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.
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.”
Since neither the movie licensing scheme nor the law at issue is trivial, I won’t analyze the judge’s arguments, leaving it to professionals (I’m sure this ruling will be discussed in the copyright circles).
One thing worth mentioning though is that the troll apparently tried to deceive (surprise!) both the defendant and the court by creating certain agreements/addendums after the lawsuit was conceived (pp 8 & 15).
I hope that the defense bar will rush to leverage this order and dig deeper into the agreements between film makers and shell companies that formally appear in the court documents as plaintiffs. It is hard to believe that the licensing scheme involving F&D is unique.
And as for F&D, Guardaley filed 24 cases in 8 districts on behalf of this particular plaintiff: all but one is closed, and I didn’t have time to look how many ended up in default judgements or settlements. In my opinion, a class action lawsuit to reclaim money extorted from fraudulently sued citizens is more than warranted.
- TorrentFreak: Judge Tells Movie Company That it Can’t Sue Alleged BitTorrent Pirate
- Techdirt: Now Another Judge Smacks Around A Guardaley Shell Company Acting As A Copyright Troll
On 1/26/2018 Carl Crowell withdrew from the case; he was replaced by Johnathan E. Mansfield and Megan A. Vaniman of Harris|Bricken. The new attorneys moved for reconsideration on 2/14. The defendant opposed on 2/27.
Today Judge Simon denied Plaintiff’s motion, so his ruling – that Fathers and Daughters Nevada does not have standing to sue – stays.
Good news: today Judge Simon ordered the plaintiff to pay $45,396 in attorney’s fees and $2,011.70 in costs: