The chances that independent filmmakers and porn studios can find a cost effective way to sue thousands of alleged film pirates appears less likely with each passing day.
Last week, lawyers representing producers of the B-film "Far Cry" dropped more than 4,500 people from a lawsuit filed in federal district court in Washington, D.C. that accused them of illegally sharing the movie via the Internet.
What prompted the removal of defendants from the suit was a decision by Rosemary Collyer, the judge in the case, who said she wanted to finally rule on whether her court had jurisdiction over the thousands of defendants who didn't live in the Washington, D.C. area. She wanted to hear arguments on the issue, but instead, the filmmakers responded by dropping all but about 140 defendants who lived near Washington, D.C.
Thomas Dunlap, attorney for the filmmakers, told CNET a week ago he planned to refile the complaints in district courts closer to the defendants' homes "hopefully" by Thursday. As of today, however, new complaints had yet to be refiled. In an e-mail to CNET this afternoon, Dunlap sounded less certain about timing.
"We are not refiling against all of them at once," Dunlap wrote. "We are filing a few at a time initially in various jurisdictions. The cases outside of DC, Virginia and Maryland [which will be pursued by Dunlap's firm] are in the hands of [other law firms that Dunlap said he has partnered with] so I cannot predict how soon they will be filed...Because the copyright statute of limitations is three years we plan to pursue the list over the course of the next year in waves."
Lawyers who represent some of the defendants aren't buying Dunlap's explanation. Some opposing counsel say they are skeptical about whether Dunlap's 12-lawyer firm can afford to litigate in courts across the country--at least not against all the people the law firm initially sued--and neither can his clients. As for farming out the complaints, skeptics say that there isn't enough money in these cases to make it profitable when it has to be divided among Dunlap's firm, outside counsel, and the filmmakers. Some opponents believe that Dunlap's original business model--which called for naming thousands of people in a single complaint and litigating against them in a single court--is busted.
Robert Talbot, a law professor at the University of San Francisco who represents more than 20 people accused by Dunlap's clients, didn't want to claim victory yet. He said he wanted to avoid prematurely claiming "mission accomplished."
"I'm telling clients to wait and see [if Dunlap re-files]," Talbot said. "Dunlap has told us in the past he would refile. But doing that will cost a great deal more money. It looks like their business model must change dramatically. It's going to be difficult and I can't figure out how they are going to do it economically."
The courtroom setbacks in the "Far Cry" case doesn't bode well for Dunlap's other indie-studio clients, including the makers of the Oscar-winning film "The Hurt Locker." It also is unlikely to be welcome news for adult-film producers who have attempted to duplicate Dunlap's legal strategy.
While Judge Collyer's decisions in the "Far Cry" case aren't binding on other courts, it isn't a good precedent for anyone filing these mass lawsuits.
At this point, the fundamental problem with Dunlap's plan appears to be his firm's inability to persuade some Internet service providers to quickly turn over names of accused file sharers.
To chase down alleged film pirates, Dunlap must first collect the Internet protocol addresses from people who allegedly share illegal files via peer-to-peer networks. He must then persuade a court to issue subpoenas to ISPs and require them to identify the owners of the IP addresses.
Time Warner Cable is one ISP that has objected to turning over large numbers of names. The company has argued that the cost and resources it takes to track down the information is too high. TWC has convinced the courts to require the company to only deliver a minimum of 28 names each month.
That means that Dunlap would need to wait five years before he could obtain the names of all the TWC subscribers his client accuses of illegally file sharing "Far Cry." Dunlap asked Collyer for a five-year extension and she promptly rejected the request. That's when he started to drop names from the "Far Cry" complaint.
These aren't the only potential pitfalls. For example, it hasn't been determined whether it's legal to name thousands of defendants in a single lawsuit
And who will pay to litigate against the people who refuse to settle? Fighting a prolonged legal battle with a feisty copyright defendant can be a huge money pit for copyright owners and there's no better example of this than Jammie Thomas-Rasset.
The Minnesota woman found liable for copyright infringement by two different juries has spent the better part of the past five years continuing her court fight and driving up the legal costs of her accusers, the four largest record companies. The labels have spent millions in legal fees and the case continues to drag on. It's important to note the record companies tried discouraging illegal file sharing by suing thousands of individuals for five years but gave the practice up in 2008.
One of the biggest tests for Dunlap's strategy will be whether he and his clients can afford to litigate cases like Thomas-Rasset's. If Dunlap's clients don't pursue at least some of the people who insist on fighting, then few defendants would feel any pressure to settle.
The rub is that it may not matter whether Dunlap and his clients go to the mat with file sharers. Two music industry sources who are knowledgeable about the labels' litigation campaign said the music companies didn't make a dime off their suits. They said copyright litigation on a mass scale simply doesn't pay for itself.
More proof of this came last week.
On Friday, a coalition of trade groups from the film and music sectors, including the Recording Industry Association of America and the Motion Picture Association of America, filed a report about copyright protection in the Internet age with the U.S. Department of Commerce, which is on a fact finding mission. In the report, the RIAA and MPAA made their feelings about litigation as an antipiracy measure very clear.
The coalition wrote: "The role of lawsuits solving the online theft problem is clearly limited."