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Monday, April 29, 2013

American Court Ran out of Patience with Commercial Invoicing

It seems that the courts of the United States are losing patience with copyright troll firms, who may find themselves on the wrong side of the law.


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A good example of the recent days is Prenda Law, which believed it would be a wizard wheeze to act on behalf of porn firms. Their model of commercial invoicing was nothing difficult: they found a list of IP addresses which downloaded the copyrighted content and threatened to sue them for hundreds of thousands. After this, the firm suggested to pay a much lower out of court settlement. As you can guess, the threat of a lawsuit was only used to scare Internet users into paying nominal settlement fees.

Prenda was doing well until one of the judges in Los Angeles claimed that enough was enough. Otis Wright demanded Prenda lawyers to explain their strategy in filing lawsuits involving hundreds of web users alleged of infringing porn film copyrights. Instead of answering to the judge, Prenda lawyers behaved very strange and pleaded the Fifth Amendment claiming that they would be incriminating themselves.

So, Prenda Law might be regretting the fact that it ended up in Wright’s court, because he ruled last year that copyright trolling was “essentially an extortion scheme” and claimed that the plaintiffs gamble that many defendants will send back a nuisance-value check to the plaintiff. The rewards were revealed by Prenda attorney, who bragged he had managed to collect $15 million settling such lawsuits. Of course, people would prefer to pay over going public in their porn downloads.

However, the things went wrong for the copyright troll when evidence was submitted that a couple of production companies it supposedly represented as clients, Ingenuity 13 and AF Holdings, appeared to be shell companies it set up on the West Indies island of Nevis. In violation of the court rules, Prenda lawyers concealed their direct interest in those lawsuits.

The judge believes that the porn companies are fronts for the copyright trolls, and Prenda Law realized it’s time to voluntarily drop the lawsuits in Wright’s court, but the judge wouldn’t let them do so. Wright hasn’t revealed what he’ll do about the company, but the experts expect him to ask federal prosecutors to investigate Prenda Law. As a result, other judges may start to look very closely at the copyright trolls as well.

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