Judges May Be Reaching Limit with Copyright Profiteering by Pornography Sellers

By and | August 6, 2019

Pornography producers and sellers account for the lion’s share of copyright-infringement lawsuits in the U.S. — and judges may have seen enough.

The courts are cracking down on porn vendors that file thousands of lawsuits against people for downloading and trading racy films on home computers, using tactics a judge called a “high tech shakedown.” In one case, two men were jailed in a scheme that netted $6 million in settlements.

The pornography companies have “a business model that seeks to profit from litigation and threats of litigation rather than profiting from creative works,” said Mitch Stoltz, a senior attorney with the Electronic Frontier Foundation, a San Francisco group that has waged a campaign against companies it thinks abuse the copyright system.

Two companies that make and sell porn are responsible for almost half of the 3,404 copyright lawsuits filed in the U.S. in the first seven months of this year, according to an analysis by Bloomberg Law’s Tommy Shen. Malibu Media LLC, which distributes such titles as “Stunning Sexy Shower,” has filed some 8,000 lawsuits nationwide since 2012. Strike 3 Holdings LLC, operator of such sites as “Tushy” and “Vixen,” has filed about 3,500 lawsuits in just the past two years, according to Bloomberg Law dockets.

The companies say they are protecting their movies from piracy and infringement under U.S. copyright law, as major movie studios have done for decades, and suggest that the content of their films is the reason for the wrath of the judges. But some of the tactics used in their infringement suits to identify targets and force settlements have critics — and some jurists — up in arms and may require congressional actions to fix.

The suits don’t initially name names. They identify the Internet Protocol addresses using peer-to-peer networks like BitTorrent to download or distribute the movies and then file suits against “John Does” and ask the courts to order internet service providers, like Verizon Communications Inc. or Comcast Corp., to identify the account subscribers. Those people are then contacted by the porn company lawyers.

The companies “don’t take any measures to try to stem the tide of piracy; instead, they try to profit from the piracy,” said Leonard French, a lawyer in Allentown, Pennsylvania, who’s represented 800 people sued by Malibu Media. He said the defendants, mostly men, run the gamut — business executives, retired military officers, authors, engineers and even law students.

Wealthy Areas

The companies target users in wealthier areas and tend to go after any adult male in the house “since they assume that only men view and download porn,” said lawyer Leslie Farber of Montclair, New Jersey, who has handled about 150 cases filed by the two companies.

Judges grant such requests in thousands of copyright-infringement lawsuits each year. Last December, though, District Judge Royce Lamberth in Washington balked at Strike 3’s request for an order, saying he “will not accept the risk of misidentification” and that the flood of lawsuits smacks of “extortion.”

Strike 3 “treats this court not as a citadel of justice, but as an ATM,” Lamberth said. “Its feigned desire for legal process masks what it really seeks: for the court to oversee a high-tech shakedown. This court declines.”

Strike 3 said Lamberth’s ruling was swayed by “an extraordinarily blatant disapproval of the purported content of Strike 3’s works.” While the company said it’s willing to take steps to protect identities of its targets, it will continue pressing its rights under the U.S. Constitution and Copyright Act.

Lamberth’s December ruling is already having a ripple effect. A federal judge in New Jersey on July 9 granted Malibu Media’s request to identify the user, but refused to enter a judgment against the man, citing Lamberth’s “scathing opinion” and concern for the privacy of the individual when only an internet address is known.

Malibu Media and Strike 3 have nothing on the actions of two lawyers, who sometimes worked under the name Prenda Law. They would upload the movies themselves to peer-to-peer sites, use shell companies to sue anyone who took the bait, and made up elaborate tales to hide their actions. Between 2011 and 2014, they collected some $6 million based on settlements of $3,000 or less, according to federal prosecutors.

One lawyer, who cooperated with prosecutors, was sentenced in July to five years for mail fraud and money laundering in what a federal judge called a “vile” scheme; the other is appealing his 14-year federal prison sentence.

Malibu Media and Strike 3 say they have no choice but to sue — both reported a drop-off in their subscription services because of the illegal downloads. Strike 3 said it filed suits only against “the most egregious of these infringers.”

Patrick Cerillo, a Flemington, New Jersey-based lawyer who represented Malibu Media in the New Jersey case, said the lawsuits are having a deterrent effect. The number of downloads that investigators are finding in any given case has dropped, from as many as 120 films at a time to an average of 8 to 15, he said in an interview. The idea that Malibu Media is using shame to coerce settlements is “a bunch of malarkey.”

“You can’t look at the content of these plaintiffs and say that they don’t deserve the same rights as a musician or an author to protect their copyrights because it’s seedy, it’s not mainstream, it’s deviant,” Cerillo said. “People lose sight of the fact that this is a law that protects the creativity of individuals and companies. And that creativity can be stifled if you can’t protect it.”

Recording Industry

The “John Doe” lawsuits came into being around 2004, after Verizon successfully argued that the recording industry, which was engaged in a controversial campaign to sue people who downloaded music, couldn’t just demand the identity of a subscriber without a court order. The goal was to protect the privacy of their customers and curb abuses.

It’s a technique used by owners of more mainstream flicks, like the owners of the 2015 Adam Sandler film “The Cobbler” who filed more than 200 lawsuits in 2015 and 2016, or the owners of the Oscar-winning “Dallas Buyers Club” who lodged some 300 cases.

No one reaches the numbers of the porn companies, though.

“They are used to filing thousands of lawsuits without much research or investigation into the individuals that they are suing,” said David Lin, a copyright lawyer whose Brooklyn-based firm has defended against about 100 such lawsuits. “They can’t just file a lawsuit against grandma just because grandma is the name on the internet account.”

Congress is considering legislation to create a sort of small claims court in the Library of Congress, with potential damages limited and lower costs to file. Keith Kupferschmid, chief executive of the Copyright Alliance, said the proposal is designed to deter high-volume litigants and will help independent photographers or other artists.

The beef shouldn’t be with copyright owners filing lawsuits to protect their property, but the “coercive tactics” to settle by the porn companies, Kupferschmid said, who blames the internet companies for not making it harder to distributed pirated works.

Critics of the plan, such as the Electronic Frontier Foundation, say they worry it would encourage more porn download cases.

Cerillo said that it would be up to Congress to change the law regarding copyright-infringement — with the warning that any attempt to derail the porn companies would affect all movie companies and copyright owners. French said Congress or the courts could require more than just an IP address to go after someone.

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