Pirate Queen of the Desert: Injunction and $10,500 judgment

In an action for the bittorrent download and distribution of their film Queen of the Desert, QOTD Film Investment has obtained an injunction together with a judgment for $10,500 for damages, costs and fees in the California federal court.

Copy of the Judgment: 3-16-cv-00749-DMS-AGS_Judgment_Order

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.

 

Canada’s Anti-Piracy Laws Prompting Positive Change

New Notice-and-Notice Regime in the Canadian Context

In 2012, the Government of Canada enacted several new copyright laws aimed at fighting copyright piracy.  A key change was the “notice-and-notice” system, which formally came into force in January 2015 through amendments to the Copyright Act.

The Government designed the notice-and-notice system to discourage online copyright infringement.  The relevant provisions now present in the Copyright Act require Internet Service Providers (“ISPs”) to take action upon receiving notification of alleged copyright infringement from a copyright owner.  Upon receiving such a notice, ISPs are required forward the notice to users whose IP address  has been identified as the source of the alleged infringement. The system also imposes specific requirements for the contents of notices and record keeping.

Since the notice-and-notice system came into force in January 2015, it has been reported that piracy rates among Canadians have actually dropped. While some critics have remained stubbornly reticent to accept the new system, evidence continues to gather in support of its efficacy.

University of Manitoba Students Received 6000+ Notices

A recent story reported by Canada’s national news broadcaster, the CBC, is a perfect example.  Thousands of students at the University of Manitoba received copyright infringement notices forwarded from copyright owners.  The notices related to piracy of textbooks, television shows, music and movies. The University of Manitoba forwarded over 6,000 notices.

This number not only reveals an alarming trend pervasive on Canadian university campuses, it is also indicative of a broader trend in Canadian culture. One prominent copyright enforcement company reported that it sent more than 6 million notices just last year.

These numbers demonstrate that casual copyright piracy has become commonplace and copyright users have become numb to the consequences.  At the same time, the negative effects of widespread piracy are not only felt by individual copyright owners, but by creative industries as a whole.  This year the Government of Canada published the results of a questionnaire conducted as part of  nationwide consultation on “Canadian Content in the Digital Age”.  Responses indicated that most stakeholders considered “creator remuneration” to be the most urgent challenge facing Canadian media industries today.  Likewise, most considered “consumer expectations of free/low cost content” to be the most urgent barrier to Canadian media industries’ success in the future.

As situations such as that reported at the University of Manitoba continue to come to light, it becomes increasingly clear that the notice-and-notice system is prompting positive change.  The system is potentially disrupting the culture of casual copyright piracy that has developed in Canada in the digital age by bringing the problem into the public discourse.  Rights holders not only finally have an new tool to enforce their rights, but more importantly they now have the ability to remind consumers that illegal downloading is, in fact, illegal.

TCYK Case To Proceed in UK; Lawdit Billing Questioned

Defendant’s motion to strike out TCYK’s Claim for Bittorrent downloading denied, Judge ruled for the Claim to proceed to be argued in Court, and summoned Defendant to file their defence.

TCYK LLC brought claims against a wide array of individuals for infringing their copyrights by downloading their motion picture, The Company You Keep. The Defendant of the first case brought to Court, Michael Coyle of Lawdit Solicitors, filed an Application to strike out the Claim out of court, and deemed TCYK’s activities as “speculative invoicing”. The Judge however ended up questioning Mr Coyle on their invoicing.

As part of the Application to strike out the Claimant’s Claim out, Lawdit Solicitors submitted a Statement of Costs for £12,387. However, as the Judge pointed out, Lawdit Solicitors openly advertise their legal services for copyright infringement cases for the sum of £90. Michael Coyle explained that the firm has been funding their efforts against TCYK LLC from donations, yet they were still looking to ‘double dip’. After further questions, the Judge enquired if Mr. Coyle’s client was going to pay the £12,387 cost if the application got was denied. To this, Mr. Coyle failed to answer.

As much as one must appreciate the charitable legal work, be that volunteering or the use solicit of donations to cover costs, we would even should not look past the fact that Lawdit Solicitors are representing pirates, who illegally download content – more simplistically or more simply put, steal films. Nevertheless, one might find it rather ironic that their method of invoicing is being questioned in Court. It is also alarming, that while the service is publically advertised for £90, they are claiming £12,387 in fees. One might therefore wonder if the donations Lawdit has obtained would be handed over to their clients in any assessment of costs should they lose.

We must applaud Lawdit Solicitors for their clever business model. They raise money from donations, only ask for £90 from their clients, however yet claim £12,387 from their opponent. Should they lose, the cost will not be charged to the client – even though there is no legal agreement between Lawdit and their clients in this matter, as Mr. Coyle stated in Court. We would not, however, go as far as to call their invoicing methods speculative, although they are questionable at best.

 

Judge Orders Defendant To Stop All Piracy

Judge Anna J. Brown recently ordered a Defendant to stop all use of “BitTorrent or the Internet for copying or downloading content in violation of U.S. copyright law.” Other findings included the defendant, “willful, intentional, and in disregard of and indifference to Plaintiff’s rights, and such conduct caused harm to Plaintiff and deprived Plaintiff of income.”

In addition to the order and injunction, the Judge also awarded the Plaintiff $7,500 “to compensate the Plaintiff and to provide notice to others as a deterrent.”

Case: PTG Nevada v. Wilson, 3:15-cv-2017-BR (D.Or. Sept. 15, 2016).

3:15-cv-2017-BR Order and Judgment

Malibu Media Litigation Program: “Exactly” What The Copyright Act Is For

In a recent podcast, Anandashankar Mazumdar, the legal editor of BNA’s Patent, Trademark & Copyright Journal notes:

“The Copyright act is intended to give creators legally enforceable rights, now Malibu Media is doing exactly what the copyright act seems to contemplate they will do. They will create works, sell them and distribute them and if somebody infringes their right they will go to court and make them stop.”

The full audio of the Aug 15, 2016 CODE & CONDUIT Podcast:

 

$10,000 Judgment for Downloading in Louisiana

Plaintiff ELargo Holdings, owner of the motion picture Close Range (IMDB) has obtained a $10,000 judgment against a BitTorrent infringer, together with a permanent injunction against their use of BitTorrent in violation of U.S. copyright law.

The case is ELargo Holdings, LLC v. Doe-104.5.232.186, E.D.LA. 2:16-cv-02867

For a copy of the judgment and permanent injunction: 2:16-cv-02867 Judgment and Order

$35,000 Awarded In Pair of BitTorrent Cases

In a pair of case the Federal Courts has awarded over $35,000 for the download of the motion picture The Cobbler. Both cases were defaults, with the defendants ignoring the proceedings.

Costs and fees added to the award, brings the final sums the defendants will have to pay to $17,437 ($15,000 in statutory damages, $1,950 in attorney fees, and $487 in costs) in the case of Cobbler Nevada v. Jokic, 8:15-cv-2653-T-27TBM, and $18,382 ($15,000 in statutory damages, $2,895 in attorney fees and $487 in costs) in the case of Cobbler Nevada v. Woodward, 8:15-cv-2652-T-33AEP.

As noted by one judge:

Given the widespread practice of illegally downloading movies online, it is likely others besides Woodard will download The Cobbler. Accordingly, damages should be sufficiently high to deter third-party infringement. See Clever Covers, Inc. v. Sw. Fla. Storm Def., LLC, 554 F. Supp. 2d 1303, 1306 (M.D. Fla. 2008) (awarding

$31,000 in statutory damages for each copyright infringed). Statutory damages may be calculated to deter future unlawful conduct. See St. Luke’s Cataract & Laser Inst., P.A. v. Sanderson, 573 F.3d 1186, 1205 (11th Cir. 2009) (in calculating damages for willful infringement “deterrence of future violations is a legitimate consideration”) (internal citations omitted). …

* * *

After weighing the applicable factors, this court finds statutory damages of $15,000 is appropriate and is awarded against Woodard in favor of Cobbler Nevada. Id. (awarding $25,000 in statutory damages for using BitTorrent to infringe on a motion picture copyright).

– Cobbler Nevada v. Woodward, 8:15-cv-2652-T-33AEP

The relevant opinions and awards:

15-cv-2653-T-27TBM-Judgment $17,437

15-cv-2653-T-27TBM-Opinion

15-cv-2652-T-33AEP-Judgment $18,382

15-cv-2652-T-33AEP-Opinion

Malibu Media v. Tashiro, et al. : $21,000 Damages, $199,000 In Costs And Fees

The long running case of Malibu Media v. Tashiro is one step closer to being closed today with Malibu Media being awarded $199,040.53 in costs and fees. Previously Malibu Media was awarded $21,000 in damages.

The case involves the BitTorrent download of 28 Malibu Media films. After long denying any involvement, the Tashio’s were revealed to have committed perjury and spoliation, the destruction of evidence. As per the Findings and Recommendations:

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.

May, 18, 2015 Findings and Recommendations.

The Court then entered a default judgment in favor of Malibu Media in the amount of $21,000 on November 24, 2015.

After significant further briefing and opposition by the Tashiro’s, on August 2, 2016, the Court went on to award Malibu Media and additional $199,040.53 in costs and fees.

The relevant documents:

13-cv-00205 Malibu Media v. Tashiro Sanctions Order

13-cv-00205 Malibu Media v. Tashiro $21,000 Judgment

13-cv-00205 Malibu Media v. Tashiro $199,040.53 Fee Award