Over the past several years, adult entertainment company Strike 3 Holdings has filed thousands of copyright cases in U.S. federal courts.
These lawsuits target people whose Internet connections were allegedly used to download and share copyright-infringing content via BitTorrent.
Rare File-Sharing Trial
Many of these cases result in private settlements and are never heard of again. On occasion, however, a defendant decides to push back. A case that was initially filed against a “John Doe” in Florida, made it all the way to the final trial preparations.
It’s unusual for such a file-sharing case to be so heavily litigated since that’s quite costly for both sides. The prospect of a potential jury trial is even rarer, but neither Strike 3 nor the defendant, who was later named as John Adaire, wanted to give in.
The case has plenty of nuances but, in essence, the main question was whether Adaire downloaded and shared 36 of Strike 3’s porn videos without permission. According to the adult company, the evidence was clear as day.
Opposing Views
Strike 3 previously informed the court that it repeatedly found an IP address, assigned to the defendant, sharing pirated movies. This was backed up by technical evidence as well as other expert testimony.
The adult company further accused the defendant of destroying evidence by wiping data from his desktop computer, mishandling a hard drive, and reinstalling the operating system on his laptop.
For his part, the defendant drew the court’s attention to Strike 3’s piracy evidence, suggesting that it was below par.
The adult company uses tracking software to monitor the IP addresses in BitTorrent swarms. Similar to other rightsholders, this is then recorded in ‘PCAP’ evidence files. However, Strike 3 developed its “VXN” tracking technology in-house, which makes it little more than ‘circumstantial’ evidence.
No Trial
The case was scheduled to go to trial this week, and attorneys and jurors were all getting ready for several days of court action. On Sunday evening, however, there was a sudden breakthrough after the parties reached a confidential settlement.
“Parties have finalized and executed, by way of written agreement, a final settlement resolving all claims raised in this case. Based on such resolution, the Parties notify the Court that a trial would be moot,” they informed the court.
Due to the confidential nature of the settlement, it’s not clear if either party agreed to pay compensation. And the fact that both sides are content with the outcome doesn’t give anything away either.
Everybody Happy?
Defense attorney Curt Edmondson informs us that the dispute was amicably resolved to the satisfaction of all. Strike 3’s lawyer Christian Waugh is also content with how the lawsuit was resolved.
Strike 3 sees the outcome as “historic”, in part due to the permanent injunction agreed as part of the settlement deal.
A case like this, where my client obtained summary judgment on Defendant’s counterclaim and the judge actually found that the Defendant spoliated evidence, is not one that is appropriate for wasting a judge or jury’s time in trial.
This injunction, which has yet to be signed by the Florida court, stipulates that the defendant will have to pay $125,000 in damages if they infringe any of Strike 3’s copyrights in the future.
“The injunction itself is a historic result for content creators and owners like my client,” Waugh tells TorrentFreak. “There are extraordinary penalties, including contempt, if Defendant ever violates the injunction imposed by the Court,”
The defense attorney adds some nuance to the injunction by pointing out that his client never downloaded any of Strike 3’s movies and has no plans to do so. This means that the massive penalty for any future infringements should never come into play.
“An injunction is for future acts. As the defendant did not download Strike 3’s movies, he has no desire or interest to do so in the future,” Edmondson notes.
“I was surprised that Strike 3 wanted to settle,” he adds, noting that earlier this year Strike 3 seemed determined to prove that their evidence was reliable. The defense, however, had a different take.
“The reality was that the raw PCAP data was extremely weak and closed to non-existent. We mapped the PCAPs and recreated .MP4 files from the PCAP data and nothing was playable. Strike 3 could have taken us to trial and they chose not to.”
The fact that improperly accused defendants cannot claim massive damages awards like copyright holders can, settling the matter made the most sense. Especially since one never knows what a Jury will decide.
More Lawsuits Pending
Now that the trial is out of the way, Strike 3 can focus on the many hundreds of open lawsuits filed at U.S. federal courts. The company is currently on track to set a new all-time record for the number of complaints filed in a year.
While some have labeled this activity as copyright trolling, Strike 3 points out that it’s a legitimate copyright holder, merely protecting its rights.
“The point of my client’s litigation is not personal or to harm any defendant, it is to protect its rights under the Copyright Act, which has been done in this case,” Strike 3’s attorney concludes.
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A copy of the joint notice of resolution is available here (pdf) and the permanent injunction that’s referenced above can be found here (pdf)
