Film Company That's Sued Thousands Might Not Even Own Rights To Film It's Suing Over

from the now-that's-how-it's-done dept

Wired has a “big” story up covering how various indie filmmakers seem to be jumping on the “sue downloaders as a business model,” bandwagon. It notes that for some filmmakers, these legal shakedowns are becoming the business model of choice:

Welcome to the future of Hollywood, or at least the less glittery outskirts of Tinsel Town that produce art films, exploitation flicks and porn. Over the past year, small-budget film producers have nearly perfected a slick, courtroom-based business strategy that?s targeted more than 130,000 suspected movie downloaders.

As the article notes, this is wholly different from the RIAA’s multi-year lawsuit strategy (which was a big money loser), which was supposed to be about deterrent. These new lawsuits are all about squeezing people for cash. Of course, if you read Techdirt, there’s not much new there. But it is a nice piece bringing a bunch of these stories together.

But here is something new. Over at THREsq, Eriq Gardner picks up on the Wired story, and notes that the main example used by Wired reporter David Kravets, the B-movie Nude Nuns With Big Guns — which Camelot Distribution Group has used to sue 5,865 alleged downloaders, claiming they’re owed $880 million dollars — may be even more ridiculous than some of the others. That’s because Camelot is being sued by Incentive Capital for “breach of contract and fraud” in relation to a $650,000 loan that was given to Camelot to acquire the rights to various films, including Nude Nuns With Big Guns. Since Camelot failed to live up to its payment requirements, Incentive foreclosed on the film — to which “no objection was made.” So, technically, it appears that Camelot no longer holds the rights to the movie at all… despite the lawsuits over it.

Yes, you read that right. Camelot didn’t make the movie. It has little to do with the movie. It apparently took out a loan to acquire the rights, sued nearly 6,000 people demanding cash for downloading the movie… and, according to the company who lent it the money, failed to pay back the loan, meaning they took control over the rights. Think about that for a second. That’s quite a business model: borrow money, “buy” the rights to a film, sue thousands of people demanding they pay up, and don’t pay back the loan, let the lending company “reclaim” the rights, but keep the lawsuits (and the cashflow) coming in.

Of course, it seems like this could open Camelot up to serious legal consequences, especially since it filed the lawsuit against those thousands of file sharers approximately two weeks after Incentive allegedly took over the rights to the film…

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Companies: camelot distribution group, incentive capital

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Comments on “Film Company That's Sued Thousands Might Not Even Own Rights To Film It's Suing Over”

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82 Comments
Anonymous Coward says:

Reading the story, it’s not clear that Camelot DIDN’T own the rights when the alleged infringements took place. According to Incentive’s claim, they got the rights back from Camelot on February 21st. Camelot filed the mass infringement lawsuit two weeks later, on March 7. It’s very likely that the infringements they’re suing over happened before February 21st, i.e., when they still owned the rights. If that’s the case, then there is no problem.

Without knowing the dates of the alleged infringements, your article is pure FUD. Have you considered pulling up the filing to see the dates of the alleged infringements? Rather than FUDing it out, you could actually do some research to see if there’s really an issue.

Anonymous Coward says:

Re: Re: Re:

You really think the details will mean the whole strategy of Camelot stinks and is not a drain on society?

I said nothing of the sort. I’m merely pointing out that there is likely no issue here with Camelot bringing suits against those who infringed their rights while they owned those rights. The subsequent transfer of rights is irrelevant.

Anonymous Coward says:

Re: Re: Re: Re:

I’m merely pointing out that there is likely no issue here with Camelot

And the point you missed everyone making here is that you’re definition of “no issue” is narrowly limited to the law.

It’s like (over) stating that there was “no issue” in owning a slave in 1800.

So if they no longer have the rights... says:

Re: Re:

… what harm was done. You could claim there was harm for a short period while they had the rights (although most here would dispute that, including me). But even if your premise is granted, why then would these people be on the hook for $880 million (as claimed by the studio sans rights)?

Surely you can’t argue they ‘lost’ that money, they no longer have the rights to it. Of course there’s an issue here, stop spreading your FUD, AC.

Anonymous Coward says:

Re: Re: Re:

… what harm was done. You could claim there was harm for a short period while they had the rights (although most here would dispute that, including me). But even if your premise is granted, why then would these people be on the hook for $880 million (as claimed by the studio sans rights)?

Surely you can’t argue they ‘lost’ that money, they no longer have the rights to it. Of course there’s an issue here, stop spreading your FUD, AC.

I didn’t say anything about harm. I’m merely pointing out that Mike’s conclusion is pure FUD. If the infringements happened while they owned the rights, they retain the right to sue for the infringement even if the rights subsequently changed ownership. I am spreading no FUD.

Berenerd (profile) says:

Re: Re: Re: Re:

Technically they didn’t own the rights. a contract was made to buy the rights, the rights were handed over but no money was paid cept by the loaning company. Therefore, minus the cost of lawyer fees (assuming the loan company continued with the lawsuits) camelot would have no claims what so ever to any infringement. They literally invested almost nothing to gain absolutely everything. Their entire business model is a fraud.

Anonymous Coward says:

Re: Re: Re:2 Re:

Technically they didn’t own the rights. a contract was made to buy the rights, the rights were handed over but no money was paid cept by the loaning company. Therefore, minus the cost of lawyer fees (assuming the loan company continued with the lawsuits) camelot would have no claims what so ever to any infringement. They literally invested almost nothing to gain absolutely everything. Their entire business model is a fraud.

Not true. Ownership transferred when the contract was perfected.

The eejit (profile) says:

Re: Re: Re:5 Re:

Which makes no sense for us laymen. Once the rights were transferred as a result of the default, the right were no longer in the plaintiff’s hands, as it were. Therefore, realistically, any monies earned after that time were deceptively obtained. So the ethical issue raised above is that there are monies obtained by deception, which is different from fraud legally speaking.

Anonymous Coward says:

Re: Re: Re:6 Re:

Which makes no sense for us laymen. Once the rights were transferred as a result of the default, the right were no longer in the plaintiff’s hands, as it were.

Let me give you an analogy. Let’s say you own a car and you are in wreck with some guy, and it’s that guy’s fault. You subsequently sell your car to someone else. You can still sue the guy who hit you, even though you do not own the car. You still retain the right to sue for the accident that happened when you owned the car.

Therefore, realistically, any monies earned after that time were deceptively obtained. So the ethical issue raised above is that there are monies obtained by deception, which is different from fraud legally speaking.

If the rights did transfer back to Incentive, then indeed Camelot would not be able to sue people who infringed on those rights after they transferred back. However, it’s not clear that these rights did in fact transfer back to Incentive. That’s simply Incentive’s claim.

Anunimus Kowerd says:

Re: Re: Re:7 Re:

“Let’s say you own a car and you are in wreck with some guy, and it’s that guy’s fault. You subsequently sell your car to someone else. You can still sue the guy who hit you, even though you do not own the car. You still retain the right to sue for the accident that happened when you owned the car.”

Except, I don’t own the car. I borrowed/leased it temporarily as part of my master plan, being to get into an accident in order to gain the excuse of suing someone for monetary gain. No matter what analogy you use, it will always boils down to an IMMORAL abuse of copyright and the law. I agree with a previous poster, the problem stems from people seeing IP rights the same as property rights, and this story shows us once again why that needs to change.

Anonymous Coward says:

Re: Re: Re:8 Re:

Except, I don’t own the car. I borrowed/leased it temporarily as part of my master plan, being to get into an accident in order to gain the excuse of suing someone for monetary gain. No matter what analogy you use, it will always boils down to an IMMORAL abuse of copyright and the law. I agree with a previous poster, the problem stems from people seeing IP rights the same as property rights, and this story shows us once again why that needs to change.

You are assuming facts not in evidence. If this was some immoral scheme, I’d agree with you. But as it is, you’re making assumptions.

Anunimus Kowerd says:

Re: Re: Re:9 Re:

At the risk of sounding childish, you started it. Plus we’re talking analogies here, so I don’t see the harm as they too have nothing to do with “facts” and everything to do with conjecture. I felt yours needed a slight tweak for the sake of accuracy and is the primary reason I bothered to post at all.

Anonymous Replyer says:

Re: Re:

That’s an interesting point, but still…if the title passes to new ownership, why wouldn’t the ability to collect pass along with it? Not sure that just because Camelot MAY HAVE owned the rights during that period means they can continue to exert claims for the past period.
Plus, this wasn’t a sale of ownership. This was a foreclosure. They arguably didn’t fulfill their obligations that would give them legitimate ownership over the titles in the first place.

Anonymous Coward says:

Re: Re: Re:

That’s an interesting point, but still…if the title passes to new ownership, why wouldn’t the ability to collect pass along with it? Not sure that just because Camelot MAY HAVE owned the rights during that period means they can continue to exert claims for the past period.
Plus, this wasn’t a sale of ownership. This was a foreclosure. They arguably didn’t fulfill their obligations that would give them legitimate ownership over the titles in the first place.

My understanding is that the accreted right to sue remains with the transferor unless explicitly granted to the transferee. The foreclosure subsequent to the breach of contract did not rescind the contract. The rights were still Camelot’s for a period of time.

Anonymous Coward says:

Re: Response to: Anonymous Coward on Apr 1st, 2011 @ 9:05am

So by your logic, it is perfectly ok to take out a loan to buy rights to something for which you never intended to make payments on, quick file a bunch of lawsuits over it before the first payment is due, let the loan default, and reap rewards for something you “owned” briefly but never paid for. You’re a bigger scumbag for defending them than the perpetrators of this scam.

Anonymous Coward says:

Re: Re: Response to: Anonymous Coward on Apr 1st, 2011 @ 9:05am

So by your logic, it is perfectly ok to take out a loan to buy rights to something for which you never intended to make payments on, quick file a bunch of lawsuits over it before the first payment is due, let the loan default, and reap rewards for something you “owned” briefly but never paid for. You’re a bigger scumbag for defending them than the perpetrators of this scam.

Not my logic at all. That would be fraud. I’m not defending anyone. I’m merely pointing out what I believe to be in fact the law.

Anonymous Coward says:

Re: Re: Re: Response to: Anonymous Coward on Apr 1st, 2011 @ 9:05am

If my example is fraud, then how is what they did not? They are doing exactly that. Would my example still be fraud if I made one or two payments on my rights purchase? Afterall, I technically am the “owner” for that brief period for which I made the first payment. Of course I know full well that I never intended to pay off the full loan but no one else does. I just briefly wanted to own it long enough to file lawsuits against infringers during the time I made payments on it.

drewdad (profile) says:

Re: Re: Re:2 Response to: Anonymous Coward on Apr 1st, 2011 @ 9:05am

It all comes down to intent.

If they intended not to pay the loan, just to temporarily gain the rights, then it is fraud.

If they planned to pay the loan, and were unable to do so, then it isn’t fraud.

Personally, I don’t see how they could have honestly expected to make enough money in time to service the loan.

Anonymous Coward says:

Re: Re: Re:3 Response to: Anonymous Coward on Apr 1st, 2011 @ 9:05am

It all comes down to intent.

If they intended not to pay the loan, just to temporarily gain the rights, then it is fraud.

If they planned to pay the loan, and were unable to do so, then it isn’t fraud.

Personally, I don’t see how they could have honestly expected to make enough money in time to service the loan.

That’s exactly right. For it to be fraud, there must that intent. We have no information one way or the other whether it was fraud or not. If it was fraud, then the contract could be rescinded, and the rights would therefore have never transferred to Camelot.

Anonymous Coward says:

Re: Re: Re:4 Response to: Anonymous Coward on Apr 1st, 2011 @ 9:05am

So what you are the saying is, that even though I never had any intent to repay the loan, and no one knows that, all I have to do is outwardly portray to everyone that I did intend to repay the loan, as evidenced by me making the first payment, and voila! I have a successful business model that people like you would support.

Anonymous Coward says:

Re: Re: Re:5 Response to: Anonymous Coward on Apr 1st, 2011 @ 9:05am

So what you are the saying is, that even though I never had any intent to repay the loan, and no one knows that, all I have to do is outwardly portray to everyone that I did intend to repay the loan, as evidenced by me making the first payment, and voila! I have a successful business model that people like you would support.

I’m not saying that at all. We don’t know whether Camelot intended to repay the loan or not. I’m not saying I support anything. I’m simply trying to explain and understand the legal issues at play here. I in no way support fraud, and if this is fraud, I hope Camelot is held accountable.

Incentive is suing for breach of contract and fraud. If they win the fraud case, the contract can be rescinded. That would mean the rights never transferred to Camelot. If it’s merely a breach of contract without fraud, then the rights were owned by Camelot for a period of time, and they can sue people who infringed during that time.

I don’t know if this is fraud or not. If it turns out to be ruled fraud, that could get the alleged infringers off the hook.

Anonymous Coward says:

Re: Re: Re:

I think TechDirt is referring to the morality of the whole thing and not the legality of it.

Mike’s final paragraph indicates otherwise: “Of course, it seems like this could open Camelot up to serious legal consequences, especially since it filed the lawsuit against those thousands of file sharers approximately two weeks after Incentive allegedly took over the rights to the film…”

Morally, I’m on board with what Mike is saying. Legally, I disagree.

Anonymous Coward says:

Re: Re: Re:2 Re:

Got it, so you latch on to the strong stance “seem like this could” speculation and make that the main thrust of your rebuttal.

Yes, I was responding to the legal issues that Mike raised. Not sure why that ruffles everyone’s feathers. That last paragraph was all FUD. Mike can’t write a story about infringement lawsuits without spreading FUD all over it. That much is clear.

mike allen (profile) says:

Re: Re:

Stupid git yes you troll I for one am fed up with your silly stupid comments you need a brain transplant oh I know a Sinclair spectrum instead has better logic. As Camelot NEVER paid for the rights they never owned the rights therefore they have committed fraud on 6000 people. think about it. If you buy a car on instalments who owns the car? hint NOT YOU. if you don’t pay the instalments who owns and eventually takes the car? hint THE REAL OWNERS.

Anonymous Coward says:

Re: Re: Re:

Stupid git yes you troll I for one am fed up with your silly stupid comments you need a brain transplant oh I know a Sinclair spectrum instead has better logic. As Camelot NEVER paid for the rights they never owned the rights therefore they have committed fraud on 6000 people. think about it. If you buy a car on instalments who owns the car? hint NOT YOU. if you don’t pay the instalments who owns and eventually takes the car? hint THE REAL OWNERS.

Ownership transferred when the contract was perfected, regardless of whether Camelot paid the price. The article mentions that Camelot did make payments at first, so you’re apparently wrong about that, but that is irrelevant to the issue of transfer of ownership.

Anonymous Coward says:

Re: Re: Re:4 Re:

You would defend anything that is favorable to copyrights even if it was Osama Bin Laden you probably be defending him too, that is how disgusting you are.

I’m not defending anyone. I’m merely explaining the law. Are you not interested in understanding what the law actually is here? I suppose understanding things is not for everyone. Personally, I’m obsessed with understanding how things work.

Jay says:

Re: Re: Re:5 Re:

That would be great and dandy if there was anything in it that didn’t seem to be to promote a culture based not on improving the arts and sciences, but the misguided belief that “transferring copyright” allows for supported growth in industry.

The thing I’m mocking was that transferring of copyright. That sure as hell doesn’t help the artists involved.

Anonymous Coward says:

Re: Re: Re:2 Re:

you are still wrong they had a loan it belonged to the bank not them use what little brain you have.

That doesn’t change the analysis. Ownership still transferred to them when the contract was perfected. Ownership transfers even if the price is paid with a loan. Banks don’t own everything they give a loan on. That’s not how it works.

vivaelamor (profile) says:

Re: Re:

“Without knowing the dates of the alleged infringements, your article is pure FUD. Have you considered pulling up the filing to see the dates of the alleged infringements?”

Have you? I’ve read the filing and know that the dates of the alleged infringements range between January and March this year. Rather than FUDing it out, you could actually do some research yourself to see if there’s really an issue.

Anonymous Coward says:

Re: Re: Re:

Have you? I’ve read the filing and know that the dates of the alleged infringements range between January and March this year. Rather than FUDing it out, you could actually do some research yourself to see if there’s really an issue.

Good job finding that. All of the alleged infringements are for before February 21, 2011, except for the very last one listed, which is for February 22, 2011. So 5,864 out of 5,865 of the alleged infringements appear to be during the period when Camelot still owned the rights. So there really is only an issue with one defendant. It’s easy enough to dismiss that one defendant, so it’s quite simple to fix this problem–if it even is a problem. We do not know for certain that the rights really went back to Incentive. That’s just their claim–that’s not what the court said. I FUDed nothing out, vivaelamor. Try harder.

vivaelamor (profile) says:

Re: Re: Re: Re:

“All of the alleged infringements are for before February 21, 2011, except for the very last one listed, which is for February 22, 2011”

Scroll through the whole list. If you had bothered to do that instead of scrolling to the bottom and assuming I was wrong then you might have noticed that the list is sorted by ISP before date.

“I FUDed nothing out, vivaelamor. Try harder.”

Please, don’t try harder; you’ll only embarrass yourself more.

Anonymous Coward says:

Re: Re: Re:2 Re:

If the number matters then I believe there are 727 defendants for infringements occurring after February 20th.

If that’s the case, then those 727 defendants might be off the hook if indeed the rights did transfer back to Incentive on Feb. 21. The other 5K or so defendants are banking on Incentive winning their fraud claim and having the contract rescinded completely. Otherwise, they’re still on the hook.

Rekrul says:

The harm in this case was to the poor downloaders who were exposed to this tripe. I mean sure, you figure with a title like “Nude Nuns with Big Guns” what could go wrong? How about the fact that the nuns weren’t all that attractive? Or that the guns weren’t really that big? Or that the budget for the movie was probably about $50. Ok, the penis-blasting scene was pretty good, but the rest of the film pretty much sucked. 🙂

Steve R. (profile) says:

Extortion Unleashed

This point is another illustration of the cancerous expansion of the so-called “intellectual property” land grab. Since the courts have not cleanly extinguished the concept that so-called “intellectual property” isn’t really property we have ever growing innovative thuggery by those asserting that they somehow have a “piece” of the property.

It seems that a “piece” for laying a claim can be virtually anything. Escaped seeds as infringement. The assertion by some music collection societies that animals listening to music requires a license. Mike even noted: “Belgian Collection Society SABAM Caught Taking Cash For Made Up Bands It Didn’t Represent”. Then there are the bulk broadcast pre-settlement offers that are just mailed out to see what sticks.

Unfortunately, if one becomes a victim of these extortionary actions they could be bankrupted. For the accuser found making a false claim. “Sorry about that. And by the way, no refund on your legal fees for defending yourself against our bullying.”

If extortion is considered a legitimate business plan, the “intellectual property” crowd is setting a very bad example should they want people to respect their so-called “Intellectual Property” rights.

Anonymous Coward says:

The disclaimer at the bottom of the Wired page is hilariously ironic:

Disclaimer: Results of Wired.com?s IP Detective tool (above) are not conclusive. If a match is found, this does not mean your computer was used to download the file in question, nor that you are a target of the lawsuit. IP addresses can change from time to time. If you didn?t personally use BitTorrent to download the named film on the day and time listed, it?s likely your computer has simply inherited the IP address of someone who did.

An online magazine holds itself to higher standards than the US justice system. How low the mighty have fallen…

Aleksandar says:

This is really great disaster what was happened, but, by the way, I will present one another disaster story…..

I have all evidences for my legal reasonable doubt :
– that two mayor US film companies : 20-th CENTURY FOX and UNIVERSAL PICTURES (together with 7 other US film companies) have done pure copyright infringement and plagiarism of my registerd script MAGMA TOWN, and shot in the year 1996/1997 two movies : VOLCANO and DANTE’S PEAK, and released them in Spring 1997 and grossed till today about $520 million.
– that based my registered script MAGMA TOWN from 1994., based of which script, Jerome Armstrong wrote his script VOLCANO, and sold it for US$500,000 to FOX 2000 PICTURES (Laura Ziskin) together with Neal H. Moritz like prospective Producer, in November 1995.
– that screenwriter Leslie Bohem has made pure plagiarism of my registered script MAGMA TOWN, and sold his script DANTE’S PEAK to UNIVERSAL PICTURES for US $1,200,000 and also, that for me unknown screenwriter plagiated also my registered script MAGMA TOWN, and sold his script RING OF FIRE to WALT DISNEY PICTURES for US $800,000, all in Autumn of 1995. .
I have sued all those 9 US film companies by the proper court here in my country Serbia in the year 2000., and the court case is ongoing.
You can open 3 different websites below : from FACEBOOK, 4-th place on the list counted from the end backward, with notices about plagiarism of many high budget American films, that are shot on the basis of carried out of plagiarism right by where you can find that I am the only one writer who is two times on the lists on those websites and that > Rank 15. VOLCANO and Rank 17. DANTE’S PEAK, which were shot on the basis of my original and registered script MAGMA TOWN, on what basis plagiators/companies have grossed in my view possible about US$520 million from 1997. till today. Open websites :
http://www.facebook.com/note.php?note_id=402105162641
from FACEBOOK, 4-th place on the list counted from the end backwards, movies : VOLCANO. 1997 Mick Jackson / DANTE’S PEAK. 1997 Roger Donaldson, – MagmaTown (Aleksandar Skocajic script, 1994)

http://www.mahiram.com/sufia/blog/181/

http://www.infotoday.com/IT/nov03/poynder2.shtml
If you are interested for this story, you can contact me by email, post address or phone, – all located at the end of the email below. If you are not interested for this copyright infringement story, please inform someone who might be interested.
Aleksandar PHONE NUMBER : 011-381-11-2836-304
Best calling about 1,00 P.M. L. A. time
E-mail address : axxskocajic@elitesecurity.org

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