Why CEG-TEK’s DMCA settlement system will FAIL.

This is a rather tricky article to write, especially since I am setting some copyright trolls apart from others, and I am unsure whether this is a good idea or not.

It is my opinion that the “Six Strikes” System which has recently gone into effect will ultimately kill Copyright Enforcement Group’s (CEG-TEK)’s “CopyrightSettlements.com” settlement system. In short, their selling point of attracting new copyright holders (the production companies) with the promise of big profits through volume settlements (from you, the internet users) by the sending of DMCA scare letters directly to internet subscribers via their ISPs will fail. I am concerned that the production companies / copyright holders might decide to start once again suing defendants in copyright infringement lawsuits.

Copyright trolls take two forms — the “copyright troll” lawyer, and the production company who embraces the concept of extorting settlements from so-called “infringers” rather than selling their copyrighted product on the marketplace.  There is one entity often missing from our blog’s focus on lawyers and their clients — the “IP enforcement company” (“IP” = intellectual property) who is working behind the scenes to 1) acquire clients for their firm, 2) track the file sharing downloads and file swarms, 3) hire and maintain one or more attorneys capable of suing, and 4) converting their tracking efforts into CASH [in terms of $$$ settlements from accused downloaders].

This explains why whether you are sued by Patrick Collins, K-Beech, or Malibu Media, you’ll be contacted by someone on the Lipscomb & Eisenberg law firm’s collection team. Similarly, if the production company is Digital Sin, Zero Tolerance, Girls Gone Wild, etc., then your IP enforcement company is the Copyright Enforcement Group (CEG-TEK) and you will be sent DMCA letters suggesting that you settle their claims against you or else they may sue you (so far, this has not been the rule, but the exception). Yet, if your plaintiff is AF Holdings, Hard Drive Productions, Openmind Solutions, or any of the others connected with Prenda Law Inc. or the new Anti-Piracy Law Group, your IP enforcement company is one of John Steele’s entities. In other words, every copyright troll plaintiff is a client of a particular IP enforcement company, and that IP enforcement company has one or more lawyers on their team (or more often then not, as with John Steele and Ira Siegel — very different entities) — the lawyers themselves appear to own an ownership interest in the IP enforcement companies they run and work on behalf of.

It is my understanding that an enterprising attorney (or members of his IP enforcement company’s sales team) will often attend annual pornography conventions, and they will rub shoulders with production companies who end up being the copyright holders in these lawsuits.

The traditional IP enforcement companies (Lipscomb, Steele, etc.) will tell them, “I am aware of your company’s piracy problem, and I have a solution. Look at all our data as to the piracy of your videos.  Our team of experts can track the piracy of your copyrighted content, and our team of “expert” lawyers will sue defendants on your behalf. Instead of defending themselves, the accused internet user will be shamed with a lawsuit and will settle with us for thousands of dollars (average asking price: $3,400), we’ll take our commission, and we’ll both be millionaires. And, we’ll cut down on piracy in the process.

CEG-TEK (the Copyright Enforcement Group) and Ira Siegel has a different approach, and I believe the Six Strikes System will be the achilles heel of their “out-of-court pre-lawsuit settlement” approach.

The Copyright Enforcement Group was essentially formed because Ira Siegel didn’t like the idea of suing defendants and having all of his settlement activities monitored by a federal judge who can ask him uncomfortable questions about his activities. Rather, he has been paying ISPs to send out “DMCA” settlement letters (invoking and in my opinion, misusing the Digital Millennium Copyright Act) in order to scare defendants into settling cases before they are filed in federal court. Settlements average $200 per accused title, but I have seen a few $500 per-title settlements as well.

It is my understanding that the way CEG-TEK acquires new clients — their “unique selling proposition,” if you will — is that they tell production companies, “we can track and sue the downloaders if we want — we have attorneys in a number of states who can sue defendants, and possibly get a $3,400 settlement from a few of them [once in a while]. However, if you come on board with us, we will send DMCA settlement letters out to the internet user directly via his ISP, and that letter will point them to our Copyright Settlements (www.copyrightsettlements.com) website where they can enter their unique username and password and privately pay their settlement fee. The settlement fee will be $200 and not $3,400, but the quantity of users who will pay us our small fee and move on will be significantly higher than those who will settle a federal copyright infringement lawsuit. We’ll all make millions!”

The reason I think CEG-TEK’s business model of sending DMCA letters will ultimately fail is because the Six Strikes System has undermined CEG-TEK’s abilities to contact so many internet users. In short, instead of sending the DMCA letters directly to the ISP subscribers as Charter and a number of smaller ISPs do, the big ISPs have banded together and formed something called the “Six Strikes System” which essentially gives six warnings to their subscribers before giving copyright holders access to their subscriber’s contact information for the purposes of suing for copyright infringement or sending DMCA threat letters as CEG-TEK does every day.

In other words, anyone who has Comcast, Time Warner, Verizon, etc. as their ISP will no longer receive CEG-TEK’s DMCA letters. Instead, they receive a notice such as “we have received a complaint of copyright infringement from your account; stop this activity.” But with ISP members of the Six Strikes Program, CEG-TEK’s DMCA LETTERS ARE NO LONGER FORWARDED OVER TO THE SUBSCRIBERS! What this means is that let’s say 75% of the market share of internet users (I’m using this number merely as a hypothetical) will no longer go online and settle CEG-TEK’s claims against them. Or in other words, the www.CopyrightSettlements.com website as of a week or so ago [the plan went into effect roughly a week or so ago] will have experienced a 75% drop in settlements.

Knowing the production companies who signed on with CEG-TEK with the sole purpose of making millions in settlements from these DMCA letters, I suspect that they are starting to get upset and impatient because CEG-TEK’s promise of directing would-be defendants to their website is no longer the money-making machine they thought it would be. As a result, I am concerned that the production companies who signed on with CEG-TEK might start opt for suing defendants once again en masse.

PERSONAL NOTE: I obviously don’t want to scare anyone because I am very far from screaming “the sky is falling.” We have been defending clients in countless cases filed in federal courts across the U.S., and in recent months, there has been a clear change in the level of education of the judges and their feelings towards “copyright troll” plaintiffs. Possibly with the help of our POLICY LETTER (or simply our phone calls and faxes to a judge’s chambers when one is assigned to a copyright infringement case).  Judges are now educated as to the copyright trolling problem, and it is much more difficult to go after defendants because our collective arguments (such as, “an IP address is not a person,” and “just because you can prove an IP address snapshot was involved in a download does not mean that copyright infringement occurred,” etc.) are starting to take plant themselves deeply in the federal court system. In other words, if they start suing, we are very prepared, and they are almost a year-and-a-half behind.

Canada begins receiving CEG-TEK DMCA settlement letters. (3/12/2015)
How time limits / purged records stop a copyright holder from learning a downloader’s identity. (12/18/2014)
CEG-TEK’s growing list of participating ISPs, and their NEW alliance with COX Communications. (11/12/2014)
The Giganews Problem (11/12/2014)
CEG-TEK is now your friendly “photo” copyright troll. (6/13/2013)
CEG-TEK’s new “you didn’t settle” letters sent from Marvin Cable. (3/22/2013)
CEG-TEK’s DMCA Settlement Letters – What are my chances of being sued if I ignore? (2/22/2013)
Why CEG-TEK’s DMCA settlement system will FAIL. (2/22/2013)

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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    35 thoughts on “Why CEG-TEK’s DMCA settlement system will FAIL.”

    1. I do not mean to rain on your parade but I have questions…
      “In other words, anyone who has Comcast, Time Warner, Verizon, etc. as their ISP will no longer receive CEG-TEK’s DMCA letters.”
      Have you heard this from the ISPs?

      Six-Strikes notices are NOT DMCA notices. While they try to invoke the DMCA feeling and “leagalness” in setting the charade up, it is very clear that the allegations being made by DtecNet/MarkMonitor/ReutersThompson are not remotely DMCA notices.
      They are a notice that the ISPs entered into an agreement with CCI to accept and fast track via the Six-Strikes system.
      The Six-Strikes system is well outside the actual legal system and if they were to stop their responsibilities under the Federal DMCA law in favor of the private corporate system, that is not open to every player, I think it would get quite the messy.

      While I do enjoy trolls getting stopped, I am unsure that your observations are correct in this manner. Given the shady history of Six-Strikes it is hard to understand how a system that is different on each and every carrier involved is actually a real system. If you have newer information about CCI and Six-Strikes please share…

      • @TAC, I wanted to take a moment to reply to your comment. I agree that the DMCA letters that Ira Siegel is sending out quite frankly has nothing to do with the Digital Millennium Copyright Act, and quite frankly, he is misusing the statute to send these out. I actually wonder whether it is even proper for an attorney to send a “take down” notice to a particular subscriber. As such, the term “DMCA letter” is a misnomer and it actually has little to do with the DMCA.

        To address your questions, it has been my experience that the big ISPs have ceased sending out Ira Siegel’s “DMCA” threat letters to their subscribers. Rather, they are sending out the warning letters you describe in your comment.

        I agree with your analysis of the Six Strikes system, and my opinion is that it has ZERO legal merit. A lawsuit is still a lawsuit, and the ISPs still by law must adhere to the DMCA, the copyright act, a federal judge’s subpoena, and all the federal rules and statutes of the states in which they operate. They cannot simply “invent” their own policies and claim that their policies are above the law.

        In sum, I see from my end that the big ISPs appear to have stopped sending Ira’s letters, and all they send is a warning notice that CEG-TEK complained of copyright infringement on the account. The little ISPs (e.g., Charter, CenturyLink, etc.) however are still even today sending them out in a fury.

    2. I’ve been giving this more thought, and sloughed through parts of the DMCA law and I can not find where a rightholder gets to have a letter forwarded to a subscriber, with the exception of – with the use of a subpoena.

      This really does continue to highlight the problems with the DMCA.
      It is not well understood, companies are left guessing if they have done the right thing or if they are now on the hook for huge damages. The result is the overreaction we see time and time again.
      Someone sends a DMCA notice about a single photo, the entire website gets shutdown to the surprise of the site owner. The host will make excuses that this is how they HAVE to respond, but it is above and beyond the actual legal requirements. The reason for the overreaction is fear or facing a pointless lawsuit designed to run the host out of cash for not ‘playing ball’ with the cartels.

      The system is always weighted towards the “holder”, promising huge fines and issues for the host and the person who posted it. But if you file a bogus complaint, and then respond to a counter notice and still claim the rights and finally can be found to be lying… nothing happens.

      The threat of perjury on the form is pointless, because they only have to have a belief they are correct. Oh yeah I thought I owned ‘Never Gonna Give You Up’ my bad for taking it down, or getting the ad revenue diverted to me.

      The system is ripe for review and repair, one can only hope that the stupidity that is Six Strikes combined with the actions of the copyright trolls forces wakes people up to how out of control the concept of IP has gotten.

    3. In late Sept,2012 I received the “Siegel DMCA threat letter”, I contacted my ISP and they told me not to reply to it, so I didn’t. It’s now March 2013 and today I received another letter from them for the same supposed infringement and thought I’d look into it alittle. after reading some of the posts here I noticed people talking about the “deadline to settle” so I figured I better check into that, after checking CEG’s website I find they want me to pay them 4 times for the same supposed infringement ($800.00), and that My deadline to settle was October 9, 2012. looks like I’m 5 months late… I don’t know what to think about all of this, are they grabbing for straws trying to see if people will pay them off, should I be worried about getting sued ? any thoughts ??

    4. I just got one of these “letters” from Comcast myself, have been thinking about paying it then thinking about not paying it. I did log on to see what it was that was downloaded. What are the odds that with the six strikes that the ISP’s have that I should be looking over my shoulder everytime I step outside?

    5. I just received a letter from CEG-TEK DMCA Settlement letter on movies that I didn’t even download, it’s not even my ISP number. Can I get sued even though it’s not my ISP number?

      • I have responded to your inquiry via e-mail. In short, it is not “getting sued” that is the issue here, but the games they would play while dancing around a threat of a lawsuit. If and when a lawsuit comes, it would likely not be done through CEG-TEK, but via the copyright holders and the copyright troll attorneys they have chosen to prosecute their cases.

    6. I received a letter from Comcast today alleging that I downloaded an illegal porn file. The reporting party is listed as cegtek. What are the chances that I will be contacted by cegtek lawyers? Due to the six strikes rule, wouldn’t they need to file lawsuit to get my information?

      • From what I understand, it is illegal for an ISP to provide your contact information without a subpoena authorized by a judge (usually in a lawsuit), but good luck in suing them if they do.

        That being said, I understand that many of the ISPs provide the geolocation data of the router (in terms of literal coordinates that you can plug-in to Google Maps or any software to see your house). It is my understanding that this is how they can figure out who you are if the case escalates to where they have one of their attorneys send a “you did not settle” letter.

    7. I got a scare letter from Mr Ira saying i have to pay 200$ to settle a bit torrent copyright infringement issue etc
      I wanted to ask

      I live in UAE so what are the chances of me being sued if I don’t pay this fees?

      And if I do pay this small fee do I need to worry about something else?

      • It is likely not a question of whether they can or would sue you here in the US if you live in UAE, but rather, whether a judgement from a federal court here would be enforceable against you in your home country. This is a question for a lawyer in your country.

        As for whether CEG-TEK would go after you because you live outside of the US — that’s a bad question because CEG-TEK are not the individuals following up or choosing whether to sue on their letters — it is the copyright holder who makes that decision. Keep in mind, the copyright holder’s lawyer is likely not CEG-TEK [because they are not suing], but perhaps one or more of the other copyright trolls.

    8. I’ve found a lot of valuable advice in this website. If I only visited CEG-TEK’s website without accessing the “case#” or giving them any of my personal information, would that lower my chances of receiving a lawsuit? Or can they track the IP traffic? Also, does Cashman Law Firm serve clients from other states besides Texas?

      • Depending on your ISP, CEG-TEK might already have your information (or at least, access to the geolocation coordinates of the router). So, you logging in from one more place only gives them one more piece of information. Logging in will not increase your chances of a lawsuit — how you respond to their follow-ups will. And yes, I would be happpy to speak to you about the CEG-TEK problem, and whether we can be of assistance.

    9. I’m a former doe in a Malibu case that begrudgingly settled anonymously through a lawyer. My roommate at the time was a big torrenter and once I was made aware of this fact, I cancelled the internet and moved. Now, I’m worried about being contacted again regarding the download of media that I was not aware of. I understand that the statue of limitations is 3 years and I have also read that Comcast has an IP log retention policy of 180 days. All of this took place over 7 months ago. Should I be able to rest easy with the notion that I PROBABLY won’t be hearing from anyone because my ip log info has most likely been purged by now? Thanks!

      • It has always been my strong opinion that it makes no sense worrying about something that MAY happen. As you mentioned in your message, you were a former Doe Defendant, and you settled your case. Since your ISP’s IP retention policy is 180 days (and we are roughly 200+ days later), my expectation is that if something WAS going to happen, it would have already happened. The lawsuits usually happen within months of the downloading happening (and, since this was posted under CEG-TEK’s article, the ISPs generally forward CEG-TEK letters within four (4) days of the download happening). So we are way past the time that you would need to be worrying.

        • I guess I left some info out from my original post. I NEVER checked my comcast email (they only keep unread messages for 45 days) so I have no idea if I ever received a notice from CEG-TEK, but I was worried that I may have received one and was not made aware of the situation…Obviously I would never try to contact them and find out. I’m unfortunately just a worrier…what IF i recieved a ceg-tek email and never saw it, what IF they decided to start filing, what IF they try to come after me….etc. Ridiculous, I know…just the way my mind works. Thanks again for the reply. It’s helping me let go of the worry in my mind.

    10. So CEG-TEK doesn’t appear to file lawsuits, but Malibu Media LLC does from what I’ve seen. If I got a notice from my ISP from CEG-TEK with their typical $200 demand, but that’s not related to Malibu Media LLC right? So I won’t be sued by Malibu Media LLC? Sorry I’m really confused by all of this.

      • Malibu Media LLC (the company behind the X-ART.COM website) is a client of Lipscomb & Eisenberg (“L&E”), a Florida law firm. CEG-TEK is a California law firm with no affiliation to L&E.

        There is crossover between the two law firms, (e.g., the Patrick Collins client, etc.) are BOTH clients of L&E and of CEG-TEK. However, the two law firms are not related (and are actually at odds / are in competition with each other). L&E files lawsuits, CEG-TEK sends DMCA letters.

        As far as I have seen so far, Malibu Media, LLC is not a CEG-TEK client, but a L&E client. Also, to be technically correct, CEG-TEK is a company, not a law firm (although they have lawyers who work for them).

      • My 2 cents: a situation when a troll goes after once settled target is extremely unfavorable to him. Lipscomb goes to great distances trying to convince anyone that he is better than John Steele (as a matter of fact, he is worse, IMO), and if he is caught “milking” a victim twice, it would add to already bad publicity, and I would sure do all I can to spread the word.

    11. I’m also in a bind here. I got a notice in email from charter from CEG Tek. The thing is i contacted them and clicked the dumb link with the case files to see how much was owed. I’m really worried they will come after me after I talked to them. They have my isp address, my old phone (Which I’m sure pinpoints my location even if its not in the same state as them.) and my email and only first name. I’m worried they will ask my isp for the names and details if I don’t agree to pay them $50 a month for 20 months. I haven’t seen a recent lawsuit by either the company that is infringed (is copyrighted after I looked it up) and them coming after me to search my pc’s which i can’t guarantee that it wasn’t there. I need help. I want to ignore and not pay but I also don’t want to have to wait 3 years for it to drop. I know after research they do sometimes come after does for money. I have knots in my stomach, Plz help. I don’t have money for a lawyer and live on low income. I seen one case where a person was sued and they owed lawyers and court fees. How likely is it they will come after me if I don’t pay by the deadline at the end of this month? I want it all to go away, no lawsuits, nothing. Just be done. I heard people trying to pay had the site crashed on them. I won’t use my real info even if i were to pay, using a different card. (like prepaid)

    12. I found this article to be the most informative thus far and appreciate the information. i realize this is an older article and I am wondering if you can give any update on what the situation looks like now. I have received the threat of law suit with the option to settle for the 3 files in question. Basically i am wondering what the likelihood of them following through with a law suit considering the small amount of files.

    13. I have a roommate who torrented files on his own device while I was the account holder of the internet policy. The time stamp given was when I was in California and he was the only one in the house. If there was a law suit conducted would I be help accountable or him?

      • Thank you for your inquiry. If a lawsuit is filed, it would be against you since you are the account holder. However, if you choose, you may easily join your roommate as a co-defendant, and this would likely absolve you from liability. Remember, you cannot be found “guilty” for a “crime” that you did not commit.

        That being said, nobody wants to turn in a friend, and you should be happy that at the moment, there are ways to resolve or refute copyright infringement accusations without even stepping foot in a courtroom.

    14. I just received one from opening my internet browser and it was from centurylink and one of the (10) listed downloads was all the way back from april or may of 2014 if they were that old why was I not notified earlier? Im not saying it was me who downloaded the file. I need help here dont know what to do!

    15. So as a non tech person I have tried to navigate some of these articles and apply it to my situation. I received a CEG allegation letter from my ISP a couple weeks ago. I went to the CEG website but did not enter any of my information (still foolish in hindsight it seems). I wasn’t too concerned until recently I have gotten 3 more of seemingly the same CEG letter. Is this simply CEG to try and apply more pressure or? I can’t really afford to settle as it is but should I try and find a way? Should I contact my ISP and tell them I’m deciding not to settle so that they don’t cancel me? Any thoughts would be greatly appreciated.

      • I have replied personally to your message. In short, CEG-TEK treats “duplicate title” cases as separate instances of copyright infringement, and thus they often ask for multiple settlements for the same title. This is something I can help you with (e.g., to make the duplicate titles go away).

        As far as contacting your ISP, your ISP and CEG-TEK are entirely different entities who have zero follow-up communication about your matter (after your ISP forwards you CEG-TEK’s DMCA notice requesting a settlement). Thus, contacting your ISP will do ABSOLUTELY NOTHING to resolve a CEG-TEK matter. They simply have nothing to do with one another.

    16. Hello, I’m a Missouri resident who just received three emails from Charter alleging torrent downloads of three pornographic titles from “Digital Playground” with attached demands from CEG-TEK. Anyway, I followed the link in one of the emails to a settlement offer of $300 per title, for a total of $900! By logging into their system via my cell phone browser (I provided no personal information) were they somehow able to acquire ID info about me?

      What is the current climate for these issues? Is “Digital Playground” pushing CEG-TEK to take these issues to court? I certainly don’t want to pay $900 but there is a Jan 31 deadline before they threaten that action will be taken.

    17. I received a similar letter from Ira looking for $300 I clicked the link that auto signed me in, at this point should I just pay to not make it worse or is this a scam

    18. I also received a notification of copyright infringement email on a movie I did not watch! The owner is Digital Sin Inc. with Ira M. Siegel being the lawyer. How could my IP address be used if I didn’t watch the movie? I did check with our internet provider and it showed our modem was actually used!! How could that have happened? Now what do I do? How can I protect myself from this happening again? Canada

    19. Hi Sir, how are you? I was reading your article about CEG-TEK and their tactics to scare people. I have a question. In the letter they sent me it stated this;

      “Until this matter is resolved, whether by settlement or otherwise, we require you to accept this as written notice to preserve any and all hard drives or other means of electronic storage used with your above referenced IP address and to take no steps whatsoever to remove, erase, discard, conceal, destroy or delete from any means of electronic storage any evidence of piracy and/or other illegal or unauthorized downloading and distribution of Rights Owner’s Work.”

      They are telling me that I can’t remove or erase any of the content I downloaded from the internet. Is this true, Sir? Because if anyone ended up receiving a letter from them, the instinct would be the removing of whatsoever the downloaded from them. I hope you can give me any advice. Thank you very much!


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