Sometimes there are no words other than silence to best express the thoughts I have about Judge Wright’s order essentially referring John Steele and the Prenda Law Inc. gang to the IRS’ Criminal Investigation Division (CID) for all the settlements on which no taxes were paid. There is one police agency that a criminal organization does not want to be contacted by, and that is the CID.
The $81K in sanctions essentially funds the lead attorneys who spent time on this case. And, the referral to the bar associations means that the principals at Prenda Law Inc. may no longer have their law licenses shortly.
In sum, there is not much for me to comment here, except to be silent, because the judge’s order itself says all it needs to. Copyright trolling may seem profitable for the attorneys filing the lawsuits, but no money can compensate for the loss of freedom that one experiences when what was once a multi-million dollar law practice lands the principles in prison for tax evasion. This should be a lesson to all other copyright trolls out there. Judge yourselves accordingly.
— 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.
While the Cashman Law Firm, PLLC and its clients were celebrating “freedom,” I am sure some of my readers will be wondering the fate of Prenda Law Inc. / Steele Hansmeier, PLLC / John Steele / Paul Duffy / Mark Lutz / Brett Gibbs et al. after their hearing today before Judge Wright. Today was the big day where the world of those who have been injured by Prenda Law Inc.’s activities looked on to see their demise.
In sum, the hearing was short, and John Steele and his “gang” showed up as they were ordered to, but they decided to plead the Fifth Amendment to the United States Constitution rather than answer Judge Wright’s questions. As a result, the judge did not allow them the pleasure of “pleading the fifth” as he appears to have no interest in lawyer gamesmanship. Thus, after 12 minutes, he walked off the bench and ended the hearing.
While there was no immediate gratification for those who flew over to attend the hearing, in my opinion, “Popehat” described their fate better than I ever could:
“Prenda Law may still be standing. But it’s dead.”
I would be very surprised if I saw any further activities coming from this law firm. I expect that in a few days (if not sooner), Judge Otis Wright will write an order which will make any copyright troll shake in their boots, and it is my hopes that this order will serve as a warning shot to any of the other copyright trolls who go after individual downloaders using the tactics and corporate structures that Prenda employed.
It is my opinion (although I *am* still cautious until I actually see Judge Wright’s order,) this will likely be the end of Prenda Law Inc., John Steele, and Paul Duffy, as I expect that this will evolve into inquiries which will endanger their law licenses. I don’t think we’ll see the end of them, per se, as it is not so difficult to find a hungry lawyer who will agree to have his hand held while he lets others practice under his law license in the shadows.
On the other hand, I believe the result of this case (and Judge Wright’s influence over the the future penalties of unlawful copyright enforcement tactics) will force the bittorrent cases to evolve from its current state (which comprise mere pre-trial settlement “or else” tactics) to actually taking clients to court on the merits. Also, while the inquiry in this case surrounded plaintiff copyright trolls who “invent” corporate figureheads, who seem to falsify copyright assignment documents, and who structure their business tactics to allow their activities to proceed with limited affects on the attorneys furthering their scheme) no doubt, this will be a damaging blow to those copyright holders who try to enforce their copyrights against individual downloaders.
— 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.
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.
— 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.
The Hard Drive Productions, Inc. v. Does 1-1,495 (Case No. 1:11-cv-01741) case in the District of Columbia has been dead for almost a month now, and Prenda Law Inc. (now the “Anti-Piracy Law Group”) is still calling each and every dismissed defendant as if the case were still alive.
In my opinion, these calls to dismissed defendants are indeed very concerning. The threat is that unless a dismissed defendant settled, they will immediately name and serve them in the federal court in their home state.
HOW TO CHECK WHETHER THEIR THREATS HAVE ANY MERIT
I have literally been hearing about these threats from dismissed defendants for weeks, and there is a VERY EASY way to test whether their threats have merit or not — simply check to see whether Hard Drive Productions, Inc. has filed lawsuits naming individuals. The easiest way to do this is to visit http://www.rfcexpress.com, scroll down on the right-hand side, and check only the “copyright” button. Type “Hard Drive Productions” into the “Party Name” field, click submit, and you’ll see the last state and the last date they filed suit against defendants. [As of 6:45pm on 1/16/2013, there have been ABSOLUTELY NO FILINGS by Hard Drive Productions, Inc. since they tried to sue defendants here in the Southern District of Texas using Doug McIntyre as their local counsel — and you know how badly that ended for them.]
SHOULD YOU CALL THEM?
Now this should be common sense, but you NEVER want to be calling the attorney who is threatening to sue you. Especially when you already know that their game is to extort and solicit settlements from those they believe they can scare into settling.
CAN THEY FOLLOW-UP ON THEIR THREAT AND SUE YOU INDIVIDUALLY?
Obviously Prenda Law Inc. (now the “Anti-Piracy Law Group”) has the capacity to name and serve many individuals in many states. However, they are lawyers just as we are lawyers. And, whatever Prenda Law Inc. does on behalf of a client, somebody needs to pay the bill (especially if there is local counsel involved). If they are suing on behalf of Hard Drive Productions, Inc., then Hard Drive Productions, Inc. needs to pay their bills (or, you do by way of your settlements). Lawsuits are not cheap for a plaintiff, and the up-front cost of filing one ($350 per lawsuit), plus all the time drafting and responding to motions in front of a judge for each case is quite an undertaking.
SHOULD YOU SETTLE?
Thus, if you have no reason to settle, then don’t settle. If you see that they are naming and serving individuals, then contact one of us lawyers. Depending on your circumstances and if I can figure out a way for you to fight your case without settling, that might be the cheaper alternative. Just please don’t try to respond to their calls thinking that you’ll negotiate your way out of this. The only way to get out of this is to back them into a financial corner forcing them to drop your case, defend your case on the merits, or to pay them to make the case go away. I like any option that does not include sending them a check.
— 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 don’t know how to say this other than in my field of work, it is not often that I am shocked. I often speak to local counsel who get excited that they are handling a “porn” case. Just a few days ago, I called one of Steele’s (a.k.a., “Anti-Piracy Law Group”) local counsel. When I introduced myself, he said to me (with a boyish excitement), “Aren’t you the porn lawyer?” to which I responded, “Aren’t YOU the porn lawyer?!?”
Anyway, I cannot help but to generalize these cases into “okay, one more production company suing a college kid or husband for clicking on a link and viewing copyrighted materials.” What I often forget is that there is usually some guy behind the scenes who has trailed so far into the world of pornography that he has opened up his own company, produced some porn videos, and now is suing defendants for their download.
The motive is usually the same. Instead of “let’s punish these pirates” as they would like you to believe, their motive is rather, “let’s hit up as many people for thousands of dollars each until we get shut down by the courts.” In my opinion, this was the motive of the Hard Drive Productions, Inc. lawsuits.
Digressing, the epic news of the day is that the Hard Drive Productions, Inc. v. Does 1-1,495 (Case No. 1:11-cv-01741) case has been dismissed. Congratulations to the Cashman Law Firm, PLLC defendants who have been released from this case.
I don’t need to go into details about the case history — it has been riddled with controversy since they started suing internet users 2+ years ago. As far as the legal issues were concerned, this was a typical copyright infringement lawsuit plagued with the same procedural issues that most of the other cases of its time suffered from — improper joinder (defendants were not part of the same “swarm”), and improper jurisdiction (defendants were sued in a court which did not have personal jurisdiction over them because the DC court’s reach could not decide the case against most of the defendants who were implicated in the lawsuit because they lived outside of the court’s jurisdiction).
What surprised me about the Hard Drive Productions, Inc. case was not Hard Drive Productions, Inc., but the District of Columbia judges who made a political mess of these cases.Judge Beryl Howell came on the scene making pro-copyright troll rulings, such as 1) “you don’t need to decide jurisdiction or joinder until a defendant is named and served in a lawsuit,” 2) an ISP cannot file a motion to quash on behalf of their subscribers, and 3) accused John Doe Defendants cannot file motions to quash until they are named as defendants in the case. Mind you, she was a copyright lobbyist before she was appointed a federal judge.
Then in February, 2012, Judge Facciola came in with a ruling in the West Coast Productions, Inc. v. Does 1-1,434 (Case No. 1:11-cv-00055) case which I was sure was going to kill the Hard Drive Productions, Inc. case and all the other bittorrent cases in DC. In his order, he ruled that “a defendant who does not live in the District of Columbia cannot be sued in the DC court because the DC court lacks jurisdiction over those defendants.” However, at some point, it appears to me as if the RIAA/MPAA copyright lobby (probably by using Judge Beryl Howell as their mouthpiece) pressured Judge Facciola into giving into the copyright lobby’s pressure, and with a few contradictory rulings, he transitioned over to being Judge Beryl Howell’s sidekick in these cases.
Judge Bates also came in appearing to protect the procedural rights of the accused defendants who lived outside of DC, but once again, after what appeared to be some pressure from the RIAA/MPAA copyright lobby (once again, my educated guess is that Judge Beryl Howell was the force behind what happened), he was removed from the case which Judge Facciola took over. Then, after some time, it appears as if Judge Bates too eventually caved in to the RIAA/MPAA copyright lobby (some refer to them as the “mafia,” or the copyright police), and on my September 27th, 2012 post, Judge Bates reversed his decision in Hard Drive Productions, Inc. case and let the “extortion” of the John Doe Defendants at the hands of John Steele and Co. (a.k.a., Steele Hansmeier PLLC, a.k.a., Prenda Law Inc., and now a.k.a., the “Anti-Piracy Law Group”) continue.
So. The story with this dismissal is not necessarily a Hard Drive Productions, Inc. story, but a story of the forces behind the public interest groups and lobbyists who pressure Washington to always rule in favor of the copyright holder, regardless of whether the copyright holder is a pornography company, or whether the copyright holder is involved in making B-movies. Bottom line, these lobbyists insist that WASHINGTON MUST CONTINUE TO BE PRO-COPYRIGHT AND MUST CONTINUE TO RULE IN FAVOR OF THE COPYRIGHT HOLDERS, regardless of who the copyright holder is, or at what cost.
So as things stand in DC, there is still a split as to the rights of unnamed John Doe Defendants between the rulings of Judge Wilkins (relating to the “motion to compel” lawsuit by Prenda Law Inc. against Comcast relating to their Millennium TGA, Inc. cases [BTW, dismissed last week]) and the rulings of Judge Beryl Howell, because as you read, Judge Howell certified an interlocutory appeal to answer questions relevant to these cases, but it appears to me that someone is dragging their feet there in DC and hoping for a dismissal so that they don’t have to decide the issues.
Lastly, there is a lot of activity on Twitter as to the 28 or so defendants who have settled their case, and some anger directed at these anonymous defendants who have settled. Quite frankly, they are not all anonymous. What happened with these is that without warning, Prenda Law Inc. turned around and sued one of these defendants (or threatened to imminently sue these defendants) in lawsuits in their home states. I understand that many, if not most of the defendants in the “Hard Drive Productions, Inc. v. John Doe” cases which were filed towards the end of 2011 probably settled (I’ve listed a few of the named defendants in the “At What Point Does a Copyright Troll Stop Being a Troll” article.)
In closing, people are asking me whether I think Hard Drive Productions, Inc. is dead, or whether this is just the next logical progression before a slew of defendants being named. I must note that Hard Drive Productions, Inc. got their butts kicked quite a few times, especially with the Hard Drive Productions, Inc. v. John Doe, 3:11-cv-05634-JCS (Seth Abrahams) case and the Hard Drive Productions, Inc. v. John Doe, 4:11-cv-05630-YGR (Liuxia Wong) case, both in California. If you look at the http://www.rfcexpress.com website, there have been ZERO filings since March, 2012. A defendant must also understand that with the egos of these copyright troll attorneys, there is the saying, “As the ego of the attorney inflates, so does his hourly rate.”
We also know there have been squabbles between Prenda Law Inc.’s local counsel and Steele, and we know that their own attorneys have been jumping ship (and in some cases even testifying against Prenda Law Inc. in their attempts to withdraw as local counsel.) Thus, there are problems all around, so my best advise is to watch the http://www.rfcexpress.com website and see whether Hard Drive Productions, Inc. starts a flurry of lawsuits across the U.S. or not. And remember — behind every lawsuit there is a person (joking using the term “person” to mean a human, a fictitious person (who might not exist), or an offshore entity) who needs to pay Steele’s legal fees so that he can pay for his Las Vegas lifestyle of traveling the country “not” representing his clients in these matters.
— 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.
