A few years ago, Malibu Media was one of the most active ‘copyright trolls’ in the United States.

The California-based company behind the adult brand ‘X-Art’ filed thousands of lawsuits targeting Internet subscribers whose accounts were allegedly used to share Malibu’s films via BitTorrent.

In recent years this activity ground to a halt, and in the cases that remained active, things didn’t go to plan. After plenty of drama , Malibu was ordered to pay more than $100,000 to a wrongfully accused internet user in 2021.

Last Cases Standing

At the start of 2023, only two Malibu Media cases remain open. In one, the court denied a default judgment last summer, instructing the rightsholder to provide more evidence of infringement beyond a simple IP-address. After that, things went quiet.

In the other case, the accused file-sharer went on the offensive . The “John Doe” defendant filed a long list of counterclaims against Malibu Media, accusing the company of abuse of process and misuse of copyright, among other things.

“Plaintiff monetizes its alleged copyrights through coercive and needless litigation and by extracting settlements from that litigation disproportionate to the minimal value of Plaintiff’s works,” the defense wrote.

Corporate Status Suspended

The Doe defendant also asked the court to dismiss Malibu Media’s claims, arguing that the company can’t be involved in a lawsuit due to its corporate status. California’s Franchise Tax Board suspended Malibu Media in 2021 over tax deficiencies .

“Plaintiff lacks the capacity to sue. Specifically, Plaintiff is suspended in its state of incorporation, California. Under California law, a suspended corporation cannot maintain a lawsuit,” the defense wrote.

The suspension came to the forefront in 2021. The court initially allowed Malibu some time to get its paperwork in order to get the suspension lifted, but that doesn’t appear to have happened. At the time of writing, California’s Franchise Tax Board continues to list Malibu Media’s status as suspended.

In a recent advisory to the court, Malibu Media confirms that its corporate powers are still suspended. However, it argues that courts have previously held that suspensions are a “mere technicality” that, once fixed, return a company’s status “back to good standing”.

Malibu sees no reason why the present case should not be able to proceed to trial due to a technicality.

Dismissal Looming

U.S. District Court Judge Ezra agrees that previously suspended companies successfully continued lawsuits, but only after their suspensions had been resolved. That’s not the case here.

“Corporate status may be a ‘mere technicality,’ but courts in California and the Fifth Circuit only deem it so after the corporation has cured the defect in its corporate status,” the order reads.

“Therefore, if Malibu Media’s corporate status is not reinstated by Friday, January 20, 2023, the case will be dismissed without prejudice,” Judge Ezra adds.

A dismissal “without prejudice” means that Malibu will be allowed to refile its claims after the suspension is lifted. Based on the lack of recent progress, it’s doubtful that will happen anytime soon.

The underlying issues aren’t entirely clear but Malibu CEO Colette Pelissier is no stranger to corporate troubles. Other companies under her control – Colette Productions , Colette Holdings and Colette Properties – are all listed as suspended.

The order issued by U.S. District Court Judge David Alan Ezra is available here (pdf)

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

By now most BitTorrent users should be well aware that their IP-addresses and downloads can be easily monitored.

This has resulted in hundreds of thousands of lawsuits against alleged video pirates, both in the U.S. and abroad.

In the U.S., most of these cases are filed by Strike 3 Holdings. The company produces adult entertainment videos made available via the Blacked, Tushy, and Vixen websites. When the videos are shared on pirate sites, Strike 3 takes action.

More Pirates, More Lawsuits?

These lawsuits can be a lucrative business, especially when targeted defendants opt for quick settlements of 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.

These lawsuits deter many alleged pirates and maybe some of their neighbors too, but the copyright-infringement problem is rather persistent, as is exemplified by Strike 3’s own track record.

This week, we decided to take a look at the number of file-sharing lawsuits filed in the United States in 2022. The data shows that one company has been particularly active: Strike 3 Holdings.

New Record!

From January 1 to today, Strike 3 submitted 2,788 complaints in various courts around the U.S., targeting “John Doe” subscribers. This is a record-breaking statistic. 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 at 2,094 in 2018.

Strike 3 filed its first case in 2017 and since then has submitted over 9,000 complaints at federal courts.

Strike 3 is currently responsible for most legal action against file-sharers in the U.S. 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 90% have already been closed. This happens when the parties reach an out-of-court settlement or if Strike 3 drops a complaint for other reasons.

Edge Cases

There are also instances of defendants simply ignoring Strike 3 lawsuits. When that happens, Strike 3 often requests a default judgment from the court, which can go either way depending on the circumstances.

A massive award for damages is one potential outcome. Last year a federal court in New York ordered a local resident to pay $108,750 in damages for sharing 145 pirated videos via BitTorrent. Other courts have denied similar default judgment requests.

Due to the costs involved, it’s rare for accused pirates to fight back and then secure a win , but when Strike 3 filed a lawsuit against a “John Doe” who turned out to be a 70+-year-old retired police officer, the tables were turned.

Another “Doe” is putting up a spirited fight in a separate case, one that’s currently heading to trial . If that goes ahead, it will only be the second time that’s ever happened.

Overall, we assume that Strike 3 must be quite pleased with the results of its legal campaigns. If it was a money-losing operation, 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, adult entertainment company Strike 3 Holdings has filed thousands of cases in U.S. federal courts.

These lawsuits target people whose Internet connections were allegedly used to download and share copyright-infringing content via BitTorrent.

Rare Files-Sharing Trial

Many of these cases result in private settlements and are never heard of again. On occasion, however, a defendant decides to push back and a case filed against a “John Doe” at a Florida federal court is now heading to trial.

It’s unusual for such a file-sharing case to be so heavily litigated. The prospect of a potential jury trial is even rarer but a few days ago the parties submitted their joint pretrial statement, bringing a trial one step closer.

The case has plenty of nuances but, in essence, the main question is whether John Doe downloaded and shared 36 of Strike 3’s porn videos without permission. According to the adult company, the evidence is clear as day.

Strike 3 Piracy Evidence

In the pretrial statement, Strike 3 explains that it repeatedly found that an IP address, assigned to John Doe, shared the pirated movies. This is backed up by technical evidence as well as other expert testimony.

The adult company further accuses the defendant of destroying evidence by wiping 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 writes in the pretrial statement.

The alleged misconduct is made worse due to the defense’s “fee-split” agreement, Strike 3 argues. The lawyers would allegedly submit a higher fee to the court than they billed the Doe, and agreed to “split” the difference between themselves and their client.

John Doe Counters

The defense characterizes the “fee split” allegations as a red herring. Instead, they draw the court’s attention to Strike 3’s evidence, suggesting that it’s below par.

The adult company uses tracking software to monitor the IP-addresses in BitTorrent swarms. Similar to other rightsholders, this is then recorded in ‘PCAP’ evidence files. However, Strike 3 developed the “VXN” tracking technology in-house. This makes it little more than ‘circumstantial’ evidence.

“Strike 3’s computer system: ‘VXN’ that was used to collect the PCAP’s in 2019, was not tested by Strike 3’s until 2022. 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,” Doe’s attorney writes.

The defense submitted a motion in limine asking the court to exclude this evidence from trial.

In addition, the defense wants 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.

Troll Ban

Strike 3 has also submitted a motion in limine to restrict information the defendant can use at trial. Among other things, the company doesn’t want the term “copyright troll” to be used.

The copyright troll moniker is often applied to companies that file many piracy lawsuits against invividuals. Even courts have used the term, even though there’s no official definition.

According to Strike 3 it is clear, however, that being called a ‘troll’ isn’t something positive and it wants to prevent a jury from being influenced by this type of ‘prejudicial’ language.

“Through the expert Dr. Eric Fruits, Doe has called Strike 3 a ‘copyright troll’ or ‘troll,’ a term that has no established legal or dictionary definition, but which is undeniably negative,” Strike 3 writes.

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

In a similar vein, the adult entertainment company also wants to exclude blogs, media, and other Internet coverage from the potential pool of evidence, as these contain subjective comments.

“The Court should also preclude Doe from referring to any Internet blogs, media coverage, or articles on Strike 3 for any purpose,” Strike 3 writes.

“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.”

Going Forward

The court has yet to decide on these and other requests to exclude evidence before a trial can get underway. In addition, both parties have submitted motions for summary judgment which could still impact the course of the case.

Earlier this week the parties attempted to reach a settlement in court through a mediation process, but they eventually reached an impasse.

—

A copy of the pretrial statements can be found here (pdf) , and the motions in limine are available here ( 1 , 2 , pdf)

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

The vast majority of today’s movie-related copyright infringement lawsuits can be linked back to companies working with piracy monetization company, GuardaLey.

They begin with piracy tracking firm Maverickeye monitoring IP addresses allegedly sharing certain movies online. Those IP addresses later become evidence in court processes where the owners of the monitored movies ask the court to compel ISPs to match the IP addresses with specific subscribers, so they can be pursued directly.

The fundamental problem is that an IP address isn’t a person, and the person identified as the account holder/billpayer isn’t necessarily the infringer, especially in homes where many people have access to the internet. So, in cases where the actual pirate can’t be identified, GuardaLey-affiliated entities claim that since the billpayer failed to prevent piracy, they can be seen as ‘authorizers’ of someone else’s infringing activities.

Voltage Lawsuit in Canada Runs Into Trouble

A 2018 lawsuit filed in Canada by U.S. movie company Voltage Holdings aimed to uncover the identities of 110 ‘John Doe’ defendants who allegedly pirated the movie ‘Revolt’. After obtaining their personal details, Voltage settled or dismissed cases against 80. The 30 remaining internet account holders, all recipients of earlier infringement warnings via their ISPs, were sued by Voltage. None filed a response.

Supported by evidence provided by GuardaLey’s Benjamin Perino, who also wrote Maverickeye’s tracking software, Voltage moved for default judgments against the absent defendants. The Canadian Internet Policy and Public Interest Clinic (CIPPIC) intervened on behalf of the internet billpayers, arguing that while Voltage had successfully identified account holders, they had no evidence that these people were the infringers.

Justice Angela Furlanetto rejected the idea that the billpayers must disprove their association with the alleged infringing activity. It is up to the plaintiffs to show, on the balance of probabilities, that the named defendants (the billpayers) are also the infringers, the Judge said.

Predictably, Voltage said it could also take action against billpayers if it believes they authorized or allowed someone else’s infringing activity. When Voltage produced no evidence to support its authorization claims, the Judge refused to issue default judgments , at least until it could.

Voltage Files An Appeal

In a 36-page memorandum submitted to Canada’s Federal Court of Appeal, Voltage outlines 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.

Voltage says that in the case of direct infringement, it did “all that is technically possible” when it identified the name of the person responsible for paying the bill on the accounts in question. Voltage says that it is partly relying on a “shifting of the tactical burden” or a “negative inference to prove that the direct infringer was the account holder.”

In the original case, Justice Furlanetto said that Voltage could conduct further discovery to identify the actual infringers. If that failed, even in the face of non-compliance, the burden of proof would not change and negative inferences would not be drawn. Voltage describes this as an error in law.

“[T]he evidence before the Court will be the same whether a Default Defendant fails to participate in the action 4 times or 5 times,” Voltage writes. “Even if discovery takes place, Voltage is not obliged to put this information to the Court to its prejudice, and in either case, Voltage has made out its case with the evidence available in a default proceeding.”

Authorization and Errors in Law

With its authorization claims, Voltage gets two bites at billpayers. Direct infringement and authorization of infringement are both copyright offenses but, in practical terms, Voltage wants to argue a) the billpayer is the direct infringer, and therefore liable, or b) the billpayer is not the direct infringer, but is still liable. It has zero evidence to prove either.

When Justice Furlanetto informed Voltage that further evidence was required to show that the billpayers had control “over those that actually uploaded the unauthorized content,” that was another error in law, Voltage says.

“According to decisions of the Supreme Court of Canada and the Federal Court of Appeal, it is only necessary to establish that the internet subscriber (i.e.a Default Defendant) ‘possessed sufficient control over the use of his or her internet account and associated computers and internet devices such that they authorized, sanctioned, approved or countenanced the infringements particularized’ once notice of infringement had been brought to the attention of the account holder.

“Control over the direct infringer and the infringer’s activities is not part of the relevant legal test,” Voltage notes.

Highlighting that the notice-and-notice ISP warning scheme in Canada was designed to tip power in favor of copyright holders, Voltage says that Justice Furlanetto “reviewably erred” by not following the intentions of Parliament.

CIPPIC Intervenes With Memorandum of Facts and Law

Over the years, the Canadian Internet Policy and Public Interest Clinic (CIPPIC) has expended extraordinary effort in many lawsuits affecting internet users. CIPPIC’s involvement in this case injects much-needed balance to proceedings that, in other countries, are typically one-sided affairs.

In its memorandum of facts and laws filed at the Federal Court of Appeal, CIPPIC gets straight down to business.

“Judges wield power with an anxiety that they sanction wrong-doers, not innocents. Voltage’s motion for default judgement placed this concern squarely before Justice Furlanetto. The only personal evidence Voltage Pictures LLC (‘Voltage’) tendered about these Defendants was that each had a contract for internet services,” CIPPIC’s submission reads.

“Voltage took no steps to obtain direct evidence of the Defendants’ activities. Justice Furlanetto concluded that it would not be just in the circumstances to award judgement.”

CIPPIC says that Voltage’s appeal boils down to two issues: the test for copyright infringement by authorization, and Justice Furlanetto’s request for facts in the face of “Voltage’s paltry evidentiary record.”

Authorization: Voltage’s Theory Meets The Supreme Court

CIPPIC says that Voltage’s theory of authorization called on Justice Furlanetto to overturn a “century of statutory interpretation of the authorization right.” The Judge was right to reject Voltage’s theory and, in the absence of supporting evidence, it was appropriate to grant further opportunity to obtain the relevant facts.

“These defendants were before the Court only because they were subscribers for internet accounts linked to allegedly infringing activity. Justice Furlanetto, declining to do the work Voltage was unwilling to do for itself, refused to draw the inference Voltage demanded that the subscribers were the infringers. This Court should not insert itself into Justice Furlanetto’s fact-finding exercise,” CIPPIC adds .

In respect of authorization, CIPPIC cites the Supreme Court’s definition in CCH Canadian Ltd v Law Society of Upper Canada.

“The Court cautioned that ‘a person does not authorize infringement by authorizing the mere use of equipment that could be used to infringe copyright.’ One authorizing use of equipment enjoys a presumption that ‘a person who authorizes an activity does so only so far as it is in accordance with the law’,” CIPPIC notes.

In the same case, the Supreme Court clarified that if a relationship or degree of control existed between the alleged authorizer and those who committed the copyright infringement, the presumption may be rebutted. But, as CIPPIC points out, the control in question relates to the authorizer’s control of the infringer, not the equipment used to infringe, as Voltage claims.

“There’s a lot at stake here,” says Canadian copyright lawyer Howard Knopf .

“If these mass default proceeding tactics are sanctioned by the Court, we will almost certainly see a parade of thousands of default judgments in dozens or more cases involving up to $5,000 in statutory damages against each and every defendant – whether or not each defendant actively downloaded, simply had their Wi-Fi used by someone else (e.g. teenage kid, babysitter, neighbour, tenant, etc.) or were just misidentified.

“This would be unacceptable and would require a legislative remedy,” Knopf concludes.

The Voltage and CIPPIC submissions are available here and here (pdf)

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

Copyright Management Services Ltd (CMS) was incorporated in the United Kingdom in October 2014.

Its founding director was Patrick Achache, who later rose to fame as the boss of Germany-based BitTorrent tracking company, MaverickEye.

Both companies operated as parts of Guardaley, the international lawsuit factory that to date has targeted scores of thousands of alleged BitTorrent pirates in the United States, UK, Sweden , Denmark , Norway, Finland and Brazil , among others.

In a sample period spanning 2016/2017, Danish law firm Njord Law represented CMS Ltd in legal action targeting telecoms giant Telia. Using data captured by Maverickeye, more than 82,000 Telia subscribers in Sweden, Finland and Denmark faced being unmasked on behalf of the companies behind London Has Fallen and Mechanic: Resurrection, among others.

This small sample is just the tip of an extremely large and well-documented iceberg, which as a business model is continuously active today. For now, however, it’s time to say farewell to CMS as it seeks to shut itself down and disappear into the night.

Copyright Management Services Wants Out

According to UK Companies House data, Patrick Achache stopped being a director and the significant controller of CMS on November 19, 2019. On the same day, Lubesly Tellidua – a beauty queen from the Philippines with links to Achache and Guardaley – became the controlling party

When Tellidua inspected the CMS accounts she would’ve seen a company barely breaking even, a surprise given the scale of the business. Accounts filed for 2020 showed cash at hand of £1.00, significantly down on the £25 in hand listed a year earlier.

In July 2022, Lubesly Tellidua filed an application for CMS to be struck off the register of companies.

CMS hasn’t yet filed its accounts made up to October 31, 2021, but they’re only three months late, HM Revenue and Customs probably won’t mind, and since all the cash is long gone, nobody in government is likely to get excited about it. A few people might even celebrate the demise of CMS but, given the circumstances, that would be missing the bigger picture.

In Brief: CMS is No Longer Needed

When Patrick Achache was in control of CMS, Maverickeye and Guardaley, he formed a copyright settlement partnership in the UK with Robert Croucher of Hatton & Berkeley. From 2015, as part of their promised ‘ anti-piracy invasion ‘, they sent letters to alleged movie pirates demanding cash , in the same way as CMS did in Scandinavia, using the same Maverickeye tracking data, under the Guardaley umbrella.

Late 2019, we discovered that Hatton & Berkeley’s Robert Croucher had teamed up with FACT Worldwide Ltd, an anti-piracy company directly connected to the Federation Against Copyright Theft. The partnership was made under an existing entity called H&B Administration LLP and its earliest member, dating all the way back to 2016, was a company called Copyright Management Services Ltd.

By 2021, FACT Administration LLP was in full swing, pressuring internet subscribers for cash settlements yet again. CMS wasn’t needed anymore since the ‘ protective wrapper ‘, insurance in the event of a lawsuit going wrong, would be provided by the FACT Administration limited liability partnership.

Everyone is Related to Each Other

A few quick observations and connections to sum things up:

Patrick Achache operated Copyright Management Services Ltd, Maverickeye, and Guardaley. Copyright Management Services Ltd was the entity with significant control over H&B Administration LLP. Robert Croucher is the director and person with significant control at Hatton & Berkeley Management Ltd.

In turn, Hatton & Berkeley Management Ltd was the entity with significant control at FACT Administration LLP, despite it being declared dormant as of March 31, 2021, with just £100 to its name. And then there’s Guardaley itself.

In a U.S. court in 2011, Guardaley was reported as having two employees, Patrick Achache and Benjamin Perino. Perino resigned his Guardaley directorship in 2018 and a day later he was replaced by Thomas Nowak, the managing director of piracy data collection outfit Maverickeye.

Guardaley Limited continues to live on in the UK under Nowak but, unlike many of its partners and subsidiaries, including the outgoing and apparently broke CMS, Guardaley doesn’t seem to have problems making money.

The company filed its most recent accounts last month, public information for anyone interested.

But the UK operation isn’t the end of the Guardaley empire. A company is registered in Germany under the same name, also run by Tomas Nowak, and elsewhere in Europe too.

On June 1, 2019, Guardaley Technologies Limited was incorporated in Cyprus under the directorship of former Guardaley employee, Benjamin Perino.

Three months earlier American Films LLC, a company described by Bloomberg as having “no significant operations”, said it had taken over Guardaley’s US-based operations.

“GuardaLey Ltd., the leading data investigation company combating online piracy on peer to peer file sharing networks, has selected American Films, Inc. to take over the USA operations through its Joint Venture formed at the beginning of February. American Films, Inc. will own 100% of this joint venture company,” American Films announced.

“The partnership with American Films will combine the resources of GuardaLey and American Films, to monitor peer-to-peer file sharing networks, search for illegally downloaded digital media files and provide the resources to enforce against repeat offenders.”

Plus ça change, plus c’est la même chose….

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

After beginning life as DigitalRights back in 2009, anti-piracy company Rightscorp became known for its cut-price copyright-trolling operations.

Where competitors would attempt to charge hundreds up to multiple thousands of dollars per alleged file-sharing infringement, Rightscorp initially offered to settle cases for around $20. The long game was for every ISP in the United States to forward Rightscorp notices to customers, thereby negating the need for courts, subpoenas, and other legal expenses.

While some ISPs did indeed forward Rightscorp’s notices, the anti-piracy company couldn’t balance the books with its settlement model and lost millions of dollars. In a change of direction, Rightscorp data was later utilized by music publisher BMG to sue Cox Communications for failing to disconnect repeat infringers.

After BMG came out on top , Rightscorp successfully persuaded the RIAA to sue several other ISPs based on the data in its infringement databases.

Rightscorp Allegedly Entered into Acquisition Talks

For many years, Rightscorp’s very existence presented a conundrum. In 2013 the company went public but its accounts revealed that since at least 2011 it had being losing millions every year. With the situation worsening every year thereafter, Rightscorp changed its company status and removed the need to make future accounts public.

Against all the odds, Rightscorp is still alive today, most likely due to perceived value in its repeat infringer database. According to an announcement Monday, Rightscorp’s CEO encouraged a company called American Films, Inc. to acquire Rightscorp but things didn’t go to plan. Through a multi-million dollar lawsuit filed in a Florida court, American Films is hoping to straighten things out.

American Films, Inc. What Does it Do?

In 2019, GuardaLey – the most infamous BitTorrent ‘copyright-trolling’ operation in the world – said it had entered into a joint venture with American Films, Inc. The U.S. company would become the 100% owner of GuardaLey’s U.S. operations, the extent of which were never revealed.

More than three years later, it still isn’t clear what American Films actually does, where, or with whom. It has a website now and describes itself as an “innovative global intellectual property protector” but if the company is involved in a GuardaLey-style settlement business, it’s hiding that very well.

According to Yahoo Finance, “American Films, Inc. does not have significant operations. The company intends to merge or acquire one or more properties or businesses.” At some point it appears that Rightscorp became an acquisition target but after a warm start, things failed to progress and eventually ended up in court.

Filed at the Circuit Court of the 20th Judicial Circuit for Collier, Florida, the American Films lawsuit targets Rightscorp, Inc. and its CEO and chairman, Cecil B. Kyte.

“The lawsuit alleges Rightscorp and Kyte lured [American Films] into a transaction to acquire Rightscorp, and then Rightscorp and Kyte used confidential information from the deal to reap a profit,” the company’s announcement reads.

From the limited court documents we’ve been able to obtain, the claim amount is officially listed as “over $100,000.00” in the category “contracts and indebtedness”. American Films says the lawsuit seeks to recover in excess of $15 million from Rightscorp but what the amount relates to is unknown.

American Films is a Rightscorp Shareholder

American Films further revealed this week that the company owns shares in Rightscorp, a supposed rival. How many of the anti-piracy outfit’s $0.01 shares are held by American Films (AFI) isn’t clear but the company appears to be flexing its muscles, for the benefit of Rightscorp, it insists.

“As a shareholder of Rightscorp, Inc. common stock, AFI is currently reviewing the possibility of initiating a shareholder rights action against Rightscorp, Inc. Any shareholder rights action would be brought for the benefit of all Rightscorp shareholders and the corporation, Rightscorp, Inc., itself,” the American Films statement reads.

It seems unlikely that Rightscorp has $15m lying around so whether it will choose to fight or pay a settlement remains to be seen. In the meantime, American Films failed to mention an interesting detail about its lawsuit in its September 26, 2022 announcement.

According to Collier County Court documents, the lawsuit against Rightscorp was e-filed on March 22, 2021. Why it’s taken 18 months for the big public reveal isn’t clear but that’s largely in keeping with American Films’ activities in general.

American Films may be doing big things in the shadows but right now, we’re unable to highlight anything beyond an 18 month old lawsuit against a company with no money. That being said, Rightscorp does own a massive repeat infringer database, the perfect gift for a company that apparently owns a massive copyright-trolling operation in the United States.

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

So-called copyright trolls come in all shapes and sizes and while most have a cynical approach to copyright law, some are prepared to go to extremes.

The most notable case in the United States involved Prenda Law. After playing the victim for years, an investigation found that the law firm uploaded movies to sites like The Pirate Bay and then sued those who downloaded them. Two lawyers were later sentenced to prison, one of them for 14 years .

Taiwanese authorities are currently dealing with a similar case, with lawyers at the helm once again.

Licensed ‘Copyright Cockroaches’

Early June 2022, news outlets in Taiwan reported that former ultramarathon runner, entrepreneur, political critic, and law graduate Kevin Lin was a suspect in a “copyright cockroach” case.

According to a police investigation, Truth Intellectual Property Consulting Co – a company owned by Kevin Lin – obtained public transmission licenses which enabled it to distribute several films to the public. Movies covered by these licenses subsequently turned up on BitTorrent networks and people who downloaded them began receiving legal threats.

According to reports, Lin’s company enticed users to download the torrents, tracked their IP addresses, and then filed copyright lawsuits in an effort to profit from cash settlements. Lin said that due to his support for the opposition government and his criticism of its handling of the COVID-19 pandemic, the investigation against him is politically motivated.

Five Indicted For Running Copyright Troll Scheme

This morning Taipei prosecutors announced that Kevin Lin had been indicted for his role in the copyright-trolling operation. Since August 2021, hundreds of lawsuits had been filed against alleged movie downloaders by Lin’s company, prosecutors said, something that should attract a heavy sentence.

It’s alleged that Lin was admitted to the College of Law at National Chengchi University in 2018 and graduated two years later. From there he set up a copyright consultancy company with the goal of turning litigation against file-sharers into profit for his company.

In May 2021, licenses were obtained from Vie Vision Pictures Co. and Applause Entertainment Ltd, which led to 18 movies being uploaded to BitTorrent networks, to tempt users into downloading them. After capturing their IP addresses, Lin’s company obtained their identities from ISPs and sued them. The goal was to obtain out-of-court settlements.

Big Crimes Deserve Heavy Sentences

Since August 2021, Lin’s company filed 937 lawsuits for copyright infringement. In just 25 of those cases, the company managed to “extort” settlements of NT$900,000 (US$29,207), FocusTaiwan reports . In addition to Lin, several other people have also been indicted for their part in the operation.

Prosecutors are demanding heavy sentences for Lin and a lawyer identified by the surname Cheng, who played a key role in devising the litigation strategy. The company’s lawsuits overwhelmed the Intellectual Property Police Corps, other police agencies, and prosecutors’ offices, authorities say.

Three other men, identified by their surnames and alleged roles in the operation – Lin (lawyer), Hsu (company owner on paper), and Chen (employee) – have also been indicted. A third lawyer, an accountant, and a client of the lawyer are subjects of deferred prosecution.

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 US federal courts.

These lawsuits target people whose Internet connections were allegedly used to download and share copyright-infringing content via BitTorrent.

Many of these cases result in private settlements and are never heard of again. On occasion, however, a defendant decides to push back and a case filed against a “John Doe” at a Florida federal court is now on track to go to trial.

It’s quite unique for a ‘copyright troll’ case to be so heavily litigated. The prospect of a potential jury trial is even rarer but before the case gets that far there are some issues to resolve.

Hollywood Quality?

A few days ago, Strike 3 filed a motion asking the court to exclude an expert report from Mr. David Dickson, one of the defense witnesses. Mr. Dickson is a film director and producer who produced an expert report commenting on several claims made by Strike 3.

The report has little to do with copyright infringement. Instead, it relates to the purported quality of the adult movies, including a quote from the complaint which claims that the films are “produced with a Hollywood style budget and quality.”

Mr. Dickson counters this claim by pointing out that the budgets of Strike 3’s adult films range between $2,000 and $6,000. This is in line with other adult industry productions, but a far cry from the multi-million budgets of mainstream Hollywood productions. The films overall are on a different level too.

“It is fair to say that there is nothing ‘…high-end, artistic, and performer-inspiring…’ about Strike 3 movies or that the Strike 3 movies are ‘…produced with a Hollywood style budget and quality…’,” Dickson says.

Factory Line Production

The report goes on to cite the average wages of porn actors, the size of the film crew, and the originality of the scripts. Mr. Dickson even went as far as creating a table to show how the same location was used to shoot multiple films, which suggests factory line production.

“Unlike movies produced by the same director or the same studio, in these films I found that the same location shot was used in multiple movies. Shooting out of sequence is an industry standard technique but at this scale it suggests a factory line of production,” the report reads.

Not Original

Mr. Dickson also points out that there is little originality in the productions and doubts that the actions of the actors and actresses in these films are actually copyrightable.

“There is no originality in pornographic movies because the producers have landed on a formula that requires no original and creative input but can be pressed out for the same effect every time,” Mr. Dickson writes.

The overall theme of the expert report is that Strike 3’s films are not to be compared with Hollywood productions, as the original complaint suggests.

It’s not clear how the defendant plans to use this testimony but it could help to show that Strike 3’s “Hollywood style” claims are overblown. In addition, it could help mitigate potential damages, if these are awarded.

Strike 3 Disagrees

Needless to say, Strike 3 isn’t pleased with this expert report. In a filing submitted a few days ago, the company asks the Florida federal court to exclude the opinions and testimony from the evidence.

The adult entertainment company argues that Mr. Dickson has zero experience in the industry and that this is evident from the opinions and conclusions in the report. As such, he is not qualified to be an expert.

According to Strike 3, the conclusions are wrong as well. For example, a statement referring to “Hollywood industry standards” would merely refer to the picture quality, which is 4K MP4 UHD.

That budgets are not comparable to Hollywood blockbusters is not disputed by Strike 3. However, the company points out that this is in part due to the length, the total number of all cast members, and the number of locations, that drive up the costs of Hollywood productions.

According to the adult entertainment company its content is top of the bill in the industry, as shown by the many XBIZ and AVN awards it has won.

MPA Rating?

The expert report also noted that, unlike Hollywood productions, Strike 3 never attempts to get an MPA rating for its films. However, Strike 3 notes that this would make no sense, as its films clearly aren’t intended for children.

“It is nonsensical for Strike 3 to seek ratings from the MPA, since all its works are universally geared towards adults. If anything, this criticism highlights again Mr. Dickson’s lack of knowledge of the adult motion picture industry,” Strike 3 notes.

The above is just a brief summary of the arguments from both sides and the defendant has yet to respond to Strike 3’s motion. However, it is clear that seemingly simple copyright cases can become quite complex.

Summary Judgment

In addition to the motion to exclude the expert report, both sides have also submitted motions for summary judgment in their favor. The court has yet to rule on these motions.

If either side is granted summary judgment there is no longer any need for a trial. At the same time, that would also end the discussion on the Hollywood-type characteristics of Strike 3’s films.

—

A copy of Strike 3’s Motion to exclude the opinions and testimony of Mr. Dickson is available here (pdf)

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

More than eight years ago, internet subscribers in Finland began receiving letters claiming that they owed hundreds of euros to companies they’d never heard of.

The letters, sent by the law firm Hedman Partners, alleged that subscribers’ internet connections had been used to download or share movies (some pornographic) using BitTorrent. Alleged pirates were given a choice – pay a substantial settlement amount to the rightsholders or face punishing legal action. This controversial business model would occupy Finland’s legal system for years to come.

Thousands of settlement letters, demanding between 600 and 3,000 euros per offense, targeted account holders, with some cases going to court. In 2015, the chief judge at Finland’s Market Court questioned whether the system had the resources to cope but that didn’t deter those seeking to turn piracy into profit.

Initial Victory For Internet Subscribers

Three years after internet subscribers first began receiving settlement demands, a case before the Market Court cast doubt on the future of cash settlement factories in Finland.

Filmmakers had requested the personal details of hundreds of alleged BitTorrent users from local ISP DNA, so they too could be sent demands for cash. According to Section 60a of Finland’s Copyright Act, rightsholders are entitled to obtain a subscriber’s details if they make content available to the public “to a significant extent.”

In this case, the filmmakers’ did provide evidence of infringement but failed to show how serious those infringements actually were – the amount of data transferred or incidences of repeat infringement, for example.

As a result, the Court decided that when balancing the defendants’ privacy rights against those of the filmmakers, the failure of the applicants to meet the criteria in Article 60a meant that the application for disclosure should be dismissed .

Rightsholders Refuse to Give Up

In January 2020, media company Scanbox Entertainment filed an application at the Market Court again seeking subscriber details from DNA relating to 34 subscribers. This time it provided additional evidence including the size of the ‘swarm’ (# of people sharing) to which subscribers connected, the size of all swarms where the same content was being shared, plus evidence of ‘test pieces’ downloaded.

The ISP objected, claiming that Section 60a could not be applied; none of the subscribers identified in the application had made the copyrighted material available to the public to a significant extent, as required by law. In some cases, DNA said, alleged infringers had only made content available for a few minutes – seconds in others.

The Market Court ruled that the subscribers should be dealt with on a case-by-case basis. Ultimately it was determined that the threshold for “significant infringement” had been met in five cases – users who shared movies for several days and/or long periods of time repeatedly.

The Court ordered DNA to hand over the details of those customers to Scanbox and, by extension, a network of movie companies all over Europe and the United States.

Supreme Court Hears Appeal

After both sides were granted permission to appeal, DNA filed a request for the Market Court’s decision to be overturned and for Scanbox’s appeal to be dismissed. Scanbox responded by demanding that DNA’s appeal should be dismissed and the Market Court’s ruling should be annulled and then applied against all subscribers.

The Supreme Court conducted a detailed analysis of the application, including whether the sharing allegedly carried out by the 34 subscribers meets the threshold required under law.

The Supreme Court’s Key Findings:

– In order to prove that [copyrighted content] has been made available to the public, it is not necessary to prove that the relevant user has first downloaded from the network a number of parts of the file representing a certain de minimis threshold value.

– By downloading and installing a separate program that is a prerequisite for using BitTorrent technology, users are aware of the program’s features and have given their consent to use the program. In this regard, the fact that the file containing the work can be downloaded automatically and in very small parts is not important.

– The European Court of Justice has given importance to the large number of IP addresses connected to the network when assessing whether a significant number of persons use a peer-to-peer network using BitTorrent technology.

The Court of Justice of the European Union has also considered it relevant when interpreting the concept of making available to the public that there is an unlimited number of potential recipients and that there is quite a significant number of persons.

– Based on the report presented in the case, BitTorrent users have practically no opportunity to influence in which swarm they share the work and how many users are attached to this swarm. The number of users of the swarm can be considered to indicate the total number of persons who directly participated in the sharing and downloading of a certain work at a certain moment.

– Based on the report presented in the case, an internet subscriber cannot be surprised by the fact that the downloadable work can be downloaded by other users at the same time when BitTorrent is used.

– The disclosure of the subscriber information in question is in accordance with the goal of achieving a fair balance between the copyright holder’s right to access information and the privacy protection of internet users.

“The Supreme Court, based on the above-mentioned grounds, considers that [DNA] must be ordered to hand over to [the rightsholders], in addition to what is ordered by the Market Court, the user’s and subscriber’s contact information also from those telecom subscriptions for which the Market Court has rejected the application,” the decision concludes.

In short, all 34 subscribers met the threshold for significant infringement and will have their details passed on to the rightsholders. It is likely that all will receive demands for cash settlements in the near future and that more applications will be filed by rightsholders now they have a green light.

The only remaining questions relate to the scale of the operation and how aggressively it will be pursued.

The Supreme Court decision can be found here

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