Their example was soon followed by other law firms, representing dozens of copyright holders, who saw an opportunity to convert instances of piracy into a healthy revenue stream.

One of the movie studios that teamed up with USCG is Nu Image, the makers of The Expendables, an independent production that grossed more than $100 million in the United States alone.

A massive list of 23,322 U.S. Internet users were targeted by the film studio, and for a short while Nu Image had the questionable honor of having started the biggest file-sharing lawsuit the world has ever witnessed.

But, instead of raking in millions of dollars from the accused file-sharers as was the plan, Nu Image has now thrown in the towel by voluntarily dismissing the case.

Late last month the film studio received bad news as District Court Judge Robert Wilkins ruled that Nu Image can only go after those individuals who are reasonably likely to be living in the District of Columbia. This means that the movie studio could not send any subpoenas to ISPs when the IP-addresses are located in other districts.

This effectively meant that 99% of the initial defendants walked free. A devastating blow to the plans of USCG and Nu Image, and as a result they’ve now decided to drop the case in its entirety, including the defendants who were sued in the right district.

“Plaintiff hereby gives notice that it voluntarily dismisses the case in its entirety, without prejudice,” the attorneys write in a brief notice to the court.

Although it is not the first time that a judge has ruled that defendants have to be sued in the right court, the current case adds extra weight because of the sheer number of defendants and the fact that it received widespread coverage in the media previously.

If other judges side with Wilkins, future mass-lawsuits against BitTorrent users will become more costly. Although it is unlikely that these cases will disappear entirely, it seems plausible to assume that lawyers will now think twice before they sue thousands of defendants in the wrong district.

USCG in particular has to change their tactics if they want to continue suing alleged copyright infringers, not least because their actions are being watched more closely after doubt was cast over the reliability of their evidence.

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

This scheme was pioneered in the US by the law firm Dunlap, Grubb & Weaver, aka the U.S. Copyright Group (USCG), but recently it has been replicated by several other lawyers across the country. A few days ago, USCG filed a round of new lawsuits on behalf of another major client, Nu Image, the studio behind the action flick The Expendables.

After The Hurt Locker, The Expendables is the first major film release associated with this type of legal action. It is also one of the largest mass P2P lawsuits that was ever started, with a total of 6,500 unidentified defendants (Does). All defendants are suspected of having shared The Expendables on BitTorrent in recent months.

The complaint, filed by Dunlap, Grubb & Weaver at the District Court of Columbia, further appears to be copied from previous cases. It starts off with describing how BitTorrent works, and goes on to explain how the defendants have used this technology to distribute The Expendables without permission of the copyright holder.

As with previous cases, the true purpose of the lawsuits is not to start a full trial, but to obtain the personal details of the customers who are linked to the “infringing” IP-addresses. A classic pay-up-or-else scheme, or exploiting the legal system for commercial gain as others have described the process.

There is no doubt that involvement in this type of lawsuit will lead to the creation of a negative image for the studio among the general public, but on the flip side the revenue potential is enormous. If 80 percent of all defendants pay a $2,000 settlement, the plaintiffs would earn more than $10 million, which equals 10% of the total box office grosses in the US.

And there is potential for even more revenue.

Even today, five months after a high quality copy of The Expendables became available on BitTorrent, the movie is still being downloaded by a few thousand people every day. This means that there’s enough potential to sue tens of thousands additional BitTorrent users in the future, if the courts permit it of course.

The latter is a question that is likely to be answered in the months to come. Already, law firms involved in these mass lawsuits are meeting resistance from consumer rights organisations and judges. With more cases being entered month after month, the pressure on the legal system is increasing at a rapid rate too.

In the UK, where these pay-up-or-else practices began back in 2007, legal setbacks, incompetence and pressure from the public eventually led to the fall of the most prominent anti-piracy law firms ACS:Law. With the spotlight now on the US, Dunlap, Grubb & Weaver and the other law firms that are involved better brace themselves.

BitTorrent users who receive a subpoena are advised to contact a legal representative, the EFF has some good advice to start with.

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

One of the movie companies partnering with USCG are Achte/Neunte, the makers of the movie Far Cry. That case originally had more than 4,500 defendants but in November 2010 a district court judge told USCG that they could only pursue those who were sued in the correct jurisdiction, 140 in total.

Now, according to Hollywood Reporter, USCG have not been put off by this setback. On the contrary, they have just signed up a new company to their scheme.

Although Nu Image Films may not immediately ring any bells with BitTorrent users, they have an impressive 179 movies in their portfolio. One of their most successful movies to date will certainly sound familiar- the 2010 blockbuster ‘The Expendables’.

According to Thomas Dunlap at USCG, The Expendables will be the focus of a new lawsuit being prepared by his company which is set to target the untold thousands of Internet users who shared the movie on BitTorrent during 2010. Dunlap says other lawsuits for Nu Image movies will follow.

The potential numbers are significant. The Expendables first appeared in TorrentFreak’s chart of most-pirated movies back in August 2010 and stayed there for 8 straight weeks. It was also the 27th most-searched for term on one of BitTorrent’s most popular indexes last year.

In a sure sign that USCG’s business plan is all about making money from piracy and not stopping or deterring it, THR quotes Dunlap as saying that USCG has been doing background checks on identities of BitTorrent users it has obtained to date and that those who live in “a $100,000 house” may be more appealing targets than those who live in a “$10,000 trailer”.

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