Anti-Piracy Lawyers Sued For Fraud, Abuse and Extortion

The US Copyright Group thought it had found the ideal scheme to turn piracy into profit when it started filing lawsuits against tens of thousands of BitTorrent users this year. But the defendants in the Far Cry lawsuits have now become the plaintiffs in a class action filed against the anti-piracy lawyers and their partners. Among other things, the lawyers are accused of fraud, extortion and abuse.

far crySince the beginning of this year the United States Copyright Group (USCG) has sued tens of thousands of BitTorrent users who allegedly shared films without the consent of copyright holders. One of the copyright holders who teamed up with USCG are Achte/Neunte, the makers of the movie Far Cry.

What first seemed to be a relatively effective and profitable way to turn piracy into a healthy revenue stream, is rapidly turning into a nightmare for the anti-piracy lawyers and their partners.

To add to the growing problems and difficulties for the US Copyright Group (USCG), a class action lawsuit has now been filed by the alleged file-sharers. The accusations put forward in the 96 page complaint are not mild, and could potentially put an end to this and similar cases in the United States.

The class action lawsuit is targeting all the parties involved in the Far Cry pay-up-or-else scheme. It was was filed on behalf of one of those accused, Dmitriy Shirokov, but includes others who were included in the Far Cry case.

“This is a class action brought by Plaintiff, on behalf of himself and 4,576 other similarly-situated victims of settlement fraud and extortion,” the lengthy complaint starts. The tables are turned this time with USCG, law firm Dunlap, Grub and Weaver (DGW) and Far Cry copyright holder Achte/Neunte in the defendant’s seats.

The complaint goes on to describe the practices of the anti-piracy lawyers as “lucrative trade in monetizing copyright infringement allegations,” and carefully dissects the operation and the numerous offenses that were allegedly committed by the lawyers and their partners.

In total, the alleged BitTorrent users are seeking relief based on 25 counts including extortion, fraudulent omissions, mail fraud, wire fraud, computer fraud and abuse, racketeering, fraud upon the court, abuse of process, fraud on the Copyright Office, copyright misuse, unjust enrichment and consumer protection violations.

One of the most prominent allegations against the law firm is that the copyright of Far Cry was registered at the Copyright Office after the movie was published, and after many of the alleged sharers were caught. It is claimed that the copyright registration was “intentionally obtained under false pretenses” and subsequently used to back up “baseless threats in the demand letters.”

“The Letters falsely claim that the law allows Achte to seek extraordinary forms of relief, namely statutory damages and attorney’s fees, for infringing Achte’s copyright for the motion picture Far Cry, despite fatal defects in its copyright registration and the express provisions of the Copyright Act,” the complaint reads.

This then leads to the following allegations of fraud, extortion and related offenses.

“The Letters sent to the proposed Class are predicated on fraud—upon Plaintiff and the proposed Class, and upon the ISPs, the United States Copyright Office, and the United States District Court for the District of Columbia.”

“DGW and its fellow Defendants are directly involved in perpetrating, conspiring to commit, and/or aiding and abetting this massive scheme of fraud, extortion, abuse of
process, fraud upon the court, copyright misuse, and misappropriation of funds.”

The complaint

Another key issue is that DGW threatened to sue each and every individual they targeted, but that this would be practically impossible to achieve with the small team of attorneys they have. Also, they specifically stated to clients that cash settlement is what they are after.

“DGW does not genuinely intend to pursue most, if any, of these thousands of claims to trial. Operating through its alias USCG, DGW advertises its copyright business model to prospective clients in the film industry stating one overriding goal: to “obtain settlement”—not judgments, which would require litigating and proving its allegations,” the complaint reads.

“With only thirteen attorneys on staff, DGW has issued a volume of demand letters that far surpasses its ability to litigate this volume of claims case by case. USCG tells prospective clients that civil prosecution of copyright claims has not been “practical,” in light of the financial status of individual infringers.”

The above is just the introduction of the complaint, which then continues with dozens of pages discussing the legal background, eventually concluding that DGW’s revenue model is not based on upholding copyright law, but that it capitalizes on fear and aims to intimidate. DGW extorted thousands of infringers by perpetrating fraud on the U.S. Copyright Office, the complaint alleges.

“Fraud has infected each stage of Defendants’ actions since that false registration, tainting their complaints, subpoenas, coercive demand Letters and websites.”

The conclusions lead to numerous allegations and eventually a long list of 25 counts for relief. The plaintiffs demand a jury trial and are seeking a wide range of damages as well as restitution and reimbursement of the money plaintiffs have spent on the extortion scheme thus far.

Among other things, the plaintiffs further seek dismissal of all court actions brought on by the anti-piracy lawyers, an injunctive relief to stop the scheme, and an injunctive relief to stop the identities of the proposed plaintiffs being revealed.

The above is just a selection from a complaint that may very well crush the future of USCG’s pay-up-or-else scheme in the United States. If anything, the lawyers and the other defendants have some serious explaining to do.

In recent months, USCG’s scheme has been copied by various other law firms, protecting a wide variety of copyright holders. Just last week the German based copyright profiteers Digiprotect launched their first two cases in the United States, and many more are likely to follow, unless a court speaks out against this type of creative use of the legal system.

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