Over the past few months, a group that calls itself the U.S. Copyright Group has setup two operations to nab people who downloaded illegal copies of Hollywood movies.
First, in February, they brought suit against about 23,000 people who had downloaded the movie The Expendables using the peer-to-peer software BitTorrent. Then, in April, they filed a lawsuit against about 25,000 people who they say downloaded illegal copies of the Academy Award winning film, The Hurt Locker.
This works in a round-about way: U.S. Copyright Group, which was formed by the Washington-based law firm Dunlap, Grubb & Weaver, gives a court a list of IP addresses of users they say have downloaded movies. The court then issues subpoenas to allow the law firm to request the names behind those IP addresses from internet service providers.
Today, the technology news site Ars Technica reports that a judge in The Expendables lawsuit has decided to revoke the subpoenas he granted two months ago. Ars Technica reports:
Two months after Judge Wilkins approved the subpoenas, they have still not been served; upset at this behavior, he has now revoked them. In explaining his decision, the judge said the delay was "especially surprising given the fact that one of Plaintiff's stated reasons for 'good cause' for the expedited discovery was that the ISPs typically retain the information that Plaintiff seeks only for a limited period of time... Plaintiff's delay in pursuing the discovery they requested on an expedited bases is inexcusable."
Further, the judge has realized that few of the IP addresses in question are likely to belong to DC residents; the plaintiffs admitted as much in a recent status conference. "The Court finds it inappropriate and a waste of scarce judicial resources to allow and oversee discovery on claims or relating to defendants that cannot be prosecuted in this lawsuit," said the judge.
So what's going on here? Why would USCG bring lawsuits and not act on the subpoenas?
CNN Money has a great overview of the cases, today, and they report that USCG usually goes after a few thousand defendants at a time and of those thousands many of them choose to settle out of court:
[Corynne McSherry, intellectual property director at the Electronic Frontier Foundation] and other critics have attacked the USCG for what they say is a "pay up or we'll getcha" method — that is, pay a relatively small fee to settle or face tens of thousands of dollars in legal fees and potential penalties.
Massachusetts resident Dmitriy Shirokov received one of those demand letters last year, and he promptly filed a lawsuit accusing USCG of making a business out of threatening people. The suit alleged that USCG exploited copyright law — and that its goal was to frighten people into paying up a small settlement of $1,500 to $2,500 rather than face litigation.
ArsTechnica explores that thread a little further, explaining that USCG lawyers said they hadn't acted on the subpoenas because they were waiting on the court to resolve the issues of venue. The court didn't agree with that and ArsTechnica spoke to one lawyer who posed another theory: The money, he said, is in going after illegal downloads of pornography:
David Kerr, a Colorado lawyer who has worked with 250 different P2P defendants over the last year, has a different take: the settlement money in such cases comes mainly from porn videos.
Based on his experience, Kerr told me that "the settlement rate for porn films is about 80 percent, whereas for legitimate films it is usually less then 50 percent. Plus, all settlements for porn films are usually several hundred to thousand dollars more than for legit films. You can go to the public docket and see that all of Dunlap's other cases besides the porn films are totally dead."