CEG-TEK vs RightsCorp. Same genus, different species.

Are Rightscorp and CEG-TEK Comparable?

Rightscorp (a.k.a. Digital Rights Corp.) has been compared to CEG-TEK in many ways, but they remain a separate ‘kind’ of entity and thus they have their own rules.

Similarities Between Rightscorp & CEG-TEK

Copyright Enforcement Group (a.k.a. CEG-TEK) and RightsCorp at first glance look alike, but they are different animals. While they both use the DMCA laws (or with CEG-TEK, their foreign-country’s equivalent) to send letters to internet users accusing them of copyright infringement, and while they both attempt to force account holders to pay a “settlement fee” to settle all claims claimed against them, the mechanisms of how they operate are quite different.

Rightscorp asks for $20-$75/title, CEG-TEK $300/title

True, both CEG-TEK and RightsCorp send DMCA notices to ISP subscribers (internet users). CEG-TEK (currently) asks for a settlement of $300 per title (C$225 for account holders in Canada), and RightsCorp asks for $20-$75 per title (multiplied by the number of times the song was downloaded or uploaded).

Rightscorp does not release the settling party from liability.

The big difference between CEG-TEK and RightsCorp is that CEG-TEK releases the accused downloader from liability when the settlement is paid; in CEG-TEK’s contract, there is NO ADMISSION OF GUILT (UPDATE: CEG-TEK recently updated their settlement agreements and now they have an inflammatory “admission of guilt” provision, speak to your attorney about this), whereas RightsCorp contracts explicitly have the settling party admit guilt in an “I did it, I’m sorry, I’ll never do it again” fashion. This ‘admission of guilt’ issue was the initial reason I wouldn’t work with RightsCorp.

Rightscorp sends additional infringement notices for other titles after one settles.

There are obviously other issues with CEG-TEK settlements that we’ve discussed before, just as there are obvious issues with RightsCorp settlements (namely, with RightsCorp, many have reported that after paying one $20 settlement, they received 10-40 additional infringement notices, whether or not the downloads actually happened).  In the end, a $20 settlement (1 settlement @$20) can result in a $3,000 settlement ($75 per additional infringement notice x 40 additional notices = $3,000 settlement).  Personally, I prefer CEG-TEK’s method of being transparent over Rightscorp later asking someone who settled for more money.

CEG-TEK does not sue people (although their clients might).

Lastly, there are customer service differences between CEG-TEK and RightsCorp. CEG-TEK retains multiple individuals who respond to inquiries and convince those who call in [with inquiries, objections, and website troubles in processing payment] to pay the requested settlement amount or face a lawsuit. They have been known to claim that they record the conversations (watch out for this, as an admission of guilt here can be used against you, as can a lie later be used against you later in a perjury claim).

The important thing to note about CEG-TEK is that CEG-TEK DOES NOT SUE PEOPLE. Rather, they are a SERVICE PROVIDER providing COPYRIGHT INFRINGEMENT SERVICES TO THEIR CLIENTS (namely, the copyright holders). CEG-TEK has also been known to scrape the list of callers to ascertain their identities (although this used to happen before we learned that they are now able to obtain [from select ISPs] the geolocation data identifying where the download took place). Thus, if a settlement is not reached, they forward the file over to the copyright holders to allow them to follow-up with the accused downloader using their own attorneys.  At this point, CEG-TEK is out of the picture.

Well, to be accurate, first CEG-TEK has their own attorney Marvin Cable send out settlement demand letters asking for $1,750 per title, and only after he is unable to obtain a settlement from the accused downloader, only then do they forward the file over to the copyright holder(s) for their own attorneys to do what they will with it. This is where in my opinion the “ignore” route can result in an accused downloader being contacted by an attorney requesting a settlement, this time asking for a significantly higher amount. Again, depending on the COPYRIGHT HOLDER [namely, whether they have sued in the past (you can look this up on http://www.rfcexpress.com), and whether they intend to sue again in the future], this is how to best determine whether to ignore or settle the claims listed on the CEG-TEK website.

In my opinion, this CEG-TEK policy of “we forward your file over to the copyright holders” is where the misuse of that information *can* originate. Not all copyright holders are upstanding citizens (note to self to write about how a particular action might be illegal or unethical, but we see lawyers doing it anyway, unpunished — “LEGAL, BUT NOT LAWFUL”), especially considering that most of Ira Siegel’s clients are adult entertainment companies (pornography), and their lawyers do not think twice before reminding the accused downloaders that they could be involved in a lawsuit for the download of pornography.

Rightscorp has been accused of fabricating their infringement notices.

RightsCorp has its own set of problems. First of all, aside from the settlements having accused downloaders admit guilt to one or more downloads, there is a difference in the validity of the claims between RightsCorp and CEG-TEK.  RightsCorp’s initial claim may be valid, but the many follow-up claims have been said to be fabricated.  Contrast this to CEG-TEK — CEG-TEK sends an infringement notice within days of a download taking place, but when the internet user logs in to CEG-TEK’s site, CEG-TEK’s computers have already searched and found any older downloads somehow linked to that internet user (based on the geolocation provided to CEG-TEK, presumably by the ISPs themselves, and also based on the list of IP addresses leased to the subscriber over how long the ISP keeps these lists of past IP addresses based on their “IP retention policy”).

NOTE: There is more to say here, but the jist is that CEG-TEK uses fuzzy science (same geolocation, same bittorrent software, same port number) to link cases together.  This causes problems when CEG-TEK’s system links together multiple tenants’ downloads in an apartment complex or dorm, or when an unlucky VPN subscriber receives an infringement notice containing all of the downloads from the hundreds of other users connecting through that same VPN IP address.

Rightscorp operates with NOBODY answering the phones.

And, while CEG-TEK provides what they call “Customer Service” (a.k.a., “tell me about what a bad boy you were so that I can thank you for admitting guilt and force you to settle or face a lawsuit”), last I checked (and admittedly, it has been some time) there is ABSOLUTELY NO CUSTOMER SERVICE from RightsCorp. Yet, RightsCorp won’t hesitate calling you with their Robocalls all day and night.

Rightscorp’s stock is plummeting.

Lastly, the biggest difference between CEG-TEK and RightsCorp is that whereas RightsCorp is financially a “sinking ship,” and last I checked, their stock price dropped to $0.06 per share on the stock exchanges, CEG-TEK has only been *expanding* their operations, growing in size, expanding into other counties (most recently, sending copyright infringement notices in Canada), openly speaking about hiring foreign attorneys to enforce their clients copyrights, and they even have been going into other areas of intellectual property (e.g., going after those who sell counterfeited goods over the internet).

My thoughts about CEG-TEK versus Rightscorp (so far).

In sum, Copyright Enforcement Group in my opinion is the “big bad wolf” of copyright infringement, yet they do everything they can to keep their “paws” clean. What has always bothered me about them (other than that former plaintiff attorney Ira Siegel‘s name appears on each of their settlement demand letters), is that with their growth comes the ability to push around attorneys and internet users with boilerplate settlement agreements, (recently) new terms on their settlement agreements which are less friendly than the former friendly terms, and the ability to continually raise the settlement amount (which was initially $200, then $250, then $300), and nobody can do anything about it.

“Settle or ignore,” it does not matter to CEG-TEK.

As for RightsCorp, I still hold by what I said almost 24 months ago. I see no reason to get involved with them, as they have always been a sinking ship. It is only a matter of time before they are bought out by someone else.

NOTABLE RIGHTSCORP ARTICLES (from Slyck.com):
Rightscorp’s Red Bottom Line Gets Larger and so Does its List of Copyrights to Protect (8/19/2014)
Rightscorp Scores More Copyrights to Protect from The Royalty Network (7/11/2014)
Rightscorp, ‘We Aim to Protect Millions of Copyrights as we Continue to Lose Money’ (5/14/2014)
Rightscorp Sets its Sights on the Pay-Up or Else Program for UK Pirates (5/7/2014)
Rightscorp Scores Again, Gets 600 Copyrights from Rotten Records to Protect (4/16/2014)
Rightscorp Adds 13,000 More Copyrights From Blue Pie Records to Protect (3/31/2014)
Rightscorp Publishes its Full-Year & Fourth-Quarter 2013 Financial Report (3/26/2014)
Downloaders Beware; Rightscorp Now Monitoring Billboard Hot 100 Songs (2/28/2014)

COPYRIGHT ENFORCEMENT GROUP (CEG-TEK) ARTICLES (from this blog):
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 VPN 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)

[2017 UPDATE: Carl Crowell has created a new entity called RIGHTS ENFORCEMENT which has reverse-engineered CEG-TEK’s proprietary DMCA copyright infringement notice system.  Many of you have visited CEG-TEK links thinking that RIGHTS ENFORCEMENT was CEG-TEK, but really they are an ‘evil twin’ competitor.  Since their methodologies are nearly identical, this article is still very useful in order to understand how they operate.]


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.

I Predict No Orange Jumpsuits For Prenda. Just sanctions.

It has been almost a full day since yesterday’s historic Prenda flop where the attorney for Prenda Law Inc. (formerly, Steele|Hansmeier, PLLC and before that, Steele Law Firm PLLC) appeared to be woefully unprepared to overturn the sanctions that were ordered against Prenda Law and their team. (Flashback: “The 12 minute hearing and the end of Prenda Law Inc.” on 4/3/2013)

For those of you who missed it, you can watch the entertaining video here (fast forward to the tall guy).

As a quick recap, two years ago, Prenda Law was caught forging the name “Alan Cooper” on the copyright assignment documents which gave them the apparent authority to sue on behalf of their clients. The “real” Alan Cooper (John Steele’s gardener) who was the victim of identity theft hired an attorney, showed up at one of Prenda’s hearings, and served John Steele with his own lawsuit.

I don’t know how to explain what happened in a recap other than that the whole “house of cards” that was Prenda Law Inc. was unraveled — not because of the Alan Cooper forgery issue, but because John Steele couldn’t stay away from the cases when he successfully made the courts believe that he sold his Steele Hansmeier PLLC law firm to Paul Duffy. Shortly afterwards, he resumed making phone calls and openly running things himself, and he started showing up at hearings and speaking to the judges. This is what tipped off Judge Otis Wright to ask who the real parties in interest were in these lawsuits.

Personally, it jaded me a bit to see that after being caught (having their grand scheme exposed by good lawyers), the lawyers for Prenda continued their stories of misinformation by lying under oath in their depositions and in court proceedings. Further, I was annoyed when I learned about the scheme unfold in its entirety, including the creation of various offshore entities created to funnel settlement payments, and where Prenda peddled the blatant lie that Mark Lutz (the paralegal) was the mastermind behind the lawsuits.

Being behind the scenes when all this was happening, I was also hearing about issues of Prenda Law lying to, not paying, and in one notorious case, turning against their own local counsel who put their law licenses in jeopardy to file the lawsuits on Prenda’s clients’ behalf. Lastly, there were even more issues that I was privy to that never even made it into the courtroom, namely what appeared to be a credible accusation that Prenda Law Inc. was uploading and seeding their own clients’ content on the bittorrent networks — the same bittorrent swarms in which they sued the internet users for downloading the content they uploaded.

My own thought process was that the proper judicial response was 1) for the federal judges to serve as the “guardians of the gates” of the federal courts [e.g., to kill the copyright infringement cases as they are filed based on principles of improper joinder, etc.], and 2) to prevent the attorney(s) at this point from practicing law through the remedies of suspension and disbarment through their local bar associations. If the attorney persists, the attorney(s) should be charged with the unauthorized practice of law. Yet none of this happened. A lawyer (who for the purposes of this article will remain private) filed ethical charges against John Steele to have him disbarred, and in return, Steele filed ethical charges against him [a story for him to tell, not my secrets to tell].  Then, Steele at some point appeared to have voluntarily disbarred himself and retired from the practice of law, and his organization went inactive in the Illinois state registry. Yet his involvement in the cases persisted.

Thus, I was not surprised when Judge Wright wrote his order sanctioning John Steele, the Hansmeier brothers, and all those involved in the conspiracy. What surprised me was their hubris in that they continued fighting after they already lost. This is why I call the Prenda Law fiasco a “circus.” Everybody continues to argue in circles, but nobody goes to jail.

So, getting back to yesterday’s hearing (YouTube Link), there were THREE ITEMS that I took note of in what was perhaps the most entertaining 3-panel judge hearing I have ever seen.

ITEM 1) John Steele and the Hansmeiers were quite upset that Judge Wright implicated them as having broken criminal laws, and even though they were never charged for the violation of those laws (which I could only guess include identity theft [forgery], extortion, perjury, fraud, and perhaps even money laundering and/or racketeering). [NOTE: There were other acts allegedly committed, including the unauthorized practice of law, violation of countless ethical rules including compensating a non-attorney as a partner of the law firm, alleged tax evasion, and misuse of corporate structures after they were dissolved, etc.] Many of these acts if looked into could make the principles of the law firm personally liable for any charges without the protection of a corporate entity.

They appear to have hired attorney Daniel Voelker for the sole purpose of disputing the $200K+ in sanctions awarded against them because Judge Wright implicated them in a lawsuit which they tried their darnedest to keep at an arms length through the use of legal structures, funneling money into offshore entities, using the paralegal as the “fall guy,” and through the use of local attorneys. But rather than arguing against the sanctions award on the merits of whether it was proper to award the sanctions, they appear to have been offended by the implication of having broken criminal law in what Judge Pregerson called “an ingenious extortion fraud [scheme].” Thus, they instructed attorney Voelker to request that the court REMAND (meaning, return to the lower courts as a “do over”) the case to the U.S. District Court so that they can properly defend the insinuation that they committed one or more crimes while running what was — at the time — the most successful copyright trolling extortion scheme in existence.

ITEM 2) Attorney Daniel Voelker appeared to be woefully unprepared for the hearing. When asked about the details of the various copyright troll lawsuits filed by Prenda Law Inc. / Steele Hansmeier PLLC / Steele Law Firm, PLLC, he was unaware of anything other than what was the subject of the appealed case. This was surprising to the judges, it was surprising to me, and I am sure it was surprising to the hundreds of “fans” who were watching the hearing live and streamed over the internet. How could this attorney not be aware of the hundreds of other filings that his client took part in?!?

I also want to point out that YET AGAIN, STEELE, HANSMEIER, AND MARK LUTZ THE PARALEGAL WERE NOTORIOUSLY ABSENT FROM THE PROCEEDINGS.

ITEM 3) Simplifying the discussions of damage multipliers and other damages issues that were discussed, the jist of what the judges needed to decide were 1) whether to uphold the sanctions award against Prenda Law and company, and 2) whether to remand the case so that the questions of criminal conduct could be hashed out.

IN MY OPINION, again, this whole Prenda Law fiasco is a circus. John Steele and his buddies have been “gaming” the system since they began, and even when their whole scheme came tumbling down around them, they turned to lying, cheating, and misdirection in order to get around the rules.

Nothing will right the wrongs that were inflicted on tens of thousands of internet users except seeing each of these attorneys disbarred and jailed for criminal conduct. Yet I cannot see this happening because notorious criminals today too often go uncharged. Judges too often find the “lazy” alternative of slapping an attorney with sanctions, and then not following up on their order when the attorney weasels their way out of paying those sanctions. This is a sign of a corrupt system, and as much as I have faith in the law, I do not have faith that the judges will inflict stern judgement (“fire and brimstone”) against a bunch of lawyers who look more like a**clowns in the courtroom.

Thus, it is my best guess that the sanctions will not only be upheld, but they will be strengthened and perhaps multiplied. However, as for the criminal prosecution of the clowns who perpetrated this grand heist of an extortion scheme, their activities will go unpunished. Maybe they’ll lose their law licenses (noting that in part, this has partially happened to some of them). Maybe they’ll be held personally liable without the shielding of the corporate entities they tried to use to hide their involvement in these cases. Maybe one or more of them will need to continue to hide their money indefinitely and file for bankruptcy. Maybe one or more of them will need to move out of the country and live out their days on a beach somewhere.

I don’t see orange jumpsuits in anyone’s future here. Not in today’s lawless society.

USEFUL ARTICLES ON YESTERDAY’S HEARING:


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.