Southern District of New York Decision Deals Heavy Blow to Mass Copyright Suit Profiteers Digitprotect

Published On April 21, 2011 | By ZwillGen | General, Litigation, Privacy

Last week, in Digiprotect USA Corp. v. Does 1-266, 10 CIV. 8759 TPG, 2011 WL 1466073 (S.D.N.Y. Apr. 13, 2011), the U.S. District Court for the Southern District of New York, determined that its concerns regarding the potential for unfairly “ensnaring unsophisticated individuals from around the country” in mass BitTorrent and P2P copyright infringement suits justified limiting discovery to those Doe defendants for whom a prima facie showing of personal jurisdiction could be made.  In doing so, the court dramatically reduced the number of potential defendants in the plaintiff’s case from 266 to 15.

The plaintiff, Digitprotect, is a German-based company known for purchasing limited copyrights from film producers for pornographic films so that it may then enforce those rights and “educate” consumers by bringing mass lawsuits and seeking modest settlements from individuals who have illegally downloaded or shared the film via BitTorrent or peer-to-peer networks.  However, before Digiprotect can seek settlements from consumers, it must first be able to identify them.  Thus, Digiprotect filed suit in the Southern District of New York and sought expedited discovery from Internet Service Providers for the identities of 266 users associated with IP addresses linked to infringing activity.

The Court initially granted discovery, but two ISPs, Comcast and Time Warner Cable sought protective orders arguing in part that the Court lacked personal jurisdiction over the defendants.  Indeed, based on testimony from the ISPs and Digiprotect, the Court found that out of the 266 IP addresses identified by Digiprotect in its complaint, only 10-15 were associated with account holders located in the state of New York.  Faced with this evidence, the Court expressed concern that allowing plaintiffs to seek broad discovery against all of the IP addresses, might lead defendants who are not subject to personal jurisdiction in New York to waive that objection and settle rather than devote the time and money necessary to fight jurisdiction.  As such, the Court limited Digiprotect to seeking discovery as it relates to those individuals for whom a prima facie showing of personal jurisdiction can be made, or in this case those Doe defendants specifically linked to an ISP account located in the state of New York, stating “[s]uch a showing is particularly important in a case such as this, where defendants will likely be unaware of their rights and unable to afford an attorney.”  In support of this limitation the Court stated:

Digiprotect has made no showing that any of the Doe defendants expected or reasonably should have expected their downloading of this film to have consequences in New York, particularly when the producer of the film is located in California. Furthermore, Digiprotect surely has no basis from which to allege that the unknown defendants derived substantial revenue from interstate or international commerce.

Since Digiprotect can thus make no prima facie showing of long-arm jurisdiction over out-of-state defendants, it is left with only those defendants present in the jurisdiction, over whom the court has in personam jurisdiction. Under these circumstances, the court is satisfied that a showing that an ISP account is located in the state of New York and corresponds to the alleged infringing of Digiprotect’s copyright is enough to make a prima facie showing of in personam jurisdiction with regard to the holder of that ISP account.

By requiring the plaintiff in this case to make a showing regarding jurisdiction, the Court has likely reduced the number of similar cases that will be brought in the future in New York, as it will be far more costly for plaintiffs to identify the infringing parties.  Due to the recent surge in popularity of mass BitTorrent and P2P copyright suits, it will be interesting to see if more jurisdictions adopt such a limited approach to discovery in these cases.

 

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