Day in and day out the company scours the Internet for people sharing their movies via BitTorrent. They then collect the associated IP-addresses, and ask courts all over the country to help them find the perpetrators.

Nearly all of these cases end up being settled for a few thousand dollars each. However, every now and then a defendant fails to respond, giving Malibu Media the opportunity to obtain a default judgment.

This happened to L. Sagala from Muskegon, Michigan, who was found guilty of willful copyright infringement by a federal court last week.

Malibu Media found that the IP-address registered to Sagala was used to share several X-Art movies and asked the court to award $40,500.00 in statutory damages. A bargain, according to Malibu Media, who claim that the real damages are even higher.

“Despite the fact of Defendant’s willful infringement, Plaintiff only seeks an award of $40,500.00 in statutory damages. This amount is reasonable when considering that Plaintiff’s actual damages far exceed this sum,” Malibu Media’s lawyers write.

“To explain, Defendant materially aided each of the other participants in the BitTorrent swarm of infringers. This swarm contained thousands of peers and continues to grow. Plaintiff’s actual damages are the lost sales of its content to those thousands of infringers. In the aggregate, these lost sales far exceed $40,500.00,” they add.

In an order filed before the weekend, District Court Judge Robert Jonkert grants Malibu Media’s damages request, as well as $1,649.40 for attorneys’ fees and costs. As Sagala failed to defend himself the verdict doesn’t come as a surprise. However, the relatively high damages award is not something we see every day.

The Order

Over the past few months Malibu Media has scored several similar default “victories” and there is no sign that they will be stopping anytime soon. Together with numerous settlements, which are worth up to thousands of dollars each, the company and its lawyers are estimated to have made millions of dollars.

Malibu Media’s legal action against alleged BitTorrent pirates initially started in 2012, when it followed in the footsteps of several other adult entertainment outfits. Since then, the company has filed a total of 1,894 lawsuits. It’s pretty safe to say that in addition to its x-rated activities, Malibu Media has also perfected the ‘art’ of copyright trolling.

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

Ever since, many hundreds of thousands of Internet users there have been plagued by threats from rightsholders of almost every kind of media, with many settling for amounts up to 1,200 euros a shot.

As we know, these pay-up-or-else schemes also spread to the UK and then to the United States, proving particularly popular with porn companies out to prop up their failing business models. One such outfit, Malibu Media, has filed dozens of lawsuits in the United States and recently made efforts to export their project back to Germany. It didn’t go well.

Last year, Malibu issued complaints in Germany that Internet subscribers had illegally shared eight of their X-Art movies including “Flexible Beauty” and “Young passion”. As a result the company wanted to obtain the identities of Internet subscribers behind the IP addresses it held on file in order to extract settlements from them.

However, as outlined in a recently published ruling by the District Court of Munich, the complaints proved problematic.

Firstly, Malibu claimed to be the creator of the movies but the District Court said that the company’s name was nowhere to be found on the videos in question, only references to the X-Art brand. As a result Malibu were unable to convince the Court that they held the rights.

Next there was the issue of distribution. Although Malibu claimed that the movies had been released worldwide, it failed to demonstrate that they had either been released locally on DVD or via an online platform. On that basis the District Court found that the works had never been released in Germany and were therefore ineligible for protection under the Copyright Act.

Finally, the District Court said that the actual content of the videos raised issues under Germany’s Copyright Act. The Court noted that the videos showed “only sexual processes in a primitive way” and are therefore classified as “pure pornography.” As such, the productions are not a “personal intellectual creation” and are not entitled to protection under Germany’s Copyright Act.

The District Court’s ruling is definitely a setback for Malibu in Germany but it should be noted they have been extremely persistent in the United States following earlier problems. They’ll probably be back after some fine-tunes, there’s simply too much money at stake to give up now.

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