Strike 3 Saga: Turning BitTorrent Downloads Into A Copyright Infringement Settlement Machine Part 1

By on September 16th, 2020

Posted in New Jersey

D.C. Circuit Reverses District Court’s Denial of Strike 3’s Request for Early Discovery to Obtain Identity of Subscriber of IP Address Allegedly Used to Illegally Download Strike 3’s Adult Videos

The D.C. Circuit recently revived one of thousands of copyright lawsuits filed by an adult film studio, Strike 3 Holdings, overturning the lower District Court Judge who declined to allow Strike 3 to engage in early discovery sharply criticizing the film studio plaintiff for using the courts as an ATM. See Strike 3 Holdings, LLC v. Doe, No. 18-7188 (D.C. Cir. 2020). The three-judge appellate panel, however, ruled that the judge erred in refusing to grant Strike 3’s request to subpoena an internet service provider in order to identify the name and address of a John Doe subscriber of an IP address allegedly used to illegally download Strike 3’s films using BitTorrent.

The case is one of over 3,000 lawsuits Strike 3 has filed since 2018. The suits target John Doe owners of IP addresses, seek to subpoena internet service providers to identify the name of the John Doe owner, then typically settle out of court. Taking issue with the salacious nature of Strike 3’s copyrighted works, the volume of identical lawsuits filed by Strike 3, and the playbook pattern that typically results in settlements and case dismissals, the District Judge refused Strike 3’s request for early discovery to obtain the name of the John Doe defendant: “Armed with hundreds of cut-and-pasted complaints and boilerplate discovery motions, Strike 3 floods this courthouse (and others around the country) with lawsuits smacking of extortion,” Judge Lamberth of the District Court wrote. “It treats this court not as a citadel of justice, but as an ATM. Its feigned desire for legal process masks what it really seeks: for the court to oversee a high-tech shakedown. This court declines.” Concerned with the potential for misidentification and Strike 3’s inability to allege with any certainty that the John Doe subscriber is the one who downloaded the videos, as opposed to a neighbor, a spouse, a household member, or a visiting friend, the District Court found that Strike 3’s need for the subpoenaed information was outweighed by the “potentially-noninfringing defendant’s right to be anonymous”—a privacy interest the court found especially weighty given the “particularly prurient pornography” at issue, and therefore dismissed the complaint without prejudice.

In reversing, the Circuit Court concluded that Strike 3’s well pled complaint for copyright infringement entitled it to discover the name of the John Doe subscriber associated with the IP address Strike 3’s investigators determined was used to illegally download dozens of Strike 3’s adult videos.

To avoid expensive appeals and recalcitrant judges, Strike 3 has moved its settlement mill to Miami-Dade County in Florida. Rather than file hundreds of lawsuits against individual IP addresses, Strike 3 has recently taken advantage of Florida’s “Pure Bill of Discovery” procedure, which allows a litigant to obtain a court order for the production of information or documentation, which may then be used in a later lawsuit. Pure Bills of Discovery have traditionally been used to investigate fraud, to inspect and preserve evidence, and to obtain pertinent documentation. Generally speaking, a Pure Bill Of Discovery can be used by a person or entity to obtain information from another prior to filing a lawsuit on the merits.

Therefore, in one fell swoop Strike 3 can obtain an order allowing it to subpoena ISPs to turn over the identities of the owners of hundreds of IP addresses. No more wayward district court decisions and constantly fighting over Strike 3’s entitlement to pre-answer discovery in individual federal lawsuits. When John Does fight back by moving to quash the subpoenas or challenge the Florida court’s jurisdiction, Strike 3 will dismiss that defendant’s IP address from its Pure Bill of Discovery suit and file an individual suit in John Doe’s home state. So far, Strike 3’s new litigation strategy seems to be paying off as the settlements continue and the cost savings (filing fees, motion fees, etc.) stack up.

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