France Agrees With Spain In Saying Modding Nintendo DS Is Not Illegal

P2P Pre-Settlement Letters In Germany May Have Been Illegal; Lawyer Who Reveals This Threatened With Lawsuit

from the extortion-or-not... dept

Mon, Dec 7th 2009 1:34am — Mike Masnick

There have been plenty of legal questions over the activities of a small group of companies in Europe, including law firm Davenport Lyons, ACS:Law, Logistep and Digiprotect among others -- who all seem to work together to purposely put files online that they have licensed, and then send threat letters to the owner of any IP address that connects to them. This leads to a fair number of totally bogus demands for people to pay up to avoid getting sued. Apparently, the business is quite profitable, even as no actual lawsuits have been filed.

Yet, now reader Dan alerts us to the news that, at least in Germany, the pre-settlement letters and relationships between these companies may be entirely illegal. This was discovered due to a recently leaked document -- the one that showed how profitable all this was -- which also noted that the relationships between the various companies were not based on any direct monetary exchange:

The document states that "the whole project is kind of a joint venture where no party charges the other party with any costs." The problem with such a set-up is that the pre-settlement offers are usually based on costs incurred by retaining a law office to pursue the claim. File sharers are asked to pay 450 bucks for a porn movie because it costs money to investigate their IP address and send them the cease and desist letter.

However, German law specifically states that these costs can't be based on the success of the claim. In other words: In order to invoice file sharers for lawyer fees, these fees have to occur and be paid by someone no matter whether a file sharer pays up or not. Invoicing someone for costs that haven't actually occurred could be seen as fraud.

Oops. After a German lawyer, Thomas Stadler, reviewed all this and posted his analysis saying that the efforts in Germany were clearly illegal under German law (Google translation from the original) , the German lawyer who had sent the original document (the leaked one, detailing how these operations worked), Udo Kornmeier sent him a cease-and-desist letter (again, Google translation from the original), demanding he take down his blog post that showed the whole operation was illegal. Apparently, lawyers who may be breaking the law in Germany don't like other lawyers exposing them...

Thank you for reading this Techdirt post. With so many things competing for everyone’s attention these days, we really appreciate you giving us your time. We work hard every day to put quality content out there for our community.

Techdirt is one of the few remaining truly independent media outlets. We do not have a giant corporation behind us, and we rely heavily on our community to support us, in an age when advertisers are increasingly uninterested in sponsoring small, independent sites — especially a site like ours that is unwilling to pull punches in its reporting and analysis.

While other websites have resorted to paywalls, registration requirements, and increasingly annoying/intrusive advertising, we have always kept Techdirt open and available to anyone. But in order to continue doing so, we need your support. We offer a variety of ways for our readers to support us, from direct donations to special subscriptions and cool merchandise — and every little bit helps. Thank you.

–The Techdirt Team

Filed Under: germany, legality, pre-settlement letters
Companies: acs:law, davenport lyons, digiprotect, logistep

17 Comments

If you liked this post, you may also be interested in...

Reader Comments

Subscribe: RSS

View by: Time | Thread

Anonymous Poster, 7 Dec 2009 @ 1:42am

Awwwww, look, somebody doesn't wanna take their spanking.
[ link to this | view in thread ]
Jaws4theRevenge, 7 Dec 2009 @ 1:47am

Let me get this straight...
His company is doing something that is probably illegal so he's threatening to sue another lawyer who exposed this. That doesn't seem like a smart move...
[ link to this | view in thread ]
more proof they are predators themselved, 7 Dec 2009 @ 2:00am

more proof they are predators themselves
lawyers nto knowing what the law was , YEA RIGHT
that should get them disabarred form practicing in that country at min and criminals charges for a breech of public trust at worst. Its liek a fireman knowing during an inspection that somethng has a real bad risk of causing a fire and he knowingly does nothing.

OR a police officer not doing his job
imagine if we all acted the way the copyright industry does OMG
look at greece cause thats were its heading folks
[ link to this | view in thread ]
Tor (profile), 7 Dec 2009 @ 2:04am

Streisand effect
Minimizing publicity doesn't seem to be their strong side.
[ link to this | view in thread ]
martin, 7 Dec 2009 @ 4:55am

He didn't send a cease-and-desist for posting the stuff online, but apparently for saying that this might be fraud.

Demanding Money from a defendant is only valid in Germany when the costs will be paid by the plaintiff. The company disputes therefore that they demanded money, but instead say they just told the defendant that in a trial, the amount of money would have to be paid.

Sources: (in german, babelfish yourselves :))
http://www.lawblog.de/index.php/archives/2009/11/26/gute-zeichen/
http://www.heise.de/tp/r4/ar tikel/31/31610/1.html
[ link to this | view in thread ]
Vinny, 7 Dec 2009 @ 5:16am

Re:
Say ... nice store you have here.
Would be a shame if anything were to happen to it. I could sell you an insurance policy.
[ link to this | view in thread ]
Reverend Dak (profile), 7 Dec 2009 @ 12:36pm

Sounds like Blackmail to me, isn't _that_ illegal?
[ link to this | view in thread ]
Matt (profile), 7 Dec 2009 @ 12:59pm

Hrm...
My German is rusty, and was never very good. But it is customary for lawyers to advise potential adversaries that their clients are prepared to sue, anticipate doing so, and anticipate that there will be costs associated with doing so that will be born by the other side. It is typical to also state that they would be willing to settle for the costs of such a suit and a cessation of the objectionable conduct. That is decidedly different from saying "we have already incurred $x in attorney fees that you will have to pay if we go to court."

I can't tell which of these is going on, here. If the former, then the blog post was probably libelous. If the latter, then the C&D compounds the problem.
[ link to this | view in thread ]
The Mad Hatter (profile), 7 Dec 2009 @ 9:47pm

Hehe - guess they've got publicity now!
I agree with Tor - the Streisand effect will do more to them now, than if they'd just ignored the blog posting. With this much publicity I suspect that their cash cow is going to turn into a dead skunk.
[ link to this | view in thread ]
Sue (profile), 8 Dec 2009 @ 4:58am

Good to read this - I have had 2 letters and sent them back 2 of my own. Heard nothing for 3 months now. Keep hoping ACS:Law will leave me alone being innocent of any P2P filesharing; I have never heard of Scooter (oops) being a menatalist radiohead obsessive and they don't care who downloads their music!
[ link to this | view in thread ]
KK, 5 Oct 2010 @ 8:32am

Re: Lawyer scams
Hi,

I just read your post from last year regarding the 2 letters you for for illegal file sharing.

I just received 3 letters and am unsure what to do. Can you tell me what you wrote in your letters and whether the law firms responded to you?

Thank you,
Kristina
[ link to this | view in thread ]
Josh, 14 Oct 2010 @ 9:09am

hello
Buy Viagra I think you've enough talent to post this.
[ link to this | view in thread ]
adult services, 19 Oct 2010 @ 2:45pm

Wow that is some interesting P2P news. Thanks for posting it.
[ link to this | view in thread ]
getting laid, 29 Nov 2010 @ 2:08pm

Great post. Thanks for keeping us all updated.
[ link to this | view in thread ]
fap turbo, 9 Dec 2010 @ 4:29am

wow great i have read many articles about this topic and everytime i learn something new i dont think it will ever stop always new info , Thanks for all of your hard work!
[ link to this | view in thread ]
Flood damage Butler PA, 10 Feb 2012 @ 3:06am

I never hear this guy but I really wonder why he dress like that, it's like a some kind of religion or something else...
[ link to this | view in thread ]
Board ups Joliet IL, 29 Mar 2012 @ 8:01pm

The ratings firm, which raised its issuer default rating by a notch to A-minus, also said the rating considers Home Depot's leading position in the home improvement retail sector and the challenges posed by the difficult housing market and high unemployment.
[ link to this | view in thread ]