Should There Be Punishment For Bogus 'Pre-Settlement' Letters?

from the one-would-hope dept

We've recently seen efforts to ramp up the system of "pre-settlement" letters as a way to "profit" off of file sharing. The scheme works by having a company that either holds the copyrights to certain works or has merely licensed them for this purpose put those files online and then see who is downloading them. That's the simplest version (though, of questionable legality since if the copyright holder itself is putting the content online, you can raise questions about whether or not the sharing is really unauthorized). Some others in the space don't actually put their content online themselves, but try to find IP addresses of those who are sharing the content, and then sending those users "pre-settlement" letters, in the hopes that many people just pay up, rather than fighting the letters (or, more likely, ignoring them).

Of course, one of the big problems with such a system is that those sending such letters have very little incentive (if any) to actually verify that unauthorized file sharing has happened. They want to cast as wide a net as possible and send out as many letters as possible to as many people as possible. It's a pure numbers game. And, for that reason, plenty of false positives are identified. Now, plenty of people reasonably point out that IP addresses are not indicative of individuals, and there are problems with relying solely on IP addresses -- but those problems become even bigger when you're dealing with folks who don't understand how BitTorrent actually works. That activity leads to claims of copyright infringement by networked laser printers.

Over at Freedom to Tinker, computer science professor Mike Freedman discusses how the popular CoralCDN has been getting hundreds of pre-settlement letters because one of these companies doesn't seem to do even the slightest verification of whether or not an IP address is actually involved in sharing content, and misinterprets the data it has received (despite the self-supported claim that "The information in this notification is accurate"). Of course, since the "punishment" for such things is slight to non-existent, the company in question (in this case, "Video Protection Alliance") has no incentive to improve its process. But it presents a real cost to Freedman, who helps run CoralCDN:
Our personal experience with DMCA takedown notices is that network operators are suitably afraid of litigation. Many will pull network access from machines as soon as a complaint is received, without any further verification or demonstrative network logs. In fact, many operators also sought "proof" that we weren't running BitTorrent or engaging in file sharing before they were willing to restore access. We'll leave the discussion about how we might prove such a negative to another day, but one can point to the chilling effect that such notices have had, when users are immediately considered guilty and must prove their innocence.
At some point, shouldn't we start to consider serious sanctions against those issuing not just bogus DMCA takedown notices, but then also using such notices to demand "pre-settlement" payments from individuals who may not realize their legal rights and may just pay up?


Reader Comments (rss)

(Flattened / Threaded)

  1.  
    identicon
    Anonymous Coward, Dec 1st, 2009 @ 5:38am

    CoralCDN might find themselves facing an issue, if they are allowing end users to use their service to distribute pirated wares. They are the "end of the line" as far as IP tracing would go, leaving them on the hook.

    They can send the letters back and jump up and down screaming "230! 230!" but that would just give the legal people a whole bunch more fun stuff to work from. If you have enough notices to the same place, it would be pretty easy to show in court that you might need to get user information to get to the bottom of the situation.

    The letter people are unlikely to go to that level, but certainly you do have to admit that they are sending letters to the right place for the moment. They could always pass CoralCDN's replies off to a more in depth team who might want to work it down to individual users.

     

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  2.  
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    Richard (profile), Dec 1st, 2009 @ 5:50am

    Scotland

    In Scotland a judge decided that private car park clamping constituted extortion - and more or less banned the practice.

    I guess a Scottish judge would probably take the same attitude to this scam (and it IS nothing but a scam).

    There are penalties for extortion.

     

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  3.  
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    Amoron N. A'Hurry, Dec 1st, 2009 @ 6:34am

    Penalty

    How about...

    If you send out a fraudlent letter, that does not have legitimate inforation that can be verified, the person who received the letter can:

    1) Turn a copy over to the local authorities to prosecute as fraud, exhortion, racketeering and postal fraud (assuming it was sent thru the mail)

    2) Sue civially for defamation of character and libel

    3) If proved incorrect, they must publish public apologies in all major newspapers in their area and in the area where the victim lives

    4) And... they lose a finger.

     

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  4.  
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    Anonymous Coward, Dec 1st, 2009 @ 6:38am

    I really hate it when these companies put out files they own on share sites then pounce on people that download it. If these jerks put out a couch at the curb in front of their house then jumped out and started handing "pre-settlement" letters to people who came to take the couch the judge with smash their heads in with a gavel.

     

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  5.  
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    choirkurt (profile), Dec 1st, 2009 @ 6:39am

    Re: Penalty

    I would add:

    5) The attorny of record for the notice is disbarred.

     

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  6.  
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    :Lobo Santo (profile), Dec 1st, 2009 @ 6:45am

    Unrelated:

    Hey Mike, don't let the shills get to you. Lots of us are glad you're here.

    Related:
    Wouldn't the present set of 'Fraud' laws cover it?
    You know, attempting to defraud monetary (blah blah etc)...?

     

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  7.  
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    Anonymous Coward, Dec 1st, 2009 @ 6:57am

    Death

    That way there are no repeat offenders.

     

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  8.  
    identicon
    Anonymous Coward, Dec 1st, 2009 @ 7:18am

    YES and very strict - Heavy Fines PLUS loss of your business licenses after three times, disbarment of ALL lawyers involved.

    Fishing expeditions should not be tolerated.

     

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  9.  
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    robin, Dec 1st, 2009 @ 7:35am

    Re: shill

    "...but certainly you do have to admit that they are sending letters to the right place for the moment."

    if you had rtfa, you know that that statement is clearly and simply a lie:

    "...For whatever reason, some publisher started including a Coralized URL for the tracker's location,..."

    i do have to admit though to admiring the gall of some people and their delight in out-n-out lying. you may continue.....

     

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  10.  
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    Anonymous Coward, Dec 1st, 2009 @ 8:00am

    Should There Be Punishment For Bogus 'Pre-Settlement' Letters?

    YES!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

     

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  11.  
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    Mike Masnick (profile), Dec 1st, 2009 @ 8:04am

    Re:

    CoralCDN might find themselves facing an issue, if they are allowing end users to use their service to distribute pirated wares

    I would suggest reading the article. That's simply not true.

    They are the "end of the line" as far as IP tracing would go, leaving them on the hook.


    Again, reading the article would go a long way towards actually knowing what you are talking about.

    They can send the letters back and jump up and down screaming "230! 230!" but that would just give the legal people a whole bunch more fun stuff to work from.

    I mentioned this to you last week, so I'm not sure why you keep confusing it, but Section 230 has nothing to do with copyright.

    Even so, this is not an issue of safe harbors or the DMCA. Again, reading the article might help. This is a case of simply not understanding the technology.

    If you have enough notices to the same place, it would be pretty easy to show in court that you might need to get user information to get to the bottom of the situation.

    Yes, but if all those notices are misdirected because someone doesn't understand the basic technology, then it's not just useless, but it's outright fraud.

    Once again, it might help if you read the underlying article to understand the technological issues.

    The letter people are unlikely to go to that level, but certainly you do have to admit that they are sending letters to the right place for the moment.

    Other than the fact that you are 100% wrong.

    They could always pass CoralCDN's replies off to a more in depth team who might want to work it down to individual users.

    Again, reading the article is a good place to start. I recognize that you get a certain level of glee in trying to rebut every post, but when your responses display this level of ignorance, you are making a fool of yourself.

     

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  12.  
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    fogbugzd (profile), Dec 1st, 2009 @ 8:24am

    Should address the bigger problem

    This isn't strictly a case of copyfraud because in this case they do have copyright. However, it seems that if this is tolerated, the next logical step is to not bother with uploading a file, and to simply send letters to people who have any files shared. If anyone makes a fuss, the case won't be prosecuted. If the letter is sufficiently intimidating, it will probably get enough people to pay up to make the scheme profitable.

     

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  13.  
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    Thomas (profile), Dec 1st, 2009 @ 8:28am

    From a book...

    In the Godfather series, Don Corleone said (not sure if I have the wording right) "one lawyer can steal more than 10 men with guns."

     

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  14.  
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    ChurchHatesTucker (profile), Dec 1st, 2009 @ 8:46am

    Re: Should address the bigger problem

    "However, it seems that if this is tolerated, the next logical step is to not bother with uploading a file, and to simply send letters to people who have any files shared. If anyone makes a fuss, the case won't be prosecuted. "

    They're already doing that.

     

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  15.  
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    Rekrul, Dec 1st, 2009 @ 3:04pm

    At some point, shouldn't we start to consider serious sanctions against those issuing not just bogus DMCA takedown notices, but then also using such notices to demand "pre-settlement" payments from individuals who may not realize their legal rights and may just pay up?

    And who is going to impose these sanctions? To have any power, they'd have to be part of the law, but the only copyright related laws that get passed are the ones the content industry pays for. Why would they want a law that could be used against them?

     

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  16.  
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    Tank, Dec 1st, 2009 @ 6:27pm

    Consumer Fraud??

    I would like to think i have a decent grasp of both the article and th technology involved so please rebut in the comments if you do not agree. It would appear that this practice could be argued in a courtroom as a 419 scam and possibly prosecuted as such since they operate under nearly the same principle. True 419 scammers use illegally purchased databases of emails and domains to randomly blast emails with/from, but do they not seemingly operate the same in theory, hence arguable in court?

     

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  17.  
    identicon
    Rick Sarvas, Dec 1st, 2009 @ 6:51pm

    -

    This isn't strictly a case of copyfraud because in this case they do have copyright. However, it seems that if this is tolerated, the next logical step is to not bother with uploading a file, and to simply send letters to people who have any files shared. If anyone makes a fuss, the case won't be prosecuted. If the letter is sufficiently intimidating, it will probably get enough people to pay up to make the scheme profitable.

    Why stop there? Why not create a series of web pages that contain specific keywords for a number of major software products along with keywords like crack, serial, keygen, reg code, etc. If you do it right, and those pages eventually get established in the various search engine listings, you could then send threat letters demanding a quick settlement to the various IP addressees that hit those same pages when refereed from various search engines with searches such as "adobe photoshop keygen".

    ...Bonus points for threatening to sue on behalf of a "client" in Marshall Texas.

     

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  18.  
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    Paul, Dec 2nd, 2009 @ 2:45am

    DMCA

    1st, regarding the copyright holder/licensee placing materials in the system:

    a. It may result in waiver via the first sale doctrine. It would be interesting for someone to trace the IP address for the uplink if possible (sorry I am obviously not BitT knowledgeable).

    b. DMCA Section 1202(a) makes the following illegal:

    "Sec. 1202. Integrity of copyright management information

    `(a) FALSE COPYRIGHT MANAGEMENT INFORMATION- No person shall knowingly and with the intent to induce, enable, facilitate, or conceal infringement--

    `(1) provide copyright management information that is false, or

    `(2) distribute or import for distribution copyright management information that is false"


    Also, by uploading the data in the first place they may be violating the DMCA themselves under the plane reading of 1201(a) and (b). If so, then they are subject to criminal sanction. THus, if you can catch the person uploading it, their only defense would be to say it was authorized which then would seem to make the first sale doctrine applicable. Either that or it was outright fraud.

    DMCA Sec. 1204. Criminal offenses and penalties
    `(a) IN GENERAL- Any person who violates section 1201 or 1202 willfully and for purposes of commercial advantage or private financial gain--
    `(1) shall be fined not more than $500,000 or imprisoned for not more than 5 years, or both, for the first offense; and
    `(2) shall be fined not more than $1,000,000 or imprisoned for not more than 10 years, or both, for any subsequent offense


    About False DMCA letters:

    17 USC Sec. 512
    (f) MISREPRESENTATIONS- Any person who knowingly materially misrepresents under this section--
    `(1) that material or activity is infringing, or
    `(2) that material or activity was removed or disabled by mistake or misidentification,
    shall be liable for any damages, including costs and attorneys' fees, incurred by the alleged infringer, by any copyright owner or copyright owner's authorized licensee, or by a service provider, who is injured by such misrepresentation, as the result of the service provider relying upon such misrepresentation in removing or disabling access to the material or activity claimed to be infringing, or in replacing the removed material or ceasing to disable access to it.

     

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  19.  
    identicon
    Mark Schmidt, Dec 2nd, 2009 @ 2:17pm

    Nexicon....the Video Protection Alliance data provider

    Its worth pointing out that Video Protection Alliance uses an anti-piracy company called Nexicon http://www.nexiconinc.com to collect data. Some recent articles from Torrentfreak:



    - http://torrentfreak.com/automated-legal-threats-turn-piracy-into-profit-090628/

    - http://torrentfreak.com/tag/video-protection-alliance/



    Looks like the founder/cto is this Tommy Stiansen guy:

    - http://ww.nexiconinc.com/corpblog

     

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  20.  
    identicon
    Andreas, Dec 5th, 2009 @ 5:38am

    Hey, be glad. In Germany Universal Music for instance let' s it contractor proMedia GmbH send out those letters to John Does, if they downloaded just one Album. They usually ask for 1200 Euro for the past infringment and 5001 Euro for every other.

     

    reply to this | link to this | view in thread ]


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