A recent federal magistrate decision threatens plaintiffs’ ability to seek redress from persons who anonymously download and share copyrighted content online.
In Strike 3 Holdings, LLC v. Does, the court denied a request for expedited discovery to unmask the identities of “John Doe” defendants through subpoenas to internet service providers (ISPs). According to the court, the plaintiff had to identify the defendants by more than their Internet Protocol (IP) addresses to state an infringement claim. Although not the first court to deny an ex parte request for subscriber-identifying discovery, the court in Strike 3 broke new ground by basing its decision on the deficiency of the underlying claim under the pleading standards of Federal Rule of Civil Procedure 12(b)(6). ABA Section of Litigation leaders expect that, if followed, the ruling will have a profound effect on the viability of other “John Doe” infringement claims in the future.
Expedited Discovery on a Deficient Claim Would Be “Futile”
The plaintiff, Strike 3, is the intellectual property holding company of an online pornography distributor that claims to possess “the most pirated adult content in the world.” Beginning in October 2017, Strike 3 launched a large-scale attack against illegal downloading, ultimately filing more than 3,000 infringement lawsuits. Armed with only the IP addresses associated with the alleged downloading, Strike 3 would plead claims against “John Doe” defendants, then seek expedited discovery on an ex parte basis from ISPs, such as Comcast, Yahoo, and Verizon, to uncover the names of subscribers associated with the IP addresses. This strategy was largely successful for several years, as even the judge who denied discovery in the latest case had approved it in previous instances.
In the new ruling, however, the court denied Strike 3’s request, noting “red flags” highlighted in a recent District of Columbia decision in another Strike 3 case. After a “deep dive” into Strike 3’s method of identifying IP addresses, the court labeled the company’s subpoenas “misleading” because they would not elicit the names of subscribers at the time of infringement, but rather those of the current subscribers. Due to the “dynamic nature of IP addresses,” the court held that “Strike 3 . . . does not know who infringed its works,” and therefore failed to state an actionable infringement claim. Without a valid claim, expedited discovery would be “futile.”
“A Legal Remedy Does Not Exist for Every Wrong”
In so holding, the court acknowledged that its ruling “may make it more difficult for Strike 3 to enforce its copyrights against potential infringers,” but added, “A legal remedy does not exist for every wrong.” Michael D. Steger, New York, NY, cochair of the Section of Litigation’s Intellectual Property Litigation Committee, emphasizes this as the key point of the ruling. “Even if there’s actual infringement going on, this ruling effectively shuts down this type of case,” Steger says. As a result, he adds, “Plaintiffs like Strike 3 will have to rethink their whole strategy.”
Expanding on the point, Ronald Hedges, New York, NY, cochair of the Section’s Pretrial Practice & Discovery Committee, explains that “courts are aware that there is a great deal of uncertainty with IP addresses, and they have to be cautious, especially when proceeding on an ex parte basis. This case is a judicial reaction to those concerns,” Hedges concludes. “It says that you just can’t do what the plaintiff is trying to do.”
Both Section leaders were skeptical of the court’s suggestion that Strike 3 possessed an effective alternative remedy in takedown notices under the Digital Millennium Copyright Act (DMCA). As Steger notes, unlike Strike 3’s ISP subpoenas, a DMCA notice is a targeted act: “Takedown notices are a well-known means to address websites displaying infringing content, but in that instance, you know what the website is or who to contact,” he explains. “Here, you don’t.”
Hedges concurs. “We just don’t know if the DMCA is an effective remedy [against illegal downloading],” he says. “It hasn’t been used enough in that area.”
Concerns about Misidentification and Loss of Privacy
In addition to futility, the court denied Strike 3’s requested discovery on multiple alternative grounds, including that the subpoenas presented “too great of an opportunity for misidentification” of potential infringers. On this point, the court faulted Strike 3 for, among other things, minimizing “the substantial prejudice that may inure to a subscriber from the release of its private information and the possible false identification in a lawsuit.” This concern, Section leaders observe, is key to the court’s ruling.
As Hedges notes, “in a judge’s mind, ‘John Doe’ is an individual. That’s not necessarily so, but the assumption is that it’s a person who could potentially be embarrassed, not a business.” Steger concurs, observing that the court’s concerns “might not have applied if it were clear that the accused infringers were businesses.”
Because the discovery was ex parte, he adds, the court’s concerns were heightened: “The defendants have not even been identified, much less served with the complaint, and the court has to be extremely careful when allowing discovery of them without them even knowing,” Hedges says.
John M. McNichols is a contributing editor for Litigation News.
Hashtags: #Infringement, #Privacy, #DMCA, #Copyright
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