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Copyright Settlement Firm Rightscorp Gets Hit with Class Action

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By Mark Wilson, Esq. on November 25, 2014 11:55 AM

Rightscorp is a company that valiantly pursues copyright infringers in an attempt to get them to pay their fair share for the harm they've caused to copyright owners.

That's one way of looking at it.

Another is that Rightscorp "asks ISPs to disconnect you from the Internet unless you pay it money for alleged, unproven copyright infringements." A class action suit being filed in the Central District of California seeks to figure out the truth.

How Much Ya Got?

What we do know is that Rightscorp finds file-sharers and then tries to use DMCA takedown notices to get ISPs to identify those file-sharers. Rightscorp then offers them a "settlement" of about $20 per infringement. This business model has worked so far (that is, when ISPs comply with their requests, and it's not entirely clear that they have to).

The class action, filed by Morgan Pietz, who helped take down porn-copyright-troll Prenda Law, alleges that Rightscorp employs a variety of questionably legal techniques to extract "settlements" out of alleged copyright infringers.

First, it trawls file sharing sites and peer-to-peer networks looking for users infringing its clients work. With an IP address in hand, it find's the user's ISP and uses a subpoena to get the name and information of the customer associated with that IP address, even though "[i]t has been well-established for a decade that subpoenas may not be issued under 17 U.S.C. § 512(h) to ISPs merely acting as conduits for electronic communications."

Then, it mails and emails a threatening letter to the customer, claiming that the customer infringed, but offers to "settle" for twenty bucks per infringement. (One alleged infringer who called the company asking for clarification of the vague claims was robocalled at least once a day for the next two months.)

All of this happens, according to the lawsuit, without Rightscorp identifying what works were infringed, and when, and who owns the copyrights to them.

I Wouldn't Invest Just Yet

This business model probably won't go well. We know that because Righthaven, a Las Vegas-based company that purported to sue on behalf of copyright owners for "infringement" of newspaper articles, got severely shut down by the Ninth Circuit last year. In that case, the court held (or, rather, reaffirmed) that "the assignment of the bare right to sue for infringement, without the transfer of an associated exclusive right, is impermissible under the Copyright Act and does not confer standing to sue."

Consequently, to the extent Rightscorp claims the ability to sue on behalf of a copyright holder, it really doesn't. Only the copyright holder can do that (unless the actual copyright holder has transferred ownership of the copyright to Rightscorp, which doesn't seem all that likely).

To date, Rightscorp has run away whenever it's actually been challenged in court. I wonder how this will go.

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