Strike 3’s Copyright Litigation Campaign Completely Strikes Out

Another judge denies an unmasking subpoena to Strike 3, even though the judge has previously issued subpoenas to Strike 3, and even though it may mean that Strike 3’s infringement case will fail and Strike 3 will be left without any remedy for the alleged infringement.

How Strike 3 Works

Strike 3 files “John Doe” complaints naming unidentified assigned subscribers to an Internet Protocol (“IP”) address who have been identified by its contractor as an infringer on the BitTorrent (“BT”) network. BT is a software protocol that allows users to distribute data through peer-to-peer networks. The BT network permits users to download, copy and distribute Strike 3’s movies. The only pleaded connection in Strike 3’s complaints between the “John Doe” defendant and the alleged infringement is that the “John Doe” is the subscriber to the listed IP address. Strike 3 acknowledges it does not know if the subscriber or someone else downloaded its works.

After filing its complaint, Strike 3 files ex parte motions for expedited discovery requesting leave to serve a subpoena on the John Doe’s Internet Service Provider (“ISP”), i.e., Comcast, Yahoo, Verizon, etc. Although multiple infringements are listed in its complaints, Strike 3’s subpoenas only ask for the name of the IP subscriber for one infringement. Thus, as to the exemplar complaint, even though the alleged infringement occurred on 31 occasions from December 3, 2017 to August 16, 2018, Strike 3’s subpoena only asks for the subscriber’s name on July 27, 2018. Due to dynamic IP addresses, however, the subscriber identified in response to Strike 3’s November 13, 2018 subpoena, may or may not be the same person who subscribed to the IP address on July 27, 2018. After Strike 3’s motion for expedited discovery is granted and its subpoena is served and responded to, the ISP identifies the current subscriber to the listed IP address. Importantly, this is not necessarily the same person who subscribed to the IP address on July 27, 2018. Strike 3 then conducts an additional investigation and either settles, dismisses, or amends its complaint to specifically name the IP subscriber.

Strike 3’s Complaint Doesn’t Clear the 12(b)(6) Threshold

There is a split of opinion about whether Strike 3’s complaints could survive a 12(b)(6) motion to dismiss. The majority of cases say yes; a minority say no. This judge joins the minority:

Strike 3’s complaints are devoid of facts sufficient to show it is entitled to relief from the named John Doe/IP subscriber. The only material fact pleaded in Strike 3’s complaints is that the listed IP address is associated with the downloading of Strike 3’s works and the John Doe is the subscriber of the address. All other material averments in Strike 3’s complaints, e.g., that the John Doe subscriber downloaded Strike 3’s works, are conclusory statements, not facts. If Strike 3’s complaints are stripped of their conclusory statements, they are left with the notion that merely subscribing to an IP address that downloaded copyrighted works is sufficient to make out a cause of action for copyright infringement. This is not sufficient.

(cites to the Cobbler case).

The court then says a defective complaint can’t support expedited discovery: “it would be anomalous to permit a plaintiff in a John Doe case to obtain discovery based on a futile boilerplate complaint. Such bootstrapping must be barred in order to protect the integrity of the courts.”

So Strike 3 might be in a Catch 22. It cannot properly draft a complaint without discovery to fill in the missing facts; but it can’t get discovery without a properly drafted complaint. The court says tough luck:

The Court is not unsympathetic to Strike 3’s argument that without the requested discovery it may not be able to identify alleged copyright infringers. After all, who can argue with the notion that Strike 3 has a right to protect its copyrights. However, the fact that the law lags behind technology is not an ill this Court can cure. The Court will not create a remedy for Strike 3 that does not exist under existing law.

Unverified Complaint Accusations

Strike 3 unequivocally avers that the John Doe IP subscriber “downloaded, copied, and distributed” its copyrighted works. Yet, however, Strike 3 acknowledges it is equally as likely the subscriber or someone in the household is to blame for the infringement. Strike 3 also acknowledges that despite its unequivocal averments it does not know for certain where the subscriber lives. The fact that Strike 3 has to resort to making unequivocal statements of alleged facts that it does not know to be true in order to obtain expedited discovery, is troublesome and is a relevant fact the Court considers when it decides whether to grant Strike 3’s discovery requests

Timing Mismatches

Strike 3 does not reveal that the subscriber identified by its subpoenas may not be the subscriber when its work was infringed. For example, as to the exemplar complaint Strike 3 alleges 31 works were infringed from December 3, 2017 to August 16, 2018. Strike 3’s November 13, 2018 subpoena only asks for the name of the IP subscriber on July 27, 2018. In its motions Strike 3 does not mention that due to dynamic IP addresses the name of the subscriber identified by Strike 3’s November 13, 2018 subpoena may not be the person who subscribed to the same address on July 27, 2018. This information is not revealed by Strike 3 even though Strike 3 recognizes there are a limited number of IP addresses, the addresses are dynamic, and they therefore change….The fact that IP addresses change so frequently creates a significant opportunity for misidentification….Given the dynamic nature of IP addresses, the Court cannot be sure that the subscriber’s name revealed by Strike 3’s subpoenas is the name of the subscriber on the infringement date.

Strike 3 could fix this particular problem by asking for the subscriber information for all 31 works, but apparently it doesn’t do so due to the costs involved.

Strike 3 Has Alternative Ways to Combat Infringement

The court says that Strike 3 can (but doesn’t) send takedown notices to IAPs for infringing subscribers, and it could sue the IAPs if they fail to terminate repeat infringers. While that’s true, I don’t love this alternative.

Strike 3’s Litigation Campaign Isn’t Deterring Infringers

“Despite filing thousands of copyright complaints, Strike 3 recognizes infringement of its works has increased.”

Prejudice to Subscribers

the substantial prejudice that may inure to a subscriber from the release of its private information and the possible false identification in a lawsuit is significant. The innocent subscriber may have to pay a substantial sum to retain a lawyer to defend the lawsuit, or possibly settle to avoid incurring future costs. The innocent subscriber may also be subject to unduly intrusive discovery such as searches of his/her computer and social media. In addition, negative publicity and embarrassment may occur from being named in a copyright infringement lawsuit. Also, the fact that the innocent subscriber was named in a lawsuit may be revealed in an unrelated employment or credit search.

Conclusion

The Court is not unmindful that its ruling may make it more difficult for Strike 3 to identify copyright infringers. To the extent this is the price to pay to assure compliance with the applicable law, so be it. A legal remedy does not exist for every wrong, and it is unfortunately the case that sometimes the law has not yet caught up with advanced technology. This is not the first time, nor will it be the last, where a party who believes it was wronged was denied discovery.

Implications

Are we nearing the end of Strike 3’s litigation campaign? It seems like more judges are, on their own initiative, waking up to the problems with Strike 3’s tactics. I expect any future judges who read this opinion will find it persuasive; so the only question is whether future judges will see it or if it will get buried amidst the dozens of other Strike 3 rulings.

I’ve repeatedly asked whether a mass copyright litigation campaign can ever be profitable. We don’t get any statistics here about Strike 3’s profitability, but this ruling–if followed–will reduce Strike 3’s revenues and possibly raise its costs. It would not surprise me if the math is getting untenable for Strike 3.

For putting together a thorough, detailed, well-researched, and persuasive opinion without any assistance from defense counsel, and for recognizing that sometimes you have to shut the courthouse door to plaintiffs when the law doesn’t support them, I’m awarding the Technology & Marketing Law Blog’s Judge of the Day award to Honorable Joel Schneider and his clerks.

Case citation: Strike 3 Holdings LLC v. John Doe Subscriber Assigned IP Address 173.71.68.16, 2019 WL 5446239 (D. N.J. Oct. 24, 2019)

Selected Posts on Strike 3

* 512(h) Doesn’t Preempt Doe Unmasking Lawsuits–Strike 3 v. Doe

* Court Blasts “Copyright Troll” for Treating Courts “as an ATM”–Strike 3 v. Doe