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?
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Filed Under: bittorrent, copyright, dmca, pre-settlement

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


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

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

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