USCG Making the RIAA Look Soft

Posted by Cyberbear on November 24, 2010 in Copyright Law, Internet, Litigation |

Posted by: Andrei Toma

Most people have heard of the Recording Industry Association of America’s (RIAA) near decade long campaign to crack down on peer to peer (P2P) piracy by sending threat letters and filling lawsuits. The campaign ended just last year, with over 18,000 law suits. One group manages to put the RIAA to shame, suing more than 16,000 people this year, in just one case, and the numbers just keep growing.
An enterprising group of lawyers created the United States Copyright Group (USCG), an organization founded to save the cinema. The USCG teams up with an Indy Film producer who usually recently released a commercially unsuccessful film, and sends a threat letter to the alleged P2P movie sharer which threatens to add the recipient to the lawsuit, unless the P2P user pays up. Profits/proceeds of the settlements are then split between the Film Producer and the USCG. Most people pay up rather than fighting back because it is cheaper to pay off the USCG than hire a lawyer.
Is this really legal? How long can USCG keep this business model going? The short answers are that this is sort off legal, and that the USCG probably cannot keep this going much longer.
The USCG’s business model is based on the RIAA’s anti-P2P campaign. The RIAA previously sent out threat letters to alleged infringers, informing the alleged infringers that they must pay a settlement or face a lawsuit. Over 90% of people settled with the RIAA, but this led to some very bad public relations. Also the RIAA did not find this to be particularly profitable, and there have been counter suits. The USCG has turned this form of threat letter revenue gathering into an art.
After the USCG retains a film producer as a client, it convinces them to let them sue alleged P2P violators free of charge, then it sends out subpoenas to the ISP to find out whom the IP address that downloaded the infringing film is registered to. Once the USCG has the name of the person registered to that IP address, it sends out the threat letter which promises to pursue the maximum damage award possible for each infringement, $150,000. All a recipient has to do is log on to the USCG website with the generously provided “Defendant Record ID”, pay whatever the threat letter demands with any major credit card (usually between $1,500-2,500), and the USCG promises to dismiss the recipient from the lawsuit. The USCG has done this to over 16,000 people without naming a single defendant.
This has left some critics claiming that the USCG does not actually plan on suing anyone. These critics allege that the USCG’s business model is based on continually threatening to add new defendants to an ever growing lawsuit which will never actually be prosecuted. No good thing can last forever.
This time the ISP Time Warner (TW) was apparently tired of being USCG’s IP hunting slave. ISP’s are required to identify who subpoenaed IP addresses are registered to or face liability for contributory infringement. TW complained about the time and cost of hunting down alleged infringers. In response to the complaint Federal Judge Rosemary Collyer ordered that TW only had to identify 28 IP’s for USCG a month. Identifying all the remaining alleged violating IP’s just for the film ‘Far Cry’ (over 800) would take TW five years according the USCG, so the USCG wants all that time to add new defendants to the trial.
Judge Collyer is overseeing the ‘Steam Experiment’ and ‘Far Cry’ case, which makes up a sizable chunk of the USCG’s total defendants this year. The judge’s patience seems to have come to an end. After already extending the original July deadline to November 18th, when USCG asked for an additional 5 year extension the Judge set a December 6th deadline for the USCG to name who it will sue. The Judge is apparently tired of receiving complaints that her DC District Court lacks jurisdiction over many of the letter recipients which have yet to be named as defendants.
Each Judge may handle the cases brought by the USCG differently, but it will be interesting to see what happens when the USCG has to actually name a defendant and possibly try a case.
Critics claim that the USCG’s methods are merely legal extortion. USCG claims they are protecting Indy Film producers from illegal file sharing. But when a law group files over 16,000 threat letters based on no evidence but the IP addresses, the probability that innocent people will be charged is very high.
It is not hard to imagine people who still have open WiFi networks being targeted by the USCG. Anyone in the vicinity of an open WiFi router (one that has not been password protected) can download illegal movies through the IP address of that router with the owner never knowing. There is also the possibility have hacking a WiFi network even if it is password protected.
In the United Kingdom lawyers who came up with the ‘pay up or we’ll sue’ are facing disciplinary tribunals for doing the same thing the USCG is doing. An IP address is not specific enough to prove that anyone actually committed an infringement. In the UK sending threat letters on merely the basis of an IP address is considered an abuse of a lawyer’s power because of the very real and likely possibility that innocent people will be threatened.
A letter recipient (not yet a defendant as none of been named) claims she never heard of ‘Far Cry,’ and did not even know what a torrent was before receiving the threat letter. She does, however, have a WiFi router. The letter advised here to either pay $1,500 when she received it, or $2,500 by the end of the month or be added to the lawsuit. Hiring an attorney to defend herself costs more than that. However, if her story is true the USCG may soon have another class-action suit to deal with.
Whether or not the USCG can keep the lawsuits going is a question the courts will have to decide relatively soon. However, if the USCG has to deal with countersuits and actually trying cases, the ‘pay up or we’ll sue’ business model may become very unprofitable.

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