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File-sharing Lawsuits in 2016 Take Nosedive, Researchers Say

File-sharing Lawsuits in 2016 Take Nosedive, Researchers Say
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Jul 19, 2016 1:43 PM PDT    Text size: 

SAN FRANCISCO — File-sharing litigation appears to have been a “short-lived trend,” according to Lex Machina, a legal research firm operated by Lexis-Nexis.

Lex Machina said that the number of copyright lawsuits in the U.S. over file-sharing have dropped significantly this year — by more than half.

“In the second quarter of 2016, the drop off in the number of new file-sharing cases sharply accelerated, decreasing more than 50 percent over the first quarter (517 cases to 249 cases in the second quarter),” the research firm said.

“This suggests that file-sharing litigation, which had represented the majority of copyright litigation from the fourth quarter in 2014 through the fourth quarter in 2015, may have been a short-lived trend.”

Lex Machina defines file-sharing lawsuits as cases having "John Doe” defendants and accusations based on file-sharing technology such as BitTorrent.

In the past six years, most of the file-sharing suits have been filed by adult copyright holders in typical fashion: They would file complaints against Does and used early discovery mechanisms to determine the identities of the persons it alleged illegally downloaded films.

One in particular — Malibu Media, which operates X-art.com — has filed more than 4,300 infringement lawsuits in federal courts against those who illegally downloaded its films.

But X-art.com’s infringement numbers suddenly stopped. Since April 1, the adult company hasn’t filed any suits against alleged infringers.

Instead, the adult company is currently embroiled in a legal standoff with its former general counsel Keith Lipscomb and his Florida law firm, Lipscomb, Eisenberg & Baker.

X-art.com’s partnership with Lipscomb began to unravel after his firm stopped distributing funds to X-art.com owners Brigham Field and Collette Pelissier Field. In April, Lipscomb said the copyright operation was "winding down" because it was no longer profitable.  

X-art recently filed suit against Lipscomb and his firm in Los Angeles, while Lipscomb has filed his own suit against the adult company at Florida state court.

Another mass copyright infringement filer was the Prenda Law firm, which would set up a number of shell companies that purchased copyrights to adult videos and then seek judicial approval for early discovery mechanisms.

The shell companies would then mail letters threatening to sue unless the individual paid about $4,000 to “settle” the case.

By misusing the subpoena power of the court, a federal appeals court recently said, Prenda Law made millions of dollars from suing thousands of Does across the country.

The Prenda Law firm, no longer in business, dissolved in spectacular fashion and was forced later to defend itself against several sanction awards, which were upheld on appeal.

Things didn’t get better for the three controlling Prenda Law principals. Paul Hansmeier agreed to suspend his law license in Minnesota and is going through bankruptcy proceedings, John Steele faces disciplinary charges in Illinois and Paul Duffy died from heart and alcohol-related conditions. 

Prenda Law's surviving former members continue to be the subject of a federal probe over their trolling operation.

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