Decisions of the federal courts rarely make for riveting sci-fi reading, but the Prenda case is an exception. Earlier this week U.S. District Judge Otis D. Wright II handed down a blistering decision against alleged porn trolls Prenda Law and its principals John Steele, Paul Duffy, Paul Hansmeier, and Brett Gibbs.
The Prenda case is a classic demonstration of how easily copyright law can be abused by parties with strong financial motives and no scruples whatsoever. Here's how this scam worked.
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Prenda buys up copyrights to a handful of porn movies. It then creates shell corporations that "own" the copyrights. It hires a hand-puppet attorney (Gibbs) to represent said shell corporations. It lurks on BitTorrent networks collecting the IP addresses of people who download the porn files, then issues a subpoena to their ISP demanding their names and addresses.
Hand puppet then sends a cease-and-desist letter to the downloaders offering to settle the case out of court for $4,000, or slightly less than the minimum cost of hiring a lawyer and defending themselves. The vast majority of downloaders decide they'd rather pay than admit to being porn fiends in court. If someone challenges the law firm, they quickly drop the suit and move on to the next victim.
They then repeat the process thousands of times, netting millions of dollars, all tax-free.
Prenda goes where RIAA has gone before
If that MO sounds eerily familiar, that's because most of it was taken directly from the playbook of the RIAA, which used similar tactics against music and movie file swappers for years (though the RIAA's average settlement was closer to $3,000).
Judge Wright was having none of that. He gave Prenda a galaxy-class smackdown, accused the attorneys of fraud, urged the FBI to prosecute them under the RICO act, the IRS to investigate them for tax evasion, and their respective state and federal bars to revoke their shyster credentials. He wrote:
Plaintiffs have outmaneuvered the legal system. They've discovered the nexus of antiquated copyright laws, paralyzing social stigma, and unaffordable defense costs. And they exploit this anomaly by accusing individuals of illegally downloading a single pornographic video. Then they offer to settle -- for a sum calculated to be just below the cost of a bare-bones defense. For these individuals, resistance is futile; most reluctantly pay rather than have their names associated with illegally downloading porn. So now, copyright laws originally designed to compensate starving artists allow starving attorneys in this electronic-media era to plunder the citizenry.