Defense Against the Dark Arts of Copyright Trolling

Author:Matthew Sag & Jake Haskell
Position:Law Professor at Loyola University Chicago School of Law and the Associate Director of the Institute for Consumer Antitrust Studies/Recent graduate of Loyola University Chicago School of Law and an attorney practicing intellectual property law in Chicago
Pages:571-661
SUMMARY

In this Article, we offer both a legal and a pragmatic framework for defending against copyright trolls. Lawsuits alleging online copyright infringement by John Doe defendants have accounted for roughly half of all copyright cases filed in the United States over the past three years. In the typical case, the plaintiff's claims of infringement rely on a poorly substantiated form pleading and are... (see full summary)

 
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571
Defense Against the Dark Arts
of Copyright Trolling
Matthew Sag & Jake Haskell *
ABSTRACT: In this Article, we offer both a legal and a pragmatic framework
for defending against copyright trolls. Lawsuits alleging online copyright
infringement by John Doe defendants have accounted for roughly half of all
copyright cases filed in the United States over the past three years. In the typical
case, the plaintiff’s claims of infringement rely on a poorly substantiated form
pleading and are targeted indiscriminately at noninfringers as well as
infringers. This practice is a subset of the broader problem of opportunistic
litigation, but it persists due to certain unique features of copyright law and
the technical complexity of Internet technology. The plaintiffs bringing these
cases target hundreds or thousands of defendants nationwide and seek quick
settlements priced just low enough that it is less expensive for the defendant to
pay rather than to defend the claim, regardless of the claim’s merits.
We report new empirical data on the continued growth of this form of
copyright trolling in the United States. We also undertake a detailed analysis
of the legal and factual underpinnings of these cases. Despite their underlying
weakness, plaintiffs have exploited information asymmetries, the high cost of
federal court litigation, and the extravagant threat of statutory damages for
copyright infringement to leverage settlements from the guilty and the innocent
alike. We analyze the weaknesses of the typical plaintiff’s case and integrate
that analysis into a strategy roadmap for both defense lawyers and pro se
defendants. In short, as our title suggests, we provide a useful guide to the
defense against the dark arts of copyright trolling.
*
Matthew Sag is a Law Professor at Loyola University Chicago School of Law and the
Associate Director of the Institute for Consumer Antitrust Studies. Jake Haskell is a recent
graduate of Loyola University Chicago School of Law and an attorney practicing intellectual
property law in Chicago. We acknowledge the generous research funding of the Institute for
Consumer Antitrust Studies at Loyola and the database access provided by Lex Machina. We
thank Tonja Jacobi, and Spencer Waller for their many insights and comments and Wade Formo
for additional research. The views presented in this Article are strictly our own. We emphasize
that although this Article contains advice about the law, it is not legal advice, and we disclaim any
inference of an attorney–client relationship between the reader and ourselves.
572 IOWA LAW REVIEW [Vol. 103:571
I.INTRODUCTION ............................................................................. 573
II.ESSENTIAL BACKGROUND .............................................................. 575
A.THE CURRENT WAVE OF FILE-SHARING LITIGATION .................. 575
B.AN OVERVIEW OF THE PLAINTIFFS CASE ................................... 580
III. THE WEAKNESSES OF THE PLAINTIFFS CASE ................................ 582
A.OUTSIDE THE BLACK BOX ........................................................ 582
1.Ownership of a Valid Copyright ................................... 583
2.Lack of Authorization ................................................... 584
3.Improper Joinder .......................................................... 584
4.Personal Jurisdiction ..................................................... 588
5.Reliance on IP Addresses .............................................. 590
6.Reliance on Propensity Evidence ................................. 592
7.Using the Lack of Evidence as Evidence ..................... 592
B.INSIDE THE BLACK BOX ........................................................... 593
1.No Evidence of a Copy Being Made ............................ 593
2.The Black Box Has Credibility Problems .................... 599
3.Defendants Never Get to See Inside the Black Box.... 602
C.WHY DO SUCH WEAK CASES PERSIST? ...................................... 604
IV.STRATEGIES FOR DEFENDING AGAINST COPYRIGHT TROLLS ......... 605
A.STAGE I: COMPLAINT, SUBPOENA, THREAT LETTER, AND
RESPONSE ............................................................................... 605
1.The Complaint .............................................................. 606
2.Subpoena, Motions to Quash and to Sever ................. 606
3.Motion to Proceed Anonymously ................................ 609
4.Threat Letter ................................................................. 609
5.Letter in Response ........................................................ 611
B.STAGE II: AMENDED COMPLIANT, MOTION TO DISMISS, AND
ANSWER .................................................................................. 611
1.Strategic Considerations ............................................... 611
2.When to Settle and How ............................................... 612
3.The Motion to Dismiss .................................................. 614
4.Motion for Early Discovery ........................................... 618
5.Answer ............................................................................ 620
6.How Does Stage II End? ............................................... 620
7.Attorneys’ Fees and Statutory Damages ....................... 621
i.Attorneys’ Fees ........................................................... 621
ii.The Defendant’s Case for Attorneys’ Fees ..................... 622
iii.Is the Defendant the “Prevailing Party?” ..................... 624
iv.The Plaintiff’s Case for Attorneys’ Fees ........................ 625
v.Statutory Damages ..................................................... 628
C.STAGE III: DISCOVERY AND SUMMARY JUDGMENT ...................... 629
2018] DEFENSE AGAINST THE DARK ARTS 573
1.Discovery ........................................................................ 629
2.Disqualification of Plaintiff’s Experts .......................... 631
3.Summary Judgment ...................................................... 632
D.STAGE IV: TRIAL ..................................................................... 634
V.CONCLUSION ................................................................................ 636
I. INTRODUCTION
Over the past six years, a small group of copyright owners has deluged
the federal court system with lawsuits against John Doe defendants alleging
online copyright infringement. These lawsuits are sometimes directed against
a single defendant, sometimes thousands. This new wave of file-sharing
lawsuits is, in our view, copyright trolling because of the opportunistic way in
whic h they s eek to m onetiz e asser tions of infringement. More importantly, we
regard these suits as a kind of trolling because the plaintiffs’ claims of
infringement rely on poorly substantiated form pleadings and are targeted
indiscriminately at noninfringers as well as infringers. Plaintiffs have realized
that there is no nee d to invest in a case that could actuall y be proven in court
or in forensic systems that reliably identify infringement without a large ratio
of false positives. The lawsuits described in this Article are filed primarily to
generate a list of targets for collection and are unlikely to withstand the
scrutiny of contested litigation. Sometimes the plaintiffs get lucky and target
an actual infringer who is motivated to settle. Even when the infringement has
not occurred or where the infringer has been misidentified, a combination of
the threat of statutory damages—up to $150,000 for a single download—
tough talk, and technological doublespeak are usually enough to intimidate
even innocent defendants into settling.
The plaintiffs play a numbers game, targeting hundreds or thousands of
defendants and seeking quick settlements priced just low enough that it is less
expensive for the defendant to pay than to defend the claim. This game is
profitable, whether the lawsuits are targeted at actual infringers or not. It is
difficult to overstate the extent to which copyright trolling has come to
dominate the federal copyright docket. In this Article, we report new
empirical data on the continued growth of copyright trolling in the United
States. We show that around 10,000 copyright lawsuits have been filed against
John Doe defendants in the last six years and that these suits have accounted
for almost half of all the copyright cases filed in the United States between
2014 and 2016.1 However, counting cases filed grossly understates the
1. We discuss the data infra Part II. It is enough to note here that copyright lawsuits against
John Doe defendants outnumbered all other copyright claims in 29 federal districts in either
2015 or 2016. In 2016, John Doe cases accounted for more than half of copyright cases filed in
the following federal districts: Arizona; the Eastern, Northern, and Southern Districts of
California; Colorado; Connecticut; District of Columbia; the Northern District of Illinois; the

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