Danger in downloads.

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Porn, Copyright Law and a Raised Judicial Eyebrow

Noah Feldman is a Bloomberg View columnist. He is a professor of constitutional and international law at Harvard University and was a clerk to U.S. Supreme Court Justice David Souter. His books include “Cool War: The Future of Global Competition” and “Divided by God: America’s Church-State Problem -- and What We Should Do About It.”
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Trolling for copyright violations for illegally downloading pornographic films seems like a near-perfect business. What viewer would want to fight a lawsuit in which he  could be forced to pay damages if he lost and embarrassed even if he won?

Yet a law firm that almost turned the trolling business into a science ended up sanctioned by a U.S. federal district court – and now an appellate court has upheld the sanctions despite a scanty legal basis for doing so.

The episode shows that federal judges have a conscience. But it also raises an important question about the law itself: When following the letter of the law would produce a morally repellent outcome, should judges find a way to get around it?

The trolls’ business plan was inherently legal. A group of lawyers formed a firm called Prenda Law. They also formed several shell companies to purchase rights to pornographic films. Using commercially available software, they monitored downloads. When one of their films was downloaded from a sharing site, the law firm would file suit in the name of whichever shell company owned the copyright.

So far, there was nothing wrong with the scheme. Plenty of content businesses have sued illegal downloaders. That's playing hardball to protect copyright, and doing so is allowed by Congress.

In principle, there seems to be nothing wrong with buying copyrights in order to enforce them. Furthermore, pornography is subject to the same intellectual property rules as other content. Under the First Amendment, copyright law probably has to treat all legal speech the same.

Possessing only an IP address for downloader, Prenda Law would sue the defendant as John Doe, then go to federal court for an order to find out who the downloader was. Then the Prenda lawyers would send the defendant a letter offering settlement for $4,000 – an amount it computed was just a bit below the cost of a bare-bones defense.

Most said yes, and the firm earned millions of dollars – no one knows exactly how much.

Where Prenda Law went awry was in how it represented itself in court when it sought the orders to identify downloaders. The firm tried to hide the fact that its principals also owned the copyrights. Presumably, it feared that courts would be less willing to grant the orders if they knew that the entire scheme was dreamt up by the lawyers.

After one John Doe fought back, federal district judge Otis D. Wright II in Los Angeles unraveled the scheme. In 2013, he issued a decision denouncing the Prenda lawyers. His unusual opinion included a detailed map of the Prenda principals and their business relationships, complete with photographs intended to shame them.

Quirkily, Wright opened the opinion with an epigraph: “‘The needs of the many outweigh the needs of the few.’ — Spock, Star Trek II: The Wrath of Khan (1982),” and he peppered the opinion with Star Trek references. Judges deserve to have a little fun, but the literary references were also telling. They suggested that Wright knew he was doing something unusual, on the edge of ordinary legal decision-making.

Wright was careful not to go too far. Instead of awarding punitive fraud sanctions, which would have required an extensive hearing, he awarded attorney’s fees to John Doe’s lawyer, then doubled them as an added sanction. The total was $81,319.72.

In a devilish measure-for-measure footnote, he explained that the “punitive portion is calculated to be just below the cost of an effective appeal.”

The legal basis for the sanctions was slim. The judge noted that Prenda typically brought suit without knowing how much of a film had been downloaded or whether the John Doe might have had his IP address stolen. But these weren’t the grounds on which Wright relied – and they might have existed equally in a more traditional copyright enforcement suit.

Instead, Wright concluded that Prenda had forged the signature of one copyright assignment, using the name of a groundskeeper at one of the Prenda principals’ homes. Wright noted that the signature wasn’t even legally necessary, but “a forgery is still a forgery.”

He admitted that he had no further evidence of fraud. “Nevertheless,” he wrote, “it is clear" that the Prenda enterprise "relies on deception.” He suggested that there were other examples of deception in other courts where Prenda brought suits.

Prenda went to the U.S. Court of Appeals for the Ninth Circuit, arguing that Wright had subjected them to criminal sanctions that required more due process than he gave them. The Ninth Circuit disagreed, holding that Wright hadn’t abused his discretion to punish bad-faith litigation practices. It agreed with Wright that the doubled attorney’s fees were remedial, not criminal, and didn’t require extensive fact-finding.

A cynic might observe that the small cost of the sanctions wasn’t much for the Prenda firm to pay, especially given the millions it may have reaped.

But it remains noteworthy that the district judge reacted so strongly to the trolling scheme, and that the Ninth Circuit was happy to wink and let him get away with it.

Essentially, Prenda’s conduct was barely unlawful. Without the misrepresentation, it would have been completely legal.

What made the judges angry was the fact that Prenda made the legal system look foolish – by drawing attention to how the law could be used to enforce a scheme that Wright called a “legal shakedown.”

The judges’ real objection wasn’t legal, but moral. That’s a good thing – in small and carefully measured doses.

  1. Or she. But ….

  2. The Talmud calls this being “a scoundrel under the authority of the Torah.” The rabbis don’t like it any more than the judiciary does.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

To contact the author of this story:
Noah Feldman at nfeldman7@bloomberg.net

To contact the editor responsible for this story:
Jonathan Landman at jlandman4@bloomberg.net