Troll Control ? Reactions to Copyright Trolls | Part Two

Intellectual Property Update

Troll Control ? Reactions to Copyright Trolls | Part Two

When faced with a copyright troll, courts recognize “the challenge in administering intellectual property law to discourage so-called intellectual property ‘trolls’ while protecting genuine creativity.” Design Basics LLC v. Lexington Homes, Inc., 858 F.3d at 1096. Although courts do not have unlimited discretion to dismiss a troll’s case, a court may employ some general rules in copyright law to thwart the troll. In PART ONE we discussed summary judgement. Here we discuss additional litigation tools to control trolls

Discretion to Dismiss the Case. Video and music streaming cases often involve BitTorrent and other peer to peer networks, which can be used to freely share movies, music and TV shows. Glacier Films (USA) Inc. v. Turchin, 896 F.3d 1033, 1035-36 (9th Cir 2018). In those cases, the copyright owner has to identify the unauthorized downloader. That is done by serving a subpoena on the Internet Service Provider (ISP) to identify the registered user of the IP address. When a number of file sharing users have access to the same IP address, Defendant’s “status as the registered subscriber of an infringing IP address, standing alone, does not create a reasonable inference that he is also the infringer. Cobbler Nevada, LLC v. Gonzales,1142 (9th Cir. 2018). The court must balance the need for discovery with a potentially non-infringing defendant’s right to be anonymous. Arista Records, LLC v. Doe 3, 604 F.3d 110, 119 (2d Cir. 2010). These general principles may be helpful in specific cases involving trolls.

Permission of the Court is required to conduct discovery to identify the defendant so the Complaint can be served. When a troll plaintiff sued numerous defendants and could not connect the defendants to the district where the suit was filed, discovery was denied and the case dismissed. AF Holdings, LLC v Does 1-1058, 752 F.3d 990, 995-96 (D.C. Cir. 2014).

After the AF Holdings case, one D.C. District Court ruled a troll was not entitled to any discovery because the “objecting party’s privacy expectation” outweighed “the need for the subpoenaed information.” The court believed the subpoena was being misused to extract a settlement, not to advance the litigation. Strike 3 Holdings, LLC v. Doe, 351 F. Supp. 3d 160, 162 (D.D.C. 2018). That ruling was reversed on appeal. Before discovery to determine the facts of the case, it was improper for the District Court to have drawn “negative inferences against Strike 3 regarding its litigation tactics.” A District Court’s discretion “is not unbounded.” Strike 3 Holdings, LLC v. Doe, 964 F.3d 1203, 1205 (D.C. Cir. 2020).

Courts must allow due process even to an aggressive troll. Once the facts of a case are determined, however, a court can rule for the defendant while staying within the boundaries of its discretion. After such a ruling, attorneys’ fees or other sanctions may be imposed.

Attorneys’ fee awards. An award of attorney’s fees in a copyright case is discretionary. Kirtsaeng v. John Wiley & Sons, Inc., 136 S. Ct. 1979, 1983 (2016); Doc’s Dream LLC v Dolores Press, 959 F.3d 357 (9th Cir. 2020)(an award of attorney’s fees to a prevailing party is not automatic and instead lies within the discretion of the court). Whether or not a court exercises that discretion may depend upon how it perceives the motives and tactics of the plaintiff. Fee shifting can be ordered to deter “overaggressive assertions of copyright claims.” Kirtsaeng, 136 S. Ct. at 1989 (citing Bridgeport Music, Inc. v. WB Music Corp., 520 F.3d 588, 593-595 (C.A. 6 2008) (awarding fees against a copyright holder who filed hundreds of suits on an overbroad legal theory, including in a subset of cases in which it was objectively reasonable)). Therefore, a prevailing copyright troll may be denied attorneys’ fees.

If a defendant prevails in a copyright case, the court may award it the attorneys’ fees it incurred in mounting a successful defense. Cobbler Nevada, LLC v. Gonzales, 901 F.3d at 1149. Tresona Multimedia, LLC v. Burbank High School Vocal Music Ass’n, 953 F.3d 638, 654-55 (9th Cir. 2020). A fee award against a troll may be justified “to deter counsel from bringing unreasonable claims based on a cost/benefit analysis that . . . they can score big if they win and that there will be no adverse consequences if they lose.” Bechler v. MVP Group Int’l, No.16-CV-8837 (LAP), 2021 WL 848024 (S.D.N.Y. March 5, 2021)

For example, Design Basics was required to pay $243,506.28 in attorneys’ fees and expenses in the Lexington case. Design Basics LLC v. Lexington Homes, Inc., 2017 WL 1901453 (E. D. Wis. May 8, 2017). A fee application in the Signature case is still pending. And in an unpublished, non-precedential memorandum decision, the Ninth Circuit recently upheld an attorneys’ fees award against Strike 3. See Ninth Cir. Upholds Attorney Fee Award in Strike 3 Copyright Loss, Bloomberg Law (March 18, 2021) available here.

If the court perceives that the facts of the lawsuit are inequitable in light of the plaintiff’s behavior, it may exercise discretion to award or not award attorneys’ fees as a way to control a troll. 

Attorney Sanctions. Some courts have taken steps against the attorneys that enable undesirable behavior. One attorney representing photographers reportedly filed an average of one copyright infringement case every working day over a 4 year period. The attorney has been called a copyright troll and sanctioned for his conduct. See Usherson v. Bandshell Artist Mgmt., No. 19-CV-6368 (JMF), 2020 WL 3483661 (S.D.N.Y. June 26, 2020), 2020 WL 5894490 (S.D.N.Y. Oct. 5, 2020); 2020 WL 7028566 (S.D.N.Y. Nov. 30, 2020), appeal pending; see also Mondragon v. Nosrak LLC, No. 19-CV-01437-CMA-NRN, 2020 WL 2395641, at *1 (D. Colo. May 11, 2020), 2020 WL 8254285 (D Colo. May 27, 2020), 2020 WL 6686499 (D. Colo., Nov. 12, 2020).

In an egregious situation, lawyers whose trolling conduct was deemed fraudulent were prosecuted criminally. See AF Holdings, LLC v Does 1-1058, 752 F.3d 990, 992-93 ( D.C. Cir. 2014) (forged signature); see generally Prenda Law, Wikipedia, available here.

Conclusion. Faced with a copyright troll, a defendant may have defenses that induce the court to resolve the case without a trial, or even order the troll to pay the cost of defense. If forced to litigate, some trolls become their own worst enemy and fail to conduct the litigation properly. While settlement is an option, it is not the only option. You should consider all the options with the advice of an attorney.