CHICAGO — Eighty-eight percent of all copyright-trolling cases in the U.S. in 2014 involved an adult entertainment film, according to a new study on intellectual property litigation.
The study, titled "Intellectual Property in U.S. District Courts: 1994-2014" and authored by Matthew Sag, a professor at Loyola University Chicago School of Law, also noted that one porn company — Malibu Media, aka X-art.com — accounted for 80 percent of all John Doe suits in 2014.
Sag’s report, just released yesterday, undertakes a broad-based empirical review of intellectual property litigation in federal district courts from 1994 to 2014.
It undertakes a systematic analysis of more than 190,000 individual case filings and examines the subject matter, geographical and temporal variation within federal IP litigation over the past two decades.
In the study, Sag said that the numbers of porn copyright infringement claims in the past four years have remained at a steady high rate.
“[A]lthough BitTorrent monetization has always been closely associated with pornography, the percentage of pornography in the John Doe category has varied from 70 percent in 2010, 93 percent in 2011, 85 percent in 2012, 69 percent in 2013 and most recently, 88 percent in 2014,” Sag wrote.
“I have criticized the Copyright Office for ignoring this phenomenon; however, in light of the 2014 data it is increasingly apparent that policymakers should be cautious about extrapolating from current trends in this context because the BitTorrent monetization era cases appear to be inherently idiosyncratic.
One measure of this idiosyncrasy, Sag said, was the extent to which litigation is driven by just a few porn companies that appear to be copyright trolls. Those trolls typically enforce copyrights it owns for purposes of making money through litigation, in a manner considered unduly aggressive or opportunistic.
“The trend from 2012 to 2014 is one of increasing concentration of plaintiff activity,” Sag wrote. “In fact, the pornography producer, Malibu Media is such a prolific litigant that in 2014 it was the plaintiff in over 41.5 percent of all copyright suits nationwide.
“John Doe litigation is not a general response to Internet piracy; it is a niche entrepreneurial activity in and of itself.”
When reached today, Sag told XBIZ that he thinks that Malibu Media, or X-art.com, has found a way to transform copyright infringement from a problem into an opportunity with big returns.
Sag said he believes Malibu Media could be making up to $10 million a year out of copyright infringement litigation alone.
“To some extent, they are taking advantage of a loophole in the law,” he told XBIZ. “Statutory damages were originally intended to provide relief for copyright owners whose actual loss was difficult to calculate and to serve as a deterrent.
“There is no doubt that Malibu Media is getting some compensation and perhaps even creating something of a deterrent, but their primary aim seems to be monetizing infringement as a separate profit center. That is not really want statute three damages were meant to do.”
Sag said that he’s heard stories of Malibu Media attorneys being “quite indifferent to evidence that they are going after the wrong people.”
“I think that misidentification is quite common when all you have to go on is an IP address, but that it's quite difficult for people accused of infringement to prove their innocence.”
Nevertheless, Sag said that adult content creators should be entitled to copyright protection.
“My only issue with this type of litigation is that the statutory damages available are absurdly excessive and that some plaintiffs in Malibu Media's position have resorted to sleazy tactics designed to leverage the social embarrassment some people feel about pornography.
“Some judges have called this extortion, and it certainly comes close.”
