Court Rejects ‘One Size Fits All’ Bit Torrent Ruling

Stephen Carlisle, Esq. wades into the ongoing saga of Bit Torrent litigation. In a decision with major implications. the Ninth Circuit Court recently rejected a "one size fits all"approach to Bit Torrent lawsuits, in which the sins of one case could be brought to bear on others.

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Guest post by Stephen Carlisle, Eeq. of NOVA Southeastern University

The old adage of “be careful what you wish for, because you might get it” was never more true than when looking at Bit Torrent litigation.

A recent case from Oregon highlights this. The District Court refused to award attorney’s fees to a successful Bit Torrent Plaintiff. The Court justified the denial partly because the same attorney had filed over 300 copyright infringement cases, thus indicating an “overaggressive assertion of copyright claims.” The Ninth Circuit, in reversing, pointedly noted that the large amount of copyright cases was due in part to the District Court’s own case management order which limited Bit Torrent plaintiffs to suing one defendant at a time. ¹

In other words, if you’ve got 100 people participating in a Bit Torrent swarm, you’re going to get 100 lawsuits.

It’s understandable that the Courts are frustrated with the large number of copyright lawsuits currently clogging up the court system. But these numerous lawsuits are the direct result of various court rulings making the conduct of Bit Torrent suits more difficult.

Let’s rewind, shall we?

Way back when in 2003, the RIAA tried to serve subpoenas on Verizon to obtain the names and addresses of Verizon subscribers they suspected of peer to peer file sharing. Verizon refused. Ultimately, the Court of Appeals for the District of Columbia ruled that Verizon was not subject to a subpoena under the DMCA and directed the District Court to quash the subpoena. ²

So instead of simply serving a subpoena on an ISP, and getting a name, you now have to file a lawsuit. Since you do not know the name of the person behind the IP address, you have to sue them anonymously, then ask the Court for leave to file a third party subpoena. This leads to the eye-catching headlines of “RIAA sues grandmother” or “RIAA sues 12 year old girl.” No they didn’t. They sued an IP address because that’s what the Court said they had to do. They had no idea who was behind the IP address. And, of course, these arguments never explain why being a grandmother confers blanket immunity from being sued for copyright infringement.

But, I digress.

Next, the Courts struggled with how many people could be sued in a single lawsuit. The theory underlying suing several persons in one case was that due to the nature of Bit Torrent technology, namely, that participants in a “swarm” (technical explanation here) ³ constituted a “single transaction or occurrence.” Some Courts adopted this logic. ⁴ Other Courts noted that multiple defendants “raised a panoply of individual defenses, including…technological savvy, misidentification of ISP accounts, the kinds if WiFi equipment and security software utilized; and the location of defendant’s router.” ⁵

I can understand and appreciate the Court’s position. However, requiring the Plaintiff to sue only one defendant at a time ensures that copyright owners wishing to vindicate their rights will be forced to file numerous lawsuits, possibly in the hundreds. How this is going to prevent “a waste of judicial resources” ⁶ is a mystery to me.

And, thus is born the tautology of the “copyright troll.” Because the copyright owner has been forced by Court rulings to file lots of lawsuits against Bit Torrent users, the copyright owner now becomes a “copyright troll,” well, because they file lots of lawsuits.

Part of the antipathy towards Bit Torrent Plaintiffs arises from the fact that many of the early cases were brought by producers of pornography. ⁷ This has led to, in the words of the Ninth Circuit, a “one size fits all” ⁸ approach to Bit Torrent litigation, in which the sins of other Bit Torrent cases are brought to bear on individual Bit Torrent cases.

Yet, the case at issue, Glacier Films (USA) Inc. v. Turchin, does not involve pornography at all. Plaintiff is the producer of a mainstream Hollywood movie: American Heist. The movie was set for wide release but was leaked over the internet before its release, where it was downloaded over 100,000 times. ⁹ So devastating was this to the financial prospects of the film, that the distribution deal collapsed, forcing Plaintiff to release the film straight to DVD. ¹⁰ Plaintiff tracked copies of the movie to Defendant’s IP address, where their film had been shared over 80 times, and was associated with 700 other movie titles.

As you might imagine, Defendant was less than the picture of virtue. His litigation tactics bore this out.

• Failed to respond to Plaintiff’s numerous letters, forcing the issuance of a subpoena.
• At his deposition, admitted to pirating American Heist. In fact, he had continued to use Bit Torrent to pirate movies right up to the day before his deposition.
• Failed to file an answer to Plaintiff’s complaint for almost three months.
• Filed an answer only after Plaintiff moved for default.
• Despite admitting pirating Plaintiff’s work in his deposition, denied liability in his answer.
• Raised seven “baseless” defenses, including that downloading via Bit Torrent was “fair use” and that American Heist was not eligible for copyright protection. ¹¹

After eight months of this, the parties reached a settlement: $750 in statutory damages, a permanent injunction against further distribution, and attorney’s fees, as set by the Court.

The Court, based on this record, awarded no attorney’s fees.

The District Court rationalizes this by calling Plaintiff’s victory de minimus. It ruled that since Plaintiff’s film had been downloaded over 100,000 times but the suit at issue resulted in an injunction against only one person, it hardly would have an effect on piracy. ¹² This, of course, ignores the fact that this is the result of the Court’s own order that all Bit Torrent defendants had to be sued individually. ¹³The Ninth Circuit wastes no words:

“An assertion that ‘lots of other people are doing it too’ is not a persuasive equitable principle and does not counsel toward a denial of fees. Instead we see dissonance between the district court’s citation to the large number of infringers and its conclusion that fees are unnecessary as a deterrent.” ¹⁴

Also:

“This case fits squarely within the tradition of copyright enforcement. Turchin’s conduct—pirating and distributing dozens of copies of Glacier’s film—does not “promote the Progress of Science and useful Arts”…[r]ather, this case is the digital equivalent of standing outside the neighborhood Redbox—or Blockbuster Video, for fans of history—and giving away copies of the movie for free. Nevertheless, the district court did not analyze whether Turchin’s conduct furthers or frustrates the goals of the Copyright Act.” ¹⁵

Finally, but most significantly, the Ninth Circuit reverses the District Court for its “one size fits all” determination that makes this Plaintiff pay for the sins of other Bit Torrent litigators.

“Instead, its decision rested on a view that awarding ‘attorney fees in this case would only contribute to the continued overaggressive assertion and negotiation of’ other copyright claims. Apparently, the court saw the fact that Glacier’s counsel had filed 300 copyright actions against BitTorrent infringers as an “overaggressive assertion of copyright claims,” which counseled toward a denial of fees. (continuing in endnote) That Glacier’s counsel filed many actions may be a product of the district court’s Case Management Order, which provides that copyright holders may name only one potential infringer per BitTorrent suit.”

Precisely.

“The court also based its decision on generalizations about other BitTorrent cases, not on the “totality of circumstances in [this] case… (citation omitted)The district court nonetheless lumped the present case together with the worst of “these BitTorrent copyright cases,” even though it shares none of the unsavory characteristics. Here, Glacier did not “demand thousands of dollars to settle a claim … where the infringing defendant admits early in the case that they illegally downloaded the movie.” The company did not seek a confidential or uncounseled settlement not subject to court approval, or “pursue particularly vulnerable individuals.” Nor is Glacier a quintessential “copyright troll”—a term defined by the district court as an entity “more focused on the business of litigation than on selling a product or service or licensing their [copyrights] to third parties to sell a product or service.” ¹⁶

This is precisely where the Courts struggle to get it right. Yes, litigation should not be a “profitable business model”…for the copyright owner. It does have to be a profitable business model for the attorney who provides services. Here, the attorneys sought $4,833.35 in attorney’s fees, ¹⁷ some of this clearly attributable to the Defendant’s bad faith and dilatory tactics. Yet, an attorney who incurs $4,000 in fees to recover $750 will soon find himself without paying clients, and out of business. The Courts in turn will find that settlements such as these, for the minimum amount of statutory damages, will disappear. Without the prospect of attorney’s fees, in this Court being denied on a blanket basis, Plaintiffs will insist on a damages award at least equal to the fees incurred, and the litigation will roll on, clogging up your docket.

Be careful what you wish for…