Rights Holders Get 30% from Mass BitTorrent Litigation

The plague of mass litigation "pay up or else" letters has now hit the shores of the United States. 20,000 BitTorrent users are to be targeted soon, with 30,000 in the months to follow. According to new information, 300 movies are set for enforcement action, with their rightsholders receiving just 30% of the spoils.

The very lucrative turn-piracy-into-profit “speculative invoicing” model has leapt over the Atlantic to the United States and, as with most things stateside, it’s likely to be bigger than ever before.

According to The Hollywood Reporter, a company known as U.S. Copyright Group has been monitoring BitTorrent users allegedly sharing various 3rd-rate independent films.

Currently it’s just a handful of movies being targeted, but TorrentFreak has learned that U.S Copyright Group has around 300 titles enrolled into their program meaning that the scope of this action is likely to increase rapidly.

Through its anti-piracy monitoring partner firm Guardaley IT, a little-known German-based company with a UK address shared with dozens of other companies, the group has been harvesting IP addresses for use in legal action.

Already 20,000 users are being pursued through the federal court in Washington, DC, with another 30,000 set to face the same treatment in the months to come.

These lawsuits will attempt to force ISPs to hand over the personal details of the account holder in question, who will then receive a pre-settlement (pay-up-or-else) letter demanding a few hundred dollars to make the whole thing go away. The lawyers involved in this scheme are very upfront about their motivations.

“We’re creating a revenue stream and monetizing the equivalent of an alternative distribution channel,” says Jeffrey Weaver, a lawyer for U.S. Copyright Group.

So what proportion of the revenue stream goes to the rightsholders? In common with similar schemes in Europe, it’s relatively small. TorrentFreak discovered that the majority of a settlement payment – a huge 70% – goes to the U.S Copyright Group and its anti-piracy partners. The remaining 30% goes to the rightsholders.

The numbers involved in these schemes are huge. An admission from group lawyer Thomas Dunlap revealed that the program in Germany handled one particular limited-release movie and netted the copyright holder $800,000.

It is in this open admission of a financial motivation that recipients of these letters will find the key to combating the threats. All they have to remember is that these schemes are simply about generating profit – anything that can be done to reduce or remove the profit element has usually resulted in the lawyers backing off. No profit, no interest.

In the UK, many recipients of these letters enter into “letter-tennis” with the lawyers, asking for or providing small amounts of extra information each time they write, including outright denials, requests for more information and clarification of evidence. The greater the load on the lawyers, the less money they can make, meaning that ‘difficult’ letter recipients get pushed to the bottom of the pile, many never to be seen again.

So far, US Copyright Group says that one ISP has cooperated by handing over the names and address of 71 account holders. However, not all ISPs are playing ball and respect is to be given to those who are apparently fighting in court right now to avoid handing over their details of their customers. ISP TalkTalk has refused to co-operate in the UK and it has done their reputation no harm at all.

US Copyright Group claim that eight account holders have already paid up, but if experience of these schemes elsewhere is anything to go by, figures and statements coming out of these outfits are always calculated ones and just part of the marketing. Perception is everything, and that perception needs to be “people are paying up”.

Despite the element of bluff, expect them to take one or two very unlucky individuals to court in some way. Likely candidates are those prepared to enter into a private agreement which can be pumped up for the benefit of the press to create a convenient metaphorical head-on-a-pike warning to scare others into paying.

If no-one pays, however, the entire scheme collapses. It’s just a question of who blinks first.

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