Copyright Trolling An Empirical Study of “John Doe” Litigation Prof. Matthew Sag, Loyola University Chicago School of Law July 10, 2014

Background I Copyright is a private right, not typically enforced by the State. U.S. Copyright allows for statutory damages without evidence of copyright holder’s loss or infringer’s unjust enrichment. BitTorrent is a very efficient P2P file sharing system capable of lawful and unlawful uses. A BitTorrent swarm usually has 1000s of participants. Technologically sophisticated copyright owners can identify participants by IP address. 2

Background II John Doe Lawsuits  Plaintiff files suit in the form “Digital Sin v. Does 1 through 5000” – One filing fee ($350) – Cases are not intended to go to trial  Plaintiff files a motion for early discovery to obtain names + addresses from ISPs  Plaintiff demands settlement (threatens exposure, statutory damages) – Does not usually bother to serve defendants so named – $2,000 to $4,000 settlements are common 3

How Common Are John Doe Copyright Suits? 4

Copyright Trolling DATA 41,769 cases  Filed between January 01, 2001 and March 31, 2014  Nature of Suit = Copyright (820)  All U.S. District Courts (does not include appeal dockets) John Doe  Search for “doe” “does” + manual review Number of Does  From case title, e.g. “Digital Sin, Inc v. Does 1-208” + hand correction on an ad hoc basis. Pornography  Plaintiff is a known pornographer, Google, IMDB  All/nothing assumption 5

Copyright Trolling Data Sources: PACER (maintained by the Administrative Office of the U.S. Courts) Bloomberglaw (dockets) IMDB Google 6

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Implications 8

1. Are these plaintiffs “trolls”? 2. The synergy of statutory damages + joinder + leverage 9

= Troll? Copyright trolls, patent trolls  Patent literature focuses on entity status, e.g. “non-practicing entity” synonymous with troll in the eyes of many.  Others have applied this same understanding to copyright, e.g. Righthaven (NPE, Sham Owner) suits against blogs etc. 10

= Troll? Not illegal, many cases have merit  Troll should mean something other than meritless in the R.11 sense  Meritless in terms of the objectives of the system  Litigation not driven by the merits (the threat of statutory damages means merits don’t matter that much) Motive  RIAA used John Doe suits as deterrence/education  Current trend is to use John Doe suits to ‘monetize infringement’ Methods  Threat of public exposure = shakedown 11

= Troll? A troll is a systematic opportunist Any definition of trolling that does not capture extortion-driven pornography related John Doe litigation is not a very good definition Opportunism is not confined to a particular economic structure such as “non-practicing entity” 12

Even if pornography is the problem, reform of statutory damages is the solution. 13

Statutory damages 14

Statutory damages The corrosive effect of statutory damages  Statutory damages range from $750 to $150,000  No requirement of actual damage  Original intent was to deter commercial infringers  Now seen as a pot of gold at the end of the copyright rainbow Court house > market place  For some plaintiffs statutory damages offer rewards significantly greater than they could ever hope to obtain from voluntary market transactions  The lure of easy money seems to attract lawyers with questionable ethics – See paper for citations to various sanctions. 15

Joinder The significance of procedural rules relating to joinder  Massive John Doe suits reduce plaintiff costs  A pretext for discovery  Provide a window of opportunity for court supervision – … but note that joinder is becoming more difficult and less significant 16

Individual Doe Defendants in John Doe Copyright Cases 2001 –

Not so many mega suits 18

% 41.27% 40.77%

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¡Muchas Gracias! 21