Protect-IP Act: Powerful In Rem Remedies for Private Plaintiffs Against Offshore Infringers

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Last week the Senate Judiciary Committee voted the Protect-IP Act out of committee.  Sen. Ron Wyden put a hold on it on Thursday.   I read it and my comment focus on the aspects of interest to the civil litigator.

Section 4 "Eliminating the Financial Incentive to Steal Intellectual Property Online" of the Protect-IP Act would let a private attorney, on behalf of a copyright or trademark owner, commence an in personam action against a registrant or owner of an "Internet site dedicated to infringing activities".   If these folks cannot be found or don't have addresses within the U.S., the private plaintiff could bring an in rem action against the domain name itself.    As part of the remedies authorized, you would be able to get a court to order any company processing financial transactions with the domain to stop, as well as any company advertising on the domain name.

Invoking these provisions would subject a plaintiff to a fairly high standard of proof.   Critics have focused on other aspects of the bill giving the Attorney General sweeping powers (see links below).   For a U.S. IP owner facing an offshore scofflaw who is doing business in the United States, Section 4 of the bill seems to be a fairly sensible and well-balanced remedy.
A copy of the full text of the Protect-IP Act passed by the Senate Judiciary Committee last week here.

The Electronic Frontier Foundation' criticisms of the bill here.

Last Thursday, Senator Ron Wyden of Oregon blocked this "internet censorship" bill, story here.

Larry Downes' take at Forbes here.   Techdirt on Larry Downes here.

The 1709 Blog reports Google's defiance of search-engine blocking provisions here.


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Fair Use Doctrine: How To Download Files Using BitTorrent

Caution: accessing copyrighted files may constitute copyright infringement.

Plaintiffs are now pursuing BitTorrent swarms and may discover your IP address and personal information if you download or make your computer available to upload copyrighted works through BitTorrent.


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How To Sue and Discover A BitTorrent Swarm: Liberty Media, A Swarm of John Does and the Cable Privacy Act

Corbin Fisher's Down on the Farm  (Retail Price 69.95)

 In Liberty Media Holdings, LLC v. Swarm of November 16, 2010, Sharing Hash File A3E.... and John Does 1-95 2011 WL 1597495 (S.D. Cal. April 26, 2011), the court permitted suit and early discovery, together with claims for copyright infringement, civil conspiracy and negligence against a BitTorrent swarm that accessed and downloaded plaintiff's copyrighted work.   

Plaintiff identified the copyrighted work that had been accessed and copied by the BitTorrent swarm.  Plaintiff was able to identify to the court the Internet Protocol (IP) addresses of each of the members of the swarm, but was unable to serve any of the individuals because Plaintiff lacked their names and addresses.

The court found that the Cable Privacy Act, 47 U.S.C. 551(c)(1) applies.  The Cable Privacy Act requires cable companies to inform subscribers before any of their confidential information is turned over.

Under Rule 26 of the Federal Rules of Civil Procedure, discovery may not commence until the parties have had a "meet and confer" under Rule 26(f).     However, in rare cases where the plaintiff cannot learn the defendants' identities without limited discovery, courts may order such discovery.

From the opinion:

Although discovery usually takes place only after a defendant has been served, “[s]ervice of process can pose a special dilemma for plaintiffs in cases ... in which the tortious activity occurred entirely on-line ... because the defendant may have used a fictitious name and address in the commission of the tortious acts.” Columbia Ins. Co. v. Seescandy.com, 185 F.R.D. 573, 577 (N.D.Cal.1999). Accordingly, courts have, in rare cases, “permitt[ed] limited discovery to ensue after filing of the complaint to permit the plaintiff to learn the identifying facts necessary to permit service on the defendant.” Id. (citations omitted).


In determining whether a motion for expedited discovery should be granted to identify anonymous Internet users named as Doe defendants, courts consider whether: (1) the plaintiff can “identify the missing party with sufficient specificity such that the Court can determine that defendant is a real person or entity who could be sued in federal court”; (2) the plaintiff has “identif [ied] all previous steps taken to locate the elusive defendant”; and (3) the “plaintiff's suit against defendant could withstand a motion to dismiss.” Id. at 578–80.

Liberty Media Holdings, LLC v. Swarm of November 16, 2010, Sharing Hash File A3E6F65F2E3D672400A5908F64ED55B66A0880B8 2011 WL 1597495, 2 (S.D.Cal.) (S.D.Cal.,2011)

The court permitted subpoenas to be served pursuant to Rule 45 of the Federal Rules of Civil Procedure on the cable companies and directed that the cable companies inform individual subscribers that their personal information was being requested.   The court denied further discover due to Plaintiff's failure to specify the precise discovery sought.

Interesting that the court permitted a negligence claim against individual IP address holders to proceed.



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 Purchase Copyright Litigation Handbook 2010 by Raymond J. Dowd from West here  

Filmon.com Solicits Plaintiffs For Limewire Piracy Class Action Against CBS and CNET

More information here
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Copyright Law: Tenenbaum and Statutory Damages - Comments from the Blogosphere

Derek Bambauer is critical of Judge Nancy Gertner's decision in Sony BMG v Tenenbaum.

Info/Law » Tenenbaum and Statutory Damages

My admiring post on Judge Gertner's decision in Tenenbaum here.

The Electronic Frontier Foundation's  Corynne McSherry writes on the Deeplinks blog

But the most interesting aspect of the ruling may be the court's conclusion that Congress never intended copyright's extraordinary statutory damages provisions — which permit an award of up to $150,000 per work if the defendant has willfully infringed — to apply to noncommercial users of peer-to-peer networks, even if they are found liable for willful infringement. After a lengthy review of the legislative history, Judge Gertner found that there was "substantial evidence indicating that Congress did not contemplate that the Copyright Act’s broad statutory damages provision would be applied to college students like Tenenbaum who file-shared without any pecuniary gain."

Full Deeplinks post here

Expect the opposite from Ben Sheffner, who is thinking about it here.

Purchase Copyright Litigation Handbook from West here

Illegal Downloading of Software: Czech Cracker Leeches Warez Gets 30

In U.S. v. Klimecek, 2009 WL 102128 (7th Cir. January 15, 2009), the Seventh Circuit upheld a 30-month sentence for a member of a warez group who downloaded Czech movies and music. The decision does not state that any of these works were registered with the Copyright Office. Italics below are from the decision:

He was indicted under 17 U.S.C. § 506(a)(2) and 18 U.S.C. § 2319(c)(1) for willfully infringing copyrights by reproducing or distributing during a 180-day period at least ten copies of one or more copyrighted works with a retail value of more than $2500. He was further charged under 17 U.S.C. § 506(a)(1) and 18 U.S.C. § 2319(b)(1) because the purpose of his infringement was for private financial gain.

Klimecek pleaded guilty. [Rec. Tab 9.] During the plea colloquy, he declared that he bought and installed hardware and software to set up a computer server and paid half of the monthly service charges to connect the server to the Internet. [Rec. Tabs 3-4.] In exchange, Klimecek was to obtain access to Czech movies and music. [Rec. Tab 6.] He admitted that he knew that Internet users from around the world were accessing the server to upload and download copyrighted works. [Rec. Tab 4.] The defendant also stated that during a 180-day period he caused at least ten or more copies of one or more copyrighted items to be uploaded to the server and thus made available for unauthorized download by Internet users. [Rec. Tab 5.] Klimecek admitted that the retail value of these copyrighted materials exceeded $2500. [Rec. Tabs 6-8.]

Even with the guilty plea, Klimecek got thirty months of prison under the Sentencing Guidelines. The court was not sympathetic to his arguments that he was a minor player and found that under the guidelines his conduct did not warrant a further downward departure.

The court also rejected the argument that the sentence was unreasonable. He had no criminal background, made next to no money on the scheme, and claimed he was not particularly sophisticated and thought he was just playing around with some friends.

Be very careful out there. Under the statute, a good chunk of the high-school and college population of the United States would probably qualify for some very hard time. Until the grandchildren of federal judges start getting hit with these sentences, they will continue to appear "reasonable" to the federal judiciary. Housing, feeding and guarding Klimecek for thirty months is an egregious waste of tax dollars and entirely disproportionate to the offense, which could largely be remedied (and give the copyright owners greater financial benefits) through painful but effective civil remedies or restitutionary penalties. Now that Klimecek will spend probably a couple of years in prison, there is little chance he'll be able to pay the level of restitution to the copyright owners that he would have been able to pay if he'd been permitted to work.

A suspended sentence conditioned on restitution would have been the economically prudent and just solution. Just because there is a stupid law on the books does not mean the prosecutor has to ask for a stupid sentence. Cf. Hugo, Victor, Les Miserables. And just because a law is on the books does not mean that the federal judiciary should abandon reason in favor of the Sentencing Guidelines.