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Posts Tagged ‘Copyright Enforcement Group’

As an attorney, unfortunately there is often information that I need to be tight-lipped about when discussing a case or a particular copyright holder. Malibu Media, LLC and their implosion with Keith Lipscomb (who ran each of their thousands of lawsuits filed across the US) was one such example, but not for the reasons you may think.

This summer, I sat back and watched what was once one of the biggest copyright trolls and their scheme implode as the relationship between the attorney hired to represent their cases across the US (Keith Lipscomb) and Malibu Media, LLC crumbled. Regardless of the screams of autonomy each local counsel hired by Lipscomb claimed in the courts, it was still plain and obvious to me that Lipscomb was running each of the thousands of lawsuits filed against single “John Doe” defendants (not only because the filings were identical, and the court documents allegedly filed by different attorneys had the same spelling errors in each filing, but because every settlement payment — regardless of which local counsel was allegedly in charge of the lawsuit — went to Lipscomb’s Florida office).

Recognizing that there is ‘no honor among thieves‘, I laughed when I learned that Malibu Media sued Lipscomb for not paying them the settlement monies him and his attorneys extorted from hundreds if not thousands of John Doe Defendants across the US, and… he appears to have kept the settlement monies for himself.

However, the reason I stayed quiet was because I knew of something going on internally at Copyright Enforcement Group (CEG-TEK), and I saw a possible reality where Keith Lipscomb got into negotiations with CEG-TEK, and he got them to agree to send DMCA letters to thousands of accused downloaders through their ISPs, but instead of asking for a $300 settlement for one copyrighted title allegedly downloaded, he would list each-and-every title from his X-Art.com siterips.

Instead of CEG-TEK sending a notice for each title allegedly downloaded, Keith would have them send one notice for the siterip [when accessed by clicking a link on a bittorrent website, and that bittorrent file wold contain possibly 100+ titles to be downloaded]. However, when that unsuspecting user logged into CEG-TEK’s copyrightsettlements.com website using the username and password provided in the DMCA notice, each-and-every title in the X-Art Malibu Media siterip would have appeared. Thus, a $300 per accused downloader settlement could have easily turned into a $30,000+ per accused downloader settlement ($300/title x 100+ titles in the siterip). This could have even been exacerbated if Lipscomb asked for higher per-title settlement amounts, as his attorneys are accustomed to negotiate with other attorneys in the $750-$500/title range.

In my opinion, a Lipscomb-Siegel/CEG-TEK marriage would have been a nightmare, and because at the time CEG-TEK was changing their business model and shifting how they send out letters and to whom (remember the Girls Gone Wild fiasco?), the timing was right for Lipscomb to reach out to them, and I was concerned that they would have accepted his plan.

[In passing, I want to note that CEG-TEK had a shake-up as well over the summer. They were changing their business model from sending DMCA notices and soliciting small $300 settlements for copyright infringement claims for just a few titles to sending notices only to “more egregious downloaders” which in turn would increase the per-person settlement amount paid to CEG-TEK on behalf of their clients. They also appear to have been changing their client base by transitioning away from little porn companies to more well-known copyright trolls (e.g., Millennium Films, LHF Productions, etc.) — copyright holders who threatened to sue downloaders (and in at least one circumstance did sue at least one client of mine in federal court.) The point is that they were changing their image from being a company who’s clients didn’t sue to a company who’s clients do sue. Lipscomb fit their former profile of bringing pornography copyright holders to the table, and he matched their new profile because he brings a strong proclivity to sue defendants who ignored the notices. Thus in a possible reality, I saw Lipscomb meeting with CEG-TEK, and I did everything I could behind the scenes to avert this reality.]

Now we are roughly six-months later, and I am happy to share that the marriage between Lipscomb and CEG-TEK never took place, and CEG-TEK is no longer in a place where they would accept Keith Lipscomb or the $10K/client+ settlement amounts he would have brought to the table.

For this reason, I am sharing the story of this nightmare which — even though the ‘stars aligned’ — never happened (and thankfully, will never happen).

…there is new news for Lipscomb’s former Malibu Media, LLC client. I will post about that next.


CONTACT FORM: If you have a question or comment about what I have written, and you want to keep it *for my eyes only*, please feel free to use the form below. The information you post will be e-mailed to me, and I will be happy to respond.

NOTE: No attorney client relationship is established by sending this form, and while the attorney-client privilege (which keeps everything that you share confidential and private) attaches immediately when you contact me, I do not become your attorney until we sign a contract together.  That being said, please do not state anything “incriminating” about your case when using this form, or more practically, in any e-mail.

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There was a point where someone raised the question, “should I be afraid that a copyright troll might try to sue or collect money for copyrights they don’t own?” That is an interesting question and certainly this could happen, but apparently CEG-TEK took it seriously since they represent so many copyright holders, and they have altered some of the DMCA letters that they send to accused internet users through their ISPs.

As a response to this question (which I suppose was asked enough times to inspire them to take action upon it), in the most recent versions of the CEG-TEK DMCA letters, there is now often a link to a “certification page” which affirms that CEG-TEK is authorized to collect settlements on behalf of a particular copyright holder.

I clicked on a few of the links, and while a few of them were innocuous (containing only the certification from the copyright holder’s website), some of them were pretty explicit as far as the graphics they show on their websites. I thought it would be a good idea to take a few screenshots and post them here, but after seeing a few of the sites, posting the screenshots here would put our website into the “Not Safe For Work (‘NSFW’)” category (as if it is not already in that category from its content).  I have pasted one below just to show an example of what they look like:

Reality Kings

For some of their other clients, below are some of the links I have collected over the past few weeks (and by NO MEANS is this a complete list of CEG-TEK’s client list. I tried to create such a “List of CEG-TEK clients” in June, 2014, and it backfired because immediately afterwards, so many of the copyright holders scattered and changed their name completely confusing the issue of who is a copyright troll and who is not a copyright troll.) I am merely providing this list as a quick sample to prove the existence of an AGENCY AGREEMENT between CEG-TEK and various copyright holders:

Digital Sin Inc. (a known copyright troll which carries the following brands: Digital Sin Inc, Greedy, Hot Boxxx, Lesbian Provocateur, New Sensations Inc*, The Romance Series, Vengeance XXX, X-Play)
http://www.digitalsindvd.com/distro/agent-cert.php

MG Premium Ltd DBA Mofos (which carries the following brands: Canshetakeit, Iknowthatgirl, Ingangwebang, Latinasextapes, Letstryanal, Milfslikeitblack, Mofos, Mofosnetwork, Mofosoldschool, Mofosworldwide, Pervsonpatrol, Publicpickups Realslutparty, Shesafreak, Teensatwork)
http://www.mofos.com/cegtek-cert/

Porn Pros [also seen as AMA Multimedia, LLC] (which carries the following brands: Drive Shaft, Gay Castings, Gay Room, Man Royale, Men POV, Porn Pros, Pure Passion, Thick and Big, Tiny4K)
http://pornpros.com/cegtek-cert

MG Premium Ltd DBA Brazzers (which carries the following brands: Asses In Public, Baby Got Boobs, Big Butts Like It Big, Big Tits At School, Big Tits At Work, Big Tits In Sports, Big Tits In Uniform, Big Wet Butts, Brazzers, Brazzers Vault, Brazzers Network, Busty And Real, Bustyz, Butts And Black, Day With A Pornstar, Dirty Masseur, Doctor Adventures, Hot And Mean, Hot Chicks Big Asses, HQ Honeys, Jizz On My Juggs, Jugfuckers, Milfs Like It Big, Mommy Got Boobs, Pornstars Like It Big, Racks And Blacks, Real Wife Stories, Sex Pro Adventures, Shes Gonna Squirt, Teens Li)
http://www.brazzers.com/cegtek-cert/

MG Content RK Limited DBA Reality Kings (which carries the following brands: 40inchplus, 8thStreetLatinas, Bignaturals, BigTitsBoss, Bikini Crashers, CaptainStabbin, CFNM Secret, Cum Girls, CumFiesta, Cumfu, Dangerous Dongs, EuroSexParties, Extreme Asses, Extreme Naturals, FirstTimeAuditions, FlowerTucci, Footville, Girls of Naked, Happy Tugs, Hot Bush, InTheVip, Itsreal, Kingdong, Kristinslife, Manueluncut, MegaCockCravers, MikeInBrazil, MikesApartment, MilfHunter, MilfNextDoor, Mollyslife, Moms Bang Teens, MoneyTalks, MonsterCurves, Muffia, Mysexylife, Nakedmovie, etc.)
http://www.realitykings.com/cegtek-cert.htm

MG Content DP Limited DBA Digital Playground
http://www.digitalplayground.com/cegtek.html

E.A. Productions / Evil Angel
http://www.evilangelvideo.com/copyright/

Addicted 2 Girls
http://www.addicted2girls.com/cegtek.php

New Sensations Inc. (a known copyright troll which carries the following brands: Digital Sin Inc*, Greedy, Hot Boxxx, Lesbian Provocateur, New Sensations Inc, The Romance Series, Vengeance XXX, X-Play)
http://www.newsensations.com/tour_ns/cert.html

MG Cyprus Ltd DBA Men
http://www.men.com/cegtek-cert/

*[UNRELATED, BUT FUN TO NOTICE: Note the overlap between these companies as far as which brands are owned by which companies. Many of the popular names have the same parent company, e.g., MG Content, MG Premium, or more plainly, Manwin.  Also notice that some “brands” which market themselves to be separate and apart from one another are actually owned by the same entity, e.g., New Sensations, Inc. and Digital Sin, Inc.; as much as they tried to pretend that they were different entities when suing in the federal courts, we now know that they are the same entity. It is also interesting to see what a “small world” the adult industry is, and who the power players are behind the scenes of the “large” brand names. Unrelated to this article, when defending clients in federal court and in settlement negotiations, I have often found it funny to find that “old man grandpa” or “innocuous family woman grandma” is the CEO or power behind a large multi-million dollar adult company.]

What to take away from this article is simply that CEG-TEK’s role is as an “Intellectual Property Monetization” company, where the copyright holders hire them to track instances of copyright infringement using the bittorrent networks (hence the “CEG” portion of their name stands for “Copyright Enforcement Group,”), to collect and record the IP addresses of the accused infringers, identify the internet service providers (ISPs) associated with those IP addresses (and yes, they now contact ISPs not only in the U.S., but also in Canada and Australia), and request, pay, pressure, or threaten the ISPs to forward their copyright infringement notices to the subscribers which invites the accused internet user to visit their CopyrightSettlements.com website in order to view the claims against them and to pay a settlement fee to avoid potential legal action that may be taken against the internet users.

What is also important to note is that the legal role CEG-TEK plays is the authorized AGENT of the copyright holder. This means that whatever CEG-TEK agrees to (e.g., when an attorney negotiates a settlement on behalf of a client, or when CEG-TEK agrees to make one or more cases “go away” as part of a settlement negotiation), all of their activities are binding on their client, the copyright holder. Thus, if you pay CEG-TEK*, it is as if you paid the copyright holder. I am obviously simplifying the law of Agency here (where there are nuances), but what to take away is that anything CEG-TEK does, they do on behalf of their client and with the implicit [and in many cases, explicit] authorization of their client. That means that no, a copyright holder cannot turn around and sue you if you paid CEG-TEK to satisfy that copyright holder’s claim of copyright infringement against you where that client has hired CEG-TEK to enforce the copyright holder’s copyrights on their behalf (now you know the term, as their “agent.”).

*NOTE: I don’t need to toot my own horn and solicit my own services, but before you decide to pay CEG-TEK or visit their website, please do your research and contact an attorney who is familiar with their operation.  There are things to be aware of specifically with regard to capabilities CEG-TEK and ISPs have as far as geolocation technologies to identify the location where a download is claimed to have taken place, and how a company can dig into your past browsing history (with the help of an ISP providing your past IP addresses) in order to discover past acts you may or may not have taken part in.  Each of these impact your anonymity when settling a claim against you, and ultimately what a copyright holder can or can not later claim against you.  Your lawyer should understand this to help you understand the limits of CEG-TEK’s knowledge so that whether you choose to ignore or settle a claim, you will be aware of who is allowed to do what before, during, and after a settlement, and what are the time limits they face before information they may have on you is purged from your ISP’s records, sometimes making it unnecessary to worry about a settlement or a lawsuit.

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The first rule of Usenet is “you do not speak about usenet.”  While writing something like this can upset those I would not want to upset, there is a bigger problem — what happens when the Usenet service provider (or more accurately, newsgroup service provider) fingers you as the internet user who is accused of committing a crime you did not do?

My mind can swirl with the possible implications of the above inquiry (oh what crimes can one commit), but in the context of this TorrentLawyer blog, there is a Usenet provider which is causing problems for their subscribers by identifying them as being the users who downloaded one or more copyrighted videos.

Many privacy-minded individuals flock to a service called Giganews because the content they provide is parallel to none.  The problem is that Giganews providers their subscribers with a Virtual Private Network (“VPN”) called VyprVPN (in conjunction with their Golden Frog service), where their VPN is supposed to hide the identity and the activities of the users while they are logged into the Giganews service.  This is effective for privacy-minded individuals who wish to communicate with others privately (e.g., stream a VoIP phone conversation over an encrypted connection) or mask their IP address from websites they visit.  Similarly, a VPN is useful when your ISP monitors your connection for the purposes of what is known as “traffic shaping” — making certain activities happen faster, and slowing down less-favored activities.

[To those that have been paying attention, VPN providers are not created equally.  Notoriously, some (e.g., HideMyAss) have turned over the identities of their subscribers causing their arrest and incarceration.  Giganews has also been implicated as being infiltrated by the FBI, and they are known to track and log all of their subscribers’ activities, even those activities apparently masked through their VyprVPN service.]

To the chagrin of those who have placed their trust in the VyprVPN service, many have received notices from Giganews implicating them as being the downloaders of copyrighted materials.  They are sent one or more DMCA settlement demand letters from companies (such as CEG-TEK), even when they have not done any downloading at all.

While in this case I cannot fault any of the parties (accused subscriber, CEG-TEK) who are now enmeshed in a “yes you did,” “no I didn’t” fight, I can fault Giganews / Golden Frog / VyprVPN for mistakenly pointing the finger at one of their users for activities that user did not partake in.

Now obviously as an attorney, I represent many accused internet users, many of whom “have always been downloaders, and will always be downloaders,” but specifically with Giganews, too often there is an inaccuracy where the wrong user is accused of downloading copyrighted media when that user was not even logged into the Giganews service at the time the downloads allegedly happened.

This is a problem with timekeeping and recordkeeping, something Giganews (or Golden Frog) should remedy ASAP.

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I try my hardest to separate out the “photo” copyright trolls from the “bittorrent” copyright trolls when writing articles on this blog, as they are a separate category of trolls with their own rules.

In sum, “photo” copyright trolls search the web for images that are used on websites, often by bloggers, without permission or license from the owner of that photograph. Essentially, a blogger writes (for example) about the topic of “red pepper” vegetables. To make their blog entry more visually appealing, they search Google Images for “red pepper,” copy the first image they see, and they paste it on the top of their blog.

Most bloggers stay away from pictures that have a watermark on it, or from images which have a copyright logo marked on it. The problem is that 99% of the pictures out there have no copyright marking, and are not sold anywhere. Unsuspecting bloggers use these photos or random pictures on their blogs, and unbenownst to them, the owner (or a third party who purchases the rights to the photo with the intention of suing bloggers) begins asserting their copyright interests in the photo. Many accused bloggers who I have spoken to have expressed that they didn’t think they needed a license for a photo for non-commercial activities, and now they are facing threats of a lawsuit for using an image on their website.

Where the waters get muddied is that now Copyright Enforcement Group (a.k.a., “CEG-TEK”, “CEG TEK”, and more recently, “CEG”) is sending out the same DMCA letters that they ordinarily send to my bittorrent clients, but now they are in the “photo trolling” business. Their letters assert that a particular website used a copyrighted photo without a license, and the copyright holder is now asserting his rights for the “theft” that happened to his intellectual property rights. Thus, they are asking for $500 per photo, which in my opinion is obscene considering all their other letters ask for $200 per video shared via bittorrent.

On a personal note, hitting website users with a threat of a lawsuit over an image pulled from a Google image search is simply obscene. I would certainly understand such a letter if the image had a watermark pointing the user to a website where they can purchase rights to the photo without the watermark, or if there was a copyright mark on the image. Yet these photos have none of these, and they are literally trolling old websites and blogs looking for photos which were copied from other websites.

What makes this so obscene is that the photo copyright owners are asserting the same copyright infringement claims as do the copyright holders for the bittorrent cases we deal with daily. Along with the same copyright claims come the same shock of having the law provide statutory damages of $150,000 to the copyright holder who can prove the infringement. $150,000 for a movie download in my mind is an obscene and disproportionate punishment for the “crime” of downloading a copyrighted title. Even moreso for a photo. AND, even moreso for an unmarked and unwatermarked photo freely available on a Google image search.

Now here are the details as they are unfolding. So far, it appears as if the “photo” copyright troll entity asserting the copyrights is a company called “AKM Images / GSI Media.” The letter CEG-TEK is sending out provides a screenshot image of the blog containing the photo (and in a number of cases, the blog is no longer in existence and is only shown in the internet archives on the “Way Back Machine” on http://archive.org). It appears as if even CEG-TEK was unsure if they wanted to go into this area, because many of the screenshots are said to be from last year (2012). And, the so-called DMCA letters are not sent by ISPs, but appear to be forwarded by the website admins who host the various blogs.

6/13 UPDATE: There is some talk about the copyrighted images being posted on the website owner’s website or blog by a third party RSS aggregator. In sum, the accused blogger or website owner in many cases didn’t even post the images themselves, yet they are still asked by CEG to pay $500 to avoid a lawsuit.

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Back in November 2012, I wrote an article about CEG-TEK’s CopyrightSettlements.com web site “crashes” where following a failed settlement transaction (purposeful or not), accused infringers received letters essentially saying, “[B]ecause you have decided not to settle, we will be moving forward against you in a copyright infringement lawsuit. Please pay us $3,500 or else we will sue you.” These letters were apparently sent from Copyright Enforcement Group (CEG-TEK), a software brainchild of Ira Siegel.

Now it appears that CEG-TEK is “stepping up” their game again, and more letters are being sent out, but this time from CEG-TEK’s local counsel, Marvin Cable. What is particularly concerning is that this letter appears to be sent out to:

1) ANYONE WHO CALLED IN TO CEG-TEK, BUT DID NOT SETTLE (they are scouring the CALLER-ID RECORDS and matching them with publicly available contact information), and

2) ANYONE WHO ENTERED THEIR CONTACT INFORMATION ON THEIR WEBSITE (e.g., to process their credit card payment), but the website “crashed,”

3) ANYONE WHO LEFT “BREADCRUMBS” WHEN INTERACTING WITH THEM, BUT DID NOT SETTLE.

NOTE: I have personally heard reports of 1) and 2), but 3) is a catchall for items I have not yet heard about, but expect that they are doing.

In sum, as I suspected when the Six Strikes System was put into place, with the big ISPs no longer forwarding their “$200 per title” settlement letters, their settlement stream of cash has started to run dry. As such, their production studio clients are forcing them to do whatever they can to “monetize” their clients IP (here, scrubbing the voicemail records, the caller ID records, and website tracking records, and putting names to those traces left by accused internet users), or else sue. In order to keep these clients, we see examples of letters such as this one:

Just to be clear, for a long time, when people ask “Should I settle or ignore CEG-TEK’s DMCA letters? What are my chances of being sued if I ignore?” I have been telling people that they could do either, and I laid out the factors to consider.  I am still of this opinion, namely that 1) Neither Ira Siegel, Terik Hashmi, Marvin Cable, or Mike Meier have sued anyone in MANY MONTHS (since July, 2012 to be exact), and 2) the purpose of their CopyrightSettlements.com website was to convince production companies that it is easier for them to sign on with CEG-TEK and run a settlement “IP monetization” campaign, rather than to sue everyone in a copyright infringement lawsuit.  I assume they are still trying to salvage this system, especially with the renewed efforts to find those who have not settled.

And as always, if you haven’t read my previous articles on the topic, I am still getting reports of website transactions not working (website “crashes,” failed transactions), and so once again, be smart and protect your contact information. Know that when you visit a website, unless you are using Tor or you subscribe to a private VPN, you share with that website your IP address, and when you call Copyright Enforcement Group’s phone number to inquire about your matter, you leak your phone number which can easily be cross-referenced back to you.

In other words, be careful with your information, and the “breadcrumbs” you leave when you conduct your daily life.  These breadcrumbs can be traced back to you, and next thing you know, you’ll be on the phone with me asking how to defend a copyright infringement lawsuit filed against you and 200 other Doe Defendants.

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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.

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It is very easy to put up a banner claiming “MISSION ACCOMPLISHED — NO MORE BITTORRENT CASES IN SOUTHERN DISTRICT OF NEW YORK,” but reality is not that simple. A judge can give a ruling, and it can be a darned good ruling which is binding on all other judges in that federal district (similarly, that ruling is persuasive for judges in other federal districts). One such case is the case written up by Sophisticated Jane Doe in her “The Domino Effect: Trolls are not welcome in the Southern District of New York anymore” article posted just moments ago. I do not need to re-write this up — she did a wonderful job, and there is no reason to duplicate her efforts.

That being said, this case does merit some discussion. The name of the case is Digital Sins, Inc., v. John Does 1-245 (Case No. 1:11-cv-08170, or 11 Civ. 8170) [misspelled], filed in the U.S. District Court for the SOUTHERN DISTRICT of New York (remember our blog post about forum shopping there?). I am happy to share that the case is now SEVERED AND DISMISSED. Obviously, congratulations to the Cashman Law Firm, PLLC clients who were part of that case. This ruling is WONDERFUL for you.

As far as I am concerned, this ruling was the order I was waiting for back in March when I reported that all of copyright troll Mike Meier’s New York cases were consolidated by Judge Forrest. Similarly, you’ll see what I thought would happen in my “New York Judge consolidates and freezes SMALLER BITTORRENT CASES for plaintiff attorney” article earlier that month. Well in short, my opinion with hindsight was that all this was a dud, and Judge Forrest merely consolidated the cases to rein in Mike Meier so that she can control him and his cases so that they all had uniform outcomes. This was obviously a step in the right direction, but it did not dispose of the cases in their entirety. Perhaps because Judge Forrest had experience with copyright cases in the past, she thought she should be the one to preside over them. However, in my opinion, she just made them more orderly; she didn’t rule on the underlying issues plaguing each of Mike Meier’s cases.

Here comes Judge Colleen McMahon of the same Southern District as Judge Forrest, and she (like Judge Forrest) has my respect. In her ruling on Tuesday, she took the opportunity to take a John Doe ruling, and turn it into NEW LAW FOR NEW YORK COURTS (obviously I am referring to the federal courts). What impressed me was that not only was she aware of Judge Forrest’s activities, she changed the law by dissenting with them.

“Judges Forrest and Nathan, have decided to allow these actions to go forward on a theory that permissive joinder was proper.  I most respectfully disagree with their conclusion.” (p.4)

Further, she ruled that if Mike Meier wanted to sue these 244 defendants, he may do so in separate lawsuits, AND HE MUST PAY THE $350 FILING FEE FOR EACH LAWSUIT (that’s $85,400 in filing fees that Digital Sin, Inc. will have to pay if they want to go after the dismissed defendants).

“They are dismissed because the plaintiff has not paid the filing fee that is statutorily required to bring these 244 separate lawsuits.” (p.4)

What made this case blogworthy (and you’ll notice, I rarely post about the run-of-the-mill dismissals that happen every day in various jurisdictions when their rulings teach nothing new) was that Judge McMahon suggested TWO STRATEGIES to John Doe Defendants that she believes would successfully refute the plaintiff attorney’s geolocation evidence as proof that the court has personal jurisdiction over the accused IP addresses.

Firstly, she suggests that the John Doe defendants not living in the jurisdictional confines of the court simply file a SWORN DECLARATION that they live somewhere else.

“John Doe 148 could have overcome [the geolocation data evidence provided by the plaintiff] by averring [e.g., in a sworn decaration] that he was a citizen and resident of some state other than New York — even New Jersey or Connecticut, portions of which are located within the geographic area that is covered by the geolocation data.” (emphasis added, p.5)

Secondly, she said that since plaintiff attorneys are getting the personal jurisdiction right (e.g., filing lawsuits against Californians in California, against Texans in Texas, etc.), defendants could start asserting the “WRONG VENUE” argument (essentially saying, “Court, yes, I live in New York.  But I was sued in Long Island and I live in Buffalo.  It would be an extreme hardship for me to travel down to Long Island every time I need to show up for a hearing there to defend my case.”).  The actual verbiage suggested by the Court is that “…plaintiff has failed to plead facts rom which a reasonable trier of fact could conclude that this Court has personal jurisdiction over this John Doe, or that venue is properly laid in this district.”  (emphasis added).

Next, this ruling is VERY EXCITING because it puts handcuffs on Mike Meier should he wish to file against any of the severed and dismissed defendants in a follow-up case.  Those rules are:

1) When an ISP complies with a subpoena request, it may not share the telephone number or e-mail address of the subscriber with the plaintiff attorney.

2) Assuming the ISP does not file a motion to quash (it obviously may AND SHOULD do so on behalf of its subscribers [my opinion]), the ISP shall share the subscriber’s information WITH THE COURT ONLY (not directly to the plaintiff as is usually done), and the court will disclose the information to the plaintiff attorney.  (I’m not sure the benefit of this — they still get the contact information of the John Doe Defendants this way).

3) The plaintiff may use the information disclosed ONLY FOR THE PURPOSE OF LITIGATING THAT CASE (so the plaintiff may no longer use the threat of future litigation if they do not immediately settle to extort a settlement.  This was a tactic used by many plaintiff attorneys (most notoriously, Prenda Law Inc. who admitted that they dismissed the case so that they can go after the John Doe Defendants [extorting settlements] without the court’s involvement).

Lastly — and her timing is quite interesting as we just finished writing about forum shopping in bittorrent cases — she warned Mike Meier not to engage in “judge shopping.”

“Lest plaintiff’s counsel think he can simply put cases against the severed and dismissed John Doe defendants into the wheel for assignment to yet another judge, I remind him of Local Civil Rule 1.6(a) [which requires the plaintiff attorney to bring the existence of potentially related cases to the attention of the Court].” 

For your reading pleasure, I have pasted a copy of the order below.  For my own opinion on the topics discussed by the judge, I have pasted them below the judge’s order.

MY OPINION:  There is more here that I did not write about, namely that the judge believes that all the bittorrent cases currently being held by Judge Forrest and Judge Nathan should be assigned over to her so that she can dispose of them once and for all.  She also went into other judge’s rulings which duplicate content in other articles on the blog.  However, once again, we have another wonderful ruling.  However, moving forward, perhaps I am a bit jaded, but I don’t foresee Judge Forrest or Judge Nathan tomorrow assigning over all their bittorrent cases to this judge.  There is now a disagreement in the New York courts (as there are in many jurisdictions) as to how to handle these cases.  I would love to jump up and down, wave a banner and declare “MISSION ACCOMPLISHED — NO MORE BITTORRENT CASES IN SOUTHERN DISTRICT OF NEW YORK,” but quite frankly this is not reality.

More likely than not, plaintiff attorneys such as Mike Meier, Jason Kotzker, and any other copyright troll who wants to file in New York will continue to file there.  As you can see in my forum shopping article (which should more properly be called “Judge Shopping”), an attorney can in ONE DAY file  9 SEPARATE CASES and receive 7 SEPARATE JUDGES, as was the case with Kotzker’s recent filings.

In addition, while the SWORN DECLARATION argument and the VENUE arguments are both easy solutions to disprove the plaintiff’s prima facia case for personal jurisdiction (meaning, the bare minimum a court will require in order to accept the fact that it has personal jurisdiction over the defendants in the case), a John Doe Defendant hoping to hide his identity from the plaintiff attorney and quash a subpoena should not be excited by these solutions.  1) For the sworn declaration, they’ll necessarily be giving up their true location (they cannot lie that they live in Connecticut when they live in California), and we all know that Mike Meier is only ONE local attorney to a larger IP monetization group (“The Copyright Enforcement Group”) which has other attorneys in other states, and who continues to recruit new hungry would-be copyright trolls.  So even if they succeed in getting their case dismissed here, guess who will be filing against them in their home state’s federal court?  2) A John Doe Defendant who asserts the “correct state, wrong venue” argue just made a big blunder — he admitted that personal jurisdiction is proper in that state.  Rules for venue are based on a number of factors, NOT ONLY WHERE THE DEFENDANT LIVES.  Similarly, no doubt the plaintiff will respond in a wrongful venue argument in a motion to quash that “John Doe filed this motion to quash asserting wrongful venue (which by the way is not a valid ground to quash a subpoena; jurisdiction IS), but he is not a party to the action [yet] and thus he has no standing to file this motion to quash.”  Remember this?  Lastly and realistically, the proper time a defendant CAN AND SHOULD use this wrongful venue argument is in his ANSWER (which means he was already NAMED as a defendant in the case).  Too late.  There are better issues to kill a case at this point than complaining that the court is too much of a drive.

[DISCLAIMER: I’ve given many opinions here which is not to be taken as legal advice.  Each defendant has different needs and different circumstances, and for this reason, the legal advice I give for one of my clients may not be appropriate (or may even be harmful) to another client who’s circumstances are different.  Also, obviously no attorney-client relationship is formed until you sign a retainer and become a client.]

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