PA Bellwether Case – Bench Trial Comments
19 Jun 2013 Comment – Judge Baylson issued his report on the Bellwether trial. Fightcopyrighttrolls and The Philly Law Blog (Jordan Rushie) have postings on the report. Not a shocking report and certainly not what Lipscomb would have liked to have seen.
18 Jun 2013 Comment – Here is a little bit from the trial where Lipscomb reads part of the deposition of John Doe # 1. It shows what they think of people who visit sites like mine and Fightcopyrighttrolls.com. What do they fear from people who want basic information on what these law suits are about??? If your cases are so strong, the free flow of information will do nothing to affect the outcome.
This part starts at approximately 9:14 on part two of the audio. John Doe # 1 is asked to -
Identify each Web site, blog, or message board, which you have visited, or which you have subscribed, posted to, which refers to, relates to, or discusses Internet Piracy, BitTorrent file sharing , or which provides information to people regarding suits which alleged people have committed online copyright infringement.
13 Jun 2013 Update – Doe #16 and Lipscomb stipulated that Doe #16 would pay $128,350.50 for fees and costs associated with the trial. Doc_198-1_Stip_Fees_02078(PA)
Well I completed listening to both parts of the PA bench trial recordings, 2:12-cv-02078, and no big surprises were noted. Even with all three of the defendants (Does 1, 13, & 16) admitting liability (committed the infringement), it was interesting to see many of the otherwise hidden aspects to how the Copyright Trolls operate. NOTE: It is my opinion that Keith Lipscomb and Malibu Media LLC (X-Art) are still Copyright Trolls. I do not equate they are the same as Prenda Law, just a different variety of Copyright Trolls. I do not dispute that Malibu Media is damaged by copyright infringement; Or that they do produce & own the content in these law suits. I just believe the methods they are using (directly & indirectly) are excessive, inappropriate, and designed to generate revenue on a repeatable basis. In my opinion, their actions (and inaction) are indicative of an operation not concerned with stopping copyright infringement. If anyone wants to coin a new term for the sub-species of copyright trolls I would be interested. When Prenda Law had real content owners as clients, we still considered them a copyright troll. Just because there is a content owner and a valid copyright registration, does not mean these people should not be called Copyright Trolls.
It is clear by listening to the trial that the confidential settlement agreement between all parties dictated what was generally going to occur. John Does # 1 & 13, were able to remain anonymous and pay an agreed upon amount to Plaintiff, by admitting liability, stipulating to various facts, and not being a pain in the rear to Plaintiff’s witnesses/experts (no cross-examinations).
John Doe #16, due to his perjury and evidence destruction, didn’t fare so well. There was still a settlement agreement based on admitting liability and making the case easier for Plaintiff, but court did issue a damages finding against him in the amount of $112,500, plus attorneys fees and cost (TBD). The judge came to this calculation by starting off with the accepted base amount of $2,250 (3 X minimum of $750) for each act of willful infringement. He then multiplied it by 10 for the perjury and evidence destruction ($22,250); then multiplied it by the 5 movies – $112,500. The total could go as high as $500,000 once attorney fees and costs are assessed. The statutory damage portion was significantly less than what Lipscomb asked for – $375,000 for 5 movies. Lipscomb told the court that he would like to have seen the court issue the following damage amounts for John Does # 1 & 13. Doe # 1 – $30,000 X 4 movies = $120,000. Doe # 13 – $2,250 X 35 movies = $78,750. Note: Doe # 1 lied about his activity, while Doe # 13 never denied it. This was the first time I heard about the $2,250 statutory damage amount as being a commonly accepted base amount.
Please take the time to listen to all the testimony and tell me what you think. As it was decidedly one-sided, some hard questions were not asked of Colette, IPP Limited personnel, and Patrick Paige. Colette did not speak to the fact that they do not issue DMCA notices to the ISPs to get the subscribers to stop the activity. They were also quiet on the issue that since they started encrypting where they store their movie prior to release, it has to be a paying member who loads copies up on BitTorrent. Why hasn’t she gone after the initial torrent uploader or at least suspended the accounts of those responsible???
It was interesting to hear that for a recent average of 50K subscribers, Malibu Media/X-Art charges $24.95 month/$99.95 year. That works out to a range of approximately just under $5 Million on the low-end and just under $15 Million on the high-end each year. Colette said it costs her approximately $2 Million a year to produce the content. They have employees and other costs, but still looks like a nice profit. I wish we would have heard how much money Malibu Media received from these cases.
The other witnesses were interesting to listen to and may be worth discussing the various aspects of their testimony.
Hearing Lipscomb complain about being called a Copyright Troll was a laugh. He really didn’t like being associated with Prenda Law. He told the judge that all of their cases were against single defendants who were the “worst of the worst” BitTorrent copyright Infringement offenders. They (Lipscomb/Malibu Media) were a “Different Model” of litigation (compared to Prenda Law), with these offenders infringing on 10, 30, or 60 plus Malibu Media copyright protected movies over the span of weeks and months. What Lipscomb didn’t tell the court was that previously, he ran the same business model as Prenda Law. Mass-Does law suit, using the Florida Bill of Discovery statute, not taking anyone to actual trial, and the failure to drop case promptly when presented with clear evidence of non-infringement are all hallmarks of a Copyright Troll. Neither did Lipscomb inform the court the reason for changing his business model. Yes, it was because of the Does who fought back, our Web sites, our community members, and the defense attorneys who took action.
So what it looks like now is Lipscomb/Malibu Media is only going after an US public IP address if it is sharing a large number of Malibu Media movies – let say 10+ movies, over a period of two+ weeks. They also will try to determine other type of copyright protected media the public IP address is sharing in addition to the Malibu Media content. Their expert (IPP Limited) stated that approximately 80,000 US IP addresses are infringing upon Malibu Media movies each month. With that number, I don’t expect Lipscomb to slow down on the cases. With Malibu Media he charges an hourly rate of $300 and most likely also has a settlement split agreement.
Also of note was some of the various questions they asked the Does during depositions. One of the questions they asked was if their network was “open” or secured with a password. An open WiFi can be a harder defense to get around unless there is addition evidence to show infringement activity by the ISP subscriber. A secured WiFi Internet connection makes it easier for them, as unless a device is compromised, the offender likely had to have the WiFi password – indicating a member of the residence. Lipscomb made a big deal that many people were falsely claiming their WiFi Internet access was “hacked.” Regardless of the security of the WiFi Internet connection, he goes on to ask the Does if after they were notified of the case by the ISP subpoena, did they change the password on their WiFi Internet device. Lipscomb made the point that for these three Does, none of them changed their WiFi Internet connection passwords or did an inquiry into what happened after notified by the ISP of the subpoena. He believed the Does didn’t do this as they were the offender and such actions were pointless. I have repeatedly stated that doing that is important and to document what you find. As Plaintiff does not send out DMCA take down notices to the ISPs, the ability to get anything off the Small Office/Home WiFi Router soon after the activity is noted is doubtful.
The last part I will mention here is what Lipscomb told the court concerning the computer evidence. He stated that he initially believed that for these types of cases, there wouldn’t be any computer evidence, as the Doe would simply remove the system that did it. Without the computer, these cases would be harder to prove unless other supporting evidence was available. It can be done, but there is a good chance of losing a case also.
With the exception of this trial, no other cases have been judged on their merits. This was no accident on the part of Plaintiff. As this cases was more of a show then a substantial examination of the facts (one-sided), I’m not very impressed. The fact that copyright infringement occurs and the monitoring software appears to work does not justify the slimy past and present activity of the copyright trolls. I think we may see a small number of future trials, but for this business model, it is a usually a losing option. Still, providing false statements/testimony and destroying evidence can get you into serious trouble.