Dallas Buyers Club, LLC? Or Voltage Pictures, LLC pretending to be DBC?

It is 12:30am and I really do not have time to go into this, but I just learned that Dallas Buyers Club, LLC is suing Voltage Pictures, LLC in Montgomery County, TX for, among other things, not paying fees to Dallas Buyers Club for the licensing fees owed to them.

[Hat tip to SJD @ FightCopyrightTrolls for breaking the story.  Her link to the lawsuit can be found here.]

It appears from the TX case filing (Cause No. 15-06-06049) that Voltage Pictures, LLC approached Dallas Buyers Club, LLC and offered to pay for the license to act as Dallas Buyer’s Club’s agent so that they can sell the film abroad and… so that they can file lawsuits against John Doe Defendants across the US. Part of this agreement appears to be that Voltage Pictures was permitted to use Dallas Buyer’s Club’s name.

082516 Voltage-DBC Power of attorney

…and skipping down a bit:

082516 Voltage-DBC Exclusive Agent

Well, now we learn that Nicholas Chartier and Voltage Pictures are being sued because after making all of the sales and suing all of the John Doe defendants for copyright infringement, Voltage Pictures is accused of cheating Dallas Buyers Club out of their earned licensing fees.

I feel as if I just fell down a rabbit hole…

Thus, whenever we saw a Dallas Buyers Club, LLC lawsuit, and whenever we represented a client against Dallas Buyers Club, LLC, we were really representing them against… VOLTAGE PICTURES, LLC?!?

This brings me to the Fathers & Daughters Nevada, LLC cases.  Did Voltage Pictures, LLC make the same licensing deal with the Fathers & Daughters movie producers, and are they also not paying them the money that is due to them?  When we see a Fathers & Daughters Nevada, LLC case, are we really representing clients against the makers of the Fathers and Daughters movie? Or are we representing clients against VOLTAGE PICTURES, LLC who is parading as Fathers & Daughters Nevada, LLC and claiming that they are Fathers & Daughters Nevada, LLC, when really they are not?!?

This also makes me ask who the attorneys for the Fathers & Daughters Nevada, LLC are really representing? Are Josh Wyde and Gary Fischman suing on behalf of Fathers & Daughters Nevada, LLC? Or are they suing on behalf of Voltage Pictures, LLC pretending to be Fathers & Daughters Nevada, LLC?  I know Josh is watching this blog, so please feel free to comment.

Who is their client? Voltage or Fathers & Daughters Nevada?

Last question, and then I’m going to sleep. Will Voltage Pictures, LLC soon be sued by the real Fathers & Daughters copyright holders for failure to pay the licensing fees, proceeds, and sales from the monetization of the Fathers & Daughters movie copyright? Have the same facts that are coming out with the Dallas Buyers Club, LLC lawsuit also transpired with the Fathers & Daughters Nevada, LLC copyright holder?

One more thought — a while back, I was concerned that perhaps the shell companies that were created for various movies were not properly funded. [Well, okay, I backed away from that accusation, but that was on my mind.]  The original thought was that production companies made movies, and to limit their liability, we understood that they set up shell companies as limited liability companies so that if something went wrong or if, say, Dallas Buyers Club caused damage to someone and they were sued, fined, sanctioned, or otherwise held liable for damages from their activities, those damages would be contained to the Dallas Buyers Club, LLC limited liability entity, and they would not trickle “up” to what I thought was the Voltage Pictures, LLC production company.

However, now we see that Voltage Pictures, LLC is NOT the production company, but a LICENSEE (one who signs an agreement to acquire a license to sell or act on behalf of the copyright holder [the licensor]). Thus, this brings me back to the entity that was formed to sue John Doe Defendants in federal court. Dallas Buyers Club, LLC, and Fathers & Daughters Nevada, LLC (the two Voltage-related companies that are currently on my mind). Are they properly funded? Who owns them, and who are the real parties acting through them? Voltage Pictures or Dallas Buyers Club? Voltage Pictures or Fathers & Daughters? Who is providing the funding for them?  And did they properly notify the court of this arrangement when they filed the lawsuits against the John Doe Defendants?

Wow, when they say that there is “no honor among thieves,” they weren’t kidding.  First Keith Lipscomb is sued by Malibu Media, LLC for not paying them the royalties and/or funds received through Lipscomb’s Malibu Media, LLC v. John Doe lawsuits across the US, and now Voltage Pictures, LLC is being sued by Dallas Buyers Club, LLC for the same thing. I also want to point out that Liberty Media also sued their lawyer, Marc Randazza (although the circumstances were different, and if what Marc wrote in his defense was true (e.g., that they used his office desk to shoot adult films), both Liberty Media and Randazza are both to blame, but for different reasons). I also remember when Prenda Law Inc. stopped paying their local counsel here in Houston the fees and commissions he earned through the filing of the lawsuits.

So… in sum, is this the scenario of thieves stealing from thieves as we have seen before? Or is this an example of “copyright trolls stealing also from their own clients”?? Wow, this field of law has skeletons hidden in closets all over the place.

UPDATE: For more on this topic, SJD covered this topic in detail.  See FightCopyrightTrolls article, “How copyright trolls plunder both US citizens and… rights holders.


CONTACT FORM: If you have a question or comment about what I have written, and you want to keep it *for my eyes only*, please feel free to use the form below. The information you post will be e-mailed to me, and I will be happy to respond.

NOTE: No attorney client relationship is established by sending this form, and while the attorney-client privilege (which keeps everything that you share confidential and private) attaches immediately when you contact me, I do not become your attorney until we sign a contract together.  That being said, please do not state anything “incriminating” about your case when using this form, or more practically, in any e-mail.


Off Topic: “Group Buying” through the eyes of a private bittorrent tracker.

I was reading an article called “Collaborative Intellectual Property Purchasing” by a blogger called Close to Anonymity. In his article, he clearly describes the concept of “group buying,” and suggests that it is one method to provide a solution to the piracy problem. The problem is that in many circumstances [as the copyright laws and DMCA statutes are in their present form] “group buying” is illegal.

NOTE: While he approaches the topic from an honest and upstanding discussion on how to provide a “fix” to the copyright statutes, this article is a dark, cynical, and corrupted view of the topic from a jaded view of the law. This article approaches the merits and faults of group buying, but it does so by viewing it through the eyes of a “pirate.” Up front, I ask for the forgiveness from the author.

Collaborative buying, or “group buys” is something that you will find on various bittorrent websites (not public websites like Pirate Bay or what was KAT, but more often on “private” file sharing websites which host “private” trackers). To get access to these websites, you usually need an invitation and need to know someone who knows someone, etc. The private tracker sites are often topic-specific, so if you are looking for art-related books, you’ll go to one bittorrent website which hosts this kind of content, and if you are looking for business-based torrents, you’ll go somewhere else.

The idea as I have seen it in practice is that someone posts a proposed “Group Buy” on a forum for a digital product. This can be a DVD course, a piece of software, or anything that can be copied and shared online. This digital product costs, say, $100, so to get the price down to $10 per person, the user proposing the group buy will ask for ten people to commit to spending $10 a piece. I am not aware of how the funding happens (e.g., through an intermediary website), but one person will purchase the product on behalf of the group, and they will share it with the other users who participated in the purchase. I suppose the group buy participants believe that they are not “pirating” the software or the media because they each contributed a few dollars to purchase it, and in a way, they are right.  However, the law disagrees.

As for the legality of group buys, copyright licenses for multimedia products and software often think in “one purchase, one license, one copy, [or, one purchase, one installation]” terms. You see this concept of “one purchase, one copy” on full display when trying to view a digital copy of a book purchased by your local library via the Overdrive app.  If a library has purchased one copy of an ebook or an audio book, they can only allow that one digital copy to be “taken out” by one user at a time, even though the technology is there to share the ebook or audio book with all of their patrons at the same time.  It’s a silly model for a library to prevent all of their patrons from accessing the copyrighted content at the same time, and my best guess is that if they were to negotiate unlimited licenses, then the cost of licensing the content to the library would be significantly higher, perhaps on the level of a scribd, or a Netflix.com.  Thus, they opt to buy the “one copy” and they strictly adhere to the “one copy owned, one copy available for use” copyright model.

In the context of piracy and group buys, when one end user purchases the product and shares that product with ten other individuals (each of whom paid a proportional share of the cost of the product, and each of whom install the software product on their machines and use the same serial code to activate the product), when the software “phones home” to authenticate the same serial number for the ten computers, the software developer sees the 9 users as “infringers” and the original purchaser as someone the one who is responsible for the piracy, and they’ll deactivate the software for everyone.

Similarly, when group buying something as simple as a movie or a DVD title, the individual who breaks the copy protection on the DVD and provides copies of the cracked DVD to a number of his friends who contributed to the purchase is seen as both violating the DMCA laws (breaking copy protection), and violating the copyright statutes because that user copied the DVD without authorization from the production company.

Thus, the copyright rules and the DMCA rules do need to be updated to stop piracy. I commend the author of the “Close to Anonymity” blog for proposing a viable solution to making products more affordable to end users while at the same time providing the content creators (the copyright holders) with extra money and sales through the group buy. The solution will not stop the “piracy problem,” but allowing for group buys on a large scale can at least mitigate (somewhat) the damage that copyright holders claim to suffer at the hands of piracy.

I am jaded somewhat, however, and I cannot stop the nagging feeling that group buying will never be legalized. The content producers will claim that group buying would hurt their sales, in that if the nine (9) users were unable to get together to purchase the $100 piece of software, if at least two (2) of them paid the full $100 for it, then the content producer would have made $200 in sales, whereas with group buying they would only be making a $100 sale. Thus, they would not go for such a concept.

Similarly, I cannot imagine the lawmakers [who are showered with benefits for voting in line with the MPAA / RIAA lobbyists] would ever try to make content more readily available to end users. If you look at the way lawmakers have voted over the years, copyright statutes only get worse and worse for the public, not better. Case in point (and I am going by memory here without checking this fact) — the statutory damages for copyright infringement were not always $150,000 in the US. This ever-increasing statutory damages limit is the doing of the lawmakers who I can only think had their pockets lined for voting in favor of harsher and harsher penalties for copyright infringement.  Between you and me, I am already of the opinion that the statutory damages for copying one video, music, or copyrighted work are already unconstitutionally high, but good luck getting a judge to rule this way.

Lastly, in the author’s article, he mentions the idea of a group buy for a $1.29 hypothetical song called “Hey Moe.” If the copyright holders knew that multiple individuals could purchase their same song in a group buy settling (e.g., increasing the price to $1.34 by having one purchaser pay $1.24 [a discount] and the other purchaser pay $0.10), while the solution proposed by the author would provide the copyright holder with a $1.34 sale, the “greedy” copyright holder would sulk at the $1.24 in lost profits by claiming that if such a group buy were not available, both purchasers would have paid $1.29 each for the song.

[How would they see lost profits? $1.29 x 2 sales = $2.58 in sales – $1.34 for the group buy sale = $1.24 in lost profits.]

Thus, the realistic result [if a “group buy” framework were legalized and made possible when purchasing copyrighted media] is that the “greedy” copyright holders would steeply increase the price of the media so that the “net” amount they make is the original $1.29 per copy that they would have made were there no group buy in the first place.

In sum, group buying is a great idea and it should be considered when revising the copyright statutes. But practically, because copyright holders in my experience are profit-driven to a fault (greed), and lawmakers are corrupt to a fault, I do not think we will ever see group buying being made legal in the near future.

However, for the pirates out there on private trackers, “group buying” will remain a viable method of obtaining new content to be shared first with the participants of the group buy, and then later with the members of the website. I am by no means encouraging or endorsing the practice, but with things as they are, group buying seems to be the most “ethical” (and still yet illegal) way to obtain content without paying full price for it, and bittorrent websites seem to provide the perfect forum for allowing such a practice to happen. In my opinion, if the bittorrent website only shared content with members who “bought in” to the group buy without sharing it with anyone else, that would be the closest to an ‘ethical’ solution (and yet it would still be illegal). A less ethical solution is to allow each user to buy in after the fact, making the product progressively cheaper-and-cheaper with every downloader “buying in” to the group buy, and thus crediting every previous purchaser’s account every time a new downloader “buys in” to the group buy after the fact.

But then again, through this example, I just made the point of the copyright holder. Eventually with group buys [after-the-fact], the product price would become infinitesimally small, and the copyright holder would only have made one sale of the product, which would then be shared with potentially hundreds or thousands of downloaders. This is copyright infringement in the classic sense — the unlawful copying or duplication of a copyrighted work, and one sale through a group buy would not adequately compensate the copyright holder for the purchase of his work.

In sum, the copyright system is broken, there is piracy, and until the content producers work with end users to make their content more readily available, or they price their products correctly to the point where they could capture the sale of a majority of those who would purchase their product, there will remain end users who might have purchased the product if it were more available or priced lower, but who instead turn to piracy to obtain that media because of the unavailability of that content for a price that the “market” can bear.


Hollywood provides poor content and poor distribution, but blames piracy for their losses.

I thought that TAC’s response to my article last night deserved a spot of its own, so I am pasting it below.

In short, he’s right. As a lawyer, I get so caught up with each individual client and defending whether copyright infringement actually happened or not that I overlooked the big picture “elephant in the room” point — that if the movie production companies would actually make good content which would inspire someone to buy a movie ticket, and if they would make that good content readily available rather than blaming downloaders for a few bucks of loss of revenue, then piracy wouldn’t even be a problem.

I used to be a movie buff. I would see every movie in the theaters, and if there was something I missed, I would catch it later when it came out on DVD. However, the… pardon my language… “crap” that has been coming out of the theaters over the last ten years has lost me as a fan. I cannot remember the last time I saw a movie and felt that I got my money’s worth. More often then not, I leave the theater feeling cheated.

The internet created a problem for the movie companies where it enabled average internet users to share digital copies of movies which [by definition of being “digital”] are the identical quality as the files burned on DVDs from which they are ripped. They tried to stop the copying through creating privacy measures that blocked an individual from being able to copy videos, but individuals got around those protections.  Then they passed the Digital Millennium Copyright Act (“DMCA”) statutes and made it a crime to unblock the copy protections, but people did it anyway.  Then they sued the downloaders and claimed they were going after the lost revenue, but instead, they went after statutory damages of $150,000 per instance of infringement.  In the process of suing downloaders (rather than suing the initial uploader or working to take down the infringing videos), with the birth of the Dunlap Grubb and Weaver, LLC Voltage Pictures, Inc. “Hurt Locker” and “Expendables” lawsuits, Voltage Pictures, Millennium Films, and other production companies turned their failed b-rated movies into a money-making extortion-like shakedown scheme where they asked for tens of thousands of dollars for what was really the loss of a movie ticket or a DVD rental.

The point is that Hollywood and their production companies spend so much time trying to clamp down and stop people from getting content that if they spent those same dollars finding new ways to make content readily available, they would stop the piracy problem (or at a very minimum, they would convert many would-be pirates into paying customers).  Netflix, Amazon Prime Video, and Redbox have the right idea of trying to find ways to get movie content into consumers’ hands, but even they run into licensing problems where the Hollywood movie studios won’t let them provide content to their subscribers (and thus great movies and TV shows are commonly lost to history).

[Case in point — The Stargate TV series (Stargate SG-1, Stargate Atlantis, and Stargate Unvierse) — all AMAZING shows, but there was a point that Netflix took them down from their site citing licensing issues, and if you wanted to see them, you would have needed to either buy the DVDs on Amazon, or “look elsewhere” for them (meaning, piracy).  I would have happily paid more to Netflix to keep them available, even in a “click here to pay a bit more to see this video” fashion.  UPDATE: I am happy to share that Amazon Prime provides all seasons of these shows to their paying customers, so yes, Jeff Bezos is doing his job of making content available.]

This argument has gone around in circles for many years. Point being, the movie companies have obviously chosen that their focus will be to clamp down and spend their money to fight the losses from piracy rather than innovate and make good content that would inspire people to open their wallets and pay for a movie ticket or rent a DVD.

This is my point, this is my feeling, this is how I see things. I could be wrong, but who cares. Unless I see quality new content in the theaters (and not recycled old story lines), I’m not buying a ticket. Superman versus Batman?!? Really? Yet one more Borne Identity?!? Really? Ice Age in Space?!? Really? How many times can I hear the same story told over and over again? I’m honestly bored of all of this recycled media crap and I wish they would start looking for new and original content.

Thus, in all fairness and thanks to “That Anonymous Coward (TAC),” below is his comment to last night’s “We are winning the bittorrent piracy war against copyright holders, but what are the unintended consequences?” article which inspired this entire line of thought.

TAC from that anonymous coward :
 

And there in lies the biggest problem.
People look at Popcorn Time, and don’t understand how it works. They might assume that its just an awesome service. It works like everyone imagines we should be able to get content.

The “war” has always been pointless.
Everything done to “stop” pirates, ends up punishing paying customers… and eventually when you hassle paying customers enough they look for other ways to get the content.
We’ve missed out on technology moving forward, because of screams that it MIGHT hurt the bottom line of an industry that has its own special ‘accounting’ practices that manage to make a world wide blockbuster look like it lost money.
They aren’t honest about their books, they aren’t honest about actual harm, they aren’t honest about why they refuse to stop punishing paying customers & creating more consumers that might turn to piracy because it meets their want for the content how, where, when they want it that the industry can’t seem to understand.

When they cling to an outdated business model, ignoring the consumer demand for access, they have forgotten they are in business to sell content… not impose pointless control over people who already paid them who get treated worse for playing by the rules.

Imagine what they could have done with all of the time and money they have dumped into the anti-piracy schemes (that never pay that well or accomplish what is promised) and had used it to “fix” the horrible patchwork of laws & rules to create a unified worldwide business model that makes getting the content customers want faster & easier. But then they would be making more money they they ever imaged possible… but would still be imagining there is a dollar out there they aren’t getting & end up harming paying customers chasing the imaginary dollars.


We win the piracy war, and CEG-TEK turns evil.

Every pirate knows that the only way to block the copyright trolls from identifying their true IP addresses (and thus sending out DMCA copyright infringement notices, as outfits such as CEG-TEK have been known to do) is through the use of a Virtual Private Network (VPN) [, and not just any VPN, but a paid VPN provider which does not track their subscribers’ activities*].

In recent weeks, I have heard from various copyright trolls that bittorrent users are “winning the piracy war,” in that their activities have thwarted the copyright holders from learning who they are. Armed with what is becoming common knowledge of free software which can be configured to stream pirated content (e.g., Kodi, formerly XBMC), internet users who wish to “unplug” from the cable companies are able to do so in a way in which it becomes difficult if not next to impossible to be caught viewing streamed content**. Not only this, but many have even purchased Amazon Fire sticks which can be jailbroken to allow the Kodi software to be installed on it, and they are watching pirated videos from their HDTV without even needing a computer.***

But what is the effect of “winning the war” on those who are left behind and don’t realize that they need to use a VPN if they are going to bittorrent their favorite movie, software, or video game? This is the point of the article.

The unintended consequence of bittorrent users learning to use a VPN, or migrating away from bittorrent and towards free streaming services is that copyright holders [who for three years now have enjoyed easy settlement money] are realizing that there simply are not enough people to send DMCA / copyright infringement notices to in order to line their pockets with gold and dirty cash. As a result, it is my experience that they are becoming “less nice” and they are trying to make more money from fewer downloaders. Case-in-point: Girls Gone Wild DMCA notices used to ask for one $300 settlement for a whole page of 60+ videos, but now they are asking for tens of thousands of dollars for that same “click” of a bittorrent file.

I am also noticing that CEG-TEK is acting differently, perhaps in response to what has been described to me as a steep decline in numbers of “pirates” to whom they can send DMCA notices. In the past few weeks, it has been my experience that Copyright Enforcement Group (CEG-TEK) is now sending multiple notices out to the ISPs for the same download. In one case regarding their Girls Gone Wild client that I mentioned above, CEG-TEK sent literally over 1,000 notices to one ISP for the alleged download of one bittorrent file.

At first I thought this was a glitch in their computer system, but then it occurred to me that maybe CEG-TEK somehow benefits from keeping the numbers of DMCA notices sent to the ISPs artificially high. Is there any benefit to them to be doing this? I have been racking my brain on this topic and I still cannot come up with a reason.

Honestly, here is my concern. When an animal is backed against the wall, what does it do? It attacks. If indeed we are winning the bittorrent piracy war, I am concerned that CEG-TEK will begin taking on new clients who thrive on stacking their bittorrent files with hundreds of adult films. Those who are sophisticated will understand exactly who I am speaking about.  

They will then trap the unsuspecting bittorrent user who “clicks on ONE bittorrent file” in their spider web, and that user will receive hundreds of DMCA notices which will scare the b’jeebies out of him.  Then they will give in to the urging of their less-than-ethical client, and they will agree to start charging more than the $300 per title that they currently do (remember, at one point, CEG-TEK used to charge $200 per title, and then at what I understood to be the urging of their client, they raised the settlement amount to $300 per title).  So they are pliable, as we have seen in the past.

In the end, just as we saw hints of this with the recent Girls Gone Wild debacle, CEG-TEK will morph from a $300 per title copyright enforcement outfit (lamb) into a $3,500 per title shakedown outfit (wolf) where they base their settlement amounts on the client’s ability to pay rather than what they believe is a “fair” amount to compensate the copyright holders.

Last, but not least, I learned that CEG-TEK threatened an accused downloader with criminal prosecution this week. For those of you who know me, I have spent almost every day since 2010 working on copyright infringement cases. NEVER until last week have I seen a copyright holder threaten an accused internet user with criminal charges for a copyright infringement matter.

In sum, the times they are a changin’. If we are indeed winning the war, what will CEG-TEK turn into in order to survive?  And, what will their copyright holders (who for the most part have been docile and lazy these past few years) do when their easy income stream dries up?


CONTENT CUT FROM THE ARTICLE:

*[UNRELATED PERSONAL NOTE: I am a fan of such VPN providers not because they make piracy more difficult to detect, but because I believe strongly in a person’s right to be anonymous. The amount of snooping that happens with internet trackers, cookies, and newer methods literally sickens me, and I do not believe that advertising companies and ISPs should have so much knowledge about their customers. For this reason, I have nothing wrong with sharing for privacy purposes that examples of VPNs that you can rely on can be easily found by searching “torrentfreak secure vpn” on Google, or just by going to TorrentFreak’s website where they review VPN providers which take your anonymity seriously. Just be sure to have some mechanism in place that if the VPN connection goes down, even for a second, that your real IP isn’t exposed to whatever site you happen to be visiting, or to whatever server you happen to be connected to. This is called a “DNS leak,” and there are easy ways to configure your system to lock down the connection if or when the VPN goes down, even for a second.]

** NOTE: There is a popular software called PopcornTime which I am sad to share has given our firm many clients who have been caught downloading mainstream movies (e.g., The Dallas Buyers Club cases, Voltage Pictures’ Fathers & Daughters Nevada, LLC cases, and most recently, Millennium Film’s London Has Fallen (“LHF”) movie cases, etc.). Most recently, I have been seeing new CEG-TEK notices for Millennium Film’s “Criminal” movie which the copyright holders have already started suing in “Criminal Productions, Inc. v. John Doe” copyright infringement lawsuits . The reason for so many getting caught is that PopcornTime appears to be a software which allows you to stream video content, but it uses bittorrent as its back-end to download the movies.

*** NOTE: The Amazon Fire sticks which have Kodi installed in my opinion can still get you caught for copyright infringement. The reason for this is that they connect directly to the internet exposing your real IP address. Most people don’t realize that they need to also configure their ROUTER to connect to the internet through their paid VPN provider.


CONTACT FORM: If you have a question or comment about what I have written, and you want to keep it *for my eyes only*, please feel free to use the form below. The information you post will be e-mailed to me, and I will be happy to respond.

NOTE: No attorney client relationship is established by sending this form, and while the attorney-client privilege (which keeps everything that you share confidential and private) attaches immediately when you contact me, I do not become your attorney until we sign a contract together.  That being said, please do not state anything “incriminating” about your case when using this form, or more practically, in any e-mail.


Is Girls Gone Wild going nuts with their DMCA notifications? (CEG-TEK)

dmca gone wild

I have been sitting on this article for a few days because I was not sure what to make of it.

I don’t know if what I am noticing is based on greed on behalf of the “Girls Gone Wild” copyright holder (a.k.a., GGW Brands LLC) based on their corporate shakeup and recent bankruptcy, or whether CEG-TEK’s computer system has been going haywire sending sometimes hundreds of DMCA copyright infringement notifications for one “click” of a bittorrent file, or if there is a shift coming where CEG-TEK will be using the DMCA notices in a new way to extort larger and larger settlements from accused downloaders.

BACKGROUND [SKIP IF YOU KNOW HOW BITTORRENT WORKS]:
CEG-TEK has always tried to be a modestly clean organization.  While an internet user downloads a video using bittorrent software, CEG-TEK’s servers are “dipping in and out” of the various bittorrent swarms which share their 100+ clients’ [usually adult] videos, and while CEG-TEK is “in the room” (so to speak, meaning, while CEG-TEK’s servers are connected to the bittorrent swarm [in which the internet users’ bittorrent software downloads file fragments from multiple individuals also in that same bittorrent swarm, and in which the bittorrent software shares (“seeds”) file fragments it has acquired to other bittorrent users in the swarm who are lacking that particular file fragment in order to obtain the entire shared file(s)), CEG-TEK writes down the IP addresses of each of the file sharers, they identify which ISP that IP address belongs to, and their computer sends a DMCA notice to that ISP.  That DMCA “scare letter” notice is then forwarded to the account holder who was assigned that IP address at that particular date and time.

So with the Girls Gone Wild copyright holder, in the olden days (meaning up until two weeks ago), an internet user would click on a bittorrent file which contained something like 20-30 GGW videos, but when we logged into the CopyrightSettlements.com website to view the claims against my client, there would only be a few claims of copyright infringement.  Why?  Because GGW was having CEG-TEK ask for $300 per copyrighted DVD (which it itself contained many “files” or “scenes”).  Point being, one click, one copyrighted DVD pirated, one $300 settlement.

This is no longer the case.  Now when an internet user clicks a download link on a bittorrent website (sample screenshot of a GGW bittorrent link below — this one containing 95 video files), the same 20-30 video files are downloaded, but instead of ONE (1) DMCA notice being sent to the internet subscriber’s ISP, these past few weeks, 20-30 DMCA notices are being sent.

TPB_GGW

To make the effect of downloading Girls Gone Wild videos more egregious, instead of asking for $300 for each GGW DVD pirated, the copyrightsettlements.com website now lists 20-30 “cases,” asking for $300 for each file downloaded, rather than $300 for each DVD.  Thus, in the 20-30 file example, now an accused internet user will see a settlement request of $6,000-$9,000 for one click of a bittorrent website (or in the example shown above with 95 video files, CEG-TEK would now be asking for a $28,500 settlement, when before it would have been just a few hundred dollars).

Now, let’s take the scenario further, because I’ve seen settlement amounts as high as $78,000 in the past few days.  How?

That same internet user who clicked on this link above containing 95 titles leaves his bittorrent software running in the background.  He does not realize that after the downloads are complete, his software is set to “seed” (upload) the files to other bittorrent users who have not yet acquired all 64.02 Gigabytes of data (as if someone actually has that amount of free space on their hard drive to download all of those videos, and as if each and every video was actually downloaded — both topics outside the scope of this article).

It takes roughly 4-5 days for a Charter or a CenturyLink subscriber to receive his DMCA notice, so by the time he learns that he has done something wrong by that “one click,” his ISP has changed his IP address 5 times (IP addresses are leased to subscribers for 24 hours, although this differs from ISP to ISP), that means that CEG-TEK “thinks” he has 475 instances of infringement (MATH: 95 videos * 5 days seeded = 475 instances of infringement).  Thus, when those 29 downloaders and 5 uploaders shown in the image above (listed as “29 leechers” and “5 seeders”) get their DMCA copyright infringement notice for this particular torrent five (5) days later, each one of them will see a settlement amount of $142,500.  Obscene.

Now obviously a lawyer (myself or anyone else) can negotiate the amount of the settlement, or, based on the copyright holder’s tendency to sue or knowing the limitations of CEG-TEK’s abilities to know who you are [taking into consideration the ISP and the known information such as geolocation data as to where you live, etc.], I may just as easily suggest that you ignore the claims against you, but quite frankly, if CEG-TEK is really expecting to get a $142K settlement (or even a $10K settlement), well, this suggests to me that maybe they are getting a bit greedy.

In sum, here is what I know:

1) Girls Gone Wild and CEG-TEK (as their agents) are now asking for $300 settlements for each and every video file downloaded.

2) CEG-TEK’s computer systems are going haywire, and ISPs are receiving HUNDREDS of DMCA violation notifications for files contained within one bittorrent file.

3) CEG-TEK’s computer systems lock out users who have more than ten (10) claims against them with a note to call their 800 number to discuss the claims with them.  This means that your claims WILL LIKELY BE LOCKED when you try to log in and you will get their “Please contact Ira Siegel” notice.

4) If you made the mistake and called them, you would be faced with an obscenely high settlement amount to negotiate down from.

My interpretation:

Here is my interpretation of what is going on.  I see two possible causes for what we are seeing.

The founder of Girls Gone Wild appears not to be an upright citizen.  He has been reportedly convicted of tax evasion, bribery, false imprisonment, assault causing great bodily injury, dissuading a witness, record-keeping violations, and he has even reportedly pleaded no contest to child abuse and prostitution.  It does not jolt me to add copyright trolling to his list of indiscretions, and thus if this new development is coming from CEG-TEK’s “Girls Gone Wild” client rather than from CEG-TEK itself (management), I am not surprised by what I am seeing.

From 2007 – 2013, GGW advertised up the wazoo on late night infomercials, and they used to sell their DVDs, but there was a point where something happened to their business — the internet happened, and people stopped purchasing their videos.

In 2013, I remember hearing about a lot of drama and “shake-ups” on the corporate level, where Girls Gone Wild was talking about filing for bankruptcy, and where they were no longer putting their focus on the sale of DVDs.  Rather, moving forward, they would be focusing on “intellectual property monetization,” which is another way of saying that they hired a number of lawyers and copyright enforcement entities (e.g., CEG-TEK, or Copyright Enforcement Group) to elicit settlements from those internet users who they blame for the collapse of their company.

In sum, either Girls Gone Wild is tired of collecting a few bucks here and there, or CEG-TEK is no longer happy with the $300 settlement and they are trying to increase the settlement amounts to lawsuit levels without having to file a lawsuit.  Either way, be aware that things are changing, and I will let you know as I see the shift reveal itself in a more pronounced way.


CONTACT FORM: If you have a question or comment about what I have written, and you want to keep it *for my eyes only*, please feel free to use the form below. The information you post will be e-mailed to me, and I will be happy to respond.

NOTE: No attorney client relationship is established by sending this form, and while the attorney-client privilege (which keeps everything that you share confidential and private) attaches immediately when you contact me, I do not become your attorney until we sign a contract together.  That being said, please do not state anything “incriminating” about your case when using this form, or more practically, in any e-mail.


“Shell Game” Copyright Holders and Attorney Fees

When representing a client, in my eyes I am representing the internet users against the “bad guys.” Copyright holders who use the federal court subpoena power to unclothe the identity of the internet subscriber with the intent of extorting that internet user out of thousands of dollars (regardless of whether the internet user did the download or not) is an abuse of the federal court system.  To offset the very high cost of hiring an attorney to defend a copyright infringement claim in federal court, copyright law provides the “winner” of the lawsuit attorney fees (see, 17 U.S. Code § 505).

That way, when an accused internet user is forced to spend tens of thousands of dollars to properly defend him or herself against claims of copyright infringement (which often include appearing for multiple court hearings, allowing the household’s computers and electronic devices to be inspected by a forensics expert, being questioned under oath [or having to answer written interrogatories under oath]), *IF* at the end of the investigation (e.g., at the end of “discovery”), the claim of copyright infringement ends up being unfounded and the claim of copyright infringement against the internet user is dismissed, the law gives that internet user the right to collect from his accuser all the fees he paid to his attorney.

Beware, however.  Just because a defendant is entitled to attorney fees does not mean that they will get them.  There are three scenarios which can stop a defendant from obtaining their fees back from a copyright holder plaintiff:

1) The “cut and run” scenario, where a copyright holder dismisses the defendant before a judge can rule that there was no infringement, and

2) the “limited liability company” plaintiff, where the movie company has created smaller independent “shell” companies, and they use those companies to sue defendants in copyright infringement actions (knowing that if those companies incur liability, that liability will not trickle up to the owner or to the other corporate entity), and

3) the “underfunded shell company” scenario, where the copyright holder might not have the funds to pay the attorney fees to the defendant (for example, when the settlement funds have been siphoned off to another entity, or paid out to the copyright troll attorneys).

SCENARIO 1: THE “CUT AND RUN” SITUATION

In a “cut and run” situation, the accused internet user (a.k.a., the “named” John Doe Defendant) mounts a sufficient defense to demonstrate either that the plaintiff copyright holder does not have sufficient evidence to find him guilty of copyright infringement, or he is able to prove that it was not him “at the keyboard” at the time the download took place (because suing the account holder based on an ISP demonstrating that the account holder was assigned a particular IP address [which was used to participate in the downloading or copying of a copyrighted video] has been held in various jurisdictions to be insufficient to prove that it was the account holder who did the download).

In this first scenario, the account holder “fights back,” and hires and pays an attorney to file an answer to the complaint once named and served.  That attorney shows up to the court hearings, he cooperates with the discovery requests (the attorney sits with his client as he answers questions under oath, objects to questions, speaks to the judge in the middle to clarify issues that arise, etc.), and after what ends up being hundreds of hours, the copyright holder dismisses the defendant proactively before the court can rule on a summary judgement hearing that there was never a case against the client in the first place.   I saw this over and over with the Malibu Media, LLC cases.

SCENARIOS 2 & 3: THE “LIMITED LIABILITY COMPANY (LLC)” PLAINTIFF, AND THE “UNDERFUNDED” SHELL COMPANY:

The second scenario in which a defendant could be deprived of attorney fees is when the movie studio sets up multiple limited liability “shell” entities (as seen by the “LLC” designation behind the name), and then that “shell” entity is used to file a lawsuit, but it does not have the funds to pay an award of attorney fees should it lose the copyright infringement claim against the “named” defendant.  This could be either because the “shell” entity was not properly funded in the first place, or because the plaintiff lawyers or the owners of the entity are siphoning the settlement funds out of the entity so that it would not be able to pay attorney fees if it was ordered to do so.

This is what bugs me about the limited liability entities which are set up and used to sue defendants — there is no accountability to the accused copyright defendant for the misuse of those entities.  Using Voltage Pictures, Inc. as an example (and by no means am I insinuating that their “shell” entities are misused or underfunded), Voltage Pictures, Inc. is a big name movie company that has sued thousands of defendants over the years.  Since our firm started in 2010, I have been seeing Voltage Pictures, Inc. as a copyright troll who has sued defendants, who has hired not-so-ethical attorneys to enforce their copyrights against bittorrent users, and I do not think one year has past where I have not seen one lawsuit or another where Voltage was behind the scenes as the copyright holder.

Over the years, I have seen Voltage shift from suing thousands of defendants using their their own Voltage name in the lawsuits to setting up smaller “shell” entities which are then used to sue John Doe Defendants.  It is not always obvious that a company suing for copyright infringement is a Voltage copyright troll, but there are tip offs in that each time a new copyright troll “shell” entity files a lawsuit, I see the same copyright troll attorney(s) filing the identical complaint as they filed in other lawsuits, and each time, I see the same discredited German forensics company (Guardaley) listed as the “expert” in the lawsuit.  With so many hundreds of lawsuits filed — and I wasn’t sure I was going to go here, but I am — , I ask myself why the judges don’t see that these are the same set of entities filing the lawsuits, and I shake my head in disgust that the copyright troll scam is still going on.  It boggles my mind that companies as large as Voltage Pictures, Inc. are still taking part in this kind of legal militarism and butchery.

Dallas Buyers Club, LLC was one such shell company that was set up and used to sue defendants, which I later learned was a Voltage Pictures, Inc. shell company.  More recently, Fathers and Daughters Nevada, LLC appears to be another such shell company.  These companies are all “limited liability companies,” which means that unless the company was structured improperly when it was formed, or unless the principals of the company did something stupid (e.g., intermingling company funds with another shell company’s funds), it is very difficult to “break the veil” to hold the owner of the company personally liable for the company’s mistakes.

This got me thinking.  A defendant does not immediately know whether a copyright troll corporate “shell” entity is properly funded or not, and before hiring an attorney and spending tens of thousands of dollars on a defense, the first thing that defendant should do (or have his lawyer do) is have the “shell” company demonstrate that they have the funds to pay the defendant’s attorney fees should it be demonstrated a) that the account holder “named” and served as the defendant was not the one who did the download in the first place, or b) that the plaintiff’s experts cannot provide sufficient evidence to prove that the copyright infringement actually happened.

Why? Because if the plaintiff does not have the funds to proceed, why spend the time and money defending the lawsuit?  Rather, hit them early on with a bond request to demonstrate that 1) they have the funds to proceed, and to demonstrate 2) that they have the intent to move forward, all the way to trial (if necessary).  This is not a cheap proposition for the copyright holders, as lawsuits such as these could easily run into the hundreds-of-thousands of dollars in fees.

 

Anyway, my point in this article is simply caveat emptor.  Before you go ahead throwing out all of your money paying an attorney for a defense, make sure the plaintiff can pay your fees if you win. Have them post a bond, or do something to demonstrate that they have the funds to proceed if the case goes in that direction.  If they cannot demonstrate this, then maybe there is no need to defend your case in the first place.

In sum, the copyright laws as they are practiced is lopsided.  Copyright owners are given their remedy — the ability to sue for “statutory damages” of $150,000 per instance of infringement.  And, the accused defendant apparently has his remedy — the ability to retrieve his paid attorney fees when he successfully defends his case against the copyright holder.  Why shouldn’t an accused defendant take a few steps to preserve his rights and check to make sure the plaintiff can pay his attorney fees if he wins?

NOW A NOTE FOR THE JUDGES:

Accused internet users are thrown around, threatened, extorted for thousands of dollars in cash, and the law does little to protect their rights. Defendants have the remedy to have their funds returned to them if they fight and win, but what individual internet user defendant has the ability to pay for a lawyer to defend him in court?  What use is it for the law to award attorney fees and costs to a defendant who prevails “on the merits” when that defendant cannot afford to hire a lawyer to get to that point in the legal process?

Rather, the duty to protect the public in circumstances such as these (suing internet users for the download of copyrighted materials) is on the judges themselves.

Judges know (or their clerks can easily discover) when a particular copyright holder is a “copyright troll” and they know if the same parties have filed serial lawsuits in one state, or if they have filed multiple lawsuits in multiple states, or whether that same entity has sued defendants using multiple shell companies.  Judges also know that most accused defendants cannot pay a lawyer even for the most basic defense.

Too often, judges do not act as the gatekeepers they are, and they let the copyright holders do whatever they want to do while the judges pretend to pressure the copyright holders to move forward and name and serve defendants, or not. This is a charade — one that unnerves me, because it is an open secret that the copyright holders have absolutely no interest in taking a case to trial.

Judges who rubber stamp “expedited discovery” motions: WHY allow copyright holders access to the names of the accused John Doe Defendants when those copyright holders have shown through their past filings that they have absolutely NO INTENTION of proceeding to trial?  And why not make the plaintiff copyright holders demonstrate that they intend to proceed to trial (e.g., by having them post a bond as a matter of course) rather than using your federal court as a weapon to extort settlements from defendants who otherwise do not have the funds to pay for an adequate defense?

Since I mentioned Voltage Pictures, Inc. in this article (since they are the ones behind the Dallas Buyers Club, LLC lawsuits from a few months ago, and more recently, they are the ones behind the Fathers & Daughters Nevada, LLC lawsuits), below are a list of cases filed across the U.S. (and this is only a small sample of the lawsuits that were filed).  Judges, how can you NOT know that this “Fathers & Daughters Nevada, LLC” entity is a shell company practicing copyright trolling across the US?!?  Will you now let this “shell” entity do the same thing that every Voltage Pictures, Inc. “shell” entity did before them?  Ask yourself: Have ANY of these Voltage plaintiffs gone to trial?

Current Cases Affected by this Article (I am listing these so that you see how deep the Voltage Picture lawyer network goes — cases are not only filed in Texas, but like the Malibu Media, LLC cases were, they are filed across the US):

Fathers & Daughters Nevada, LLC v. Does (Case No. 4:16-cv-01968, Texas Southern District Court (July 5, 2016))
[Plaintiff Attorney Joshua S. Wyde]

Fathers & Daughters Nevada, LLC v. Does (Case No. 4:16-cv-01315, Texas Southern District Court (May 10, 2016))
[Plaintiff Attorney Joshua S. Wyde]

Fathers & Daughters Nevada LLC v. Unknown Parties (Case No. 2:16-cv-01073, Arizona District Court (April 15, 2016))

Fathers & Daughters Nevada LLC v. Unknown Parties (Case No. 1:16-cv-00362, Michigan Western District Court (April 8, 2016))

Fathers and Daughters Nevada, LLC v. Does 1-13 (Case No. 2:16-cv-10948, Michigan Eastern District Court (March 16, 2016))

Fathers And Daughters Nevada, LLC v. Does 1-26 (Case No. 1:16-cv-02452, Illinois Northern District Court (Feb. 22, 2016))

Fathers and Daughters Nevada, LLC v. Does 1-32 (Case No. 1:16-cv-02453, Illinois Northern District Court (Feb. 22, 2016))

Fathers and Daughters Nevada, LLC v. Does 1-17 (Case No. 1:16-cv-02456, Illinois Northern District Court (Feb. 22, 2016))

Fathers And Daughters Nevada, LLC v. Does 1-21 (Case No. 1:16-cv-02450, Illinois Northern District Court (Feb. 22, 2016))

Fathers and Daughters Nevada, LLC v. Does 1-15 (Case No. 2:16-cv-10371, Michigan Eastern District Court (Feb. 2, 2016))

Fathers and Daughters Nevada, LLC v. Does 1-15 (Case No. 2:16-cv-10372, Michigan Eastern District Court (Feb. 2, 2016))

Fathers & Daughters Nevada, LLC v Does 1 Through 12 (Case No. 1:16-cv-00187, Hawaii District Court (April 22, 2016))

Fathers and Daughters Nevada, LLC v. Does 1-13 (Case No. 4:16-cv-10948, Michigan Eastern District Court (March 16, 2016))

Fathers and Daughters Nevada LLC v. Unknown Parties (Case No. 2:16-cv-00406, Arizona District Court (Feb. 12, 2016))

Fathers and Daughters Nevada, LLC v. Does 1-14 (Case No. 4:16-cv-10939, Michigan Eastern District Court (March 15, 2016))

Fathers & Daughters Nevada, LLC v. John Does 1-7 (Case No. 1:16-cv-01318, Colorado District Court (June 1, 2016))

Fathers and Daughters Nevada, LLC v. Does 1-14 (Case No. 2:16-cv-10939, Michigan Eastern District Court (March 15, 2016))

Fathers and Daughters Nevada, LLC v. Does 1-14 (Case No. 4:16-cv-10751, Michigan Eastern District Court (March 3, 2016))

Fathers and Daughters Nevada, LLC v. Does 1-18 (Case No. 4:16-cv-10785, Michigan Eastern District Court (March 4, 2016))

Fathers and Daughters Nevada, LLC v. Does 1-13 (Case No. 4:16-cv-10654, Michigan Eastern District Court (Feb. 23, 2016))

Fathers and Daughters Nevada, LLC v. Does 1-11 (Case No. 2:16-cv-10910, Michigan Eastern District Court (March 14, 2016))

Fathers & Daughters Nevada, LLC v. John Does 1-15 (Case No. 1:16-cv-00560, Colorado District Court (March 8, 2016))

Fathers & Daughters Nevada, LLC v. Doe 1 et al (Case No. 1:16-cv-00670, Colorado District Court (March 22, 2016))

Fathers and Daughters Nevada, LLC v. Does 1-11 (Case No. 4:16-cv-10910, Michigan Eastern District Court (March 14, 2016))

Fathers & Daughters Nevada, LLC v. Doe 1 et al (Case No. 1:16-cv-00747, Colorado District Court (March 31, 2016))

Fathers and Daughters Nevada, LLC v. Does (Case No. 1:16-cv-00278, New Mexico District Court (April 11, 2016))

Fathers and Daughters Nevada, LLC v. Does 1-15 (Case No. 4:16-cv-10372, Michigan Eastern District Court (Feb. 2, 2016))

Fathers & Daughters Nevada, LLC v. Doe 1 et al (Case No. 1:16-cv-00613, Colorado District Court (March 16, 2016))

Need more examples?


CONTACT FORM: If you have a question or comment about what I have written, and you want to keep it *for my eyes only*, please feel free to use the form below. The information you post will be e-mailed to me, and I will be happy to respond.

NOTE: No attorney client relationship is established by sending this form, and while the attorney-client privilege (which keeps everything that you share confidential and private) attaches immediately when you contact me, I do not become your attorney until we sign a contract together.  That being said, please do not state anything “incriminating” about your case when using this form, or more practically, in any e-mail.


Siemens PLC Lawsuit – Yes, Bittorrent.

This is a follow-up article to the “What to do about the Siemens Product Lifecycle Management Software Inc. v. Does case (TX)” article I wrote last week.

I did a bit more digging into the Siemens Product Lifecycle Management Software Inc. v. Does 1-100 (Case No. 4:16-cv-01422) lawsuit in the U.S. District Court for the Southern District of Texas, and I learned more about their software, and more about where some of the John Doe defendants are coming from.  What I also learned was that this is not the first time they have sued defendants for copyright infringement.

The Siemens Product Lifecycle Management (“PLM”) software being sued over is known as the Siemens NX software.

According to Wikipedia, “NX, formerly known as NX Unigraphics or usually just UG, is an advanced high-end CAD/CAM/CAE software package originally developed by Unigraphics, but since 2007 by Siemens PLM Software… NX is a direct competitor to TopSolid, CATIA, Creo, Autodesk Inventor, and SolidWorks.”

The Pirate Bay shows 9 torrent files for “Siemens NX” software (below).

062016 Siemens PLM NX

Surprisingly, for version 9, there are only 3 seeders (uploaders).  For all others, there is only one seeder.  For a program that takes on average 1GB-5.7GB to download, a download like this could take forever to complete.

Looking at version 10 (the current stable release; version 11.2 is probably a fake), there is one seeder (uploader) and one leecher (downloader).  See attached.

062016 Siemens PLM NX 10

As dry as this post may be, the point is that my suspicions were correct — even though the bittorrent file provides a serial number (probably a valid, but likely an OLD registration code), and even though there is an “activator” which modifies or “cracks” the pirated file to allow the software to accept the old serial number [it likely does this by blocking the “authentication” feature when the software checks with the server to verify the registration key], the software looks to the user as if he has successfully registered the software.

However, through the normal use of the software, the activator software is likely not persistent, which means that after the software is registered using the old key, it restores the software’s executable (.exe) file to its original state.  Then, when using the software, it connects to Siemens’ servers for whatever purpose (to download an update, to check for new features, etc.), and this is how their copyright enforcement / IT department can identify the IP address of the individual using a pirated copy of the software.

In sum, what this means is that Robert Riddle and the Siemens copyright holder likely knows how long the software has been in use, and which IP addresses have been using an old or invalid serial number.  This will likely be a consideration when discussing the matter with the plaintiff attorneys on behalf of my clients.

What all this means for you — 1) June 22nd appears to be the date that Comcast will be ordered to hand over the names and addresses of the 100 accused John Doe defendants, so there is no anonymity and the John Doe defendants will be exposed to being named and served as defendants in the lawsuit. 2) If you have been using the software, they likely know more details than you would like as to what you have been doing with it.  3) Speak to an attorney (me, or anyone else) about what options you have to get out of this, whether you were the downloader, the purchaser (of a pirated copy of the software), or whether you have absolutely no idea why you have been implicated as being one of the John Doe defendants in this case.

 


Siemens Product Lifecycle Software: Copyright Troll?

This is one of the more difficult blog entries to write, because the “Siemens Product Lifecycle Management Software Inc.” case is not the typical bittorrent extortion case, but rather, more of a “compulsory licensing” case.

In short, it would be too easy to say that the 100 John Doe defendants were implicated as downloading or uploading Siemens’ CAD software using bittorrent, because this is not the case. Siemens’ software appears to “phone home” when being used, revealing the computer users IP address (thus making them a target in a lawsuit such as this one).

Cracks and keys probably were part of the software download package, if the software was downloaded via a website. Alternatively, the download instructions perhaps instructed “to block the internet connection using a software firewall,” but the downloader forgot to read the instructions.

Lastly, some of the defendants are believed to have purchased the software (e.g., while the software license itself could cost $20,000, the pirated copy cost $50), but the software they purchased was pirated. Thus, when they entered the key to register the software, the key was flagged as being a pirated copy.

In short, Siemens is a software company looking to stop the unlicensed use of their software, and for this reason, they filed the Siemens Product Lifecycle Management Software Inc. v. Does 1-100 (Case No. 4:16-cv-01422) lawsuit in the U.S. District Court for the Southern District of Texas.

The weird part for me about this case is that there are so many software solutions out there which would accomplish the result for significantly cheaper.  The Siemens software modules appear to be commercial and high-end, which is more than a typical engineer would need to do their work.

So… what to do now. If you purchased a pirated copy or downloaded an unlicensed copy of the software, all is not lost. This is why you will be hiring an attorney — to speak to your plaintiff attorney and “make it right,” whether that means purchasing a copy after-the-fact, or signing a licensing agreement for the months or years the software was in use.

If you are a business owner, or if the software is in use in your engineering company (or on the laptops of your employees) without authorization, you are the plaintiff’s prime targets, and the licensing strategy will likely be more comprehensive.

If you have absolutely nothing to do with this lawsuit and yet you were implicated as a John Doe Defendant, well, this happens too, and I’d be happy to represent you telling them that there will be no software licensing deal, and that there will be no payment to the plaintiff copyright holders.

The immediate concern is that like all copyright infringement “John Doe” lawsuits, your plaintiff copyright holder has been given permission by a federal judge (here, Texas Judge Keith Ellison) to issue subpoenas to the internet service providers to hand over the subscriber contact information to the plaintiff attorney by or before a certain date.  That date is quickly coming to a close, so this is why you have been trying to contact our firm to figure out your options in how to proceed.  I’d be happy to discuss these with you, obviously time permitting.


CEG-TEK: New ISP Recruits in US & Canada.

We already know that it is the business model of CEG-TEK and other copyright monetization companies is to develop relationships with the internet service providers (“ISPs”), and to have them forward copyright infringement / DMCA notices to their subscribers.

I have mentioned this already with regard to the relationships CEG-TEK has with Charter, CenturyLink, and Suddenlink, and as we know, COX Communications, Inc. signed on with CEG-TEK in December of 2015, and has been sending CEG-TEK’s DMCA violation notices to their users.  What we did not notice until now is that Cox Communications has become CEG-TEK’s “golden goose.”

WHY COX IS CEG-TEK’s “GOLDEN GOOSE”:

Why Cox? Because Cox provides its users the same IP address each day. This “one subscriber, one static IP address” trend provides copyright holders and government officials an “ID” of sorts which allows them to identify a particular IP address, watch the activities of that IP address over time as it interacts with different websites (e.g., to see what links that internet user clicks on, to learn where they shop online, what accounts they use, what items they purchase, and what bittorrent downloads they participate in).  Then, when they have developed enough of a profile on that user to convict, they then trace that IP address back to a certain Cox Communications account for prosecution, or in our case, extortion.

For CEG-TEK, they are focusing their efforts on Cox because by doing so, they do not need to obtain from the ISP a past list of IP addresses assigned to that user, and it is very easy for CEG-TEK to go back in time and check their own logs of the past bittorrent swarms to see whether that particular subscriber / IP address participated in any other downloads of their other clients. Some have suggested to me that CEG-TEK can do a search to see what other bittorrent downloads the accused Cox subscriber has participated in. In short, Cox’s “one subscriber, one static IP address” is nothing short of a violation of their subscriber’s privacy, and it is only a matter of time before someone’s IP address gets “followed” and someone gets hurt because Cox is not obscuring the identity of their subscribers.

BRIGHT HOUSE NETWORK IS NOW WORKING WITH CEG-TEK:

Other than Cox, I have recently learned that Bright House Networks (brighthouse.com) is now working with CEG-TEK. I do not yet know in what capacity they are working with CEG-TEK, or in what kind of relationship, but it appears as if they are a new ISP “recruit” in CEG-TEK’s “war” against piracy.

NEW CHARTER COMMUNICATIONS POLICIES AS TO HOW THEY FORWARD DMCA NOTIFICATIONS (THE GOOD AND THE BAD):

For the thousands of you who are Charter subscribers, Charter has recently changed the way they forward the DMCA notices, and this can only be good for subscribers. Instead of forwarding the notices in an e-mail, they are now asking subscribers to “log in” to their website, where only then can then view and copy for themselves a copy of CEG-TEK’s letters.

This is both very good, and bad. On the good side, any “hoops” an ISP makes a subscriber jump through to see the claim(s) against him might annoy the subscriber, but it no doubt infuriates the copyright holders and “monetization” companies (like CEG-TEK) that rely on them seeing their DMCA notices to provide their copyright holder clients their dirty money (I could have said “ill-gotten gains,” but emotionally, calling it “dirty money” seemed to fit better).

THE PROBLEM OF “LOST” DMCA NOTICES:

However, BUYER BEWARE! I have received many calls about people who have physically LOST their DMCA notice because they did not copy it down when they viewed it. And when they called me about it panicked, because I couldn’t see the claims because they did not know who was claiming copyright infringement against them, I couldn’t tell them whether the copyright holder was a “copyright troll” or not, or whether they are suing downloaders in the federal courts. So please, as soon as you access the DMCA violation notices sent to you, either download a copy of it for yourself, or copy-and-paste it into a text file.

GOOGLE FIBER IS A DISORGANIZED ISP WHICH HAS ALSO LOST DMCA NOTICES:

Google Fiber subscribers also — Google Fiber seems to not be organized as to keeping track of the DMCA notices that they are forwarding to their subscribers. So when an internet user inadvertently deletes that notice, it is gone forever. Neither I, nor anyone else can help you fight or settle (or even advise you as to your options) if you accidentally deleted the notice. I suspect that if you are reading this article, it may already be too late.

CANADA — NEW CANADIAN ISP RECRUITS:

Okay, last piece of news and then I need to get back to work. As we know, CEG-TEK has been sending letters for months to Canadians and forcing the ISPs to send these letters to their subscribers under what is known as “notice and notice.” I have written about the problem and the solutions here in my “CEG-TEK: What are your financial risks and considerations of ignoring, settling, or being sued for copyright infringement if you live in Canada or Australia?” article. The news is that just as CEG-TEK is growing their business by signing on new ISPs in the US, this is also true in Canada.

The new Canadian ISPs now working with CEG-TEK appear to be Videotron (a.k.a., Vidéotron), Bell Aliant (www.bellaliant.ca), and Eastlink (www.eastlink.ca) — this will also affect their FibreOP users under the ISP names NorthernTel, DMTS, Telebec (Télébec), and Cablevision. If anyone receives notices from these internet providers, I would like to see them, as I hear that CEG-TEK is not following the notice rules.

As for the older ISP names — Bell Canada, Rogers Cable, Shaw Communications (sjrb.ca), ACN Canada, Electronic Box Inc., TELUS Communications, Start Communications, and TekSavvy, yes, these are still in play. The only one of these that has my respect thus far is TekSavvy which has tried to protect their users by fighting back, but even so, they are still sending CEG-TEK’s DMCA violation / copyright infringement letters, so my respect is limited.


CONTACT FORM: If you have a question or comment about what I have written, and you want to keep it *for my eyes only*, please feel free to use the form below. The information you post will be e-mailed to me, and I will be happy to respond.

NOTE: No attorney client relationship is established by sending this form, and while the attorney-client privilege (which keeps everything that you share confidential and private) attaches immediately when you contact me, I do not become your attorney until we sign a contract together.  That being said, please do not state anything “incriminating” about your case when using this form, or more practically, in any e-mail.


The cozy relationship between CEG-TEK and the ISP.

Obviously I am not privy to the contracts signed between CEG-TEK and the internet service providers (“ISPs”).

There are three possible relationships between a copyright enforcement company and the ISP through which they send DMCA letters informing subscribers that unless they settle the claims against them for downloads that allegedly occurred, they might be implicated in a copyright infringement lawsuit.

1) A RELATIONSHIP OF FORCE AND THREATS AGAINST THE ISP (where CEG-TEK threatens, and the ISP complies),

2) A RELATIONSHIP OF PROFIT FOR BOTH SIDES (where CEG-TEK pays, and the ISP cooperates), and

3) A RELATIONSHIP OF PURE MOTIVE (both CEG-TEK and the ISP hold hands and cooperate, to “fight piracy”).

SCENARIO 1) “A RELATIONSHIP OF FORCE AND THREATS AGAINST THE ISP” (where CEG-TEK threatens, and the ISP complies)

In the first scenario, a company or set of attorneys representing the copyright holders contacts the ISP and informs them that they might be in violation and subject to various lawsuits, fines, and penalties for not complying with the U.S. Digital Millennium Copyright Act (“DMCA”), and other statutes (in Canada, the ISPs are literally required to pass on claims to their customers, and this is referred to as “notice and notice”). If the ISPs do not comply, they could be sued for millions of dollars for encouraging piracy on their networks (I am speaking loosely in the vernacular).

ISPs across the US would be included in this first scenario, which explains how many of the bigger ones such as Comcast [who I understood were originally NOT working with CEG-TEK, because doing so would violate how they are supposed to act by being part of the “Six Strikes” system] started sending out abridged CEG-TEK infringement notices a few months ago, even to first time offenders.  Another such example of ISPs who “take steps” to stop infringement is Charter, which has been known to temporarily suspend their users who are accused of copyright infringement, but only with a pop-up notice that they need to click on to acknowledge the claim of copyright infringement against them before their internet service is resumed, unhindered.

NOTE: Comcast also has a strong profit motive as demonstrated in Scenario 2 (below), as does Charter, who has been known to be working with CEG-TEK since the beginning of their operation.  We believe the relationship between Charter and CEG-TEK is one of “for mutual profit” (Scenario 2) because CEG-TEK has obtained information about accused downloaders that they could only obtain with the help of the ISP.  Also, I understand that over the years, there have been periods of “tension,” (as I called them) where Charter has held back the sending of the CEG-TEK DMCA infringement notices for sometimes weeks at a time, only to send them all at once (my joke at the time was, “I guess they were waiting for their payment.”)  All jokes aside, the point here is to note both the Comcast example and the Charter example to show the actions an ISP will take to make it look as if they are “taking steps” to fight piracy.

In each of these scenarios, the ISP does the absolute minimum to comply with the claims against their customers, but what you don’t see is the “wink and a nod” from the ISP that they are likely not going to shut your account down or lose you as a customer over this (in other words, your activity violates the ISP’s terms of service “TOS” or “PUA”, but I have not been hearing of anyone’s account being shut down).

UNRELATED, BUT STILL VERY IMPORTANT: I have even heard that ISP customer service representatives actively tell their subscribers [in ignorance of the law] to just delete the infringing content and to ignore the notices.

FYI, look up “spoliation” of evidence, where the victories of the copyright holders in the US against downloaders happen where the copyright holder can prove that the accused defendant wiped his hard drive or deleted the infringing content after being notified by the copyright holder that there was a claim of copyright infringement against the subscriber. Thus, take what the ISP customer service representative says with a grain of salt because even though they might not care that the download happened on their network, there is still the law and the claims against you, and your ISP’s customer service rep is in no position to be giving you legal advice. Better to deal with or resolve the CEG-TEK claim against you first (if you were going to settle) before wiping the hard drive in fear of having other claims of copyright infringement or lawsuits filed against you (e.g., by other copyright holders such as Malibu Media, LLC, etc.) in the near future.

NOTE: Your relationship with your ISP has ABSOLUTELY NOTHING TO DO with your relationship with the copyright holder (or CEG-TEK) or the claims against you, since the copyright holder(s) still have one or more claims of copyright infringement against you.

SCENARIO 2) “A RELATIONSHIP OF PROFIT FOR BOTH SIDES” (where CEG-TEK pays, and the ISP cooperates)

In this scenario, the understanding is that CEG-TEK is actively paying the ISP for providing their DMCA infringement notices to their subscribers. While I did not initially believe this was happening in Canada (although I did have my suspicions), as of this morning, I now believe that Shaw Communications Inc. (a.k.a. Shaw Cablesystems G.P., or “sjrb.ca”) is working with CEG-TEK in a “for profit” relationship. I obviously cannot prove this, but from what I understand is about to happen with their subscribers [who will shortly be receiving multiple letters of infringement sent to them at the same time], this type of “delay, then dump a bunch of infringement claims” experience usually happens in a “for profit” relationship when the ISP is being compensated for the time they spend complying with the copyright infringement requests, and the payment is not immediately made.

Two examples demonstrating the “for profit” motive of various ISPs in the U.S. with facts (in these two cases, the “for profit” motive was forced upon CEG-TEK to their frustration) can be seen in the past behaviors of both Comcast and AT&T. A few years back, to handle the increasing number of subpoena requests (at the time, as a result of John Steele / Prenda Law Inc. lawsuits and the increasing number of bittorrent lawsuits being filed across the U.S.), Comcast opened up a “subpoena compliance” department in Morristown, NJ and staffed [at the time] twelve new hires just to handle the new subpoena demands from the lawsuits. In the lawsuit filings, when the copyright holders and their attorneys learned that Comcast was trying to profit off of the bittorrent lawsuits, they complained to the judges that Comcast was stalling on the subpoenas (Comcast was, at the time, under a duty to comply with the many subpoenas that were being requested of them).  It came out that Comcast was asking for something like $25-$50 per IP address lookup, when they were supposed to be complying with the subpoena for free.  Comcast prevailed in getting their IP address lookup fees, which I understand they continue to charge, even though other ISPs still do this for free.

Similarly, for those who know anything about Ira Siegel — the name that shows up on the bottom of every single CEG-TEK DMCA notice — there was a point where Ira absolutely refused to work with AT&T because AT&T’s subpoena department would charge $200 per subpoena request or IP address lookup, something at the time I heard that he found infuriating. Thus, you’ll notice that even today, you’ll never find a recipient of a CEG-TEK violation notice being a subscriber to AT&T, but as you can see, there *is* a profit motive of the ISPs to benefit financially from the growing influx of copyright infringement claims against their subscribers.

NOTE: I understand that the relationship between Charter, Centurylink, Suddenlink, Cox, sometimes Comcast, [and now most recently in Canada, Shaw Communications] fall under this scenario. The reason I am of this understanding is because of the advanced information CEG-TEK is able to identify about that subscriber, sometimes including the subscriber’s name (I have my own understanding as to how they get this from the geolocation), the geolocation itself of where the downloads occurred, along with other “past downloads” that allegedly happened weeks or months in the past at that same location, or by that same subscriber (based on a list of old “IP addresses” provided to CEG-TEK so they they can correlate that list against their own bittorrent records).

SCENARIO 3) “A RELATIONSHIP OF PURE MOTIVE” (both CEG-TEK and the ISP hold hands and cooperate, to “fight piracy”)

This is the “kum baya” view of piracy, where CEG-TEK approaches the ISP and tells them that they want to fight piracy. They show statistics of how when other ISPs “joined forces” with them and started sending out the DMCA violation settlement letters, piracy dropped significantly on that ISP’s network.

The ISP then sees this information and also agrees to “sign on” with CEG-TEK to help them forward their settlement demand letters to their subscribers with the hopes of diminishing the amount of “piracy” of copyrighted content that occurs on their networks.

NOTE: In this last scenario, you won’t find a profit motive by the ISP, and this is where I believe they get colleges and universities to sign on with them to fight piracy on their networks.

MY PERSONAL OPINION AND BIAS: Whatever the relationship or the scenario between CEG-TEK and the ISP, in the end, the subscriber is the one who suffers because it is THEY who receive the “settle or else my client will sue you as a John Doe Defendant in a U.S. federal court lawsuit for copyright infringement” letter.  Call it “speculative invoicing,” call it “Intellectual Property Monetization,” call it “fighting piracy,” when it is the individual downloader the copyright holder goes after, it is still WRONG.

To CEG-TEK’s merit, I have personally been in conversations with CEG-TEK where they were excited that piracy was actually going down on a particular ISP’s network — so apparently they do believe in what they do — but then again, whatever I feel about piracy and how the copyright laws should be changed to match today’s internet generation, in the end, it is the college students, their parents and landlords, the young graduates who are trying to find jobs, and those who are lured in by the adult content which is so addicting, widely available, and prevalent on the internet who fall prey to the tactics of the copyright holders.  For this reason, I still believe that the copyright holders should focus their efforts on pursuing those SELLING FOR PROFIT, DISPLAYING PUBLICLY WITHOUT A LICENSE, POSTING OR INITIALLY SHARING copyrighted content, but leaving alone those internet users who have no profit motive, who click on a link to view the copyrighted content.  

Back to my policy letter, I believe that it is the job of the copyright holders to police their own copyrighted materials, and not to attack, sue, extort, threaten, or pressure those who view or download content already aired on TV or in a public forum and posted on the internet.  The internet today has become like the TV and the Betamax of yesteryear.  Media becomes available, and people watch that media, whether the source is legitimate or not (think, Youtube).  TV shows are recorded, and are posted on many websites, some of them are licensed to share that content (e.g., Netflix, Hulu, ABC.com, etc.), some unlawfully do so without a license.  However, it is not the job of the internet user to inquire as to whether a source for a video is legitimate, especially when watching a show that was publicly aired just a few days beforehand.

The last thing that I want to do is to think twice when clicking on a YouTube video.  Taken to extremes, this is where the copyright holder’s activities go.


CONTACT FORM: If you have a question or comment about what I have written, and you want to keep it *for my eyes only*, please feel free to use the form below. The information you post will be e-mailed to me, and I will be happy to respond.

NOTE: No attorney client relationship is established by sending this form, and while the attorney-client privilege (which keeps everything that you share confidential and private) attaches immediately when you contact me, I do not become your attorney until we sign a contract together.  That being said, please do not state anything “incriminating” about your case when using this form, or more practically, in any e-mail.


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