Lawsuit Takes Aim at People Swapping Movies Online

A new lawsuit filed in federal court accuses 20,000 people of illegally downloading and sharing movie content over the Internet. The court action, filed by the U.S. Copyright Group on behalf of the copyright holders, is part of a strategy to monetize file sharing "through the United States Federal Courts...demand letters and subpoena process," according to a video on savecinema.org, the company's Web site. The USCG is also planning to bring a second lawsuit against another 30,000 defendants accused of illegal movie file sharing, according to The Hollywood Reporter.

The First Case

For its first attempt to win financial compensation from file sharers, the USCG is working with small, independent film producers to sue individuals over the illegal downloading of five movies: "Steam Experiment," "Far Cry," "Uncross the Stars," "Gray Man," and "Call of the Wild 3D." A second case against a further 30,000 file sharers will include another five films whose titles have not been disclosed, according to THR.

So far, major Hollywood studios and trade associations like the Motion Picture Association of America have not signed up with the USCG's plans. Instead, the major industry players are waiting to see what happens with the USCG's initial cases before considering action to recoup costs from illegally traded major motion pictures, according to THR.

If Hollywood does go after file sharers, this wouldn't be the first time. In 2004, the MPAA sued some traders of copyrighted content to try and deter unauthorized movie sharing, and the MPAA has been a party to actions against file-sharing sites and services like KaZaA (2001), Grokster (2005), The Pirate Bay (2008), and Torrent Spy (2008).

The US Copyright Group

The USCG describes itself as a "collection of attorneys and IT consultants that work together to monetize distribution channels." Those "distribution channels" include file-sharing technologies like BitTorrent and sites like The Pirate Bay and IsoHunt.

What's interesting about the USCG is that this company is trying to create a business model around pursuing file sharers. Instead of rights holders and professional organizations initiating a campaign against users--as the Recording Industry Association of America famously did--the USCG approaches distributors and rights holders to empower the USCG to go after file sharers on the rights holder's behalf. In a way, the USCG is acting kind of like a private copyright police force that profits off the misdeeds of Internet users.

To find users, the USCG is employing a technology successfully used in Europe; it identifies file sharers by their Internet Protocol (IP) addresses, when the illegal downloading took place, and whether the downloaded content was copyrighted material. An IP address is a unique identifier that is specific to a single Internet connection behind which can be one computer, such as a home connection, or many devices, such as an office or other place of business.

Will the Real John Doe Please Stand Up?

The problem with bringing legal action against users is that ultimately you have to identify who the miscreant file sharers are.

To obtain a user's actual identity, the USCG is filing what are called John Doe lawsuits against people identified solely by their IP addresses. After the suit is filed, the USCG can then issue subpoenas to Internet Service Providers to obtain the identity of the customer behind a particular IP address. The problem is ISPs are often reluctant to reveal customer information, and have been known to fight these subpoenas in court.

However, ISPs have also been known to work with rights holders in the past. In 2009, several providers agreed to help the Recording Industry Association of America, by serving warning notices to users who were downloading copyrighted music. But deliver warning notices based on an IP address is a far cry from revealing a customer's identity.

The other problem is that an IP address can be easily masked or hidden by using a proxy server, which makes discovering the identity of a file sharer more difficult.

Deja Vu All Over Again

The actions by the USCG are reminiscent of many past attempts to obtain compensation for rights holders through litigation. In 2009, the RIAA abandoned this strategy after several court setbacks, Congressional scrutiny, and a negative public reaction to its actions.

Whether the USCG will fare better remains unclear. The USCG's plan is incredibly ambitious in that it hopes to be a significant deterrent against the practice of illegal file sharing, according to the company's About page. "Research suggests that once a copyright infringer is forced to pay settlement damages far in excess of the actual cost of the stolen content," the USCG writes. "He will never steal copyrighted material again. Through these methods, the US Copyright Group has the ability to recover losses for our clients and stop film piracy on a massive scale."

The Electronic Frontier Foundation, a consumer advocacy group, isn't buying the USCG's argument. In a recent blog post, the EFF said the USCG's cases show that "copyright law has become unmoored from its foundations." The EFF also says that "copyright should not line the pockets of copyright trolls intent on shaking down individuals for fast settlements a thousand at a time."

What do you think of the USCG's plans?

Connect with Ian on Twitter (@ianpaul).

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