As an attorney, unfortunately there is often information that I need to be tight-lipped about when discussing a case or a particular copyright holder. Malibu Media, LLC and their implosion with Keith Lipscomb (who ran each of their thousands of lawsuits filed across the US) was one such example, but not for the reasons you might consider.
This summer, I sat back and watched what was once one of the biggest copyright trolls and their scheme implode as the relationship between the attorney hired to represent their cases across the US (Keith Lipscomb) and Malibu Media, LLC crumbled. Regardless of the screams of autonomy each local counsel hired by Lipscomb claimed in the courts, it was still plain and obvious to me that Lipscomb was running each of the thousands of lawsuits filed against single “John Doe” defendants (not only because the filings were identical, and the court documents allegedly filed by different attorneys had the same spelling errors in each filing, but because every settlement payment — regardless of which local counsel was allegedly in charge of the lawsuit — went to Lipscomb’s Florida office).
Recognizing that there is ‘no honor among thieves‘, I laughed when I learned that Malibu Media sued Lipscomb for not paying them the settlement monies him and his attorneys extorted from hundreds if not thousands of John Doe Defendants across the US, and… he appears to have kept the settlement monies for himself.
However, the reason I stayed quiet was because I knew of something going on internally at Copyright Enforcement Group (CEG-TEK), and I saw a possible reality where Keith Lipscomb got into negotiations with CEG-TEK, and he got them to agree to send DMCA letters to thousands of accused downloaders through their ISPs, but instead of asking for a $300 settlement for one copyrighted title allegedly downloaded, he would list each-and-every title from his X-Art.com siterips.
Instead of CEG-TEK sending a notice for each title allegedly downloaded, Keith would have them send one notice for the siterip [when accessed by clicking a link on a bittorrent website, and that bittorrent file wold contain possibly 100+ titles to be downloaded]. However, when that unsuspecting user logged into CEG-TEK’s copyrightsettlements.com website using the username and password provided in the DMCA notice, each-and-every title in the X-Art Malibu Media siterip would have appeared. Thus, a $300 per accused downloader settlement could have easily turned into a $30,000+ per accused downloader settlement ($300/title x 100+ titles in the siterip). This could have even been exacerbated if Lipscomb asked for higher per-title settlement amounts, as his attorneys are accustomed to negotiate with other attorneys in the $750-$500/title range.
In my opinion, a Lipscomb-Siegel/CEG-TEK marriage would have been a nightmare, and because at the time CEG-TEK was changing their business model and shifting how they send out letters and to whom (remember the Girls Gone Wild fiasco?), the timing was right for Lipscomb to reach out to them, and I was concerned that they would have accepted his plan.
[In passing, I want to note that CEG-TEK had a shake-up as well over the summer. They were changing their business model from sending DMCA notices and soliciting small $300 settlements for copyright infringement claims for just a few titles to sending notices only to “more egregious downloaders” which in turn would increase the per-person settlement amount paid to CEG-TEK on behalf of their clients. They also appear to have been changing their client base by transitioning away from little adult film companies to more well-known copyright trolls (e.g., Millennium Films, LHF Productions, etc.) — copyright holders who threatened to sue downloaders (and in at least one circumstance did sue at least one client of mine in federal court.) The point is that they were changing their image from being a company who’s clients didn’t sue to a company who’s clients do sue. Lipscomb fit their former profile of bringing adult film copyright holders to the table, and he matched their new profile because he brings a strong proclivity to sue defendants who ignored the notices. Thus in a possible reality, I saw Lipscomb meeting with CEG-TEK, and I did everything I could behind the scenes to avert this reality.]
Now we are roughly six-months later, and I am happy to share that the marriage between Lipscomb and CEG-TEK never took place, and CEG-TEK is no longer in a place where they would accept Keith Lipscomb or the $10K/client+ settlement amounts he would have brought to the table.
For this reason, I am sharing the story of this nightmare which — even though the ‘stars aligned’ — never happened (and thankfully, will never happen).
…there is new news for Lipscomb’s former Malibu Media, LLC client. I will post about that next.[2017 UPDATE: This is bad news. In my article, I wrote about how former Guardaley kingpin Lipscomb might have corrupted CEG-TEK. Since the April 2016 breakup of the Lipscomb/Guardaley relationship, new Guardaley kingpin 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 this link thinking that RIGHTS ENFORCEMENT was somehow related to CEG-TEK (at first, I thought so too), but really it is an ‘evil twin’ competitor. In sum, apparently my concerns about CEG-TEK’s DMCA notice system getting corrupted may actually have happened, but I got the entity wrong. It wasn’t CEG-TEK’s system that was corrupted, it was Crowell’s reverse-engineered ‘evil twin’ copy of CEG-TEK which we now see in RIGHTS ENFORCEMENT.]
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