While these cynical schemes seem straightforward enough, they are currently suffering drawbacks. Judges are increasingly ruling that it is improper to join so many unconnected individuals together in a single lawsuit, which leaves the alternative of suing each defendant individually, a costly exercise which eats away at valuable profits.

Movie studio Liberty Media, however, had a new trick up their sleeve last month which didn’t require any lawsuits at all. The simply announced that they intended to sue people sometime in the future, and that if people who had downloaded their products wanted to avoid being involved in that, they should simply turn themselves in.

Bizarrely, with Liberty Media having absolutely no idea who they are, where they live or even if they’re guilty, so far a total of 10 seemingly crazy individuals have freely handed over $1,000 each to the company.

But there’s more. Liberty Media general counsel, Marc Randazza, has announced that the company is preparing to file lawsuits against 36,000 BitTorrent users. And guess what? He’s running another amnesty program, this time at nearly double the settlement price of the earlier one.

So, if you’ve acquired some Liberty Media videos from BitTorrent and want to freely hand over $1,900, despite the company being as familiar with you at this point as they are with the person currently watching guard over Osama Bin Laden’s hideout, be our guest.

Easiest money making scheme ever.

Source: TorrentFreak, for the latest info on copyright, file-sharing and anonymous VPN services.

Essentially the defendant in the case would not be paying anything like $250,000 and this amount had been touted around publicly in order to scare others into not sharing Liberty Media content. We concluded that since this was a single person lawsuit, and not those containing the hundreds and thousands of Does to which we have become accustomed, the motives behind this action were unlikely to be turn-piracy-into-profit.

We are reporting today that in the latter respect, we were far too generous.

Through the adult entertainment industry’s XBIZ Newswire, Liberty Media, via their subsidiary Corbin Fisher, have announced their latest anti-piracy scheme which demonstrates clearly why they were so concerned with their $250,000 settlement headline.

So, BitTorrent users, have you downloaded any Liberty Media movies? If so the company says it is time to hand yourselves in. From 8th February for 14 days, the kind folk at Liberty are offering an amnesty.

“Despite the fact that these people are stealing from us, we wanted to give them a chance to admit their mistakes and move on,” said Brian Dunlap, Corbin Fisher’s COO. “Therefore, we are offering this limited period where we will resolve these cases quickly and cheaply.”

That’s right folks. When handing yourselves in, you shouldn’t go empty handed but have a crisp stack of dollars in your fist totalling a cool $1000. In return the company says you won’t get sued and will get a year’s membership to their websites as a bonus.

For those that choose not to settle, Liberty is warning that it will soon launch lawsuits against BitTorrent users.

“A list of thousands of torrent users has already been provided to Corbin Fisher by an independent research group, and all of these users will be targeted in the first wave of lawsuits to be filed in February,” the company added. “Anyone who has shared Corbin Fisher content via a torrent site is encouraged to contact the company immediately.”

“The company won millions of dollars in court judgments in the past year, including a recent $250,000 judgment against a single torrent user,” Liberty warns.

And there you have it. That’s what the earlier boasting about the $250K settlement was for – propaganda and scare tactics to fuel their pay-up-or-else scheme.

Liberty Media’s lawyers are currently fairly busy. Earlier this month the movie studio filed suit against file-hosting site Hotfile and 1000 of its users. PayPal was also named as a defendant alongside calls for it to freeze Hotfile’s account. The court was also asked to seize Hotfile’s domain name.

Source: TorrentFreak, for the latest info on copyright, file-sharing and anonymous VPN services.

Liberty describes Hotfile Corp as a Panamanian company with no physical presence there and one that takes steps to “obfuscate the facts of its location, address, and principals.” The studio states that Hotfile’s owner is a Russian named Anton Titov, who may or may not be a resident of Bulgaria and/or The Netherlands, and who also may have a residence in Florida.

A company called Lemuria Communications is also listed as a defendant. The company is claimed to be Hotfile’s webhost and an alter ego of Anton Titov. Hotfile is said to operate servers in Dallas, Texas and Florida.

The studio goes on to list 1000 ‘John Doe’ defendants who it’s claimed “jointly and severally, with actual or constructive knowledge of or with willful blindness, reproduced and distributed certain LIBERTY-owned works through www.Hotfile.com.”

PayPal is also named as a defendant on the basis that it offers financial services to Hotfile, Titov and Lemuria. Liberty demands that the court freezes defendants’ assets held by PayPal pending the outcome of the case.

Liberty Media says that while Hotfile may have legitimate uses, its aim is “to profit from the illegal sharing of copyrighted materials, many of which are the intellectual property of LIBERTY,” material which the studio says is placed there by “an army of assistants.”

These assistants, Liberty claims, are otherwise known as affiliates which together form a business model described as a “massive pyramid” of cascading payments from which Hotfile, but not copyright holders, profit.

Liberty says it discovered more than 2,400 links to 800 of its titles stored on Hotfile and that the file-hoster used Lemuria Communications’ servers to achieve its “unlawful goals”.

“Hotfile.com cleverly avoids cataloging or indexing the files in order to be willfully blind to their users’ uploads and downloads, while profiting from the site’s web traffic,” the lawsuit states, adding:

“Demonstrating that Defendant Hotfile.com is aware of the illegality of its conduct, it offers two methods for download services. For its first option, Defendant Hotfile.com permits its partners to download a stolen movie at a very slow transfer speed for no charge. The other option allows users to pay a premium to download the movie ten times faster.”

In respect of safe harbor, Liberty Media claims that while Lemuria had a registered agent as required under the Digital Millennium Copyright Act (DMCA) at the time of the infringements, Hotfile did not. As such it is “not entitled to the DMCA’s safe harbor provisions for the complained of infringements.”

Liberty describes Hotfile as a massive copyright infringer which encourages affiliates to upload copyright material in order to attract further visitors to its website from which both the company and affiliates profit.

With demands for a jury trial, Liberty Media claims Hotfile is guilty of inducing, contributory and vicarious infringement and wants statutory damages of $150,000 per infringed work.

Furthermore, Liberty requests that the court seizes Hotfile’s domain name pending the outcome of the case.

Source: TorrentFreak, for the latest info on copyright, file-sharing and anonymous VPN services.

Liberty Media, who according to court papers identified torrent user Mr Schwaller through his IP address, claimed that he had uploaded six sample movies “to thousands of other individuals.” Furthermore, they also claimed that Schwaller was not a plain BitTorrent user but actually “one of the primary sources of the stolen Corbin Fisher works circulating on the Internet.”

Claiming willful and intentional infringement, Liberty Media requested an injunction against Schwaller forbidding him from sharing any further copyright works, now or in the future. They also asked for damages, costs and attorney’s fees.

A summons was issued the very next day and then, just 72 hours later and as if by magic, it was all over. According to a consent judgment filed December 24th, Liberty Media and the defendant had quickly resolved all disputes between them.

In a 19 point background summary, it was agreed that Schwaller “illegally copied and distributed many” Liberty movies to various torrent sites and by doing so he should have known that he would cause economic harm in California – the home of Liberty Media and the place where the original complaint was filed.

It was further agreed that the acts constituted “intentional and/or willful infringement of the Plaintiffís copyrights,” causing $500,000 in actual damages. That amount was halved to $250,000 for the purposes of the settlement.

So the big question is this: Why would someone agree to such a huge settlement amount – probably the biggest there’s ever been in a file-sharing case – seemingly without any kind of legal battle?

In part the answer almost certainly lies in simple math. Last year, a jury found student Joel Tenenbaum guilty of “willful infringement” and awarded damages mounting to $675,000. That was later deemed to be an excessive amount and was reduced to $67,500, still a significant amount but altogether more manageable.

But there is also another element to the settlement worthy of note. This paragraph:

Defendant has an opportunity to reduce the amount payable to Plaintiff if Defendant ceases any further content theft (whether the Plaintiffís content or anyone elses), and if he makes regular payments toward the judgment on a schedule which will be agreed upon between the parties in a separate settlement agreement.

So, one might reasonably conclude that this is a “good behavior” clause, and one which will bring the settlement down to an altogether more manageable and realistic amount. An amount painful enough to deter further infringement and enough to cover Liberty Media’s costs.

It has long been believed that in both the United States and Europe, the mere threat of a highly public court case involving pornographic material might be the greatest boost to achieving a quick financial settlement.

But this theory has nearly always been aimed at the turn-piracy-into-profit motives of so-called “copyright trolls” and it has to be said, in this case the plaintiff shows no sign of that kind of behavior with one defendant in one lawsuit.

The actions of Liberty Media show that what the company wants is the metaphorical head on a pike, the super-painful $250,000 “biggest ever” settlement headline that will deter others from uploading their material to the Internet in future.

However, one perhaps unintended side-effect is that this settlement, even though it will ultimately turn out to be substantially smaller than the quarter of a million headline grabber, will almost certainly be touted by copyright trolls to “encourage” those they target in mass litigation to pay up. They are, in fact, very different animals.

Source: TorrentFreak, for the latest info on copyright, file-sharing and anonymous VPN services.