Court Lets Malibu Media Move Forward With Discovery In Copyright Case, But Blocks 'Speculative Invoicing'

from the a-more-careful-approach dept

Just recently, we noted that a court in Australia, clearly understanding the issues with copyright trolling, had blocked Voltage Pictures/Dallas Buyers Club from pushing out questionable "settlement" letters (i.e., shakedown letters) to subscribers -- and required a huge bond if the organization wanted to move forward. It appears that some US courts may be thinking along similar lines in an effort to stop copyright trolls from abusing the judicial system as a way to shake people down for money in a practice known as "speculative invoicing" (i.e., pay up or we sue you).

The world's largest copyright troll, Malibu Media, has been taking some hits lately, pissing off judges who appear to be catching on to the game that Malibu and its lawyers (mainly Keith Lipscomb) are playing. And now, one judge is taking something of a page from that Australian court, in "allowing" Malibu Media to move forward with a case, but with a ton of restrictions to try to avoid the pure shakedown aspect of the business model (ht to Raul for the pointer).

The judge, James Bredar, in Maryland, clearly understands what Malibu Media is hoping to do: get ISPs to hand over names and contacts of a bunch of people, so that it can start bombarding them with demands for money, along with threats to "reveal" the names of embarrassing porn titles it's accusing them of downloading in the form of a lawsuit. Judge Bredar is allowing the discovery process to go on, but with restrictions to avoid the standard out-and-out shakedown game of Malibu Media. First off, before any names will be revealed to Malibu Media, all individuals must be given a chance to quash the subpoena:

After having been served with the Subpoena, the ISP will delay producing to Malibu the subpoenaed Information until after it has provided the Doe Subscriber with

Notice that this suit has been filed naming the Doe Subscriber as the one that allegedly downloaded copyright protected work;b. A copy of the Subpoena, the complaint filed in this lawsuit, and this Order;c. Notice that the ISP will comply with the Subpoena and produce to Malibu the Information sought in the Subpoena unless, within 30 days of service of the Subpoena, the Doe Subscriber files a motion to quash the Subpoena or for other appropriate relief in this Court. If a timely motion to quash is filed, the ISP shall not produce the subpoenaed Information until the Court acts on the motion.

Also, Malibu Media will need to pay all of the ISPs' costs, including attorneys' fees, and then if the subscriber does not seek to quash, the ISP will hand over the names... but, Malibu can't start shaking them down. Instead, it needs to hold the information in a confidential manner, and can only use it to file a lawsuit if it thinks it has a case -- and, even then, the name of the individual will be blacked out.

Malibu shall reimburse the ISP for its reasonable costs and expenses, including attorney's fees, associated with complying with the Subpoena and this Order. On receipt of the Information from the ISP, Malibu must mark it as "Highly Confidential," and, in the absence of further order of the Court, may only use it to determine whether, pursuant to Rule 11(b), it has sufficient information to amend the complaint to name as an individual defendant the Subscriber. Unless otherwise ordered by the Court, Malibu, its agents, representatives, and attorneys may not disclose the Information received from the ISP to any person not directly involved as an attorney in representing Malibu in this copyright infringement action relating to the Information received, except as provided below. Any person to whom the Information or its contents is disclosed shall be required to sign an agreement to be bound by the provisions of this Order, enforceable by an action for contempt, prior to being informed of the Information or its contents. Any amended complaint filed by Malibu naming an individual defendant shall be filed so that the name and any specifically identifying information is redacted from the publicly available court docket, to be replaced by first and last initials only, with an unredacted copy of the amended complaint filed under seal.

More importantly: no shakedown efforts:

Malibu is prohibited from initiating, directly or indirectly, any settlement communications with any unrepresented Doe Defendant whose identity has been revealed pursuant to the Subpoena or deposition described in paragraph 4 above. Any settlement communications with an unrepresented Doe Defendant shall be initiated only as approved by the Court. On request submitted to the Court at any time by Malibu or the Doe Subscriber, whether represented or unrepresented, settlement shall be conducted under supervision of one or more Magistrate Judges designated by the Court for this purpose. Unless otherwise ordered by the Court, any settlement negotiations shall be subject to the confidentiality provisions of Local Rule 607.4. This paragraph shall not prevent Malibu from initiating or responding to a request for settlement communications with a Doe Defendant who is represented by counsel.

In other words, the court knows what Malibu is up to and will be watching closely. It will be interesting to see if Malibu Media actually follows through or just cuts its losses and moves on to other courts with less aware judges.

Filed Under: copyright, copyright trolling, discovery, james bredar, speculative invoicing
Companies: malibu media, xart