Over a year ago, I wrote about how adult film producer Strike 3 Holdings -- filer of literally thousands of copyright infringement lawsuits -- struck out in some recent attempts to sue "John Doe" defendants' IP addresses where its adult films were being watched without permission. That trend continued for several months, with other courts disallowing Strike 3's attempts for expedited discovery to uncover the identity of the IP address subscribers. The result of this trend was the almost total shut down of Strike 3's previously torrent copyright infringement filing streak.
Well, the tide has turned. In two recent decisions, the District of New Jersey overturned a Magistrate Judge's sweeping order denying expedited discovery in several pending cases and the D.C. Circuit Court of Appeals reversed a D.C. district court's similar dismissal and denial of discovery. With these decisions, Strike 3 is back in the copyright infringement lawsuit business, and illegal downloaders and streamers of pornography -- or any other copyrighted materials -- beware.
In Strike 3 Holdings, LLC v. Doe, 2020 WL 3567282 (D.N.J. June 30, 2020), the District Judge, reviewing the Magistrate Judge's dispositive decision, held that "the Magistrate Judge considered material outside of the complaint and drew inferences against [Strike 3] in determining the complaint would later fail, both of which constitute reversible error." Essentially, Magistrate Judge Schneider examined Strike 3's extensive filing history and determined that Strike 3 was really just guessing that the Doe defendant who owed the IP address at issue was the copyright infringer -- and, on that basis, found that the complaints under scrutiny failed to state a claim for relief. Judge Hillman, however, reversed, finding that Strike 3's linking of the identified IP addresses with the placeholder-defendant subscribers was plausible. Given that reasonable inferences are drawn in a plaintiff's favor at the pleading stage, Strike 3 had "sufficiently stated a viable claim of copyright infringement." Read: it's not implausible that the IP address subscriber is the person illegally downloading porn. The court also found that the limited expedited discovery sought -- in particular, the name and permanent address of the IP address subscribers -- satisfied the good cause standard.
In a separate case, Strike 3 Holdings, LLC v. Doe, 2020 WL 3967836 (D.C. Cir. July 14, 2020) [note: the case name is not a typo -- there are A LOT of these cases], the D.C. Circuit court seemed to go a step further, perhaps motivated by the lower court's apparent animus toward Strike 3's business and litigation practices. The district court in that case stated that Strike 3's films were "aberrantly salacious" and assigned "great weight" to the privacy expectations of the John Does in a case involving "particularly prurient pornography" (say that five times fast). The appellate court, in reversing the district court's decision, identified three particular flaws with that decision:
"First, the district court 'relied on an improper factor' by treating the content of Strike 3's copyrighted works as relevant to its entitlement to early discovery. Second, the court committed legal error when it concluded Strike 3 could not state a plausible claim of infringement against the IP address subscriber even if the requested discovery was granted. And third, the court drew unsupported, negative inferences against Strike 3 regarding its litigation tactics and motivation in seeking the requested discovery."
So, perhaps Strike 3 is back to Square 1, weeding out potential infringers through expedited discovery into the identity of IP address subscribers. What it means for the rest of us, however, is that this technique has found new legal support. Strike 3, for its part, seems to have a fairly sophisticated geo-locating method to target high-volume unauthorized downloaders. But other content holders may use the Strike 3 legal precedents to target IP-address subscribers with a lesser justification to proceed. Indeed, businesses could be at risk for suits against them based on allegedly infringing activity by their employees using the company's IP addresses -- and I'm not just talking about watching porn at work. Seemingly legitimate business activity where the employee downloads copyrightable materials without permission can be targeted. Companies would be wise to educate employees and contractors regarding proper protocol for downloading materials from the Internet (for many reasons) and perhaps take steps to limit such activity. And maybe discourage watching illegal porn at work while you're at it.
Strike 3 Holdings, LLC v. Doe, 2020 WL 3567282 (D.N.J. June 30, 2020)
Strike 3 Holdings, LLC v. Doe, 2020 WL 3967836 (D.C. Cir. July 14, 2020)
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