Special Report: Are Copyright Trolls The Future Of Digital Content Protection?

Entrepreneurial law firms in the United States and United Kingdom are targeting suspected internet infringers through mass letter-writing and lawsuit campaigns. Are “copyright trolls” the way of the future for protecting digital content?

The practice reportedly began with the London-based firm ACS:Law in 2009. In the US, at least five law firms have taken up the baton since the beginning of this year, the oldest of which is the US Copyright Group (USCG), technology news site Ars Technica reported.

They typically target infringers via peer-to-peer (P2P) detection companies which trawl networks looking for copyrighted content, it said. The internet protocol (IP) addresses are then handed to lawyers who file “John Doe” lawsuits against unknown individuals. Courts then order internet service providers (ISPs) to translate the IP addresses into names and physical addresses. Once that information is known, the firms send letters telling the accused either to pay up or face litigation.

According to the Electronic Frontier Foundation (EFF), the USCG approaches independent film producers and offers to collect money from people who are illegally downloading their movies on BitTorrent. Suspected infringers are then threatened with judgments of up to $150,000 per downloaded movie, the maximum penalty allowed by US law in copyright suits, to pressure them to settle quickly for $1,500-$2,000 per person, EFF said.

Another firm, Righthaven LLC, has filed over 100 infringement lawsuits in a Nevada federal court, EFF said. It finds cases by searching the internet for parts of newspaper stories posted online by individuals, nonprofits, political organisations and others, buying the copyright to those newspaper stories, then suing the website operator for infringement, EFF said. Like the USCG, Righthaven relies on the threat of copyright liability – and “an entirely bogus threat of loss of the target’s domain name” – to scare people into quick settlements of $2,000-$3,000, it said.

On 15 October, EFF asked a court in Washington, DC to dismiss USCG claims against two defendants it said were “wrongfully ensnared” in mass movie-downloading lawsuits. Its amicus brief argues [pdf] that because neither the two defendants nor the plaintiffs reside in Washington, the court has no jurisdiction over the claim. USCG counts on people settling in order to avoid defending themselves from far away, said EFF Legal Director Cindy Cohn. USCG has sued around 16,000 people in Washington for alleged piracy of movies such as “Far Cry” and “The Hurt Locker,” it said.

ACS:Law, meanwhile, is embroiled in a data security investigation launched by the UK Information Commissioner. As reported by the Guardian and many others, data obtained through court orders to ISPs leaked online after a denial of service attack on the firms’ website. In the aftermath of the data spill, the ISPs involved are challenging the court orders.

“Flaky Evidence”

Copyright trolling is on the rise, EFF Referral Coordinator Eva Galperin told Intellectual Property Watch. Nevertheless, it is surprising to see it in the UK which, unlike the US, does not permit statutory infringement damages (damages set by law, not based on actual harm), she said. That, and the fact that the UK has stricter privacy laws, make the strategy more dangerous and less likely to generate big money there, she said.

The P2P detection technology is reportedly provided by German company GuardaLey, Galperin said. GuardaLey is expanding its reach to places where it thinks attorneys will buy its software, although EFF has no specific information on which countries are involved, she said. Lawyers seem to have an “immense amount of faith” that the software produces no false positives, but she receives messages every day about false readings in the US and UK, she said. GuardaLey did not respond to a request for comment.

An IP address is “very flaky evidence,” said Jérémie Zimmermann of French citizens’ internet advocacy group La Quadrature du Net. It cannot be considered evidence itself, but must be complemented in complex matters such as copyright infringement by proper investigation that involves evidence whose materiality is assessed by a judge, not a private company such as an ISP, he said.

One place where law firms are unlikely to be able to adopt the US/UK example is France, said Winston Maxwell, a telecom and internet lawyer in Hogan Lovells’ Paris office whose clients include film producers and distributors. There, collecting IP addresses of suspected infringers of P2P networks is considered processing personal data in connection with criminal violations, and is available only to collective rights management societies, he said. Moreover, rights organisations need prior approval from the national data protection authority to install snooping software, Maxwell said.

“Business Model Problem”

The Recording Industry of America “apparently discovered the difficulty of enforcing the copyright law against individuals by lawsuit” and, in December 2008, after filing proceedings against some 35,000 people, stopped suing, a US copyright lawyer said. The only results of the lawsuits appear to have been aggravation for the very people record labels wanted to reach – 14-to-23-year-olds – and an income stream for lawyers, he said.

Law firms now rounding up adult entertainment and other independent film-makers have reportedly threatened over 100,000 individuals, he said; assuming only 10 percent settle quickly, that’s a quick $10 million.

“I’m in no way condoning copyright infringement” but, given the RIAA example, this does not appear to be an appropriate way to support indie film-makers or to persuade consumers to buy legitimate copies of their works, the copyright attorney said.

“What we face is a business model problem,” the copyright lawyer said. He said he hopes legitimate streaming services such as Netflix and Amazon will offer a good marketplace for independent movies to show their products and collect box-office revenues. Like the RIAA lawsuits, he said, “I don’t see anyone other than the lawyers benefiting from this latest round of litigation against consumers.”

Besides that, the more successful the copyright trolls are, the more likely that BitTorrent and other P2P networks will turn to encryption, the US lawyer said. If press reports are to be believed, this trend has frightened intelligence agencies because few people encode private communications today, he said.

The US National Security Agency reportedly “yelled at” the French government for implementing a “three-strikes” anti-piracy approach – involving warnings to and possible termination of internet access of suspected infringers – over fears it would drive users to encryption, the copyright lawyer said. This would presumably make it difficult to sort out communications from terrorists, whether encrypted or not, because encryption is generally used now only by corporations or in individual financial transactions, he said.

Nevertheless, the US attorney said, because this recent round of online infringement suits is being driven by lawyers, with rights holders along for the ride, the practice will likely be “around for a while.”