Loyola University Chicago, School of Law LAW eCommons Faculty Publications & Other Works 2018 Defense Against the Dark Arts of Copyright Trolling Matthew aS g Jake Haskell Follow this and additional works at: https://lawecommons.luc.edu/facpubs Part of the Civil Procedure Commons, and the Intellectual Property Law Commons Defense Against the Dark Arts of Copyright Trolling Matthew Sag &Jake Haskell * ABSTRACT: In this Article, we offer both a legal and a pragmaticframework for defending against copyright trolls. Lawsuits alleging online copyright infringement by John Doe defendants have accounted for roughly half of all copyright casesfiled in the United States over the past threeyears. In the typical case, the plaintiffs claims of infringement rely on a poorly substantiatedform pleading and are targeted indiscriminately at noninfringers as well as infringers. This practice is a subset of the broaderproblem of opportunistic litigation, but it persists due to certain unique features of copyright law and the technical complexity of Internet technology. The plaintiffs bringing these cases target hundreds or thousands of defendants nationwide and seek quick settlements pricedjust low enough that it is less expensive for the defendant to pay rather than to defend the claim, regardless of the claim's merits. We report new empirical data on the continued growth of this form of copyright trolling in the United States. We also undertake a detailed analysis of the legal andfactual underpinnings of these cases. Despite theirunderlying weakness, plaintiffs have exploited information asymmetries, the high cost of federal court litigation, and the extravagant threat of statutory damages for copyright infringement to leverage settlementsfrom the guilty and the innocent alike. We analyze the weaknesses of the typical plaintiffs case and integrate that analysis into a strategy roadmap for both defense lawyers and pro se defendants. In short, as our title suggests, we provide a useful guide to the defense againstthe dark arts of copyright trolling. * Matthew Sag is a Law Professor at Loyola University Chicago School of Law and the Associate Director of the Institute for Consumer Antitrust Studies. Jake Haskell is a recent graduate of Loyola University Chicago School of Law and an attorney practicing intellectual property law in Chicago. We acknowledge the generous research funding of the Institute for Consumer Antitrust Studies at Loyola and the database access provided by Lex Machina. We thank Tonjajacobi, and Spencer Waller for their many insights and comments and Wade Formo for additional research. The views presented in this Article are strictly our own. We emphasize that although this Article contains advice about the law, it is not legal advice, and we disclaim any inference of an attorney-client relationship between the reader and ourselves. IOWA LAWREVEW [Vol. 103:571 I. INTRO DU CTION ............................................................................. 573 II. ESSENTIAL BACKGROUND ..............................................................575 A. THE CURRENT WAVE OFFILE-SHARING LITIGATION .................. 575 B. AN OVERVIEW OF THE PLAINTIFF'S CASE ............................... 580 III. THE WEAKNESSES OF THE PLAINTIFF'S CASE ................................ 582 A. OUTSIDE THE BLACK BOX ........................................................ 582 1. Ownership of a Valid Copyright ................................... 583 2. Lack of Authorization ................................................... 584 3. Im properJoinder .......................................................... 584 4. Personal Jurisdiction ............................................... 588 5. Reliance on IP Addresses .............................................. 590 6. Reliance on Propensity Evidence ................................. 592 7. Using the Lack of Evidence as Evidence ..................... 592 B. INSIDE THE BLA CK BOX ........................................................... 593 1. No Evidence of a Copy Being Made ............................ 593 2. The Black Box Has Credibility Problems .................... 599 3. Defendants Never Get to See Inside the Black Box.... 602 C. WHYDO SUCH WEAK CASES PERSIST? ...................................... 604 IV. STRATEGIES FOR DEFENDING AGAINST COPYRIGHT TRoLs ......... 605 A. STAGE I" COMPLAINT, SUBPOENA, THREAT LETTER, AND RESPONSE ............................................................................ 605 i. T he C om plaint .............................................................. 6o6 2. Subpoena, Motions to Quash and to Sever ................. 6o6 3. Motion to Proceed Anonymously ........................... 6o9 4. Threat Letter ............................................................ 6o9 5. Letter in Response ................................................... 611 B. STAGE II: AMENDED COMPLIANT, MOTION TO DISMISS, AND ANSWER .............................................................................. 6 11 1. Strategic Considerations ........................................... 611 2. When to Settle and How ............................................... 612 3. The Motion to Dismiss .................................................. 614 4. Motion for Early Discovery ...................................... 618 5. An sw er ............................................................................ 6 20 6. How Does Stage II End? ............................................... 620 7. Attorneys' Fees and Statutory Damages ....................... 621 i. A ttorneys'Fees........................................................... 621 ii. The Defendant's Casefor Attorneys'Fees..................... 622 iii. Is the Defendant the "PrevailingParty? ...................... 624 iv. The Plaintiffs Casefor Attorneys'Fees........................ 625 v. Statutory Damages..................................................... 628 C. STAGE III: DISCOVERYAND SUMMARYJUDGMENT ..................... 629 2o18] DEFENSE AGAINST THE DARK ARTS 1. D iscovery ........................................................................ 6 29 2. Disqualification of Plaintiffs Experts .......................... 631 3. Sum m aryJudgm ent ...................................................... 632 D. STAGE -IV. TRIAL ..................................................................... 634 V . C O NCLU SION ................................................................................ 636 I. INTRODUCTION Over the past six years, a small group of copyright owners has deluged the federal court system with lawsuits against John Doe defendants alleging online copyright infringement. These lawsuits are sometimes directed against a single defendant, sometimes thousands. This new wave of file-sharing lawsuits is, in our view, copyright trolling because of the opportunistic way in which they seek to monetize assertions of infringement. More importantly, we regard these suits as a kind of trolling because the plaintiffs' claims of infringement rely on poorly substantiated form pleadings and are targeted indiscriminately at noninfringers as well as infringers. Plaintiffs have realized that there is no need to invest in a case that could actually be proven in court or in forensic systems that reliably identify infringement without a large ratio of false positives. The lawsuits described in this Article are filed primarily to generate a list of targets for collection and are unlikely to withstand the scrutiny of contested litigation. Sometimes the plaintiffs get lucky and target an actual infringer who is motivated to settle. Even when the infringement has not occurred or where the infringer has been misidentified, a combination of the threat of statutory damages-up to $150,000 for a single download- tough talk, and technological doublespeak are usually enough to intimidate even innocent defendants into settling. The plaintiffs play a numbers game, targeting hundreds or thousands of defendants and seeking quick settlements priced just low enough that it is less expensive for the defendant to pay than to defend the claim. This game is profitable, whether the lawsuits are targeted at actual infringers or not. It is difficult to overstate the extent to which copyright trolling has come to dominate the federal copyright docket. In this Article, we report new empirical data on the continued growth of copyright trolling in the United States. We show that around io,ooo copyright lawsuits have been filed against John Doe defendants in the last six years and that these suits have accounted for almost half of all the copyright cases filed in the United States between 2014 and 2016.1 However, counting cases filed grossly understates the 1. We discuss the data infra Part II. It is enough to note here that copyright lawsuits against John Doe defendants outnumbered all other copyright claims in 29 federal districts in either 2015 or 2016. In 2016,John Doe cases accounted for more than half of copyright cases filed in the following federal districts: Arizona; the Eastern, Northern, and Southern Districts of California; Colorado; Connecticut; District of Columbia; the Northern District of Illinois; the IOWA LAWREVEW [Vol. 103:571 significance of copyright trolling, since an individual lawsuit may contain dozens, even thousands, of individual defendants.- This places the true number of defendants in the hundreds of thousands. Many of these defendants are noninfringers. The infringement claims made in these file-sharing cases are a Potemkin village: Their