UK Court Wants To Limit Copyright Trolling... But Not Enough To Stop It Entirely

from the some-good-some-bad dept

Wed, Mar 28th 2012 2:43am — Mike Masnick

Earlier this week there was a long and detailed ruling out of the UK's High Court of Justice, looking into the practice of copyright trolling (suing a bunch of alleged infringers based mainly on IP address info, where the real purpose is to send threatening letters to get people to pay up) and finding it questionable -- but still agreeing to force an ISP to hand over some user account information. These kinds of lawsuits certainly feel like a form of legalized extortion, and, over in the UK, ACS:Law and Davenport Lyons each ran into legal troubles for the scheme. A perfect ruling here could have completely slapped down the practice, but instead, it appears the court went for a more nuanced route.

The judge here tries to slice a ruling down the middle -- rejecting large parts of this lawsuit for effectively trying to create a "court sanctioned... sale of the Intended Defendants' privacy and data protection rights to the highest bidder," which the court finds questionable. It also goes into a discussion about copyright trolling, or, as it calls it, "speculative invoicing."

However, at the same time, the judge does require ISP giant O2 to hand over data on a bunch of people accused of file sharing to Golden Eye Ltd -- but does so with some caveats. While there were many associated cases that all got rejected, the court did pick one, Ben Dover Productions, which it allows to move forward with O2 being required to release a lot of customer data. However, apparently somewhat fearful that such info would be abused to send out shakedown letters, the court wants to "supervise" any "pre-action correspondence" that the companies send. After admitting that this is not "normal," the court says that the situations with ACS:Law and MediaCAT show "why this is an appropriate course to take."

the court needs to consider the impact of the letter of claim upon ordinary consumers who may not have access to specialised legal advice, who may be innocent of what is alleged against them and who may be embarrassed and/or distressed by being alleged to have been involved in filesharing involving pornography.

From there, the court actually goes on to critique the "draft letter" -- noting that the original letter Golden Eye wants to send is "objectionable in a number of respects," specifically in misleading recipients of the nature of the threat and their options. It also attacks the specific demand for £700, noting that the amount is "unsupportable." The reasoning here is quite interesting, with the final reason being the most telling. The judge slams Golden Eye for admitting that it chose £700 because "only a small proportion" of people they send the letter to will actually pay up. As the court notes:

This comes quite close to an admission that the figure of £700 has been selected so as to maximise the revenue obtained from the letters of claim, rather than as a realistic estimate of the damages recoverable by the relevant Claimant from each Intended Defendant.

The judge also points out that each defendant may be a different situation, and some may not have infringed at all. Having a blanket settlement fee simply is not appropriate, and clearly is not an accurate representation of damages. Additionally, the court notes numerous other problems with the nature of the shakedown letter:

First, the reference to the Code of Practice is inappropriate both for the reasons given by HHJ Birss QC and because it was not designed for letters to ordinary consumers.

Secondly, the draft letter does not make it clear that the fact that an order for disclosure has been made does not mean that the court has considered the merits of allegation of infringement against the Intended Defendant.

Thirdly, the draft letter asserts under the heading "Infringing Acts" that the Intended Defendant is liable for infringement. Although the last paragraph under that heading implicitly acknowledges the possibility that the Intended Defendant may not be the person who was responsible for the infringing acts, this acknowledgement is not sufficiently explicit. Furthermore, the reference under the heading "Proposed Settlement" to "inaction, by permitting a third party to use your internet connection" undermines the effect of the implicit acknowledgement. As HHJ Birss QC has explained, nothing less than authorisation suffices for infringement, at least in the context of a claim for damages.

Fourthly, the second paragraph under the heading "Legal Consequences" is too one-sided in that it sets out the consequences to the Intended Defendant of a successful claim without acknowledging the consequences to the relevant Claimant of an unsuccessful one. Fifthly, the reference to "other intellectual property" under the heading "Proposed Settlement" is unjustified. There is no evidence that any other intellectual property rights of the Claimants have been infringed.

Sixthly, I consider that requiring a response within 14 days is unreasonable given that the Intended Defendants are consumers and that there is no urgency in the matter. 28 days would be reasonable.

Lastly, the threat to make "an application to your ISP to slow down or terminate your internet connection" is unjustified. Counsel for the Claimants accepted that the word "application" was inappropriate, and said that "request" would better convey what was intended. I do not agree that a threat even of that nature is justified in a letter of this kind, however.

All in all, it's good to see the court recognize how such copyright trolling can and is abused, and try to limit that. It's too bad that it still comes down on the side of having O2 give up a bunch of user information, still knowing that this is likely how it's going to be used. However, at least it's trying to minimize the abuse.

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Filed Under: copyright, speculative invoicing, trolling, uk
Companies: acs:law, ben dover productions, golden eye, o2

18 Comments

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Capitalist Lion Tamer (profile), 28 Mar 2012 @ 3:16am

As a rule...
I try not to let my counterpoints run up to the point where I have to use the word "fifthly" as I'm pretty sure that I'd mispronounce it as "filthy" when reading it out loud.
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- Anonymous Coward, 28 Mar 2012 @ 1:38pm
  
  Re: As a rule...
  It's 'Ben Dover Productions.' I think 'filthy' might be appropriate. A quick Google confirms that, as it's a 'gonzo porn company.'
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Capitalist Lion Tamer (profile), 28 Mar 2012 @ 3:21am

It is nice to see a copyright speculator admit that it chose a certain dollar amount solely to maximize income, rather than it having any bearing on real life damages whatsoever. It's pretty much Golden Eye, Ltd. blatantly admitting that, yes, it's an extortion scheme, but it's not a very good extortion scheme.
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Anonymous Coward, 28 Mar 2012 @ 4:12am

when an IP address identifies an internet account holder only, not a person that was downloading at the supposed time of an infringement, i still dont see what real proof there is. it isn't even law to have a wifi connection secured. i would have thought that the judge would have insisted that the methods used to collect information on a supposed infringer were not only checked but also 100% accurate. how that could be done without a picture of someone sitting at the computer at the time in question, i dont know.
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- Anonymous Coward, 28 Mar 2012 @ 5:58am
  
  Re:
  Don't give them ideas.
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Rikuo (profile), 28 Mar 2012 @ 4:12am

Just why is it that the courts don't bother looking at how ironclad the evidence gathering (IP addresses) is? That should be the first and most important thing to be looked at first, not whether or not you dotted your t's and crossed your i's. After all, you're telling an ISP to hand over private details of its customers, you better make sure that there's at least some merit in the claims.
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- Andrew (profile), 28 Mar 2012 @ 4:40am
  
  Re:
  Consumer Focus supplied an expert report on this subject. I haven't read it, nor the claimants' response to it, but it is discussed quite extensively in the judgement. That said, it is unfortunate that the court effectively admits ignorance and punts on the "who did what" question:
  
  Dr Clayton's expert report provides a lucid explanation of the technical issues surrounding traceability, that is to say, determining "who did that?" on the internet. Mr Torabi took issue via Mr Becker's second statement with a number of points of detail in Dr Clayton's report. Clearly I cannot resolve those disputes.
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- Duke (profile), 28 Mar 2012 @ 4:48am
  
  Evidence
  Reading the judgment, I get the impression the judge really tried to get details of the evidence-gathering from the claimants, and succeeded to some extent. The problem is that the claimant said "this works and is good, we have a witness saying so" (although one who admitted he didn't know how the tech worked), and Consumer Focus (who were "defending", see below) had another who said it probably didn't work.
  
  The judge therefore ruled that the evidence might be suitable. However, as this wasn't a trial, he wasn't in a position to rule on whether the evidence is actually any good. It's a fairly complex procedural issue, but this was simply an application for a pre-trial order to get information needed to bring a full claim.
  
  The really depressing thing about this judgment is that it nearly didn't happen. The claim first went before Chief Master Winegarten (who issued many of these orders before), and he seems to have decided (probably due to all the criticism he received last time around) to refer it to a full judge (Masters are sort of like deputy judges). Arnold J (the current main copyright judge in the UK), noting that O2 wasn't remotely interested in fighting the application provided it got paid, invited Consumer Focus to intervene if they wanted to (possibly due to having met their copyright-lobbyist person at a few events and knowing they're interested in this sort of thing).
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Andrew (profile), 28 Mar 2012 @ 4:32am

�700
It's good that the court rejected what appears to be a claim of contributory liability: that the �700 should not only cover losses due to the defendants' infringement, but also the losses due to the infringement of others (which should be assessed on a royalty basis). Arnold J ruled that liability should be based on the actions of each defendant individually: "Claimants have no idea about the scale of the infringements committed by each infringer".

The ruling also suggests that additional damages may not be awarded if the case went to court (cf., of course, US statutory damages), limiting any award to �700 (claimants) or �70 (Consumer Focus), though the legal costs may not be fun.
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DannyB (profile), 28 Mar 2012 @ 5:53am

Legalized extortion
> These kinds of lawsuits certainly feel like
> a form of legalized extortion

That's because they are.

Getting falsely accused sure feels like getting falsely accused.

Having your perfectly legal tools taken away and made illegal because of others' misuse sure feels like my freedom is being infringed. (I'm not talking about BitTorrent, but rather about the crowbar in my trunk.)
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Anonymous Coward, 28 Mar 2012 @ 7:01am

Still, things could be worse: it could be Ben, Dover & Tai-Kit as the plaintiffs on behalf of Golden Eye.
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Anonymous Coward, 28 Mar 2012 @ 8:13am

Seriously?
The ONE company the court TOOK SERIOUSLY was named "Ben Dover Productions"? If THAT isn't irony, I don't know what is.
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- Anonymous Coward, 28 Mar 2012 @ 9:11am
  
  Re: Seriously?
  Who was the judge? Bart Simpson?
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Anonymous Coward, 28 Mar 2012 @ 8:17am

�700
I'm having a hard time getting over Golden Eye Ltd selecting a number with two 0's and a 7 as their requested payment.
Maybe there's another level of trolling going on here.
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Monkey with Attitude, 28 Mar 2012 @ 8:53am

Hmmm
"However, at least it's trying to minimize the abuse."

will that work for this too:
"we only tazed them a litte?" - NYPD
"we only abused their rights a little, its ok right?" - Congress
"this law is only a little abusive, its ok right?" - Supreme Court
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Dr Evil, 28 Mar 2012 @ 10:21am

the court still has work to do
perhaps they (the court) should also have forced the James-Bond-movie-name-pirates to include language in the extortion letter indicating the actual number of times the company has actually went to court in similar trollings, that the falsely accused DO have rights to countersue for a variety of reasons if actually sued, and that the damages recoverable by plaintiffs are almost unlimited if the information used by the said pirates is leaked out in any way, shape or form before a formal suit is filed. etc. I don't believe it was the courts job to tell the pirates how to make a better demand letter, they should have rejected it without comment, and forced GE to re-file it. (btw, kudos to the person noting the 007 link to 700 amount. :-) )
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Andy J, 30 Mar 2012 @ 12:40pm

Groundless Threats
It is worth noting that under UK IP law there are penalties for anyone who makes groundless threats in allegations of infringement of Design Right (somewhat similar to the US Utility Patent), Trade Marks and Patents, but not in Copyright cases. If there was a similar clause in any future copyright legislation, maybe some of these speculative letters would be toned down or indeed ceased if the recipient had a statutory right to counter-sue where clearly unjustified statements have been made.
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Dr Evil, 14 May 2012 @ 7:49am

another note
perhaps a better way to go:
force the 'copyright holder' to file suit (pay the court fees) against each IP address, then let them get the information from the ISP as part of their discovery. If they choose to dismiss each lawsuit later, fine. If they choose to pursue, they will already have filed suit. win win. then when they have to drop the suit, or lose the suit because of the IP does not equal person argument, another win.

question: if my internet service is paid for by a corporation, can the corporation be sued for infringement?
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