Wednesday, November 25, 2015

CEG TEK Settlement Demands: What are They?

I frequently get calls from individuals who ask me about an email they received from their ISP.  In it, their ISP informs them that they have been accused of copyright infringement, and the email includes information about the infringement in the lower portion of the email.  Most often, the email includes something called a "Case #" and a password.  Then the email invites you to visit copyrightsettlements.com and pay them some money.

Everyone who gets one of these immediately freaks out and thinks they've been sued for copyright infringement and their life is over.  They see visions of $150,000 default judgments dancing in their heads.  Wait. Before you freak out, go read my post about catastrophizing and calm down.

You have not been sued  

What you got is something referred to in the law as a DMCA takedown notice.  It is not notice of a lawsuit.  It's not even notice that a lawsuit is about to be filed.  It is a notice that a copyright owner is required to send to an Internet service provider -- like Comcast or Charter -- about suspected copyright infringement using that ISP's service.  In other words, it's actually a notice to Comcast (not you) telling Comcast that someone is suspected of using their service to violate the copyright laws.

Why Did Comcast Get It?

Why did Comcast get that notice?  Well, because the copyright laws obligate the ISP to do something about it or else the ISP is liable for the copyright infringement.  Let me say that another way.

Let's assume that someone (a subscriber) actually committed copyright infringement using the ISP's service.  That's a pretty big assumption because they are very often wrong, but let's make that assumption now.  Under the DMCA, the ISP is immune from liability for copyright infringement committed by any of the ISP's subscribers.  In other words, the subscriber might be liable for copyright infringement, but the ISP is not, as long as the ISP does what the DMCA requires.

So what is the ISP required to do to ensure that it is not liable for its subscriber's infringement?  One thing is respond promptly when a copyright owner gives the ISP notice of copyright infringement.  So when CEG TEK sends one of these notices to Comcast, unless Comcast honors that notice and does something about it, Comcast will be liable for its subscriber's infringement.  And since Comcast has lots of money (probably a lot more than any one of its subscribers), CEG TEK sends the notice to Comcast to try and make Comcast liable for its subscriber's infringement.  And unless Comcast (or whatever ISP) does something about the notice, then Comcast will be on the hook for potentially lots of money.  ISPs don't like that idea.

Why Did You Get It? 

Why did Comcast (or whoever your ISP is) send you the notice?  Well, to put it bluntly, because CEG TEK asked them to.  Note that I said the ISP has to do something to try and stop the alleged infringement or else the ISP becomes liable itself.  Coincidentally, CEG TEK includes right in its DMCA takedown notice a request for the ISP to forward that notice on to the subscriber directly.  

Now since the ISP is required to do something about the allegation of infringement, it might as well do exactly what CEG TEK asked. So the ISP sends the notice to the subscriber.  That way the ISP remains immune to liability.  And that is why you got a copy of the notice that was intended for your ISP.

What Should You Do About It?

This is the million dollar question.  All the people who call me ask:  What should I do?  And again, there is not one good answer.  What you should do typically depends on whether you did it or not.  

If you didn't do what you are accused of doing, the answer is simple.  Don't do anything.  In my opinion, if you know there is no way you are responsible for the copyright infringement you are accused of in that notice, then ignore it.  Some people worry too much to just let it go, but as far as I'm concerned you should not even consider paying a dime for something you know you didn't do.  

If maybe you did do it, then consider your options.  Or if maybe someone you know did it, again consider the options.  What are those options?  You have two:  Ignore the notice or pay the money.  That's it.  Two very clear options.  

Most people understand those are the options, but what they really want to know is how likely are they to get in real trouble if they pick Option A and ignore it.  If they don't pay, are they likely to get in even bigger trouble later?  I can't say yes, but I can't say no either.  CEG TEK (or at least its founder, Ira Siegel) used to file lots of copyright infringement suits.  I'm sure they made good money doing it, but they also got some heat too.

But it does not appear that CEG TEK is filing many suits these days.  It seems they are content to accept voluntary payments by people who receive these notices.  Does that mean they won't start suing people again?  Some other smart people suggest that they almost have to in order to compete with the other copyright assertion folks.  That logic makes some sense, but if they aren't suing people now, the real question is how risk averse are you?

What Is Peace-Of-Mind Worth To You?

So if you got one of these notices and you did what you are accused of doing, ask yourself how much risk are you willing to tolerate?  Some people I speak to say they are willing to risk being sued because the risk is fairly low.  For those people, that's the right decision.  Other people I speak with say that the peace-of-mind of knowing that this issue is behind them is worth the two or three hundred dollars that CEG TEK is demanding.  

Don't get me wrong.  Three hundred dollars is a fair amount of money.  But it's nothing compared to what the other copyright assertion companies demand when they file suit.  Make no mistake about it:  If you turn your back on the settlement number now, it will not be there later if a law suit gets filed.  

So you have to decide for yourself if you are comfortable with a small risk of paying a lot more money later in a messy law suit, versus the certainty of being out of pocket a few hundred dollars now but with peace-of-mind.  For many people, they kick the can and take their chances.  And so far, that risk has probably been worth it.  I am unaware of any lawsuits that CEG TEK has filed lately.  But if that notice is keeping you up at night, as they sometimes do, consider paying the money just to ease your mind.  The stress and heartburn just aren't worth a few hundred dollars.

I have to wrap up by reiterating my earlier advice:  If you didn't do what you are accused of, you should not even consider paying a dime.  Nothing.  Nada.  

Rest assured that sometimes these bittorrent "investigations" just get it wrong.  I have spoken with many accused people who denied doing anything wrong.  Sometimes I can tell they just don't want to admit it, but many times it is clear they didn't do it.  Little old ladies who live alone and need help to check their email on their ten-year-old computer didn't do it.  I never, never, never recommend that those people should even consider paying.  

Hopefully this has helped at least some of you better understand what that email means, and what you should do about it.

Monday, November 2, 2015

Dallas Buyers Club Update

Judge Jones is becoming increasingly leery of the Dallas Buyers Club folks here in Seattle.  So let me start by recapping some of the goings on so far.

Dallas Buyers Club started suing John Does here in Seattle back in July of 2014.  Over the subsequent months, Dallas Buyers Club filed about a dozen cases here.  They did the ordinary thing where they asked the judge for authority to get subscribers' names from their ISPs so they could name them in the suit.  The judge granted that request because on in its face it is a reasonable request.  Anyone engaged in legitimate litigation might ask for the same thing.

But after it got those names, DBC didn't amend its complaints to name anyone.  It pushed its “settle or ruin” policy but never actually did what it told Judge Jones it was going to do.  Then later DBC went back to the judge and asked for even more power.  It asked the judge to allow it to force the subscribers – whose names it now had – to provide testimony under oath.  Initially the judge denied that request because DBC didn't provide any details about what exactly it would be asking.  Instead, the judge told DBC to serve whatever subpoena it wanted and either the people served would object or they wouldn't.  But until there was some real definition to exactly what DBC was asking for, there was nothing the judge would do.

DBC chose to interpret the judge's order as authorizing it to serve any subpoena it wanted to demand anything it wanted, no matter how unreasonable.  When people started receiving those subpoenas, a few came to us and asked for help.  The subpoenas DBC was serving were patently unreasonable. For instance, all of them demanded that the subscribers appear for a deposition on less than a week's notice, and that the subscribers bring with them all manner of documents like information about their routers and software installed on their computers.  There was nothing even remotely proper about them, so we filed some motions to quash.

The judge agreed with us and quashed all those subpoenas, and then he expressed some real concern about how the cases were progressing.  The judge authorized DBC to move forward with drastically less onerous subpoenas, but he also cautioned DBC to either get their cases moving forward or risk having them dismissed.

So now several more months have gone by and still no one has been served.  Business as usual for DBC.  Since that $105,000 attorneys fees slap down in Eastern Washington, DBC – or whoever their real puppet master is – just has no stomach for an actual fight.

Not to be dissuaded, DBC pushed its luck and went back to the judge and asked again for even more authority to get more information from the subscribers.  More specifically, DBC is asking the judge to sanction several subscribers who just refused to attend their depositions and to give it more time to continue putting pressure on those subscribers to try and extract more settlements.

Well Judge Jones is having none of it.  He penned an order denying DBC any more subpoena power until DBC either demonstrates that this is legitimate litigation or starts dropping cases.  Particularly interesting is Judge Jones' reference to a Whitaker Law Group client, Jeff Pleake, who has been very vocal with his dissatisfaction over being wrongly accused of downloading movies he's never even seen.

And one more thing.  The DBC folks have been threatening to move forward on some sort of "ratification" theory of liability.  Basically, DBC is arguing that if a subscriber refuses to voluntarily give DBC whatever information DBC asks for, the subscriber should be liable for "ratifying" the copyright infringement even if the subscriber had nothing to do with it.  Well thankfully, Judge Jones is again having none of it.  In no uncertain terms, Judge Jones shut that down in a big way.  Bottom line, Judge Jones said "that theory is incomprehensible and rejected. This Court could not find
any case supporting such a theory."

See the order below.