Evil Angel, DigiProtect Address Controversy Over Pursuit of File Sharers

VAN NUYS, Calif. — With piracy becoming an even hotter topic in recent months, the blogosphere has lit up with questions about a German company’s practice of aggressively pursuing alleged illegal file sharers on peer-to-peer networks.

Of particular interest is the Frankfurt-based DigiProtect’s relationship with adult studio Evil Angel.

In order to clear up accusations and misconceptions not only about DigiProtect’s methods to recover damages for its clients as a result of illegal file sharing, but also to clarify its relationship, both companies spoke to XBIZ seeking the set the record straight.

XBIZ reported on Aug. 21, that Evil Angel hired DigiProtect to track down and sue illegal file sharers that were making the studio’s copyrighted works available via P2P.

The contract between Evil Angel and DigiProtect was executed by former Evil Angel Vice President Chris Norman in January.

According to the contract, “[Evil Angel] is a film maker and a proprietor of the rights of use and enjoyment and exploitation of pornographic movies. [Evil Angel] suffers economic damages as a result of the illegal exploitation of the movies on so-called peer-2-peer networks. The object of the agreement is the appointment of DigiProtect by [Evil Angel] to implement suitable measures to prevent the economic disadvantage licensor is suffering.”

What Evil Angel did in effect was sign over the P2P distribution rights of its movies to DigiProtect, so the anti-piracy company could go after illegal file sharing on those networks in Evil Angel’s name. For DigiProtect to successfully win judgments it has to be established that it’s the legal copyright holder for the works in question.

“We basically said ‘All of our titles. Go after [illegal P2P file sharing],’” Evil Angel General Manager Christian Mann told XBIZ. “The way it worked is this: since no one was buying P2P rights, we assign P2P rights to you, DigiProtect. By doing so, you can now sue these people without Evil Angel itself having to bring suit in all these different jurisdictions,” which Evil Angel doesn’t have the resources or manpower to do.

DigiProtect pays all the legal expenses related to its pursuit of alleged illegal file sharers.

When DigiProtect either collects a judgment or settles, Evil Angel gets a percentage of the damages awarded — and Mann said Evil Angel has collected.

“It’s brought in some money — nothing huge,” Mann said. “They’ve sued and they’ve prevailed.”

Recent controversy has bubbled to the surface over a section in the contact entered into by DigiProtect and Evil Angel that gives DigiProtect the rights to distribute more than 800 Evil Angel movies via P2P networks. Some bloggers assert that DigiProtect itself is surreptitiously uploading the content in order to entrap file sharers — a claim Digitprotect’s key account manager Thomas Hein flatly denies.

The Framework Benchmark Agreement, a public document between DigiProtect and its client the licensor, is used as evidence during litigation to show the court that DigiProtect is in fact that legal copyright holder of the illegally shared content.

“We need to be granted those rights otherwise the whole system would not work,” Hein told XBIZ. “It has to be clear that our company has the rights and we use the rights exclusively to prosecute people. You will never find any content distributed from our company on the Internet and especially with the adult content — it’s illegal anyway,” because of the lack of age verification.

“Whoever uploads or downloads an adult movie [on P2P networks] is illegal,” Hein said. “So there is no contract that gives us the legal right to put something on P2P networks. Even if we would be doing that, we would be held accountable for distributing pornography to minors, which is a bigger issue than copyright infringement. So that is the first point that needs to be clear — there is no legal content distribution of adult material over P2P networks.

“The second thing is we’re not just doing this for the adult industry, we’re doing this for software companies and the music industry,” Hein said. “I can also tell you that we hold the rights for major studios from the U.S. and no one has said that we could be uploading their files on P2P. The people we caught, they did a crime and they have to be aware of that.”

Mann said that it was explained to him that DigiProtect does not in any way distribute the adult studio’s movies via P2P file sharing.

“There is so much P2P file sharing going on, there’s no need for DigiProtect to entrap people into it,” Mann said. “That would be like someone accusing the LAPD of throwing bricks through windows during the riots to entrap people into looting.”

Much of the recent public backlash on overseas blogs and on P2P message boards also is the result of the actions of British law firm Davenport Lyons who works on behalf of DigiProtect to send out cease-and-desist letters to people DigiProtect’s harvested the IP addresses of it believes are linked to illegal file sharing.

Hein estimates that the company has sent out 5,000 such letters and expect there to be 10,000-15,000 more next year. DigiProtect believes that these pre-settlement notices will deter potential illegal file sharing.

The BBC reported on Sunday that many people who’ve received C&Ds from Davenport Lyons deny copying the movies. The letters, which demands £500 (roughly $748), lists the name of the film along with the time and date it was allegedly downloaded.

“Lawyers representing DigiProtect say the £500 demand is calculated as a token sum in damages for lost sales plus the ‘considerable’ costs involved in obtaining evidence and legal fees,” according to the BBC article.

Evil Angel owner John Stagliano told the BBC he wasn’t aware the pre-settlement notices were asking for such a sum.

"It's not my understanding that they ask for anything near that,” Stagliano told the BBC yesterday. “I think the amount was $50. I would be very surprised and I wouldn’t be happy because it would mean it was completely misrepresented to me.”

With more than 6 million people in the U.K. alone engaged in P2P file sharing, Hein believes the widespread, aggressive effort by his firm is necessary to combat a growing global problem that affects all kinds of content producers. The added stigma of being caught allegedly illegally downloading porn adds to the controversy.

Since adult companies don’t have the wherewithal to engage in identifying international file sharers and then lacking the legal muscle to prosecute them simultaneously all over the world, DigiProtect performs a necessary service according to Hein.

“For example in Germany, the ISPs only keep the data for seven days, stored,” Hein said. “So if you’re a studio that says ‘I want to protect my copyrights in Germany.’ So what you have to do is first of all figure out who is downloading your material on P2P in Germany and then go every week to court and you have to get a court order for every Internet service provider in Germany. And I can tell you even if you are the biggest studio it is not financially feasible for you alone to go to court and make any money out of it.

"You would pay more money in expenses than you could get out of it. Now if there are several studios that assign the copyrights to us, we go to court, we get court orders for all the Internet service providers for all our customers so the legal cost can be spread over a lot of studios. That is the only way in Germany to make money out of it.

"That’s the reason why we have to be proprietor of the rights, because the law in Germany states this. The law in England states that we have to be the proprietor of the rights.”

Hein said that Evil Angel is not DigiProtect’s only adult client, but that confidentiality agreements prevent him from identifying others. Hein also said that while each contract is basically the same there could be restrictions and parameters as to the territory that DigiProtect can enforce the licensor’s rights.

DigiProtect incorporated in 2006, but Hein said it’s been involved in anti-piracy efforts three to four years earlier. The company has its roots in the music industry.