Complaints To FTC About Rightscorp Detail Robocalls, Harassment And Baseless Threats To Sever Internet Connections

from the you-know,-all-those-things-everyone's-suing-about dept

If these FTC complaints are to be believed, Rightscorp is doing pretty much everything Morgan Pietz's class action lawsuit has accused it of.

Among other wrongful conduct: Rightscorp has engaged in telephone harassment and abuse (15 U.S.C. § 1692d); made various false and misleading representations (15 U.S.C. § 1692e); engaged in unfair collections practices (15 U.S.C. § 1692f); failed to provide validation and required notices relating to the debts (15 U.S.C. § 1692g); and furnished emails and letters knowing they would create false beliefs on the parts of consumers that their Internet Service Providers (“ISPs”) were participating in the attempt to collect on the purported debts when in fact the ISPs were not participating (15 U.S.C. § 1692f).

Robocalls, baseless threats, seemingly endless harassment, constantly fluctuating "settlement offers"... it's all included in the FTC complaints. (And turned over with extreme expeditiousness by the FTC -- seven days from the point my FOIA request was received.) [Spreadsheet link. Scroll all the way to the right to see complaint details. Also note there are two tabs of complaints.]

Consumer had his internet turned off and he called his service provider and they told him that Digital Rights Corp sent them a warning telling him that they would shut off his internet if he didn’t contact them and he did and they told him that they had 34 counts against him of uploading a children’s song and they told him that it could be $150 thousand dollars per each count and they have admitted that he didn’t do it but he has to pay it because his service was used to do this and he has to pay teh consumer was told if he gave them $500 they would make everything go away. Advised Consumer to call the State Attorney General.

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Consumer is receiving repeated phone calls from a company claiming to be from Rights Corp and the company claims that the consumer has illegally downloaded music and the company is trying to collect money for the illegal downloads. Consumer states that the company states that the consumer must pay immediately and they tried to obtain a cc number. Consumer states that the company claims that if the consumer does not pay over the phone the amount of the money owed would be mulitplied by 100% and that they would terminate the consumer's internet services.

Every settlement offer looks "reasonable" when compared to maximum statutory infringement damages -- something Rightscorp has no intention of pursuing. As for the claim that the alleged infringer's internet connection could be cut off? It's mostly false. Rightscorp has managed to push around a few small ISPs using its untested theory that the DMCA requires service providers to boot repeat infringers. But at this point, any internet disconnection is a purely voluntary action on the part of the ISP. There's no legal basis for its claims and no court decision that backs its assertions up. And, most importantly, Rightscorp can't actually cut off anyone's internet connection -- at least not on its own. But that doesn't stop it from insinuating that it possesses this power.

How can you tell Rightscorp has far less power than it pretends to have? By how swiftly it resorts to bargaining.

The Digital Rights Corp. has charged us with 216 illegal down loads. They said that 153 sucessfully down loaded. They first wanted us to pay 3,000 dollars. Now everytime we speak to them the amount changes from 3,000, 560.00, 500.00, and the last amount was 390.00.

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Rightscorp, Inc sent us a letter about 6-24-2014 saying we owe $4,060 for copyright infringments. We called to inquire on this accusation. They stated pay $460 by ~6pm (that day ) or pay the full amount. They also pressed for a credit card number. To this day they have been calling about 3x's a week. (They threaten to cut off our internnet service.)

And how can you tell Rightscorp is nothing more than a troll? Because if you feed it, it comes back for more.

Forwarded by the State of Alabama Office of the Attorney General… Consumer responded to first email and paid $20 for the fee requested. She received 27 more emails each requesting $20… Consumer received another email threatening to shut down her internet service demanding settlement. Consumer states she is now getting phone calls from this company.

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Digital Rights started annoying robot calls after I made a $20 payment on behalf of a third party to settle an alleged copyright issue. They decided I "owed" them a lot more, $280. I demanded no further calls...They insisted they can call me as much as they want by any means even though I was not actually involved directly with the internet account.(gift,not at my home) They sent a threatening letter and emails, too...

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I received notification from my internet provider that a report had been made of illegally download. I contacted Charter who offer no assistance they were "only relaying a message" I then contacted the RIGHTSCORP. I was hesitant to give them information but was coerced into giving them our name and phone number. Initially they said they wanted 20.00 or else they would sue us for 150,000.00 dollars. I told them I had checked with the entire family and they did not believe they had downloaded these songs. She , Cecilee, called back and stated the charges were now 180.00.

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I made a single payment on behalf of my son in law to clear a digital rights claim as I gave him a year internet as a gift. Now they won't stop calling me trying to get more money for more "claims."

Rightscorp apparently deploys two tactics with regularity, both unpleasant: threats and harassment.

Rightscorp sent me a letter for copyright infringement so I called the number on the paper they sent and they said that it carries a fine of $150,000 but if I gave them $20 they would settle it. Now they call me every Monday, Wednesday & Friday and are continuing to send me the same letter.

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Rights Corp is claiming that I owe them money because they served my internet service provider with a subpoena for my information. They call 3 or 4 times per day in addition to text messaging…

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This company has been calling my home 3-4 times a day for months, originally threatening me to pay them thousands of dollars or they would sue us. Since the initial call with them, which I refused to comply with, they have called continually, everyday and on weekends, always with a recorded message that I never pick up...

And the company's "collection agents" appear to be disguising the origin of the calls.

False claims of copyright infringement from well-known copyright "troll". Company is California based, but call came from Tennessee.

---

...They are trying to intimidate me into giving them money for nothing by harassing me over the telephone. Most of the telephone calls are not live people, but an automated message that leaves me a voice mail from several different numbers with several different area codes..

I've reached out to Rightscorp to see if it has any comment on the FTC complaints. I'm not holding my breath for an answer, considering much of what's alleged in these complaints is the subject of two class action suits. But what's detailed here is nothing more than pure copyright trolling: baseless threats, harassment, and settlement offers. We've seen this deployed by a fair number of supposed rights enforcement entities and most of those are now languishing. Rightscorp isn't looking too healthy itself.

And the most amazing part is that -- despite two lawsuits centering on this abusive behavior -- it hasn't reined in its collection efforts. Many of the complaints filed with the FTC appeared after Morgan Pietz filed his lawsuit in November of 2014, with the latest listed being March 24, 2015. Apparently, it's just going to keep up its questionable tactics until it's forced to stop, even though there's little indication they've resulted in anything more than a few scattered, small settlements.

Filed Under: copyright, copyright trolling, ftc, harassment, robocalls, shakedown, threats
Companies: rightscorp

Warner Bros. And Rightscorp Argue That Copyright Trolling Is Protected By The First Amendment

from the that's-one-way-to-look-at-it dept

Is the process of copyright trolling protected by the First Amendment? That appears to be the claim that both Rightscorp and Warner Bros. are making in response to a class action lawsuit filed against them.

Back in November, we wrote about a class action lawsuit filed against Rightscorp, by lawyer Morgan Pietz. Rightscorp, of course, is a company trying (and mostly failing) to make copyright trolling slightly more respectable by shaking down accused infringers (based on a questionable methodology) for somewhat lower amounts than traditional copyright trolls. Morgan Pietz, if you don't know, is one of the key lawyers who helped take down infamous copyright troll Prenda Law -- so his involvement was noteworthy.

Since November, when the lawsuit was initially filed, there's been some back and forth in the lawsuit (and even the main named plaintiff has changed). In the first amended complaint [pdf] that was filed last month with new lead plaintiff, John Blaha, the claims about violations of the Fair Debt Collection Practices Act have been removed, to focus mainly on violations of the Telephone Consumer Protection Act and abuse of process. The TCPA bans autodialing telemarketers, and Pietz is trying to argue that Rightscorp's autodialers fall under this law. The abuse of process claims focus on how Rightscorp got access to various people to shakedown, using DMCA 512(h) subpoenas. This is the process -- which courts have clearly rejected -- by which copyright trolls think they can issue subpoenas to ISPs about potential infringers, without first filing a lawsuit. Every few years, copyright trolls think they've newly discovered this loophole even though the courts have rejected it. The lawsuit has also added key Rightscorp clients, Warner Bros. and BMG, as defendants as well.

Last week, Rightscorp responded [pdf] by arguing that the case should be dismissed under California's anti-SLAPP law. Now, we've been huge supporters of California's anti-SLAPP law and believe that we need a similar federal anti-SLAPP law. Anti-SLAPP laws allow defendants to quickly get lawsuits dismissed when it's clear those lawsuits are nothing more than attempts to silence their public speech (SLAPP standing for "Strategic Lawsuit Against Public Participation.") However, I'm hard pressed to see how robocalling someone demanding they pay up or get sued is "public participation" in any way. Here's how Rightscorp makes its argument however:

The abuse of process claim should be dismissed under California’s anti-SLAPP statute, as Plaintiff’s attempt to recover damages from Defendants and enjoin them from making further subpoena applications impermissibly impairs Defendants’ free speech and petitioning rights. The imposition of the remedies Plaintiff seeks is prohibited as it would unduly burden Defendants’ efforts to invoke legal process to identify copyright violators who illegally distribute Rightscorp’s clients’ protected works. As the California courts have consistently held, claims attacking a defendant’s efforts to invoke the legal system are subject to being automatically stricken under anti-SLAPP.

But that's not true at all. It's hard to see how anyone can argue that merely filing a subpoena for information is protected free speech. There are plenty of situations where courts have ruled that such subpoenas are inappropriate -- including (as mentioned above) in nearly identical cases. It's not a free speech issue at all. But having gone down this path, Warner Bros. (Rightscorp's main client) has decided to chime in as well [pdf].

Specifically, Plaintiff’s claim impermissibly challenges Defendant’s petitioning conduct, which is protected under California’s anti-SLAPP statute.

While I'm not convinced that Pietz's class action will survive (for a variety of reasons), the idea that the lawsuit itself should be barred under California's anti-SLAPP law seems ridiculous. The lawsuit is not seeking to block Rightscorp's First Amendment rights. It's seeking to stop robocalls and illegal subpoenas that are used to allow Rightscorp to shakedown people for settlement money by bombarding them with demands to pay up to avoid being sued.

Filed Under: anti-slapp, california, class action, copyright, copyright trolling, dmca, first amendment, morgan pietz, process violations, robocalling, subpoena
Companies: rightscorp, warner bros.

Rightscorp Discovering That Harassing Broadband Users Isn't The Cash Cow It Thought It Would Be

from the and-how-is-that-working-out-for-you? dept

For a few years now, Digital Rights Corp (aka Rightscorp) has been trying to turn copyright infringement notices into a revenue stream, sending accused pirates letters telling them they can avoid court battles if they just pay a $20 fee (per infringement). The idea was to engage in a "friendlier" form of copyright trolling where the demands were so "reasonable," most users would quickly settle up. But like so many copyright trolls before it, Rightscorp's behavior has been sloppy at best, with the company often trying to navigate dubious DMCA legal loopholes in the pursuit of cash.

Apparently, the company's methods aren't just legally dubious, they're unsurprisingly unprofitable. We'd already noted a few times how the company's shady tactics -- and the lawsuits (pdf) in response to those tactics, which include violating federal robocalling laws -- were putting the company on unsound financial footing. Now, new SEC filings confirm as much.

According to 10-K documents filed with the SEC earlier this month, the total loss from Rightscorp operations for 2014 was $3,398,873, with revenues of just $930,729 for the year. "As of December 31, 2014, our accumulated deficit was approximately $7,093,377," states the filing, adding that the company lacks the revenue to allow it to "continue as a going concern." Rightscorp stock price, meanwhile, similarly isn't much to write home about. Not so viable for a company that on a recent earnings call declared itself "one of the only viable solutions to the multi-billion dollar problem of peer-to-peer piracy."

There's not much going on there if you're an investor looking for growth. The IP section of the filing notes that Rightscorp has 7 US patent applications on file. Next to most of the patent applications, Rightscorp itself says "this application currently stands rejected by the USPTO," "the rejection is a Final Rejection," or "this provisional application is now expired." Similarly, Ars Technica notes that while Rightscorp continues to expand its ISP relationships from 50 to 233 cooperating ISPs, most of those ISPs are tiny and its overall broadband user coverage is small:

"However, that's not a very meaningful increase. While Rightscorp may have gone from 50 to 233 ISPs, most of those are very small providers, with at least some of them being individual universities who forward notices to students. The amount of the US population who have Internet service providers that cooperate with Rightscorp remains stable at about 15 percent."

And while many small ISPs play along, a number of mid-sized ISPs like Grande Communications and Windstream have increasingly been standing up to the company, lamenting it "abuses the subpoena power of the federal courts" in California and elsewhere. Meanwhile, most of Rightscorp's already limited finances are coming from two companies: Warner Bros. and BMG, which accounted for 76% and 13% of the company's sales last year, respectively. In the end, maybe harassing broadband users isn't quite the cash cow Rightscorp expected and the company may want to explore some additional revenue generation options. Perhaps used car sales or home theater installations?

Filed Under: copyright, copyright trolling, shakedown
Companies: rightscorp

Rightscorp Facing Another Lawsuit For Harassing Alleged Infringers

from the Omnishambles:-est.-2013 dept

Rightscorp -- another company with designs on revolutionizing the pursuit of infringers -- has a murky past, a very troubled present, and almost no future. For the second time in three months, it's facing a lawsuit over its shakedown tactics. Rightscorp tries to present itself as the good guy of the anti-piracy world, "allowing" alleged infringers to buy their way back into the company's good graces for the low, low price of $20 per accusation. It seems like quite a bargain when coupled with the company's Standard Threat Letter, which never fails to mention the $150,000 statutory limit when addressing potential shakedown victims.

So far, its efforts have met with limited success. (Putting it kindly.) Its stock price -- which occasionally threatened to top the gilded $1/share limit now hovers at around $0.09/share.

Its perky press releases can't hide the fact that a trickling revenue stream backed by shady tactics is never going to make millionaires of its shareholders.

The lawsuit filed last November accuses Rightscorp of violating damn near everything under the sun in its quest to spin alleged infringers into gold.

The complaint seeks class damages against Rightscorp for violations of the Telephone Consumer Protection Act, the Fair Debt Collection Practices Act, California’s Rosenthal Act, and Abuse of Process. The complaint alleges unlawful robo-calls, as well as other unfair debt collection practices, and that Rightscorp has abused the legal process by issuing DMCA Section 512(h) subpoenas that it knew were objectively baseless.

If someone can take Rightscorp down for its shakedown tactics, it's probably Morgan Pietz, who is armed with a wealth of practical Prenda experience. This latest suit doesn't have Pietz, but it does have another list of accusations, most of which revolve around Rightscorp's seeming indifference to federal laws governing telecommunications.

First, in the rundown of the events leading to this class action lawsuit, attorney Sergei Lemberg points to the fact that Rightscorp's questionable tactics can be traced back to information obtained with an equally questionable subpoena. (Internal citations omitted.)

The legality of Rightscorp’s subpoenas is highly questionable. Under 17 U.S.C. § 512(h), a subpoena may not be issued to an ISP which does not store information on its system but rather acts as a mere “conduit” for electronic communications. Rightscorp willfully disregards this requirement, issuing such subpoenas to conduit ISPs and storage ISPs alike. In In re Subpoena Issued to Grande Commc’ns Networks LLC, 1:14-mc-00848, Doc. No. 1 (W.D. Tex. Sept. 5, 2014), the plaintiffs moved to quash a subpoena issued by Rightscorp to its internet service provider. Rather than defend its subpoena’s legality, Rightscorp packed up its bags and withdrew its subpoena the very next day. The case was dismissed in result.

From there, the filing moves on to what Rightscorp did with its questionably-obtained subscriber data, including the deployment of unsolicited phone calls, text messages and threatening emails. Here's one email one plaintiff received.

Dear Melissa Brown,

Attached is the evidence of 26 copyright infringements that have occurred as a direct result of a file sharing program operating under your internet connection: [REDACTED]. I have also included all 26 e-mail notifications that were automatically sent to your internet service provider regarding federal law being broken under their services. Any further questions or concerns you may contact my direct line at (310) 405- 0102. I do ask that you refrain from derogatory language when speaking with a DMCA Agents, as the transactions are kept on file.

Thank you for your cooperation,
Marina

The last sentence of this email stands out, as it could add to the numerous legal woes currently being faced by Rightscorp. As was pointed out by one of Fight Copyright Troll's Twitter followers, this wording suggests Rightscorp records and stores all incoming calls in apparent violation of California law.

California is a so-called two-party state, and the recording of a phone conversation without consent may result in penalties.

That point isn't mentioned in the lawsuit, but plenty of other violations are. The complaint notes that Rightcorp also sent unsolicited text messages to the plaintiff's phone as well as used a robodialer to make repeated calls. Considering the only loophole for unsolicited communications under the Telephone Consumer Protection Act pertains to "emergency purposes," it would appear that its use of both (text messages are considered "calls" by the FCC) run afoul of federal law.

Despite being told to cease its calls, emails and text messages, Rightscorp persisted. Now, it's being accused of "wilfully violating" the TCPA in its pursuit of the two plaintiffs.

While debt collectors are allowed to call debtors to pursue collections, they have to adhere to many rules, including how many calls may be placed a day and between what hours. Unless consent is obtained, they cannot send text messages or use other forms of communications (like email).

Rightscorp isn't a debt collector, although I'm sure it feels its business model is closely related. In reality, Rightscorp's business is more closely aligned with telemarketers, which any person can opt out of receiving calls from in perpetuity. (Telemarketers are also not allowed to send unsolicited text messages.) Rightscorp is, in essence, selling $20 settlements to any alleged infringer it can obtain contact data for. Its "offers" are backed by no legal authority. It would take an actual lawsuit to pursue infringement allegations and that has never been part of Rightscorp's plans.

If it chose to handle its business honestly (by suing alleged infringers), it would have no need to harass the accused via phone calls, emails and text messages. (It would, in fact, have several reasons not to contact potential defendants.) But since suing doesn't figure into the revenue stream, Rightscorp is reduced to pitching tiny "settlements" (in quotes because settling doesn't prevent an infringer from being sued by the rightsholders themselves) to the gullible or easily-intimidated.

Hopefully, this lawsuit (and its previous one) will take the last few pennies out of its falling stock price and force it to return to whatever it was that it was doing when it was d/b/a Stevia Agritech Corp. or Kids Only Market Inc. There are much better ways to pursue alleged infringers (like: not at all!) than abusing or skirting every law on the books that relates to the chosen "business model." At this point, Rightscorp's tactics appear to be every bit as toxic as its stock price.

Filed Under: copyright trolling, extortion, lawsuit
Companies: rightscorp

No Surprise: Rightscorp Already Abusing Canada's Notice & Notice System To Send Bogus Shakedown Letters

from the why-not dept

While Canada's new notice and notice copyright notification system has some problems, it's significantly better than almost every other attempt to do something similar. Of course, that doesn't mean it won't be abused, and apparently the first company to rush bumbling through the "abuse" door would be none other than Rightscorp, the copyright trolling operation that is no stranger to questionable practices and legal interpretations.

Michael Geist has the details of a totally bogus "notice" that Rightscorp has been sending to Canadian users via the new system. Geist does a nice job highlighting all the "mistakes" with Rightscorp's letter:

The notice falsely warns that the recipient could be liable for up to $150,000 per infringement when the reality is that Canadian law caps liability for non-commercial infringement at $5,000 for all infringements. The notice also warns that the user’s Internet service could be suspended, yet there is no such provision under Canadian law. Moreover, given the existence of the private copying system (which features levies on blank media such as CDs), personal music downloads may qualify as private copying and therefore be legal in Canada.

In addition to misstating Canadian law, the notice is instructive for what it does not say. While a recipient might fear a lawsuit with huge liability, there is very little likelihood of a lawsuit given that Rightscorp and BMG do not have the personal information of the subscriber. To obtain that information, they would need a court order, which can be a very expensive proposition. Moreover, this is merely an allegation that would need to be proven in court (assuming the rights holder is able to obtain a court order for the subscriber information).

From the actual letter itself, it's pretty clear that Rightscorp is just sending an identical version of the letter it sends in the US to ISPs hoping they'll pass it on to the customer (most don't). It even cites US copyright law, rather than Canadian code. And that $150,000 number is the US statutory maximum (and even that's misleading, but that's another post for another time).

Of course, Rightscorp doesn't care. It's not interested in going to court. Its entire business model is based on volume: specifically scaring enough people to "pay up" to avoid a lawsuit that wouldn't be coming in the first place. So what does it care? Under Canadian law, ISPs will pass along the notification, and Rightscorp can cite laws from the US, Canada or Sudan for all it cares about the actual law. All it wants is to frighten people into paying, even if its legal arguments are completely nonsensical.

Filed Under: canada, copyright trolling, notice and notice, takedowns
Companies: bmg, rightscorp

Music Publishers, With Help From Rightscorp, Test Legal Theory That DMCA Requires Kicking Repeat Infringers Off The Internet

from the this-ought-to-get-interesting dept

Late Wednesday evening before Thanksgiving, two music publishers, BMG and Round Hill Music, who are partners of struggling copyright trolling operation Rightscorp, sued the ISP Cox, testing out the theory that (1) the DMCA requires ISPs to kick "repeat infringers" offline entirely and (2) that notices from Rightscorp suffice to prove that one is a repeat infringer. You can read the complaint here [pdf or embedded below].

There's a lot of background here to unpack -- very little of which made it into the WSJ's initial coverage of this story. First off, it's true that the DMCA safe harbors include a requirement of a "repeat infringer" termination policy in 512(i). Furthermore, for years, the RIAA and its friends have insisted that 512(i) means that ISPs need to boot people off the internet entirely. After the RIAA, MPAA and five top ISPs agreed to the "voluntary" six strikes program, in which the ISPs insisted that it wouldn't kick anyone off the internet for file sharing, the RIAA started telling people that even when ISPs said that, 512(i) would require ISPs to kick users offline anyway.

However, that hadn't been tested in court. There had been some thinking that the RIAA and associated labels would likely wait until they had enough examples of individuals hitting all "six strikes" and still having an account before testing out this legal theory -- but it looks like Rightscorp's friends are jumping the gun. If it succeeds, then the legacy copyright players will have a massive new weapon in their arsenal: a digital guillotine that would allow them to pressure ISPs to kick people entirely off the internet for a few simple infringements.

It's interesting that the target of the lawsuit is Cox for a couple of reasons. First, years back, Cox was actually one of the first ISPs to kick people offline for file sharing, publicly stating that the DMCA required it. This argument was, and remains, incorrect, but it's unclear if Cox still follows the same practices today. The filing says that Cox says this is its policy, but it doesn't actually follow through. Second, Cox is not a partner in the "six strikes" program -- and it makes you wonder if the plaintiffs will try to use that against the company (which could pressure ISPs into joining the program to avoid liability). In other words, it's possible that part of this strategy will be to force all ISPs to join the "voluntary" six strikes program.

Either way, the legal theory is fairly questionable. As AT&T argued years ago when such a theory was floated, an ISP can't just assume that someone is a "repeat infringer" based on questionable notices -- especially when the evidence for such notices (generally IP addresses) is notoriously unreliable. Furthermore, it's worth reading the details of probably the key case on implementing a "reasonable" policy, the Perfect 10 v. CCBill case. While the situations are not analogous, that case certainly seems to suggest that service providers have pretty wide latitude in setting up a policy, so long as they're not purposely trying to interfere with efforts to respond to infringement. The fact that, at least in the past, Cox did kick users off its service, suggests that it's not ignoring these issues and has a policy, even if it's not to Rightscorp's liking. Now, that CCBill case is in the 9th Circuit, and this lawsuit was filed in Virginia (the 4th Circuit), so perhaps the plaintiffs are hoping for a friendlier view towards these theories.

In the specifics in this case, BMG and Round Hill seem to be upset that Cox won't forward Rightscorp's notices -- and, in fact, appear to treat them as spam:

Plaintiffs, through their agent, have attempted to work closely with Cox to find a workable and common sense solution to Cox's system-wide repeat infringer problem. Cox, however, has refused to engage with Plaintiffs' agent in any substantive way and instead has taken the position that repeat infringement notices provided to Cox "do not relate to matters subject to the DMCA." Incredibly, Cox's Privacy Counsel advised Plaintiffs' agent that it has implemented a "policy not to accept or to forward notices such as those sent to us by your firm." Moreover, Cox chose "to limit the number of notices that [it] can accept from many senders because of the total volume that [it] receive[s]."

By its actions. Cox has intentionally ignored and continues to ignore the overwhelming evidence that provides it with actual knowledge ofrepeat copyright infringers on its network and Cox actually has taken measures to avoid and stop receiving those notifications in direct violation of the spirit and legal requirements of the DMCA. Cox cannot have any credible, effective repeat infringer policy, let alone one that is reasonably implemented as required by 512(i), if it purposefully ignores notifications, sufficient under the DMCA, of repeat infnngers sent by copyright owners who are tracking the repeat infnngers on the Cox network and providing Cox with actual knowledge of those repeat infringers on a daily basis.

Once again, though, the publishers are exaggerating the actual law and what's happening. They seem to assume that Cox has some sort of legal obligation to pass along Rightscorp's notices, which just isn't the case. Furthermore, the lawsuit states, incorrectly, that "Cox directly profits" from repeat infringements. But that's wrong. Cox may profit from people who have used its service to infringe, but the law (and court rulings) have been fairly clear that Cox would need to profit specifically from the infringements itself, not merely because some users infringe. Users who infringe and users who don't all pay Cox the same amount, so Cox receives no special profits from infringement, blowing a big hole in the legal theory presented.

No matter what, courts sometimes come out with wacky decisions, and this one could quickly shape up to be a key case in testing this theory that's floated around for years, but has never really been tested. That makes this a clear case to follow, as it could have tremendous impact. If the publishers' theory is vindicated by the courts, it would mean that -- contrary to all the previous promises that ISPs wouldn't kick people accused of infringing offline -- the US technically might require the loss of internet service for repeat infringers. Such a policy would clearly go against stated aims of the government in encouraging internet access, but it's not impossible. I would imagine that if such a result came about, the resulting protests from internet users would be even more vocal than what happened to prevent SOPA. Kicking people entirely off their internet connection for copyright infringement has always been a non-starter in the US. Kicking that hornet's nest seems like a risky move for these publishers.

Filed Under: 512i, copyright, dmca, music publishers, repeat infringer policy, repeat infringers, six strikes, three strikes
Companies: bmg, cox, rightscorp, round hill music

Class Action Filed Against Rightscorp For Shaking Down People With Robocalls

from the heading-down,-down,-down... dept

We've written a few times about Rightscorp, the company that has tried to set itself up as a sort of "friendlier" copyright troll, acquiring a bunch of copyrights, sniffing out IP addresses connected to sharing of content associated with that copyright, and then trying to demand payments. The main "difference" with Rightscorp is that it usually demands lower, potentially more palatable sums than traditional copyright trolls, and it's trying to "partner" with ISPs to send notices on its behalf, rather than suing people. Most ISPs, so far, have refused to do this. And so far, Rightscorp has been something of a joke -- thinking it had discovered a subpoena loophole that had been slammed shut by the courts years ago (every few years a new copyright troll thinks it's found this same loophole) and talking about hijacking browsers. The reality is that it's a company with a sketchy past that seems to have reverse-mergered itself into being a public company that has seen its stock drop precipitously and still hasn't shown much ability to actually make any money from shaking down file sharers.

And now, it's facing a class action lawsuit from Morgan Pietz, the lawyer who was one of the main lawyers who helped unravel and bring down Prenda.

The complaint seeks class damages against Rightscorp for violations of the Telephone Consumer Protection Act, the Fair Debt Collection Practices Act, California’s Rosenthal Act, and Abuse of Process. The complaint alleges unlawful robo-calls, as well as other unfair debt collection practices, and that Rightscorp has abused the legal process by issuing DMCA Section 512(h) subpoenas that it knew were objectively baseless.

Here's the same thing in more detail from the legal filing itself:

Rightscorp is regularly engaged in the business of collecting on alleged obligations of consumers to pay money (i.e., debt collection) for purported copyright infringement claims, such that it is subject to the Fair Debt Collection Practice Act (15 U.S.C. § 1692 et seq.) (“FDCPA”) and the Rosenthal Fair Debt Collection Practices Act (Cal. Civ. Code §§ 1788 et seq.) (“Rosenthal Act”). However, Rightscorp has repeatedly and systematically failed to comply with the provisions of the FDCPA and the Rosenthal Act. Among other wrongful conduct: Rightscorp has engaged in telephone harassment and abuse (15 U.S.C. § 1692d); made various false and misleading representations (15 U.S.C. § 1692e); engaged in unfair collections practices (15 U.S.C. § 1692f); failed to provide validation and required notices relating to the debts (15 U.S.C. § 1692g); and furnished emails and letters knowing they would create false beliefs on the parts of consumers that their Internet Service Providers (“ISPs”) were participating in the attempt to collect on the purported debts when in fact the ISPs were not participating (15 U.S.C. § 1692f).

Further, to identify potential consumers to target, Rightscorp has willfully misused this Court’s subpoena power by issuing at least 142 special DMCA subpoenas, per 17 U.S.C. § 512(h), to various Internet Service Providers (“ISPs”). These subpoenas, which were issued on this Court’s authority, but procured outside of an adversarial proceeding and without any judicial review, are so clearly legally invalid as to be a sham and abuse of the legal process. After an ISP moved to quash one of these 142 subpoenas in the Western District of Texas, on September 10, 2014, Rightscorp withdrew that subpoena rather than risk judicial review of its plainly unlawful use of this Court’s subpoena power. See In re Subpoena Issued to Grande Com’n. Net’s., LLC, W.D. Tx. No. 1:14-mc-00848, ECF No. 3, 9/10/14; see also id. at ECF No. 1, 9/5/14 (ISP’s motion to quash). Nevertheless, since then, throughout the later part of September and through until the filing of this action, Rightscorp has continued to issue dozens of new, legally invalid DMCA subpoenas on this Court’s authority (see, e.g., In re Subpoena Issued to US Internet Corp., C.D. Cal. No. 2:14-mc-864-UA, 10/14/14).

Should be an... interesting lawsuit to pay attention to.

Filed Under: copyright trolling, debt collection, lawsuit, robocalls, shakedown
Companies: rightscorp

Rightscorp's 'Secure' Payment System Exposes Names And Addresses Of Alleged Infringers

from the stupid-stupid-stupid dept

Rightscorp, the supposed new face in copyright enforcement, is currently trying to shake down alleged infringers for $20/infringement, using smaller ISPs (or those not signed up for the Six Strikes program) as middlemen for its small-time settlement services. Rightscorp issues scary-looking settlement letters to internet subscribers, informing them that they have been caught torrenting movie or music files and giving them a chance to pay for their (allegedly) illicitly-obtained goods through its website.

Each settlement letter (forwarded from the ISP to the customer) contains a unique link to a $20 settlement offer, which can be paid online.

Techdirt reader Andrew Jenson informs us that Rightscorp's "secure" settlement site isn't all that secure.

Rightscorp posts variables using hidden form elements rather than sessions, cookies, or something similar. This sort of lax security policy could lead to someone easily gaining access to and having a field day with the Rightscorp database which contains confidential and personal information.

Rightscorp lets Google index secure pages for anyone to find. Simply Google “rightscorp miramax” and you will find the following indexed.

https://secure.digitalrightscorp.com/settle/TC-2f9d25d6-a153-4f03-a774-f9490bac66b4

If anyone's posted a link from a settlement letter on the web, anyone else can access it.

Down at the bottom of the form, you'll see some more false assurances about your data. There's a pretty little picture of a lock by the fields for your credit card info, but it doesn't link anywhere or signify anything.

In fact, Chrome has to block content from the non-secure Digital Rights Corp. website (there are links back to the corporate website all over the "secure" site) in order to call the site "secure."

Loading this script kills the security.

Verified here by "Inspect element."

Jenson notes that Rightscorp uses a "cheap GoDaddy SSL certificate with no extended validation," not exactly the sort of thing you want to hear when being asked for credit card information. Jenson adds:

Imagine if someones personal details had been entered. They would be open for the world to see.

You don't have to imagine it. It's acutally happening.

While digging around for URLs to verify Johnson's claims, I soon discovered that if someone has actually paid a settlement fee to Rightscorp, it allows the settlement receipt, along with the subscriber's name and address, to sit there openly available to anyone who comes looking.

I found four different settlements involving four different people simply by searching for publicly-posted settlement URLs using "https://secure.rightscorp.com/settle" as the search term. Some results linked to pending settlement offers but others led directly to the terms of paid settlements, which included the name and address of the accused infringer.

I informed Rightscorp of this security issue, giving the company a chance to fix this before we published. I received a response from Robert Steele, the president of the company, stating:

The name and address at that URL will be redacted in about 15 minutes. Thank you for bringing this to our attention.

That Rightscorp responded to an issue within an hour of it being raised is a good sign. Unfortunately, Steele and his IT team seemed to have missed the point of my first email. I sent an email back re-informing him that it's not a single URL that's affected. It's every single URL it's issued to alleged infringers. Any one of these can be accessed by anybody. I received this from Robert Steele about a half hour later:

They have all been redacted. There are no live links providing this information. Thank you again for bringing this to our attention. Our system is not providing any names and addresses to the public as you now assert.

So, this leak has been fixed (or at least, redacted -- the pages are still publicly available). And anyone can still access open settlements, which still makes it appear as though Rightscorp cares little for the privacy and security of the internet users it's targeting.

Remember, this is a company with grand designs on controlling the internet activities of repeat infringers (via browser hijacking) who aren't swayed by its $20/per file offers. It also appears to be bullying smaller ISPs into handing over user data, using a supposed "loophole" in the DMCA to send tons of subpoenas without actually filing lawsuits. This is the same company that claims to have a revolutionary new way to track repeat infringers, even across multiple IP addresses. But for all of its supposed technical prowess and "revolutionary" shakedown techniques, it seemingly can't be bothered to provide actual security for settlement payments or subscriber data.

The worst part is that it's those who have paid Rightscorp that were being protected the least. Their names and addresses were publicly available and linked to infringing activity. Just because Rightscorp managed to convert IP addresses into subscribers by abusing subpoenas and bullying ISPs doesn't mean it can simply leave that information laying around in the open. Maybe it felt those subscribers deserved to be named and shamed. Maybe it just didn't care as long as there was an easy way for infringers to pay up (direct link, accessible by anyone). Or maybe it just half-assed together its payment processing as cheaply as it could in order to maintain a healthier profit margin. Either way, it's more evidence that Rightscorp runs a shoddy (and shady) business, one whose success relies greatly on the ignorance of others.

Filed Under: copyright, copyright troll, copyright trolling, leaking, privacy, robert steele, security
Companies: rightscorp

Rightscorp's New PR Plan: The More Ridiculous It Gets (Such As By Claiming To Hijack Browsers), The More Press It Will Get

from the good-luck-with-that dept

Over the last few months, there's been tremendous press attention paid to a little nothing of a company called Rightscorp, which has basically tried to become the friendlier face of copyright trolling: signing up copyright holders, sending threat letters to ISPs, hoping those ISPs forward the threats to subscribers, and demanding much smaller fees than traditional copyright trolls (usually around $20). The idea is by being (just slightly) friendlier, and keeping the fees much lower, they might be able to "make it up in volume." The company has been subject to big profiles in Ars Technica, which calls it "RIAA-lite," and Daily Dot, which referred to it as a "boutique anti-piracy firm." Frankly, the only thing that Rightscorp has shown itself to be good at is getting press coverage -- often through outrageous claims, such as saying it found a loophole in the DMCA that lets it send subpoenas to identify ISP subscribers without filing a lawsuit. Lots of copyright trolls think they've found that loophole, only to discover a court already rejected it.

Rightscorp's real strategy seems to be to just keep bombarding ISPs with notices until they wear down and agree to pass them along, and then collecting bits and pieces from folks who agree to pay up. But to do that, it needs to get more copyright holders to sign agreements with the company (and the company sends out tons of press releases when they do), and so it keeps making crazy claims -- like its latest plans to supposedly hijack the browsers of people who don't pay up. TorrentFreak got the transcript of a recent investor conference call by the company, showing that it's still barely taking in any revenue ($440,414 in the first six months of the year, against expenses of $1.8 million), and still wants to get big ISPs to be "compliant" (with Rightscorp's own twisted interpretation of the law), but that, eventually, the plan is to get ISPs to hijack browsers:

“So we start in the beginning of the ISP relationship by demanding the forwarding of notices and the terminations,” Steele told investors.

“But where we want to end up with our scalable copyright system is where it’s not about termination, it’s about compelling the user to make the payment so that they can get back to browsing the web.”

Steele says the trick lies in the ability of ISPs to bring a complete halt to their subscribers’ Internet browsing activities.

“So every ISP has this ability to put up a redirect page. So that’s the goal,” he explained.

“[What] we really want to do is move away from termination and move to what’s called a hard redirect, like, when you go into a hotel and you have to put your room number in order to get past the browser and get on to browsing the web.”

Furthermore, the report claims that people are paying a lot more than just $20, because the company is lumping together lots of claims, and asking for $20 for each of them. Of course, being an investor conference call, the company's COO/CTO Robert Steele tries to spin all of this positively, but it's basically all marketing. The company has no real legal basis for what it's doing, and the program will only work if it tricks basically everyone into believing that it has the right to do what it does. So that's why it's constantly pushing out press releases and making claims to drum up press. If it gets big enough, it seems to be hoping to wish the world to act the way it wants it to (the way in which it gets lots of money instead of a tiny pittance).

But, as the TorrentFreak report notes, when an investor asks what percentage of people are actually paying when they get a notice... well, that's "a trade secret." In this context, that means almost no one is paying.

As for the plans to put in this "hard redirect" and hijack your browsing, good luck with that insane idea. The ISPs fought pretty damn hard when the RIAA and MPAA (two much more powerful organizations) demanded such powers with the six strikes "voluntary" agreement. And that happened pre-SOPA. After SOPA, we heard rumblings that the big ISPs were considering "renegotiating" that agreement, though they eventually went ahead with it. The likelihood that any ISP is going to agree to hijack their subscribers' browsing experience because some piddly company wants to start cashing more checks is... pretty low. But keep on talking big, Rightscorp.

Filed Under: anti piracy, browsers, copyright trolling, pr, takedowns
Companies: rightscorp

Yet Another Copyright Troll Thinks It's Found The DMCA Subpoena Loophole That Slammed Shut Years Ago

from the that's-not-how-it-works dept

Over a decade ago, when the RIAA first decided to start going after its biggest fans for sharing music online, one of the biggest challenges it faced was -- of all companies -- Verizon. The RIAA started sending "DMCA subpoenas" to Verizon demanding the names of its customers without filing a lawsuit and without any judicial review. Verizon vigorously fought back, claiming that such subpoenas were unconstitutional and violated its customers' anonymity rights. After some back and forth Verizon prevailed in the DC Circuit appeals court, and the Supreme Court refused to take the RIAA's request to hear the case. Since that time, it's been pretty well established and accepted that you can't use DMCA subpoenas to get info out of ISPs like that. That's not what they were ever intended for, and they go against the basic First Amendment protections for anonymity (which allow people to be revealed, but not solely on the basis of a subpoena with no judicial review). That milestone victory by Verizon is what eventually lead the RIAA to actually filing lawsuits against thousands of unnamed fans, as opposed to just getting their info and threatening them.

Anyone who's spent even just a little bit of time studying copyright law is familiar with this case. A decade ago, it was one of the key copyright legal battles. But, it seems that every few years, some copyright troll lawyers who really have no understanding of copyright law at all "rediscover" DMCA subpoenas and think that they've found some amazing loophole that lets them get user info without judicial review. Three years ago, copyright troll Evan Stone was all excited that he'd discovered this amazing subpoena provision, gleefully telling reporters that it was going to be the key to keeping his copyright trolling going. Instead, he got hit with sanctions for abusing subpoena powers.

So it seems a bit bizarre that another operation, "Rightscorp" thinks that it's discovered some amazing "loophole" to get information on alleged infringers without judicial review (also, odd that Torrentfreak suggests this is a new development, since it also reported on Evan Stone claiming to have found that same "loophole" that doesn't exist). The TorrentFreak article does ask Rightscorp's CEO about the Verizon case, and he insists that it was decided incorrectly. That's a... risky proposition at best. While he's technically correct that the Supreme Court hasn't decided this issue, it has been ruled on in both the DC Circuit (that Verizon case) and the 8th Circuit (similar case, similar ruling) and no one has challenged it for a decade. The interpretation of DMCA subpoenas is pretty widely accepted across the board. If this actually got to court, Rightscorp would find it pretty difficult to prevail and upend rulings that have been considered established law for a decade.

But despite the bluster, it seems quite unlikely that Rightscorp really wants to test this in court. Torrentfreak also notes that "Rightscorp is avoiding any of the major Internet providers." That's clearly a conscious choice, knowing that the legal teams for these smaller ISPs probably are unfamiliar with the details of DMCA subpoenas and how they don't apply. Indeed, it appears that Rightscorp's strategy to date has been somewhat successful, as clueless ISPs are handing over info on their customers that they should not be handing over under the law. I'm wondering if those ISPs, who are violating their customers' privacy (potentially in violation of their own terms of service), may come to regret that decision (and the fact that their legal departments seem unaware of how DMCA subpoenas work). Also, hopefully a little publicity will help those ISPs to quickly study up on DMCA subpoenas and why they don't apply here.

Filed Under: 512h, copyright, copyright trolls, dmca subpoenas
Companies: riaa, rightscorp, verizon