By , February 10, 2011.

The latest technique to appear in the struggle against online infringement is the “reverse class-action” lawsuit.

Earlier this month, OpenMind Solutions, a producer of adult films, filed suit against a defendant class consisting of all persons “engaged in copyright infringement activity via BitTorrent file sharing protocol during relevant time period” of its films.

A class action is “lawsuit by representation.” In some situations, the amount of individual parties is so large that joining them all together would prove highly unworkable, and the factual and legal issues are so similar that having individual lawsuits for each party would be a waste of time and resources. So the law allows these individuals to join as a class, with a representative party to do the litigating and the ultimate judgment (or settlement) being binding on all parties. This conserves scarce judicial resources and allows parties to have their day in court when damages in the aggregate are large but individual damages are too small for a lawsuit to make sense.

Most commonly, the class in a class action is a group of plaintiffs suing an individual defendant. Chances are, you’ve already been part of one of these class actions — maybe you’ve gotten a letter notifying you of a lawsuit involving all customers of company x who purchased product y in the last year followed a few months later by some gift certificate or coupon when a settlement was reached.

The Defendant Class Action

Class actions have been around for centuries. Susan T. Spence notes that litigation by representatives of certain groups (villages and parishes) was “well established in England by the 12th century.” 1For more on the history and origins of class action lawsuits, ClassActionBlawg has a nice collection of links at http://classactionblawg.com/2008/06/02/did-you-ever-wonder-where-class-actions-came-from/ In the US, the basis of the modern class action is found in Rule 23 of the Federal Rules of Civil Procedure, which provides requirements for when “one or more members of a class may sue or be sued as representative parties on behalf of all members,” and states have similar provisions.

While plaintiff classes are by far the most common, you’ll note that the language of Rule 23 provides for both plaintiff and defendant classes (“sue or be sued“). In the 16th, 17th, and 18th centuries, defendant classes were as typical as plaintiff classes. 2Vince Morabito, Defendant Class Actions and the Right to Opt Out: Lessons for Canada from the United States, 14 Duke Law Journal of Comparative & International Law 197, 203 (2004). Today, though rare, defendant classes still show up. 3For example, see Kerney v. Fort Griffin Fandangle Ass’n, 624 F.2d 717 (5th Circ. 1980); In re Broadway Funding Corp., 66 BR 1005 (Bankr. EDNY 1986); and also Tilley v. TJX Cos., 345 F.3d 34 (1st Cir. 2003), a copyright infringement case against a defendant class where, though the court vacated the class certification, noted that since it was “cognizant of the idiosyncratic circumstances that would seem in some ways to make class certification an attractive device in cases such as Tilley’s (in which a single copyright holder seeks to prevent continued infringement on the part of many defendants who sell identical articles),” it left the “district court free, on remand, to explore whether some suitable basis for class certification in fact exists.”

Although OpenMind’s lawsuit marks the first time a defendant class action has been brought against individual downloaders, the idea has been tossed around for some time. One of the earliest papers I’ve seen is a 2001 paper by a law student written during the litigation against Napster but before the RIAA’s lawsuits against individual downloaders. Who’s Walking the Plank: The Recording Industry’s Fight to Stop Music Piracy, by James Dye, also suggests the idea. 46 Pittsburgh Journal of Technology Law & Policy 5 (2005). Interestingly, more than one scholar has suggested the certification of defendant classes in online infringement cases as a way to better protect the defendants. 5Johnathan Reich, The Class Defense: Why Dispersed Intellectual Property Defendants Need Procedural Protections, 9 Duke Law & Technology Review (2010); Assaf Hamdani & Alon Klement, The Class Defense (2004).

Strategies for Enforcing Copyright Online

Pros and cons of OpenMind’s strategy aside, the story highlights the difficulties creators have in protecting their rights online. From Napster to Hotfile, industry groups have gone after intermediaries, but this is time-consuming, expensive, and there’s no shortage of newcomers to fill the void for every infringing site successfully shut down.

The RIAA’s efforts against individual downloaders was a mixed success — raising awareness that unauthorized downloading is illegal but having little long-term effect on piracy. After it ended the strategy in 2008, independent and individual creators have taken up suing individuals, though many are running into roadblocks in court and certainly not winning any PR points.

The DMCA takedown procedure offers creators one method for removing unauthorized content without having to go to court. However, creators of all stripes — from individual film-makers like Ellen Seidler all the way up to companies like Viacom — will tell you that the process is time-consuming and there’s simply too much infringing content available online. DMCA takedowns also only work for companies who act legally responsible — the internet has plenty of “catch me if you can” services that disregard notices.

One of the goals of the DMCA was to create incentives for content creators and service providers who benefit from that content to work together voluntarily in order to address infringement. 6See Senate floor debate on Conference Report on H.R. 2281, the Digital Millennium Copyright Act (Oct. 8, 1998), Sen. Leahy remarks: “This title is intended to preserve incentives for online service providers and copyright owners to cooperate to detect and address copyright infringements that occur in the digital networked environment.” When the RIAA ended individual lawsuits, it announced that it would shift its focus to exactly that. Other countries have put the force of law behind this strategy, typically through some form of “graduated response.” France’s HADOPI law is perhaps the most famous and began sending out notices of infringement to ISP customers last fall. The UK’s Digital Economy Act calls for similar requirements to limit internet access for repeat infringers, though implementation has been delayed.

Other new approaches are being tried out as we speak. In the US, of course, domain names of a number of sites facilitating infringement have been seized over the past several months. A new version of the Combating Online Infringement and Counterfeits Act is expected to be introduced this session, which would tie additional legal requirements for advertisers and financial transaction services to cut off business with seized sites. Other countries are exploring similar legislation. 7For example, Spain and the UK.

And in the past week, Intellectual Property Enforcement Coordinator Victoria Espinel released her annual report which disclosed that a number of legislative proposals for enforcing copyright online will soon be sent to Congress. The report was followed up with an executive order establishing two new interagency intellectual property enforcement committees.

Why Online Enforcement is Important

The goal of all of this is not to eliminate or stop piracy. The goal is to deter it — to secure to creators the ability to make their investments of time, energy, and money pay off. The goal is to give content industries and legitimate intermediaries the time needed to develop and grow sustainable online business models that ensure high-quality works continue to be made.

Some say the only response to piracy is to do nothing. Creators should be happy absorbing all the costs of creating while everyone else shares in the benefits. Unlike every other job on the planet, the people who create the books, movies, music, etc., that add to our knowledge and enrich our lives are not entitled to expect compensation.

The “content fire sale” that results from online piracy may benefit consumers in the short term — who doesn’t want something for nothing — and pirate sites — seized domain Torrent Finder made $15,000 in one year from advertising for giving other people’s content away — but a fire sale is not a sustainable model. The next generation of creators, and the progress of the arts, can best be promoted by ensuring that exclusive rights continue to be secured. The future will likely see the use of more new enforcement strategies.

References

References
1 For more on the history and origins of class action lawsuits, ClassActionBlawg has a nice collection of links at http://classactionblawg.com/2008/06/02/did-you-ever-wonder-where-class-actions-came-from/
2 Vince Morabito, Defendant Class Actions and the Right to Opt Out: Lessons for Canada from the United States, 14 Duke Law Journal of Comparative & International Law 197, 203 (2004).
3 For example, see Kerney v. Fort Griffin Fandangle Ass’n, 624 F.2d 717 (5th Circ. 1980); In re Broadway Funding Corp., 66 BR 1005 (Bankr. EDNY 1986); and also Tilley v. TJX Cos., 345 F.3d 34 (1st Cir. 2003), a copyright infringement case against a defendant class where, though the court vacated the class certification, noted that since it was “cognizant of the idiosyncratic circumstances that would seem in some ways to make class certification an attractive device in cases such as Tilley’s (in which a single copyright holder seeks to prevent continued infringement on the part of many defendants who sell identical articles),” it left the “district court free, on remand, to explore whether some suitable basis for class certification in fact exists.”
4 6 Pittsburgh Journal of Technology Law & Policy 5 (2005).
5 Johnathan Reich, The Class Defense: Why Dispersed Intellectual Property Defendants Need Procedural Protections, 9 Duke Law & Technology Review (2010); Assaf Hamdani & Alon Klement, The Class Defense (2004).
6 See Senate floor debate on Conference Report on H.R. 2281, the Digital Millennium Copyright Act (Oct. 8, 1998), Sen. Leahy remarks: “This title is intended to preserve incentives for online service providers and copyright owners to cooperate to detect and address copyright infringements that occur in the digital networked environment.”
7 For example, Spain and the UK.

3 Comments

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  3. Perhaps piracy is a paradigm shift as people are coming to expect in the digital era. Rather than be uncomfortable with the idea that someone didn’t pay the MSRP on a DVD, there’s other options to make people pay for something.

    Neil Gaiman learned it. I’m sure there’s other authors learning the same lessons.

  4. Awwww isn’t Neil cute.

    Dave Elliot had a completely different experience:

    “A couple of years ago, Steve Pugh and myself did a three issue series for Image called Shark-Man. Steve saw that it instantly popped up on the bit-torrents. Going into chat rooms he tracked down the guys who did the scanning and uploading…

    Their first reason for doing it was that the book was sold out and they wanted to share it with a friend. Did they mail their read copy for them to enjoy and mail back? No they scanned it in and put it on the torrents and told everyone else it was there.

    Funny thing, Steve was more upset about the quality of the scans because if you’re familiar with his art, he puts a LOT of work into it and it looks gorgeous.

    So what Steve did was to give them better quality jpegs and gave them permission to release it with a Paypal account on it so that anyone downloading it could pay something if they enjoyed it as well as a promise to stop distributing their scanned version.

    It raised a couple hundred dollars in a few months. Allowing for what I am told is reasonable expectations of the percentage of people that will donate like this, to reach that number about twenty thousand people downloaded the comic in that two month period. That doesn’t include the previous versions in circulation.

    The real kicker is that they thought of Image as a “big corporation” that had paid us to do the comic so they thought we wouldn’t be affected by it.

    Ooops, wish that were so, but they seemed shocked that people would spend so much time doing something for no upfront money and where there was no dependable revenue stream coming in…

    If there are any pirates reading this, please think twice about scanning new comics. The pay is crap and royalties few and far between.”

    Bottom line, it doesn’t work for everyone, and a multi-millionaire writer may have less to lose than Dave Elliot.

    Not every artist has the same kind of readership. Piracy does not work for everyone, and even Dave Elliot’s SANCTION of the uploading did not work for him.

    Stop being a thug, forcing artists to do whatever you want, even if it hurts them.

    All Neil offers are anecdotes, but we must take them at face value because it makes pirates feel like they are sharing. So sweet!

    Dave Elliot will be ignored, because he doesn’t make a very good piracy poster boy. And he doesn’t make piracy looting look half so cute.

  5. Neil Gaiman Fan

    Neil is, apparently, not so keen on having his work on the internet as people like Jay would have you believe. Here is a post from Neil’s website, just this week. He makes it clear he takes his own work down and shows others how to do it as well:

    “Well, I’ve always started out by contacting the webmaster (a quick WHOIS search will give you an e-mail address) or the person who posted it, if they have their address up on the page. (Lots of times stuff has been posted without the webmaster knowing it. And they don’t want it up, putting their website at risk: I once wrote to the very cool Project Gutenberg people, who make public domain material available on the web, pointing out that Stephen King and Douglas Adams and I were not yet in the public domain, and could they take that page down, and they were mortified.) Seeing I’m the copyright holder and have every right to grumble, no-one’s ever done anything more than take the book or story down, occasionally — very occasionally — muttering something hopeless and grumbly like “information wants to be free!” as they do, but mostly being very pleased someone let them know that it was up there.

    (“No, that’s pizza,” I want to tell them. “Pizza wants to be free. Concentrate on liberating pizza from evil pizzerias. Information, on the other hand, really hates being free, and is never happier than when manacled to a wall, like Kirk and Spock in some piece of late 70s bondage-oriented slash fiction.”)

    Sending an e-mail to the book’s publisher is probably the easiest way to do it, if you don’t fancy an exchange of e-mails with the webmaster or the person posting the stuff. (For The Gold Bug Variations it’s William Morrow/HarperCollins). Check out the publisher’s website, or the author’s authorised website if they have one, and send an e-mail to the CONTACT person giving them the website address of the place with the unauthorised materials, and brief details. (For this web site it’s Julia Bannon, Julia.bannon@harpercollins.com who would forward your e-mail to the right place.).”