There have been plenty of legal questions
over the activities of a small group of companies in Europe, including law firm Davenport Lyons, ACS:Law, Logistep and Digiprotect among others -- who all seem to work together to purposely put files online
that they have licensed, and then send threat letters to the owner of any IP address that connects to them. This leads to a fair number of totally bogus
demands for people to pay up to avoid getting sued. Apparently, the business is quite profitable
, even as no actual lawsuits have been filed.
Yet, now reader Dan alerts us to the news that, at least in Germany, the pre-settlement letters and relationships between these companies may be entirely illegal
. This was discovered due to a recently leaked document -- the one that showed how profitable all this was -- which also noted that the relationships between the various companies were not based on any direct monetary exchange:
The document states that "the whole project is kind of a joint venture where no party charges the other party with any costs." The problem with such a set-up is that the pre-settlement offers are usually based on costs incurred by retaining a law office to pursue the claim. File sharers are asked to pay 450 bucks for a porn movie because it costs money to investigate their IP address and send them the cease and desist letter.
However, German law specifically states that these costs can't be based on the success of the claim. In other words: In order to invoice file sharers for lawyer fees, these fees have to occur and be paid by someone no matter whether a file sharer pays up or not. Invoicing someone for costs that haven't actually occurred could be seen as fraud.
Oops. After a German lawyer, Thomas Stadler, reviewed all this and posted his analysis saying that the efforts in Germany were clearly illegal under German law
(Google translation from the original
) , the German lawyer who had sent the original document (the leaked one, detailing how these operations worked), Udo Kornmeier sent him a cease-and-desist letter
(again, Google translation from the original
), demanding he take down his blog post that showed the whole operation was illegal. Apparently, lawyers who may be breaking the law in Germany don't like other lawyers exposing them...