be under threat. It is not that all linking would be illegal or require permission, but a broad ruling in favor of the plaintiff in this case would mean that every link is potential source of copyright infringement unless you know for certain that the material you are linking to is authorized (by the copyright owner) for general public communication.

For additional comments and links, see Matt Schruers And Jakob Kucharczyk, “EU’S Highest Court To Weigh Whether Hyperlinking Will Remain Legal In Europe” Feb. 2, 2016 (Disruptive Competition Project (DisCo))

(4/4) 2015 Data on the geographic distribution of US IP litigation

2015 Update

This is the fourth and final post in a series 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 Courts2015 Update (January 5, 2016). Available at SSRN: http://ssrn.com/abstract=2711326.

The previous post discussed recent trends in patent litigation and the true nature of the patent litigation explosion. This post concludes with an update to the data concerning the geographic distribution of copyright, patent and trademark litigation in US district courts.

4. The geographic distribution of copyright, patent and trademark litigation

In  IP Litigation in United States District Courts: 1994 to 2014, I discussed at length the geographic distribution of copyright, patent and trademark litigation. I have updated the key figures and tables from that discussion below. Figure 6 (below) illustrates how the copyright, patent and trademark litigation rankings of selected districts have varied from 1994 to 2015.

Figure 6 Copyright, Patent and Trademark Litigation Rankings by District 1994—2014

Spagetti Districts Combined

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

The associated tables are not particularly easy to read in this format, but I have included them for completeness. They are available in text form in the pdf version of this Update, see Matthew Sag, IP Litigation in United States District Courts2015 Update (January 5, 2016)(http://ssrn.com/abstract=2711326).

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End of post

(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 Courts2015 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

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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

(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 Courts2015 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

Second Circuit clears the last hurdle for Google Book Search

The Second Circuit ruled today that, in its present form, the library digitization that Google began over ten years ago does not infringe US copyright law. This decision was entirely predictable given the court’s ruling in the related Hathitrust litigation, it is nonetheless momentous. Judge Leval’s cogent explanation of the law and the facts is an exemplary piece of legal writing. The decision is available here (AG v Google October 16, 2015) and merits careful reading.

This is great win for Google, but more importantly, it confirms a balanced approach to copyright law that will ultimately benefit authors, researchers, the reading public and the developers of new forms of information technology.

I have written several law review articles on the issues raised in this case — Orphan Works as Grist for the Data Mill, 27 Berkeley Technology Law Journal 2012, The Google Book Settlement and the Fair Use Counter-factual, and Copyright and Copy-Reliant Technology 103 Northwestern University Law Review 1607–1682 (2009). However, I believe that it was only when I teamed up with Matthew Jockers (a professor of English literature) and Jason Schultz (a law professor with deep experience in public interest litigation in addition to expertise in copyright) to write the amicus Brief Amicus Curiae of Digital Humanities and Law Scholars that my work truly became influential. The court did not cite the any amicus briefs in the case, but they were cited in the district court case and the related Hathitrust cases. Reading Judge Leval’s decision, I think it is clear that the excellent briefing by Google’s lawyers and the many public interest groups who contributed was helpful and influential.

This case is great victory for the public interest, it is also a great illustration of how a deep commitment to scholarship complements law school clinical programs and helps us serve the public interest.