Porno-Troll Scheme Slammed by D.C. Circuit

(CN) - The D.C. Circuit crushed a pornography patent troll's request for more than 1,000 names and addresses of alleged porn downloaders, calling it an abuse of the discovery process.

"Generally speaking, our federal judicial system and the procedural rules that govern it work well, allowing parties to resolve their disputes with one another fairly and efficiently," the Tuesday ruling begins. "But sometimes individuals seek to manipulate judicial procedures to serve their own improper ends. This case calls upon us to evaluate - and put a stop to - one litigant's attempt to do just that."

AF Holdings, a Caribbean-based company, filed this lawsuit asserting its rights to the pornographic movie "Popular Demand." It then filed discovery claims seeking to identify more than 1,000 individuals who allegedly illegally downloaded the movie over the Internet using BitTorrent software.

"A full understanding of this case requires knowing some things about the lawyer and 'law firm' that initiated it," Judge David Tatel wrote for a three-judge panel.

AF Holdings is represented by Paul Duffy, who works for Prenda Law, which U.S. District Judge Otis Wright II called a "porno-trolling collective" in a 2013 opinion.

Wright found that AF Holdings was a company formed by attorneys seeking easy money. They acquired the copyrights to pornographic movies then filed massive copyright infringement lawsuits against "John Does."

Once AF Holdings acquires the names of illegal downloaders via an identifying IP address, it has been highly successful at negotiating settlements with the accused given the nature of the pirated material.

Although no case filed by AF Holdings has every proceeded to trial, Prenda Law has allegedly made around $15 million in less than three years, according to a Forbes Magazine article.

But in this case, the Internet service providers balked when subpoenaed in Washington, D.C., for the names and addresses linked to 1,058 IP addresses.

They noted that only 20 of the 188 Verizon subscribers and just one of the 400 Comcast subscribers named in the subpoenas live in D.C. Meanwhile, AT&T, Cox and Bright House do not even offer Internet service in the district.

"AF Holdings's refusal to cabin its suit and corresponding discovery requests to individuals whom it has some realistic chance of successfully suing in this district demonstrates that it has not 'sought the information because of its relevance to the issues' that might actually be litigated here," Tatel wrote, overturning the lower court's ruling. "Although AF Holdings might possibly seek discovery regarding individual defendants in the judicial districts in which they are likely located, what it certainly 'may not do ... is improperly use court processes by attempting to gain information about hundreds of IP addresses located all over the country in a single action, especially when many of those addresses fall outside of the court's jurisdiction.' In seeking such information, AF Holdings clearly abused the discovery process."

AF Holdings likewise failed to show that two individuals who participate in a BitTorrent swarm at different times still participate in the same "transaction," which would bind all 1,058 users to D.C. jurisdiction, just because one user in the swarm was located in the district.

"To paraphrase an analogy offered by amicus counsel at oral argument, two BitTorrent users who download the same file months apart are like two individuals who play at the same blackjack table at different times," the 16-page ruling states. "They may have won the same amount of money, employed the same strategy, and perhaps even played with the same dealer, but they have still engaged in entirely separate transactions."

The Electronic Frontier Foundation, which filed an amicus brief along with the American Civil Liberties Union, Public Citizen and Public Knowledge, called the decision "a crucial victory."

"We are thrilled that a higher court has recognized that it is unfair to sue thousands of people at once, in a court far from home, based on nothing more than an allegation that they joined a BitTorrent swarm," EFF Intellectual Property Director Corynne McSherry said in a statement.

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