Last week we reported that Strike 3 Holdings, the most active copyright litigant in the US, had stopped filing new lawsuits in federal courts.

A few days later we found out that the adult entertainment company hadn’t really halted its efforts. Instead, it had moved to a Florida state court where it targeted dozens of alleged copyright infringers at once.

This maneuver is controversial. Copyright cases are a matter of federal law and generally don’t belong in state courts. However, Strike 3 filed their cases as a complaint for “a pure bill discovery.”

This means that, instead of filing a copyright complaint, it asked the court to allow it to request subpoenas against ISPs to identify the alleged pirates. That information can then ‘possibly’ be used to file a federal case. Or it can be used to directly demand settlements from alleged infringers.

The advantage of the latter option is that Strike 3 can target dozens if not hundreds of alleged pirates in a single case. This saves tens of thousands of dollars in filing fees, as many federal courts only allow one defendant per case.

The move to state courts has prompted objections from various copyright attorneys. They argue that these cases don’t belong in state court and, as we highlighted a few days ago, the general belief is that Strike 3 is taking this route to save money.

The company itself sees things differently. Just days after we pointed out the lack of action in federal courts, the company filed a handful of new cases. However, these come with a twist.

The new cases we spotted specifically target IP-addresses that are associated with subscribers who objected to Strike 3’s state court shortcut. The timing, which coincides with our reporting, is interesting, and so are Strike 3’s arguments.

In the new complaints, the company states that it took its cases to state court to save “judicial resources” at the federal court. That the same move also saves tens of thousands of dollars in legal costs for the company itself isn’t mentioned.

“In an effort to conserve Federal judicial resources, Strike 3 originally moved to discover Defendant’s identity utilizing a state court procedure in Florida where Strike 3’s infringement detection servers are located,” Strike 3 writes (pdf).

“Defendant objected asserting that the action is more properly litigated in the federal court of his or her domicile. Because Plaintiff is amenable to litigating the matter in either forum, this suit was initiated,” the company adds.

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Strike 3’s suggestion that it merely wanted to help bring down the caseload at the federal court is something many skeptics will doubt. Whether it’s true or not, it does reveal that the company didn’t intend to file federal cases against all defendants.

After all, that would ultimately result in the same caseload for the federal court.

In other words, the plan was to reveal the identity of alleged pirates through the state court without filing a copyright case. The company could then use that information to extract settlements from these defendants, for a fraction of the time and costs at the federal court.

But apparently the costs reduction is just a by-product. The real goal here, according to Strike 3, was to conserve federal judicial resources.

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This week we have two newcomers in our chart.

6 Underground is the most downloaded movie.

The data for our weekly download chart is estimated by TorrentFreak, and is for informational and educational reference only. All the movies in the list are Web-DL/Webrip/HDRip/BDrip/DVDrip unless stated otherwise.

RSS feed for the articles of the recent weekly movie download charts.

This week’s most downloaded movies are:

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Most reports of copyright-based legal action in the United States center on the unlicensed downloading, sharing, or distribution of movies, TV shows, music and software.

Albeit at a slower rate, other less mainstream materials are also detailed in infringement complaints, notably copyrighted scientific and research papers, often with pirate sites like Sci-Hub or Libgen somewhere in the equation. This week a relatively rare complaint was filed in a US court protesting the illegal sale of copyrighted petroleum industry documents.

The application for a DMCA subpoena, filed at a Delaware district court by powerful oil and gas industry association American Petroleum Institute (API), claims that its authored standards documents are being made available online without its permission.

“For decades, API has authored standards for the safety and quality of products in the petroleum and gas industry. As author, API owns the copyright in these standards and has registered the copyrights with the U.S. Copyright Office,” counsel for API writes.

“The copyrighted standards constitute a very valuable asset to API. Indeed, sales of the API standards to petroleum and gas industry professionals create considerable income for API.”

According to API, others are also benefiting from the sale of its standards. The application lists several problematic domains (e-standard.org, e-stds.org, pdfstandards.org) all of which direct to one main site located at e-standardstore.org.

“This company is not an authorized distributor of API’s standards. Despite not being an authorized distributor, these links display images of API’s logos. This unauthorized use of API’s logos falsely suggests to consumers that this company is an authorized distributor of API standards,” API adds.

The E-Standards.org ‘pirate’ site

As the image above shows, API’s publications are easily discoverable on the infringing site. API says there are at least 1,700 standards for sale in PDF format, which is problematic in itself since the association only offers physical standards which means the downloads must be copies.

“Additionally, API does not permit sales of its standards in PDF format (or any other electronic format) by anyone. Therefore, the sale of downloadable or e-mailed copies of API’s standards are clearly sales of unauthorized copies or scans of API’s publications,” API adds.

API says that after investigating the ‘pirate’ site’s IP addresses, they were determined to be operated by Cloudflare. As a result, API wants the CDN company to immediately terminate its services utilized by E-Standards.org while handing over the personal details of whoever is behind the platform.

From the API subpoena to Cloudflare

The Delaware court quickly signed off on the API subpoena so some type of action by Cloudflare can be expected soon. That being said, this set of domains isn’t only a thorn in the side of API but also various other specialist organizations that author their own standards.

According to Google’s Transparency Report, all of the redirection domains have been the subject of DMCA notices, some of which date back to 2013. The main domain cited by API (E-Standards.org) is also at the center of most additional complaints including those filed by safety company Underwriters Laboratories, International Organization for Standardization (ISO), the National Fire Protection Association, and American Water Works Association.

A copy of the DMCA subpoena to Cloudflare is available here (pdf)

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In 2014, we reported on a lawsuit filed against Tom Kabinet, a Netherlands-based online marketplace for used eBooks.

Fearing that the sale of such content would undermine their business model, the Dutch Publishers Association (NUV) and the General Publishers Group (GAU) sought an injunction to restrain Tom Kabinet from further sales. The request was denied and went to appeal, with a succession of local courts seemingly unable to determine whether the sale of used eBooks is permissible under EU law.

So, in common with other complex copyright matters, questions were sent to the Court of Justice of the European Union (CJEU) to determine whether the principle of exhaustion, whereby a copyright holder’s right of distribution is exhausted after the first sale of a product, applies to eBook content as it does software (pdf).

In September 2019, Advocate General Szpunar delivered his non-binding opinion, advising that exhaustion under Article 4 of the InfoSoc Directive does not exist and that the provision of eBooks falls under the copyright holder’s right of communication to the public.

The CJEU has now handed down its decision which broadly concurs with the opinion of the Advocate General.

“The Court found that the supply by downloading, for permanent use, of an e-book is not covered by the right of ‘distribution to the public’ provided for by Article 4(1) of Directive 2001/29, but that it is covered by the right of ‘communication to the public’ provided for in Article 3(1) of that directive, in which case exhaustion is excluded under paragraph 3 of that article,” the CJEU release reads.

The CJEU decision references an underlying World Intellectual Property Organisation (WIPO) Copyright Treaty, noting that the EU legislature intended that the rule of exhaustion be reserved for the distribution of physical objects, such as paper-based books.

“By contrast, the application of that rule of exhaustion to e-books would be likely to affect the interests of rightholders in obtaining appropriate reward much more than in the case of books on a material medium, since dematerialized digital copies of e-books do not deteriorate with use and are, therefore, perfect substitutes for new copies on any second-hand market,” the Court notes.

In respect of whether the supply of used eBooks represents a “communication to the public”, the Court said it considered whether technical means different to those previously used were deployed, or whether the communication was made to a “new public”, i.e an audience that wasn’t taken into account by the copyright holders when they authorized the initial communication to the public.

“In the present case, since the making available of an e-book is generally accompanied by a user license authorizing the user who has downloaded the e-book concerned only to read that e-book from his or her own equipment, it must be held that a communication such as that effected by Tom Kabinet is made to a public that was not already taken into account by the copyright holders and, therefore, to a new public,” the decision reads.

On those grounds, the Court (Grand Chamber) ruled as follows:

The supply to the public by downloading, for permanent use, of an e-book is covered by the concept of ‘communication to the public’ and, more specifically, by that of ‘making available to the public of [authors’] works in such a way that members of the public may access them from a place and at a time individually chosen by them’, within the meaning of Article 3(1) of Directive 2001/29/EC of the European Parliament and of the Council of 22 May 2001 on the harmonization of certain aspects of copyright and related rights in the information society.

The ruling was welcomed by publishing group GAU.

“Now that the European Court of Appeal has followed the argument of the GAU / Media Federation and the conclusion of its AG, it is clear that what Tom Kabinet has done for all these years is contrary to copyright,” a GAU statement reads.

“The decision is not only important for the book sector, but also for the music and film industry, because now also for music and film, downloaded copies may not be resold. The GAU / Media Federation is happy that after many years there is finally clarity about the application of copyright to e-books.

“The GAU / Media Federation will now investigate with authors and publishers what recoverable damage Tom Kabinet has caused,” GAU concludes.

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