In the Northern District, Prenda’s “AF Holdings” client has been hit with $22,531.93 in sanctions for bringing a frivolous copyright claim, with a goal of deterring future abuse of copyright law to coerce settlements.
According to Judge Chen — who is the same judge who sanctioned Charles Carreon for his abusive litigation in the ‘Satirical Chas’ First Amendment case — AF Holdings’ claims were frivolous for a variety of reasons. (I use “AF Holdings” and “Prenda” interchangeably for obvious reasons.)
First, Chen considered the circumstances surrounding the ‘Alan Cooper’ issue. Chen dismisses Prenda’s argument that Alan Cooper’s “repudiation” of his signature on various documents was a conspiracy concocted by the EFF and other nefarious social terrorists, saying the argument is “sheer speculation” backed by little (if any) evidence.
Chen also brushes aside Prenda’s alternative argument that, even if Cooper’s signature on copyright assignment documents were forged, it wouldn’t matter because only the assigning party’s signature is needed to have a valid transfer of copyright interest. Prenda’s argument misses the mark, according to Chen, as the determinative issue is whether AF Holdings had standing to bring a claim in Federal courts at all. I confess that I don’t quite understand this distinction, but will update this post once I’ve had time to consider it.
Second, Chen follows a number of other courts in concluding that Prenda’s investigation in identifying the alleged BitTorrent user was unreasonable in that Prenda named “the alleged infringer simply because he best fit the demographic that is attracted to its content.”
Third, Chen assailed Prenda’s conduct in litigating the matter, from filing a motion to compel responses when the defendant’s responses weren’t yet due to crying foul over being ordered to post an undertaking. Chen also suggests that Prenda abused the litigation process in seeking a stay:
“AF was likely motivated to file its motion to staydiscovery in February 2013… in order to keep its 30(b)(6) deposition from going forward; to deprive [the defendant] of evidence needed to oppose AF’s then-anticipated motion to reconsider the undertaking ruling; and to prevent adverse information from being brought to light which could be used against it in the proceeding before Judge Wright of the Central District of California.“
Finally, Judge Chen found that AF Holdings was not motivated to protect a legitimate copyright, but to coerce settlements — perhaps even going so far as to upload the files to BitTorrent themselves:
[A]s indicated by the findings made by Judge Wright in his case, AF does not appear to have been motivated to file suit in order to protect the copyrighted work at issue. Rather, AF’s business model was to sue people for downloading pornography in order to coerce settlements. [...] [Defendant] has offered evidence – the Neville declarations – which indicate that persons affiliated with AF used the alias “sharkmp4” to post links on the Pirate Bay website to many of the copyrighted works in order to induce users to download the works so that they could then be sued for copyright infringement. This evidence corroborates Judge Wright’s finding that the motivation for this and similar suits is to sue and coerce settlement. [...] [N]otably, what AF has not done is offer any counterevidence such as a declaration from Mr. Steele in which he denies that he is “sharkmp4” or other evidence that AF did not take steps to induce users to download the subject works. This evidence could easily have been offered by AF as a part of its opposition brief. AF’s failure to submit any factual denial under oath is telling.