Court slaps Prenda client with more than $20,000 in defendant’s costs and attorney’s fees

AF Holdings, represented by infamous copyright trolls Prenda Law, voluntarily withdrew its copyright infringement claims against the defendant, an alleged BitTorrent infringer. Defendant sought to recover his costs and attorney’s fees pursuant to the Copyright Act, which provides that:

In any civil action under this title, the court in its discretion may allow the recovery of full costs by or against any party other than the United States or an officer thereof. Except as otherwise provided by this title, the court may also award a reasonable attorney’s fee to the prevailing party as part of the costs.

The court found that all factors for an award of costs and attorney’s fees weighed in defendant’s favor:

  • Degree of success: There was no dispute that defendant completely prevailed in the case.
  • Frivolousness/Objective Unreasonableness: Plaintiff’s case was frivolous and objectively unreasonable in that it never presented any evidence (although it had the opportunity to do so) to support its claim that it had standing to assert a claim for copyright infringement. Moreover, the court found that plaintiff did not do a proper investigation to determine defendant was the one in the household who committed the alleged infringement. Instead, it simply alleged that he fit the best demographic of one who would infringe.
  • Motivation: The court found that it did not appear plaintiff was motivated to protect the copyright at issue, but merely to coerce settlements.
  • Compensation/Deterrence: The court awarded fees as a deterrent to copyright trolls everywhere: other persons or entities that might contemplate a similar business model that is not intended to protect copyrighted work but instead designed to generate revenues through suits and coerced settlements.
  • Furthering the Purpose of the Copyright Act: The primary objective of the Copyright Act is to encourage the production of original literary, artistic, and musical expression for the good of the public. But here, the court found, plaintiff had not acted to protect original expression but rather to capitalize on coerced settlements.

Based on these factors, and after considering the number of hours spent and the hourly rate of defendant’s counsel, the court ordered plaintiff to pay $19,420.38 in attorney’s fees and $3,111.55 in costs (mainly for electronic discovery and deposition costs). Copyright trolls be warned.

AF Holdings LLC v. Navasca
, 2013 WL 3815677 (N.D.Cal. July 22, 2013)

Are courts wising up to BitTorrent copyright trolls?

BitTorrent copyright trolling continues despite Prenda Law’s self-implosion. But there is hope that courts are coming to their senses.

Earlier this week Judge Wright issued a Hulk smash order lambasting the tactics of notorious copyright troll Prenda Law and finding, among other things, that the firms’ attorneys’ “suffer from a form of moral turpitude unbecoming an officer of the court.”

Though Prenda Law’s copyright trolling days may be numbered, it is still too early to announce the death of BitTorrent copyright trolling. Copyright plaintiffs are still filing lawsuits against swarms of anonymous accused infringers, and courts are still allowing those plaintiffs to seek early discovery of John Does’ names.

But there is reason to believe that courts are recognizing the trolls’ disingenuous efforts to join scores of unknown defendants in a single action. Last week, a federal court in Ohio (in Voltage Pictures, LLC v. Does 1-43, 2013 WL 1874862) expressly recognized the concern that some production companies have been “misusing the subpoena powers of the court, seeking the identities of the Doe defendants solely to facilitate demand letters and coerce settlements, rather than ultimately serve process and litigate the claims.” Likewise, the court recognized that other BitTorrent plaintiffs have abused the joinder rules to avoid the payment of thousands of dollars in filing fees that would be required if the actions were brought separately.

So the court issued an ominous warning. Though it found that at this preliminary stage it was appropriate to join all 43 accused swarm participants in a single action, the court noted that “[s]hould [it] find that plaintiff has abused the process of joinder, the individual John Doe defendants may be entitled to — in addition to a severance — sanctions from plaintiff, under [the applicable rule or statute] or the Court’s inherent powers.” The court went on to warn that “[w]hile the Court will not automatically hold plaintiff responsible for the alleged abuses of others in its industry, it will not hesitate to impose sanctions where warranted.”

Though it has taken several years of abusive and extortion-like litigation brought by BitTorrent copyright trolls, we may be entering an era where courts will be more willing to require these trolls to show the courage of their convictions. No doubt we have Prenda Law and its possibly-unlawful tactics to thank mostly for this crackdown. Prenda had a good thing going (from its perspective, of course). Too bad it did not abide by the timeless maxim, “pigs get fed, hogs get slaughtered.”

BitTorrent defendant not negligent for failing to secure home Wi-Fi network

AF Holdings, LLC v. Doe, 2012 WL 3835102 (N.D. Cal., September 4, 2012)

Copyright troll plaintiff AF Holdings sued defendant for, among other things, negligence for failing to secure his home wi-fi network. Plaintiff argued that defendant’s inaction allowed a third-party to commit large-scale infringement of AF Holdings’ copyrighted works.

Defendant moved to dismiss for failure to state a claim. The court granted the motion and dismissed the negligence claim.

It held that a defendant like the one in this case had no duty to protect another from harm in this situation of “non-feasance” (i.e, failing to do something) unless a special relationship existed which would give rise to such duty. In law school this principal is articulated through the hypothetical of standing on a lakeshore watching someone drowning — you don’t have to jump in to save the person unless you are a lifeguard (or the victim’s parent, or a member of some other very limited class).

The court found that no special relationship existed here, thus plaintiff had not articulated any basis for imposing on defendant a legal duty to prevent the infringement of plaintiff’s copyrighted works.

We talked about this issue, along with other issues like copyright preemption, as it arose in a different case back on Episode 170 of This Week in Law beginning at about the 19 minute 40 second mark:

Court tosses copyright claims against 244 accused BitTorrent infringers

Digital Sins, Inc. v. John Does 1–245, 2012 WL 1744838 (S.D.N.Y. May 15, 2012)

Plaintiff Digital Sins filed a copyright lawsuit against 245 anonymous BitTorrent users. The court dismissed the case against all but one of the unknown John Does, finding that the defendants had been improperly joined in one lawsuit. The judge observed that “there is a right way and a wrong way to litigate [copyright infringement claims], and so far this way strikes me as the wrong way.”

Federal Rule of Civil Procedure 20(a)(2) provides that defendants can be joined into one case if, for example, the plaintiff’s right to relief arises out of the same transaction, occurrence, or series of transactions or occurrences, or if there is any question of law or fact common to all defendants.

In this case, the court found that those requirements had not been met. Plaintiff’s allegations that the defendants merely commited the same type of violation in the same way, did not satisfy the test for permissive joinder under Rule 20. There was no basis, according to the court, to conclude that any of the defendants was acting other than independently when he or she chose to access the BitTorrent protocol.

The court went on to find that having all the defendants joined in one action would not give rise to any valid judicial economy. Any such economy from litigating all the cases in a single action would only benefit plaintiff, by not having to pay separate filing fees to sue each defendant. Moreover, trying 245 separate cases in which each of 245 different defendants would assert his own separate defenses under a single umbrella would be unmanageable.

Photo credit: nshontz

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