Category Archives: Evasive Angles Entertainment

CEG-TEK: Naughty or Nice?

[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.]

Copyright Enforcement Group (CEG-TEK) has sent possibly hundreds of thousands of letters to internet users accused of downloading copyrighted content via bittorrent. In their letters, they invoke the Digital Millenium Copyright Act (DMCA) as the justification for their “intellectual property (IP) enforcement” activities. They claim to be the good guys, but are they?  Are they “naughty or nice”?

CEG-TEK claims to be the good guys — they stop piracy, and as a result of their efforts, fewer people download on the ISPs’s networks (a social “good” and a “win” for the copyright holders). They have stopped the copyright troll lawsuits, for the moment. And, although they are charging $300 per title for each downloaded movie (sometimes higher) for what is often an accidental “click of the mouse,” they claim that they are not “bad” or “vindictive” like their Rightscorp competitor, which charges only $20 per title, but then sues the accused downloaders in federal courts, and then even go so far as contacting the ISPs in order to attempt to shut down the internet accounts of those accused of downloading their clients’ copyrighted titles via bittorrent.

But then again, CEG-TEK is a business. While I have had success negotiating away cases against veterans, the elderly, and in many cases, college kids, CEG-TEK has taken a number of steps which at best would be questionable.

Most relevant is the “admission of guilt” clause in their settlement agreements, which at the time of writing this article has flipped back to the version which does not include this clause. Months ago, when CEG-TEK expanded into Canada and then Australia, the settlement agreements which released those who have settled from liability included the following clause:

111715 Admission of Guilt in CEG-TEK Settlement Agreement

[For those of you who cannot see the image, it says, “…in the event of a (i) failure to clear, (ii) chargeback, (iii) cancellation, (iv) failure to complete…this Release shall be considered admissible and conclusive evidence of RELEASEE’s infringement of the copyright in the Work and that RELEASEE will be liable to CONTENT COPYRIGHT OWNER for all damages, statutory and/or otherwise, for such infringement plus attorney fees plus costs as of the Settlement Date…” (emphasis added)]

[Now as a side note, for those who are particular about formatting and details, note that CEG-TEK placed that inflammatory clause at the bottom of Page 2, and they split it up where half of it is at the bottom of the page, and the other half is at the top of the next page, where even a careful individual might not read the clause in its entirety because the inflammatory clause is separated by being on different pages.]

The problem with such a clause admitting guilt is that it is binding on an unsuspecting individual who tries to settle the claims against him by paying with a credit card. How?  These contracts are available to the individual paying the settlement fee on the CopyrightSettlements.com website to review, and upon processing the credit card payment, they agree to the terms contained within the contract.

Then, when their credit card transaction fails (either because their card is not accepted by CEG-TEK’s website, or because the transaction is declined, or, if through no fault of their own, because of the website itself the bank flags the transaction as suspicious (fraud alert for a large online charge) and fails to approve the transaction), at that point, the individual has admitted guilt to copyright infringement, which carries a $150,000 statutory fine for each title downloaded. Assume for the moment that the individual has five (5) cases.  Multiply this $150,000 amount by five separate copyright holders, and the individual could be looking at 5 x $150,000 lawsuits (= $750,000 in statutory damages separated into multiple lawsuits filed by different copyright holders all of whom hired CEG-TEK as their agent to enforce their copyrights) where the internet user has already admitted guilt.

Then, when the confused internet user who tried to settle calls CEG-TEK on the phone already having admitted guilt, what sort of leverage does the individual have if they are asked for more than $300 per title? Legally, they likely have no defense because according to the terms of the agreement, they already admitted guilt — even if the credit card transaction failing was not their fault.

So… Copyright Enforcement Group may be the “good guys” because they let attorneys negotiate away cases for vets, old ladies, and elderly gentlemen who don’t realize that they should be using a VPN when they download adult content, and CEG-TEK may serve the public good by demonstrating that piracy has gone down because of their efforts. While this is all true, remember: watch their contract, because caveat emptor still applies.

I don’t want to make this into a “you should have hired an attorney for your $300 matter” blog entry, but really, this is but one example of how even the “good guys” need to be approached with caution, and better yet, through a proxy by using an attorney. [I won’t even go into the conspiracy theories about CEG-TEK trying to get more than the $300 per title that is listed on the website.] Let’s stick to the facts and look at their contract to judge them on whether they are truly “naughty or nice.”


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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.

Florida Judge consolidates and freezes ALL SMALLER BITTORRENT CASES for plaintiff attorney.

*I AM POSTING THIS ENTRY UNEDITED BECAUSE OF THE IMPORTANCE OF ITS CONTENT. I WILL EDIT, ADD LINKS, AND WILL CLEAN UP LATER*

If you were a plaintiff attorney suing thousands of defendants, what would you do if the judge figured out that you were not allowed to practice law?

Terik Hashmi, owner of the Transnational Law Group, LLC just received a note from U.S. District Judge Robert Hinkle essentially freezing each and every one of his 28 cases filed against John Doe Defendants, at first glance because he was not licensed to practice law in the state where he lives.

In short, in order for an attorney to gain admission to practice as an attorney in a federal court, the court requires that you be licensed to practice law and be in good standing in the state in which you are licensed. Without delving too deeply into this, on Terik Hashmi’s letterhead, it says, “PRACTICE LIMITED TO FEDERAL COPYRIGHT PROTECTION AND ENFORCEMENT LAW,” which essentially says, “I’m not licensed in this state and this state’s bar, but I’m not practicing any state law,” which is usually a way out of being charged with the unauthorized practice of law (“UPL”), or practicing law without a license.

Looking a bit deeper, when Terik signs his name, he signs it as “Terik Hashmi, JD, LLM (OH, FL/ND)” suggesting that he is licensed in the State of Ohio and in the U.S. District Court for the Northern District of Florida (the court that issued this ruling).

Taking a look at the Ohio Bar’s website he appears to be licensed as an attorney and in good standing. Apparently he was sanctioned three (3) times during the years 2000-2001, 2002-2003, and 2004-2005 for failing to comply with the continuing legal education (“CLE”) requirements [he just had to pay fines for this], but other than these, I see nothing that indicates that he is not licensed as an attorney in Ohio.

The problem is that it would NOT be the unauthorized practice of law if he lived in ANOTHER STATE and he was filing cases in the Northern District of Florida Federal Court as he has been. However, because Mr. Hashmi RESIDES IN the State of Florida (meaning he appears to be running his law practice while being in the physical borders of Florida — hence the “limited to federal practice” notation on his letterhead), the judge is suggesting that he is in violation of the Florida State Bar unauthorized practice of law statutes (and probably as a result will be in violation of his Ohio state bar’s ethics rules as well).

For this reason, all of his 28 cases [for the time being] have been merged into Case No. 4:11-cv-00570 and are FROZEN. Lastly, quoting from the judge’s order, “Mr. Hashmi must show cause by March 9, 2012, why these cases should not be dismissed on the ground that he has no authority to practice law in Florida or in this court.”

What this means to you is that as things stand, “…Mr. Hashmi must not attempt to settle any of these cases, must not accept any payment in settlement of any of these cases, and must not take any other action in any of these cases.” In other words, for the time being, Terik Hashmi’s cases (listed below) are DEAD.

THIRD DEGREE FILMS, INC. v. DOES 1-259 (Case No. 4:11-cv-00570)
THIRD DEGREE FILMS, INC. v. DOES 1-375 (Case No. 4:11-cv-00572)
DIGITAL SIN, INC. v. DOES 1-208 (Case No. 4:11-cv-00583)
DIGITAL SIN, INC. v. DOES 1-145 (Case No. 4:11-cv-00584)
DIGITAL SIN, INC. v. DOES 1-167 (Case No. 4:11-cv-00586)
NEXT PHASE DISTRIBUTION, INC. v. DOES 1-126 (Case No. 4:12-cv-00006)
PATRICK COLLINS, INC. v. DOES 1-85 (Case No. 4:12-cv-00007)
ZERO TOLERANCE ENTERTAINMENT, INC. v. DOES 1-52 (Case No. 4:12-cv-00008)
MEDIA PRODUCTS, INC. v. DOES 1-34 (Case No. 4:12-cv-00024)
SBO PICTURES, INC. v. DOES 1-92 (Case No. 4:12-cv-00025)
SBO PICTURES, INC. v. DOES 1-97 (Case No. 4:12-cv-00026)
METRO INTERACTIVE, LLC v. DOES 1-56 (Case No. 4:12-cv-00043)
EVASIVE ANGLES ENTERTAINMENT v. DOES 1-97 (Case No. 1:11-cv-00241)
ELEGANT ANGEL, INC. v. DOES 1-87 (Case No. 1:11-cv-00243)
ELEGANT ANGEL, INC. v. DOES 1-115 (Case No. 1:11-cv-00245)
ELEGANT ANGEL, INC. v. DOES 1-85 (Case No. 1:11-cv-00246)
ELEGANT ANGEL, INC. v. DOES 1-77 (Case No. 1:11-cv-00247)
MEDIA PRODUCTS, INC. v. DOES 1-175 (Case No. 1:11-cv-00248)
DIGITAL SIN, INC. v. DOES 1-150 (Case No. 1:11-cv-00280)
DIGITAL SIN, INC. v. DOES 1-131 (Case No. 1:11-cv-00281)
EXQUISITE MULTIMEDIA, INC. v. DOES 1-178 (Case No. 1:12-cv-00002)
MEDIA PRODUCTS, INC. v. DOES 1-43 (Case No. 1:12-cv-00003)
NEXT PHASE DISTRIBUTION, INC. v. DOES 1-93 (Case No. 1:12-cv-00004)
PATRICK COLLINS, INC. v. DOES 1-159 (Case No. 1:12-cv-00018)
THIRD DEGREE FILMS, INC. v. DOES 1-195 (Case No. 1:12-cv-00019)
MEDIA PRODUCTS, INC. v. DOES 1-168 (Case No. 1:12-cv-00020)
SBO PICTURES, INC. v. DOES 1-98 (Case No. 1:12-cv-00021)

On a personal note, do I really think this is the end of these cases? No, and this is merely because I am still floored that these cases are still around almost TWO YEARS no after they first started to appear. Plaintiff attorneys have come and gone, but the cases still appear to continue [for the most part] unhindered by the various Judges. Obviously many of them have smartened up the the mass extortion scheme being perpetrated on now a hundred or so thousand John Doe defendants, but the fact that the “Plaintiff v. John Doe 1-25” or “Plaintiff v. John Doe 1-250” cases are still around in the first place suggest that the attorney generals and the U.S. attorney generals are doing ABSOLUTELY NOTHING to make these cases go away as they did with the Trevor Law Group automobile repair shop extortion scheme cases (look them up) a few years back in the Northern District of California.

Do I think Terik Hashmi is finished? Probably not. I am sure he’ll find a way to overcome this obstacle, but again, I say this only because I’m a bit dark and jaded from the fact that plaintiff attorneys still have their law licenses and are still filing lawsuits long after their cases have been shown to be what they are.

For now, we should enjoy our victory and not get overly confident that these cases cannot reappear in the near future. Congratulations to all.

Most importantly, THIS IS THE FIRST TIME A JUDGE HAS TAKEN DOWN ALL OF THE SMALLER “JOHN DOE” LAWSUITS AT ONCE. Other plaintiff attorneys should sit up and take notice.