Extortion-Like Mass Automated Copyright Lawsuits Come To The US: 20,000 Filed, 30,000 More On The Way

from the this-is-not-how-the-legal-system-is-supposed-to-work dept

Uh oh. It appears that a group of independent filmmakers don't seem to recognize the kind of backlash they can receive for going to war against file sharers. It appears that a company, ridiculously named the US Copyright Group, has signed up a bunch of independent filmmakers, with the unofficial backing of Independent Film & Television Alliance, to follow in the footsteps of the disastrous European automated copyright infringement threat letter campaign, and have already gone after 20,000 alleged file sharers with another 30,000 about to follow. Five specific lawsuits have been filed, listing the 20,000 IP addresses accused of infringement.

We've covered the shenanigans of companies like DigiProtect, Davenport Lyons and ACS:Law over in Europe for a while, where they monitor BitTorrent activity and then send out tens of thousands of "pre-settlement" threat letters, demanding payment to avoid a lawsuit. Of course, with such a machine gun approach, a ton of totally innocent people are sent such letters demanding payment. This practice has been condemned by politicians, consumer advocates, lawyers, ISPs and even (believe it or not) the recording industry. Some of the lawyers involved in these programs have been referred for disciplinary action and some involved in this practice have been barred from practicing law.

And yet, apparently these letters are really lucrative. Many people just pay up to avoid any lawsuit -- and many of the companies in the space pitch this not as a way to "stop file sharing" but as a way to "monetize file sharing." In fact, with at least some companies in the space, they're seeding the content themselves -- despite the fact that this raises all sorts of questions over whether or not this is "authorized."

For a while, we've wondered why such practices have stayed in Europe, and assumed that perhaps those in the US had looked at the disastrous PR results of the RIAA's lawsuit campaign. Or, maybe, seen how well-known companies quickly backed out of such schemes after the negative publicity of mass threat letters. These days, most of these threats seem to come from porn providers and small software firms.

However, with this new campaign in the US, it looks like the lawyers involved (built off a program in Germany) have signed up a bunch of independent film producers. The full story, by Eriq Gardner at THREsq, has plenty of details. Apparently, the lawyers sought to get the support of both the IFTA and the MPAA, and got some sort of unofficial support:
Before doing so, however, Dunlap talked with the IFTA, which wouldn't explicitly endorse the litigation, but which agreed to be generally supportive. Dunlap also talked with the MPAA and other big studios, which expressed interest but wanted to see proof that ISPs would be cooperative. And so, in the past few weeks on behalf of some low-key indie films, the first lawsuits were filed.
Of course, those involved are also touting this as a "revenue stream" and "monetizing the equivalent of an alternative distribution channel." That's a really stunning statement when you think about it. While I'm sure some independent filmmakers are happy to get some money, this is a scorched earth method of getting paid. This is putting a gun to people, based on little evidence, and forcing them to pay up.

That's not how you build a business. That's not how you build up fans. It's certainly not going to build up any loyalty.

Gardner's article highlights three risks with this plan: the PR disaster potential, the legal questions over IP addresses as evidence as well as whether or not a BitTorrent fragment really is infringement, and ISPs' general unwillingness to hand over names without a lawsuit filed:
To get past ISPs, a copyright holder needs to file a "John Doe" case and get a court to issue a subpoena that orders the ISP to hand over information. This can be costly. According to Dunlap, ISPs are charging $32 to $60 for each IP address account requested. ISPs cite the cost of notifying the account holder and giving them opportunity to file a motion to quash the subpoena.

When the U.S. Copyright Group filed its recent lawsuits and approached AT&T and other ISPs for account information, the lawyers say they were stunned at the reaction. "Their subpoena compliance group said, 'We thought we had shut this (approach) down with the MPAA before,'" says Dunlap.

The difference between the MPAA's past approach and the new one being offered by the US Copyright Group could come down to numbers. Weaver says the MPAA took a less targeted approach going after a smaller sampling of infringers in a single suit for multiple films, to send a message that would hopefully resonate to a much larger crowd. In contrast, Dunlap and his partners are using the new monitoring technology to go after tens of thousands of infringers at a time on a contingency basis in hopes of coming up with the right cost-benefit incentive to pursue individual pirates.
He then noted that one ISP (unnamed, unfortunately) has cooperated and just handed over 71 names, all of whom were sent "settlement offers." The other ISPs, who fought this in the past, are apparently trying to fight it here as well. Hopefully the courts shut down such a blatant machine gun approach quickly.

But the bigger issue, really, is that anyone thinks this sort of move makes business sense. We've been seeing more and more independent filmmakers embracing smart new business models that involve building a loyal fan base and giving them a real reason to buy. We've seen independent filmmakers embracing file sharing to their own advantage, building up huge and loyal followings, and then figuring out how to sell them something valuable and scarce. To see a bunch of independent filmmakers now go down this extortion-like path instead is really disheartening.

Filed Under: copyright, file sharers
Companies: us copyright group

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  1. identicon
    cc, 30 Mar 2010 @ 2:21pm

    new worm

    why haven't any of them commissioned a hacker to make a worm to send automated lawsuits out to everyone? imagine how much more effective that'd be at making money than regular spam.

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