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Crushing Blow for Copyright Trolls: Appeals Court Halts AF Holdings' Extortion Scheme

PRESS RELEASE
May 27, 2014
Copyright Holders Can't Abuse Legal System to Pressure Thousands of Internet Users to Pay Unfair Settlements

Washington, D.C. - Striking a crushing blow against a legal linchpin of the copyright troll business model, a federal appeals court held today that copyright holders may not abuse the legal process to obtain the identities of thousands of Internet users.

"This decision is a crucial victory," said Electronic Frontier Foundation (EFF) Intellectual Property Director Corynne McSherry. "We are thrilled that a higher court has recognized that it is unfair to sue thousands of people at once, in a court far from home, based on nothing more than an allegation that they joined a BitTorrent swarm."

The plaintiff in this case, AF Holdings, sought the identities of more than 1,000 Internet users that it claims are linked to the illegal downloading of a copyrighted pornographic film. Over the protest of the Internet service providers that received subpoenas for those identities, a lower court approved the disclosure of the names. EFF, joined by the American Civil Liberties Union, the ACLU of the Nation's Capital, Public Citizen, and Public Knowledge, urged the U.S. Court of Appeals for the District of Columbia Circuit to reverse that ruling and help keep the legal process fair and balanced by requiring AF Holdings to show it has a good faith basis for going after these defendants.

This same coalition has fought for years in courts around the country to explain how the trolls were abusing the legal process to extort settlements from unsuspecting John Does. While several district courts have agreed, this is the first time a federal appeals court has weighed in.

The case is one of hundreds around the country that follow the same pattern. A copyright troll looks for IP addresses that may have been used to download films (often adult films) via BitTorrent, files a single lawsuit against thousands of "John Doe" defendants based on those IP addresses, then seeks to subpoena the ISPs for the contact information of the account holders associated with those IP addresses. The troll then uses that information to contact the account holders and threatens expensive litigation if they do not settle promptly. Faced with the prospect of hiring an attorney and litigating the issue, often in a distant court, most subscribers—including those who may have done nothing wrong—will choose to settle rather than fight.

"Once a troll gets the names it's looking for, then it already has what it needs to put its shakedown scheme in motion," EFF Staff Attorney Mitch Stoltz said. "For the defendants, it will come down to risking being named in a lawsuit over a pornographic movie, or settling for less than the cost of hiring an attorney. As a matter of law and basic fairness, a copyright plaintiff needs to show that its case is on solid ground before putting hundreds of Internet users into that kind of bind."

AF Holdings is linked to Prenda Law, a firm that is facing allegations that it used stolen identities and fictitious signatures on key legal documents and made other false statements to the courts.

For the text of the opinion:
https://www.eff.org/document/appeals-court-opinion

Contacts:

Corynne McSherry
   Intellectual Property Director
   Electronic Frontier Foundation
   corynne@eff.org

Mitch Stoltz
   Staff Attorney
   Electronic Frontier Foundation
   mitch@eff.org

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