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The Biggest Filer of Copyright Lawsuits? This Erotica Web SiteIn 2006, Colette Pelissier was selling houses in Southern California, and her boyfriend, Brigham Field, was working as a photographer of nude models. Colette wanted to leave the real-estate business, so she convinced her boyfriend to start making adult films. “I had this idea, when the real-estate market was cooling—you know, maybe we could make beautiful erotic movies,” she said.
By 2009, they had started shooting adult films in places like Madrid and Prague, and launched a Web site, X-art.com. The site promises erotica featuring “gorgeous fashion models” from “the USA, Europe, South America and Beyond.” For forty dollars a month, subscribers have unlimited access to a growing collection of short films. The site attracted a few hundred subscribers in its first year, then a couple thousand the next; it became profitable by 2010. The couple married in 2011; Pelissier changed her last name to Pelissier Field. That year, she noticed a change at X-art.com: the number of subscribers—the site had about fifty thousand by then—had stopped growing. The Fields hired an outside company to investigate whether people were watching their films without paying. They concluded that, each month, three hundred thousand people were watching pirated versions of their movies—including eighty thousand in the U.S. “We felt like we had to do something,” she said. “I don’t want to wake up in five years and have everything be free.”
Adult-film companies are not the only ones that face piracy made possible by Internet file-sharing, and the Fields weren’t the first to consider legal action. In 2003, the Recording Industry Association of America started suing thousands of people suspected of illegally sharing music, stopping only after piracy declined and legitimate sales rose. In a lawsuit in 2011, the production company Voltage Pictures accused about twenty-five thousand defendants of stealing its movie “The Hurt Locker”; after announcing that it had reached a series of settlements with accused thieves, it dropped the vast majority of cases.
A handful of adult-film companies had also filed copyright-infringement lawsuits against suspected online thieves, and the Fields decided to try it themselves. To identify thieves, the Fields hired outside computer investigators who tracked I.P. addresses where their movies were being illicitly shared via BitTorrent, a file-sharing program. (Using BitTorrent is different from visiting a video-streaming site like YouTube. A BitTorrent user not only downloads a movie but his or her computer automatically uploads a tiny piece of that movie for other file sharers—a process that makes BitTorrent users who view pirated movies liable for copyright infringement.) In February, 2012, the Fields filed their first suits against suspected pirates.
By 2013, subscriptions had declined to below fifty thousand. The Fields ramped up their annual production budget to around two million dollars, hoping to lure more subscribers with fresher material. They started to post new films on X-art.com nearly every day. Their investment in high-quality production paid off when “Farewell”—a narrative-driven film about two lovers on the run in the California desert —attracted a glowing review: Adam Baidawi wrote in British GQ that year that “the mom-and-pop American start-up has grown into a global production team,” making “perhaps the world’s most sophisticated cinema erotica.” In 2013, the Fields purchased a sixteen-million-dollar coastal mansion in Malibu. Having found a niche in the crowded world of online pornography, X-art.com still had tens of thousands of fans shelling out money for its movies. Quietly, the Fields were also making some extra money in another way: by becoming the biggest filer of copyright-infringement lawsuits in the nation. In the past year, their company Malibu Media LLC has filed more than thirteen hundred copyright-infringement lawsuits—more of these cases than anyone else, accounting for a third of all U.S. copyright litigation during that time, according to the federal-litigation database Pacer—against people that they accuse of stealing their films on the Internet.
Today, they average more than three suits a day, and defendants have included elderly women, a former lieutenant governor, and countless others. “Please be advised that I am ninety years old and have no idea how to download anything,” one defendant wrote in a letter, filed in a Florida court. Nearly every case settles on confidential terms, according to a review of dozens of court records. Malibu Media’s attorney, Keith Lipscomb, said that most defendants settle by paying between about two thousand and thirty thousand dollars. The income earned by all the suits represents less than five per cent of Malibu Media’s profits, Lipscomb said.
While the lawsuits represent a small portion of the Fields’ income, they have attracted outsized interest—and spurred colorful debates—in the legal world. One judge has defended the suits as legitimate copyright enforcement: “Malibu [Media] is not what has been referred to … as a ‘copyright troll,’ ” Michael Baylson, a U.S. district judge, wrote. “Rather, Malibu is an actual producer of adult films and owns valid copyrights.”
Ben Depoorter, a professor at the University of California, Hastings College of Law, said that there is no U.S. government enforcement agency tasked with policing copyright infringement; the law is designed primarily for private civil lawsuits, like the ones that Malibu Media has filed. But some judges may question whether the company’s motive is to make money or to deter piracy, he said: “If you’re filing three lawsuits per day, that very much looks like an abusive model. Some judges may say this looks like a business model. On the other hand, infringement is infringement.”
Pelissier Field told me that she and her husband “go back and forth about the best way to protect” their business against piracy, and have concluded that this is the only choice. In its complaints, Malibu Media typically seeks the maximum statutory damages allowed under copyright-infringement law: a hundred and fifty thousand dollars per stolen movie. Even someone who claims not to have read or understood a copyright warning can be held liable for some amount of damages.
There is another catch: Malibu Media can only identify suspected thieves by an I.P. address—similar to a telephone number for an Internet connection—which is what the company initially names as the defendant. Later, its attorneys use court discovery to identify a person linked to the bill or the address for that Internet connection. “To sue an I.P. address is a huge problem,” Eric Goldman, a professor at the Santa Clara University School of Law, said. He believes that this identification system can ensnare the wrong person, as some defendants have argued. Because most cases settle, these factual disputes do not always make their way to court, where they could be considered by a jury or a judge.
Targeting defendants using an I.P. address is on the rise, according to Matthew Sag, a professor at the Loyola University Chicago School of Law. He released a paper in March that found that suits naming multiple anonymous defendants were the most common form of copyright litigation in nineteen federal districts that he studied in 2013. A few other adult-film companies have named hundreds or even several thousand defendants in each complaint. Malibu Media, by contrast, has made it a practice to target just one defendant per case.
One federal judge has compared its lawsuits to an “extortion scheme” writing that many defendants, whether they committed copyright infringement or not, would rather settle than face the costs and potential embarrassment of fighting their cases. It is hard to see why anyone facing such a suit would choose not to settle: hiring a lawyer costs more than settling, and damages are exponentially higher in the event of a loss at trial. Plus, no one wants to be publicly accused of stealing pornography. To avoid embarrassment, many defendants may choose to settle before Malibu Media names them in a complaint. Many judges have allowed defendants to remain anonymous as their cases progress toward a trial or settlement, although their names would be revealed if they ever faced a monetary court judgment. (Malibu Media’s attorney said that the company would never oppose a defendant’s wish to remain anonymous, and doesn’t threaten to out anyone.) So far, only one of Malibu Media’s cases has proceeded to trial. The judge in that case, determining that a defendant had stolen five movies and lied about it in court, decided that a hefty punishment was necessary—two hundred and forty thousand dollars in damages and attorneys’ fees. “We can prove every case,” Lipscomb said, adding that Malibu Media drops a suit if there’s any hint of a mistake.
Still, things haven’t always gone smoothly. Last month, a federal judge in Florida said that Lipscomb had engaged in conduct that perpetuated “stereotyped caricatures of attorneys.” In that case, the defendant, Leo Pelizzo, claimed that he had been in Venezuela at the time of the alleged theft, and that the residents of his building share a pool of I.P. addresses. Lipscomb offered to dismiss the suit, but the defendant’s attorneys had already billed more than seventeen thousand dollars, so Pelizzo wanted recompense. When he would not walk away, Lipscomb sent an e-mail to his lawyer threatening to take the case to trial, where Pelizzo would “lose everything he owns.”
Lipscomb later offered to pay thirteen thousand dollars toward attorneys’ fees. A magistrate judge said that Lipscomb had acted, “for a brief period of time, vexatiously,” but that the suit was not frivolous. She recommended that Malibu pay only six thousand eight hundred dollars in fees, and a district judge has finalized that decision. Lipscomb told me that he was contrite for sending the e-mail, but said that the defense attorneys had asked for an “excessive” sum for doing little work. Indeed, lawyers are expensive, so the system is stacked in favor of companies that can file a lot of suits against people who can afford to settle but can’t afford to hire a lawyer.
In 2012, Malibu Media sued Jeff Fantalis, who lives in Louisville, Colorado, for allegedly stealing thirteen movies. Fantalis said that he “strongly denies” the allegations. Settling quickly would have been the easiest path, Fantalis told me. But he had worked as a technology consultant and understood computers. Hoping to create a road map for other defendants, he decided to fight back. He represented himself, though he is not a lawyer, filing briefs that pointed out problems with identifying thieves by their I.P. addresses: imposters can mimic other people’s I.P. addresses. Neighbors can “camp” on a wireless network, or decrypt a password and hack in. Roommates share wireless networks. Soon, other defendants started circulating his briefs on blogs such as fightcopyrighttrolls.com. But fighting Malibu was “nine months or so of hell,” Fantalis told me: the legal research took time and effort, and he always worried that the allegations would stain his reputation. After months of this, both sides agreed to a confidential settlement. Fantalis and the Fields wouldn’t tell me the terms. “It was a lot of sleepless nights and hundreds of hours of time,” Fantalis said. “Even still, after all this, if you Google my name, this is the first thing that comes up.”
Pelissier Field said that she wishes Congress would intervene with a solution that made litigation a last resort to deter piracy. She also said that she and her husband have no plans to stop filing suits: as of early May, they had filed about thirty-eight per cent of all copyright suits in 2014. “My husband is, like, ‘You’ve spent so much time doing this,’ ” Pelissier Field said. “I’m, like, ‘If we don’t, who will?’ ”
Gabe Friedman writes about legal affairs, the environment, and business. He was a Knight-Bagehot Fellow at Columbia University and lives in New York.
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