Highlighted Paper: "The Case Against Combating BitTorrent Piracy Through Mass John Doe Copyright Infringement Lawsuits"

This month I'd like to highlight another Michigan Law Review article that is germane to this blog's focus. The article is: Sean B. Karunaratne, The Case Against Combating BitTorrent Piracy Through Mass John Doe Copyright Infringement Lawsuits, 111 Mich. L. Rev. 283 (2012).  I have seen much in the technology blog-o-sphere about this topic, typically highlighting some of the less than ethical tactics that these mass lawsuits engage in, but I can't remember seeing much in scholarly work on the subject.
That defendants may likely be successful arguing improper joinder or lack of personal jurisdiction is the thrust of the piece. The abstract is below:

Today, the most popular peer-to-peer file-sharing medium is the BitTorrent protocol. While BitTorrent itself is not illegal, many of its users unlawfully distribute copyrighted works. Some copyright holders enforce their rights by suing numerous infringing BitTorrent users in a single mass lawsuit. Because the copyright holder initially knows the putative defendants only by their IP addresses, it identifies the defendants anonymously in the complaint as John Does. The copyright holder then seeks a federal court's permission to engage in early discovery for the purpose of learning the identities behind the IP addresses. Once the plaintiff knows the identities of the John Does, it contacts them with a settlement demand. But often before such discovery is granted, the anonymous defendants have been improperly joined, and the lawsuit has been filed in a court that lacks personal jurisdiction over the defendants. This presents no problem to the plaintiff because the plaintiff does not intend for the lawsuit to go to trial. However, the defendants effectively have no choice but to succumb to the plaintiff's settlement demand because settling will be less costly than fighting the action. This Note argues that courts should not grant expedited discovery in such procedurally deficient lawsuits. To rein in these mass lawsuits, this Note argues that mass copyright infringement suits should meet certain minimum joinder and personal jurisdiction requirements before courts grant expedited discovery.

I think the strong-arm settlement tactics of these copyright litigation factories needs to be reigned in, especially in the case of pornographic works; the embarrassment of the consumer is often a boon to these outfits bordering on unjust enrichment. Copyright owners should have recourse for infringement, but not at the expense of cannibalizing individuals and legal rules in the process of doing so. Thankfully, there has been judicial push-back on these types of approaches.

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Craigslist wins $233K in case against optimization site

In Craigslist, Inc. v. Kerbel, 2012 U.S. Dist. LEXIS 108573 (N.D. Cal. Aug. 2, 2012), the Northern District of California granted default judgment for Craigslist against www.craigslist-poster.com for violations of the CFAA, Lanham Act, California hacking statute, California fraud statute, and DMCA. Kerbel and his website exploited the CAPTCHA function of craigslist, and sold credits for "campaigns" that would blast out posting all over the country ("24/7"), circumventing the Terms of Use specified by Craigslist. As the court described it, the "[d]efendant's activities burden craigslist's systems and cause it to incur expenses to increase server capacity, provide additional customer service and support for its legitimate customers, and investigate and enforce its policies." The defendant also used trademarks of Craigslist without authorization.

With regard to the CFAA claims, the court stated:

Plaintiff alleges that Kerbel's conduct was both knowing and intentional because it was designed to circumvent craigslist's security features and Defendant had to agree to the TOU with no intention of complying with it. Kerbel also continued said conduct despite receiving cease and desist letters. His conduct caused harm to craigslist of over $5,000 per year, including increased costs associated with the burden on Plaintiff's servers, investigation and enforcement costs to maintain the legitimacy of posts to the site, loss of goodwill, and the need for increased customer service and support. Thus, the Court finds Plaintiff is entitled to default judgment on its CFAA claims.

Kerbel was also dinged for violations of California's hacking statute - California Penal Code §§ 502(c)(1)-(7).  Additionally, he was hit for statutory damages under the DMCA equaling 200K, which was at the low end of the spectrum. The high end, according to the court, would have been 1.7 million dollars. Keep in mind that the owner of the site made only 33 thousand dollars. That amount was tacked on to the judgment for trademark infringement, making the total judgment ~$233,000.

If nothing else, this reinforces the binding force of TOU on websites.

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