Today, it’s common knowledge that IP-addresses and downloads of BitTorrent users can be easily monitored by tracking outfits.

This inherent transparency has fueled thousands of lawsuits against alleged video pirates, both in the U.S. and around the world.

In the United States, Strike 3 Holdings established itself as the absolute frontrunner in recent years. The company produces adult entertainment videos published under the brands ‘Blacked’, ‘Tushy’, and ‘Vixen’ made available from its own websites. If any of these videos are shared on pirate sites, Strike 3 takes action.

These lawsuits can be a lucrative business, especially when targeted defendants opt to swiftly settle the action for a few thousand dollars. The money comes on top of the deterrent factor, which is often cited by copyright holders as one of the main reasons to take action.

Legal pressure can deter the accused pirates and, perhaps, some of their neighbors too. On the whole, however, the copyright infringement problem is rather persistent, which is exemplified by Strike 3’s track record.

Raising the Bar

With the year in its final week, we decided to take a look at the number of file-sharing lawsuits filed in the United States in 2023. The data shows that Strike 3 Holdings has set a new record yet again.

From January 1 to today, Strike 3 submitted 3,465 complaints in various courts around the U.S., targeting “John Doe” subscribers. This is a new milestone; never before has a copyright holder filed this many lawsuits against alleged file-sharers in a single year.

For comparison, in 2017 all rightsholders combined filed 1,019 file-sharing cases. In the following years, this number increased mostly thanks to Strike 3, which set the previous record of 2,878 in 2022 .

12,500+

Strike 3 filed its first case in 2017 and since then has submitted over 12,500 complaints at federal courts.

Strike 3 is currently responsible for most legal action against file-sharers in the United States. Other independent movie studios also file piracy-related lawsuits, but these are limited to a few dozen at most.

With this level of workload, it’s no surprise that most cases are resolved relatively swiftly. Of all lawsuits filed in the first half of the year, more than 2,000 have already been closed; that’s more than half. This happens when the parties reach an out-of-court settlement or if Strike 3 drops a complaint for other reasons.

Trial Canceled

Earlier this year there was some ‘excitement’ when one of Strike 3’s lawsuits appeared to be headed to trial. That was canceled after the adult entertainment company and the defendant settled their differences at the eleventh hour .

There was no clear winner in that case, but both sides were ultimately happy with the outcome. According to Strike 3’s attorney Christian Waugh, the goal of these cases isn’t to damage individual defendants. The company wants to protect its rights.

“The point of my client’s litigation is not personal or to harm any defendant, it is to protect its rights under the Copyright Act, which has been done in this case,” Waugh told us at the time.

Courts have also issued judgments in these cases in the past. This has resulted in a windfall for Strike 3 in some cases but, when Strike 3 filed a lawsuit against a 70+-year-old retired police officer, the tables were turned .

Overall, however, it seems likely that there’s a financial benefit to Strike 3’s rights protection efforts. If the lawsuits generated losses, they probably wouldn’t file thousands of complaints every year.

From: TF , for the latest news on copyright battles, piracy and more.

Over the past several years we’ve covered dozens of copyright troll cases against tens of thousands of alleged copyright infringers.

Our coverage mostly focuses on piracy-related cases, but there are other variants too. Outfits that target blogs and other websites for using photos without permission, for example.

The definition of the term ‘copyright troll’ is fluid. In the file-sharing space it typically refers to parties that accuse large numbers of people of copyright infringement, who are then threatened with legal action and the potential for large damages awards. Targets are encouraged to pay settlements to ensure these legal problems go away.

The phenomenon has been ongoing for well over a decade and while the most severe examples have disappeared, the business model remains active today. According to an amicus curiae brief filed at the Supreme Court last week, the problem could get worse.

Copyright Troll Warning

These cautionary words come from the Electronic Frontier Foundation (EFF), the Authors Alliance, the American Library Association, and the Association of Research Libraries. They intervened in the Warner Chappell Music v. Nealy lawsuit, a music copyright case that in itself is unrelated to copyright trolling.

The case in question deals with the period during which rightsholders can recover damages for copyright infringement, known as the ‘discovery accrual rule’.

According to U.S. copyright law, there is a three-year statute of limitations to file complaints. This period starts after a rightsholder ‘discovers’ the infringement. Courts have been split on whether this three-year limitation also applies to the damages that can be claimed, or if ‘damages accrual’ can go further back.

Don’t Feed the Trolls

According to the amicus curiae brief, an extended damages accrual period could give more ammunition to copyright trolls. It would allow them to claim that they only just discovered infringements that took place many years ago, allowing them to claim damages beyond three years.

“The discovery accrual rule as interpreted by the Eleventh Circuit in this case […] encourages copyright trolling. The ability to recover damages for infringements that occurred an arbitrarily long time ago, as long as litigation is begun within three years of discovery, expands the opportunities to seek nuisance-value settlements against numerous internet users.

“The problem of copyright trolling illustrates why the Court should hold that infringement claims accrue when the infringement occurs, with the three-year statute of limitations running from that date,” the groups add.

Torrents, Photos, and More

The filing provides a detailed overview of the copyright trolling landscape. This includes the many lawsuits filed against BitTorrent users, who are targeted for sharing pirated movies. These lawsuits are typically settled or dismissed and rarely go to trial.

While this practice is still common today, courts have limited their scope; in some jurisdictions, trolls are no longer welcome.

“Many courts have thrown out these suits on procedural grounds (such as improper joinder and lack of personal jurisdiction), and courts have recognized the impropriety of using the judicial process solely to extract quick settlements,” the brief notes.

In BitTorrent cases, rightsholders have to actively monitor for copyright infringements, so lawsuits are not typically filed after many years have passed. For image-related trolling, the position differs.

Reverse image search tools allow photographers and their attorneys to spot content posted a long time ago. They can then go after alleged infringers years later, claiming damages.

“These demands frequently concern images posted well over three years earlier. Such postings cause little or no monetary harm to rightsholders, no significant gain for website authors, and would not otherwise be the subject of litigation,” the brief reads.

Time Limited Damages

The amici are concerned that if rightsholders can claim damages for much longer periods, this would only make the trolling problem worse. In a recent blog post , EFF explains its concerns in detail, asking the Supreme Court to mind the trolls.

Copyright disputes come in many forms, but EFF stresses that courts should ensure judicial safeguards are in place to prevent abuse. They note that limiting the damage period is key to prevent excessive trolling.

“EFF filed its brief in this case to ask the Supreme Court to extend these judicial safeguards, by holding that copyright infringement damages can only be recovered for acts occurring three years before the filing of the complaint.

“An indefinite statute of limitations would throw gasoline on the copyright troll fire and risk encouraging new trolls to come out from under the figurative bridge,” EFF concludes.

—

A copy of the full amicus curiae brief, submitted by EFF, the Authors Alliance, the American Library Association, and the Association of Research Libraries, is available here (pdf)

From: TF , for the latest news on copyright battles, piracy and more.

While opinions, definitions, and scope vary, it seems fairly clear that lawsuits targeting BitTorrent pirates do little to prevent mass piracy. A steady stream of suspected pirates continuously line up to become the next individuals to face potential legal action, regardless of how many that has happened to previously.

For companies whose movies are downloaded and shared illegally, solutions have been developed that allow them to monitor suspected pirates and track them back to their ISPs, before obtaining their identities and making a settlement offer to end the risk of a full-blown lawsuit. For many movie companies, this business model provides a stream of revenue from those perceived as unprepared to pay for their product.

Internet users targeted by lawyers working for those companies often view settlement demands of up to thousands of dollars as disproportionate to any actual damage suffered. Nevertheless, huge numbers of people have paid up over the years, with their cash often being handed to a law firm in the first instance. From there, payments typically wind their way back to the movie companies, with intermediaries also involved taking their cuts in what has become a global, industrial-scale settlement factory.

Movie Companies Sue Lawyer In Dispute Over Settlement Cash

Millennium Funding, Bodyguard Productions, and LHF Productions are behind famous movies including The Expendables, Olympus Has Fallen, and The Hitman’s Bodyguard. They’ve also built a reputation for demanding cash settlements from alleged pirates and more recently, filing lawsuits against internet service providers alleged to have knowingly harbored them.

In a lawsuit filed at an Illinois district court last week, the companies target attorney Michael Hierl of Illinois, and Hughes Sokol Piers Resnick & Dym, Ltd, a Chicago law firm of which Hierl is a shareholder.

According to his profile , Hierl has practiced exclusively in the area of intellectual property law since 1980; the lawsuit claims that Hierl and his law firm carried out work for the plaintiffs, including “filing infringement actions against and collecting monetary settlement payments from third-party infringers.”

In a nutshell, the plaintiffs allege that the defendants have refused to provide a “complete and accurate accounting identifying all costs, fees, and receipts for each infringement action” and failed to forward settlement amounts received in those actions.

The movie companies allege a breach of contract but note that due to the defendants’ alleged accounting deficiencies, they are unable to put an exact figure on the amount Hierl and his law firm failed to pay. For their part, the defendants view the situation quite differently.

Fighting Pirates, Help From Agents

The lawsuit describes Millennium’s entry into this particular piracy-fighting arena as follows:

To help combat infringing copies of Millennium’s Films being sold and distributed through the Internet, in 2012, Millennium and its predecessors in interest, through their prior agent, engaged Defendants to prepare and file infringement actions against the third-party infringers in the United States District Court of the Northern District of Illinois.

The name/s of Millennium’s “predecessors in interest” go unnamed at this point, with the same applying to Millennium’s “prior agent”. The complaint simply notes that the agent would supply Hierl and his law firm with the IP addresses of suspected infringers and they would file ‘John Doe’ complaints and “propound subpoenas to non-party internet service providers” to determine the identity of the suspected infringers based on their IP addresses.

Once suspected infringers were identified, the defendants reportedly amended the complaints to name the suspected infringers. In the event the named defendants agreed to settle, Hierl and his law firm were authorized to take a percentage of the settlement amount as their contingency fee and then send the balance to Millennium’s agent.

“Since Millennium engaged Defendants in 2012, Defendants have filed hundreds of cases on behalf of Millennium and parties that have since merged with Plaintiff Millennium Media, Inc., in the Northern District of Illinois against third-parties infringing Millennium’s Intellectual Property,” the complaint adds.

New Agent Replaces Prior Agent

Millennium says that in 2019 (date unspecified), it appointed a new agent “to communicate with Defendants on Millennium’s behalf to coordinate Defendants’ enforcement of Millennium’s Intellectual Property, thereby replacing Millennium’s prior agent.” This change was communicated to the defendants on December 7, 2020, the complaint notes, adding that all future payments should’ve been made to the new agent.

In common with the prior agent, the new agent’s name isn’t identified at this point. However, Millennium says that the defendants should’ve sent the new agent “monthly reports providing details of the Infringement Actions including, but not limited to, any number of actions filed, the number of settlement agreements reach, and collections made as a result of any such settlement agreements.”

On unspecified dates in 2021, the movie companies said they “detected discrepancies” between the information available from the dockets of the infringement actions brought on their behalf and the “information and accountings” the defendants had provided to the movie companies, including “what appeared to be settlement payments Defendants collected but failed to report and pay to Plaintiffs.”

The complaint alleges that since then, and despite numerous requests for Hierl and his law firm to provide files “and a complete and accurate accounting” for the infringement actions carried out, none have been forthcoming.

‘Prior Agent’ Was Part of Infamous Guardaley Settlement Operation

The complaint refers to a letter dated November 23, 2021, in which Hierl responds to a proposed complaint by Millennium which outlines the movie company’s differences with Hierl and his law firm. It contains the following paragraphs:

Some clarifications are in order before moving on.

CMS and PML

CMS (the ‘prior agent’) is a reference to Copyright Management Services Ltd, a company that has appeared in many lawsuits targeting alleged BitTorrent pirates in a number of jurisdictions on behalf of many copyright holders. The company was founded by Patrick Achache, a leading figure at anti-piracy tracking firm Maverickeye, which in turn works with German/UK company Guardaley; Achache previously described himself as Guardaley’s data director.

As previously reported, Achache stopped being a director of CMS on November 19, 2019, and the same day, Lubesly Tellidua – a beauty queen from the Philippines with links to Achache and Guardaley – became the controlling party. In July 2022, Tellidua filed an application for CMS to be struck off the register of companies and on October 25, 2022, official records in the UK reported that the company had been dissolved .

PML (the ‘current agent’) is a reference to PML Process Management Ltd , a Cyprus-based company that began life under a different name before switching to its current name in the first half of 2020.

By 2021, many lawsuits in Sweden alone suggested a link between CMS and PML, if only due to the latter picking up where the former had left off while continuing to use data provided by Maverickeye as the basis of copyright actions.

As reported in 2022, copyright notices sent to US ISP CenturyLink in support of a DMCA subpoena application by Millennium and several other companies, referenced infringements between January 2020 and January 2021; the notices were issued by a known Guardaley partner in the UK, some marked as sent by CMS, others PML.

Since Cypriot public business records tend to obfuscate company ownership, claims that PML was simply CMS with a new coat of paint, and/or under new ownership, remained speculative.

Hierl and Hughes Sokol Piers Resnick & Dym, Ltd: CMS is Our Client

From the statements in the complaint, the position of Hierl and Hughes Sokol Piers Resnick & Dym seems clear: their business relationship is with CMS, nobody else. In February 2021, the law firm wired $19,100.39 to Millennium, reportedly at the direction of CMS, PML and Millennium itself.

“A balance of $69,765.78 was wired to CMS based on our understanding that CMS and Millennium had agreed,” the letter continues. “Our firm has no relationship with PML (attorney-client or otherwise). Further, we were not aware of any unresolved fees allegedly due PML. Our information was that PML was not entitled to any portion of the settlement recoveries.”

Familiar Names, Familiar Companies

At this point, Hierl’s letter references what appears to be a change in the business arrangement, one that he nor his company acknowledge having agreed to. Relevant as that might be, the end of the paragraph is more interesting.

“There was no agreement to change the distribution from ‘gross collections’ to ‘net collections.’ But PML already knows that because CMS and PML apparently use the same accountant, Thomas Nowak, who was a recipient of that email.”

Thomas Nowak is the director of German-based UK-registered company Guardaley and German-based tracking company Maverickeye, whose evidence netted Millennium and other filmmakers big wins , including some against VPN providers.

Spare All Parties From “Senseless Litigation”

In his November 2021 letter, Hierl calls on the movie companies to find some common ground to avoid “time and expense of senseless litigation.” The lawsuit filed last week suggests consensus was elusive. A November 2022 letter sent to Hierl by the plaintiffs notes that while CMS may be Hierl’s client in some capacity, the attorney reportedly filed several cases on Millennium’s behalf, meaning that Millennium is also a client.

“In addition, Millennium requests that you cease all communication with Patrick Achache, CMS, and/or any company associated with Mr. Achache or CMS related to any matter involving Millennium. Moving forward, please report all information and developments in any case you are handling for Millennium to us,” the letter concludes.

Overall, Millennium believes that there is an enforceable contract and it’s owed $130,000 in collected settlements. The movie companies are suing for breach of contract and request an order requiring the defendants to provide a full, current and complete accounting of the infringement actions. They’re also seeking monetary relief in an amount to be decided at trial.

PML says that it has “ten years of experience in this field” and provides a “seamless service delivery” on behalf of its clients.

“We offer returns of 30% of net revenue (the rest is distributed to the partners working on the project, e.g. law firms and data supplier) in exchange for providing this service,” a statement on its website reads.

How all of this dovetails with a March 1, 2019, claim that Guardaley had handed over its United States operations to an entity called American Films isn’t clear.

In this lawsuit, American Films receives zero mentions but according to a recent press release , ISPs can take advantage of an offer to prevent themselves being sued for their customers’ piracy activities. This arrangement involves another company using an American Films subsidiary’s tracking abilities.

The complaint can be found here ( pdf )

From: TF , for the latest news on copyright battles, piracy and more.

Voltage Holdings is one of many mostly American movie companies that have attempted to turn piracy into profit over the last 15 years. A lawsuit the company filed in Canada is broadly the same as others filed elsewhere but the same cannot be said about the outcome.

Background

In 2017, piracy monitoring company Maverickeye collected IP addresses of BitTorrent users sharing the Voltage-owned sci-fi movie ‘Revolt’. Canada operates a so-called ‘notice-and-notice’ regime so Voltage identified the ISPs related to the IP addresses and warning notices were sent to the relevant subscribers. Second notices were sent after Maverickeye found the same IP addresses sharing the same work a week or more later.

In March 2018, Voltage filed a statement of claim against 110 ‘Doe’ defendants, identified only by their IP addresses. Voltage later obtained a so-called Norwich order which compelled the ISPs to disclose the names and addresses of the subscribers.

Voltage labeled a subset of those subscribers “the worst of the worst” and since they failed to respond, the company requested default judgment at Canada’s Federal Court.

Justice Angela Furlanetto agreed the defendants were in default but since Voltage only presented IP address-based evidence, questions remained over who had actually shared the movie.

The Judge said that there wasn’t enough evidence to show a direct link to the subscriber or draw an adverse inference. Voltage argued that if the subscriber wasn’t the infringer, the fact that they had already received warnings under Canada’s ‘notice-and-notice’ regime, among other things, meant that they should be held liable for ‘authorizing’ infringement carried out by others.

In June 2022, Justice Furlanetto declined default judgment but also refused to dismiss the case. Voltage was given more time to present evidence to support direct infringement or authorization but the company took its case to the Federal Court of Appeal instead.

Basis for Voltage’s Appeal

In its 36-page memorandum filed in November 2022, Voltage outlined two legal theories; either the billpayers pirated the movie themselves (direct infringement), or they authorized someone else’s direct infringement by allowing them to continue pirating Voltage’s movie, despite receiving warning notices from their ISPs.

Arguments were heard on March 28, 2023, and three appeal court judges (Justices Donald J. Rennie, David W. Stratas, Wyman W. Webb) handed down their judgment last week.

The judgment says that the appeal engages two issues: the jurisprudence on what constitutes direct infringement and authorizing infringement, and the burden of proof and circumstances under which an adverse inference can be drawn.

“These issues are closely interrelated. The jurisprudence with respect to the law of copyright determines the minimum evidentiary requirements to establish the asserted types of infringement; in other words, the jurisprudence constrains the extent to which an adverse inference may be drawn in the context of online copyright infringement,” the judgment reads.

Judgment Guided By Supreme Court Ruling in 2022

According to Voltage, once it had presented all “technologically available” evidence to the Court, a “tactical burden of proof” shifted to the internet subscribers. This effectively meant they had to show they were not the infringers. In respect of its authorization claims, Voltage said that Justice Furlanetto was wrong to insist on more evidence; the fact that the subscribers received notices yet failed to control their internet connections was sufficient.

The judgment deals with the authorization claims first, guided by a Supreme Court decision handed down in 2022 in Society of Composers, Authors and Music Publishers of Canada v. Entertainment Software Association .

“The Supreme Court endorsed the Copyright Board’s determination that ‘it is the act of posting [the work] that constitutes authorization’ because the person who makes the work available ‘either controls or purports to control the right to communicate it’ and ‘invites anyone with Internet access to have the work communicated to them. The authorizer is the individual directly engaging with the copyrighted material,” the judgment clarifies.

As a result, the Court of Appeal says that whoever used the subscribers’ internet connections to make Voltage’s movie available for download, authorized the infringement. The Supreme Court found that an authorizer permits reproduction but Voltage claims that an authorizer is someone who permits someone to permit reproduction.

The difference in opinion would prove fatal.

Collisions in Copyright Law

Justice Rennie says the Voltage appeal fails to show “any reversible error” in the Federal Court’s decision. Furthermore, Voltage’s arguments on authorization are “inconsistent” with the Supreme Court’s 2022 decision. Voltage’s claims of direct infringement also run into trouble.

“Although it accepted that individuals using each respondents’ IP address had infringed the appellant’s copyright by uploading the Work, the Federal Court found that it could not conclude at this time that the respondents were themselves those particular
individuals. I agree,” Justice Rennie writes.

On the question of a subscriber’s failure to defend, the Judge agrees that can lead to an adverse inference. However, just because a defendant is found to be in default at an early stage, it does not necessarily follow that an adverse inference should be drawn at the same stage.

“If the fact that a defendant was in default automatically allowed for adverse inferences at the second stage of the test for motions for default judgment, plaintiffs on ex parte motions for default judgment would need to present no evidence to the court in order to be successful. Some evidence is required,” Justice Rennie continues.

Indeed, the Federal Court held that “something more is needed than the bare assertion that a subscriber is, by default, the user responsible for infringement.” Voltage failed to provide sufficient evidence, the Court of Appeal notes, so no adverse inference could be drawn.

Court of Appeal Tightens the Noose

Voltage’s reliance on infringement warnings to show subscribers’ failure to exercise control – over internet connections and connected devices – fails.

As clarified in the Supreme Court decision, authorization depends on the alleged authorizer’s control over the person who committed the resulting infringement; it does not depend on the alleged authorizer’s control over the supply of their technology.

Furthermore, to establish an infringing activity, there must be evidence to show what the activity does to the work in question.

“Posting a work online and inviting others to view it engages the author’s authorization right; however, sharing internet access after receiving notices of alleged infringement does nothing to the work in question, and does not therefore engage any copyright interest granted to the author exclusively,” the Court of Appeal notes.

Conclusion: Voltage’s Appeal is Dismissed

From the judgment: “In the factual matrix of this case and at this relatively early stage of this case, the defendants’ lack of participation in litigation does not offset the plaintiff’s lack of evidence.

“The Federal Court was not obligated to draw an adverse inference at this stage of the litigation merely because the respondents had, by their silence, not put forward sufficient evidence to rebut the appellant’s allegations,” Justice Rennie concludes.

For these reasons, Justices Rennie, Stratas, and Webb, dismissed the appeal.

The full judgment is available here ( pdf )

From: TF , for the latest news on copyright battles, piracy and more.

On an ordinary weekend roughly 6,000 days ago, news that so-called ‘copyright trolls’ had arrived in Britain came as a big surprise to the country’s file-sharers.

Aside from the well-publicized RIAA lawsuit campaign in the United States, in 2007 ‘trolling-as-a-business-model’ was considered a mostly German problem by the minority who’d even heard about it.

Despite thousands of international headlines over the next several years, the same ‘surprises’ replicated themselves across the EU, Australia, the United States, Brazil, and anywhere else where courts were prepared to accommodate actions against thousands of ISP subscribers.

Not Even Canadians Can Escape

Despite efforts to render internet subscribers less accessible and in theory, less lucrative targets, Canadians haven’t escaped the global industrial-scale settlement machine. Reports over the last few days suggest that things may be getting worse.

An RCI article published Friday mentions a lawsuit that lists more than 1,900 IP addresses allegedly linked to piracy of the Ryan Reynolds movie Hitman’s Wife’s Bodyguard . The publication notes that opponents of these cases claim they monetize the “fear and uncertainty” associated with threats of being sued.

Of the 10,000 subscribers already sued in Canada, few would disagree; their names are on the internet bill, so they’re first to feel the heat. Regardless of whether they’re the actual infringers, subscribers are often pressured until they offer to settle, incriminate themselves, or provide the details of someone in the household who may have more information about what actually happened.

Having spoken to scores of letter recipients over more than 15 years, the heartbreak for some innocent subscribers is very real. The existence of actual, correctly targeted infringers is also non-trivial, and easily matched by often devious rightsholders who stop at nothing to turn a ‘speculative invoice’ into hard cash.

Fundamentally, Nothing Has Changed

For most readers here, little of the above will come as a surprise. For a worrying number of people posting in huge discussion threads on RedFlagDeals and other platforms, 15 years of lawsuits, warnings, advice, and the unprecedented VPN explosion, may as well have happened in a different dimension.

Despite an abundance of quality local advice from groups such as CIPPIC, there are many reports of internet subscribers contacting the claimants directly by telephone or email, hoping to sort everything out as quickly as possible. With all due respect to those who posted reports suggesting that their negotiations were successful, for the inexperienced it’s a high-risk strategy the claimants positively welcome.

In short, IP address evidence alone is useful to a claimant, but an IP address coupled with a subscriber’s real name is exponentially more valuable. The general rule of thumb is that a claimant with big evidence will be better placed and more likely to demand big money. The most likely route to obtain that big evidence is when a defendant opens their big mouth and tells the claimant something relevant they didn’t already know.

Information is currency here, and it is not uncommon for innocent subscribers to incriminate themselves or ruin someone else’s defense. Having an innocent but nervous human on the phone dramatically increases the likelihood that they will a) reach into their own pocket or b) provide information about someone in the household more familiar with the allegations. Logical, yes. Predictable outcome? Not so much.

For example, the subscriber may feel it’s only fair that the correct infringer is pointed out; unfortunately, the transcript on the claimants’ end may conclude the subscriber authorized the infringement so is still liable. That means there are now two possible routes to obtain a settlement and new leverage to obtain even more money. That’s just one of many negative outcomes available to those who foolishly take on people who do law for a living.

Of course, none of this detracts from the fact that if the claimants have a case, paying a settlement will be preferred by some defendants, and understandably so. There’s just no real reason to maximize the amount when offering compensation for a legitimate claim since that’s taken care of by the claimants.

Pirate Surprise

On the basis that people who pirate movies must know enough about pirating movies to be able to pirate them, it seems inconceivable that hundreds of thousands of mainly BitTorrent users remain oblivious to the risks. For example, adult entertainment company Strike 3 is the most litigious in the business yet appears to have absolutely no problems obtaining huge numbers of new IP addresses every month which form the basis of new lawsuits and settlement claims.

In the first half of this year alone, Strike 3 filed 1,600 lawsuits against people who allegedly shared its relatively niche content, sold under blatantly obvious names. Yet somehow these fans didn’t know or didn’t care that the chances of being caught on Strike 3 torrents are very high indeed. At this very moment one public torrent site has a 1.2TB torrent that is almost certainly being harvested for lawsuits, yet remarkably the peers keep on coming.

Kenneth Clark, a lawyer at Toronto-based law firm Aird Berlis which represents Hitman Two Productions Inc., has a theory that newer style download apps may be part of the problem. Where users previously used traditional streaming apps associated with a low risk of legal issues, apps that also share downloaded content with other pirates aren’t always advertised as such, leading users into a false sense of security. It’s hard to confirm, but it does sound plausible.

Deterrence vs. Profit

That neatly brings us to the stated aim of these lawsuits. Clark told CBC News what these and similar companies have said from the beginning; deterrence.

“There’s a lot of online piracy that people think have no consequences. Our mandate is to show people that illegal conduct has legal consequences,” Clark said.

While Clark’s mandate may indeed be just that, any deterrent effect is less than obvious, as evidenced by the constant flood of lawsuits and 15 years of deterrence that remains completely unknown to the people who matter. The more cynical of observers believe this is just part of a broader business model that monetizes infringement rather than simply succumbs to it.

In this controversial game, anything is possible but for those who follow it, new revelations are increasingly rare. Revelations apparently set to arrive later this week may put settlement models like these in a whole new light.

From: TF , for the latest news on copyright battles, piracy and more.

Over the past several years, adult entertainment company Strike 3 Holdings has filed thousands of cases in U.S. federal courts.

The company, known for its Blacked, Tushy, and Vixen brands, targets people whose Internet connections were allegedly used to download and share copyright-infringing content via BitTorrent.

Track, Sue and Settle

These efforts, often referred to as so-called ‘copyright-trolling’, are pretty straightforward. Copyright holders track down a ‘pirating’ IP-address and then request a subpoena from the court, compelling ISPs to hand over the associated customer data.

Many of these lawsuits result in private settlements, which can be rather lucrative. With minimal effort, rightsholders can rake in hundreds or thousands of dollars per defendant.

Other rightsholders have deployed similar strategies over the years but Strike 3 is the only major player still involved today. That doesn’t mean that the company is scaling down its business, quite the opposite in fact.

1,660 Lawsuits in 2023

Strike 3 has increased its enforcement efforts in 2023. Looking at the number of new lawsuits filed in the first six months of the year, we see that 1,660 complaints have been filed across various federal courts in the United States.

This figure is a 57% increase compared to the first half of 2022, suggesting that the adult company continues to increase its productivity. At the current rate, it will break the record number of piracy cases it filed last year.

With this level of workload, it’s no surprise that most cases are resolved relatively swiftly. Of all lawsuits filed in the first half of the year, more than a third have already been closed. This typically happens when the parties reach an out-of-court settlement.

Strike 3 can also drop a complaint for other reasons and occasionally it obtains a default judgment due to a lack of response from a defendant. Rarely ever, do we see one of these cases go to trial.

A Trial is Coming

While rare, there is currently a trial in preparation at the Middle District of Florida. This proceeding is scheduled to start later this month and both Strike 3 and the accused pirate will get four days to present their arguments.

In the leadup to this legal battle, Strike 3 asked the court to ban the term “copyright troll” at trial. The company argued that this language is “derogatory” and “prejudicial” but Judge District Court Judge Mary Scriven denied the request .

The trial itself won’t be about semantics. Among other things, the defense seems intent on attacking Strike 3’s evidence-gathering technology, while the adult company will counter by pointing out that the defendant destroyed important evidence on his computer.

Whether the trial will keep Strike 3 busy enough to prevent a new piracy case record has yet to be seen. To reach this milestone, the company ‘only’ has to file 1,129 complaints in the second half of the year.

From: TF , for the latest news on copyright battles, piracy and more.

Rightsholders operating business models that attempt to turn piracy into revenue are always looking for ways to streamline their work to reduce costs and maximize profits. Identifying infringers in bulk is one of the favored options.

In 2016, a group of movie companies known for their pursuit of alleged BitTorrent pirates attempted something rare in Canada. Voltage Pictures, Cobbler Nevada, Ptg Nevada, Clear Skies Nevada, and several other companies filed an application at Federal Court requesting certification of a reverse class action.

Their targets were an unspecified number of BitTorrent users who allegedly shared movies, including The Cobbler, Pay the Ghost, Good Kill, Fathers and Daughters, and American Heist.

Building a Case Around Single Defendant

The plaintiffs (collectively ‘Voltage’) built their case around a single customer of ISP Rogers, initially known only as John Doe #1. Voltage claimed the subscriber had uploaded all five movies and after obtaining his personal details via a so-called Norwich disclosure order (which included a trip to the Supreme Court), Robert Salna became the plaintiffs’ point of focus.

Salna owns several rental properties and provides internet access to his tenants. Salna said that they must be responsible for the alleged infringements, something they denied. Voltage subsequently added the tenants to the case but then discontinued the action against them.

Significant Opposition, Federal Court Denies Certification

Schemes targeting large numbers of internet subscribers are fraught with difficulties and rarely popular beyond the plaintiffs. Interveners in the case included Canadian Internet Policy & Public Interest Clinic (CIPPIC), Bell Canada, Cogeco Connexion, Rogers Communications, Sasktel, Telus Communications, Videotron, and Xplore.

All opposed the class action approach and in November 2019, the Federal Court supported their position. The Court found that since a file-sharing case involving many alleged infringers would require multiple individual fact-findings for each class member, class certification would be denied on all grounds.

Voltage’s Successful Appeal

Voltage and related plaintiffs have a reputation for exhausting every option before conceding defeat, a track record maintained in Canada. In 2021 at the Federal Court of Appeal, Justice Rennie set aside the 2019 Federal Court ruling, reversing it on all grounds.

The Court noted that while a reverse class action could benefit the plaintiffs, those accused of infringement could also take advantage by pooling their resources. The case was then referred back to the Federal Court with two questions: was a reverse class action the preferable procedure in this case, and did Voltage have a workable litigation plan?

In deciding the latter, the Federal Court would be required to revisit Voltage’s proposal to use Canada’s ‘notice-and-notice’ infringement warning program to communicate with alleged infringers. The system was put in place to allow rightsholders to notify subscribers, via their ISPs, that their connections had been monitored sharing copyrighted content.

The Federal Court previously ruled that the system could not be used to facilitate communication in a class action, a point on which the Court of Appeal subsequently disagreed.

Federal Court Again Weighs Arguments

In a process over six years old, Voltage’s goal of targeting more than 55,000 subscribers in a class action has faced deterioration over time. As of September 16, 2022, potential class members (internet account subscribers who allegedly infringed Voltage’s copyrights during the previous six months) had been reduced to less than 1,000.

According to the Federal Court’s estimate in its order handed down June 26, the figure is now ‘just’ 874 subscribers. Justice Fothergill said that even if the class comprised 874 members, he was satisfied that Voltage had demonstrated “some basis in fact” for the conclusion that a class proceeding is indeed the preferable procedure in this matter.

“A class proceeding will permit the determination of common issues based upon a single set of pleadings. The common issues will be decided on the basis of common evidence, including expert evidence. Respondent Class Members may pool resources to fund the defense, and may advance a coordinated position with the assistance of Class Counsel. This in turn alleviates the risk of inconsistent judgments,” his order reads

“A class proceeding may permit Respondents to benefit from a higher degree of anonymity. They may choose to identify themselves only to Class Counsel. By contrast, individual applications, including those commenced against multiple respondents, will require identification of each respondent by name unless the Court grants a confidentiality order.

“Another major advantage of a reverse class proceeding is that any settlement must be approved by the Court. This is an important safeguard against ‘copyright trolling’, where respondents are pressured to settle unmeritorious claims under threat of significant litigation costs.”

ISP Interveners Object

As is often the case when rightsholders target large numbers of internet users, ISPs are expected to assist in processes that involve their subscribers and their data. In this case the ISPs objected to Voltage’s plan, which would require them to send a class action “Certification Notice” to the alleged infringers and “retain data on identities of their subscribers until following final determination of the hearing on the merits (including any appeals).”

The ISPs said that retaining subscriber data would mean the unrealistic proposition of storing all data for all customers for years, redesigning their software and databases to automatically preserve only data retroactively selected by Voltage, or manually saving data for potentially tens of thousands of customers.

Inevitably the ISPs would face other subscriber-related issues, including customers calling for legal advice and the need to train staff to deal with these sensitive discussions. Some customers may choose to complain or blame their ISP for their predicament, or even leave to join another ISP. Others may be tempted to sign up with bogus contact information to avoid legal liability, preventing ISPs from contacting their own customers in relation to their accounts or developing business with them.

More fundamentally, the ISPs said that using the “notice-and-notice” system to communicate with class members would be illegal under Canadian law. The Federal Court agreed and said that would not happen.

“[V]oltage’s proposed use of the notice-and-notice regime to advance this class proceeding is inconsistent with the Copyright Act, and is contrary to law,” Justice Fothergill’s order reads. “It is therefore unnecessary to reach definitive conclusions regarding the ISPs’ concerns about cost, inconvenience and the potential disruption of their relationships with their subscribers.”

Federal Court Again Denies Class Certification

In conclusion, the Federal Court found enough deficiencies in Voltage’s litigation plan to deny class certification, at least for now.

“Voltage remains at liberty to present a revised litigation plan that does not depend on the notice-and-notice regime in the Copyright Act to identify and communicate with Class Members, and that makes adequate provision for the funding of Class Counsel,” the order reads.

How the case will progress from here is unclear. In very basic terms, the settlement model favored by Voltage is no different from any other business; costs of doing business are weighed against anticipated revenue (via settlements) and if the difference represents an acceptable return, there’s a reason to press ahead.

Since free use of the notice-and-notice has now been ruled out, costs appear to be going in the wrong direction, something particularly problematic in Canada. Unlike most other regions where Voltage is active, Canada places a $5,000 cap on non-commercial infringement, something that significantly dampens the psychological pressure to settle “or else”.

Justice Fothergill’s order can be found here (pdf)

From: TF , for the latest news on copyright battles, piracy and more.

Strike 3 Holdings has been a familiar name in U.S. federal courts for a while now.

Last year, the adult entertainment company filed a record-breaking number of lawsuits against alleged BitTorrent pirates.

The company is keeping up this pace in 2023, averaging dozens of lawsuits per week. Most of these are never mentioned in the press and a large number are settled behind closed doors.

Every now and then, an accused Internet subscriber objects, but these cases rarely go to trial. According to some, the lawsuits’ main objective is to collect settlement payments and default judgments.

Motion to Quash

This line of reasoning was also brought up by a “John Doe” defendant whose IP address was targeted in a recent complaint. The defendant submitted a motion to quash, hoping to prevent Comcast from revealing their identity.

“Considering the thousands of John Does being sued by Plaintiff, it is highly likely that Plaintiff has no intention of pursuing an actual trial on the merits in the thousands of copyright infringement cases filed by Plaintiff Strike 3,” Doe’s attorney writes.

“[Strike 3] instead hopes to profit from settlements with small and relatively resource limited individual defendants as well as default judgments against individual defendants who are unsure of how to, or feel they are financially unable to, defend themselves through the full course of a copyright infringement trial.”

Based on these and other arguments, the defendant tried to stop the lawsuit in its tracks. However, as we have seen before in these types of cases, the Colorado federal court denied the request.

According to U.S. Magistrate Judge Michael E. Hegarty, who handles all the Strike 3 cases in the district, subpoenas to identify Internet subscribers can only be quashed if there’s a valid claim of privilege or if a privacy issue is implicated. That’s not the case here.

Reliability of the Evidence

The accused pirate’s motion raised questions about the accuracy of the evidence and whether it can accurately detect infringers. For example, if a subscriber has an open wifi network, others including neighbors might use it as well.

Judge Hegarty doesn’t deny this, but notes that this argument is not sufficient to quash the subpoena. Instead, the defendant can bring it up at a later stage.

“Defendant’s arguments challenging Plaintiff’s investigation methods and concerning the accessibility of a Wireless Firewall/Router are premature at this stage of the litigation and more properly raised during adjudication of the merits of this case,” Judge Hegarty writes.

If the case wasn’t allowed to go forward, rightsholders couldn’t possibly enforce their copyrights against alleged BitTorrent pirates, the order adds.

“In fact, Plaintiff’s attempt to obtain information from the ISP is a necessary first step in Plaintiff’s process of discovering the identity of the alleged infringer for the purpose of enforcing its copyright.”

No Troll

The argument that the company simply pursues these cases to collect settlements isn’t sufficient either. On top of that, the court refutes the suggestion that Strike 3 is a copyright troll.

“[T]he Court has neither observed nor been made aware of any particular Defendant in the cases before this Court who has experienced ‘coercive’ settlement tactics by Plaintiff,” Judge Hegarty writes.

“[T]his Court has handled over a hundred similar cases and consistently found these plaintiffs are not copyright trolls but rather actual producers of adult films whose works are infringed.”

Whether the term “troll” applies is a matter of semantics. A few weeks ago, a Florida court allowed the term to be used during a rare trial, which is scheduled to take place later this year.

Embarrassment and Undue Burden

Finally, the motion to quash highlighted the Doe defendant’s fears that exposing their identity could lead to undue embarrassment and all sorts of related problems.

Specifically, it “would be highly embarrassing to Defendant, unjustifiably stigmatizing to Defendant, injurious to Defendant’s character and reputation, and potentially jeopardizing to Defendant’s employment.”

Judge Hegarty admitted that these are serious concerns. However, since the defendants in these cases can request a protective order to proceed anonymously, it is no reason to quash the subpoena and end the case before it even gets started.

“The Court finds that Defendant has not met his or her burden of showing that the subpoena served on Comcast must be quashed. Therefore, the Court denies Defendant John Doe’s Motion to Quash,” Judge Hegarty concludes.

This outcome doesn’t come as a surprise as similar efforts in Colorado’s federal court have failed as well. However, it is important to highlight that these cases continue to make their way through the courts.

Since all Strike 3 cases in Colorado end up at Judge Hegarty’s desk, this order suggests that it will be very hard to submit a successful motion to quash in this district.

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A copy of U.S. Magistrate Judge Michael E. Hegarty’s order on the motion to quash the Comcast subpoena is available here (pdf)

From: TF , for the latest news on copyright battles, piracy and more.

Strike 3 Holdings is a familiar name in U.S. federal courts. Last year alone the adult entertainment company filed a record-breaking number of lawsuits against alleged BitTorrent pirates.

While many of these lawsuits have resulted in private settlements, Strike 3 also encountered pushback from some of the people it sued.

In the Middle District of Florida, for example, a “John Doe” defendant denied any wrongdoing and fought back. The previously unnamed adversary came out of the shadows as John Adaire last week, as both parties prepare to go to trial.

Heading to Trial

It’s rare for this type of case to make it this far without being settled. As a result, the parties are fighting tooth and nail to obtain the best possible position in preparation for a public showdown.

According to Strike 3, it is clear as day that the man downloaded and shared 36 of Strike 3’s porn videos without permission. Backed up by technical evidence and testimony, Strike 3 explains that it repeatedly found an IP address, assigned to Adaire, sharing the pirated movies.

The adult company further accused the defendant of destroying electronic evidence by deleting data from his desktop computer, mishandling a hard drive, and reinstalling the operating system on his laptop

“Even if Doe were not the infringer, he made sure to destroy and conceal evidence of his innocence,” Strike 3 wrote in its pretrial statement.

The defendant, now identified as Mr. Adaire, denied any wrongdoing and alleged that Strike 3’s evidence is unreliable. The adult company developed its “VXN” tracking technology in-house, which makes it little more than ‘circumstantial’ evidence.

“VXN had no user’s manual, no design documentation, and was never verified by an independent third party. There is no known false positive rate of VXN, since it was never measured,” the defense argued.

Excluding Homebrew Piracy Evidence?

In preparation for a trial later this year, both parties submitted a motion in limine asking the court to withhold evidence from the jury. Among other things, the defense asked to exclude the VXN tracking evidence.

In addition, the defense asked the court to exclude evidence taken from Doe’s social media profiles and comments from his neighbors, who testified on the strength of his WiFi signal.

Last week the court delivered a mixed ruling. US District Court Judge Mary Scriven denied the request to exclude the VXN data. This means that Strike 3’s main evidence, which links the defendant’s IP-address to pirated films, remains intact.

However, the court granted the request to prohibit the use of information from the defendant’s social media profile. On top of that, testimony by non-experts such as neighbors is, in principle, not allowed either.

Copyright Troll & Press

Strike 3 also asked the court to exclude information from the upcoming trial. As reported previously, the company doesn’t want the defense to use the term “troll,” which is often used to describe its sue-and-settle practice.

According to Strike 3, it’s clear that being called a ‘troll’ is derogatory, so it wants to prevent a jury from being influenced by ‘prejudicial’ language.

“Name-calling has no place in civil litigation,” Strike 3’s lawyers wrote, noting that the label is inaccurate and thus irrelevant.

In her order, Judge Scriven doesn’t agree that this term is off-limits so denied the request. This means that the defense can freely use the ‘copyright troll’ moniker in their arguments.

Aside from the troll worries, the adult entertainment company also wanted to exclude all blogs, media, and other Internet coverage from the potential pool of evidence.

These online news articles often contain subjective comments that put the company in a bad light, which could present the wrong picture to the jury, Strike 3 argued.

“The Internet and media articles target Plaintiff and its counsel and contain comments that are biased, slanderous, and prejudicial, and should not be referred to at trial for any purpose,” it wrote.

The court was more sympathetic to this argument and granted the request “on stipulation”. This stipulation isn’t detailed further in the written order, but it’s a win for Strike 3 nonetheless.

Summary Judgment and Sanctions

The good news for Strike 3 doesn’t stop there. In addition to the motion in limine, the court also ruled on the motions for summary judgment from both sides, handing an early victory to the adult company.

After reviewing all arguments, Judge Mary Scriven denied Mr. Adaire’s request for a judgment that he didn’t engage in any copyright-infringing activity. This question will be decided by the jury instead.

Strike 3’s own request for summary judgment was denied along with most of Mr. Adaire’s counterclaims.

The only remaining counterclaim is the accusation that Strike 3 misused its copyrights, by using the Florida State Court as a preliminary process to attempt to acquire federally protected subscriber information. This argument can be presented to the jury.

Finally, Judge Scriven ruled that the alleged pirate will be sanctioned for failing to preserve electronically stored evidence. This is based on Strike 3’s finding that the defendant destroyed evidence by wiping data from his desktop computer and other devices.

Details of the sanctions aren’t revealed in the court order but they certainly won’t help the defense during trial.

All in all, the case can still go either way. It will ultimately be up to the jury to decide on the copyright infringement allegations but Strike 3 will likely feel emboldened by the court’s recent orders.

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A copy of U.S. District Court Judge Mary Scriven’s full order, which also touched on other subjects, is available here (pdf)

From: TF , for the latest news on copyright battles, piracy and more.