Last month we wrote about an interesting case in which a judge effectively called the bluff
of Malibu Media, a copyright trolling operation that has filed 365 lawsuits, targeting about 6,000 people. And, of course, it's never taken a single one to an actual trial, because that does not appear to be the goal. Instead, it's all about getting people to settle, and it sounds like Malibu has been successful on that front. In the case we mentioned last month, the judge made it clear that he wanted Malibu Media to actually go through a trial, and highlighted four defendants who had claimed innocence, and wanted to use those as a "bellwether" trial, to effectively test Malibu's theories. The judge, Michael Baylson, was pretty clear that he would not be happy if Malibu Media tried to squeeze out of the case.
At the beginning of the month, Malibu filed its "amended complaint"
against the "John Does" in question, which gave up on some of the arguments in the original complaint and instead focused on direct infringement claims -- while also expanding the number of works infringed.
Yesterday, the Does hit back
. It's interesting to note that they've signed up Marc Randazza (along with Jordan Rushie) to help them, as Randazza has both been on the other side of some porn copyright trolling cases and was also the lawyer largely responsible for bringing down the famed copyright trolling operation Righthaven. His work with porn studios to take part in similar cases has resulted in some worries of ulterior motives
in taking on John Does in other cases, though that seems to be a bit paranoid.
Either way, the Does hit back hard
. They're throwing the kitchen sink at Malibu Media. Among other things, they're claiming that the decision to expand the case to other possible infringements is ridiculous since the defendants use dynamic IP addresses, and Malibu is basing the other infringements on the same IP, but a totally different date or time. Also: the defendants claim that Malibu initially argued that all of the Does needed to be lumped together in a single lawsuit because they represented a "swarm" and as such had to be tried together. Except, in the amended complaint, they move away from that completely (no surprise, since the judge carved out just these few defendants). However, the defendants point out the inconsistency:
When considering litigating the “swarm theory,” Malibu was faced with the prospect of
dozens of defendants, joined in their common defense against the plaintiff, with an initial seeder
who very well may have had a license to publish the works to BitTorrent or elsewhere. When
push came to shove, Malibu decided to dismiss more than eighty percent of the defendants it
initially sued, despite its prior claims that the cases were brought against unified “swarms.”
Malibu apparently thought better of the swarm theory, and decided to reduce the number of
defendants. However, Malibu cannot properly abandon its foundational theory and still leave the
case against Doe 13 intact. The swarm theory of liability relies upon a “swarm” of defendants
and renders these now-dropped defendants indispensable to the action. Without even an
allegation against the initial seeder, we have no idea whether Malibu itself seeded the relevant
files. As Malibu does freely distribute the relevant films, it is entirely possible, if not most
likely, that the initial seeder had permission to distribute the files via BitTorrent. If he or she
did not, it is entirely likely that a participant in the swarm, from whom Doe 13 received the file,
may have had such permission. Malibu’s omissions speak loudly in favor of dismissal. Unless
Malibu re-joins these previous defendants, including the initial seeder, the Court must dismiss
the action against Doe 13, who is by Malibu’s own theory incapable of according Plaintiff full
and complete relief.
That paragraph has footnotes to point out that the company Malibu was using to obtain IP addresses, IPP (formerly Guardaley -- remember them
?) is accused of actually seeding the files in the first place, which would suggest the copies were authorized. Of course, it's worth noting that Randazza, when on the other side of these cases, has used the swarm
argument in the past.
Either way, that's just the warmup for the problems with the amended complaint. There's also a few other problems -- such as that it doesn't appear that Malibu legitimately owned the copyright in question. Oops. First, there's the fact that the filmmaker argued that the key film was a "work for hire" made for Malibu. Except, Malibu only came into existence in early 2011 and the movie was made years earlier. Malibu claimed this was an oversight in the registration process and then sought to register the copyrights properly just recently. However, again there are problems, as the assignment from the filmmaker failed to assign the specific rights under Section 106 of the Copyright Act, which are what you need if you want to sue. This was the critical defect in the Righthaven cases, in that they pretended to assign those rights, but it was in name only since the original copyright holder really retained all the key rights provided under Section 106. Furthermore, the defendants argue that the assignment statement does not really qualify as an assignment, and is, at best, a license.
In this case, the Assignment contains no provision of any exclusive rights from Field to
Malibu Media. The assignment is silent as to what, if any, rights Field has within the films.
Rather than transferring any discernible exclusive rights under Section 106 to Malibu Media, Mr.
Field has executed what is essentially a quit-claim deed to Malibu Media, giving Plaintiff a
jumble of unidentified rights (or perhaps none at all) that, on the face of the assignment, do not
include the rights required to sustain an infringement action: exclusive rights under Section
106. Absent any indication that Field possessed full, undivided interest in the copyrighted
works or exclusive rights therein, there is no basis on the face of the assignment for finding that
Malibu Media acquired any exclusive rights and nothing in the assignment addresses past
Then they point out that even if the assignment is proper, it still doesn't help Malibu, because it is not clear when the assignment was made. And, under the law, while you can transfer the right to sue (along with other exclusive rights) for past infringements, that needs to be expressly stated in the assignment. That's not the case here.
Then there are other issues concerning the "swarm" argument. The defendants point out that if they were being sued as part of a swarm, the total awards across all the defendants can't surpass the maximum statutory rate. Yet with a bunch of defendants having settled, it's possible that Malibu has already been "made whole."
Malibu has already recovered significant funds in connection with the infringements
alleged in the Amended Complaint.
Prejudice against Does #6 and #19 before this action was set for a bellwether. (Dkt. Nos. 16 and
17). Presumably, this was because Malibu received adequate settlements from these defendants.
In fact, Malibu may have received doubly-adequate settlements from them – in which case
Malibu is now triple-dipping by seeking damages that have already been satisfied by third parties
Malibu intentionally kept out of this litigation.
Because the swarm is global in scope, and the Plaintiff has likely already been made
whole by other undisclosed swarm members, nothing short of full disclosure and setoff would
allow Doe #13 to evaluate Plaintiff’s ability to bring this action that it repeatedly claims to be
based on the uploading and downloading the exact same file. Since the Plaintiff seeks statutory
damages, if the Plaintiff has already collected the statutory maximum for this work from other
defendants, then the Plaintiff must stop visiting the well.
Malibu filed Notices of Voluntarily Dismissal with
Thought they were done? Not yet. They also claim that Malibu is abusing subpoena powers outside of what was alleged in the complaint. In the amended filing, Malibu notes that its "partner" in identifying infringement, IPP, passed along the info that at least one of the Does has been accused by another IPP customer of infringement as well. As the defendants point out, that's completely irrelevant to the case at hand:
Nucorp, Ltd. is not a party to this action or any other action against Doe #13, and this
allegation is scandalous and impertinent. Furthermore, set forth in more detail below, adding
allegation also violated two court orders forbidding Malibu from abusing its subpoena power for
purposes outside of what was alleged in the Complaint. Accordingly, Paragraph 53 and Exhibit
“F” of the Amended Complaint should be struck .
In one of the other Motions to Dismiss, questions are also raised about whether or not Malibu has the proper and necessary licenses to do business in Pennsylvania where the lawsuit was filed.
There's more, but you get the idea. It certainly looks like some are trying to give Malibu the Righthaven treatment. And we all remember how that went