Feeds:
Posts
Comments

Archive for February, 2013

As you can see, I am taking some time educating individuals involved in the Copyright Enforcement Group (CEG-TEK) / Ira Siegel DMCA letters being sent to thousands of individuals across the U.S. by their http://www.CopyrightSettlements.com system.

As a recap, anyone involved in receiving such a letter should read the following three articles I have written on their tactics:
1. Why CEG-TEK’s DMCA settlement system will FAIL (2/22/2013)

2. When CEG-TEK’s DMCA notices contain duplicate titles. Purposeful luring of defendants or not? (11/26/2012)

3. The trouble with Copyright Enforcement Group (CEG-TEK)’s DMCA scare letters. (11/2/2012)

Now, as far as the topic of this blog entry, the question people often ask is “what are the risks that CEG-TEK or Ira Siegel will sue me if I don’t settle?”

While the easy answer is that so far it appears as if they are NOT suing (remember, they are soliciting their clients under the premise that they’ll make more money by making use of their DMCA settlement system rather than by suing), that answer needs to be elaborated.  I hope you will forgive me saving time in answering this way, but I have laid out my answer below in the form of an e-mail I sent to one of the individuals who called me for assistance.

LETTER SENT TO CLIENT:

It is good to hear from you. Just to reiterate, the “case” numbers are not actual lawsuits (at least not yet). If you did not settle by their due dates, their threat is that they would file a lawsuit against you [likely for only one of the titles; knowing them, in order to maximize their return, they would reserve the other titles for separate lawsuits]. Also, my opinion is that the lawsuit would be filed in the Northern District of California (where Ira Siegel is), or the Southern District of New York (where Mike Meier is). Even though you live here in [LOCATION REDACTED] and [COURT REDACTED] would be the proper location for a lawsuit, by filing in the wrong location, they know by doing so they would push you to settle rather than hire an attorney (someone like me) to fight the jurisdiction issue on your behalf.

So far as we discussed, their lawsuits are few and far in between. In fact, up until a week or so ago, I was ambivalent whether a client ignores the letter or settles it (see below article link for what has changed). If you want to see what they are doing lawsuit-wise, you’ll find them by looking for the words “Digital Sin” or any of their other clients on the http://www.rfcexpress.com website. Alternatively, you can search for “Mike Meier” since he seems to be their top guy as far as skill in suing defendants aside from Ira Siegel himself.

It is my opinion that they are not in the habit of suing at this point, which means they are trying to “milk” the settlements for all they are worth. However, they do have three (3) years from the alleged date of infringement to sue, so if you didn’t settle, you’ll be looking over your shoulder waiting for them to have a bad day when they decide to press the button and sue everyone.

I wrote an article yesterday on my http://torrentlawyer.wordpress.com website which should answer your questions as to the factors influencing the odds of whether they’ll be suing defendants in the near future, or whether they would wait the full three-years to sue everyone at once.

Once again, it drives me nuts when attorneys try to scare defendants into settling their cases.  With these DMCA “scare” letters, I am merely stating the obvious paths CEG-TEK and their attorneys can take.

For me, I think Ira Siegel and the Copyright Enforcement Group (CEG-TEK) would like to avoid suing defendants.  It didn’t seem that profitable for them the first time around, and it took incredible resources to maintain their copyright infringement lawsuits prior to the creation of their out-of-court turn-key settlement system. Then again, they are IP enforcement companies who are serving the needs of their production company clients (the copyright holders), and if the clients pay them to use their CopyrightSettlements.com system and send DMCA letters to the ISPs, they send the letters.  If the clients instruct them to sue, they sue. It is my understanding that they dislike the other copyright trolls, and that they compete for business (e.g., the production companies). Thus, if their settlement system dries up as I believe it inevitably will, they will do anything not to lose their clients to the likes of Lipscomb, Steele, or the other less credible trolls out there.

Read Full Post »

This is a rather tricky article to write, especially since I am setting some copyright trolls apart from others, and I am unsure whether this is a good idea or not.

It is my opinion that the “Six Strikes” System which has recently gone into effect will ultimately kill Copyright Enforcement Group’s (CEG-TEK)’s “CopyrightSettlements.com” settlement system. In short, their selling point of attracting new copyright holders (the production companies) with the promise of big profits through volume settlements (from you, the internet users) by the sending of DMCA scare letters directly to internet subscribers via their ISPs will fail. I am concerned that the production companies / copyright holders might decide to start once again suing defendants in copyright infringement lawsuits.

Copyright trolls take two forms — the “copyright troll” lawyer, and the production company who embraces the concept of extorting settlements from so-called “infringers” rather than selling their copyrighted product on the marketplace.  There is one entity often missing from our blog’s focus on lawyers and their clients — the “IP enforcement company” (“IP” = intellectual property) who is working behind the scenes to 1) acquire clients for their firm, 2) track the peer-to-peer / bittorrent downloads and torrent swarms, 3) hire and maintain one or more attorneys capable of suing, and 4) converting their tracking efforts into CASH [in terms of $$$ settlements from accused downloaders].

This explains why whether you are sued by Patrick Collins, K-Beech, or Malibu Media, you’ll be contacted by someone on the Lipscomb & Eisenberg law firm’s collection team. Similarly, if the production company is Digital Sin, Zero Tolerance, Girls Gone Wild, etc., then your IP enforcement company is the Copyright Enforcement Group (CEG-TEK) and you will be sent DMCA letters suggesting that you settle their claims against you or else they may sue you (so far, this has not been the rule, but the exception). Yet, if your plaintiff is AF Holdings, Hard Drive Productions, Openmind Solutions, or any of the others connected with Prenda Law Inc. or the new Anti-Piracy Law Group, your IP enforcement company is one of John Steele’s entities. In other words, every copyright troll plaintiff is a client of a particular IP enforcement company, and that IP enforcement company has one or more lawyers on their team (or more often then not, as with John Steele and Ira Siegel — very different entities) — the lawyers themselves appear to own an ownership interest in the IP enforcement companies they run and work on behalf of.

It is my understanding that an enterprising attorney (or members of his IP enforcement company’s sales team) will often attend annual pornography conventions, and they will rub shoulders with production companies who end up being the copyright holders in these lawsuits.

The traditional IP enforcement companies (Lipscomb, Steele, etc.) will tell them, “I am aware of your company’s piracy problem, and I have a solution. Look at all our data as to the piracy of your videos.  Our team of experts can track the piracy of your copyrighted content, and our team of “expert” lawyers will sue defendants on your behalf. Instead of defending themselves, the accused internet user will be shamed with a lawsuit and will settle with us for thousands of dollars (average asking price: $3,400), we’ll take our commission, and we’ll both be millionaires. And, we’ll cut down on piracy in the process.

CEG-TEK (the Copyright Enforcement Group) and Ira Siegel has a different approach, and I believe the Six Strikes System will be the achilles heel of their “out-of-court pre-lawsuit settlement” approach.

The Copyright Enforcement Group was essentially formed because Ira Siegel didn’t like the idea of suing defendants and having all of his settlement activities monitored by a federal judge who can ask him uncomfortable questions about his activities. Rather, he has been paying ISPs to send out “DMCA” settlement letters (invoking and in my opinion, misusing the Digital Millennium Copyright Act) in order to scare defendants into settling cases before they are filed in federal court. Settlements average $200 per accused title, but I have seen a few $500 per-title settlements as well.

It is my understanding that the way CEG-TEK acquires new clients — their “unique selling proposition,” if you will — is that they tell production companies, “we can track and sue the downloaders if we want — we have attorneys in a number of states who can sue defendants, and possibly get a $3,400 settlement from a few of them [once in a while]. However, if you come on board with us, we will send DMCA settlement letters out to the internet user directly via his ISP, and that letter will point them to our Copyright Settlements (www.copyrightsettlements.com) website where they can enter their unique username and password and privately pay their settlement fee. The settlement fee will be $200 and not $3,400, but the quantity of users who will pay us our small fee and move on will be significantly higher than those who will settle a federal copyright infringement lawsuit. We’ll all make millions!”

The reason I think CEG-TEK’s business model of sending DMCA letters will ultimately fail is because the Six Strikes System has undermined CEG-TEK’s abilities to contact so many internet users. In short, instead of sending the DMCA letters directly to the ISP subscribers as Charter and a number of smaller ISPs do, the big ISPs have banded together and formed something called the “Six Strikes System” which essentially gives six warnings to their subscribers before giving copyright holders access to their subscriber’s contact information for the purposes of suing for copyright infringement or sending DMCA threat letters as CEG-TEK does every day.

In other words, anyone who has Comcast, Time Warner, Verizon, etc. as their ISP will no longer receive CEG-TEK’s DMCA letters. Instead, they receive a notice such as “we have received a complaint of copyright infringement from your account; stop this activity.” But with ISP members of the Six Strikes Program, CEG-TEK’s DMCA LETTERS ARE NO LONGER FORWARDED OVER TO THE SUBSCRIBERS! What this means is that let’s say 75% of the market share of internet users (I’m using this number merely as a hypothetical) will no longer go online and settle CEG-TEK’s claims against them. Or in other words, the http://www.CopyrightSettlements.com website as of a week or so ago [the plan went into effect roughly a week or so ago] will have experienced a 75% drop in settlements.

Knowing the production companies who signed on with CEG-TEK with the sole purpose of making millions in settlements from these DMCA letters, I suspect that they are starting to get upset and impatient because CEG-TEK’s promise of directing would-be defendants to their website is no longer the money-making machine they thought it would be. As a result, I am concerned that the production companies who signed on with CEG-TEK might start opt for suing defendants once again en masse.

PERSONAL NOTE: I obviously don’t want to scare anyone because I am very far from screaming “the sky is falling.” We have been defending clients in countless cases filed in federal courts across the U.S., and in recent months, there has been a clear change in the level of education of the judges and their feelings towards “copyright troll” plaintiffs. Possibly with the help of our POLICY LETTER (or simply our phone calls and faxes to a judge’s chambers when one is assigned to a copyright infringement case).  Judges are now educated as to the copyright trolling problem, and it is much more difficult to go after defendants because our collective arguments (such as, “an IP address is not a person,” and “just because you can prove an IP address snapshot was involved in a download does not mean that copyright infringement occurred,” etc.) are starting to take plant themselves deeply in the federal court system. In other words, if they start suing, we are very prepared, and they are almost a year-and-a-half behind.

Read Full Post »

Many things just happened in the Central District of California which no doubt will affect many (if not all of the Ingenuity 13 LLC cases, along with all of the Guava cases, and the AF Holdings LLC) cases. In short, California is no longer a troll-friendly place to sue defendants for copyright infringement.

Looking at Judge Otis Wright’s order yesterday in the Ingenuity 13 LLC v. John Doe (Case No. 2:12-cv-08333) case in the U.S. District Court for the Central District of California, we learn many new things about “the law of bittorrent use.” I’ll go over these in separate headers.

RULE 1. IN ORDER TO SUE A DEFENDANT FOR COPYRIGHT INFRINGEMENT, YOU MUST PROVE THAT THE DEFENDANT DOWNLOADED THE ENTIRE COPYRIGHTED VIDEO.

I’ve always dumbed copyright infringement down into two elements: 1) “Access” to the copyrighted file, and 2) “SUBSTANTIAL SIMILARITY” to the copyrighted work.

Here according to the judge, a plaintiff catching a downloader in the act of downloading a file is no evidence that the file was actually downloaded. According to yesterday’s ruling, even a downloader downloading a viewable portion (e.g., a few second snippet of a copyrighted video) would still NOT be guilty of copyright infringement until the amount of the file downloaded rises to a “substantial similarity” to the original copyrighted work. In traditional copyright law, this means that copyright infringement happens when the downloaded file becomes substantially a “copy” of the entire original work.

Us lawyers have been bouncing around ideas as to what we think a judge might rule constitutes copyright infringement with regard to internet downloading and bittorrent use, and so we have been playing with the possibility that maybe having a viewable portion of the file downloaded might be sufficient, but NO. Sticking to black-and-white copyright law, the “substantial similarity” element applies in copyright law to bittorrent downloads as well (at least now in California federal courts), and according to this ruling, a plaintiff needs to demonstrate that the entire copyrighted video (not a fragment, a snippet, or a snapshot) was downloaded. This would absolve roughly 99% of accused downloaders across the U.S. who started to download a file, decided not to complete the download, and who got sued anyway.

RULE 2. A “SNAPSHOT OBSERVATION” OF AN IP ADDRESS ENGAGED IN DOWNLOADING AT THAT MOMENT IS INSUFFICIENT PROOF OF COPYRIGHT INFRINGEMENT

Here, all the evidence a copyright troll plaintiff has on a suspected defendant is that at a particular date and time (a “timestamp”), that particular IP address was engaged in the downloading of a particular copyrighted file.

Here, a “snapshot” of an IP address correlated with evidence from the subscriber’s internet service provider (“ISP”) [that it was the subscriber who was leased that IP address during the date and time the alleged activity took place] is insufficient proof that the download actually took place. The defendant could have merely entered the swarm and could be in queue to download his first byte of data. The defendant could be 10% done with the download and could have in his possession an unviewable fragment of the copyrighted video — hardly enough to rise to the level of “SUBSTANTIAL SIMILARITY” that is required in order to find a defendant guilty of copyright infringement. And, yet at the same time, that same snapshot could refer to a defendant having a download which is 99% complete.  A snapshot of an IP address in a bittorrent swarm is simply not conclusive that the downloader infringed the copyright.

The analogy the judge gives is taking a “snapshot” of a child reaching for a candy bar. In order to find someone guilty of copyright infringement, a plaintiff needs to prove that it is “more likely than not” that activity rising to the level of copyright infringement occurred. A snapshot places the defendant at the “scene of the crime.” It does not convict him for the unlawful act itself, and usually this is all the evidence a plaintiff copyright troll compiles when tracking a bittorrent swarm.

RULE 3. BEFORE SUING A DEFENDANT FOR COPYRIGHT INFRINGEMENT, YOU MUST DO A “REASONABLE INVESTIGATION” TO DETERMINE THAT IT WAS THE NAMED DEFENDANT WHO DID THE DOWNLOAD, AND NOT SOMEONE ELSE WITH ACCESS TO HIS INTERNET CONNECTION.

We have known for a while that the Prenda Law Inc. model of naming defendants is 1) find out who lives in the household, 2) name the prepubescent male member of the family as the defendant. I am sad to say that the Malibu Media, LLC and the Lipscomb cases appear to be following the same trend with their exculpatory letter “scare” strategy.  I am very happy to see a judge object to this tactic.

I want to point out that EVERY LAWSUIT ACROSS THE U.S. where the copyright troll (plaintiff) has named the ISP subscriber as the defendant with no further investigation suffers from this same flaw. We have been saying for months that being an ISP subscriber (and coincidentally the one implicated as the defendant in these cases) does not mean that you were the one who did the download (nor were you responsible for all activities that took place on your internet connection).

The judge described steps a plaintiff could take to rule out the possibility that it was not someone other than the defendant who did the download. For example, the plaintiff could drive up to the defendant’s house and see if there is wireless access (to eliminate the defense that it was a neighbor); they could track multiple instances of downloading and correlate them with times and dates the defendant was home; etc. etc. etc.

There is so much more on this topic that I could discuss that in my opinion could kill every copyright troll lawsuit out there. In sum, merely citing that an IP address assigned to the alleged infringer was engaged in an unlawful act does not mean that it was the ISP subscriber (the one paying the bills) who was engaged in that unlawful act. Failing to take that extra step of “putting the ISP subscriber at the keyboard at the time of the download” (or offering evidence to prove that it was the ISP subscriber himself who did the download, and not a neighbor or someone else in his household) would be fatal to any lawsuit.

IN SUM, this was a great decision, and I look forward to it being adopted by federal courts across the country. But, before everyone starts calling and assuming that this is “the law,” I want to point out that in 99% of the states across the U.S., what exactly constitutes copyright infringement when it comes to internet downloading via peer-to-peer networks is still largely undefined.

As of yesterday, this order is now considered “the law” or more accurately “case law” which is binding in the California federal courts. However, as to the federal courts of other states, this ruling is merely “persuasive” (which effectively means “suggestive”). A judge of any other state can read this ruling and agree, or disagree. Obviously my hope is that judges in other states will read this opinion and adopt the ruling in their own cases, but it is not “the law” until 1) Congress passes a statute which the Senate ratifies, and the President signs it into law, or 2) judges in each state rule in accordance with this opinion, making this “case law” one state at a time.

For more on this topic, Sophisticated Jane Doe wrote a great write-up on this case in her “Judge Otis Wright is fed up with Brett Gibbs’ and Prenda’s frauds, hints at incarceration” article. Anyone associated with the AF Holdings, LLC cases (or any of the others filed by Prenda Law Inc. [or their new “Anti-Piracy Law Group” entity]) should take notice of this ruling, and should file in their own cases what is known as a “JUDICIAL NOTICE” informing each judge of this order.

Lastly, no doubt Brett Gibbs might be in some serious legal trouble, and he might even face jail time for his actions in these cases for fraud upon the court. But, I hope the court recognizes that Brett Gibbs (as destructive as he has been to thousands of families over the past 2+ years) is merely local counsel to the larger “Prenda Law Inc.” entity who is run by players such as John Steele and his partners in his former Steele|Hansmeier PLLC firm.

Read Full Post »