Strike 3 Holdings Scores Big Legal Win in New Jersey

NEWARK, N.J.—To those who create content, copyright is a very important legal principle. Ask anyone who's tried to use the character of Mickey Mouse, created in 1928, in any project not approved by the Walt Disney Company—a corporation that actually has enough clout to keep getting Congress to extend the copyright laws so its characters remain covered by it decades after such right should have expired. But even adult companies have the right to protect their intellectual property, and one company that's among the most vigorous at self-protection is Strike 3 Holdings, which owns the rights to several websites and their content, such as Vixen.com and Tushy.com, among others. And while some federal judges have seen fit to attempt to deny that copyright protection because, through no fault of Strike 3's own, lots and lots of people steal its content, New Jersey-based U.S. District Judge Noel L. Hillman has ruled that Strike 3 has the legal power to subpoena information that would help identify 13 of the people the company accuses of stealing its material. The problem has always been that many internet users don't identify themselves by name, much less provide their physical addresses, so companies like Strike 3 are left with trying to identify them through their IP addresses—a difficult method to say the least, since it requires the cooperation of ISPs to provide the information. Worse, some users are registered at locations other than their home address, and in one case, thousands of IP addresses were registered at a single farmhouse in Kansas. But IP addresses are still the best way to identify infringers, and Strike 3 has pursued them with a vengeance, having filed more than 3,000 subpoena requests over the past four years—enough that U.S. District Judge Royce C. Lamberth in 2018 labeled the company a "copyright troll," even though it simply wants people to pay for their porn so the company can stay in business. The case came to Judge Hillman as an appeal of the ruling of Magistrate Judge Joel Schneider, whose order denied Strike 3's plea for expedited discovery of the whereabouts of the 13 defendants named in the current action. ("Expedited discovery" is necessary because courts often move very slowly and things can happen quite quickly on the internet.) "Subject to entry of a protective order to be entered at the Magistrate Judge’s discretion, Plaintiff will be granted leave to serve a subpoena upon Defendants’ Internet Service Provider ('ISP') pursuant to Rule 45 of the Federal Rules of Civil Procedure ('Rule 45')," Judge Hillman wrote. "That subpoena will be limited in scope, but will permit Plaintiff to seek the name and address of the subscribers to the Internet Protocol ('IP') addresses identified in the captions of these matters for the time periods of alleged infringement as identified in the various complaints. Plaintiff will also be granted an extension of time within which to effectuate service." Previous objections to Strike 3's use of subpoenas have centered on the concept that simply having the IP address where a particular internet account is registered doesn't necessarily reveal the person or street address where the infringement occurred. In fact, last year, that issue was the subject of an Order out of the U.S. District Court for the Southern District of Florida, in which Judge Ursula Ungaro stated, "the Court finds that Plaintiff [Strike 3] has not established good cause for the Court to reasonably rely on Plaintiff’s usage of geolocation to establish the identity of the Defendant," and not only threw out the lawsuit which sought the IP address information, but dismissed the suit "with prejudice," and "ORDERED AND ADJUDGED that the Clerk of Court SHALL administratively close this case," adding that, "All future hearings are CANCELLED and all pending motions are DENIED AS MOOT." What that means is that Strike 3 is effectively shut out of pursuing copyright violators' IP addresses in federal courts in Florida. One of the courts' objections to issuing these types of subpoenas is contained in a ruling by U.S. Magistrate James Orenstein in the Eastern District of New York, which stated, "I have no reason to question the sincerity of Strike 3's stated commitment to ethical conduct. But as a practical matter, its assertion in that regard is no more than a promise that a court must hope it will fulfill because it has no realistic prospect of meaningful judicial oversight. As Strike 3 acknowledges, once it secures leave to engage in expedited discovery, it virtually never returns to court to continue prosecuting its claims. Indeed, of the hundreds of virtually identical cases Strike 3 has filed in this district recently, not one has resulted in adversarial testing of Strike 3's claims, and only one has seen an identified defendant file an answer." In other words, once Strike 3 identifies an infringer, its first effort is an attempt to reach a settlement with the violator rather than sue that person in court—a very time- and money-consuming procedure that would easily cost more than it could recover. However, that mattered little to Magistrate Schneider. "The innocent subscriber may have to pay a substantial sum to retain a lawyer to defend the lawsuit, or possibly settle to avoid incurring future costs," the magistrate wrote. "Negative publicity and embarrassment may occur from being named in a copyright infringement lawsuit [and] the fact that the innocent subscriber was named in a lawsuit may be revealed in an unrelated employment or credit search." Judge Hillman, however, disagreed with Magistrate Schneider's denial of Strike 3's expedited discovery motion, stating, "Plaintiff persuasively argues that the motions for expedited discovery and for an extension of time to effectuate service decided by the Magistrate Judge have a dispositive impact on its claim, as denial of those motions leaves Plaintiff without a means for discovering the identity of the placeholder Defendants, essentially preventing it from proceeding with these actions. "Plaintiff has asserted a valid copyright claim," he later added. "Unless the rules are construed to allow some reasonable method to determine against whom that claim should be asserted, Plaintiff will have presumably suffered a federal statutory wrong with no remedy. That is not just." More information on this case may be found in an article on Law360.com here (subscription required). Strike 3, of course, could only agree with that unassailable logic, and a spokesperson for the company told AVN, "We put significant resources and effort into producing the most in-demand content through our Vixen, Blacked and Tushy brands, and we appreciate the Court's recognition that we have a valid interest in protecting our copyrights." One thing is for sure, though: With copyright infringers likely operating in every state, Strike 3 may be in for a long haul in trying to get the federal court system to help it with a remedy for its losses.