Well Colorado may turn out to be a new fire storm for the Copyright Trolls. Thank you CO Doe for giving me heads-up on this development. On 20 Aug 12, Doe #7, represented by John A. Arsenault (WESSELS & ARSENAULT, L.L.C.), filed an answer to Plaintiff’s complaint. The case is Malibu Media LLC v. John Does 1-27, # 1:12-cv-00409, opened on 15 Feb 12. I don’t think Troll Kotzker was expecting this move and is now locked into the case against Doe #7. Def_Ans_complaint_00409(CO) RFC Express Complaint_00409(CO)
In the answer, Doe#7 denies all allegations of copyright infringement, states 10 defenses, and makes counterclaims against Plaintiff.
It is the Sixth Defense (Barring of Statutory Damages and Attorneys Fees – Page 8) that is really interesting.
72. Plaintiff’s claim for statutory damages is barred by the U.S. Constitution. Amongst other rights, the fifth amendment right to due process bars Plaintiff’s claim. As the Supreme Court has held, due process will prohibit an award of statutory damages meeting or exceeding a proportion of ten times or more actual damages. See State Farm Mutual Automobile Insurance Co., v. Campbell, 528 U.S. 408, 123 S. Ct. 1513, 1524 (2003); see also Parker v. Time Warner Entertainment Co., 331 F.3d 13,22 (2nd Cir. 2003); In Re Napster, Inc., 2005 WL 1287611, 377 F. Supp. 2d 796, 77 U.S.P.Q.2d 1833, (N.D. Cal. 2005). In fact, an award of statutory damages at four times actual damages “might be close to the line of constitutional impropriety.” Id. If all of Plaintiff’s settlements for infringement of the work in question are added together, the damages likely exceed beyond the statutory maximum allowed by the copyright statute.
73. Pursuant to applicable law concerning whether statutory damages are constitutional and to what extent, Plaintiff’s recovery, if any, must necessarily have a reasonable relationship to the Plaintiff’s alleged actual damages caused by the alleged infringement.
Mr. Arsenault tells the court that the US Supreme Court has limited Statutory damages to 10 times the actual damages. As X-Art is a monthly subscription site, let’s go with 10 times the monthly access fees of $19.99; or $199.90. OK, I’m feeling a bit generous; lets calculate the maximum statutory damages for the year subscription fee of $99.95; or $999.50. Now I know Plaintiff and Troll Kotzker will say the real actual damages are far greater, as the movie was shared with so many people. If that is the case, they only need to show how many people each one of the defendants shared the movie with. I’m sure there highly capable forensic experts could easily do that.
Make sure you note all the other defenses and tell me what you think.
Counterclaims (Starts on Page 10)
Mr. Arsenault drops the bomb and doesn’t mince words on what he thinks of the Copyright troll business model. He even cites a US News and World report I gave an interview to. Mr. Arsenault takes 5 pages to detail the general Copyright troll business model. Here is just a sample.
9. This business model is further complicated by the fact that the adult entertainment company’s attorney is paid a portion of any settlements received, establishing a potentially champertous relationship that can be easily abused without an incentive for further scrutiny of data provided by the forensics investigators.
10. To further improve the likelihood that the targets will settle, it is Defendant’s belief that Plaintiffs actively draw infringers to their films, and do so by uploading an archive containing a plurality of films to the internet for unsuspecting potential Defendants to access. This digital file often contains multiple registered works which Plaintiffs use to seek additional damages from Doe Defendants.
Mr. Arsenault makes the following claims against Plaintiff.
- Declaration of No Infringement of Copyright
30. Malibu Media, L.L.C., L.L.C. has incorrectly asserted in its claim that Defendant Doe has willfully infringed its copyright in the work via alleged downloading using Bit Torrent.
- Abuse of Process
37. Plaintiff’s goal in these lawsuits appears to be quickly settling with a large number of subscribers as potential Defendants as a revenue generating model, and then pursuing parties who fail to settle by either continued harassment, a default judgment, or an action against a Plaintiff based on questionable allegations of unlawful access to a pornographic work.
Mr. Arsenault asks the court to awarded reasonable attorneys’ fees, sanctions, costs, and other such awards (according to Federal and State laws); as well as holding Plaintiff liable for punitive and exemplary damages awarded to the maximum extent under law.
I foresee Plaintiff trying to settle this one as quickly and quietly as possible. It will take some time, as Kotzker and his master will try to feel out how serious Mr. Arsenault/Doe #7 are. If Doe #7 has the stomach to push this, Plaintiff may be paying him a hefty settlement. The only way Troll Kotzker has a chance is if they have some good insider information showing Doe #7 was the actual infringer. As they didn’t even bother to name him as an individual, I think they are “up #$%! creek.” Have fun with this one boys!