Irony: Sony Pictures Sued For Failing To Stop Piracy

from the shoes-on-the-other-foot dept

For many years now, the MPAA and the various studios that make it up have filed various lawsuits against various internet platforms for not waving a magic wand and making piracy disappear. This also appears to be their big complaint against Google, which has bent over backwards trying to appease the industry and it's still not enough (of course, that may be because what the industry really wants from Google is money, not stopping piracy). But now the shoe is somewhat on the other foot as Sony Pictures is being sued for failing to stop piracy. Really.

The case stems from the infamous Sony hack from a year and a half ago, where all of Sony Pictures' emails were released onto the internet. Possibility Pictures is suing Sony claiming the hack created a breach of contract in its failure to stop piracy of its film, To Write Love On Her Arms (TWLOHA), a 2012 movie starring Kat Dennings, based on the true story of the struggles a woman went through leading to the founding of her charity (which goes by the same name as the movie). While most people focus on the emails from the hack, it should be noted that before those emails were released, the hackers released some pre-release films... including TWLOHA. And that, Possibility claims, is a breach of Sony's contract.

Reading through the full filing, the key breach appears to be of Section 16.7 of the contract, which includes an "anti-piracy authorization" stating:
So that's kind of amusing, since the clause is clearly designed to give Sony the power to send out threat letters and takedowns and use DRM and other such stuff -- but Possibility is basically turning it around on Sony and arguing that its failure to stop piracy shows that it did not use "appropriate technical measures." I'm not sure a court will go for this kind of judo move in flipping the anti-piracy authorization clause around to suggest that it puts certain contractual requirements on Sony Pictures, rather than simply authorizing it to do certain things as the language is clearly designed to do.

The lawsuit goes on and on about all of the great marketing plans Possibility had for the film (Justin Bieber's mother was going to tweet about it!), but apparently that was all ruined when the hackers, whoever they were, leaked the film. It also highlights Sony's earlier security problems, focused on the famed PSN hack, even though that's an entirely separate subsidiary from Sony Pictures. And then it spends a lot of time pointing to reporters who pointed out that Sony Pictures' computer security was abysmal. That's true... but it's not clear that's against the law. Basically, this lawsuit is mostly "Sony incompetent" and then "because of that our contract was breached."

Possibility then tries to show damages from the leak of the film.
The direct and proximate result of the foreseeable and avoidable Data Breach just four months prior SPWA's planned release of the Picture was an extreme dilution of the otherwise viable market for Plaintiff's Picture. The November 2014 Data Breach resulted in the unauthorized release of the Picture on multiple sites worldwide and destroyed the audience demand for the Picture. Following the Data Breach and worldwide pirated release of the Picture, SPWA abandoned the social marketing plans and lost all interest in promoting and marketing the Picture since it was otherwise available for free as a result of its failure to maintain adequate security of the Network. As an isolated sample of the damage caused the anticipated video-on-demand ("VOD") revenue stream of the Picture, note that in the first six days alone following the Data Breach, the stolen Picture master was downloaded-for-free a reported 19,949 times (an average rate of over 3300 illegal, revenue-free downloads per day).
So... a few things on this. First, downloads don't equate to lost sales, generally speaking, so the attempt to suggest that here without further evidence is pretty silly. Second, less than 20,000 downloads is... kinda weak. It certainly suggests there wasn't much interest in the film in the first place. Third, the idea that there's no market for a movie that's available for free online is easily debunked by the numerous movies that do quite well at the box office and in the home video market despite also being pirated online.

However, the more interesting bit is that this puts Sony Pictures in the fairly awkward position of potentially having to argue that piracy isn't really that damaging to a picture. I'm guessing that Sony Pictures and the MPAA want no part of that argument ever being filed in a court, because it will boomerang back to hurt them.

Either way, the filmmakers are demanding almost $9 million:
The amount of that revenue for which we seek payment, less amounts paid to date, is $8,738,331...
For a movie that not that many people seemed interested in?

Separately, Possibility notes that Sony pointed out that there's a binding arbitration clause in their contract, and Sony has already said that if there's a dispute it must be handled by such an arbitration setup. Possibility tries to get around this, but (unfortunately!) courts have tended to accept these binding arbitration clauses as valid.

If I had to put odds on it, I wouldn't give this lawsuit much of a chance of surviving. The attempt to turn an anti-piracy authorization clause into some sort of requirement to block piracy is a massive stretch. The mandatory arbitration clause is also a problem. Plus, the overall lawsuit is pretty weak. The claim itself is not very well backed up. Chances are Sony can get this tossed out quickly -- but it will be amusing to see if it has to argue that piracy isn't really that damaging. That would be fun.

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  • identicon
    Pixelation, 29 Jul 2016 @ 11:50am

    Oh this is rich!

    Time to see how they like the penalties now.

    reply to this | link to this | view in chronology ]

  • identicon
    RD, 29 Jul 2016 @ 11:54am

    I just want to say

    May I be the first to sincerely say,

    Bwahahahahhahahhahahhahhahaha

    (Deep breath)

    Hahhahhahahahahaha!!!!

    Reap the whirlwind.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 29 Jul 2016 @ 11:56am

    On the one hand...

    It's kind of bullshit for Possibility to pull this stunt, but on the other hand, the publishers keep demanding that they need all these laws and tools in order to do precisely this - and no matter how many tools they're given, they still can't stop it.

    So fuck them for insisting that it *will* work, when it obviously doesn't. Maybe they'll finally realize all the money they dump into lobbying for the laws they want and the creation of new DRM technology is wasted... but I doubt it.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 29 Jul 2016 @ 11:57am

    Someone is taking Voltage pictures lead, in trying to make more money from lawsuits that they do from cinemas,tv and selling copies of the picture..

    reply to this | link to this | view in chronology ]

  • icon
    That Anonymous Coward (profile), 29 Jul 2016 @ 12:00pm

    "Furthermore, in the wake of the leak, Sony allegedly “lost all interest” in promoting and marketing the movie and paid no further distribution revenues to Possibility beyond an initial $800,000 advance. As a result, Possibility claims that it is almost $2.6m out of pocket versus production costs."
    https://torrentfreak.com/sony-sued-for-not-protecting-leaked-movie-from-pirates-160729/

    Heh Amazon ad offering the rental for 2.99 and to purchase for 9.99

    I think part of the problem is that Sony has no problem once the movie is out there complaining piracy hurt the bottom line (and not hollywood accounting screwing people) but in this case since it got out there early they just sorta gave up on it.

    https://en.wikipedia.org/wiki/To_Write_Love_on_Her_Arms_(film)

    It looks like they decided against a regular release and then dumped it direct to DVD. This means there was probably little to no advertising to promote the move and in turn raise awareness of the non-profit & its message. The other 4 movies still got pushed, and had many more DLs...

    I give them points for trying something, if it'll stick remains to be seen.

    reply to this | link to this | view in chronology ]

    • icon
      DannyB (profile), 29 Jul 2016 @ 1:41pm

      Re:

      > Amazon ad offering the rental for 2.99 and to purchase for 9.99

      You mean offering a short term rental for 2.99, and a longer term rental for 9.99.

      It's a rental unless I can download a DRM free copy.

      Ten years ago, who would have thought, but I can go to Amazon to PURCHASE an mp3 of music. Download it. Play it on any of my devices.

      reply to this | link to this | view in chronology ]

  • identicon
    Baron von Robber, 29 Jul 2016 @ 12:03pm

    Thank you, Possibility Pictures, for the schadenfreude. :)

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 29 Jul 2016 @ 12:13pm

    > First, downloads don't equate to lost sales,...

    Except that this is goose sauce. The MPAA, with Sony as a part, has made exactly that claim.

    reply to this | link to this | view in chronology ]

  • icon
    Ninja (profile), 29 Jul 2016 @ 12:19pm

    Holy fucks, who would have imagined Mike would use the "download doesn't equal lost sales" defending Sony. Sony!

    Let me savor the sound of troll heads exploding.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 29 Jul 2016 @ 12:25pm

    It won't take Hollywood long to correct the wording on their contracts going forward to make it so they can't be held liable for copyright infringement. Laws are for the common people.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 29 Jul 2016 @ 12:26pm

    Thanks Possibility Pictures!

    Thanks Possibility Pictures! Without your lawsuit I would have never known that I could watch "To Write Love On Her Arms" for free or that the movie even existed!

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous, 29 Jul 2016 @ 12:40pm

    calling idiots steel and lipscum - front and center!

    reply to this | link to this | view in chronology ]

  • identicon
    David, 29 Jul 2016 @ 1:06pm

    Considering that this is the company that installed rootkits on CD's

    I'm hoping for a little latent Karma to bite back.

    reply to this | link to this | view in chronology ]

    • icon
      DannyB (profile), 29 Jul 2016 @ 1:38pm

      Re: Considering that this is the company that installed rootkits on CD's

      Sony installed the rootkits into innocent people's PCs.

      Costing each victim probably at least $100 or more to have their PC repaired.

      And then Sony justified it as okay with "most people don't even know what a rootkit is".

      That's like saying: most people don't even know what ${X} is.
      Where ${X} is one of:
      * salmonella
      * radiation
      * (insert favorite heavy metal poison most people have never heard of)
      * (insert name of little known RIAA musician)

      reply to this | link to this | view in chronology ]

  • icon
    DannyB (profile), 29 Jul 2016 @ 1:09pm

    Consider if Sony were to win

    Whatever arguments that Sony makes can be used against Sony and other MPAA conspirators in the future.

    And I suppose those arguments could be used even if Sony loses.

    reply to this | link to this | view in chronology ]

    • identicon
      Norahc, 29 Jul 2016 @ 5:52pm

      Re: Consider if Sony were to win

      That is precisely the reason this lawsuit will either end in arbitration or settlement, but the terms and arguments will be confidential. That way this won't come back to deservedly bite them in the ass.

      reply to this | link to this | view in chronology ]

  • identicon
    We Are Infinite, 29 Jul 2016 @ 1:11pm

    0xDEADB0DEE

    The lawsuit will go through. Whatever the final result will be, Sony Pictures will admit that piracy is not bad and is perhaps even beneficial. They have to admit this, it's important.

    Admitting you have a problem is the first step towards fixing it.

    Currently this is about Sony, but other studios will soon follow and the whole copyright monopoly will be, if not dismantled, severely crippled. We are infinite. This message has been sent using a puppet machine.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 29 Jul 2016 @ 1:14pm

    Appropriate technical measures or other techniques

    known now or hereafter devised.

    "Your honor, the fact that it happened obviously means that the Defendant has never and will never devise a perfect means of protecting the Picture. Had they devised such a method or technology, they would have had to devise a method of time travel to provide it to themselves prior to the Picture being lost."

    reply to this | link to this | view in chronology ]

  • identicon
    Will Braunfeld, 29 Jul 2016 @ 1:45pm

    Doesn't seem to REQUIRE anything of Sony...

    "...SPWA is authorized to protect the picture worldwide..." Emphasis mine.

    Nowhere in the quoted passage, at least, is there a requirement for Sony to protect the picture. Just authorization.

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 29 Jul 2016 @ 1:58pm

      Re: Doesn't seem to REQUIRE anything of Sony...

      Indeed, I'm guessing a judge will dismiss the case on the basis that Sony wasn't *required* or *guaranteeing* to perform some action with some result.

      But I still somehow hope they get slapped for negligence.

      reply to this | link to this | view in chronology ]

  • identicon
    Skeeter, 29 Jul 2016 @ 1:57pm

    Theft and Lost Sales

    Piracy leading to 'lost sales' is about like claiming 'car thefts result in lower Mercedes sales'. There is no justification to assume the latter, why does the courts perfectly agree with the former?

    reply to this | link to this | view in chronology ]

  • icon
    Stephen (profile), 29 Jul 2016 @ 2:24pm

    Performance Indicator

    the stolen Picture master was downloaded-for-free a reported 19,949 times


    Sony probably looked at those download numbers and decided it wasn't worth marketing. If less then 20k people took the time to download it when it was free, why would they pay $10+ to see it

    I'm wondering when it was originally scheduled to be released?

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 29 Jul 2016 @ 3:48pm

    Force them to eat Robin's minstrels.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 29 Jul 2016 @ 3:53pm

    Popcorn

    I'll go and get the popcorn. Not for the movie though.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 29 Jul 2016 @ 6:44pm

    Sony will be held liable for the actions of hackers? No love lost for Sony to be sure, but this is a stretch.

    reply to this | link to this | view in chronology ]

  • icon
    G Thompson (profile), 29 Jul 2016 @ 7:36pm

    You all realise that this is about Contract law and rests on an alleged breach of contract by Sony and is NOT about copyright or about specifically blocking all piracy.

    In this instance it is about a clause that is stating that Sony has exclusive rights to protect the work with all means necessary, and therefore under equity and consideration elements Sony therefore bears ALL reasonable responsibility on this as well.

    Possibility (love the name), is alleging that not only did Sony not adequately, reasonably and using "industry standards" protect the work from the hack but also then did not meet further implied conditions of the contract due to the hack. ie: Advertising, promotion, distribution in cinema's etc.

    As for the binding Arbitration clause (which is a USA only contract law bullshit thing - but i digress) this might be moot due to Sony allegedly having discussions in July 2016 with Possibility Pictures, where they [Sony] insisted that they had “no obligation….to take any anti-piracy measures whatsoever”. This shows that they were not going to abide by any agreement. This could all come down to estoppel also.

    reply to this | link to this | view in chronology ]

  • icon
    techflaws (profile), 29 Jul 2016 @ 9:59pm

    First, downloads don't equate to lost sales, generally speaking, so the attempt to suggest that here without further evidence is pretty silly.

    Given how easily this has swayed politicians since day 1, you can't blame them trying that approach.

    reply to this | link to this | view in chronology ]

  • icon
    Kal Zekdor (profile), 30 Jul 2016 @ 2:34pm

    Arbitration

    I get how arbitration clauses are a bad thing when shoved into consumer agreements. In those cases, consumers have little to no ability to renegotiate the contract, and either accept or walk. Forcing consumers into arbitration is often done to prevent any major lawsuits from cutting into the company's profit margins.

    However, arbitration clauses in business to business contracts are a completely different beast. A court battle is not only costly, it's also inherently adversarial. You take another business to court and your relationship with them is done, whether you win or lose. Yet, disputes happen, and they need a way to be resolved. Arbitration provides a low-cost method that will hopefully allow both companies to move forward, and not sever ties. We have arbitration clauses in our contracts for those reasons. We discuss the reasoning over with the other parties, and they have always agreed readily, or even stated that they would have put in such a clause themselves.

    Most companies want to avoid costly legal battles, especially those without a team of lawyers on retainer. Arbitration provides a fair, unbiased way to resolve disputes without bankrupting the corporation with legal fees.

    (A lot of companies have liability insurance anyway, the major cost of a suit is not the judgment, but the cost of defense.)

    reply to this | link to this | view in chronology ]

  • icon
    G Thompson (profile), 30 Jul 2016 @ 10:37pm

    > Arbitration provides a fair, unbiased way to resolve disputes without bankrupting the corporation with legal fees.

    Yes it does, though it's also totally dependent on the perceived and actual non bias of the arbitrator chosen. Yes you can show that arbitrators should be unbiased due not wanting reputational problems, them wanting to be paid again and also not wanting to be taken to court themselves (though a company without funds is still in a precarious position - catch 22).

    Also are legal representatives allowed to represent because in this situation I can guarantee that Sony would have a representative appearing that though maybe not a practising lawyer, would at the least have a law degree (most probably a JD) and a LOT of experience dealing with arbitration, placing them at an advantage over a smaller company that probably wouldn't have this expertise in house..

    Another concern is how binding any non court arbitration actually is and does it interfere or appear ultra vires with legislated triers of facts ie: does it overrule any black letter law or future court decisions ?

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 31 Jul 2016 @ 6:06am

    Busines's failling to keep up with technology, and overstepping the bounds of human rights.

    That last bit, would be the, actual, ILLEGAL.. part

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 31 Jul 2016 @ 9:49am

    No sympathy for Sony.

    this is the company who's CEO emailed that changing the skin color of Johnny Storm in the remake of Fantastic four would "keep the [N-Words] happy".

    reply to this | link to this | view in chronology ]

  • icon
    PaulT (profile), 1 Aug 2016 @ 12:42am

    "The lawsuit goes on and on about all of the great marketing plans Possibility had for the film (Justin Bieber's mother was going to tweet about it!), but apparently that was all ruined when the hackers, whoever they were, leaked the film."

    I'd love to know the reasoning behind this, other than the "we can't sell something that's available illegally for free" lie. I mean, how much actual crossover can there be between people who follow the Sony hack and people who could be convinced to buy something by a person tweeting who is only known because her demon spawn got famous via a YouTube video? No marketing potential has been lost, but they have essentially rejected sales potential if they gave up on marketing plans because of the leak. The lack of name recognition for that (frankly terrible) title was almost certainly worse than the leak, especially if they decided not to market it.

    As ever with these things, I suspect they realise they either made a terrible film or marketed it badly, so now they're trying to blame the failure of piracy and the nearest scapegoat. It's nice that one of the usual liars were the target this time, even if it's just another case of an innocent 3rd party being attacked because they're the largest/most convenient target. (The actual hackers, of course, would be the real target, but they don't have Sony money...)

    reply to this | link to this | view in chronology ]

  • identicon
    Sony Pictures, 9 Aug 2016 @ 4:32pm

    It's not our fault. We need more control of the oceans.

    reply to this | link to this | view in chronology ]


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