Judge Calls Out Malibu Media For Its Attempt To Cut And Run When Faced With Challenge To Its Infringement Claims

from the so-many-trolling-jerks,-so-little-time dept

IP trolls are about 90% cardboard facade. They puff themselves up with blustery legal threats written on serious-looking legal letterhead, but it's really no different than the defensive mechanisms of many creatures found on the lower end of the food chain. For most, the slightest of pushes back results in the whole charade collapsing.

There's a great future in speculative invoicing, said no one ever in any seminal coming-of-age, post-college disillusionment film. Just look at Prenda Law, which resorted to fraudulent behavior when its aggressive, but incompetent, trolling failed to pay the bills. And yet, nothing stops the trolls from trolling. The occasional speed bump surfaces, but trolls dismiss these rather than meet the challenge head on. They're in it for settlements, not wins… and certainly not precedent.

Unfortunately, too many will get away with the following tactic, as covered by indispensable thorn-in-trolls'-side, Sophisticated Jane Doe of Fight Copyright Trolls.

[T]he “main course” served on Monday was the order denying plaintiff’s motion to dismiss counterclaim in Malibu Media v John Doe (CAND 15-cv-04441, defense attorney: Joseph C. Edmondson). As I will explain shortly, this order essentially destroyed one of the two main foundations of the copyright trolling.

While answering Malibu’s complaint on 4/26/2016, the defendant counterclaimed with a single count of declaratory judgment of non-infringement (basically asking the judge to formally rule that the defendant was not an infringer).

Malibu moved to dismiss the counterclaim, arguing that such counterclaim mirrors defendant’s denial of liability found in the Answer. The defendant replied, cleverly pointing to Oracle v Google (a lawsuit handled by the same judge), where Google made a similar counterclaim.

While Judge Alsup agreed that there is certain duplicity between the denial as an essence of the counterclaim and the denial as a part of the Answer, he nonetheless denied the plaintiff’s motion, leaving the defendant’s counterclaim alive.

Why is this denial of Malibu's motion to dismiss important? Because it undercuts its sole interest in litigation: easy money.

As I mentioned above, copyright trolling rests on two turtles: astronomically (and maybe unconstitutionally) high statutory fines, and the absence of downside for the troll as it can always cut and run, leaving the defendant with painful legal bills.

Judge Alsup just closed the second avenue, at least in his district. The case is now “locked,” and it is not in the plaintiff’s power to dismiss it unilaterally any longer.

It's a cheap legal trick -- one that even the US government isn't above using to escape cases where it may be found liable for legal fees. When the pushback arrives, dump the case. Standard m.o. There's very little margin in their normal shakedown work. That's why they try to bundle up as many Does as possible in every filing. And that's why they move to dismiss as soon as they encounter a little friction.

Malibu seeks this, knowing full well it has almost zero chance of "recovering" this amount -- hoping that the scarily large numbers (fully supported by ridiculous IP laws) will intimidate the defendant into a settlement. From Judge Alsup's denial [PDF]:

Malibu Media seeks statutory damages of at least $17,250 for defendant’s alleged infringement of twenty-three videos ($750 per work), with a potential for much greater liability if infringement is found to be willful or if the jury finds Malibu Media is entitled to damages on the higher end of the range provided by statute.

Malibu tried to pretend the counterclaim imposed an unfair burden on its trolling effort.

Malibu Media argues that permitting defendant’s counterclaim to proceed would require it to file an answer in which it would deny all the allegations and refer back to the complaint.... Malibu Media also contends the declaratory judgment counterclaim would confuse a jury.

And found no sympathy in Judge Alsup.

Not really, however, a jury would never need to know that the case involves an affirmative claim of infringement and a declaratory judgment counterclaim of non-infringement. The jury could render one verdict resolving both claims. Malibu Media will suffer no prejudice.

Alsup goes on to call Malibu's motion what it is: a transparent attempt to dodge potential liability for legal fees.

Malibu Media’s motion seems more like a gimmick designed to allow it an easy exit if discovery reveals its claims are meritless.

This, as Alsup notes, tilts the system heavily toward the plaintiff, considering what a defendant might be facing if found to be culpable.

The damages exposure in this case, as with Malibu Media’s many other cases, is significant, so a defendant may feel pressure to settle even a meritless case. Coupled with the taboo nature of the subject matter, there remains potential for abuse.

[...]

Dismissing defendant’s counterclaim would eliminate one avenue for a fee award, and, as stated, maintaining the counterclaim would cause no prejudice to Malibu Media.

It will take a steady stream of opinions like these to stem the flow of IP trolls -- and some sort of consistency between multiple jurisdictions -- but every decision that calls trolls like Malibu out for their predatory behavior is a good one.

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Filed Under: copyright, copyright trolling, counter claims, dimissals, william alsup
Companies: malibu media


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  1. icon
    Ben S (profile), 27 Jun 2016 @ 3:12pm

    Re:

    Basically, until a decision is made on the counterclaim, the case stays in court. This prevents Malibu Media from deciding to drop their claim should they find the defense is likely to win, and set an unfavorable precedent. This also prevents them from dropping the case should it look like the judge is leaning toward awarding legal fees to the defense due to claims made by Malibu Media in bad faith.

    Had the judge decided to dismiss the counterclaim, then Malibu would be free to just drop their claim, and with nothing else on the docket to be decided, the case would be over.

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