March 8, 2011

DOE #3120 is not a made up number, but from an actual case.  LFP Internet Group v. DOES 1 - 3,120, filed in the Northern District of Texas.  In LFP v. DOES 1 – 3,120, plaintiffs are suing 3,120 internet users for copying the Hustler movie, “This Ain’t Avatar XXX,” a parody of the more mainstream movie which takes place on the planet Panwhora as opposed to Pandora. 

The complaint seeks statutory damages of $30,000 to $150,000 from each DOE. That puts the total case value between $93,600,000 and $468,000,000, plus costs and attorney fees. The purpose of the suit is not to set a record for the world’s largest defense table.  Realistically, plaintiff expects to settle with the majority of defendants for a lesser amount.  But why would a case like this ever come about?

With the development of the Internet there have been a large number of well publicized instances of illegal file sharing, or copying.  The Internet allows people to quietly and almost anonymously sit in their homes and read or write just about anything.  The Internet also gives us the ability, with little more than a click, to do things we might never do should we be required to physically act out what we cause to happen digitally, namely steal thousands of dollars worth of goods and services.

While the Napster cases from the late 1990’s are fairly well know, there is a growing use of what is known as the BitTorrent service.  BitTorrent is a peer to peer file sharing protocol.  Some estimates claim up to 50% of all Internet traffic is in the form of BitTorrent file sharing.  In a nutshell, BitTorrent allows people to share large files with each other.  But it goes beyond the direct peer to peer (one computer to another) methodology to a swarm based system.  Anyone that wants to download a file can search for the file across hundreds of thousands of computers that are also using BitTorrent protocol software and then proceed to download the file.  But while prior systems used direct transfers between one computer to another, BitTorrent downloads simultaneously form several, and even hundreds of host locations.  The protocol allows for many computers to share the same file so that no one computer carries the full load, making the network faster and more reliable.  Once the file is downloaded, then that user becomes a source for others to download the same file, building the available sources for others to download from.

BitTorrent protocol and the various pieces of software, or clients as they are called, are the bane of those that wish to protect their copyrights in music, ebooks, audiobooks and movies.  While very few people would think of walking into a store and picking up a handful of DVD’s without paying for them, in the privacy and quiet of your home it is sometimes too easy to seemingly anonymously point, click and download the latest Hollywood release or a music album from your favorite band.  Blind behind the screen of a computer, it appears to be all but harmless.  Except that it is theft and defined as a crime by statute under 17 U.S.C. 506 if done for private financial gain.

One thing overlooked with this technology is that it is not as anonymous as people might think.  While there is a recognized protected interest in being able to share free speech on the Internet, this is not extended to being able to anonymously disseminate copyrighted material.  As a result, Hollywood (and the porn studios) are fighting back.  And it starts with the numbers computers use to identify each other on the internet, the Internet Protocol addresses, or IP addresses.   While you may be able to surf the internet anonymously, your computer cannot.  Just about everything your computer does leave the tag of your computers’ IP address as either the source or destination of information to and from your computer.  (If you want to know your IP address, you can go to any number of web sites, such as http://checkmyip.com/.)

Those seeking to enforce their rights may not know who is downloading their movies, but they are able to find the IP addresses.  They are filing the initial complaints against DOES identified by IP addresses. Once the suits are filed subpoenas are being served on the likes of Qwest and Comcast and records which link up IP address to actual customers are being turned over to plaintiffs.

Eventually after the complaint is filed, and usually about the time the subpoena is served asking for the local internet service provider to identify the party responsible, a client calls and asks the attorney what this is all about.  So what do you do?

The first step may be walking your client through accountability overcoming denial.  Most people do not readily confess to downloading illegal movies, or as is often the case, pornography.  There are the usual excuses: an unsecured Wi-Fi connection, guests in the house, and outright unexcused denial.  Sometimes it turns out a teen child is downloading music, movies and whatever else.  Sometimes curiosity gets the better of someone and a quiet late night click or two opens Pandora’s box.  In the end, it does not matter.  Whoever owns the internet connection is usually on the hook, at least for the initial stages.  And even the best excuse is rarely worth the costs of going to trial.

Then there are issues of accountability for the theft.  It can be difficult to convince a client that watching a low quality copy of a movie with Chinese subtitles might result in a  $30,000 penalty.  Many look on this as extortion.  The rational person might be convinced that if they write the judge a letter and explain what is going on it will all go away.  But this is not a problem to be ignored or dealt with lightly.

In a case of 3,120, when the defendants have no way of indentifying each other, they each need to obtain their own counsel.  Hiring counsel to represent a defendant and appear in Federal Court is difficult for under $5,000.00 and that’s just for the retainer.  Any substantive motion will drive up costs, and on an individual level, defendants are looking at minimum costs to begin of $5,000 - $10,000 each should they actually appear to contest the matter.  Add on the fact that by and large the defendants are liable whether they think they did anything wrong or not (there is no mental state requirement for copyright infringement), and there really is no reason to defend many of these cases, at least on the issue of liability.  As such, it might seem reasonable to expect a settlement of $5,000 from each defendant. (Still a case value of $1,560,000 for DOES 1 – 3,120.)

LFP Internet Group v. DOES 1 - 3,120 is not a unique case.  A quick search yields dozens of cases of a few hundred to a thousand or more defendants, one case against as many as 9,000 DOES.  All an attorney needs is a copyright owner who whishes to enforce their rights with some readily available internet data and they can collect and file suit against hundreds or thousands of people that at least at the time of filing are little more than IP addresses.

So what can you do?  The first thing is to make sure your clients know this is a serious matter and the reality of a $30,000 - $150,000 judgment for downloading a movie is not to be ignored.  The second is to understand the basic mechanics of Civil Procedure and how these cases work.  While your clients may not be able to escape without any liability, hopefully, a reasonable outcome can be reached with nominal impact on your client’s pocket book.

(Next:  Responding to the Demand Notice)

Carl D. Crowell is an attorney with Crowell Ing, LLP practicing in litigation, including copyright, trademark and patent litigation.

March 8, 2011

Client – DOE #3,120, Part II of II :  Responding to the Demand Notice.

In Part I of this article the general nature of mass copyright litigation was discussed using the exemplar case of LFP Internet Group v. DOES 1 - 3,120, filed in the Northern District of Texas.  This is far from a unique case. More and more mass copyright claims are filed every day.  But once the client comes to you with either a notice of subpoena or a demand and settlement offer from a plaintiff in an instance of mass copyright litigation, what should you do?

The answer depends on a combination of the facts as they pertain to the individual client, the basic mechanics of civil procedure, and the nature of mass copyright litigation.

First and foremost, there are the rules, in this case the Federal Rules of Civil Procedure (“FRCP”).  In a mass copyright litigation, generally a plaintiff has filed a complaint with the allegation that a number of DOES, identified by their internet protocol (“IP”) addresses, have violated the plaintiff’s copyrights.   In these cases, rather than file thousands of complaints, paying hundreds of dollars in filing fees for each complaint, the defendants are joined under FRCP 20 to allow the plaintiff to save money and manage discovery quickly and easily.

Under FRCP 20(a)(2), multiple defendants may be joined if “(A) any right to relief is asserted against them jointly, severally, or in the alternative with respect to or arising out of the same transaction, occurrence, or series of transactions or occurrences; and (B) any question of law or fact common to all defendants will arise in the action.”   Taking this provision in pieces, it is clear that in mass copyright cases the relief sought is not joint or several, as plaintiffs demand the statutory penalty of $30,000 against each defendant individually and cumulatively.  The liability does not arise out of the same transaction, occurrence or series of transactions or occurrences as the defendants are not only anonymous to the plaintiff, but to each other as well.  While it might be possible that two or more defendants exchanged some data through the BitTorrent system, this would be the exception and based purely on random chance and not by design or intent.  And while there will be common issues of law, it is likely each defendant will have a unique set of facts that pertain to their situation.  Some defendants may operate on a large scale.  Some may be one time violators.  Some may be victims of open wi-fi connections.  Some may have been out of town during the time of the alleged violation.   Each defendant will have their own story with its unique facts.  Finally, there is a very real argument that due process cannot be afforded a single defendant when shackled to 3000 other defendants, not to mention the logistical nightmare of any trial.

As such, joinder of the multiple defendants in mass copyright litigation is improper.    Courts finding such include, Axel Braun v. Does 1-7098, 3:10-CV-112 (N.D. Va., Dec. 23, 2010), BMG Music v. Does 1-4, LEXIS 53237, (N.D. Cal. July 31, 2006) and Interscope Records v. Does 1-25, LEXIS 27782,(M.D. Fla. Apr. 1, 2004).

The second primary issue with respect to the FRCP relates to Jurisdiction.  An IP address of a possible defendant may not identify the defendant, but it will provide basic geographic information as to the source computer, or at least the internet service provider of the computer in question.  A plaintiff, on “reasonable … further investigation” (FRCP 11(b)(3)) of a known IP address would be able to readily ascertain at least the state of the alleged defendant.  Thus the bulk of the mass copyright claims which gather IP addresses from around the country without regard to jurisdiction of defendants arguably violate FRCP 11(b).  Any reasonable inquiry through a site such as whatismyipaddress.com would reveal the city and state of the alleged defendant.  The argument that the defendants are named for purposes of discovery to ascertain jurisdiction is a sham.

In any complaint a plaintiff or counsel certifies, “factual contentions have evidentiary support or, if specifically so identified, will likely have evidentiary support after a reasonable opportunity for further investigation or discovery.”  FRCP 11(b)(3).  In light of the knowledge that defendants are not acting in concert, are likely to have unique facts, and that with nothing more than an IP address a plaintiff is able to readily ascertain whether or not there is jurisdiction over a defendant, mass naming and joining of thousands of defendants without regard to their location is clearly improper.

As Federal Magistrate Kravchuk states in Arista Records, LLC v. Does 1-27, “[r]ule 11(b)(3) requires that a representation in a pleading have evidentiary support and one wonders if the Plaintiffs are intentionally flouting that requirement in order to make their discovery efforts more convenient or to avoid paying the proper filing fees. In my view, the Court would be well within its power to direct the Plaintiffs to show cause why they have not violated Rule 11(b) with their allegations respecting joinder."  Arista v. Does 1-27, 2008 U.S. Dist. LEXIS 6241, 20-21 (D. Me. Jan. 25, 2008), (Note, this aspect of the opinion was not supported by the District Court Judge.)

The issues of improper joinder, together with a lack of jurisdictional basis, coupled with the post-Twombly pleading standards (Bell Atl. v. Twombly, 127 S. Ct. 1955 (2007)) makes mass copyright litigation a precarious venture for plaintiffs as pointed out by Judge Kravchuk.

Which leads to the basic motivating factor behind these cases: money.  Plaintiffs, or more accurately their counsel, bring these cases with the hopes of turning a profit.  To this end, a quick review of FRCP 68 offers of judgment is in order.  In many cases the defendant is liable, and the only question is for how much.  In others, the defendant may be innocent, but again, at what price?  A notable motivating factor and threat for copyright claims is the potential exposure to costs and attorney fees.  With FRCP 68, and an offer of ten (10x) to twenty (20x) times the value of any alleged infringement ($200 for a $10 DVD), coupled with FRCP 11 notices of improper joinder and questionable, if not outright disregard of the rules for jurisdiction, a plaintiff is hard pressed to not take the money offered and move on to softer targets.

Each case is unique. There will always be the individual facts that set specific defendants apart.  A key to combat mass copyright litigation is to remove the profit center, often through quick and reasonable settlement offers applying the law and the facts.  After all, when a retired widow in her 70’s offers to pay $100 because somehow her IP address is coupled with the download of a movie she has never heard of, it is unlikely a rational plaintiff’s counsel will pursue the claim.

Errata: 

• The course of many of these cases is for there to be a dismissal or severance of the various DOES, often after initial discovery.  While plaintiffs are then free to re-file against the individual defendants, filing 3,000 complaints is over $1,000,000 in filing fees and there are obvious barriers.
• Individual case facts matter and this is a developing area of the law.
• Many of the defendants have defenses that would prevail, namely many are either innocent or not liable, but that does not get over the basic costs of defending and presenting those defenses.
• While it can be argued that a defendant can simply ignore these cases and it is possible there will never be any repercussions, there is also the real risk of a $30,000 judgment being entered against a defendant through a default. 
• This is an article for counsel.  If you receive a notice or letter related to claims of copyright infringement, seek the advice of a knowledgeable attorney, as is often attributed to Abraham Lincoln: A Man who Represents Himself has a Fool for a Client.

Carl D. Crowell is an attorney with Crowell Ing, LLP practicing in litigation, including copyright, trademark and patent litigation.

April, 12, 2010

Users of the popular BitTorrent peer-to-peer file sharing protocol are being tracked down and sued in ever increasing numbers.  Downloading movies, TV shows or music can lead to an expensive penalty.  Under U.S. Law the civil penalty for copying is $30,000 and can be increased to as much as $150,000, not to mention the costs of hiring a lawyer and potentially paying for plaintiff’s legal fees.

In Axel Braun v. Does 1-7,098, plaintiffs sued 7,098 people based on their IP addresses being tied to illegal downloads through BitTorrent.   In LFP v. DOES 1-3,120, another 3,120 were sued due to their IP addresses being linked to ButTorrent use.  In West Coast Productions, Inc. v. Does 1-9,729, 9,729  people were sued in a single case, all due to their IP addresses being linked to BitTorrent use.

Copying of commercial products through BitTorrent or other peer-to-peer platforms, including movies, music or TV shows is likely to be a violation of the law.  Any use of BitTorrent should be with caution, as the careless user may end up copying and then distributing material unknowingly.

If you have illegal downloads – delete them.

If you receive a notice letter or demand claiming a copyright violation, see an attorney.