European Rights Holders Drastically Increase Borderline Extortion Pre-Settlement Letters

from the this-won't-last dept

We've covered in great detail how DigiProtect purposely seeds files of content from its copyright holding partners, in order to send anyone who downloads the content a "pre-settlement" letter that seems not very different from the traditional extortion "protection" rackets ("pay us, or we'll sue.") Those who don't pay are actually discovering that the pre-settlement letters may be handed over to collections agencies despite no agreement to pay nor a court order requiring payment. It turns out this shakedown business is quite profitable but of very questionable legality.

A new report in Germany is suggesting that DigiProtect and a few similar firms in Europe may have sent out 450,000 such letters last year. Unfortunately, NewTeeVee, in reporting on this, claims that each of these are "P2P lawsuits," but that's not true (and a large part of the problem). Nearly every one of these letters are sent without any corresponding lawsuit. The whole idea is to shake people down by threatening a lawsuit, but never having to go through the expense of filing one (or the trouble of actually proving the infringement -- which is a big deal since many, many, many bogus letters have been generated, snaring many innocent users). But, with little in the way of penalties for such bogus pre-settlement letters, there's simply no reason not to keep sending them. Apparently, enough people just pay up to make this an incredibly profitable business.

However, with the massive increase in such letters, and increasing scrutiny about the whole practice, you have to wonder when European governments will start to crack down on this behavior. It's difficult to see anyone defending these actions with a straight face. They clearly have nothing to do with preventing file sharing or unauthorized use of content, but are very much about just getting people to pay up under the threat of a lawsuit.

Filed Under: collections, europe, pre-settlement
Companies: acs:law, davenport lyons, digiprotect, logistep

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

from the extortion-or-not... dept

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...

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