Copyright Trolls, An Empirical Study Prof. Matthew Sag Loyola University Chicago School of Law

What is a troll?  NPE’ish definitions  Troll = the business of litigation is its business  Troll = “systematic legal enforcement of copyrights in which it has acquired a limited ownership interest.” Shyamkrishna Balganesh asymmetric stakes  ‘this suit is BS’ definitions  Troll = ‘bottom feeder’, in effect nuisance value settlements of ‘dubious’ claims Lack technical merit, Lack constitutional merit 2

A troll is a systematic opportunist, manifestations of opportunism are varied.  Opportunistic litigation strategy Weak claims – asserts rights it does not have, – poorly substantiated claims of infringement, – disproportionate remedies. Not bound by conventions of tolerated use – Patent: because NPE – Copyright not interested in the conventional market place (courthouse value> marketplace value, limited assignments)  Motive for rights acquisition is opportunistic Paper patents (courthouse value> marketplace value) Partial assignments, Looking for infringed works whose courthouse value> marketplace value.  Exploits sunk costs and unavoidable infringement 3

How are copyright trolls different to patent trolls?  The opportunism of copyright trolls is primarily directed towards statutory damages.  courthouse value> marketplace value  Makes weak cases stronger  Makes otherwise individually inconsequential infringements profitable  Status-based definitions clearly not helpful 4

How do Multi-Defendant John Doe suits work?  “Copyright Owner v. John Does 1 – N”  Alleging illegal file sharing using BitTorrent  Defendants identified by IP address – Joinder?, personal jurisdiction?  Early discovery from ISPs  Negotiate settlements – Threat of statutory damages, exposure, – Response to ‘it wasn’t me defenses’ 5

Are Lawsuits against BitTorrent users trolling?  Partly a question of motive, partly of tactics  RIAA is not copyright troll. End-user litigation aimed at sending a message not creating an independent revenue stream  Voltage (e.g. The Hurt Locker) Could be seen as a troll because independent revenue stream  Prenda Law (mostly porn) independent revenue stream + “extortion tactics” 6

How significant are MDJD suits?  Database = all copyright cases filed in U.S. federal district courts between January 1, 2001 and December 31, – Data from PACER – Was just 2d, 7 th and 9 th, but now all.  Identifying “John Doe” lawsuits “John Doe” and “Doe”  Identifying pornography Tedious plaintiff by plaintiff review. Assumes that one porn case is enough. 7

SOME IMPRESSIVE DATA 8

9 42% of copyright filings were multi-defendant John Doe suits in the U.S. in 2013

10 U.S. Federal districts where mdjd > all other copyright in 2013 Alabama (SD) Colorado Delaware District Of Columbia Florida (MD) Georgia (ND) Georgia (SD) Illinois (CD) Illinois (ND) Indiana (ND) Maryland Michigan (ED) Ohio (SD) Pennsylvania (ED) Tennessee (ED) Tennessee (WD) Washington (WD) Wisconsin (ED) Wisconsin (WD)

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12 Percentage of John Doe Law Suits by State, , , , , 2013

13 Percentage of John Doe Law Suits by Circuit, , , , , 2013

14 Districts where MDJD-Porn> all other copyright in 2013 Alabama (SD) ColoradoDistrict Of ColumbiaIllinois (CD) Illinois (ND)Indiana (ND)MarylandMichigan (ED) Pennsylvania (ED)Tennessee (ED)Tennessee (WD)Wisconsin (ED)Wisconsin (WD)

What (if anything) Should be Done?  What is driving this litigation?  (pervasive infringement)  Statutory damages  Permissive joinder & Early discovery  Porn “extortion” – Districts where MDJD-Porn>MDJD-Other in 2013 – Alabama (SD), California (SD) Colorado, District Of Columbia Florida (MD) Florida (SD), Illinois (CD) Illinois (ND) Indiana (ND) Indiana (SD), Iowa (SD) Louisiana (ED), Maryland Michigan (ED), Michigan (WD), Minnesota, New Jersey, New York (ED), Ohio (SD), Pennsylvania (ED) Tennessee (ED) Tennessee (WD) Texas (ND) Texas (SD), Wisconsin (ED) Wisconsin (WD) 15

16 Count of John Doe Copyright Lawsuits 2000–2013, by District

What (if anything) Should be Done?  File-sharing is wrong, but …  Fairness to defendants Statutory damages make a 5% case a winning case  Abuse of the judicial process (esp. threats)  Proposals  Reasonable Statutory damages  Conditional joinder/discovery Safeguards, agreement to reasonable statutory damages  Sever & Consolidate 17