Bloomberg News

Porn Firm Loses First Appeals Ruling Over IP Address Data

May 27, 2014

A company holding copyrights to pornographic films was rebuffed in its bid to subpoena identifying information on more than 1,000 allegedly illegal downloads in the first appellate ruling on a key tactic of so-called copyright trolls.

AF Holdings LLC is not entitled to contact information for people whose Internet addresses were linked to downloads of the film “Popular Demand” because few of them live in the District of Columbia, where the case was filed, and it’s unlikely any connection exists among all of the Internet addresses subject to the subpoena, according to a ruling by a three-judge panel.

“It is quite obvious that AF Holdings could not possibly have had a good faith belief that it could successfully sue the overwhelming majority of the 1,058 John Doe defendants in this district,” U.S. Circuit Judge David Tatel wrote. “AF Holdings clearly abused the discovery process.”

The ruling is important because it will discourage copyright infringement suits against large numbers of defendants seeking to strongarm them through embarrassment or costly litigation into paying settlements without establishing a sound legal basis, said Corynne McSherry, of the Electronic Frontier Foundation.

‘Business Model’

“This is the first appellate court that rejects the legal underpinnings of this business model,” McSherry said. Because it’s an appellate court, “other courts are likely to defer,” she said.

The panel threw out a district judge’s ruling that had allowed AF Holdings to subpoena Internet service providers including Verizon Communications Inc. (V:US) and Comcast Corp. (CMCSA:US) for identifying information on subscribers whose computers were linked to downloads of the movie via the BitTorrent file-sharing protocol.

Comcast reported that only one of 400 subscribers whose information AF Holdings sought lived in the District of Columbia, and three other companies subpoenaed didn’t even offer service in the district, according to Tatel’s ruling.

Paul Duffy, an attorney for AF Holdings who at the lower court was associated with Prenda Law Inc., didn’t reply to phone and e-mail messages requesting comment on the decision.

Prenda Law

Tatel criticized Prenda Law, noting that a judge in another case had described it as a “porno-trolling collective” that was seeking “easy money” by forming AF Holdings, acquiring rights to pornographic movies and initiating “massive ‘John Doe’ copyright infringement lawsuits.”

The firm “appears to have disbanded and then reconstituted itself in a similar form” since representing AF Holdings in the district court.

The legal system generally functions “fairly and efficiently,” Tatel wrote. “But sometimes individuals seek to manipulate judicial procedures to serve their own improper ends. This case calls upon us to evaluate -- and put a stop to -- one litigant’s attempt to do just that.”

The case is AF Holdings LLC v. Cox Communications, 12-7135, U.S. Court of Appeals for the District of Columbia (Washington).

To contact the reporter on this story: Andrew Zajac in Washington at azajac@bloomberg.net

To contact the editors responsible for this story: Michael Hytha at mhytha@bloomberg.net Fred Strasser, Andrew Dunn


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