Court Nukes Another Mass Defendant File-Sharing Lawsuit — Digiprotect v. Does

[Post by Venkat Balasubramani]

DigiProtect USA v. Does, 10 Civ. 8760 (S.D.N.Y.; Sept. 26, 2011)

Plenty of bad news for copyright plaintiffs lately. Righthaven is getting hammered left and right and is struggling (to say the least) to keep any momentum going. (See Eric’s most helpful recap: “Resetting the Righthaven Fiasco,” in which he notes that ‘[t]he Righthaven empire is in tatters.”) The mass defendant file-sharing lawsuits have mostly spiraled downward as well. So many of these lawsuits have been dismissed on procedural grounds that I’ve lost track. Here’s another one to add to the list.

Background: This was one of two lawsuits filed by DigiProtect in the Southern District of New York. In late 2009, the court granted DigiProtect’s request to conduct limited discovery, although the court put in place some procedural safeguards. In December 2010, Time Warner and Comcast moved for a protective order, claiming that compliance with DigiProtect’s subpoenas would be unduly burdensome. They sought an order requiring DigiProtect to compensate the ISPs for processing subpoenas and to limit the scope of information sought. In January 2011, the court raised the issue that the 240 Doe defendants may not be subject to personal jurisdiction in New York, and joinder may not have been proper. After considering DigiProtect’s response, the court dismisses the lawsuit, with leave to replead and name only those Doe defendants who are properly subject to personal jurisdiction in New York.

Personal jurisdiction: The court runs through the Due Process/long-arm statute analysis to determine whether jurisdiction is proper. Although a recent New York state court case construed its long-arm statute broadly to allow for lawsuits against non-resident defendants where the plaintiff/copyright-owner is located in New York, that analysis does not apply in this case. Here, DigiProtect was a New York resident, but the actual copyright holder (Patrick Collins Inc.) was a California company. In passing, the court notes that although DigiProtect is authorized to pursue claims, Patrick Collins “retains most of the bundle of rights as copyright holder.” [Houston, we may have a Righthaven-style standing problem!] The court says DigiProtect can’t sue based on the fact that the harm from the infringement would be felt in New York, because this is not the case.

DigiProtect also argues for a “swarm” theory of jurisdiction, under which infringers are viewed as agents or co-conspirators of each other. According to DigiProtect, if one participant in a P2P swarm is located in New York, then this is sufficient to assert jurisdiction over the remainder of the group. The court also rejects this argument, noting that the complaint does not connect the Doe defendants to the same “swarm” transaction. Just because the defendants may have downloaded the same media does not mean that there was any connection between the downloads. (See Pacific Century International v. Does, discussed in this blog post: “P2P Swarm Defendants Can’t Be Joined in the Same Lawsuit.”)

The court expresses a reluctance to

ensnare unsophisticated individuals from around the country in a lawsuit based in New York [where the individuals would] likely be encouraged to settle rather than incur the burden and embarrassment of contesting the litigation.

The fact that the individuals whose IP addresses associated with infringing activity are located in New York is sufficient to establish jurisdiction in the court’s view, and the lawsuit may proceed against those individuals only. However, the court notes that this is not the case for the bulk of the Doe defendants in question. Comcast reported to the court that none of the Comcast-associated IP addresses were for New York residents, and Comcast argued that this information could be obtained using a “free, publicly-available website that matches an IP address with the internet service provider . . . and lists the geographic region in which the provider uses the address.”

As Comcast notes, this “could easily have been done by Plaintiff at the outset.” The court’s discussion of this was somewhat confusing to me, as I was under the impression that you cannot reliably “look up” an Internet user’s geography using just an IP address. Comcast says that Digiprotect can find the geography of the provider. The court seems to think this means Digiprotect can identify the geography of the accountholder, but of course many Internet access providers have customers in more than one state. In any event, the fact that the court makes this statement shows that it’s not excited about plaintiff and its claims.

Costs of compliance: The court also grants the ISPs’ request for reimbursement and limitations on plaintiff’s requests for information. Plaintiff argued that the ISPs were required to turn over the information anyway based on the DMCA-subpoena provisions, but the DMCA subpoenas don’t help when the entity is just providing connectivity and not storing the user files on its servers. (See the Verizon DMCA subpoena case.) In granting the request of the ISPs, the court says:

- DigiProtect must reimburse the ISPs for IP address look-ups and for notifying subscribers;

- this amounts to $120 per IP address (not per subscriber);

- the lookups are limited to 25 IP addresses per month.

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Oy vey. A few quick observations.

I’m surprised at the procedural gaffes which have derailed the latest round of mass-defendant P2P lawsuits. I was even more surprised when I saw the large national law firm, Foley & Lardner, was representing DigiProtect. Somewhat surprising to see them involved in a lawsuit over “Let Me Jerk You 2.” Even more surprising to see them get smacked down by the court on relatively obvious procedural grounds.

What bogs down these lawsuits are the way they are pursued. You could use the IP addresses and pursue actions in individual jurisdictions (subject to discovery and subpoena limitations), or pursue one identified component of an alleged “swarm” and go after the remaining people involved (subpoena their information from the initial defendant and then go after them in other jurisdictions, if necessary). DigiProtect did not do that, and there’s a reason why. It wants to obtain the list of everyone whose IP addresses they have, and send every single one of these people a letter. The same letter. DigiProtect is pursuing the settlement mill model, and more often than not, this model is blowing up in the face of plaintiff and its counsel.

I don’t recall whether other courts have expressly approved ISP requests for processing costs, but the court does so here and this may end up effectively putting the kibosh on the lawsuit. I don’t get the sense that the plaintiff has invested significant dollars into the dispute or is willing to do so. Plaintiff may balk at the prospect of having to shell out cash upfront to learn the identity of the Doe defendants who may or may not pay off. The limitation on the number of lookups is also a significant limitation. It is at least going to slow things down

To people who are on the receiving end of subpoenas in Doe cases: take the lawsuit seriously, retain counsel, and if you don’t have the resources to defend and push back, consider settling for a nominal amount, if possible. But definitely check to see if the case has been blown up by the judge. There’s a good chance it has.