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Posts Tagged ‘Ira Siegel’

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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Every pirate knows that the only way to block the copyright trolls from identifying their true IP addresses (and thus sending out DMCA copyright infringement notices, as outfits such as CEG-TEK have been known to do) is through the use of a Virtual Private Network (VPN) [, and not just any VPN, but a paid VPN provider which does not track their subscribers’ activities*].

In recent weeks, I have heard from various copyright trolls that bittorrent users are “winning the piracy war,” in that their activities have thwarted the copyright holders from learning who they are. Armed with what is becoming common knowledge of free software which can be configured to stream pirated content (e.g., Kodi, formerly XBMC), internet users who wish to “unplug” from the cable companies are able to do so in a way in which it becomes difficult if not next to impossible to be caught viewing streamed content**. Not only this, but many have even purchased Amazon Fire sticks which can be jailbroken to allow the Kodi software to be installed on it, and they are watching pirated videos from their HDTV without even needing a computer.***

But what is the effect of “winning the war” on those who are left behind and don’t realize that they need to use a VPN if they are going to bittorrent their favorite movie, software, or video game? This is the point of the article.

The unintended consequence of bittorrent users learning to use a VPN, or migrating away from bittorrent and towards free streaming services is that copyright holders [who for three years now have enjoyed easy settlement money] are realizing that there simply are not enough people to send DMCA / copyright infringement notices to in order to line their pockets with gold and dirty cash. As a result, it is my experience that they are becoming “less nice” and they are trying to make more money from fewer downloaders. Case-in-point: Girls Gone Wild DMCA notices used to ask for one $300 settlement for a whole page of 60+ videos, but now they are asking for tens of thousands of dollars for that same “click” of a bittorrent file.

I am also noticing that CEG-TEK is acting differently, perhaps in response to what has been described to me as a steep decline in numbers of “pirates” to whom they can send DMCA notices. In the past few weeks, it has been my experience that Copyright Enforcement Group (CEG-TEK) is now sending multiple notices out to the ISPs for the same download. In one case regarding their Girls Gone Wild client that I mentioned above, CEG-TEK sent literally over 1,000 notices to one ISP for the alleged download of one bittorrent file.

At first I thought this was a glitch in their computer system, but then it occurred to me that maybe CEG-TEK somehow benefits from keeping the numbers of DMCA notices sent to the ISPs artificially high. Is there any benefit to them to be doing this? I have been racking my brain on this topic and I still cannot come up with a reason.

Honestly, here is my concern. When an animal is backed against the wall, what does it do? It attacks. If indeed we are winning the bittorrent piracy war, I am concerned that CEG-TEK will begin taking on new clients who thrive on stacking their bittorrent files with hundreds of adult films. Those who are sophisticated will understand exactly who I am speaking about.  

They will then trap the unsuspecting bittorrent user who “clicks on ONE bittorrent file” in their spider web, and that user will receive hundreds of DMCA notices which will scare the b’jeebies out of him.  Then they will give in to the urging of their less-than-ethical client, and they will agree to start charging more than the $300 per title that they currently do (remember, at one point, CEG-TEK used to charge $200 per title, and then at what I understood to be the urging of their client, they raised the settlement amount to $300 per title).  So they are pliable, as we have seen in the past.

In the end, just as we saw hints of this with the recent Girls Gone Wild debacle, CEG-TEK will morph from a $300 per title copyright enforcement outfit (lamb) into a $3,500 per title shakedown outfit (wolf) where they base their settlement amounts on the client’s ability to pay rather than what they believe is a “fair” amount to compensate the copyright holders.

Last, but not least, I learned that CEG-TEK threatened an accused downloader with criminal prosecution this week. For those of you who know me, I have spent almost every day since 2010 working on copyright infringement cases. NEVER until last week have I seen a copyright holder threaten an accused internet user with criminal charges for a copyright infringement matter.

In sum, the times they are a changin’. If we are indeed winning the war, what will CEG-TEK turn into in order to survive?  And, what will their copyright holders (who for the most part have been docile and lazy these past few years) do when their easy income stream dries up?


CONTENT CUT FROM THE ARTICLE:

*[UNRELATED PERSONAL NOTE: I am a fan of such VPN providers not because they make piracy more difficult to detect, but because I believe strongly in a person’s right to be anonymous. The amount of snooping that happens with internet trackers, cookies, and newer methods literally sickens me, and I do not believe that advertising companies and ISPs should have so much knowledge about their customers. For this reason, I have nothing wrong with sharing for privacy purposes that examples of VPNs that you can rely on can be easily found by searching “torrentfreak secure vpn” on Google, or just by going to TorrentFreak’s website where they review VPN providers which take your anonymity seriously. Just be sure to have some mechanism in place that if the VPN connection goes down, even for a second, that your real IP isn’t exposed to whatever site you happen to be visiting, or to whatever server you happen to be connected to. This is called a “DNS leak,” and there are easy ways to configure your system to lock down the connection if or when the VPN goes down, even for a second.]

** NOTE: There is a popular software called PopcornTime which I am sad to share has given our firm many clients who have been caught downloading mainstream movies (e.g., The Dallas Buyers Club cases, Voltage Pictures’ Fathers & Daughters Nevada, LLC cases, and most recently, Millennium Film’s London Has Fallen (“LHF”) movie cases, etc.). Most recently, I have been seeing new CEG-TEK notices for Millennium Film’s “Criminal” movie which the copyright holders have already started suing in “Criminal Productions, Inc. v. John Doe” copyright infringement lawsuits . The reason for so many getting caught is that PopcornTime appears to be a software which allows you to stream video content, but it uses bittorrent as its back-end to download the movies.

*** NOTE: The Amazon Fire sticks which have Kodi installed in my opinion can still get you caught for copyright infringement. The reason for this is that they connect directly to the internet exposing your real IP address. Most people don’t realize that they need to also configure their ROUTER to connect to the internet through their paid VPN provider.


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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dmca gone wild

I have been sitting on this article for a few days because I was not sure what to make of it.

I don’t know if what I am noticing is based on greed on behalf of the “Girls Gone Wild” copyright holder (a.k.a., GGW Brands LLC) based on their corporate shakeup and recent bankruptcy, or whether CEG-TEK’s computer system has been going haywire sending sometimes hundreds of DMCA copyright infringement notifications for one “click” of a bittorrent file, or if there is a shift coming where CEG-TEK will be using the DMCA notices in a new way to extort larger and larger settlements from accused downloaders.

BACKGROUND [SKIP IF YOU KNOW HOW BITTORRENT WORKS]:
CEG-TEK has always tried to be a modestly clean organization.  While an internet user downloads a video using bittorrent software, CEG-TEK’s servers are “dipping in and out” of the various bittorrent swarms which share their 100+ clients’ [usually adult] videos, and while CEG-TEK is “in the room” (so to speak, meaning, while CEG-TEK’s servers are connected to the bittorrent swarm [in which the internet users’ bittorrent software downloads file fragments from multiple individuals also in that same bittorrent swarm, and in which the bittorrent software shares (“seeds”) file fragments it has acquired to other bittorrent users in the swarm who are lacking that particular file fragment in order to obtain the entire shared file(s)), CEG-TEK writes down the IP addresses of each of the file sharers, they identify which ISP that IP address belongs to, and their computer sends a DMCA notice to that ISP.  That DMCA “scare letter” notice is then forwarded to the account holder who was assigned that IP address at that particular date and time.

So with the Girls Gone Wild copyright holder, in the olden days (meaning up until two weeks ago), an internet user would click on a bittorrent file which contained something like 20-30 GGW videos, but when we logged into the CopyrightSettlements.com website to view the claims against my client, there would only be a few claims of copyright infringement.  Why?  Because GGW was having CEG-TEK ask for $300 per copyrighted DVD (which it itself contained many “files” or “scenes”).  Point being, one click, one copyrighted DVD pirated, one $300 settlement.

This is no longer the case.  Now when an internet user clicks a download link on a bittorrent website (sample screenshot of a GGW bittorrent link below — this one containing 95 video files), the same 20-30 video files are downloaded, but instead of ONE (1) DMCA notice being sent to the internet subscriber’s ISP, these past few weeks, 20-30 DMCA notices are being sent.

TPB_GGW

To make the effect of downloading Girls Gone Wild videos more egregious, instead of asking for $300 for each GGW DVD pirated, the copyrightsettlements.com website now lists 20-30 “cases,” asking for $300 for each file downloaded, rather than $300 for each DVD.  Thus, in the 20-30 file example, now an accused internet user will see a settlement request of $6,000-$9,000 for one click of a bittorrent website (or in the example shown above with 95 video files, CEG-TEK would now be asking for a $28,500 settlement, when before it would have been just a few hundred dollars).

Now, let’s take the scenario further, because I’ve seen settlement amounts as high as $78,000 in the past few days.  How?

That same internet user who clicked on this link above containing 95 titles leaves his bittorrent software running in the background.  He does not realize that after the downloads are complete, his software is set to “seed” (upload) the files to other bittorrent users who have not yet acquired all 64.02 Gigabytes of data (as if someone actually has that amount of free space on their hard drive to download all of those videos, and as if each and every video was actually downloaded — both topics outside the scope of this article).

It takes roughly 4-5 days for a Charter or a CenturyLink subscriber to receive his DMCA notice, so by the time he learns that he has done something wrong by that “one click,” his ISP has changed his IP address 5 times (IP addresses are leased to subscribers for 24 hours, although this differs from ISP to ISP), that means that CEG-TEK “thinks” he has 475 instances of infringement (MATH: 95 videos * 5 days seeded = 475 instances of infringement).  Thus, when those 29 downloaders and 5 uploaders shown in the image above (listed as “29 leechers” and “5 seeders”) get their DMCA copyright infringement notice for this particular torrent five (5) days later, each one of them will see a settlement amount of $142,500.  Obscene.

Now obviously a lawyer (myself or anyone else) can negotiate the amount of the settlement, or, based on the copyright holder’s tendency to sue or knowing the limitations of CEG-TEK’s abilities to know who you are [taking into consideration the ISP and the known information such as geolocation data as to where you live, etc.], I may just as easily suggest that you ignore the claims against you, but quite frankly, if CEG-TEK is really expecting to get a $142K settlement (or even a $10K settlement), well, this suggests to me that maybe they are getting a bit greedy.

In sum, here is what I know:

1) Girls Gone Wild and CEG-TEK (as their agents) are now asking for $300 settlements for each and every video file downloaded.

2) CEG-TEK’s computer systems are going haywire, and ISPs are receiving HUNDREDS of DMCA violation notifications for files contained within one bittorrent file.

3) CEG-TEK’s computer systems lock out users who have more than ten (10) claims against them with a note to call their 800 number to discuss the claims with them.  This means that your claims WILL LIKELY BE LOCKED when you try to log in and you will get their “Please contact Ira Siegel” notice.

4) If you made the mistake and called them, you would be faced with an obscenely high settlement amount to negotiate down from.

My interpretation:

Here is my interpretation of what is going on.  I see two possible causes for what we are seeing.

The founder of Girls Gone Wild appears not to be an upright citizen.  He has been reportedly convicted of tax evasion, bribery, false imprisonment, assault causing great bodily injury, dissuading a witness, record-keeping violations, and he has even reportedly pleaded no contest to child abuse and prostitution.  It does not jolt me to add copyright trolling to his list of indiscretions, and thus if this new development is coming from CEG-TEK’s “Girls Gone Wild” client rather than from CEG-TEK itself (management), I am not surprised by what I am seeing.

From 2007 – 2013, GGW advertised up the wazoo on late night infomercials, and they used to sell their DVDs, but there was a point where something happened to their business — the internet happened, and people stopped purchasing their videos.

In 2013, I remember hearing about a lot of drama and “shake-ups” on the corporate level, where Girls Gone Wild was talking about filing for bankruptcy, and where they were no longer putting their focus on the sale of DVDs.  Rather, moving forward, they would be focusing on “intellectual property monetization,” which is another way of saying that they hired a number of lawyers and copyright enforcement entities (e.g., CEG-TEK, or Copyright Enforcement Group) to elicit settlements from those internet users who they blame for the collapse of their company.

In sum, either Girls Gone Wild is tired of collecting a few bucks here and there, or CEG-TEK is no longer happy with the $300 settlement and they are trying to increase the settlement amounts to lawsuit levels without having to file a lawsuit.  Either way, be aware that things are changing, and I will let you know as I see the shift reveal itself in a more pronounced way.


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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We already know that it is the business model of CEG-TEK and other copyright monetization companies is to develop relationships with the internet service providers (“ISPs”), and to have them forward copyright infringement / DMCA notices to their subscribers.

I have mentioned this already with regard to the relationships CEG-TEK has with Charter, CenturyLink, and Suddenlink, and as we know, COX Communications, Inc. signed on with CEG-TEK in December of 2015, and has been sending CEG-TEK’s DMCA violation notices to their users.  What we did not notice until now is that Cox Communications has become CEG-TEK’s “golden goose.”

WHY COX IS CEG-TEK’s “GOLDEN GOOSE”:

Why Cox? Because Cox provides its users the same IP address each day. This “one subscriber, one static IP address” trend provides copyright holders and government officials an “ID” of sorts which allows them to identify a particular IP address, watch the activities of that IP address over time as it interacts with different websites (e.g., to see what links that internet user clicks on, to learn where they shop online, what accounts they use, what items they purchase, and what bittorrent downloads they participate in).  Then, when they have developed enough of a profile on that user to convict, they then trace that IP address back to a certain Cox Communications account for prosecution, or in our case, extortion.

For CEG-TEK, they are focusing their efforts on Cox because by doing so, they do not need to obtain from the ISP a past list of IP addresses assigned to that user, and it is very easy for CEG-TEK to go back in time and check their own logs of the past bittorrent swarms to see whether that particular subscriber / IP address participated in any other downloads of their other clients. Some have suggested to me that CEG-TEK can do a search to see what other bittorrent downloads the accused Cox subscriber has participated in. In short, Cox’s “one subscriber, one static IP address” is nothing short of a violation of their subscriber’s privacy, and it is only a matter of time before someone’s IP address gets “followed” and someone gets hurt because Cox is not obscuring the identity of their subscribers.

BRIGHT HOUSE NETWORK IS NOW WORKING WITH CEG-TEK:

Other than Cox, I have recently learned that Bright House Networks (brighthouse.com) is now working with CEG-TEK. I do not yet know in what capacity they are working with CEG-TEK, or in what kind of relationship, but it appears as if they are a new ISP “recruit” in CEG-TEK’s “war” against piracy.

NEW CHARTER COMMUNICATIONS POLICIES AS TO HOW THEY FORWARD DMCA NOTIFICATIONS (THE GOOD AND THE BAD):

For the thousands of you who are Charter subscribers, Charter has recently changed the way they forward the DMCA notices, and this can only be good for subscribers. Instead of forwarding the notices in an e-mail, they are now asking subscribers to “log in” to their website, where only then can then view and copy for themselves a copy of CEG-TEK’s letters.

This is both very good, and bad. On the good side, any “hoops” an ISP makes a subscriber jump through to see the claim(s) against him might annoy the subscriber, but it no doubt infuriates the copyright holders and “monetization” companies (like CEG-TEK) that rely on them seeing their DMCA notices to provide their copyright holder clients their dirty money (I could have said “ill-gotten gains,” but emotionally, calling it “dirty money” seemed to fit better).

THE PROBLEM OF “LOST” DMCA NOTICES:

However, BUYER BEWARE! I have received many calls about people who have physically LOST their DMCA notice because they did not copy it down when they viewed it. And when they called me about it panicked, because I couldn’t see the claims because they did not know who was claiming copyright infringement against them, I couldn’t tell them whether the copyright holder was a “copyright troll” or not, or whether they are suing downloaders in the federal courts. So please, as soon as you access the DMCA violation notices sent to you, either download a copy of it for yourself, or copy-and-paste it into a text file.

GOOGLE FIBER IS A DISORGANIZED ISP WHICH HAS ALSO LOST DMCA NOTICES:

Google Fiber subscribers also — Google Fiber seems to not be organized as to keeping track of the DMCA notices that they are forwarding to their subscribers. So when an internet user inadvertently deletes that notice, it is gone forever. Neither I, nor anyone else can help you fight or settle (or even advise you as to your options) if you accidentally deleted the notice. I suspect that if you are reading this article, it may already be too late.

CANADA — NEW CANADIAN ISP RECRUITS:

Okay, last piece of news and then I need to get back to work. As we know, CEG-TEK has been sending letters for months to Canadians and forcing the ISPs to send these letters to their subscribers under what is known as “notice and notice.” I have written about the problem and the solutions here in my “CEG-TEK: What are your financial risks and considerations of ignoring, settling, or being sued for copyright infringement if you live in Canada or Australia?” article. The news is that just as CEG-TEK is growing their business by signing on new ISPs in the US, this is also true in Canada.

The new Canadian ISPs now working with CEG-TEK appear to be Videotron (a.k.a., Vidéotron), Bell Aliant (www.bellaliant.ca), and Eastlink (www.eastlink.ca) — this will also affect their FibreOP users under the ISP names NorthernTel, DMTS, Telebec (Télébec), and Cablevision. If anyone receives notices from these internet providers, I would like to see them, as I hear that CEG-TEK is not following the notice rules.

As for the older ISP names — Bell Canada, Rogers Cable, Shaw Communications (sjrb.ca), ACN Canada, Electronic Box Inc., TELUS Communications, Start Communications, and TekSavvy, yes, these are still in play. The only one of these that has my respect thus far is TekSavvy which has tried to protect their users by fighting back, but even so, they are still sending CEG-TEK’s DMCA violation / copyright infringement letters, so my respect is limited.


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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I am not licensed to practice law in Canada, and my knowledge (as far as I am able to share) is limited to U.S. Copyright Law, and the states in which I am licensed.

That being said, I have received more than just a few inquiries from those of you who have received “DMCA Copyright Infringement Notices” from your ISPs in Canada and Australia, and I thought it was time to clarify which ISPs appear to be “working” with Ira Siegel (CEG-TEK), and what their capabilities appear to be.

HOW CAN CEG-TEK SEND OUT LETTERS TO CANADIAN CITIZENS, AND WHICH CANADIAN ISPs APPEAR TO BE WORKING WITH CEG-TEK?

So far, infringement notices began to be sent out to Canadians under a loophole which allowed U.S. copyright holders to send infringement notices to Canadian subscribers.  While many have received these notices, it appears to me that CEG-TEK is focusing on the following ISPs:

Bell Canada
Rogers Communications (a.k.a. Rogers Cable)

Shaw Communications Inc. (a.k.a. Shaw Cablesystems G.P., or “sjrb.ca”)
ACN Canada
Electronic Box Inc.
TELUS Communications Company
Start Communications (a.k.a. “start.ca”)
TekSavvy Solutions Inc.

Now obviously there are others out there, but these seem to be where the focus of the letters seem to be going out.  Also, remember that CEG-TEK spends a large amount of time recruiting ISPs to sign on to their “cause” to eliminate piracy.  I remember how happy they were when in the U.S., they got COX Communications to start working with them.  No doubt, they are working to recruit more and more ISPs every day, and these few ISPs seem to be the Canadian ISPs that CEG-TEK appears to be regularly using to send out the DMCA settlement demand letters.

WHAT DO THE CANADIAN ISPs [WHO WORK WITH CEG-TEK] APPEAR TO BE PROVIDING THEM?

Originally, I expected that because of the Canadian loophole, that CEG-TEK was sending these “blind,” meaning, not knowing who the downloader is.  But, because of recent trends (where CEG-TEK is now picking up “additional cases” which were downloaded by that same user sometimes weeks or months ago), I am now understanding that certain Canadian ISPs (my best guess, Bell Canada, Rogers, Shaw, and possibly the others) are working with CEG-TEK to provide them 1) geolocation data as to where the downloads are taking place, and/or 2) lists of past IP addresses which have been leased to that internet user / subscriber over the past twelve months (or, whatever that ISPs “IP Retention Policy” before they purge the IP address data for older records).

Thus, Canadian CEG-TEK cases are starting to look and act more like U.S. CEG-TEK cases as far as them having the ability to identify who the subscriber is, and CEG-TEK being able to “look back in time” to see what other bittorrent downloads belonging to their many clients [that their bots tracked on the bittorrent networks realtime weeks or even months ago] these subscribers participated in.

WHAT ARE YOUR CONSIDERATIONS AS TO WHETHER TO IGNORE OR SETTLE WHEN YOU LIVE OUTSIDE OF THE U.S.:

If the Canadian accused of downloading copyrighted materials via bittorrent is concerned that maybe they will be named and served as a defendant in a U.S. federal court, and they have a reputation that they must preserve (meaning, they have little-to-no risk tolerance of having their name become associated with being part of a pornography or piracy lawsuit), AND THE COPYRIGHT HOLDER IS A “COPYRIGHT TROLL,” (meaning, they have sued John Doe Defendants in the U.S. courts, or they have made known that they intend to sue defendants who ignore the DMCA copyright infringement letters that are sent to accused internet users), ONLY THEN does it make sense to settle a CEG-TEK claim against you.

Why?  Because as soon as an individual is named and served as a defendant in a U.S. lawsuit, there are many “spiders” and “robots” which comb the U.S. District Court (federal) court cases, and report and index the names of the court cases on the various search engines.  The efffect of these “spiders” on a Canadian is that information on the lawsuit gets posted on the internet and remains there forever.  That way, if someone (e.g., an employer, a creditor, or someone who wants to dig up information on a particular person) does an internet search for that person’s name, then that person’s name and his involvement in the lawsuit will show up as one of the top entries on the search engine’s results, along with the case information.

And to make matters worse (which is why I would like to see some discretion on the part of the websites NOT to index the names of defendants in search engine results), even if that accused defendant did not do the download but was merely the account holder when the download allegedly occurred, or EVEN IF THAT DEFENDANT FIGHTS THE CHARGES AND WINS — FOREVER, THAT “NAMED” DEFENDANT WILL HAVE THE FACT THAT THEY WERE IMPLICATED IN A COPYRIGHT INFRINGEMENT LAWSUIT FOR PORNOGRAPHY OR PIRACY will have their reputations tarnished because the lawsuit will show up in the search engine results.

This is the most powerful leverage a copyright holder has over an accused defendant, namely, that even if he fights the case and wins, his reputation will forever be tarnished, and for this reason alone people settle the claims against them, even before there is a lawsuit.  I have spoken to hundreds (if not thousands of accused defendants) over the years, and this is the primary reason people (even those outside of the U.S.) settle.

[Personally, this is why I would like to see the laws changed to make it a crime (or more likely, very heavy civil fines, penalties, or sanctions) to name and serve a defendant without having a higher threshold of evidence (e.g., “clear and convincing” rather than “more likely than not”) that it was them who did the crime they are accused of.  Too many families have had their reputations ruined because some overzealous attorney accused them of a crime they did not commit.]

Because of the leverage a copyright holder yields over an accused defendant that they may sue, this is why I read the press releases and follow the financial lives of many of the copyright holders — so that I can properly predict what they will or will not do in the future.  This is also why I make such a large distinction on this blog and when discussing cases with potential clients of distinguishing those copyright holders who are “copyright trolls” (those who have sued in the past, or are likely to sue in the future) versus those who have not yet sued in the U.S. federal courts, and those who (in my opinion) will never sue.  That way, at least I can properly advise clients as to which copyright holders pose the greatest risks, and which copyright holders they can ignore based on who the copyright holders are, what they have done in the past, and what they have publicly stated (in court cases, motions, press releases, and on website articles) that they will do in the future.

IN SUMMARY:

So for those of you who live in Canada, or Australia, or whatever countries the U.S. copyright holders will go next to enforce their rights, please be level-headed when receiving these infringement notices from CEG-TEK and the like.  Don’t call the copyright holder or CEG-TEK and argue whether you are “guilty” or not, because their job is merely to collect a settlement from you.  Rather, contact an attorney (me, or someone else who knows the operation of CEG-TEK and the tendencies of the specific copyright holder), and determine whether you are dealing with what I refer to as a “copyright troll” or not.  Assess your risks, and proceed accordingly down the “settle” or “ignore” route we discuss on our calls.

Once again, the main consideration as to why people settle is if you have a copyright holder who is a “copyright troll,” and you are concerned that you will be named and served as a defendant in a U.S. lawsuit, and that your involvement in that lawsuit (whether or not you are found guilty) will tarnish your reputation abroad in a search engine when someone searches your name when applying for a job, etc.  Otherwise, learn who your copyright holder is and if there is a low risk of them suing, save your money.

LEGAL DISCLAIMER: I personally find it silly to see attorneys place disclaimers on website articles, but here it is actually appropriate.  In this article, I am not suggesting that any person ignore a settlement demand letter that is sent to them, nor am I suggesting that they settle the claims against them.  I am also merely stating my thoughts about the likelihood of being sued so that they can evaluate their options and the risks and rewards of each course of action.  These are not legal opinions, nor are they to be considered advice to act upon or not act upon. 

Every person’s situation is different, and every person has a slightly different set of circumstances that can affect whether the best course of action is to ignore, fight, or settle, and every copyright holder similarly makes the same financial risk-reward analysis of whether it makes financial sense to take a particular action.  Often, lawyers take actions which do not make financial sense for an alternative reason, e.g., to get a judgement in a particular location against a poor person, NOT to ever collect that judgement, but as a trophy or a weapon to show the next set of would-be defendants that he is ready, able, and willing to pursue a particular line of attack against them as just as they did to so-and-so.  The opinions stated here are my own calculations based on my own understanding of the circumstances.


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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Copyright Enforcement Group (a.k.a. CEG-TEK) and RightsCorp at first glance look alike, but they are different animals. While they both use the DMCA laws (or with CEG-TEK, their foreign-country’s equivalent) to send letters to internet users accusing them of copyright infringement, and while they both attempt to force account holders to pay a “settlement fee” to settle all claims claimed against them, the mechanisms of how they operate are quite different.

True, both CEG-TEK and RightsCorp send DMCA notices to ISP subscribers (internet users). CEG-TEK (currently) asks for a settlement of $300 per title (C$225 for account holders in Canada), and RightsCorp asks for $20 per title.

The big difference between CEG-TEK and RightsCorp is that CEG-TEK releases the accused downloader from liability when the settlement is paid; in CEG-TEK’s contract, there is NO ADMISSION OF GUILT (UPDATE: CEG-TEK recently updated their settlement agreements and now they have an inflammatory “admission of guilt” provision, speak to your attorney about this), whereas RightsCorp contracts explicitly have the settling party admit guilt in an “I did it, I’m sorry, I’ll never do it again” fashion. This ‘admission of guilt’ issue was the initial reason I wouldn’t work with RightsCorp.

There are obviously other issues with CEG-TEK settlements that we’ve discussed before, just as there are obvious issues with RightsCorp settlements (namely, with RightsCorp, many have reported that after paying one $20 settlement, they received 10-40 additional infringement notices, whether or not the downloads actually happened).

Lastly, there are customer service differences between CEG-TEK and RightsCorp. CEG-TEK retains multiple individuals who respond to inquiries and convince those who call in [with inquiries, objections, and website troubles in processing payment] to pay the requested settlement amount or face a lawsuit. They have been known to claim that they record the conversations (watch out for this, as an admission of guilt here can be used against you, as can a lie later be used against you later in a perjury claim).

The important thing to note about CEG-TEK is that CEG-TEK DOES NOT SUE PEOPLE. Rather, they are a SERVICE PROVIDER providing COPYRIGHT INFRINGEMENT SERVICES TO THEIR CLIENTS (namely, the copyright holders). CEG-TEK has also been known to scrape the list of callers to ascertain their identities (although this used to happen before we learned that they are now able to obtain [from select ISPs] the geolocation data identifying where the download took place). Thus, if a settlement is not reached, they forward the file over to the copyright holders to allow them to follow-up with the accused downloader using their own attorneys.  At this point, CEG-TEK is out of the picture.

Well, to be accurate, first CEG-TEK has their own attorney Marvin Cable send out settlement demand letters asking for $1,750 per title, and only after he is unable to obtain a settlement from the accused downloader, only then do they forward the file over to the copyright holder(s) for their own attorneys to do what they will with it. This is where in my opinion the “ignore” route can result in an accused downloader being contacted by an attorney requesting a settlement, this time asking for a significantly higher amount. Again, depending on the COPYRIGHT HOLDER [namely, whether they have sued in the past (you can look this up on http://www.rfcexpress.com), and whether they intend to sue again in the future], this is how to best determine whether to ignore or settle the claims listed on the CEG-TEK website.

In my opinion, this CEG-TEK policy of “we forward your file over to the copyright holders” is where the misuse of that information *can* originate. Not all copyright holders are upstanding citizens (note to self to write about how a particular action might be illegal or unethical, but we see lawyers doing it anyway, unpunished — “LEGAL, BUT NOT LAWFUL”), especially considering that most of Ira Siegel’s clients are adult entertainment companies (pornography), and their lawyers do not think twice before reminding the accused downloaders that they could be involved in a lawsuit for the download of pornography.

RightsCorp has its own set of problems. First of all, aside from the settlements having accused downloaders admit guilt to one or more downloads, there is a difference in the validity of the claims between RightsCorp and CEG-TEK.  RightsCorp’s initial claim may be valid, but the many follow-up claims have been said to be fabricated.  Contrast this to CEG-TEK — CEG-TEK sends an infringement notice within days of a download taking place, but when the internet user logs in to CEG-TEK’s site, CEG-TEK’s computers have already searched and found any older downloads somehow linked to that internet user (based on the geolocation provided to CEG-TEK, presumably by the ISPs themselves, and also based on the list of IP addresses leased to the subscriber over how long the ISP keeps these lists of past IP addresses based on their “IP retention policy”).

NOTE: There is more to say here, but the jist is that CEG-TEK uses fuzzy science (same geolocation, same bittorrent software, same port number) to link cases together.  This causes problems when CEG-TEK’s system links together multiple tenants’ downloads in an apartment complex or dorm, or when an unlucky VPN subscriber receives an infringement notice containing all of the downloads from the hundreds of other users connecting through that same VPN IP address.

And, while CEG-TEK provides what they call “Customer Service” (a.k.a., “tell me about what a bad boy you were so that I can thank you for admitting guilt and force you to settle or face a lawsuit”), last I checked (and admittedly, it has been some time) there is ABSOLUTELY NO CUSTOMER SERVICE from RightsCorp. Yet, RightsCorp won’t hesitate calling you with their Robocalls all day and night.

Lastly, the biggest difference between CEG-TEK and RightsCorp is that whereas RightsCorp is financially a “sinking ship,” and last I checked, their stock price dropped to $0.06 per share on the stock exchanges, CEG-TEK has only been *expanding* their operations, growing in size, expanding into other counties (most recently, sending copyright infringement notices in Canada), openly speaking about hiring foreign attorneys to enforce their clients copyrights, and they even have been going into other areas of intellectual property (e.g., going after those who sell counterfeited goods over the internet).

In sum, Copyright Enforcement Group in my opinion is the “big bad wolf” of copyright infringement, yet they do everything they can to keep their “paws” clean. What has always bothered me about them (other than that former plaintiff attorney Ira Siegel‘s name appears on each of their settlement demand letters), is that with their growth comes the ability to push around attorneys and internet users with boilerplate settlement agreements, (recently) new terms on their settlement agreements which are less friendly than the former friendly terms, and the ability to continually raise the settlement amount (which was initially $200, then $250, then $300), and nobody can do anything about it.

“Settle or ignore,” it does not matter to CEG-TEK.

As for RightsCorp, I still hold by what I said almost 24 months ago. I see no reason to get involved with them, as they have always been a sinking ship. It is only a matter of time before they are bought out by someone else.

NOTABLE RIGHTSCORP ARTICLES (from Slyck.com):
Rightscorp’s Red Bottom Line Gets Larger and so Does its List of Copyrights to Protect (8/19/2014)
Rightscorp Scores More Copyrights to Protect from The Royalty Network (7/11/2014)
Rightscorp, ‘We Aim to Protect Millions of Copyrights as we Continue to Lose Money’ (5/14/2014)
Rightscorp Sets its Sights on the Pay-Up or Else Program for UK Pirates (5/7/2014)
Rightscorp Scores Again, Gets 600 Copyrights from Rotten Records to Protect (4/16/2014)
Rightscorp Adds 13,000 More Copyrights From Blue Pie Records to Protect (3/31/2014)
Rightscorp Publishes its Full-Year & Fourth-Quarter 2013 Financial Report (3/26/2014)
Downloaders Beware; Rightscorp Now Monitoring Billboard Hot 100 Songs (2/28/2014)

COPYRIGHT ENFORCEMENT GROUP (CEG-TEK) ARTICLES (from this blog):
Canada begins receiving CEG-TEK DMCA settlement letters. (3/12/2015)
How time limits / purged records stop a copyright holder from learning a downloader’s identity. (12/18/2014)
CEG-TEK’s growing list of participating ISPs, and their NEW alliance with COX Communications. (11/12/2014)
The Giganews VPN Problem (11/12/2014)
CEG-TEK is now your friendly “photo” copyright troll. (6/13/2013)
CEG-TEK’s new “you didn’t settle” letters sent from Marvin Cable. (3/22/2013)
CEG-TEK’s DMCA Settlement Letters – What are my chances of being sued if I ignore? (2/22/2013)
Why CEG-TEK’s DMCA settlement system will FAIL. (2/22/2013)

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3/16 UPDATE: I have heard that CEG-TEK has retained an attorney who is filing the Dallas Buyers Club / Voltage Pictures bittorrent lawsuits in Canada to sue on behalf of their clients (it appears it may be James Zibarras).  Apparently they are doing it as a proof-of-concept to teach that Canada’s limited statutory damages ($5,000 CAN maximum) is per studio. CEG-TEK also claims that there were six months of warning letters (no settlement requested) before they started sending the settlement request letters.  Can anyone in Canada confirm or deny this?

“There is an untapped market of internet users in Canada who could be accused of copyright infringement and forced to pay thousands of dollars in settlement fees… or is there not?” -Copyright Trolls.

Canada until recently was a country which took steps to curb copyright trolling. They limited damages for copyright infringement to a maximum of $5,000 CAN (as opposed to $150,000 here in the U.S.). They set provisions where [with exceptions,] the plaintiff attorney in a lawsuit would need to pay their own attorney fees (as opposed to U.S. Copyright Law which allows a “prevailing party” to collect attorney fees from the non-prevailing party), and things were pretty good for the downloaders and pretty bad for the copyright holders. Who would ever sue in Canada?

Then it was explained to me that certain ISPs were sending what sounded like our “DMCA copyright infringement settlement letters” that we have seen from companies such as CEG-TEK. This evening, Techdirt wrote an article on the topic entitled, “More Copyright Trolls Rushing In To Take Advantage Of Canadian Copyright Notice System Loopholes.”

So apparently what was done to protect the Canadian internet users from copyright trolls has for the moment been undone. “Carte blanche, carpe diem, go get em tiger!” one might think. But I suspect this is only a temporary loophole. In an honest world, those who protected the internet users will continue to protect them, and attorneys will continue to defend against those who are accused of copyright infringement in Canada.

When I heard about what was going on this afternoon, I sighed, “O Canada!” Originally spelling it “Oh Canada,” I quickly found on Wikipedia under the “O Canada!” entry that there is actually an interesting distinction between the English version of the national anthem and the French version. The English version seemed passive (as I understand many mistake Canadians to be).  In my opinion based on my own family in Canada, the real character of Canada could be better found in the French version of Ô Canada! Where the English says, “O Canada, we stand on guard for thee,” the French version says “[We] will protect our homes and our rights. The French version also says, “As is thy arm ready to wield the sword, so also is it ready to carry the cross.”

In short, Canadians won’t stand for the copyright trolls, and I suspect this will be only a temporary problem which will be remedied by the legislature as quickly as a copyright troll might pop his head out from under the Pont de Québec and say “boo!”

A Translation of this article into French from a valued Contributor (just for fun): 

Le Canada jusqu’à récemment, était un pays qui a pris des mesures pour freiner les “copyright trolls” ou “pêcheurs à la traîne de droits d’auteurs”. Le Canada a limité les dommages pour violation de copyright à un maximum de 5000 $ CAN (par opposition à $ 150 000, ici aux USA). Au Canada, un demandeur victorieux doit le plus souvent payer ses propres frais d’avocat dans un procès (par opposition aux États-Unis ou la législaion permet à une “partie gagnante” de collecter ses frais d’avocat auprès de la partie perdante), et les choses étaient assez favorables aux téléchargeurs et assez mauvaises pour les détenteurs de droits d’auteur. Qui aurait jamais pensé poursuivre au Canada?

Ensuite, on m’a expliqué que certains FAI envoyaient ce qui ressemblait à nos “DMCA Copyright Violation Letter” comme celles que nous avons vues de la part de sociétés telles que CEG-TEK. Ce soir, Techdirt a écrit un article sur le sujet intitulé More Copyright Trolls Rushing In To Take Advantage Of Canadian Copyright Notice System Loopholes.”

Donc apparemment ce qui avait été fait pour protéger les internautes canadiens de copyright trolls est devenu chose du passé. “Carte blanche, carpe diem, go get ‘em tiger!”  On pourrait le penser. Mais je soupçonne que tout ceci est seulement temporaire. Dans un monde honnête, ceux qui protégeait les utilisateurs d’Internet vont continuer à les protéger, et les avocats continueront de défendre ceux qui sont accusés de violations de droits d’auteurs au Canada.

Cet après-midi, quand j’ai entendu parler de ce qui se passait, j’ai soupiré, «Ô Canada!» Originellement épelé “Oh Canada” j’ai rapidement trouvé sur Wikipedia l’article correspondant sous le titre “O Canada!” Article Wikipedia qui montre qu’il y a effectivement une distinction intéressante entre la version anglaise et la version française de l’hymne. La version anglaise semblait passive (les Canadiens sont parfois perçus comme passifs, à tort). À mon avis et basé sur ma propre famille au Canada, le vrai caractère du Canada pourrait être mieux trouvé dans la version française du Ô Canada! Là où les Anglophones disent: «O Canada, nous nous tenons sur nos gardes pour toi,” la version française indique ” Et ta valeur, de foi trempée, Protègera nos foyers et nos droits”. La version française dit aussi: “Car ton bras sait porter l’épée, Il sait porter la croix”.

Bref, les Canadiens ne toléreront pas les copyright trolls, et je soupçonne que ceci est seulement un problème temporaire qui sera corrigée par le législateur aussi rapidement qu’un copyright troll pourrait montrer sa tête sous le Pont de Québec et de faire ” boo! “

 

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