Copyright trolls

Advertisement: help to put a human face on the copyright trolling problem

If you are a copyright troll’s victim, current or former, you can help to end the trolling plague.

Copyright Troll

With Prenda’s demise, copyright trolling disease may not be in its acute phase any longer. But the virus has mutated and adapted, and the infection is now chronic. Granted, fewer people are victimized these days compared to wild times of lawsuits that lumped together hundreds and even thousands of defendants. But for individual victims, the illness is no less damaging.

Thanks to outdated laws and opportunistic parasites who abuse them, careers and families are still being steamrolled over minor copyright violations (or even when there are no violations), and money continues to flow from the pockets of productive US citizens to lawyers’ bank accounts, and to foreign “investors.”

Today’s problem is less visible, but some are still working to cure the judicial system of this sickness forever. There are forces out there that are not happy with the status quo and that want to make a change.

For that, troll victims, former or current, need to come forward.

While the number of copyright shakedown victims is estimated to be half a million, it is difficult to find motivated public speakers. I understand that the majority just want to leave their nightmarish experiences behind them. Many are concerned about their future employment and personal relationships, especially if their stories involve pornography. Some just don’t believe in justice any longer — after the state, instead of protecting them, helped crooks with law diplomas to “legally” deplete their kids’ college funds.

However, I’m sure that some victims are not afraid to come forward to help end this plague.

If you want to share your story with wider audience and are not afraid to do it under your real name, please contact me. I’m talking about the mainstream media coverage and even lobbying the Congress. You can make a difference.

All the rest: stay intrigued.

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Guardaley | Voltage

How copyright trolls plunder both US citizens and… rights holders

German extortion outfit Guardaley, together with its US collaborators — Voltage Pictures and a network of ethically handicapped attorneys — has been filing frivolous, evidence-free lawsuits across the US for years, extracting millions from alleged pirates and innocents alike. To maintain the fog of legitimacy and to shield Voltage from bad publicity, dozens of shell corporations were created — one per film — to serve as (sometimes bogus) plaintiffs in thousands of copyright infringement lawsuits filed either against individual defendants or about a dozen of John Does lumped together.

Dallas Buyer’s Club LLC is one of the most prolific troll plaintiffs who filed more than 300 lawsuits across the country in the past few years.

Unlike the majority of films exploited by copyright trolls, Dallas Buyer’s Club is a decent movie. Ironically, the film’s protagonist, who procures an unapproved anti-AIDS drug in Mexico and then sells it to save lives, acts illegally, yet ethically. On the contrary, the movie’s secondary revenue stream — from litigation — is technically legal (well, mostly), but grossly unethical.

“Grossly” is not an overstatement: as you read below, it appears that Guardaley/Voltage not only plunders the US population, but robs the very people who made the film and who likely own the copyright to it.
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Prenda’s Hansmeier stipulates to suspension of his law license

In a previous post I suggested that the next event in the long running Prenda saga was likely to be a ruling by the referee in Hansmeier’s Minnesota lawyer discipline case. Well, I was close. There was in fact a major development in this case, but rather than wait for the referee to issue his decision, Hansmeier decided to go ahead and end the suspense by entering a stipulation (read “plea bargain”) where he admitted to every allegation save one ¹.

Paul HansmeierPaul Hansmeier

According to the Minnesota Appellate Court’s “Case Management System” data for case A15-1855, on Friday, 07/1/2016 at 14:28 CDT the MN Office of Lawyer Professional Responsibility (OLPR) asked the Clerk of that Court to file two documents: Hansmeier’s “Stipulation for discipline“, and a proposed order for the Court. In the stipulation, Hansmeier “unconditionally admits” (almost) all of the allegations in the original and supplemental petitions. In exchange, the MN OLPR agrees to recommend that Hansmeier be

[…] indefinitely suspended from the practice of law, effective 14 days from the order of the MN Supreme Court, with no right to petition for reinstatement for four years.

Like in the vast majority of “plea bargains” in criminal cases, the MN Supreme Court is not bound to accept the recommendations of the OLPR. In fact, there appears to be some conclusion as the “proposed order” mentioned in the previous paragraph is exactly that: a proposed order. As of 07/02/2016, the court has not made any ruling in this case, and Hansmeier’s “law license” has not yet been suspended. (One of the “dirty little secrets” of the US courts is that the lawyers for one or both of the parties write almost every order issued by a court. The “proposed order” is what the OLPR has agreed to recommend to the MN Supreme Court.)

At this point it is important to point out that the words “suspension” and “disbarment” as used in attorney discipline do not have their usual meanings. In professional sports, if an athlete is suspended, a time frame is given and when that time period is over, he is automatically reinstated. The public also generally believes that if a lawyer is “disbarred” (or more technically, his admission to the bar of a court is “annulled”), that such an action is permanent. In reality, in almost every jurisdiction, if an attorney is “disbarred” he has the right to petition for reinstatement at some point in the future. (While such petitions are sometimes granted, they are very rare.) In MN, if an attorney is suspended for 90 days or more, then he must still petition the MN Supreme Court for reinstatement, and such reinstatements are far from automatic.

Many readers of this site may think that Hansmeier has slithered his way through his lawyer discipline process since he was “only suspended” rather than “disbarred.” However, in terms of practical consequences, there is little difference between the two. If he was disbarred, he could still petition for reinstatement at some point in the future, and there are not dramatically better odds of being reinstated after being disbarred as opposed to a significant suspension.

That leaves us with a couple of additional questions: If Hansmeier did not get a whole lot out of the agreement, why did he go along with this? What about the timing of the announcement? Finally, what about his ADA cases?
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Guardaley | Lipscomb | X-Art

Malibu Media sues its former counsel Keith Lipscomb and his firm for professional negligence and breach of fiduciary duty

Keith LipscombM. Keith Lipscomb

Today Malibu Media (a litigation shell of a hardcore “barely legal” pornography producer X-Art), represented by its new counsel, Pillar Law Group, filed a lawsuit in Central District of California against its former counsel, Michael Keith Lipscomb and his firm, Lipscomb, Eisenberg and Baker (CACD 16-cv-04715). I reported about an apparent quarrel between X-Art and Lipscomb, but I did not know the details. Now we have an opportunity to peek into the reasons behind the breakdown and the specifics of the shakedown operation in general.
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Two breathtaking first-time precedents demonstrate that copyright troll lawsuits cannot withstand meaningful judicial scrutiny

“But he has nothing at all on!” at last cried out all the people. The Emperor was vexed, for he knew that the people were right; but he thought the procession must go on now! And the lords of the bedchamber took greater pains than ever, to appear holding up a train, although, in reality, there was no train to hold.
Hans Christian Anderson

Recently two federal judges handed down two determinations that are remarkable in that they are, to my knowledge, first time precedents in which a copyright troll complaint had to clear a very low hurdle, tripped, fell flat on its face and was dismissed. What both of these breathtaking precedents have in common is that they demonstrate that a copyright troll complaint cannot withstand careful judicial scrutiny.

Precedent 1: Copyright troll, Malibu, Media LLC, loses its own motion for a default judgement
“The record suggests that Defendant could mount a meritorious defense”

First off, it is important to know that in copyright troll lawsuits a plaintiff’s motions for a default judgment are always granted. This because by not answering the complaint a Doe defendant is deemed to have admitted the truthfulness of the allegations and that he/she has no affirmative defenses to withstand the lawsuit. It is true that federal judges routinely ratchet down the troll’s requested damages to the $750 per infringement statutory minimum so the troll’s victory is oftentimes Pyrrhic, but these motions are always granted. Not so in Judge Kevin McNulty’s courtroom. In Malibu Media v. Chris Fodge (NJD 14-cv-07611) the plaintiff motioned for the non-appearing defendant and on April 5, 2016 the judge handed down an opinion denying the motion.

Kevin McNultyUS District Judge
Kevin McNulty

In this opinion Judge McNulty noted that “[m]y independent review of the record suggests that Fodge could mount a meritorious defense.” Specifically the judge found that some of its copyrighted work was not enforceable against the defendant:

Malibu Media has identified 23 works that are the subject of this action and that it owns the copyrights for these works. (Compl. Ex. B) However, with respect to seven of the works, the date the investigator connected with the Defendant’s IP address preceded the copyright registration date, and thus on the face of the Amended Complaint and without the benefit of discovery, Malibu Media cannot at this juncture establish a valid copyright at the time the defendant allegedly downloaded seven of the twenty-three works. With respect to the other sixteen works, Malibu Media has pled that it owns a valid copyright.

A copyright troll trying to enforce unenforceable copyrights is rather common and harkens back when copyright troll lawsuits first emerged, but it is quite rare for a federal judge to notice it.

The second factor that the judge found weighed against granting the motion for a default judgment was that Malibu sued the defendant because he possesses a penis. OK, the judge did not specifically write that, but rather:

[…] the Defendant’s connection to the alleged infringement is based solely on an IP address. The IP address here, as the Plaintiff concedes, is actually held by the Defendant’s spouse. (Compl. ¶ 25) In the Amended Complaint, Malibu Media is not certain that the infringer is Defendant, but rather pleads “discovery will likely show that Defendant is the infringer.” (Id. ¶ 27) In fact, the infringer could be another person altogether, such as a family member or, as Malibu Media itself concedes, “sometimes, the infringer is another person who the subscriber has authorized to use the subscriber’s Internet.” (Id. ¶ 28) Or, it could be that the infringer is someone using the subscriber’s Internet via a wireless router that is not password protected. While it is possible that the infringer is Defendant, Malibu Media has not proved that Fodge actually caused or is responsible for the alleged infringement. Defendant can state a meritorious defense to the claims presented here.

Accordingly, the motion was denied and an order of the same date was issued.
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Guardaley | Lipscomb | X-Art

Judge thwarts copyright troll’s sneaky practice of securing safe retreat from potentially meritless lawsuits

US Federal Judge
William H. Alsup

Monday was a busy day for Judge William Haskell Alsup. I already reported that on that day the judge stayed plaintiff’s subpoena pending a clarification of geolocation reliability. There was another good order issued on the same day: I will briefly touch upon it at the bottom of the post.

Those two orders were akin an appetizer and a dessert. Yet the “main course” served on Monday was the order denying plaintiff’s motion to dismiss counterclaim in Malibu Media v John Doe (CAND 15-cv-04441, defense attorney: Joseph C. Edmondson). As I will explain shortly, this order essentially destroyed one of the two main foundations of the copyright trolling.

While answering Malibu’s complaint on 4/26/2016, the defendant counterclaimed with a single count of declaratory judgment of non-infringement (basically asking the judge to formally rule that the defendant was not an infringer).

Malibu moved to dismiss the counterclaim, arguing that such counterclaim mirrors defendant’s denial of liability found in the Answer. The defendant replied, cleverly pointing to Oracle v Google (a lawsuit handled by the same judge), where Google made a similar counterclaim.

While Judge Alsup agreed that there is certain duplicity between the denial as an essence of the counterclaim and the denial as a part of the Answer, he nonetheless denied the plaintiff’s motion, leaving the defendant’s counterclaim alive.

In the past, Malibu furiously (and mostly successfully) opposed defendants’ counterclaims, and to be honest, I incorrectly thought that the sole reason of such oppositions was to delay proceedings (historically, time always worked on the troll’s side). Maybe it was a reason, but not the main one. As the judge clearly explained (emphasis is added throughout the post),

Malibu Media’s motion seems more like a gimmick designed to allow it an easy exit if discovery reveals its claims are meritless. Section 505 of Title 17 of the United States Code provides that a “prevailing party” may be awarded attorney’s fees in a copyright infringement action; however, when a copyright plaintiff voluntarily dismisses a claim without prejudice, the defendant is not a prevailing party. […] Absent defendant’s counterclaim, if events reveal that this case is meritless, Malibu Media could voluntarily dismiss its affirmative claims without prejudice under Rule 41(a)(2), seeking to avoid an award of attorney’s fees. If, however, defendant’s counterclaim remains alive, he will be able to press his counterclaim.

See? As I mentioned above, copyright trolling rests on two turtles: astronomically (and maybe unconstitutionally) high statutory fines, and the absence of downside for the troll as it can always cut and run, leaving the defendant with painful legal bills.

Judge Alsup just closed the second avenue, at least in his district. The case is now “locked,” and it is not in the plaintiff’s power to dismiss it unilaterally any longer. Thus, the troll is now exposed to possible attorney fees, and the judge has hinted (after quoting famous Judge Wright’s “essentially an extortion” line — not for the first time!) that if the case turns out to be meritless, awarding fees to the winning defendant is not a mere possibility:

The damages exposure in this case, as with Malibu Media’s many other cases, is significant, so a defendant may feel pressure to settle even a meritless case. Coupled with the taboo nature of the subject matter, there remains potential for abuse. The availability of attorney’s fees should any defendant facing a lawsuit against Malibu Media prevail protects those, such as our defendant herein, who elect to challenge Malibu Media’s case on the merits instead of accepting a nuisance-value settlement. Indeed, that may be the only factor motivating such defendants. C.f. Ingenuity 13 LLC v. Doe, Nos. 13-55859, 13-55880, slip op. at 13 (9th Cir. June 10, 2016) (“Without hope of receiving attorney’s fees for defending sanctions on appeal, Doe and other victims of abusive litigation would be left with no remedy.”).

Dismissing defendant’s counterclaim would eliminate one avenue for a fee award, and, as stated, maintaining the counterclaim would cause no prejudice to Malibu Media.

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Guardaley | Lipscomb | X-Art

Malibu Media’s geolocation accuracy: more scrutiny

Yesterday I wrote about certain skepticism expressed by California judges regarding Malibu Media’s geolocation reliability. Particularly, I mentioned Malibu’s declaration in response to a CASD magistrate’s order for supplemental briefing. That declaration included a list of reasonably precise IP address resolutions that purports to prove the following claim:

From undersigned’s experience filing lawsuits in California, Maxmind [a geolocation provider Malibu uses] has always been 100% accurate to the state level, 100% accurate at identifying the ISP and has predicted the correct district 98 out of 99 times.

However, Maxmind lists much more modest numbers on its website, and Malibu is aware of those numbers: they were copied to their declaration:

Maxmind’s geolocation tracing service is “99.8% accurate on a country level, 90% accurate on a state level, 81% accurate on a city level for the US within a 50 kilometer radius.”

Anyone with a math background should immediately experience a WTF moment. Indeed, 90% probability of correct resolution on the state level translates to 0.00000072% likelihood of 100% error-free resolution of 178 addresses (the number of subpoenas issued in the Northern District of California). To be fair, it is higher than the probability of a copyright troll having a heart, yet still extremely low. Even if we assume that Maxmind is being CYA-style cautious with the numbers, and the actual accuracy is 10 times higher (99%), it would still be only 16.7% likelihood of all the 178 addresses resolve correctly on the state level.

So, I smelled bullshit.

Now, the list of successful resolutions has 106 entries. For simplicity, let’s talk only about CAND cases as they are the most abundant: 83 entries. Why list only 83 out of 178 subpoenas issued in CAND? OK, let’s assume that Comcast has not yet coughed out subscribers’ personal information in the latest batch of lawsuits (32 cases filed on 3/31/2016). Also, in 15 cases the judge denied early discovery. Still, 131 is far greater than 83.

Cherry-picking is apparent.
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