Davenport Lyons Reported To Authorities; DigiProtect Insists Its Actions Are Aboveboard

from the the-developing-story dept

It seems things kept getting worse for Davenport Lyons and DigiProtect, who have teamed up to threaten an awful lot of people that they need to pay up to avoid getting sued for file sharing, usually on extremely flimsy evidence. That means, way too often, the letters are received by innocent people who wonder why they should pay £500 to avoid being sued for something they never did. It certainly feels like a good old fashioned protection racket, and a UK consumer group has now complained to the Solicitors Regulatory Authority (SRA) in the UK, noting that a number of innocent folks have been apparently bullied by Davenport Lyons into paying up just to avoid being sued for something they never did. The group points out:

Davenport Lyons' letters to alleged file sharers: make incorrect assertions about the nature of copyright infringement; ignore the evidence presented in defense; and increase the level of compensation claimed over the period of correspondence. In addition, the letters threaten, incorrectly, that failing to properly secure an internet connection is grounds for legal action.

Meanwhile, last month we talked about a clause in DigiProtect's contract that appeared to say that the firm promised to upload the content to various file sharing networks, which certainly looked like they were going to spread the content more widely in order to be able to send out more of these "pre-settlement" letters. Considering DigiProtect promotes its service as helping companies profit from piracy, it wouldn't be surprising to find out that in order to increase profit, it has every incentive to first increase the "piracy." However, the company (who has been rather quiet during all of this) has granted an interview to xbiz where it refutes the arguments that it's uploading content, saying that the terms of the contract were simply necessary to transfer the legal rights to DigiProtect. Of course, if that were true, why not say they transferred the actual copyrights, rather than say they had obtained the rights to make content available, along with listing out the specific file sharing networks. Oddly, DigiProtect then goes on to claim that any online distribution of porn is illegal online due to laws against distributing porn to minors. That seems like a total nonsequitor.

The company doesn't explain the claims from its only named client, Evil Angel, about the fact they were told the pre-settlement letters would be for more like $50. It also refuses to name any other customers, though points out that it works with companies besides porn movie makers, specifically noting that it works with software companies too, but it refused to name any. Perhaps that's because software firms like Atari have backed away from these tactics after all of the negative publicity.

In the end, the whole thing seems pretty questionable. Trying to force people to pay up with threatening, misleading letters with extremely flimsy evidence (which has been barred in some countries) is hardly a reasonable business model. Hopefully, companies think twice before signing up for such a program -- and perhaps the SRA will sanction Davenport Lyons for its participation in this scheme.

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Porn Company Claims DigiProtect Lied About Davenport Lyons Settlement Letter Fees

from the well,-look-at-that... dept

The saga of UK law firm Davenport Lyons, and its ongoing efforts to extract money from people for a promise not to sue them, for copyright infringement continues. The BBC is the latest publication to pick up on the story, noting an awful lot of upset people are pissed off at bogus claims from Davenport Lyons about downloading porn films which they insist they had nothing to do with. Since Atari backed out of its deal with Davenport Lyons following the negative publicity, it seems that the law firm is focusing on its porn clients -- the same ones that apparently encouraged middleman DigiProtect to upload their content widely, to make sure more people were "pirating" it.

But the really interesting claim comes buried at the end of the article. The BBC contacted the porn company, Evil Angel, which hired DigiProtect, to get their thoughts on the negative reaction to the whole campaign, and the guy in charge claims that DigiProtect misrepresented the details to him, and he believed the pre-settlement demands were much lower than the £500 that is in the pre-settlement letter:

"It's not my understanding that they ask for anything near that. I think the amount was $50 or €50. I would be very surprised and I wouldn't be happy because it would mean it was completely misrepresented to me."

Of course, this probably means that Evil Angel is only getting $50 (or maybe even less) per "settlement" leaving somewhere in the range of $700 (depends on the exchange rate) for Davenport Lyons and DigiProtect to split. For doing what? Getting some IP addresses and sending out auto-generated form letters. Nice margins, but sort of proves that these settlements have nothing to do with compensating the content creator.

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Are Copyright Holders Purposely Putting Content On P2P In Order To Demand Money?

from the that's-what-we-call-extortion dept

We've discussed the highly questionable activities of UK law firm Davenport Lyons for its supposed campaigns on behalf of various copyright holders. From what we had seen, the firm wasn't particularly interested in actually protecting content from being shared online -- only in threatening as many people as possible with "pre-settlement letters" to get them to pay up to avoid being sued. This certainly feels like what's commonly called extortion, especially, as it came to light that the pre-settlement letters are being sent to many innocent bystanders. Since this is a business model issue (squeezing individuals to pay up) rather than actually being about protecting copyright, it's no surprise that the pre-settlement letters would be sent as widely as possible, even if there was no actual evidence showing guilt.

However, the situation may be even worse than originally suspected. In an article about Davenport Lyons' latest client, TorrentFreak notes that the copyright holder may be contracting with a company to purposely spreading the content on file sharing networks for the purpose of making it easier to find people to threaten with pre-settlement letters. There are a number of different players involved here, but basically, copyright holders are licensing the copyright on various movies to a firm called DigiProtect. DigiProtect, in turn, hires Davenport Lyons to send out the pre-settlement letters. But in a leaked contract between DigiProtect and one copyright holder, it's made quite clear in the contractual language, that DigiProtect is expected to upload the movies as widely as possible prior to having a law firm send out the pre-settlement letters:

To achieve the purpose outlined in clause 1, LICENSOR grants DIGIPROTECT the exclusive right to make the movies listed in Appendix 1 worldwide available to the public via remote computer networks, so-called peer-2-peer and internet file sharing networks such as e-Donkey, Kazaa, Bitorrent, etc. for the duration of this agreement

In other words, it's quite clear that this has nothing to do with preventing content from getting on file sharing networks. Instead, they're specifically putting it there themselves, apparently hoping to get it as widespread as possible, in order to send out the threat letters more widely, so they can collect on the "settlements" from people scared that they're about to get sued. It's hard to see how that's not a massive abuse of copyright law.

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Company Wants To Patent Automated Pay-Up-Or-We-Sue Pre-Settlement Letters For File Sharing

from the by-a-cigarette-company? dept

Well, well, well. The latest story about a "solution" to the "problem" of piracy has an interesting twist to it. A company named Nexicon, claims that it's about to launch an automated piracy tracker/payment collector. It says that it's able to watch various file sharing systems, tracking who's sharing and downloading unauthorized files -- and then sends them an automated letter demanding they pay up, including a "convenient" one-click payment system where you can settle up via your credit card or PayPal. Even better, the company claims that it's trying to patent this method, which is hardly new or unique (and, you have to wonder if Nexicon is paying Amazon a license for using "one-click" payments -- as the company even seems to brag that it copied Amazon's one-click solution).

There are plenty of questions raised by this. First, if it's actually put into use as described, it would be the first time we see the industry attempting to target downloaders as opposed to uploaders. All of the various lawsuits and pre-settlement letters have always targeted those who share the unauthorized content. But the article claims this will go after downloaders (though, it's not entirely clear how they'll know who actually downloads the file). Then, of course, there's the whole extortion question of demanding payment to avoid a lawsuit -- especially when the actual evidence may be rather flimsy.

As for the patent application (which a casual search did not turn up), it's hard to see how copying the same strategy that's been used for years by the recording industry, merged with the already-questionably-patented Amazon 1-click method is somehow patentable.

Oh yeah, there are also some questions about Nexicon itself. Just last week the company announced a deal with YouTube to provide some audio fingerprinting technology -- at which point Wired pointed out the rather bizarre history of Nexicon. It started out as an online cigarette seller, that got sued for taking orders from kids, falsely advertising cigarettes as being tax-free and then (not surprisingly) failing to report taxes. Then there were the problems with the SEC over not filing its tax returns on time as well as questionable activities in some sort of reverse stock swap merger. Oh, and did we mention at one point the company was going to be a portal? These are the folks who are going to be popping up automated messages demanding you pay up for downloading a Frank Zappa tune?

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Scammers Copying Big Copyright Extortion Tactics

from the learn-from-the-best dept

It really was only a matter of time. For a while now, the entertainment industry has been using borderline extortion tactics with "pre-settlement" letters that promise individuals they won't get sued if only they pay a fee upfront -- ranging from a few hundred dollars to a few thousand. These letters have proven to be incredibly effective in getting people to simply pay up, so it's no surprise that other scammers have started copying the technique as well. Right now it sounds like they're simply calling people, but it's really only a matter of time until they start sending nearly identical "pre-settlement" letters on threatening letterhead, and getting folks to pay up as well. Of course, given the extremely flimsy nature of the evidence often used by the entertainment industry in sending out those letters, we'll once again note the very fine line between what these supposedly legitimate companies are doing and the out-and-out scammers are doing.

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