Company sues class of defendants for copyright infringement

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March 1, 2011

Company sues class of defendants for copyright infringement 

Courtney L. Davenport

In a rare twist on class action litigation, a company filed a defendant class action last month against a class of about 3,000 people for alleged copyright infringement. (OpenMind Solutions, Inc. v. Does 1-2,925, No. 3:11-cv-00092 (S.D. Ill. filed Feb. 2, 2011).)

OpenMind Solutions, Inc., which produces adult-entertainment movies, claims that the defendant class members use a software system called BitTorrent to download its movies for free. Instead of downloading material directly from a Web site, subscribers to BitTorrent type in a search for what they’re looking for, and the system hunts down other subscribers who have pieces of the movie on their computer systems—usually because they are in the process of downloading the movie themselves and have only a portion on their computers. When it has gathered all the pieces, BitTorrent sends the full movie to the subscriber’s computer. In essence, users of the peer-to-peer system are trading pieces of movies.

The problem for BitTorrent users is that downloads can be traced back to them because the system records the user’s computer Internet-protocol address. According to OpenMind’s attorney, John Steele of Chicago, the easy identification makes this case ripe for class treatment because each defendant can be proven to have traded pieces of OpenMind’s movies in the same way.

“Class actions were intended to deal with situations like ours in which there are a lot of infringers who have done our client harm, but any particular infringer did not do enough harm to bring an individual suit,” said Steele. “There are thousands of people actually stealing the products, and there’s no real way to stop them except through the court system.”

Although Federal Rule of Civil Procedure 23(a) allows defendant class actions by providing that members of a class “may sue or be sued,” such actions are rare and raise issues that aren’t usually a concern in plaintiff class actions. Some commentators argue, for instance, that Rule 23(b)(3)—the provision relied on by OpenMinds—is inapplicable because it requires that class members be allowed to opt out, and defendants will likely use that procedure to excuse themselves from the case.

Steele speculates, however, that defendants will realize they are better off staying in the class than facing individual suits, for which they would have to hire an attorney and possibly pay substantial damages.

The issue of class representation presents another complication: How will the defense attorneys be paid?

“In a lot of class actions, you create a common fund, and the attorneys get a percentage of that. But here, all the clients are going to win, at most, is the right to keep what they already have,” said Washington, D.C., class action attorney Joe Barton. “Assuming the copyright owner can’t establish liability and the class wins, how do you measure what they win?”

Barton said this uncertainty might result in inadequate class counsel because the defendants will likely be forced to hire inexpensive attorneys with no class action experience, making the case difficult to certify under Rule 23(a). More important, he argued, the adequacy of counsel might not be debated because neither plaintiff counsel nor defense counsel has an interest in proving that defense counsel is unqualified.

“There ought to be more scrutiny over defense class actions where the defendant class members are individuals without a lot of recourse,” said Barton. “[M]any people don’t know anything about class actions, so there’s an inequality there.”

Steele points out that the court would impose sanctions “at the first wisp” of OpenMind taking advantage of the defense class or suing people indiscriminately.

“Certain groups don’t like what we’re doing because they don’t like the idea of going after the little guy, but I’m not sure what other recourse we have,” he said. “It’s fundamental—we’re fighting theft. If nobody buys my client’s movie, they’ll go out of business.”

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