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Judge Wright is so right: copyright trolling is “essentially an extortion scheme”


By Raul

After reading DieTrollDie’s post regarding how troll Leemore Kushner plays loose and fast with Local Rule 83-1.3 by refusing to file notices of related cases with her shitload of Malibu Media lawsuits, I thought it was time to post about a little order which little old me stumbled across recently.

Federal Judge Otis D. Wright

The lawsuit is Malibu Media v. John Does 1-10 (12-cv-3623) which is pending in the Central District of California before Judge Otis D. Wright. As is usual with a copyright troll lawsuit, Kushner makes a motion to serve third party subpoenas prior to a Rule 26(f) conference, which, as the judge notes, is typically not allowed (in the context of all civil cases, not just mass BitTorrent lawsuits), but there are exceptions. As all the other trolls, Kushner argues that her lawsuit is an exception to the general prohibition.

Unlike some federal judges, Judge Wright displays a better understanding of BitTorrent than me. In his findings the judge notes that, amongst other things:

There are several nuances about the BitTorrent protocol. First, every participant may upload and download pieces of the file. Second, these individual pieces are useless until a user has all of them; the user cannot reassemble the original file with even 99% of the pieces. Third, a user may log on and download just one piece (e.g., a 10kb piece) of the file and then log off, waiting to download the other pieces later or discarding the downloaded piece. Fourth, a user may restrict his BitTorrent software to only download pieces, and not upload.

In discussing whether to allow the issuance of the third party subpoenas, the judge observes that (all together now!) the subscriber may not be the actual infringer, so “in some situations, the identity of the subscriber may yield the identity of the infringer; in others, the infringer may never be known,” Judge Wright then goes on to hint at how this is all going to end:

Although the Court is inclined to allow Malibu to conduct this discovery, the potential for abuse is very high. The infringed work is a pornographic film. To save himself from embarrassment, even if he is not the infringer, the subscriber will very likely pay the settlement price. And if the subscriber is a business, it will likely pay the settlement to save itself from the hassle and cost of complying with discovery — even though one of its customers or employees is the actual infringer.

Returning to his finding regarding BitTorrent, the judge points out that the troll has not put in any evidence that the Does downloaded the entire porno which the judge notes:

…that Malibu’s case is weak if all it can prove is that the Doe Defendants transmitted only part of all the BitTorrent pieces of the copyrighted work.

Judge Wright goes on to note that there is no evidence that the Does acted in concert and severs Does 2-10 from the lawsuit. With respect to Doe 1, the judge admonishes the troll (emphasis is mine):

…though Malibu now has the keys to discovery, the Court warns Malibu that any abuses will be severely punished.

In other words, do not dun Doe 1.

Here comes the punch line, and rather than dissect it, I think it is best appreciated as originally put down (again, emphasis is mine):

The Court is familiar with lawsuits like this one. AF Holdings LLC v. Does 1-1058, No. 1:12-cv-48(BAH) (D.D.C. filed January 11, 2012); Discount Video Center,Inc. v. Does 1-5041, No. C11-2694CW(PSG) (N.D. Cal. filed June 3, 2011); K-Beech,Inc. v. John Does 1-85, No. 3:11-cv-469-JAG (E.D. Va. filed July 21, 2011). These lawsuits run a common theme: plaintiff owns a copyright to a pornographic movie; plaintiff sues numerous John Does in a single action for using BitTorrent to pirate the movie; plaintiff subpoenas the ISPs to obtain the identities of these Does; if successful, plaintiff will send out demand letters to the Does; because of embarrassment, many Does will send back a nuisance-value check to the plaintiff. The cost to the plaintiff: a single filing fee, a bit of discovery, and stamps. The rewards: potentially hundreds of thousands of dollars. Rarely do these cases reach the merits. The federal courts are not cogs in a plaintiff’s copyright-enforcement business model. The Court will not idly watch what is essentially an extortion scheme, for a case that plaintiff has no intention of bringing to trial. By requiring Malibu to file separate lawsuits for each of the Doe Defendants, Malibu will have to expend additional resources to obtain a nuisance-value settlement — making this type of litigation less profitable. If Malibu desires to vindicate its copyright rights, it must do it the old-fashioned way and earn it.

Here is the entire order, hope you enjoy it:

For those who cannot access Scribd, enjoy the order here.

Happy Independence Day!

Update

07/13/2012

I’m happy to observe that Judge Write’s opinion reverberates all over the country: just noticed that it was quoted in Comcast’s reply to Prenda’s status report in the Hard Drive Productions v. Does 1-59 case (4:12-cv-00699, TXSD).

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Discussion

75 responses to ‘Judge Wright is so right: copyright trolling is “essentially an extortion scheme”

  1. What a nice thing to read this 4th of July. Have a great one today.

    “The Court will not idly watch what is essentially an extortion scheme, for a case that plaintiff has no intention of bringing to trial.”

    DTD :)

    P.S. I see lots of unicorns. ;)

  2. finally a judge who seems to be actually tech savy, soon we will have independance from trolls.

    “that Malibu’s case is weak if all it can prove is that the Doe Defendants transmitted only part of all the BitTorrent pieces of the copyrighted work.”

    along with

    “There are several nuances about the BitTorrent protocol. First, every participant may upload and download pieces of the file. Second, these individual pieces are useless until a user has all of them; the user cannot reassemble the original file with even 99% of the pieces. Third, a user may log on and download just one piece (e.g., a 10kb piece) of the file and then log off, waiting to download the other pieces later or discarding the downloaded piece. Fourth, a user may restrict his BitTorrent software to only download pieces, and not upload.”

    make me happy

  3. “…the Court warns Malibu that any abuses will be severely punished.”

    It makes me wonder if the Court has the right to disgorge. A sanction could usually only mean a court ordered dismissal. What I am waiting & hoping for is some kind of an Order that forces cases like these into a mandatory judicial review before they leave the gate. Kinda like what happens with a vexatious litigant Order.

    Reading this particular Order did feel quite good. I do agree that we have finally found a judge who gets it.

    • 2 words… Evan Stone.
      Not the porn star the copyright troll lawyer. When last we heard he filed late to appeal the Judge’s order that he had to file a copy of the Judge’s order tearing him apart in every case he had pending and moving forward. He owed quite a bit of money and was trying to claim he never made any money from the “settlement” letters…. not heard much from him lately but the Judge went wild when he found out that Stone has violated the Judges order, lied to the Judge while pleading against the order, and was trying to extort money with subpoenas the Judge had not granted. I do believe opposing council and the Judge both sent letters to the bar.

      • TAC,
        Still on the steep learning curve here, are we talking CEG or someone else? Please excuse my ignorance as this has been explained several times but my mind can never truly grasp the Columbian Cocaine Cartel like intricities involved.

        • Someone else. Stone was a solo act, one of the first to pop up after USCG started shaking people down for Uwe Bolle films. He was covered on Ars, TechDirt, and several other locations.

          He was the “Copyright Defense Agency” and he was inept well beyond even Steele. If the logo looks familiar it is the East India Trading Company’s logo.
          http://arstechnica.com/tech-policy/2011/02/meet-evan-stone-p2p-pirate-hunter/

          A Judge actually wrote in a ruling about Stones “Staggering Chutzpah”.
          http://arstechnica.com/tech-policy/2011/09/sanctioned-p2p-lawyer-fined-10000-for-staggering-chutzpah/

          “As if the money weren’t bad enough, Stone was (again) ordered to file a copy of the sanctions against him in every state and federal case in which he is an attorney. Though Stone complained this would be bad for business and that he hadn’t acted in bad faith, the judge retorted, “It may be the case, as Stone argues, that filing the Sanctions Order will result in damage to his professional goodwill. But it is Stone’s actions, and not the resulting Sanctions Order, that do damage to his professional goodwill.””
          He was fined $10K by the Judge, he owes $22K to EFF and Public Citizen for legal fees (the Judge requested they step in on behalf of the Does) and it ticks up $500 a day until he pays.
          http://arstechnica.com/tech-policy/2012/01/judge-blasts-unlawful-invasions-of-privacy-by-rogue-p2p-attorney/

          I know his appeal of the sanctions was denied… I am unaware if he ever did pay or if there was any review of his methods and the letters he used.

          His operation was the 2 man deal I sometimes reference. His “expert” was a former VP from Verizon who used an off the shelf bittorrent client and joined swarms and wrote down all the IP’s he saw. If your playing the home game this means he was serving up chunks of the allegedly infringing work, adding to the infringement of the material at question… can someone say unclean hands? Participating the the distribution of the work your going to demand settlements for… seems like that should be wrong.

          He started out doing work for a gay porn studio, and then moved on to German porn. Oh and there was that time he lied on a copyright application for the Germans film…

          As I said he was truly inept.

          Don’t worry if your not familiar with the trolls and cases I speak about sometimes, my specialty has been Gay Porn trolls not everyone is familiar with those and they get very little coverage. When Stone crossed over I discovered more and more of these scum, made friends with SJD, and then ran into DTD. They all suffer the same fatal flaws in their cases so the work I do here and in some of the “shadowy” corners of the net all ties together. There are lots of good people out here like you Raul and in the shadows, everyone working on the goal of shining a light under the bridge and showing that the big scary troll is infact a little monster you shouldn’t fear. The more we talk the more chance there is someone who has a terrifying letter will come, be educated, and learn to not give into the fear.

  4. Hooray!!! Hooray!!! This makes me happier than I’ve been in quite some time. Now, if only some of Judge Wright’s common and legal sense would rub off on Judge LeChien. I can always dream, right?

  5. The calamity continues. Troll Baker draws Judge Wright, then dismisses the next day.

    6/27/2012 1 COMPLAINT against Defendant John Does 1 through 10. Case assigned to Judge Otis D Wright, II for all further proceedings. Discovery referred to Magistrate Judge Carla Woehrle.(Filing fee $ 350 PAID.) Jury Demanded., filed by Plaintiff Malibu Media LLC.(et) [Summons not issued on 6/27/2012.] (mg). (Entered: 06/27/2012)6/27/2012 5 MINUTE ORDER IN CHAMBERS by Judge Otis D Wright, II:This action has been assigned to the calendar of Judge Otis D. Wright II. Counsel are encouraged to review the Central Districts website for additional information.It is not necessary to clear a motion date with the Court Clerk prior to filling the motion. The Court hears motions on Mondays, Criminal at 10:00 a.m. and Civil at 1:30 p.m.6/28/2012 6 NOTICE OF DISMISSAL filed by Plaintiff Malibu Media LLC pursuant to FRCP 41a(1) of John Does 2 through 10 Without Prejudice as to Malibu Media LLC. (Baker, Deborah) (Entered: 06/28/2012)

  6. So, this troll is getting his ass handed to him and the first thing the other trolls decide to do is roll the dice. AF Holdings just dropped 5 more lawsuits in CACD. Its like a Three Stooges bit.

  7. How would I anonymously mail a copy of my motion to quash to the Plaintiff’s counsel? Do I put John Doe # as sender and leave the sender address blank?

  8. I’m not one to say “I told you so” but look up my past posts and you’ll see that I mentioned this summer would be the absolute worst for the trolls. The biggest bomb is yet to be dropped, but I have a hunch it’ll come in Florida. :)

    • Trolls have been wearing out the welcome mat in so many jurisdictions it is hard to tell. My personal hope is unlikely but it would be fitting, CO or EDPA. I think the fireworks will continue in SDNY and watch for the fur to fly in AZ. Plus something will have to soon give in MA in one direction or the other (I like my coffee Sweet on this one).

      • Because of the backlash in the multiple jurisdictions and (insert back-pat) this blog and others, the tide will turn in concert rather than a couple of gradual quick wins.

        I hesitate to state but have some confidence in saying that the trolls will no longer win any cases in any jurisdiction in any venue anymore. They are done. Those that arrogantly and ignorantly persist will see something far more significant than sanctions or dismissals. Disbarment, fines (as we’ve already seen), and class action lawsuits are what’s in store for this fall into the next winter. There already exists precedence that will allow for Does to seek remedy against the personal assets of many of the plaintiffs involved in this frivolous litigation.

        The aforementioned is why we don’t see any trolls commenting anymore on any of these posts. It’s already over.

  9. Raul, your article is quite popular: had a good rating on Reddit yesterday, and today was linked from Wired today. My yesterday’s article is a disaster on Reddit (r/cyberlaws), but it got a good Twitter exposure as Cory Doctorow tweeted the link to his 200K+ followers.

    BTW there is a shill in the comments to the Wired’s article. I couldn’t resist and replied :) what is heartwarming is that his comment is being consistently downvoted.

  10. brilliant example of a well educated judge there…now if we can get someone this intelligent looking into the patent trolling that apple/ms and other top companies are doing, stupid court cases may eventually be a thing of the past!

  11. As a minor footnote, Troll Gibbs has drawn Judge Wright in one of his AF Holdings lawsuits (12-cv-5712). BTW is AF an abbreviation of “All Fabricated”?.

      • Funny how Nevis and St. Kitts is perhaps the most secretive place in the world to incorporate and transact business. Why would a porno copyright assignee need such major secrecy? It is almost as if someone read “Offshore Trolling and Money Laundering For Dummies” but I am probably mistaken as such an operation would require some foresight and discretion.

        • Setting up corporations and accounts in Nevis/St. Kitts (and other places) requires serious money-tens of thousands of dollars, at least. The ones who do it have lots of money, and presumably lots of reason to hide and “protect” it.

          Many wealthy corporations and individuals with more respectable enterprises use those islands and the offshore haven process. Imagine if offshore tax haven reputations were associated largely with porn and extortion. By bringing unwanted attention to these havens, trolls have reason to worry that they are angering very powerful interests, beyond thousands of Does. If trolls were prudent, they wouldn’t be trolls.

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