New Copyright Trolling Operation Lowers The Settlement Demands And Calls Them Fines To Improve Conversion Rate

from the devious-trolls dept

As much more attention has been brought to copyright trolls and the unethical manner in which they operate, it was inevitable that the tactics of the trolls would begin to shift. For some of us, it was immediately obvious what a PR problem these trolling operations faced. It all comes down to the "settlements" offered in a copyright troll's letters. The amounts, while designed to look small compared with the threat of a lawsuit, still tend to be quite high. Certainly the amounts make no sense when compared with the costs of simply viewing a movie or television show, which is the natural standard that lay person is likely to set. For that reason, some trolls, such as RightsCorp, have already started down the path of lowering settlement offers to levels that are more likely to cause the accused to simply pay up. Also, the fact that these letters, with all of their threatening language, even refer to the offers as "settlements" rings much closer to extra-judicial extortion than anything resembling justice.

Well, it seems that one copyright troll is attempting to correct against both of these concerns. Rights Enforcement, contracted by the studio behind the movie The Hitman's Bodyguard, is sending out letters to those it claims pirated the film with a much-reduced amount of money requested. And these requests are being called "fines" as opposed to "settlements."

Rights Enforcement sends automated ‘fines’ via DMCA notices, which is cheaper than expensive lawsuits. At the same time, this also makes the settlement process easier to scale, as they can send out tens of thousands of ‘fines’ at once with limited resources, without any oversight from a court.

TorrentFreak has seen several notices targeted at The Hitman’s Bodyguard pirates. While the notices themselves don’t list the settlement fee, recipients are referred to a page that does. Those who admit guilt are asked to pay a $300 settlement fee.

Beyond those changes, the letters are classic copyright trolling dreck. The letters are sent out on the basis of an IP address being associated with the torrenting of the film, with threats of a lawsuit still in the text. It then sends the recipient to a site where the accused offender can pay the fine -- although on that site, it refers to the "fine" as a "settlement" -- and also includes a link to where the accused can find legal representation. Legal representation that will, of course, easily cost more than the $300 fine.

The notice also kindly mentions that the recipients can contact an attorney for legal advice. However, after an hour or two a legal bill will have exceeded the proposed settlement amount, so for many this isn’t really an option.

It’s quite a clever scheme. Although most people probably won’t be sued for ignoring a notice, there’s always the possibility that they will. Especially since Rights Enforcement is linked to some of the most prolific copyright trolls.

It's not so much a reworking of the copyright troll's business model as much as it is one troll attempting to refine its process and fee structure to maximize its conversion rate. While that sounds like any business, it's worth noting that these letters are ostensibly about a harmed party looking for justice. The threats of lawsuits are, if not entirely empty, certainly not the desired outcome for the trolling operation. Any such lawsuit would cost the rights holder far more than it wants to spend.

It's still extra-judicial extortion of a kind, in other words. It's just a cheaper form of it, with a little clever wording thrown in to boot.

Filed Under: copyright, copyright trolls, settlements, shakedowns
Companies: rights enforcement, rigtscorp

Copyright Trolls... But For Houses

from the knock-knock dept

The copyright trolling business is getting weirder and weirder. Brad Heath directs our attention to a ruling in a bizarre case in the 7th circuit appeals court, in which we discover the existence of housing copyright trolls, who drive around looking for houses just a tad too similar to their copyright-covered designs. Really.

Let's start with a little history, though. We discussed some of this a month ago, in our post about how copyright was getting in the way of a guy who wanted to rebuild his home that had burnt down, and the developer arguing that this was infringement (that situation was eventually settled with the developer backing down). As we noted in that story, back in 1990, Congress passed the Architectural Works Copyright Protection Act of 1990, or AWCPA. This was done to (sort of) bring the US into compliance with the (silly) Berne Convention on copyrights. While the 1976 Copyright Act had (for the first time) included protections for an architect's plans and drawings, this was rather limited in practice. AWCPA greatly expanded this to cover (among other things) the design of buildings. Pretty much since it passed, people have questioned why this was even needed. The US had a long history of extremely creative and innovative architecture long before 1990 (indeed, long before 1976). There was no indication that there was a need for copyright protection here. But copyright protection is what we got.

A few years back, there was a nice detailed analysis of AWCPA, which noted that while many had expected cases to focus on big standout pieces of architecture, instead, many of the cases involved things like competing model home builders. And, for the most part, the courts had (thankfully!) interpreted the law pretty narrowly, noting that because much of a house is utilitarian, rather than decorative, for houses to violate AWCPA, they need to be basically identical and there needs to be some serious evidence to support copying.

Apparently, this did not deter the plaintiffs in the case we're talking about today. Patrick Carmichael and Myles Sherman purchased a long-standing home developer, Design Basics, in 2009, with the express plans of using AWCPA to go after others with similar houses. And they did exactly that:

In 2009, Patrick Carmichael and Myles Sherman purchased Design Basics as an investment opportunity. Carmichael acknowledged in his deposition that “potential copyright infringement cases influence[d his] decision to become an owner of Design Basics.” He testified that proceeds from litigation have become a principal revenue stream for Design Basics.

A search of the Public Access to Court Electronic Records (PACER) system reveals that Design Basics has been party to over 100 federal lawsuits, the vast majority of which have been filed since the 2009 change in ownership. Nearly all involve copyright claims asserted by Design Basics.

And then we have the kicker:

Design Basics offers its employees incentives to scout out potential copyright infringement cases, paying its employees a finder’s fee in the form of a percentage of the net recovery relating to any home plans that they located.

There you have it. Copyright trolling... with houses. They would literally tell employees to drive around looking for houses they could sue over, promising a cut of any proceeds.

Indeed, the 7th Circuit seems well aware of the comparison:

Design Basics’ business model of trawling the Internet for intellectual property treasures is not unique. In recent years, opportunistic holders of copyrights, patents, and other intellectual property have developed unsavory reputations for “trolling,” bringing strategic infringement claims of dubious merit in the hope of arranging prompt settlements with defendants who would prefer to pay modest or nuisance settlements rather than be tied up in expensive litigation. Like the proverbial troll under the bridge, these firms try to extract rents from market participants who must choose between the cost of settlement and the costs and risks of litigation.

Thankfully, the judges also recognize why this is a problem. Indeed, they even cite Matthew Sag's excellent research on copyright trolling and (later) they mention the great This American Life episode on patent trolls:

This business strategy is far removed from the goals of the Constitution’s intellectual property clause to “promote the Progress of Science and useful Arts.” U.S. Const. art. I, § 8, cl. 8. Intellectual property trolls have attracted much attention and derision in scholarly literature and the mainstream media. See, e.g., Matthew Sag, Copyright Trolling, An Empirical Study, 100 Iowa L. Rev. 1105, 1108 (2015) (“The essence of trolling is that the plaintiff is more focused on the business of litigation than on selling a product or service or licensing their IP to third parties to sell a product or a service. The paradigmatic troll plays a numbers game in which it targets hundreds or thousands of defendants, seeking quick settlements priced just low enough that it is less expensive for the defendant to pay the troll rather than defend the claim.”);

In the particular case at hand, Design Basics found houses by a competing developer, Lexington, that they argued were too similar. They presented little evidence as to why they were similar, while Lexington made it pretty clear they'd never seen the plans of the Design Basics house. Also, Design Basics waited until literally the day before the statute of limitations would hit to file suit. The lower court ruled in favor of Lexington and against Design Basics, and the appeals court rightfully upholds this ruling.

The court notes that while there are copyright cases where "substantial similarity" is enough to show infringement, the bar is higher with houses.

The market for affordable home designs is crowded because opportunities for originality are tightly constrained by functional requirements, consumer demands, and the vast body of similar designs already available. In this field, the substantial similarity requirement is particularly hard to satisfy.

And, indeed, the court also notes (quoting itself from an earlier case) that "two works may be strikingly similar—may in fact be identical—not because one is copied from the other but because both are copies of the same thing in the public domain. … A similarity may be striking without being suspicious." Along those lines, the court references one of my favorite (but tragically rarely used) concepts: scènes à faire. That is, the idea that certain things can only be done in a few specific ways, and it's not copying that multiple people do them the same way. This is normally applied to things like plot points in certain genres, but here, the court notes it can apply to architecture as well:

Zalewski recognized that there are scènes à faire in architecture just as in literature or music. Colonial‐style homes—or, as relevant here, a wider variety of suburban homes—share many design elements and characteristics to which no individual designer can lay claim. Design Basics’ designs also share many attributes driven by “consumer expectations and standard house design generally,” and designers can “get no credit for putting a closet in every bedroom, a fireplace in the middle of an exterior wall, [or] kitchen counters against the kitchen walls.”

As the court further notes, building homes that are seen as conventional limits any copyright claim, and keeps it "thin" applying merely to the truly different and creative elements.

Design Basics’ infringement claim fails for essentially the same reason that the plaintiff’s claim failed in Zalewski. Lexington’s accused plans resemble Design Basics’ plans, but only because both sets resemble common home designs one might observe throughout the suburbs of Milwaukee, Chicago, Indianapolis, or many other communities. There are only so many ways to arrange a few bedrooms, a kitchen, some common areas, and an attached garage, so “not every nook and cranny of an architectural floor plan enjoys copyright protection.”

And further, the court notes that since Design Basics offers thousands of different home designs, ruling otherwise might effectively allow the company to troll almost every suburban home:

Design Basics advertises over 2700 home plans at www.designbasics.com. We wonder whether there is any blueprint for a single‐family home anywhere in the country that Design Basics could not match to one of its own designs by applying the loose standard of similarity it relies upon here. An infringement doctrine that would enable an aggressive designer to sue all of its competitors and bring those claims before a jury would turn the law of copyright on its head. Far from promoting the “Progress of Science and useful Arts,” U.S. Const. art. I, § 8, cl. 8, such a doctrine would chill the market.

The court then essentially mocks the fact that Design Basics relies on its own draftsman to make the expert case for substantial similarity, but that he fails to say much more than that:

Design Basics relied on a conclusory six‐page declaration by its draftsman, Carl Cuozzo, that does not reflect any effort at side‐by‐side comparison of the plans. Cuozzo said only generally that the accused plans are “substantially similar to Plaintiffs’ Copyrighted Works in too many ways to have been the product of independent creation” and that it was “obvious” to him that the accused plans were copies of Design Basics’ plans.

Furthermore, the ruling notes that Cuozzo has delivered similarly weak entries (the court calls them "remarkably similar opinions") in a whole bunch of Design Basics other cases. The defendant, Lexington, on the other hand, brought in an actual expert who gave a detailed report detailing the many differences in the designs. In response, the court points out: "Design Basics offered essentially nothing." Ouch.

Separately, the court highlights the near total lack of evidence that Lexington even had access to Design Basic's plans. It probably didn't help Design Basic's case that it made arguments as easily disputed as the following:

Patrick Carmichael’s declaration that Design Basics “regularly and systematically” mailed publications to members of the Brown County Homebuilders Association in Wisconsin. Lexington was a member of that association from 2004 until around 2012 or 2013. But Design Basics’ own records show that it last shipped an order to the association in 1994— a decade before Lexington joined the association and years before three of Design Basics’ plans at issue were even created. The association’s executive officer swore in an affidavit that (1) the association does not disseminate plans or plan books to its members; and (2) if the association had received any plan materials from Design Basics, it would have discarded those materials at the time of receipt.

And thus, Design Basic's big housing copyright trolling scheme gets slapped down. Whether or not this will end the company's litigation strategy elsewhere remains to be seen, but it is quite incredible how widely copyright trolling is happening. At some point, people are going to need to wake up to the fact that laws that can be abused this way repeatedly with threats of lawsuits (and some actual lawsuits) represent a real problem.

Filed Under: awcpa, copyright, copyright trolls, houses
Companies: design basics, lexington homes

Telenor Looks To Lead The Anti-Troll Fight In Europe

from the to-arms dept

In what is beginning to look like a much-welcomed trend, it seems like copyright trolls are finally due to receive some pushback from powerful industry players. Whereas previous pushback has been both isolated and chiefly the province of smaller European government groups, the real curtailing of copyright trolling efforts was always going to come from a revolt by tangential corporate interests. It appears that the soldier on the front of that fight might be Telenor, an ISP that has previously pushed back against efforts for wholesale site-blocking in the name of copyright, and one that is is now looking to export its recent anti-troll win in Norway to the country of Denmark by gathering allies in the ISP industry to its side.

To stop the trolling efforts from getting out of hand, Telenor is now preparing to build a new case at the Frederiksberg Court, hoping to protect the identities of its subscribers. In Denmark, Telenor is supported by fellow Internet provider Telia, which says it will be more critical toward trolling efforts going forward.

The branch organization Telecommunications Industry in Denmark notes that other ISPs are backing Telenor’s efforts as well. The group’s director, Jakob Willer, describes the copyright trolling scheme as a “mafia-like” practice, which should be stopped.

“There is full support from the industry to Telenor to take this fight and protect customers against mafia-like practices,” Willer says.

This language choice is not remotely inappropriate. Copyright trolls rarely find themselves before an actual court against defendants, instead relying on well-crafted and often deceptive threat letters to generate settlement income for themselves and their clients. It should be immediately clear exactly what is going on here when a law firm so haphazardly threatens litigation yet never conducts it. Extortion is a word that leaps to mind, even if these wolves are garbed in the sheep's clothing offered by the imprimatur of legal language and the status of being an otherwise valid law firm. What's required to break these efforts is the unmasking of these tactics and the tenuous evidence on which they are based, as well as having the privacy erosion that these tactics require laid bare for all to see. ISPs are the perfect paladin for this, as they are the ones giving up customer information based typically on scant evidence.

Individuals will find themselves unable to compete with the legal teams of these copyright trolls. So much so, that the unmasking of account information is quickly getting out of control.

These so-called “copyright trolls” have also landed in Denmark, where the number of targeted Internet subscribers is growing at a rapid rate.

In 2015, rightsholders received permission from courts to obtain the personal details of 6,187 alleged BitTorrent pirates, based on their IP-addresses. A year later the number of accused subscribers increased by nearly 250 percent, to 21,163.

Why courts so often side with industry in this manner is a discussion for another day, but given that reality, ISPs too are an industry that can take up this fight. Seeing them begin to do so, and banding together to provide a more formidable legal defense of what is essentially their customers' rights, is obviously a step in the right direction. And, while geography plays little role in internet-related questions of this kind, it strikes anyone looking at the map how Telenor appears to be surrounding Germany, the birthplace of copyright trolling, with its legal efforts.

All is not quiet on the copyright troll front, in other words, with ISPs now looking to ally against them.

Filed Under: copyright, copyright trolling, copyright trolls, denmark, ip addresses
Companies: telenor

Singapore Court Tosses Copyright Troll Cases Because IP Addresses Aren't Good Enough Evidence

from the preach dept

We've been saying this for years, but IP addresses are not good enough evidence on which to base copyright infringement lawsuits. At some level, everyone already knows this to be true. You can tell that's the case because the typical pretenders stating otherwise are the copyright trolls with a business model that relies on gathering large numbers of supposedly infringing IP addresses, mailing out settlement demands to the supposed pirates that own the accounts of those IP addresses, and then collecting very real money from some percentage of the recipients. On top of that, even these trolls will often claim that the onus is on the account holder of an internet connection to police their own pipe, which is a delightful end-around to the common concept of punishing true infringers as opposed to innocent third parties.

There are places with legal systems that have had enough of this practice and we can now add Singapore's to the list. The High Court in Singapore recently threw out requests from several copyright trolls made to ISPs there to produce account information for IP addresses they claim were used to infringe on two movies, Fathers & Daughters and Queen Of The Desert.

The oral decision delivered at a closed-door hearing on Monday was on the grounds of "insufficient evidence", the Attorney-General's Chambers (AGC) told The Straits Times yesterday. In a rare move, the AGC intervened in civil applications made in the High Court in July last year by Samuel Seow Law Corp (SSLC), the local law firm that represents the two studios.

Last year, SSLC again served papers on Singtel, StarHub and M1 to get details of alleged pirates of Fathers & Daughters and Queen Of The Desert, with a list of over 500 offending Internet Protocol (IP) addresses. The AGC and the Intellectual Property Office of Singapore (Ipos) said they highlighted to the court that SSLC did not submit "sufficient evidence" to show a link between the IP addresses and alleged illegal downloaders. It was on such grounds that the case was dismissed.

It's an important decision in the country, with the High Court cementing the position that IP addresses are not sufficient evidence with which to demand account information over infringement issues. That the practical use for that account information would have been the type of sleazy settlement demands that have become the norm in copyright trolling circles may have played a role in the decision, but it need not have. Viewed solely on its merits, there are any number of ways an internet connection might be used for copyright infringement by someone other than the owner of the internet account: shared WiFi, brute force break-ins into the connection, etc. The simple fact is that knowing an IP address that was used for infringement doesn't tell anyone who did the actual infringing. Viewed that way, compelling ISPs to turn over personal account information based solely on IP addresses is crazy.

Some IP attorneys are already whining about the decision.

Mr Lau Kok Keng, an IP lawyer at Rajah & Tann Singapore, said requiring the rights owner to link the IP address to the actual infringer is akin to "putting the cart before the horse" - copyright holders need to know who the account holder is to ascertain if he is the actual pirate.

"So it could mean that individuals who illegally download copyright content will be able to get off scot-free because their identities will never be known, short of being caught in the act," said Mr Lau.

Which is much to do about nothing, given that, again, the infringing party might not be the IP address owner to begin with. What the copyright trolls are really looking for are essentially lead lists for settlement letters. They don't really care if the recipient of those letters is the infringer or not, they care if they can scare enough people into paying settlements to make money.

In that light, it's nice to see a government get it right on this question about IP addresses as evidence, even if we have to look all the way to Singapore to see it.

Filed Under: copyright, copyright trolls, ip addresses, singapore

When ISPs Become Anti-Troll Advocates: Bahnhof Turns The IP Tables On A Copyright Troll

from the good-guys dept

Copyright trolls still plague the world, unfortunately. While many are the group and individuals that advocate against this form of legal extortion, nearly always built upon shaky evidence at best, too silent have been the ISPs that copyright trolls utilize to send out their settlement letters. For whatever reason, ISPs en masse have decided that it isn't prudent to advocate for their clients. But not all ISPs behave this way. In Sweden, ISP Bahnhof, which we have written about previously for its client-friendly practices, is fighting back against one copyright troll on behalf of its customers in the best way possible: by turning the intellectual property tables back upon them.

Sweden has recently become something of a target for copyright trolls, with Spridningskollen leading the charge. This group, the name of which translates into English as "Distribution Check," uses data gathered by anti-piracy groups to send out the typical threat letters and settlement requests to people who have IP addresses accused of infringing on copyrighted material. A spokesman for Spridningskollen, Gordon Odenbark, insisted that his group's work was necessary for both providing revenue to rights holders and, more importantly, to deter the general public from violating the intellectual property rights of others.

There's just one problem: Bahnhof has a valid trademark for the term "spridningskollen."

“Bahnhof was the first to apply for the Spridningskollen trademark rights at the Swedish Patent and Registration Office,” the ISP announced.

Earlier this year Bahnhof was the first ISP to warn the public about the looming flood of settlement requests. To help the public understand the severity of the issue the ISP launched the site Spridningskollen.org, which they say maps the “spread of extortion letters” from copyright holders.

It's somewhat poetic that a consumer-friendly ISP started a website and got a trademark on a term that a copyright troll then chose to adopt as its name. Bahnhof appears to have started this website in April or so of this year, while the copyright troll's operations appear to have started more recently, which means that this isn't a case of Bahnhof squatting. Instead, it appears that the copyright troll, so concerned in appearance with piracy, didn't bother to do its homework in the trademark arena. And Bahnhof, seeing an opportunity to strike back legitimately in its customers' interests, isn't going to let this chance go by quietly.

Now that the anti-piracy group has ‘stolen’ their name, Bahnhof plans to take action over the apparent trademark infringement.

“It is surprising that those who claim to defend intellectual property rights don’t track it better themselves. It says a lot about the quality level of their so-called initiative,” Bahnhof CEO Jon Karlung says.

The ISP is demanding that the website of the anti-piracy group, Spridningskollen.se, is shut down.

“Our lawyers are looking into it. We see the many different ways that interfere with their operation. Extortion letters are unethical, anachronistic and counter-productive,” Karlung says.

The rest of the world needs ISPs like this to assist in the stamping out of disease-fire that is copyright trolls. One can only hope that Sweden will successfully export the concept of an ISP that actually looks out for its customers.

Filed Under: copyright, copyright trolls, isps, sweden, trademark
Companies: banhoff, spridningskollen

Bill Introduced To Create Copyright Small Claims Court... Which Copyright Trolls Are Going To Love

from the flooding-the-system dept

For a while now, some in the copyright community have been pushing for a copyright "small claims court" as an alternative to filing a federal lawsuit over copyright law. It's true that, especially for small copyright holders, the cost of filing a lawsuit may appear to be rather prohibitive. But it's not clear that a small claims court is the answer. A few years ago, we wrote about some potential concerns with such an approach, but have also admitted that if set up right, it could have some advantages. But that requires it be set up right.

Unfortunately, a new bill has been introduced, by Rep. Hakeem Jeffries, along with Rep. Tom Marino, to officially set up such a system -- and it's done in a way that looks like it will not be well-designed, and instead will lead to a massive rush of small claims, especially by copyright trolls. The bill is called the Copyright Alternative in Small-Claims Enforcement Act of 2016, or CASE Act, and... it's got problems.

The "good" news, if you can call it that, is that claims that would go before this appointed tribunal, made up of copyright lawyers recommended by the Register of Copyrights and appointed by the Librarian of Congress, would have much lower statutory damages availability than the federal courts. A copyright claim in a federal court has statutory damages up to $150k, for willful infringement. In the small claims system, the maximum statutory damages would be $15k. But, really, that's just half of today's official statutory damages -- because if there's no willful infringement, the Copyright Act puts a cap at $30k. In the small claims world, there's no option to claim willful infringement.

Another potentially good feature is that this small claims setup would be able to hear two kinds of claims: the standard ones involving claims of someone violating one of the established rights under copyright law... but then also to hear cases about abusive DMCA notifications, under Section 512(f) of the DMCA. Of course, as we've noted in the past, the federal courts have effectively written 512(f) out of the law and refuse to punish those who file bogus DMCA notices. It's not at all clear how things would change here. The bill explicitly notes that the remedies for a 512(f) bogus DMCA notice claim would be limited "to those available under this chapter." But it's unclear if that really means that you could get $15k for a bogus DMCA filing. And that's because the section on statutory damages is clearly written only with people suing for copyright infringement in mind, and not people suing over bogus DMCA takedowns.

For example, it notes that in order to qualify for the $15k maximum statutory damages, it only applies to "works timely registered." But... how does that make sense for 512(f) claims? In those cases, the question of whether or not the defendant timely registered a copyright makes no sense at all. If someone sends a bogus DMCA takedown over a copyright that doesn't exist or that they don't hold, why should its registration status matter? It's almost as if Rep. Jeffries (or the lobbyists who wrote this bill) only tossed in the part about 512(f) claims to appease people concerned about abusive DMCA takedowns, and then completely forgot about it after they included that.

But the really big problem in my mind is that this seems likely to just be swamped by copyright trolls. We already see that they're flooding the federal court system, where multiple rulings against joinder (i.e., the ridiculous bundling of thousands of possible file sharers together) has meant that when trolls do sue, they're generally limited in how many people they can sue. Making the process cheaper, but still offering statutory damages amounts that can be quite scary to the average American, and that can still get the job done of scaring threatened users into paying up fines that are much smaller than the $15,000.

And, yes, this small claims system will allow for discovery, which is the key feature that trolls want. They want to sue, and then get discovery where they can send demands to ISPs for names of subscribers based on IP addresses, and there doesn't appear to be anything in the bill to stop that. It does note that parties seeking discovery need to show "good cause" to enable discovery, but that may be a fairly low bar. It also notes that responding to discovery requests to non-parties in the dispute will be "voluntary" so perhaps ISPs will resist, but that's not certain. And thus, this three-panel board may find itself on the receiving end of a ton of ridiculous claims from trolls who have no intention of following through with the case. One would hope, with the federal court system's copyright docket currently overrun with trolling cases, that whoever drafted this law would have thought through a better plan to stop that from happening here.

Another potential issue: the bill would let individuals go after not just actual infringers, but also service providers if they fail to follow through on a DMCA takedown notice. Basically, it exports the DMCA safe harbors to this small claims process as well, but that may mean that internet platforms are going to get dragged through this process that was meant to focus on small claims that could be easily adjudicated.

There's also this oddity. After laying out the specific responsibilities of the three individuals who will handle all of these small claims cases, the bill notes:

When not engaged in performing their duties as prescribed in this chapter, to perform such other duties as may be assigned by the Register of Copyrights.

What, exactly, is that going to entail?

Who knows how this will actually play out. A few years back, the UK introduced its own small claims copyright system. But I have no idea how it's doing. I haven't seen any numbers or indication of how widely it's used. Perhaps it works great and is a useful tool for dealing with small scale infringement issues. But I do worry about the way the bill is currently written and how it can be abused, especially by trolls who just want to pressure people into settling, and where the threat of a $15k award might be plenty.

Filed Under: copyright, copyright office, copyright trolls, discovery, hakeem jeffries, small claims, tom marino

Dallas Buyers Club Demands Accused Pirate Take Polygraph, Asks For Judgment When He Agrees Anyway

from the graphic-detail dept

Anyone who has spent time with us here at Techdirt will be familiar with Voltage Pictures, the movie studio that perhaps is more famous now for being a copyright settlement troll than it is for having produced the movie Dallas Buyers Club. The studio has quite the reputation for sending settlement letters to those it accuses of having pirated the movie, typically with offers to settle for amounts in the thousands, and armed with the evidence of an IP address and nothing else. The frightened masses too often fork over the demanded settlement, not realizing that having an IP address is not evidence enough to prove guilt. It's a bullying business model that drips of sleaze.

But, like with many others that use sleazy business models, the sleaze doesn't end there. Lying and making false promises appears to be part of the model as well. Take the case of Michael Amhari, a California man on the receiving end of one of Voltage's settlement offers. The studio made several promises to try to get Amhari to settle, none of which it appears to have been willing to keep. For instance, Voltage wanted Amhari to take a polygraph to back up his claim that he wasn't the one who downloaded the film.

“Plaintiff demanded that defendant take a polygraph examination in exchange for a dismissal of the case. Plaintiff’s counsel disingenuously stated that he would bear all the costs for such a polygraph test,” Amhari’s counsel Clay Renick writes.

“When plaintiff’s counsel then agreed to take such a test with the proviso that defense costs and attorney fees be covered, plaintiff then refused to pay costs and revoked his offer to conduct a polygraph.”

Instead of coming to terms, Dallas Buyers Club asked the court to order a default judgment in their favor, which Amhari’s counsel asked the court to set aside.

In addition to playing these games with a polygraph test request, Renick is also asking the court to set aside the judgement due to all the other promises Voltage made to Amhari, with promises to dismiss its claim, that it didn't keep.

For example, they offered to dismiss the case if he would state under penalty of perjury that he was not involved, while pointing out another possible suspect. However, after Amhari submitted his declaration they moved for a default anyway.

“After receiving exculpatory evidence and the sworn declaration of defendant, Mr. Davis then refused to file a dismissal and proceeded to demand that defendant appear in the action or he would file a default. This behavior is galling and it should not be permitted by the court,” the defendant’s counsel adds.

Galling and quite exemplary of just how interested in any kind of justice Voltage Pictures is in this instance. Which is to say it isn't at all, because it appears to keep requesting information and evidence supporting Amhari's innocence and then rescinding its promises once its requests are met. That isn't someone looking for a just result. It's instead the actions of an incredibly irritating bully who is only interested in the extraction of money from someone it deems to be be bully-able. That the promises were backed by a legal staff that then has gone back to the court to try to get judgments against the defendant is breathtakingly cavalier.

Given that Amhari has agreed to pretty much every demand that Voltage Pictures has made, and has received none of the promised results, it would be nice for the court to slap the troll around a bit and at least revoke the previous default judgement.

Filed Under: copyright trolls, dallas buyers club, michael amhari, polygraph
Companies: voltage pictures

$25 Million Jury Verdict In Rightscorp Case Raises Serious Questions About Copyright Law

from the but-of-course dept

This wasn't a huge surprise after Judge Liam O'Grady's questionable reading of the DMCA a few weeks back (along with his general disdain for the internet), but a jury yesterday awarded BMG $25 million from Cox Communications, claiming that Cox was guilty of willful "contributory infringement" in not kicking accused file sharers off the internet. The jury found Cox not guilty of "vicarious liability," which is at least marginally surprising, as many people who don't spend their lives wrapped up in copyright law have difficulty distinguishing the difference between "contributory infringement" and "vicarious" (if you're confused too, Wikipedia's overview is a decent place to start). And based on that, the jury hit Cox with the $25 million award for BMG.

This will undoubtedly go to appeal, and it would seem that Cox has some pretty strong arguments. First up, the original decision that Cox is not subject to the DMCA's safe harbors is a highly questionable ruling, and would go against a number of previous rulings. As noted previously, some of Cox's actions did seem somewhat egregious, but this still involves a previously untested argument that the policy of requiring service providers to have a plan to terminate users applies to network service providers, rather than those who host content. That's a pretty big open question -- and how that issue is resolved will have a major impact on how the internet functions going forward. If Judge O'Grady's ruling stands, then the RIAA and MPAA just got a huge golden gift: it would effectively say that the US has a "three strikes"-like law where people can be kicked off the internet entirely, based solely on accusations of copyright infringement. That's a pretty scary result.

Even separate from that, the idea that Cox, an internet service provider, is guilty of "contributory liability" for infringement seems difficult to believe as well. The standard for contributory copyright infringement is basically one who "knowingly induces, causes or materially contributes" to copyright infringement done by someone else where that party "had knowledge, or reason to know, of infringement." So, in this case, the argument is that based on the notifications, Cox had the necessary knowledge of the infringement, and then "materially contributed" to that infringement by continuing to provide service. But, again, that's a huge stretch, and goes way beyond historical examples of contributory infringement, where you had things like Grokster, that actively advertised its software as being useful for infringement. In this case, all Cox did was not terminate users, and somehow that counts as "materially contributing" to infringement?

Again, if that stands, it has tremendously troubling implications for how the internet functions, and the ability of people to use copyright law to wreak havoc on the lives of others. We're talking about opening up the possibility of going way beyond the standard DMCA takedowns of content, to it becoming a weapon for killing internet access within households.

The $25 million verdict comes out to about $18,000 per each of the 1,397 copyrights listed in the case -- which is certainly less than the statutory maximum possibility of $150,000 per infringement. But, still... Either way, it's almost certain that Cox will appeal, and that's when the case will start to get a lot more interesting.

Filed Under: contributory infringement, copyright, copyright trolling, copyright trolls, dmca, safe harbors, secondary liability, vicarious liability
Companies: bmg, cox, cox communications, rightscorp

Australian Court Rejects Dallas Buyers Club Copyright Trolling Demands

from the good-for-them dept

As we've been discussing over the past few months, Voltage Pictures took its global copyright trolling efforts down under not too long ago, seeking to shakedown lots of Australians for allegedly downloading infringing copies of Dallas Buyers Club. Australian ISP iiNet (who has regularly fought back against over aggressive copyright claims) pushed back. Earlier this year, the court allowed the copyright trolling to move ahead, but with some caveats, including demanding that DBC share the letter and telephone script it would be using to try to shake down people. At the time, we hoped this would prevent the standard level of shakedown -- and that appears to have happened.

The court has rejected the proposed letter and script, noting that it was demanding way too much, and thus not allowing DBC to move forward:

"The applicant was claiming four heads of damages and was proposing to negotiate with account holders in relation to those four amounts. I've concluded that two of those amounts could never be recovered, and in those circumstances, I've decided that what is presently proposed by Dallas Buyers Club in terms of its correspondence ought not to be permitted," Perram said on Friday morning.

"I therefore make these orders: I dismiss the prospective applicant's application to lift the stay of order one made by me on the 6th of May; and I order the prospective applicants to pay the respondent's costs of that application."

Part of the problem was that DBC was asking for money for the accused users uploading activity and "additional damages for an infringer's other downloading history." The court noted that was way out of bounds, calling them "untenable claims." Further, the court noted what was really going on here, calling out that it was never the intention to allow for "speculative invoicing" (the nice way of saying "copyright trolling.")

The court will let DBC send letters if it puts up a $600,000 bond promising that it won't try to recover those bogus damages. Instead, if it puts up the bond, it will only be allowed to recover damages in the form of (1) the cost of legally purchasing the movie and (2) the cost it took for DBC to obtain the user's details. In other words, DBC would need to put up the bond and then would only be allowed to collect a rather small amount from each accused user -- which likely makes the whole scheme not particularly worth it.

Apparently the judge set the bond so high because he feared that DBC would demand more money anyway and then not care, since it has no Australian presence:

"Because DBC has no presence in Australia the court is unable to punish it for contempt if it fails to honour that undertaking," he said.

"I will therefore require its undertaking to be secured by the lodging of a bond. Having had access to what it is that DBC proposes to demand ... and the potential revenue it might make if it breached its undertaking to the court not to demand such sums, it seems to me that I should set the bond at a level which will ensure that it will not be profitable for it to do so.

"I will set the bond at $600,000 which, if the undertaking is given, is to be lodged by bank guarantee with the registrar. "

In the issued order the Judge notes that he demanded from DBC to tell the court (secretly) what it was going to request from users, since that was not detailed in the proposed letter or phone script -- and notes that it does appear that the plan was very much about trolling (again "speculative invoicing."). Based on all of this, it appears that Australia will not be a particularly friendly place for copyright trolls.

Filed Under: australia, copyright, copyright trolls, dallas buyers club, shakedown, speculative invoicing
Companies: dallas buyers club, iinet, voltage pictures

Rightscorp's Settlement Site Blocked As 'Malware' By Respected Antivirus Software Provider

from the not-helping-with-the-whole-legitimacy-thing dept

The anti-piracy catastrophe that is Rightscorp continues its slide into disrespectability, albeit inadvertently. Currently facing lawsuits for robocall phone harassment and the realities of a business model that largely relies on the kindness of accused strangers, Rightscorp is barely upright.

Granted, this latest mini-debacle isn't necessarily its fault. At least, not directly or intentionally. But it is a problem nonetheless, especially if Rightscorp is still expecting alleged infringers to beat a path to its virtual doorstep to pay up for their illicit activities. Ernesto at TorrentFreak has more bad news for the trollish company.

For the past few days prominent anti-virus vendor Bitdefender has been blocking the company’s website after categorizing it as malware.

People who receive a notice from Rightcorp are welcomed with the following popover when they try to access the settlement page. The notice is limited to the settlement pages and doesn’t appear on the regular website.

This has led to some speculation as to how Rightscorp became malware, at least in the eyes of Bitdefender. While some antivirus programs kick out more false positives than a Total Wipes DMCA takedown request, Bitdefender doesn't appear to have that reputation.

Ernesto speculates this may be due to the large number of settlement emails all providing links back to Rightscorp's "secure" (it's a bit more secure now…) payment site. Sophisticated Jane Doe of Fight Copyright Trolls points out in the comments that the page itself is a joke, what with settlement screens still providing "share" links to a variety of social media services… except that they all link back to the notice screen itself.

It could be that Bitdefender views pages that demand credit card information without any sort of preamble (a "shopping cart" screen/an opening splash page informing purchasers that they've arrived at the right site, etc.) as potentially untrustworthy and better safe than sorry.

As of right now, this appears to be a fluke error on Bitdefender's part, as it is the only antivirus/malware service to have blocked the page. Maybe this "misunderstanding" will be cleared up in a few days. Or maybe Bitdefender users with settlement notices will continue to be steered clear by their AV software. Either way, it's hardly helpful that a respected antivirus service feels the site is questionable enough that it has constructed a tiny dam right in the middle of Rightscorp's trickling revenue stream.

Filed Under: blocking, copyright trolls, settlements
Companies: bitdefender, rightscorp