Blue film firm keeping up its barrage of suits

 

Malibu Media, LLC., an adult film company, filed 201 copyright infringement lawsuits in February. It also launched 747 cases in 2016, and 1,956 suits in 2015, according to Bloomberg Law data. If that sounds like a lot, here is a mind-rattling statistic: In 2014, the company accounted for up to 40 per cent of all copyright infringement claims in the country.

The company was founded by a husband and wife team in 2009. They have said they aim to upend the industry with a higher quality of erotic films. Malibu launched the site x-art.com and created porn that was more expensive to make than most of its competition. The firm charged a monthly subscription fee of $40 for access.

In 2011, after two years of promising growth, their subscriber base plateaued at around 50,000 users. The company soon determined that 300,000 people were watching pirated versions of the company’s movies each week. Malibu filed its first copyright infringement lawsuit in February, 2012.

Copyright troll?

Is Malibu’s goal to deter piracy and protect its interests in its films, or does it view copyright infringement litigation as a business model in itself?

The media has been keen to berate so-called copyright trolls, owners of intellectual property who file large quantities of dubious lawsuits and view litigation as a moneymaker instead of as a deterrent against future infringement (one of the most notorious these operations, Prenda Law, was recently exposed for fraud). On the other hand, however, the civil justice system does generally encourage copyright owners to protect their intellectual property from unauthorized exploitation.

In a recent New Yorker piece on Malibu, U.S. District Judge Michaeal Baylson stated: “Malibu [Media] is not what has been referred to … as a ‘copyright troll.” He clarified: “Rather, Malibu is an actual producer of adult films and owns valid copyrights.”

Although no one disputes that Malibu owns copyrights—these may number in the hundreds and the firm  reportedly spends millions of dollars each year on its productions— its actions leave many legal pundits scratching their heads regarding the true intent of the company’s lawsuits. Most of Malibu’s claims are brought against John Does, defendants not actually named. The company raised eyebrows  last year when it dropped one such lawsuit after its motion to dismiss a rare counterclaim by a defendant was denied. Would a minor hiccup deter Malibu’s case if it were truly grounded in the spirit of preventing infringement?

Perhaps Malibu didn’t feel that it had a strong argument in this particular case, or maybe the company simply had a few hundred others like it that could be more easily won without paying the legal fees associated with what would likely be a slightly more protracted proceeding. Nearly none of Malibu’s suits reach trial, which allows the company to file such a high volume of low cost and high reward claims.

In one such case, Malibu Media, LLC v. John Does 1 through 10, 12-3632, 2012 WL 53832304 (C.D. Cal. June 27, 2012), U. S. District Judge Otis D. Wright in Los Angeles (a Southwestern alum, by the way) explained his concerns with Malibu’s behavior:

The Court is familiar with lawsuits like this one. These lawsuits run a common theme: plaintiff owns a copyright to a pornographic movie; plaintiff sues numerous John Does in a single action for using BitTorrent to pirate the movie; plaintiff subpoenas the ISPs to obtain the identities of these Does; if successful, plaintiff will send out demand letters to the Does; because of embarrassment, many Does will send back a nuisance-value check to the plaintiff. The cost to the plaintiff: a single filing fee, a bit of discovery, and stamps. The rewards: potentially hundreds of thousands of dollars. Rarely do these cases reach the merits. “

What’s next?

As demonstrated by the stats for February, it’s unlikely that Malibu will slow down anytime soon. The statutory damages potentially owed by each defendant in an infringement suit, paired with the risqué nature of the claims against them, creates ideal conditions for quick settlements and a recurring cash grab for Malibu. It’s clear why Malibu continues to bring the claims, and why so many in the legal profession take umbrage with them—and some, like Chicago lawyer Jeffrey Antonelli (shown above) have become notable legal adversaries of the firm.

What remains to be seen, however, is how the courts will treat Malibu if it continues filing thousands of claims each year. Will judges, who are notoriously averse to wasting time in their courtrooms, continue to hear Malibu’s arguments or will they begin to side with the tech bloggers who see the company’s claims as completely frivolous?

The judicial testiness may get more acute as partisan jams in Washington keep lawmakers from filling almost 100 openings on the federal bench, and from taking up recommendations to create dozens more new judicial posts to deal with the hundreds of thousands of criminal and civil cases piled up in the federal courts. Independent experts say it’s taking federal courts longer and longer to deal with cases, with judges getting less and less time to weigh their merits. With each federal district judge now juggling roughly 500 to 600 cases per year—and some handling as many as 1,000—how much judicial restraint will be reasonable and demonstrable to a blue moviemaker who launches the equivalent of one jurist’s annual caseload?