ON VALENTINE’S DAY, a bevy of new cases — 15 in all — were filed in federal court in San Francisco. They all involved pornography.
The cases, all brought Tuesday by Strike 3 Holdings LLC, were another’s day work in the cottage industry of federal copyright litigation over allegedly illegal downloads of adult films.
A Bay City News analysis shows that since 2017, Strike 3 has filed 9,508 copyright infringement lawsuits in federal courts throughout the United States, including 1,046 in U.S. District Court for the Northern District of California, the federal court that hears litigation from the Bay Area.
The suits all allege that the defendant has illegally downloaded one of the adult films that Strike 3 distributes through DVDs or its adult websites: Blacked, Tushy, Vixen, and Blacked Raw.
Strike 3’s legal filing touts the fact that its “motion pictures and websites have won numerous awards, such as ‘best cinematography,’ ‘best new studio,’ and ‘adult site of the year,’ though it appears that most of the awards were AVN Awards, sometimes described as the “Oscars of Porn.”
The Northern California court district has become the national leader in these lawsuits over the last five years, besting its next closest rival, the District of New Jersey, by 166 cases.
Strike 3 filed more than 200 such cases here in 2022. In the first six weeks of 2023, it filed another 39 cases, including 24 on Jan. 18, setting a single-day record for Strike 3 filings in the district and putting them on pace to exceed 300 cases in 2023.
Defense lawyers report that the bulk of settlements run in the range of $10,000 to $15,000, though individual factors, including the number of downloads, could make any case resolve for a greater or lesser amount.
Just a quickie
The cases in the district don’t last long. Strike 3 cases that have been resolved (924 of the 1,046) averaged only 122 days from filing to closure, quick by the standards of federal litigation.
A reason that the cases don’t last long is very few are litigated to a resolution.
California attorney Steven Vondran has a busy intellectual property law practice and he has handled hundreds of Strike 3 cases. In his experience, a typical case begins when his client learns that Strike 3 has asked his or her internet service provider (ISP), such as Comcast or Verizon, to identify who owns the IP address assigned to the client’s computer or router.
Vondran explains that Strike 3 believes that the owner of the IP address has used a BitTorrent client to download one of Strike 3’s copyrighted adult titles. BitTorrent is a communication protocol used for peer-to-peer sharing of large files.
Strike 3 says that it has proprietary technology that can identify the IP address of the downloader. However, the IP address is just a string of numbers and does not identify the actual person who owns the address, though it does generally identify the geographic region.
Armed with that information, Strike 3 files a suit in the relevant federal court. Because it doesn’t know the name of the alleged infringer, it names the defendant as “John Doe” and qualifies that with the IP address. The last Valentine’s Day suit in San Francisco, for example, was brought against a defendant named as “John Doe subscriber assigned IP address 18.104.22.168.”
In federal court litigation, the discovery process — that is the exchange of information and documents relevant to the case — does not usually begin immediately on filing. However, Strike 3 has had success in convincing judges in the district to allow it to very quickly subpoena the ISP that hosts the IP address and ask the ISP for John Doe’s real name and address.
When the ISP gets Strike 3’s subpoena, it will contact Doe and ask if he or she wishes to contest the release of his or her name to Strike 3. At that point Doe has to face up to a difficult situation. If Strike 3 prevails, Doe faces the potential of statutory damages under the U.S. Copyright Act that run from a minimum of $750 for each illegal download up to $150,000 for willful infringement.
Let’s keep this confidential
But even beyond the monetary damages, there is the additional risk that their name might come out in the litigation and leave them associated not only with illegal copying but with adult films to boot.
Vondran said, “we have people that have really good jobs in really prominent companies. So, you know, it’s kind of shameful and they don’t want to be associated. So they’ll pony up a settlement to avoid that, even sometimes when they think they haven’t done anything.”
Many of Vondran’s clients engage him to settle their case quickly; others start out thinking that they want to fight.
However, if they want to litigate the case and mount a defense, Vondran has to tell them that they are looking at $30,000 or more in legal fees. According to Vondran, Strike 3 won’t fold just because someone doesn’t want to settle.
“It’s not like they just go, okay, we better drop it. So you have to be in; you have to be prepared. If you’re going to fight that, you’re going to have to really want to put the money down,” he said.
There is another dynamic in these cases that also makes it harder for there to be a defense. In other areas of the law, a group of defendants who have been sued by a common plaintiff may band together and hire one attorney and share the fees. However, it is harder for a group like that to form organically because, as Vondran says, “most people wouldn’t want anyone else knowing their names.”
If someone does want to litigate, there are possible defenses. Just because a client owns the IP address where an allegedly illegal download occurred doesn’t mean that the client is liable for infringement. The IP address may be the Wi-Fi router in his or her home.
Some people don’t secure their router with a password and the downloader could be a neighbor or someone driving down the street looking for an unguarded system. And even if the system is password protected, the downloader could be a family member or a friend who knows the password.
It is Strike 3’s burden to prove by a preponderance of evidence that Doe was the actual infringer, and in some cases Strike 3 might not be able to meet its burden. Nevertheless, most cases settle and settle quickly.
For all the Strike 3 cases he has handled over the years, Vondran has not litigated a case to resolution.
Before Strike 3 came on the scene, a company in Southern California named Malibu Media LLC operated a business suing over copyright infringements of porn films. In one case, U.S. District Judge Otis Wright offered caustic commentary on Malibu’s cases.
Wright wrote, “These lawsuits run a common theme: plaintiff owns a copyright to a pornographic movie; plaintiff sues numerous John Does in a single action for using BitTorrent to pirate the movie; plaintiff subpoenas the ISPs to obtain the identities of these Does; if successful, plaintiff will send out demand letters to the Does; because of embarrassment, many Does will send back a nuisance-value check to the plaintiff. The cost to the plaintiff: a single filing fee, a bit of discovery, and stamps. The rewards: potentially hundreds of thousands of dollars. Rarely do these cases reach the merits.”
Strike 3’s cases don’t follow some of the most aggressive practices that Malibu followed (and judges in the district generally won’t let a John Doe’s actual name be used in court papers), but Wright’s observations are frequently mentioned by Strike 3 defense lawyers.
One lawyer — Joseph Edmondson of Beaverton, Oregon — is well known within the community of lawyers handling Strike 3 cases as someone who is willing, indeed more than willing, to litigate one of these cases.
Edmondson has the distinction of winning a case against Strike 3. In that matter a retired police officer was identified by Strike 3 as an infringer. The officer said he did not download the porn and his forensic expert confirmed that there was no evidence of downloads on his computer.
Strike 3 tried to drop the case but the officer counterclaimed for a determination that he had not infringed. He also asked Strike 3 to pay his legal fees. Strike 3 declined, but the trial court said that it had to do so. Strike 3 appealed and in March 2021, a panel of the 9th Circuit Court of Appeals affirmed the lower court ruling.
Edmondson is proud of that case, but points out that it did not involve litigating what he believes are some of the central — and hugely important — issues that come from Strike 3’s litigation business model.
Edmondson represents a John Doe in a federal court case in Florida brought by Strike 3. In that case, he has asserted a number of grounds to support his position, but a core argument focuses on VXN, the proprietary “tool” that Strike 3 employs to identify an alleged infringer and his or her IP address.
Edmondson’s expert witness alleges that VXN is unreliable and cannot pass the standards that the courts have established for determining whether the conclusions reached by such tools are sufficiently reliable to be admitted as evidence.
He alleges that VXN is a complete “black box” with no operating manual, no peer review, a significant false positive rate, and no third-party scientific evaluation of the technology. Moreover, he argues that Strike 3 as the owner of the technology has a conflict of interest in using it in cases where it has an economic interest.
“… (B)ecause of embarrassment, many Does will send back a nuisance-value check to the plaintiff. The cost to the plaintiff: a single filing fee, a bit of discovery, and stamps. The rewards: potentially hundreds of thousands of dollars. Rarely do these cases reach the merits.”U.S. District Judge Otis Wright
The expert wrote in his report, “To maximize income, Plaintiff Strike 3 has a vested interest in maximizing the number of IP addresses VXN reports as infringing Strike 3’s movies. Maximizing the number of infringing IP addresses maximizes the number of allegedly accused users and hence opportunities for deriving income by litigating, harassing and settling.”
The expert concludes that Strike 3 “prioritizes maximizing the number of BitTorrent users suspected of infringement over ensuring that non-infringers are reliably distinguished from infringers.”
A spring fling of litigation
Because Edmondson’s theory goes to the heart of Strike 3’s business model, the case has turned into a battle royal. There are multiple lawyers and experts on each side of the case.
In an order dated Jan. 18, the trial judge denied both sides motions for summary judgment and cleared the way for a full-blown trial, though a trial date has not yet been set. Edmondson has asked for a jury hear the case.
Strike 3’s Florida counsel, Christian Waugh, in response to a request for comment, defended the company’s technology.
“There is not nor has there ever been, anywhere, evidence that Strike 3’s VXN technology is unreliable. Just the opposite. Literally every piece of evidence produced regarding it in my case, including multiple expert reports, have demonstrated that it is virtually perfectly reliable. Furthermore, there is no evidence of any false positives,” Waugh said.
Waugh says that he intends to introduce all the VXN data at trial and expects to prove that Doe committed infringement.
It is too early to know how the 15 cases filed in San Francisco on Valentine’s Day will turn out, but if they follow the general course of Strike 3’s earlier cases in the district, by summer most or all of the cases will have settled and Strike 3 will have pocketed settlements aggregating between $150,000 and $225,000.
In the Malibu Media case, Judge Wright said that he was concerned that the federal courts should not be “cogs in a plaintiff’s copyright-enforcement business model,” but when defendants settle quickly without raising issues for a judge to consider, the cases run their course without much direct judicial involvement.
Edmondson’s case — should he be successful — might change the equation, but as long as the status quo continues, it is not unrealistic to expect that San Francisco will continue to be the national leader in these cases.