Category Archives: Bittorrent

Piracy Costs LA Infringer $26,000

In the recent case of QOTD v. Walther, plaintiff brought an action against a party that was using BitTorrent to download and then share the motion picture Queen of the Desert. After investigation and being served with the Complaint, Walther refused to respond and a judgment was entered against him.

The result was an award in favor of QOTD for $15,000 in damages and over $11,000 in costs and fees for a total of over $26,000.

The Court further ordered Walther to, “refrain from knowingly and willfully using BitTorrent or any other online media distribution system for copying or downloading content in violation of United States Copyright laws.”

Relevant Document: 16-cv-02803 Judgment

 

Single Satisfaction Smackdown

As BitTorrent defendants are realizing the evidence is stacked against them they look for new ways to avoid liability for their theft. A recent trend for defendants seeking an ‘out’ or ‘get out of jail free’ card is the presentation of the Single Satisfaction Rule arguing that those caught before them have already paid all the damages a rights holder might recover so somehow rights holders no longer have a claim.

In its simplest terms the Single Satisfaction Rule, as defendants might want to apply it, would read the Copyright Act maximum of $150,000 in statutory damages for each infringement to incorporate all members of a swarm. The idea is that once a copyright holder has recovered $150,000 total from everyone in a swarm there is nothing left to recover, or after a number of parties have been sued and the total amount paid reaches $150,000, then the rights holder can no longer bring suit, as there is a full ‘single’ satisfaction.

Of course this misses a few issues and glosses over the reality. The Single Satisfaction Rule, even if read the way some defendants would like, would not mean there is no more liability. Even if there are no additional damages a rights holder can file for injunctive relief and be awarded costs and fees. But more significantly, to apply the single satisfaction rule all the defendants or members of a swarm would need to be jointly and severally liable for the full damages of the entire swarm. As many swarms have hundreds of thousands of participants over the life of the swarm, this would mean that anyone that ever joined the swarm would be liable for the full damages of everyone that was in the swarm at any time. Even a modest 100,000 member swarm, with damages of $10 per download, would mean actual damages would be $1,000,000. With joint and several liability, every member would be liable for the full $1,000,000 and plaintiffs would be able to collect as much of that $1,000,000 as each defendant could pay before moving on to the next defendant. If there is more than one swarm (and often there are dozens), then the damages total would restart for each additional swarm. The Single Satisfaction Rule would also mandate all members of a swarm be joined in a single case with tens of thousands of defendants forced to join wherever the case might be filed. In other words, The Single Satisfaction Rule, as properly applied to join all members of a swarm and make them each individually liable for the full damages of the swarm, would be a boon to rights holders.

Clearly this has not been well thought out by many of those that argue the defense. The outcome argued has even recently been called “absurd” by the 9th Circuit. Friedman v. Live Nation Merch., Inc., 833 F.3d 1180, 1191-92 (9th Cir. 2016). And as ruled on by a judge in the pending case of QOTD Film Investment v. Wilson, 16-cv-00371 (WDWA March 3, 2017) a BitTorrent defendant’s Single Satisfaction Rule claim has “no basis in the law.”

Relevant Documents:

16-cv-00371-RSL 82: QOTD Film Investment v. Wilson’s Counterclaims based on a failed attempt to argue the Single Satisfaction Rule

16-cv-00371-RSL 94: Order Dismissing Single Satisfaction Rule Counterclaims

 

 

Subscribers Sanctioned in BitTorrent Litigation

Paying for internet service does not by itself make a party liable for any infringing activity, but as two parties have recently learned failing to cooperate in helping identify the infringer may have serious consequences.

In a traditional bittorrent case when infringing activity is traced to an IP address the plaintiff must first identify the subscriber who pays for the service. Then if the subscriber is not the liable party further investigation is needed to identify the actual infringer who may be another party with access such as a roommate or someone else.

But if the subscriber refuses to cooperate with the plaintiff this does not end the process. In a recent pair of federal court cases subscribers have been found in contempt and sanctioned for their failure to respond to letters and court orders directing them to provide information on their internet service and assist in identifying the actual infringer.

As per the opinion:

…Dallas then served Pinnell with a Rule 45 subpoena via United States Mail requiring Pinnell’ s appearance at a deposition on August 9, 2016. After Pinnell failed to appear and participate at that deposition, as required by the Rule 45 subpoena, Dallas filed a motion for order to show cause.

            Pinnell failed to appear at the show cause hearing. The record indicates Pinnell has repeatedly failed to appear as required by the subpoena and this court’s show cause order. Further, Pinnell has made no attempt to provide excuses for her nonappearances and noncompliance with the court orders. As such, the court finds Pinnell in contempt.

Full text: Dallas Buyers Club v. Doe, 3:16-cv-00551 (D. Or. Oct. 21, 2016)

In a similar finding:

…LHF personally served Thompson with a Rule 45 subpoena which required Thompson’s appearance at a deposition on August 9, 2016. Thompson failed to appear at the deposition, thus violating a court order. Subsequently, LHF filed a Motion for Order to Show Cause.

            Thompson failed to appear at the show cause hearing and the record shows Thompson has repeatedly failed to appear, in violation of the subpoena and this court’s Order to Show Cause. Further, Thompson has made no attempt to provide an explanation for his nonappearances and noncompliance with the court orders. As such, the court finds Thompson in contempt.

Full text: LHF Productions v. Doe, 3:16-cv-00716 (D. Or. Oct. 21, 2016)

In both cases plaintiffs were awarded costs and fees.

 

Compelled Internet Subscriber Depositions

Of course, in the absence of other evidence of intent, a court would be unable to find contributory infringement liability merely based on a failure to take affirmative steps to prevent infringement, if the device otherwise was capable of substantial noninfringing uses. Such a holding would tread too close to the Sony safe harbor.
         – Justice Souter in Footnote 12, MGM v. Grokster, 545 U.S. 913 (2005).

Piracy and copyright infringing activity that takes place over the Internet is problematic as often all a plaintiff or rights-holder only knows is the IP address used by the infringer. This IP address can lead to a users or subscriber’s account and the ISP may be able to tell the rights-holder who is behind paying the bill. But if the account goes to a house with several occupants, this does not answer the question of who might be the pirate. As Justice Souter made clear, paying the bill, without anything more, is not enough.

The Grokster footnote is often held as a shield for subscribers who do not personally use their internet service for infringing activity such a BitTorrent. But this shield is not as broad or strong as many might believe. Even after Grokster many courts continue to hold that if a party knows of infringing activity and fails to take action, then they are liable. See Perfect 10 v. Google, 508 F.3d 1146, 1171-72; citing A&M Records v. Napster, 239 F.3d 1004, 1021 (9th Cir., 2001)(“Because Napster knew of the availability of infringing music files, assisted users in accessing such files, and failed to block access to such files, we concluded that Napster materially contributed to infringement.”) See also, Religious Technology Center v. Netcom On-Line, 907 F.Supp. 1361, 1365-66 (N.D.Cal.1995)(Liability proper if party knew or should have known of infringing activity and failed to simply cancel account.) There is also the case of extending liability for providing an anonymizing TOR node, even without actual knowledge of any piracy. Dallas Buyers Club v. Huszar, 3:15-0907, (D.Or., April 28, 2016)(“Huszar actively and knowingly provided an unknown number of computer users worldwide with access to his Tor VM.”)

As a practical matter, even if the subscriber is not liable and knew nothing about the piracy through their network, they are still the person that paid the bill and the only one the rights-holder can identify through the IP address. Courts are recognizing this with California being the newest district to begin to compel subscribers who deny liability to appear and share what they know about who may be the infringer.

In several matching opinions, including QOTD Film Investment v. Doe, 3:16-cv-00749 (Oct. 4, 2016) and LHF Productions v. Doe, 3:16-cv-01157 (Sept. 30, 2016) the courts in California are now directing that subscribers who only pay the bill may be compelled to sit for a 1 hour deposition, cautioning plaintiffs:

Questions are limited to establishing the identity of the alleged infringer(s). The deposition is not to be treated as a fishing expedition for information other than the identity of the alleged infringer(s).

But the Courts are also cautioning subscribers:

Plaintiff shall notify the subscriber that ignoring a Court Order, a subpoena seeking the subscriber’s deposition, or a Summons and Complaint may result in sanctions including an award of attorney fees and possibly the entry of a default judgment for money damages.

These new California orders bring California in line with Louisiana (ELargo Holdings v. Doe, 2:16-cv-03144, June 24, 2016) and the well establishing Standing Orders of Oregon. Standing Order 2016-8, automatically granting a two our deposition of all subscribers in any bittorrent case filed, and Standing Order 2016-7, advising parties:

Notwithstanding contrary information available through the Internet, if a subscriber or defendant ignores a Court Order, a subpoena seeking the subscriber’s deposition, or a Summons and Complaint, then plaintiff may ask the Court for relief, including an award of attorney fees, and possibly the entry of a default judgment for money damages.

Accordingly, it is important that subscribers and defendants seek proper legal advice concerning their rights and obligations.

So while paying a bill (and nothing more) may allow a subscriber to escape liability, they can still be compelled to share what they know about who else may have been present and anyone that might have had access to their internet service which was used to commit piracy.

Default Gamble

To default or not to default, that is often a question when facing litigation.  In the realm of online copyright infringement it is no different.   Many attorneys actively advise clients to ignore letters and even complaints with the knowledge that sometimes Judges will only award $750 in damages, with costs and fees totaling only a few thousand dollars.

But the ignore strategy does not always go as planned, such as in the case of Dallas Buyers Club v. Scott. 3:15-cv-00730-AC (D.Or.). Possibly banking on a minimum damages, Scott was surprised to find a $5,000 default judgment entered against him (docket-41) together with a request for $1,800 more in fees. Scott hired an attorney and tried to set aside the default arguing he was never served and did not know about the case. (docket-54)

Defaults are often set aside as a matter of course, and often by agreement.   But in this case Dallas Buyers Club opposed setting aside the default. (docket-62) Scott replied and added the argument that at the time of the infringing activity he was not even living at the address. (docket-65)

In response, the Judge wrote in total:

Document Number: 68(No document attached)
Docket Text:

ORDER: DENYING Defendant’s Motion to Set Aside Default Judgment [54]. “If a default judgment is entered as the result of a defendant’s culpable conduct, however, [the Court] need not consider whether a meritorious defense was shown, or whether the plaintiff would suffer prejudice if the judgment were set aside.” Alan Neuman Prods., Inc. v. Albright, 862 F.2d 1388, 1392 (9th Cir. 1988) (citation omitted). “Defendant’s conduct is culpable if he has received actual or constructive notice of the filing of the action and intentionally failed to answer.” Id. Defendant was aware of potential litigation in October 2014, as he called Plaintiff’s counsel, and he admits to receiving a notice of default in December 2014. I find that he received at least constructive notice and therefore his failure to answer or otherwise defend was culpable conduct. As such, I DENY the Motion to Set Aside the Default Judgment. Defendant’s response to the Motion for Attorney Fees and Costs [44, 43] is due August 22, 2016. Ordered by Chief Judge Michael W. Mosman. (dls)

The Magistrate assigned the case then followed with:

Document Number: 69(No document attached)
Docket Text:

SCHEDULING ORDER by Judge Acosta – In light of the fact that defendant filed a motion to set aside default and default judgment (#54) and that motion being denied by Order (#68), which was filed on 8/2/16, the court still must address plaintiff’s Bill of Costs [43] and Motion for Attorney Fees and Costs[44]. Accordingly, as plaintiff had to prepare further briefing in response to the motion to set aside default and default judgment, plaintiff may, if it deems appropriate, file supplemental briefing in support of it’s motion for attorney fees and bill of costs by 8/22/16. If plaintiff does not intend to supplement it’s motions, counsel for plaintiff is to notify the court no later than 8/12/16. Defendant’s response(s) to plaintiff’s bill of costs and motion for attorney fees are due by 9/6/16. Plaintiff’s Motion for Attorney Fees [44] and Bill of Costs [43] will be taken under advisement by the court as of 9/22/16. (peg)

Taking the hint, the case concludes with a stipulation and judgment for an additional $7,000 in costs and fees against Scott to address the motion to set aside the default.

The result – Gambling on a $750 default resulted in $12,000 in costs, fees and damages.

 

8th Circuit Court of Appeals: Suing an IP address subscriber is reasonable

In the case of Killer Joe Nevada v. Leaverton, Killer Joe Nevada, LLC sued internet subscriber Leigh Leaverton for infringement under the Copyright Act for the download and distribution of the motion picture Killer Joe. When on investigation it appeared Leaverton was only the subscriber who paid for the Internet service and not the infringer, Killer Joe moved to voluntarily dismiss its suit. Leaverton objected and demanded her attorney’s fees. The court dismissed the suit and denied Leaverton’s requests for attorney’s fees.

Leaverton appealed and the key issue on appeal was whether or not it was reasonable for a subscriber to be sued solely for being the party responsible for the internet service used by the infringer and whether the District Court abused its discretion in denying her attorney fees.

As per the Court of Appeals:

[Leaverton] argues that the district court erroneously ruled it was reasonable and not frivolous for Killer Joe Nevada to sue the subscriber for the IP address. Leaverton believes it is unreasonable for a Copyright Act plaintiff to sue the subscriber without first investigating whether the subscriber was responsible for the infringement.
          . . .
Leaverton cites no binding authority that a Copyright Act suit based on the infringer’s IP address is frivolous or unreasonable. The district court thus did not abuse its discretion by concluding that Killer Joe Nevada’s acts were reasonable.
          . . .
…because Killer Joe Nevada promptly dismissed its lawsuit once it learned Leaverton was not the infringer, Killer Joe Nevada had proper motives to sue the subscriber.

If nothing else, this case stands for the principal that providing internet service alone, though it may not make you liable for infringing activity, reasonably exposes you to potential litigation.

Full Text: Killer Joe Nevada v. Leaverton, No. 14-3274, 8th Circuit Court of Appeals, Dec. 4, 2015

Maverick Eye Data Analysis “Sees Through” Dynamic IPs

In a recent case filed on behalf of Glacier Films for infringement of the film American Heist, it is revealed BitTorrent monitor Maverick Eye has developed a system to “see through” dynamically assigned IP addresses allowing the tracking of infringing activity by a single infringer through multiple IP assignments.

As stated in the complaint –

14.  The defendant’s ISP CenturyLink is known to dynamically reassign IP addresses, sometimes assigning an IP address to a party for days, and at other times only for a very short period of time.

15.  Dynamically assigned IP addresses with very short durations may be problematic in identifying a specific infringer as there is only a limited window of data available to the rightsholder in the investigation of the identity of the infringer.

16.  While the identity of the subscriber is readily ascertainable even if only an instant of infringing conduct is observed, limited data creates a greater burden for a rightsholder in using subscriber data to correlate with observed infringer data to identify a specific liable infringing party who acted through the IP address of the subscriber.

17.  To assist in overcoming this issue, plaintiff’s investigator Maverick Eye, UG has developed technology to identify other IP addresses also likely assigned the same subscriber and therefor used by the same defendant.

18.  By expanding the window of known activity associated with a singular defendant across several IP addresses plaintiff is able to use a broader pool of observed activity to assist in identifying the actual infringer and liable party.

The complaint identifies 6 IP addresses all assigned to a single defendant and seeks statutory damages and costs and fees.

 

Copy:  Glacier Films v. Doe 3:15-cv-02016

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)

 

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.

Review calculates statutory damages per infringement via BitTorrent protocol

OHIO – Plaintiff TCYK LCC filed two separate lawsuits against Does 1-47 and 48-98 for allegedly violating copyright laws by downloading and sharing plaintiff’s motion picture, The Company You Keep, via BitTorrent protocol. One of the IP addresses was traced to one Joe Snodgrass and another to one Charles Ghent. Judge Marbley presided over the cases.

In the Snodgrass case, TCYK LLC initially sought $150,000 in statutory damages. Nonetheless, the Court owns the substantial discretion to set the statutory damages within the allowable range, guided by certain variables:

“When determining the proper amount of statutory damages, courts have looked to: (1) whether defendants’ infringement was willful, knowing, or innocent; (2) defendants’ profit from infringement; (3) plaintiffs’ loss from infringement; and (4) deterring future violations by defendants and similarly situated entities.

The facts of this case do not justify plaintiff’s requested award. Although the entry of his default has established a copyright infringement by defendant, it is not necessarily the case that defendant was the original user who made plaintiff’s work available to the public. Moreover, there is no evidence that defendant profited from the infringement. The nature of BitTorrent is such that defendant would not likely have reaped any profit from his participation in the infringement of plaintiff’s copyright except for the amount that defendant saved by illegally downloading the motion picture.”

In both cases, the Court held that an award of $6,000 in statutory damages properly answers for the plaintiff’s loss, the defendant’s gain, and the public’s appeal to deter future copyright violations as “in the vast majority of [cases involving intentional copyright infringement by use of BitTorrent or other file sharing protocols], courts have found damages of no more than $6,500 per infringement to be sufficient compensation for the injured copyright holder.”