Author Archives: Rationality

Popcorn Time Breakup Exposes Dirty Secret

While Hollywood prepares to go from suing end users to the developers, the pressure has forced some key members of the Popcorn Time application to depart.  As is being reported in the Popcorn Time discussion forum and on Torrent Freak, the developers are becoming all too aware of the risks in their efforts.

One thing that is coming to light is that the application, touted as “free,” is not free at all as it is designed for users to purchase add-ons and VPN software to avoid facing litigation and fines, or worse.

Already people in Europe have been arrested for promoting Popcorn Time and in the United States the civil litigation side has pointed out that using the Popcorn Time application may expose a party to criminal liability:

From the complaint in The Cobbler v. Users of Popcorn Time; 3:15-cv-01550-ST

40.   Popcorn Time cannot be considered to have any reasonable legal or legitimate use.

41. The mere possession of a software program like Popcorn Time is the type of conduct that the State of Oregon has criminalized in ORS 164.235, which reads in part: 164.235 Possession of a burglary tool or theft device. (1) A person commits the crime of possession of a burglary tool or theft device if the person possesses a burglary tool or theft device and the person:

(a) Intends to use the tool or device to commit or facilitate … a theft by a physical taking; or

(b) Knows that another person intends to use the tool or device to commit or facilitate a … theft by a physical taking.

What is now apparent is some of the developers are seeing the financial rewards are no longer worth the risk as court records are showing the first Consent Judgments and Orders being entered against those caught using the application.

For a copy of one of the civil cases in the United States: The Cobbler v. Popcorn Time Users

Understanding Fair Use

Re:  Authors Guild v. Google, Inc.,13-4829, 2nd Cir. , Oct. 16, 2015

In a case that likely has one more stop along the way, the Second Circuit has issued its opinion in Authors Guild v. Google that relates to the Google Books project and the considerations of Fair Use.

As per the opinion:

Google has made digital copies of tens of millions of books, including Plaintiffs’, that were submitted to it for that purpose by major libraries. Google has scanned the digital copies and established a publicly available search function. An Internet user can use this function to search without charge to determine whether the book contains a specified word or term and also see “snippets” of text containing the searched-for terms. In addition, Google has allowed the participating libraries to download and retain digital copies of the books they submit, under agreements which commit the libraries not to use their digital copies in violation of the copyright laws.

In a simplistic view: Google has put millions of books online. But it is important to understand some key facts in this case, which include:

The Google Books search function also allows the user a limited viewing of text. In addition to telling the number of times the word or term selected by the searcher appears in the book, the search function will display a maximum of three “snippets” containing it. A snippet is a horizontal segment comprising ordinarily an eighth of a page.
      . . .
Google also disables snippet view entirely for types of books for which a single snippet is likely to satisfy the searcher’s present need for the book, such as dictionaries, cookbooks, and books of short poems. Finally, since 2005, Google will exclude any book altogether from snippet view at the request of the rights holder by the submission of an online form.

While it is true that Google has placed millions of copyrighted books online, it does not allow the viewers to read them, only to find out whether or not they might want to read them. As was critical in this case:

Google’s program does not, at this time and on the record before us, expose Plaintiffs to an unreasonable risk of loss of copyright value …

Google’s making of a digital copy to provide a search function is a transformative use, which augments public knowledge by making available information about Plaintiffs’ books without providing the public with a substantial substitute for matter protected by the Plaintiffs’ copyright interests in the original works or derivatives of them.

So the simplistic view is that Google is allowed to put millions of books online, but the proper understanding is that Google has created the world’s most effective card catalog to allow people to search and find books they may want to read, without making the books themselves available to read online.

After pages of tortured analysis of facts and factors, it all comes down to:

The ultimate goal of copyright is to expand public knowledge and understanding, which copyright seeks to achieve by giving potential creators exclusive control over copying of their works, thus giving them a financial incentive to create informative, intellectually enriching works for public consumption. . . .

Thus, while authors are undoubtedly important intended beneficiaries of copyright, the ultimate, primary intended beneficiary is the public, whose access to knowledge copyright seeks to advance by providing rewards for authorship.

There will be the inevitable confusion as many books on the Google Books project are available online in complete form, but it needs to be understood that the copyrights in those books have expired or been waived by the authors, thus they are properly free to the public.

For the full text:  Authors Guild v. Google, 13-4829

Deleting Files Costs $200,000 In Sanctions And Adverse Inference

Destroying evidence is always bad. Getting caught is often assured, and even worse. In the case of Clear-View Technologies v. Rasnick, et al., in the Northern District of California the severity and expanse of duties to preserve evidence have been further clarified. One thing the court makes clear, sometimes the only thing worse than a smoking gun, is a missing gun that has been thrown away leaving only traces of smoke.

As the court starts off:

Deployment of “Crap Cleaner” software—with a motion to compel pending. Lost media with relevant documents. False certification that document production was complete. Failure to take any steps to preserve or collect relevant documents for two years after discussing this very suit. Any one of these transgressions by Defendants … and their prior counsel might justify sanctions. Taken together, there can be no doubt.

Preservation of evidence is a duty, and it does not start when suit is filed.

“The duty to preserve evidence begins when litigation is ‘pending or reasonably foreseeable.’ Thus, ‘[s]poliation refers to the destruction or material alteration of evidence or to the failure to preserve property for another’s use as evidence in pending or reasonably foreseeable litigation.’ This is an objective standard, asking not whether the party in fact reasonably foresaw litigation, but whether a reasonable party in the same factual circumstances would have reasonably foreseen litigation.”

This does not mean evidence must be preserved when a party learns about a suit or when a party is served with a complaint, it means the evidence must be preserved from the time when a reasonable person thinks they might be sued. The proverbial, “I’ll see you in court!” can result in a duty to preserve and further deletion may result in sanctions. (Or as the Court quotes, in this case, the statement “[K]eep it up and you’ll find [yourself] in court[.] Call Clyde again and I sue[.] Mark my words.”)   The standard is not subjective. This is an objective standard. Even if a party is not aware of their duty, ignorance is not an excuse.

But this case had it all. Laptops and cell phones were “lost.” Emails were deleted. Documents were not produced. And likely most damming element, parties installed and ran software called CCleaner or “Crap Cleaner” which was specifically designed to delete data in a manner that it could not be recovered. Having software that is designed to hide evidence might be suspect in and of itself, evidence of its use is something courts cannot overlook.

The result of this cover up was the court ruling:

Defendants and their prior counsel therefore are jointly and severally liable for the following fees, which the court finds reasonable in light of the extraordinary effort required to uncover this widespread abuse: … $212,320.

But even more significant than the money to be paid, was the court’s ruling on further sanctions.

All this warrants the adverse instruction that the unproduced material may be deemed to support [Plaintiff’s] contentions. The court orders the jury be instructed as follows:

Defendants have failed to prevent the destruction and loss of relevant evidence for [Plaintiff’s] use in this litigation. This is known as the “spoliation of evidence.”

I instruct you, as a matter of law, that Defendants failed to preserve evidence after its duty to preserve arose. This failure resulted from its failure to perform its discovery obligations.

You also may presume that [Plaintiff] has met its burden of proving the following two elements by a preponderance of the evidence: first, that relevant evidence was destroyed after the duty to preserve arose. Evidence is relevant if it would have clarified a fact at issue in the trial and otherwise would naturally have been introduced into evidence. And second, the lost evidence was favorable to [Plaintiff].

 

The result: everything missing or deleted, no matter how innocent it might be, is presumed to be favorable to plaintiff.

The full text of the opinion: Clear-View Technologies v. Rasnick, et al., 13-cv-02744 (N.D. Cal. May 13, 2015.)

The Name Game

There is an often misunderstood element of trademark law that is oversimplified to: You can’t trademark your name.  This comes from the Trademark Manual of Examining Procedure, or TMEP 1301.02(b)  Names of Characters or Personal Names as Service Marks

Under 15 U.S.C. §1127, a name or design of a character does not function as a service mark, unless it identifies and distinguishes services in addition to identifying the character.  If the name or design is used only to identify the character, it is not registrable as a service mark.  

People seem intent on simplifying this and reading the first part: “a name or design of a character does not function as a service mark…” and then last part, “If the name or design is used only to identify the character, it is not registrable as a service mark.” And completely skipping the middle: unless it identifies and distinguishes services in addition to identifying the character.  And therein is the key:  simply being a name, even a famous one, is not enough.

For example, in In re Lee Trevino Enterprises, Inc., 182 USPQ 253 (TTAB 1974) it was determined that the name of golfer Lee Trevino identified exactly what you might expect – a golfer named Lee Trevino.  As no other services or goods were associated with the name, it could not be registered.

But when the name means more, registration is allowed. The trademark registration database is filled with famous names that represent more than the mere people that carry them on their driver’s license. There are several FRANK SINATRA registrations for everything from entertainment services (as you would expect) to spaghetti sauce.  And the list of ELVIS related marks goes for pages.

So the adage, “you can’t trademark your name” is both true and incomplete. It might be better presented as, “you can’t trademark your name for being a name.”

There is further guidance in TMEP 1202.09(a)   Names and Pseudonyms of Authors and Performing Artists

Any mark consisting of the name of an author used on a written work, or the name of a performing artist on a sound recording, must be refused registration under §§1, 2, and 45 of the Trademark Act, 15 U.S.C. §§1051, 1052, and 1127, if the mark is used solely to identify the writer or the artist….

As with TMEP 1301.02(b), the name as a name is not registrable.  But take note of the distinction in TMEP 1202.09(b)   Names of Artists Used on Original Works of Art

An artist’s name or pseudonym affixed to an original work of art may be registered on the Principal Register without a showing that the name identifies a series.

Again, the question is does the name represent a person, or is it used to designate something about the goods or services or their origin.  The name, as a badge carried by a work of art representing its origin becomes registrable.

The USPTO has an excellent web page on this topic: http://www.uspto.gov/learning-and-resources/ip-policy/musicians-and-artists-profile

As to the recent news about artist Rihanna and her efforts to trademark her real first name ROBIN being opposed by D.C. Comics for being too similar Batman’s sidekick’s name ROBYN, the issues of that matter have little to do with a person’s name acting as a trademark.  For many people it was news that ROBIN was Rihanna’s real first name. (If a name is not used to identify someone then it is not subject to a TMEP 1301.02(b) rejection.)

The ROBIN – ROBYN conflicts are purely based on classic confusion, namely, will people be confused and think Rihanna associated goods and services sold under the ROBIN brand name will be somehow affiliated with Batman’s sidekick the Boy Wonder ROBYN.  Of course this all goes away in the movie deal when Rihanna signs on to play the actual Robyn in the next movie.  Stay tuned.

The ROBIN – ROBYN opposition filed by D.C. Comics may be viewed here: ttab-91221868_ROBYN-ROBIN_Opp

Lying is Still Bad

In the long fought BitTorrent infringement case of Malibu Media v. Tashiro, (S.D. Indiana) the court appears to be close to closing this case with a resolution in favor of Malibu Media. As with just about every other case that has gone through substantive proceedings, the results appear to be either a finding of infringement, or defendants who lie and destroy evidence, resulting in a verdict in favor of the plaintiff.

This case, fought longer and harder than most, has resulting in a few extra points, one being with respect to a long fight about Plaintiff’s expert Patrick Page and efforts to discredit Mr. Paige. Curiously, these seem to have backfired as the court found Plaintiff’s expert Mr. Paige more credible than the expert offered by Defendants.

Based on the relative credentials of the parties’ experts, the Court concludes that Patrick Paige’s testimony is more accurate and more credible. As such, the Court finds it highly likely that thousands of files were deleted and were unrecoverable. This confirms that Defendant Charles did not temporarily delete relevant evidence; instead, he permanently destroyed that evidence. As a result, Charles is liable for spoliation.

But the real substance of this case relates to a husband and wife who the court found lied and destroyed evidence. Much has been written on this case about the lack of evidence, but the heart of the case deals with why the evidence was missing. As summarized by the Court:

Discovery in the federal system is intended “make a trial less a game of blind man’s bluff and more a fair contest with the basic issues and facts disclosed to the fullest practicable extent.” United States v. Procter & Gamble Co., 356 U.S. 677, 682 (1958) (emphasis added). The rules governing discovery contemplate that parties will “obtain the fullest possible knowledge of the issues and facts before trial,” such that “civil trials in the federal courts no longer need be carried on in the dark.” Hickman v. Taylor, 329 U.S. 495, 501 (1947).

[Defendant’s] conduct is simply not consistent with these principles. By deleting files from the Stover drive, [Defendant] chose to conceal—not disclose—potentially relevant information. And by doing so, [Defendant] deprived Plaintiff of the ability to gain the “fullest possible knowledge” of the facts relevant to Plaintiff’s underlying copyright claim. [Defendant] thus flouted the important principles underpinning litigation carried on before this Court and other courts in the federal system, and his decision to do so cannot go unpunished.

In this case it was more than just the husband that got in trouble, but the Court specifically found the wife at fault as well.

[Defendant Wife’s] own testimony thus demonstrates that she repeatedly failed to discharge her duty to reasonably investigate whether her discovery responses were complete and accurate, and sanctions against [Defendant Wife] are therefore appropriate.

Additionally, [Defendant Wife’s] failure to investigate was especially egregious in light of her attorney’s representations to the contrary. … These misrepresentations are hardly consistent with a party’s duties to investigate and disclose relevant facts, confirming that sanctions against [Defendant Wife] are appropriate.

In essence, the court found the husband-wife team acted together on many fronts and they were liable for the bad acts of the other.  Protecting a family member may seem like a good idea, there are consequences when doing so involves lying or hiding evidence.

Based on these considerations, the Court concludes that the [Defendants] have the sort of “close family relationship,” Sebastian, 2008 WL 2875255, at *33, that would support extending a Fifth Amendment adverse inference from one party to another. Thus, when Plaintiff’s counsel asked whether [Defendant] had agreed with his wife to hide the truth in this case, the Court may infer that [Defendant] refused to answer not only to protect himself, but also to protect his wife.

And while the court found also fault with the Defendants’ attorney, he managed to escape without sanctions.

[Defendant’s attorney’s] conduct in this case borders on sanctionable. …. In these circumstances, the Court will exercise its discretion to refrain from sanctioning [Defendant’s attorney].

In summation, the court found the Defendants guilty of perjury with respect to hiding evidence, hiding hard drives and lying about the use of BitTorrent and directed that both husband and wife be found liable under Plaintiff’s claims.

Here, the Court finds by clear and convincing evidence that Defendants have engaged in a similar pattern of misconduct. Defendants spoiled evidence, committed perjury, and failed to discharge their duties to conduct discovery reasonably and in good faith. They lied to the opposing party; they withheld the existence of material evidence; and they deleted potentially damaging computer files the very night before they were to relinquish such files for discovery. Just as in the cases cited above, this extensive pattern of conduct warrants the harshest of sanctions, and the Magistrate Judge accordingly recommends that the Court enter default judgment against both Defendants.

Based on the long record of this case and likely hundreds of thousands in attorney fees, this may result in one of the most significant awards against defendants in any BitTorrent litigation.

 

The case and relevant opinion: Malibu Media, LLC v. Tashiro, et al. 1:13-cv-00205, (S.D. Indiana, May 18, 2015)

 

Two Strikes Against “Troll Slayer”

In the closely watched case of Blaha v. Rightscorp, a prominent self-proclaimed “troll slayer” took on copyright enforcement firm Rightscorp and tried to argue that enforcing U.S. Copyright Law against those who commit theft was an abuse of process.

According to the class action complaint:

Rightscorp describes itself to investors as a “leading provider of monetization services” for copyright owners. Rightscorp’s business model involves using federal legal process and the threat of statutory damages for copyright infringement to engage in what some call “speculative invoicing” of consumers who it accuses of having engaged in file sharing.

The Plaintiff attempts to bring a class action on behalf of all those caught infringing on two basis, the first being for abuse of process, summarized in the complaint as:

To identify potential consumers to target, Rightscorp has willfully misused this Court’s subpoena power by issuing at least 142 special DMCA subpoenas, per 17 U.S.C. § 512(h), to various Internet Service Providers (“ISPs”). These subpoenas, which were issued on this Court’s authority, but procured outside of an adversarial proceeding and without any judicial review, are so clearly legally invalid as to be a sham and abuse of the legal process.

The second claim is related to the use of “robo-calls” made to identified infringers.

This action is pending in the Central District of California, a jurisdiction well known for being strict and firm in its protections against abusive copyright enforcement.

In defense, Rightscorp argued that under California’s anti-SLAPP law, which protects against abusive litigation, their actions were not only lawful, but legitimate in enforcing copyrights against acts of theft. (SLAPP stands for Strategic Lawsuits Against Public Participation.) In essence, in this case a “troll slayer” accused Rightscorp of abusive litigation in the enforcement of copyrights against Internet pirates and Rightscorp countered with the claim that it was in fact the “troll slayer” that was litigating in an abusive manner and moved to strike Plaintiff’s claim under California’s anti-SLAPP law.

The court agreed with Rightscorp.

There is no question that the complained of conduct [by Rightscorp] satisfies the first prong of the anti-SLAPP statute. The entire claim is based on [Rightscorp’s] representations to various federal courts in order to convince those courts to issue subpoenas. This kind of action is specifically defined as protected action by § 425.16(e).

The court went on to affirm that while it was clear the Plaintiff and their counsel did not approve of Rightscorp’s enforcement of copyrights against pirates, simply not liking the law was not enough.

The first fatal deficiency in Plaintiff’s abuse of process claim is that Plaintiff raises no ulterior motive in [Rightscorp’s] use of the subpoenas….there is no allegation and no evidence that [Rightscorp] sought to do anything other than what their subpoena requests indicated – identify potential copyright infringers for the purpose of pursuing Defendants’ rights under the Copyright Act.

* * *

The second fatal deficiency in Plaintiff’s claim is that it is barred by the California litigation privilege…. Plaintiff provides no argument why those communications to the various courts in acquiring the subpoenas do not satisfy the four part test quoted above, perhaps because they obviously do.

The court summarily concluded with the biggest sting in the case:

The motion to strike is GRANTED. Attorney’s fees and costs must be awarded under California Code of Civil Procedure § 425.16(c) and are granted subject to a properly noticed motion as to amount.

With a refrain of “I fought the law and the law won” (the Clash) playing quietly, a “troll slayer” must now pay.

In another motion, there was an attempt to bring in the attorney or “General Counsel” of Rightscorp as a member of the company’s “management.” The court dismissed this defendant finding:

There is no evidence that [General Counsel] was involved in any specific acts directed toward any of the class members in California. … Plaintiff has demonstrated nothing more than that [General Counsel] provides general intellectual property advice to Rightscorp, which happens to be based here. And while Rightscorp has taken certain measures in California, there is no evidence – or even an allegation – that [General Counsel’s] advice is somehow California-specific rather than advice that applies throughout the United States…. In short, [General Counsel’s] connection to California solely through his client, Rightscorp, is the kind of fortuitous contact with a forum that does not provide the kind of substantial connection with the forum needed for the exercise of personal jurisdiction.

With one claim gone, and a defendant dismissed, Rightscorp still faces a surviving claim directed at its use of “robo-calls” to infringer.  But they face this claim with an award of attorneys fees from the Plaintiff.

The case is John Blaha v. Rightscorp, Inc., et al., 2:14-cv-09032, Central District of California, (Judge Dale S. Fischer).

Relevant documents:

John Blaha v. Rightscorp, Inc., et al., 2:14-cv-09032, Dkt. 71 (C.D. Cal, May 8, 2015) – Order striking Plaintiff’s claim and awarding fees.

John Blaha v. Rightscorp, Inc., et al., 2:14-cv-09032, Dkt. 72 (C.D. Cal, May 8, 2015) – Order dismissing defendant

 

 

President’s 301 Report Calls For Stronger Copyright and Trademark Protections

The 2015 Special 301 Report on the state of intellectual property rights (“IPR”) has few surprises. In general, it calls for more and stronger protections and recognizes globalization needs to be addressed. As per the summary:

This Report reflects the Administration’s continued resolve to encourage and maintain adequate and effective IPR protection and enforcement worldwide. The Report identifies a wide range of concerns, including: (a) the deterioration in IPR protection, enforcement, and market access for persons relying on IPR in a number of trading partners; (b) reported inadequacies in trade secret protection in China, India, and elsewhere, as well as an increasing incidence of trade secret misappropriation; (c) troubling “indigenous innovation” policies that may unfairly disadvantage U.S. rights holders in China; (d) the continuing challenges of online copyright piracy in countries such as Brazil, China, India, and Russia and trademark counterfeiting in China and elsewhere; (e) market access barriers, including nontransparent and discriminatory measures, that appear to impede access to products embodying IPR and measures that impede market access for U.S. entities that rely upon IPR protection; and (f) other ongoing, systemic IPR enforcement issues in many trading partners around the world.

There are a few interesting insights. Under a review of digital piracy, the report notes:

[P]iracy over the Internet has become the priority copyright enforcement issue… The availability of, and recourse by rights holders to enforcement procedures and remedies is a critical component of the online ecosystem. … Governments should avoid creating a domestic environment that offers a safe haven for piracy on the Internet.

The report then goes on to call out Switzerland specifically which recently exempted private use downloading of content from copyright enforcement and states:

The United States strongly urges Switzerland to demonstrate its commitment to provide robust copyright protection and to combat online piracy by taking concrete steps to ensure that rights holders can protect their rights.

And there is a notable reference to increased problematic criminal activity in Switzerland with the opening of the gates to private level piracy, which is no surprise.  If you freely allow unlimited minor theft on a large scale, the proverbial “million tiny cuts” eventually become lethal.

The report also brings up two very interesting points with respect to globalization and IPR. There is a relation of the importance of IPR and the environment:

Strong IPR protection and enforcement are essential to promoting investment in innovation in the environmental sector. Such innovation not only promotes economic growth and supports jobs, but also is critical to responding to environmental challenges. IPR provides incentives for R&D in this important sector, including through university research. Conversely, inadequate IPR protection and enforcement in foreign markets discourages entry into technology transfer arrangements in those markets. This may hinder the realization of the technological advances needed to meet environmental challenges, including the mitigation of, and adaptation to, climate change.

And there is a relation of the importance of the social impact of IPR and health:

IPR protection plays an important role in providing the incentives necessary for the development and marketing of new medicines. An effective, transparent, and predictable IPR system is necessary for both manufacturers of innovative medicines and manufacturers of generic medicines.

In summary, the report presents a picture that calls for stronger protections of intellectual property rights, accountability for countries, and outlines that stronger protections further the interests of all parties economically, environmentally and socially.

 

For Full Text: 2015 Special 301 Report

 

 

More than you can chew

Mass tort litigation can promote judicial economy and efficiency in managing cases. As often quoted, the purpose of joinder is “to promote trial convenience and expedite the final resolution of disputes, thereby preventing multiple lawsuits, extra expense to the parties, and loss of time to the court as well as the litigants appearing before it.” West Coast Productions, Inc. v Does 1–5,829, 275 FRD 9, 15 (DDC 2011)

However, with great cases comes great responsibility. In the pending We 3 Kings, Inc. v. The Steve Harvey Show, et al. case the plaintiff complained that The Steve Harvey Show incorporated cue music in its production without a license. Rather that bring suit against the production company and distributor, plaintiff named each TV station that aired the show, for a total of over 200 defendants. This action also listed each time the music was used in the entire season, 268 times, and claimed $700 in damages for each use against each TV station individually for a total of 225 x 268 x $700 or $42,000,000+. (Note, the case claims $42,310,000 not $42,210,000, which may simply be a math error, or may incorporate additional defendants.)

One thing plaintiff seemed to have overlooked is that this case actually has over 200 defendants. Each defendant is a party to the case and more than simply a number in a damages calculation. When faced with the massive task of serving 200+ defendants, the plaintiff failed to follow through and effect service and then failed to dismiss the outstanding defendants. (There are other indications that the attorneys for plaintiff were non-responsive and generally failing to follow through on a number of issues.) In March 2015, well after the deadline for all defendants to be served, several of the defendants who had been served filed a motion to dismiss the balance of the parties.   The court then on its own issued a Show Cause Order demanding an explanation from the plainitff.

The result was predictable. As per the court order:

On April 13, 2015, Plaintiff and its counsel were ordered to show cause why they should not be sanctioned in the amount of $1,000 for (1) their unnecessary joinder of an extremely large number of defendants whom they apparently had no interest in pursuing in this Court and (2) their failure to respond to either the motion to dismiss or the Court’s OSC. Plaintiff’s response states only that Plaintiff is seeking new counsel and finding new counsel is taking longer than expected. For reasons left to the imagination, Plaintiff – or at least its counsel – seems to believe that this explains the failure to serve the extremely large number of defendants who were named in this case. It does not. In addition, the response fails to offer any reason for Plaintiff’s failure to respond to the motion and the OSC or for its joinder of numerous defendants it has failed to serve.

Plaintiff and its counsel are therefore sanctioned, jointly and severally, in the amount of $1,000. This amount is to be paid to the Clerk of Court no later than May 4, 2015. Counsel must file a declaration no later than May 5, 2015 stating that the sanctions have been paid.

– Order of April 24, 2015

A few things to keep in mind on this case:

– This is a $1,000 sanction in a multi-million dollar case. Copyright liability is strict and it is likely the defendants will eventually pay the plaintiff far more than this sanction of the court.

– The real lesson here: joinder may make cases more efficient, but it does not make them easy. With great cases comes great responsibility… and a lot of work. You still have to do the work.

Key documents:

The complaint: We Three Kings v. The Steve Harvey Show et al., 2:14-cv-08816, (C.D. Cal.)

April 24, 2015 Order of Judge Dale S. Fisher, 2:14-cv-08816, (C.D. Cal.)

Internet Subscriber Liability For BitTorrent Use

In a default judgment opinion, Judge Robert M. Dow, Jr., carefully scrutinized and questioned plaintiff’s motives and actions. After reviewing a number of the criticisms against BitTorrent infringement claims the Judge concluded:

Plaintiff, however, does more than merely identify Defendant as the account holder at the relevant IP address. It also offers evidence linking that IP address to bit-exchanges involving hundreds of digital media files in just three months. Taken together, these facts plausibly suggest that Defendant—the controlling account holder of an IP address associated with frequent BitTorrent use—is the infringing user. See Malibu Media, LLC v. Doe, 2015 WL 857408, at *4 (D. Md. Feb. 26, 2015) (“That the Defendant’s IP address was used to obtain 2,034 other third party files through BitTorrent over an 18–month period supports the reasonable inference that the Defendant-and not some other person using the Defendant’s IP address—was the infringer.”). The Court therefore finds a plausible claim of direct copyright infringement.

The court went on to find that even if the infringer was not the defendant, the defendant was still liable as the subscriber finding:

Plaintiff also states a plausible claim for contributory copyright infringement. “A defendant is liable for contributory copyright infringement when it with knowledge of the infringing activity, induces, causes, or materially contributes to the infringing conduct of another.” Monotype Imaging, Inc. v. Bitstream, Inc., 376 F. Supp. 2d 877, 883 (N.D. Ill. 2005) (citations and internal quotation marks omitted); see also PHE, 2014 WL 1856755, at *2.

And while declining to find willful infringement, contra Derek Andrew, Inc. v. Poof Apparel Corp., 528 F.3d 696, 702 (9th Cir. 2008)(In a default, “all factual allegations in the complaint are deemed true, including the allegation of [] willful infringement …”) the court did award all costs and fees and entered an injunction against the defendant and awarded plaintiff $11,525.00.

Once again the courts continue to extend liability for BitTorrent infringement to the account holders and subscribers.  The lesson: If you pay the bill, make sure no one is using BitTorrent.

The full opinion is: Malibu Media v. Funderburg, 1:13-cv-02614, N.D. Ill. (April 24, 2014)

### UPDATE:  On review of the Amended Complaint it appears the Judge’s finding of contributory infringement was not plead by plaintiff.  The Judge appears to have brought an alternative finding of contributory infringement to this opinion on their own based on the evidence.

The filed Amended Complaint is: Amended Complaint : Malibu Media v. Funderburg, 1:13-cv-02614, N.D. Ill.

Piracy = Jail Time

Civil enforcement of piracy gets a lot of press coverage, but one thing that needs to be kept in mind is there are both civil claims for copyright infringement and criminal penalties. Though rarely enforced, mainly due to a lack of resources, piracy can lead to jail time.

On the dockets right now in the United States there are several such cases, one being U.S. v. Brown. 14-CV-00080, N.D.Iowa. Based on court documents, Mr. Brown was caught with about 1,500 copies of movies and about 500 songs, all in violation of U.S. Copyright Law. He was charged under 18 USC 2319, which provides for five years in prison for a first offense.

It appears that in August of 2014, Mr. Brown plead guilty and is awaiting sentencing.  While not clear from public documents, it also appears the recommendation is for one year but a petition has been filed by Mr. Brown’s attorney for a reduced sentence.

Whether Mr. Brown goes to prison for 5 years, 1 year, or 6 months, as per Mr. Browns’ attorney’s request for leniency, “Let us not forget that as a result of this conviction Mr. Brown is now a felon and has lost countless rights and privileges as a result.”

Sentencing is currently set for July 16, 2015.

Relevant Documents:

U.S. v. Brown. 14-CV-00080, N.D.Iowa.–Information Complaint

U.S. v. Brown. 14-CV-00080, N.D.Iowa.–Recommendation on Guilty Plea