Recent Lawsuits Allege Illegal Downloading of X-Rated Films and Sexploitation “B” Movies: Will Their Claims Against Large Groups of Individual Consumers Succeed?

Imagine receiving notice of a lawsuit alleging that you, or a family member, had illegally downloaded an adult movie, or a “sexploitation” “B” movie with an explicit title.  Would you fight the case in court, or quietly settle to avoid embarrassment?

That is the quandary in which thousands of consumers have found themselves recently.  Just last week, for instance, a Florida newspaper reported that a Palm Beach County grandmother whose teenage grandson had set up her Wi-Fi network is one of thousands of individuals who have been named as defendants in a lawsuit filed by an adult film studio.

Adult filmmakers and makers of “B” movies – low-budget and typically low-quality films — have potentially found a way to make additional money, by suing consumers for allegedly illegally downloading copyrighted films without paying for the right to do so.

The recently-filed Broward County and Miami-Dade County cases, alone, name more than 1,300 alleged illegal movie viewers.  (The alleged viewers live in various locations throughout Florida).

And the Florida lawsuits are part of a growing trend.  To date, reportedly, over 130,000 individuals have been sued for allegedly downloading adult or “B” movies illegally via BitTorrent, a peer-to-peer file-sharing application.

Critics of this new tactic say that these moviemakers are just out to make a quick buck by engaging in high-volume litigation – and that they are using the embarrassing nature of the allegations to get individuals to quickly and quietly settle.  When one multiplies the number of defendants in these suits by a modest sum, the profits quickly add up.

Of course, it was the recording industry that started the trend of suing Internet users for downloading illegal copies of songs from the Internet.  The main differences between those suits and the suits based on X-rated or “B” movies are: (1) the Recording Industry Association of America (RIAA) sued far fewer people; and (2) the RIAA sued consumers in local courts close  to where they resided, while the current wave of lawsuits from X-rated and “B” moviemakers seeks to bring consumers into court in states far from where they live.

In this column, I will describe the nature of these recent lawsuits; outline the criticism of this approach; and discuss why the suits, as they are currently constructed, may be open to challenge.

The Trend: Suing Over Alleged Illegal Downloads of the Naughtier Kind of Pirated Films

Studios that produce adult films, or so-called “B” movies, say that they are losing millions in revenues due to online piracy.  And no one reasonably disputes that downloading an unauthorized copy of a copyrighted work is illegal.  Moreover, there is a reason that movie companies are pursuing downloaders, and not intermediary websites that enable downloads:  Such sites are often offshore, and thus difficult or impossible to sue successfully in a U.S. court.

Unlike the RIAA’s former litigation campaign, which targeted only a handful of defendants at a time, the lawsuits based on the downloads of numerous films via BitTorrent are targeting thousands of  potential defendants solely by the IP address from which the illegal downloading reportedly transpired.  Once the suit is filed, the plaintiff then asks a federal judge to order ISPs to identify Internet subscribers by name, connecting a name with each IP address.

For instance, this March, Camelot Studio sued thousands of Internet users – identified only by IP address — for allegedly illegally downloading its “B” movie revenge film Nude Nuns with Big Guns. (The case was further complicated when one of Camelot Studio’s creditors, Incentive Capital, claimed that it had legal ownership over Nude Nuns, and filed its own civil suit lawsuit, listing the same 5,865 IP addresses.)  The company then sought an order from a judge requiring various ISPs to search their subscriber records and match IP addresses with customer names.

Similarly, a February 2 lawsuit filed in Illinois, Openmind Solutions, Inc. v. Does 1-2925,  targeted those whom the company says downloaded improperly various adult titles in its collection.

This strategy was pioneered last year by the U.S. Copyright Group, a business which represents independent-film producers and which was formed explicitly to make money by suing downloaders.  It works for a number of independent film makers and has handled high-profile films such as the The Hurt Locker and The Expendables. The group uses software to monitor illegal downloading activity. The group’s strategy – of listing only IP addresses in litigation, but then seeking names and street addresses in court — is now being mimicked by individual production companies, as well.  (Courts may, however, give customers some time to fight the release of  their personal subscriber data when it is sought from an ISP.)

Once the film distributor gets the names, it typically mails letters to the alleged downloaders, seeking settlements.  Some letters threaten legal penalties of up to $150,000, but actual reported settlements are much smaller – ranging from $1,000 to $3,000.  Multiply that figure by hundreds, or even thousands, of viewers and the potential for profit swiftly balloons.

The Contrast Between the X-Rated Movie and “B” Movie Companies’ Approach and the RIAA’s Prior Approach – and Why the Movie Companies’ Approach Is Wrong

According to estimates by the Electronic Frontier Foundation (EFF), as of eight months ago, a total of 136,000 viewers had been sued  in mass lawsuits based on allegations of illegal movie downloading, and today, the EFF’s estimate already tops 150,000.

In contrast, by the time the Recording Industry Association of America abandoned its own Napster­-inspired mass lawsuit strategy in 2008, estimates indicate that the RIAA had sued somewhere between 20,000 and 35,000 downloaders over the course of six years.

Moreover, in contrast to the RIAA’s suit, the movie lawsuits appear to have been designed from the start as for-profit ventures, not as a deterrent to piracy.

The RIAA generally targeted dozens of defendants in each suit, not thousands, and it filed each case in the jurisdiction of the users’ ISP.  The RIAA reportedly lost millions of dollars with this strategy.  The organization had to pay individual $350 filing fees for each case, and sometimes engage local counsel.  But the strategy was much more fair to alleged downloaders than what the X-rated and “B” movie companies are doing now.  It allowed alleged downloaders to litigate where they lived, and it gave them at least the hope of a judge’s focusing on the specific context of their individual cases (say, illegal downloading by an immature minor, or only a scant few instances of illegal downloading).

But the X-rated and “B” movie companies’ lawsuits are different from the RIAA’s.  Critics say that the filmmakers have turned these suits into a revenue-generation scheme, rather than an enforcement mechanism to get people to comply with copyright laws.  They say that the suits offer the inducement of a fast buck for producers who may, in the end, make more money through the courts than they do from selling, and selling the right to view, their films.

Faced with the threat of a $150,000 copyright-infringement judgment — and the embarrassment of being publicly identified as having not only watched an X-rated film, but also having watched it as a freeloader – viewers of pirated films may pony up several thousand dollars to settle a lawsuit based on their allegedly viewing a film that would have sold  for only $20, had they bought it.

Of course, filmmakers are legally entitled to sue for copyright infringement, no matter what kind of films they make; they are the copyright holders.  But these lawsuits are often filed hundreds, or even thousands, of miles from where the viewer lives — meaning that he or she could have to repeatedly travel to another state to defend the case.  This entails  huge inconvenience;  potentially large travel costs; and the need to locate and retain an out-of-state attorney.  For instance, the very recent Miami-Dade County lawsuit lists IP addresses from places as far-flung as Hawaii.

Moreover, these lawsuits group thousands of defendants together, when they may have nothing in common other than having allegedly downloaded the same film.  If movie producers want to sue, defense attorneys say, they should do it the old-fashioned way: one case at a time.

Certain federal judges have sided with the movie viewers on some of these procedural issues.  For example, U.S. District Judge Dean Pregerson, in Los Angeles, recently asked the producer of a “B” movie to explain to the court its tactic of joining numerous defendants, and questioned whether the court had personal jurisdiction over all of them, given their remoteness of from the forum. The judge also appointed the EFF to defend the rights of the  unknown persons behind the 5,865 IP addresses listed in the complaint.

This June, in response to the court’s request, Incentive Capital dropped its copyright-infringement lawsuit against the 5,865 BitTorrent users who had allegedly downloaded the movie Nude Nuns.  Camelot distribution also had voluntarily dismissed its mirror lawsuit three weeks previously.

As companies file more of these lawsuits, judges may require plaintiffs to demonstrate more clearly the link between the forum and the defendant.  They may also require that there be more procedural safeguards built into the process, to avoid excessive costs and time-consuming travel for defendants.  Companies may find, in the end, that they need to file multiple suits – with each suit close to defendants’ residences.  It seems absurd to use ISPs’ locations, rather than defendants’, in these suits.

Courts may also mandate, for example, as they have done in RIAA lawsuits, that before ISPs divulge their customer’s names, they must first alert the subscribers; explain what has happened; and explain how they may contest the charges against them.

A court may also require a  model notice to be used by the ISP — one that includes a resource list of attorneys and organizations that assist individuals whose ISPs have received this kind of subpoena.

Still, even though these suits may be on their way to becoming procedurally fairer, that may take a while, and the smart approach is simply not to download movies illegally in the first place; to make clear to others that your computer is not to be used for that purpose; and to keep your wireless service locked.  Otherwise, you may find that a neighbor, babysitter, or even one of your own kids may be triggering monetary liability that will be associated with you via your IP address.

Remember the plight of the Palm Beach County grandmother, and of a condo association that reportedly offered free wireless Internet access to its members.  After someone downloaded a film, the association secretary, whose name was on the monthly Internet bill, received a letter demanding $3,000.

In the end, the criticism of these lawsuits is really about their means, not their ends.  The quarrel is with the sheer number of defendants, the remote venues, the push for Draconian settlements from viewers that are far higher than the cost of watching or even buying the movie, and the sense that the movie companies might use the viewers’ embarrassment against them — even though the viewers (if of age) would have had a First Amendment right to watch the movies had they paid for them.

A word to the wise:  Especially as these cases wind their way through the court system, users would be well-advised to take a cautious approach and to avoid these kinds of films if the copy is pirated – no matter how strong the temptation may be.