Appeals Court Reverses ‘Scathing’ Verdict Against Copyright Troll

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A Columbia appeals court has overturned an order in which Strike 3 Holdings was denied a subpoena, labeling it as a "copyright troll" that uses courts "as an ATM." According to the opinion, the district court's decision incorrectly factored in the adult nature of the content, while drawing unsupported conclusions about the company's controversial litigation tactics.

copyright trollIn November 2018, US District Court Judge Royce C. Lamberth delivered a scathing verdict against Strike 3 Holdings.

The adult entertainment company, which is one of the most prolific copyright litigants in the US, was denied a subpoena to obtain the personal details of an alleged pirate.

The case in question is typical of so-called ‘copyright troll’ lawsuits. Strike 3 identified an IP-address that was sharing its content and asked the court to help identify the account holder, so it could take further action.

District Court Slammed Strike 3 in Scathing Order

Judge Lamberth’s response was far from typical, however. He denied the request and dismissed the case, labeling Strike 3 a “cut-and-paste” serial litigant whose lawsuits “smack of extortion,” using the court “as an ATM.”

While these descriptors are common among public critics, judges are rarely this outspoken. According to Strike 3, Judge Lamberth’s ruling was out of line so the company filed an appeal to have it overturned.

After hearing the case earlier this year, the US Court of Appeals for the District of Columbia Circuit issued its judgment this week, siding with Strike 3. According to the order, the district court’s ruling went too far.

The appeals court starts off by recognizing that district courts enjoy a lot of flexibility when it comes to discovery matters. This means that it will only overturn rulings in “unusual circumstances,” which is the case here.

The district court motivated its original ruling by highlighting the “aberrantly salacious nature” of Strike 3’s adult content and pointing out the “legion pitfalls” associated with “tracking and identification of infringers.”

District Court Went Too Far

The appeals court disagrees and concludes that the district court abused its discretion by relying heavily on Strike 3’s litigation history and the nature of its films, as opposed to the relevant legal standard. Specifically, it highlights three problematic issues.

First, it notes that the nature of Strike 3’s works is irrelevant. Copyright holders have the same rights, irrespective of the type of content they produce. That there are stronger privacy concerns when it comes to adult content doesn’t change this.

Secondly, the lower court incorrectly concluded that Strike 3 has no plausible claim against the IP-address. While it doesn’t necessarily identify the pirate, dismissing a case simply because it relies on an IP-address as evidence goes too far.

“It is undoubtedly true that individuals other than the IP address subscriber may have been responsible for the infringement at issue. On these facts, however, we do not find this alternative explanation so obvious as to render Strike 3’s claim against the subscriber facially implausible,” the appeals court writes.

Finally, the court believes that Judge Lamberth’s negative view of Strike 3’s litigation efforts colored his judgment. Instead of looking at the matter objectively, it appears to have been influenced by the ‘copyright troll’ label.

“[T]he court’s perception of Strike 3’s motives appears to have colored its analysis. Indeed, the court took pains to emphasize that a different result might obtain in a case involving an ‘honest copyright holder’ and derided Strike 3’s ‘feigned desire for legal process’ in summarizing its holding. The factual record did not support the negative inferences drawn,” the court adds.

All in all, the appeals court finds that the district court abused its discretion by denying Strike 3’s subpoena request. This means that the dismissal is overturned and the subpoena request is revived.

A copy of the opinion from the US Court of Appeals for the District of Columbia Circuit is available here (pdf)

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