Court says ‘porn-trolling collective’ abusing legal system

Internet service providers do not have to disclose the identities of Internet users accused of online piracy, according to a landmark ruling against so-called copyright trolls, issued by the D.C. Court of Appeals.

The ruling, issued Tuesday by a three judge panel, was on a case involving a legal scheme aimed at extracting financial settlements from Internet users, whether they were copyright infringers or not.

In recent years, hundreds of thousands of individuals across the country have been targeted by similar schemes, in which Internet users are threatened with legal action for allegedly downloading porn.

"I'm hopeful that this decision will put an end to these abusive tactics. Now that we have a court of appeals say that this is wrong, it's very likely that other courts will stop allowing this," Arthur Spitzer, legal director for the American Civil Liberties Union, told Al Jazeera. The ACLU, along with the Electronic Frontiers Foundation (EFF), filed an amicus brief in support of the defendants. 

The case centered on AF Holdings, one of several shell companies set up by a group of lawyers from Prenda Law, a now defunct law firm, according to Mitch Stoltz, an EFF staff attorney. "The two attorneys who argued for AF Holdings in this case were actually affiliated with Prenda. AF Holdings is an alter ego of Prenda," Stoltz told Al Jazeera.

AF Holdings, registered in the Caribbean, acquired the copyrights to several pornographic movies. "They didn't really have any legitimate business interests. They trolled the Internet looking for users who downloaded their films for the purpose of eventually extorting money from the holders of the IP addresses," Spitzer said. An Internet protocol (IP) address is the numeric ID given to a computer connected to the Internet.

Those affiliated with Prenda Law were "attorneys with shattered law practices" who were seeking easy money, according to Judge David S. Tatel.

AF Holdings, which could identify subscribers only by their IP addresses, would approach the court with a list of IP addresses and request subpoenas to obtain the identities of people connected to the IPs, Spitzer told Al Jazeera.

But AF Holdings had no intention of prosecuting these individuals, Spitzer said. Once given the identities, the company would then contact the individuals via mail and phone and push for a settlement — a scheme that netted the company $15 million in a little less than three years, according to the court's opinion.

"They were demanding money from people. This was essentially a shakedown," Stoltz told Al Jazeera. "Their business model was to initiate massive copyright infringement lawsuits against thousands of Internet subscribers it accused of downloading their films. They would then settle these claims inexpensively without putting resources into litigation."

The lawyers knew if they tried to sue those users, they would probably lose, Spitzer said. "It's difficult to prove that the owner of the IP is the the same individual who actually downloaded the film."

Which explains why whenever an identified defendant sought to litigate, the lawyers would simply drop the case, Spitzer said. "They were abusing a court procedure to disclose the identities of Internet users for the purpose of extorting settlements from Internet users they had trolled."

"They settled a great many cases in this way," he said.

Of the more than 100 cases that AF Holdings initiated, none have proceeded to trial or resulted in any judgment in its favor other than cases for which defendants failed to appear in court — causing the plaintiffs to win by default, the opinion noted.

While this method proved successful for AF Holdings, several Internet service providers (ISPs) took a stand in 2012 and refused to comply with subpoenas that sought the identities of people for 1,058 IP addresses.

"The ISPs put their foot down and said, 'We shouldn't have to do this. It's a burden on us, and plaintiffs don't have a right to this information because they're suing over a thousand people in one suit," Spitzer said. An ISP provides access to the Internet.

The court agreed with the ISPs, which included Cox Communications, Verizon, Comcast, AT&T and Bright House Networks. "The present lawsuit is a quintessential example of Prenda Law's modus operandi," Tatel wrote, adding that the court was putting a stop to the "porn-trolling collective."

In addition, the ISPs argued that a subpoena request lumping 1,058 defendants in one action was improper. "In order to enjoin a large group of people in one suit, you have to show that they participated together in a joint activity," Spitzer said.

Two users who download the same file months apart are like two individuals who play at the same blackjack table at different times, the court said. "They may have won the same amount of money, employed the same strategy and perhaps even played with the same dealer, but they have still engaged in entirely separate transactions. And simply committing the same type of violation in the same way does not link defendants together," the opinion said. 

The decision does not mean that copyright owners are unable to enforce their rights, said Stoltz. "It just means that it's going to be harder and more expensive to use litigation itself as a profitable business. Copyright owners need to prepare their case carefully and sue in the right court, giving each defendant their full rights."