Copyright Blog Update: Malibu Media Finally Loses and “Transformative Use” Artist Assumes the Risks of a Lawsuit

Stephen Carlisle February 13, 2015

This blog post will serve to update several previous blog posts. There have been two previous blog posts regarding adult film producer Malibu Media and their strategy of filing thousands of lawsuits against Bit-Torrent file sharers. ¹ Also, a previous blog post criticized the complete mess that the courts have made of the “transformative use” test in examining cases of fair use. ²

As a part of my duties at Nova Southeastern University, all Federal Court decisions mentioning the word “copyright” get pushed to my computer desktop. As a result, I see all the cases, and more particularly, the judgments, involving Malibu Media. With the exception of the cases previously noted by this blog, virtually every case that has gone forward and resulted in a judgment (i.e. not counting dismissals), the judgments have been in favor of Malibu Media. Also, in virtually every case, the individual defendants, having been identified and served, never contest the lawsuit, resulting in a default judgment against them. ³ Until now.

The case of Malibu Media v. Doe ⁴ is, to my knowledge, the first case that has gone to adjudication on the merits of the case since my first blog post that has been decided against Malibu Media. Recall that Malibu Media is the creator of pornography distributed under the brand name of “X-Art.” ⁵ It identified the Defendant by his Internet Protocol (IP) address and alleged that not only did he use the BitTorrent protocol to download Plaintiff’s works, but had been used to distribute 755 third party files from the period between July 20, 2012 and February 17, 2014. ⁶ “Defendant, a computer technician familiar with BitTorrent, was the only resident of the apartment during the relevant period.” ⁷

Malibu Media filed a subpoena for the Defendant Doe’s computers and storage devices. Doe opposed the motion with a motion for protective order, which was denied, the Court ordering him to turn over for examination “all computers, storage devices and electronic media in his possession.” ⁸ The problem for Malibu Media was that they found no BitTorrent files on any of his computers with one of their movies on it, only a “fragment file,” which as the Court observed, may have been the result of a search or even a preview of one of Malibu Media’s movies.

Immediately, Malibu Media contended that the Defendant had destroyed the evidence. This contention has some merit, and even the Court stated it considered “troubling Doe’s evasive and shifting answers…” ⁹

• Malibu found evidence that a flash drive, specifically, a Kingston Data Traveler G3, had been connected to one of the computers. He denied in his deposition having such a flash drive. Later, he admitted that he did have such a flash drive, kept at his office, and despite the Court’s order to turn it over to Malibu, he didn’t turn it over because Malibu only asked him for the hard drives. ¹⁰
• Doe testified that he had one other USB storage device. Later, he admitted he had several other USB storage devices, one of which was thrown away because it “failed.” ¹¹
• Doe denied he used BitTorrent, but Malibu found more than 300 file fragments on one hard drive. However, all of those predated the relevant dates of the lawsuit. Malibu also found that BitTorrent software had been installed on one hard drive, but removed on an indeterminate date. ¹²
• Despite denying he used BitTorrent, Malibu had, as previously noted, evidence from his ISP that his IP address had been used to distribute 755 third party files during the relevant time period.

Yet, despite all the evidence of “smoke,” the Court refused to find “fire.” Despite the fact that Doe had seemingly committed perjury about his BitTorrent usage, and the various USB devices in his possession, the Court found fault with Malibu for not moving to compel the production of the USB drives, once their existence was discovered. Much like a Mafioso who is undoubtedly a bad guy, the Court ruled that Malibu had failed to prove that any of the bad acts committed by Doe were done to infringe Malibu’s copyrights.

“Malibu Media of course has no standing to complain of alleged infringement of works to which it does not hold the copyrights. Because the alleged spoliation is not relevant to Malibu Media’s claims in this case, and we hold there has been no actual suppression of relevant evidence, Malibu Media has failed to satisfy [the relevant] four-pronged test.” ¹³

Indeed, the Court found “merit in the skepticism in which other district courts have greeted Malibu Media’s discovery motions and subpoena request in similar matters.” ¹⁴ Based upon this, the court seems to be operating with a less than even hand. On the one hand, it dismisses the bad acts of the Doe Defendant as “not relevant,” but finds relevancy in the actions of Malibu Media in cases not before him personally, involving different facts and different evidence, to have “merit.”

Was there actual suppression of relevant evidence? Hard to say, but I think the Court should have been a bit more skeptical. Don’t forget that Doe moved for a protective order that was denied. This delayed the production of relevant evidence and gave rise to the opportunity to tamper with the computers and suppress evidence. In the order denying his motion, Doe was ordered to turn over all the storage devices in his possession. He denied their existence and did not turn them over, even though they in fact did exist. Yes, Malibu should have moved to compel them once they learned about them, but my guess is the damage was done by that time. We’ll never know what was on one of the USB drives because Doe tossed it in the garbage.

On the one hand, I think the Judge let his prejudices get the better of him. On the other hand, if you’re the Plaintiff, you’ve got to prove your case, not just that the Defendant is a bad guy.

Previously, this blog lamented the state of the “transformative use” test particularly in the area of so called “appropriation art” where the first step is to make a copy of someone else’s work. ¹⁵ Highlighted in that blog post was the case of Blanch v. Koons. ¹⁶ Koons, the appropriation artist, won the case and as the prevailing party, moved for an award of attorneys’ fees. ¹⁷ I’m not sure what took so long for this ruling to make it into the law reporters, but the 2007 decision was just released this week to the Federal Supplement reporter. Here, the trial Court took a very interesting tact. Even though the Plaintiff artist claimed no damages and her case was judged by the trial Court to be “weak,” the Court refused to assess attorneys’ fees against her, basically telling the Defendant “if you play with fire, you can expect to get burned.” ¹⁸

“Because of [the appropriation artist’s methods], done without giving credit to the original artist, the appropriation artists can expect that their work may attract lawsuits. They must accept the risks of defense, including time effort and expenses involved. While that does not remove the artist from the protection of the statute, litigation is a risk he knowingly incurs when he copies the others [sic] work.” ¹⁹

So, the risk of losing a copyright infringement case is not the only risk in “appropriation art.” Perhaps the Pyrrhic victory is a risk as well.