Category Archives: Copyright Infringement Cases

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

 

 

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.

A case where a motion for default is granted in part & denied in part

Riding Films Inc. (Plaintiff) Versus 129-193 John Does (Defendants)

In determining whether to enter judgment by default, courts often consider the following factors:

• the amount of money potentially involved;
• whether material issues of fact or issues of substantial public importance are at issue;
• whether the default is largely technical;
• whether plaintiff has been substantially prejudiced by the delay involved;
• and whether the grounds for default are clearly established or are in doubt.

The court may also consider;

• how harsh an effect of a default judgment might have
• or whether the default was caused by a good faith mistake or by excusable or inexcusable neglect on the part of the defendant

Defaulting defendant – considered to have admitted all the well-pleaded allegations relating to the liability. To succeed in this case,

Plaintiff must prove valid ownership of the motion picture copyright.

Defendant must be proven to have violated on or more of plaintiff’s exclusive rights (e.g. by copying and distributing plaintiffs copyrighted movie picture without authorization).

However, only within court’s discretion will the default judgment be granted and not through mere determination of the liability of the defendant.

In the Dawn Rider case, the factors militate in granting default judgment’s favour. Recommendation for the plaintiff’s motion for default judgment be granted in part and denied in part. The defendant James McLean;

Permanently Enjoined

– from directly or indirectly infringing plaintiff’s copyrighted works

Ordered

– to destroy all copies of Dawn Rider from his hard drive to any physical device in his possession where he may have transferred it to

Read the full report below:

Report & Recommendation on Mtn. for Default against J. Mclean

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.”

Motion for Default Filed for “The Company You Keep” Copyright Infringement

Failure to respond is almost always the reason behind a default judgment in courts, and this is exactly what happened to Richard Williams when TCYK, LLC filed a motion for default against him for downloading and sharing the motion picture, The Company You Keep, via BitTorrent.

Although 20 defendants were caught downloading the said movie at a specific time and date, Williams was filed with a motion for default for failing to plead or defend as required by law.

REPORT AND RECOMMENDATION

Part of the Report and Recommendation file dated January 8, 2015 says: “Plaintiff seeks $150,000 in statutory damages, $5,101.25 in attorneys’ fees, and $405.01 in costs; Plaintiff also asks that the Court permanently enjoin defendant Williams from infringing, directly or indirectly, Plaintiff’s copyrighted works.”

STATUTORY DAMAGES

The Plaintiff sought damages because “defendant’s conduct was wilful, because a maximum award will deter others, and because Plaintiff and the motion picture industry have suffered real and significant harm.” However, the court still had to determine the proper amount of statutory damages according to different factors.

THE COURT’S CONCLUSION

As a conclusion, the Plaintiff sought a permanent injunction that would “prohibit defendant’s use of the internet to reproduce or distribute Plaintiff’s motion pictures without license or express permission,” as well as to destroy all copies of The Company You Keep downloaded motion picture “onto any computer hard drive or server or transferred onto any physical medium or device in defendant’s possession, custody, or control.” The United States District Court of Ohio (Southern District) also concludes that aside from the statutory damages, the “Plaintiff is entitled to attorneys’ fees and costs, pursuant to 17 U.S.C. § 505, in the total amount of $1,905.01.”