Published by LawTechie - May 8, 2013 - LawTechie

copyright lawLately, certain plaintiffs seem hell bent on using copyright law, and our court system, as a revenue stream to make money on otherwise worthless intellectual property. What is even worse is when such plaintiffs are really just law firms that have setup shell companies to “own” and threaten to sue John Doe defendants for violating their supposed copyrighted property. This sort of nonsense clogs our court systems and pulls resources from valid intellectual property protection, and judges are starting to get wise to it.

According to The National Law Journal, U.S. District Judge Otis Wright of Los Angeles has imposed five figure sanctions on attorneys from the law firm of Prenda Law Inc. whose attempt to sue various John Does for infringement of various pornographic films owned by shell companies set up by these attorneys has been categorized by the judge as resembling a RICO (Racketeer Influence and Corrupt Organizations) racket.

“Plaintiffs have outmaneuvered the legal system,” Wright concluded. “They’ve discovered the nexus of antiquated copyright laws, paralyzing social stigma, and unaffordable defense costs. And they exploit this anomaly by accusing individuals of illegally downloading a single pornographic video. Then they offer to settle — for a sum calculated to be just below the cost of a bare-bones defense. For these individuals, resistance is futile; most reluctantly pay rather than have their names associated with illegally downloading porn.”

The ruling came six months after Wright initially became suspicious of several cases before him filed by two companies, Ingenuity 13 LLC and A.F. Holdings LLC, which were represented by Prenda Law of Chicago. The cases were filed against “John Doe” defendants, alleging infringement of their copyrights to several pornographic films and seeking subpoenas to identify the perpetrators.

Wright raised questions about Prenda Law’s practice of identifying alleged infringers with only an Internet protocol address. He expanded his concerns after discovering that Gibbs, the lead attorney on the cases before him, may have stolen the identity of a Minnesota resident named Alan Cooper to validate a potentially sham client by holding him out as principal of Ingenuity and A.F. Holdings. On February 7, Wright issued an order to show cause why Gibbs, of Mill Valley, Calif., should not be sanctioned.

This is a big deal in what I consider to be “pointless” copyright litigation. As I have reiterated several times in previous articles, I have nothing against the sincere prosecution of intellectual property rights (I would not be a very good general counsel to my tech clients if I did not believe that their IP should be protected), but I do have problems with prosecution as a means to generate income on IP that has so little value that no real company exists to claim and enforce it.

LawTechie is a blog focusing on trends in tech and digital media. Areas covered include intellectual property, cyberlaw, venture capital, transactions and litigation as they relate to the emerging sectors. The blog is edited by the firm's partner Tim Bukher with contributions from the firm's experts in their respective areas of law.


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