Guardaley | Voltage

For the first time a circuit court rules that IP address is not enough to pursue alleged bittorent pirates

When targeting internet users en masse, bittorent copyright trolls don’t bother to diligently investigate who they are suing. The trolls rely solely on an IP address for which unlicensed German “investigators” recorded a wink-long piece of a movie purportedly uploaded by that IP address to a swarm. After an ISP sells out its customer to the troll, a shakedown ritual starts — the ritual that generally results in either settlement or default judgement. Sometimes, when a victim puts up a fight, the troll “cuts and runs”: dismisses a lawsuit without prejudice in a hope to avoid compensating a wrongly accused.

Trolls don’t bother to make sure that the owner of the IP address in question — a person who pays the Internet bill — is an infringer. Such investigation is not needed because the majority of judges don’t pay much attention to screaming deficiencies of the complaints and jollily rubberstamp subpoenas and motions for default judgment.

Once in a while a district judge rules that IP address is not equal a person, and hence the plaintiff does not meet the plausibility standard set by Ashcroft v. Iqbal. Such rulings, while eagerly reported by tech media, so far have been a drop in the ocean and did not deter copyright trolls from continuing to abuse the judicial system.

Today the US Court of Appeals for the Ninth Circuit added its significant weight, and this weight can finally tip the scales of the bittorent litigation:

In this copyright action, we consider whether a bare allegation that a defendant is the registered subscriber of an Internet Protocol (“IP”) address associated with infringing activity is sufficient to state a claim for direct or contributory infringement. We conclude that it is not.

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Strike 3 Holdings

Magistrate judge finds that defendant’s privacy interest trumps copyright troll’s need to unmask an alleged infringer, denies ex-parte discovery

The recent explosion of copyright trolling lawsuits (particularly filed by a new aggressive porn troll Strike 3 Holdings¹) was possible in part because courts routinely rubberstamp ex-parte discovery requests. It does not matter that foundations of such requests are flimsy at best, illegal at worst. Since there is no meaningful opposition at the subpoena stage, judges don’t bother looking into the validity of the trolls’ claims and take false statements and fake declarations for granted. As a result, requests to unmask alleged file-sharers are almost always granted.

Yet once in a while there is a judge who denies a discovery motion. The reasons vary: it can be a doubt of geolocation accuracy, finding that a plaintiff has no intention to litigate, concerns about abuse of process, or suspicious declarations, which a real estate agent from suburban Chicago signs by the truckload.

On 4/24/2018 Magistrate Judge Franklin Noel denied a discovery motion in Strike 3 Holdings v John Doe (MND 18-cv-00768) for yet another reason. Namely, he concluded that a defendants’ privacy interests trump copyright trolls’ need to learn the defendant’s identity:

Plaintiff’s ex parte motion illustrates an ongoing conflict between the Digital Millennium Copyright Act (DMCA), 17 U.S.C. § 512, the Communications Act, 47 U.S.C. § 551, and Federal Rule of Civil Procedure 45. At the heart of this conflict is whet her a copyright owner can use the federal judiciary to discover evidence about a potential, alleged infringer when the infringer’s actual identity is unknown.

You already guessed which statute Judge Noel thinks should prevail:

This Court concludes that the conflict between the statutes, DMCA and the Communications Act, compels it to deny Plaintiff’s instant ex parte motion. As the Eighth Circuit reasoned in In Re Charter Communications, when it held that DMCA did not authorize the subpoena the district court had issued, “it is the province of Congress, not the courts, to decide whether to rewrite DMCA ‘in order to make it fit a new and unforseen internet architecture.’” 393 F.3d at 777 (quoting Verizon, 351 F.3d at 1238).

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Guardaley | Voltage

In devastating detail, defense attorney documents years of copyright trolls’ fraud on the federal judiciary


The document filed yesterday in two bittorent copyright cases – Strike 3 Holdings LCC v John Doe (WAWD 17-cv-01731) and Venice PI LLC v David Meinert et al (WAWD 17-cv-01403) – eliminates any remaining doubt that the current massive bittorent litigation campaign (steered by the German “anti-piracy” company Guardaley) differs from the infamous Prenda Law scam. This document shows that in tens of thousands of lawsuits (and more are being filed as we speak) federal courts allowed ex-parte discovery of alleged copyright infringers’ identities relying on declarations full of misinterpretations and outright fraud.

To understand the significance of this document, let’s briefly revisit the history of its inception.

Federal Judge questions legitimacy of copyright trolling lawsuits

On 11/3/2017 Federal Judge Thomas Zilly (WAWD) discovered that

In two different cases, Nos. C17-990 TSZ and C17-1075, plaintiff [Venice PI, LLC] sued the same, now deceased, defendant, namely Wilbur Miller. Mr. Miller’s widow submitted a declaration indicating that, for about five years prior to his death at the age of 91, Mr. Miller suffered from dementia and was both mentally and physically incapable of operating a computer.

This discovery was disturbing enough to question the legitimacy of the copyright trolls’ detection methods, as well as plaintiff attorneys’ predatory litigation tactics. In each of the 12 Venice cases assigned to him, the judge issued an order to show cause, directing the troll to

[…] file an offer of proof [that] shall be supported by the declaration of an expert in the field, setting forth such expert’s qualifications, and shall address the following issues:

(i) whether and, if so, how an IP address can be either “spoofed” to or faked by a BitTorrent tracker, and what is the likelihood (quantified if possible) that each defendant’s IP address was a false positive;

(ii) whether and, if so, how plaintiff can prove that the material allegedly tracked to each defendant’s IP address was a “playable” and actionable segment of the copyrighted work at issue; and

(iii) what evidence, if any, can plaintiff currently present, beyond mere association with an IP address, that each defendant engaged in the alleged copyright infringement.

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Guardaley | Voltage

Federal judge: Fathers and Daughters Nevada LLC has no standing to sue for Bittorent copyright infringement


The ink was barely dry on a recent Judge Zilly’s devastating order when another federal judge, Michael Simon, delivered a serious blow to the German-based copyright shakedown operation by finding that one of Guardaley’s shell companies – Fathers and Daughters Nevada LLC (F&D) – does not have standing to sue.

In a last week’s order WAWD Judge Zilly questioned the legality of copyright trolling operations, and, among other plaintiff’s shenanigans, called out the troll’s shell game:

In every case now before the Court, plaintiff has filed a corporate disclosure form indicating that it is owned by Lost Dog Productions, LLC, which is owned by Voltage Productions, LLC. […] A search of the California Secretary of State’s online database, however, reveals no registered entity with the name “Lost Dog” or “Lost Dog Productions.” Moreover, although “Voltage Pictures, LLC” is registered with the California Secretary of State, and has the same address as Venice PI, LLC, the parent company named in plaintiff’s corporate disclosure form, “Voltage Productions, LLC,” cannot be found in the California Secretary of State’s online database and does not appear to exist.

Michael H. SimonUS Federal Judge
Michael H. Simon

Today, a federal judge from the neighboring Oregon – Honorable Michael H. Simon – didn’t question the legal status of F&D and connected entities (which include Voltage). However, he granted the defendant’s motion for summary judgement (Fathers and Daughters Nevada LLC v Lingfu Zhang, ORD 16-cv-01443). In that motion, filed on 9/27/2017, the defendant’s attorney David Madden asserted that F&D didn’t possess exclusive rights to sue for copyright infringement, as required by the Copyright Act. Today the judge agreed:

“Under the Copyright Act, only the ‘legal or beneficial owner of an exclusive right under a copyright’ has standing to sue for infringement of that right.” Righthaven LLC v. Hoehn, 716 F.3d 1166, 1169 (9th Cir. 2013) (quoting 17 U.S.C. § 501(b)).

[FN1] Section 501(b) states: “The legal or beneficial owner of an exclusive right under a copyright is entitled . . . to institute an action for any infringement of that particular right committed while he or she is the owner of it.”

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Guardaley | X-Art

Under penalty of perjury: Copyright troll Malibu Media gets caught serving up falsified attorney’s fees declarations

Richard Nixon is a no good, lying bastard. He can lie out of both sides of his mouth at the same time, and if he ever caught himself telling the truth, he’d lie just to keep his hand in.
Harry Truman

It is fairly common knowledge to those who defend against Malibu Media copyright trolling lawsuits that there is a large percentage of lawsuit targets that cannot afford legal representation. Accordingly, a large portion of these lawsuits result in default judgements, where the defendant gets served, neglects to respond to the lawsuit, and Malibu Media is pro forma granted a judgement that includes money “damages,” injunctive relief to delete the porn from the defendant’s computer, and attorney’s fees. These default judgements are made on motion and are supported by an attorney’s unsworn declaration UNDER PENALTY OF PERJURY that the hourly records supporting the request for fees are true (see 28 U.S.Code § 1746).

Except they are not.

That is at least what Magistrate Judge Charles B. Day found in his Report and Recommendation dated January 5, 2018 in Malibu Media v John Doe (MDD 15-cv-03185).

Magistrate Judge
Charles B. Day

What piqued the judge’s interest is that Malibu Media’s local counsel Jon A. Hoppe’s Declaration, dated April 21, 2017 (sealed), requesting attorney’s fees in the sum of $1,182.00 is identical to one that was submitted in another Malibu Media lawsuit in another state by another Malibu Media local attorney:

Plaintiff seeks attorney’s fees of $1,182.00 and costs in the amount of $450.00, for a total request of $1,632.00. In Malibu Media, LLC v. Cowham, Plaintiff also requested attorney’s fees in the amount of $1,182.00. Equally, in Malibu Media, LLC v. Doe, Civ. No. CCB-15-1700, 2016 WL 245235, at *3 (D. Md. Jan. 21, 2016), Chief Judge Blake granted Plaintiff’s request for attorney’s fees plus costs of $1,632.00. Although these cases were brought in different states and had different attorneys of record, the charts included in the supporting declarations for fees were identical.

Consequently, the judge ordered a hearing so that Hoppe could explain this remarkable coincidence and produce documentation to support the request for fees.
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Guardaley | Voltage

A Washington nonprofit aims to unveil copyright trolls’ dirty secrets


Remember Elf-Man v. Lamberson (WAED 13-cv-00395) — a bittorent copyright infringement case that resulted in the troll (Guardaley) paying $100K attorney’s fees to an innocent defendant? It was an encouraging victory, a proof that a fighting victim can prevail over the secretive network of foreign “investors” and unethical attorneys who, as Judge Otis Wright aptly put it, have been “plundering the citizenry” for almost a decade.

In addition to giving hope to victims, this case lifted a cover of mystery from the trolls’ operations. Because of the defendant’s attorney Christopher Lynch’s diligent work, the public learned some of the trolls’ secrets (for example, the Griffin fraud, which is still waiting for a deserved attention from the alphabet agencies).

While almost three years passed since the judgment, it looks like this case still hides a ticking bomb or two – in the form of sealed exhibits – and has a potential of damaging the copyright trolling industry.

On 10/31/2017 the Center for Justice – a Spokane nonprofit organization “dedicated to access to justice, government accountability, and judicial transparency” – filed the motions to intervene and to unseal six exhibits:

In short, several of the documents filed under seal may expose how film companies, investigators and lawyers have coordinated an illegal settlement factory, sending threatening and deceptive letters to hundreds of targets, and seeking quick settlements priced just low enough that it is less expensive for the defendant to pay rather than to defend the claim.

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Guardaley | Voltage

Magistrate judge to copyright troll: you may cut and run if you want, but first compensate defendant

Today Magistrate Judge Stacy F. Beckerman recommended to grant bittorent copyright troll Carl Crowell’s motion to voluntary dismiss the case without prejudice, but with a condition: the plaintiff must pay the defendant’s attorney’s fees. This is new and significant.

Stacie BeckermanUS Magistrate Judge
Stacie Beckerman

Copyright trolls always try to preemptively dismiss a fighting defendant – a to-go tactic to avoid exposing trolls’ numerous frauds in discovery. When a defendant in a copyright infringement lawsuit is dismissed without prejudice, he or she is not considered the prevailing party, and §505 fees are not awarded. Thus, defense attorneys usually concentrate on arguing that the court should dismiss the case with prejudice instead. Such an approach is rarely successful.

However, Rule 41(a), which governs voluntary dismissals, includes the following clause (emphasized):

(2) By Court Order; Effect. Except as provided in Rule 41(a)(1), an action may be dismissed at the plaintiff’s request only by court order, on terms that the court considers proper. If a defendant has pleaded a counterclaim before being served with the plaintiff’s motion to dismiss, the action may be dismissed over the defendant’s objection only if the counterclaim can remain pending for independent adjudication. […]

The defense bar seemingly never tried to explore this avenue. Until now.

A Portland attorney Lake Perriguey was assigned as pro bono counsel for the defendant in ME2 Productions, Inc. et al v. Sheldon (ORD 17-cv-00158). After a short answer and a one-paragraph counterclaim (which was meant to prevent the troll from easily killing the case without a court order), the defense demanded extensive discovery, which apparently scared off the troll, and (surprise!) Crowell asked the court to be allowed to cut-and-run dismiss the case.

The defendant responded (emphasis is mine)¹:

Defendant does not oppose Plaintiffs’ Motion to Dismiss without prejudice. However, Plaintiffs’ Motion to Dismiss is silent as to whether the court should award costs and attorney fees. Consistent with rulings in district courts throughout the circuits, Defendant requests that the court condition the dismissal on the payment of Defendant’s costs and attorney fees, and require that any future litigation Plaintiffs might bring against Defendant alleging copyright infringement of Plaintiffs’ titles alleged in their Amended Complaint be brought in this court. Further, if Plaintiffs file another lawsuit asserting the same or similar claims against Defendants based on the facts of this case and dismiss that action, such dismissal should operate as an adjudication on the merits under Rule 41(a)(1)(B).

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