Counterclaims Alleging Copyright Misuse, Conspiracy Not Struck in BitTorrent Case

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By Anandashankar Mazumdar  

 

A defendant's counterclaims that a plaintiff in a copyright infringement proceeding had established a pattern of blackmailing BitTorrent users into settling claims that they had infringed adult videos were not immaterial, impertinent, or scandalous with respect to the proceeding, the U.S. District Court for the District of Connecticut ruled Aug. 16 (AF Holdings, LLC v. Olivas, D. Conn., No. 3:12-cv-01401-JBA, 8/16/13).

Denying a motion to strike, the court further ruled that allegations that the plaintiff had engaged in a civil conspiracy could not be struck for being false until there was some evidence for reaching such a conclusion.

Defendant Participated in BitTorrent Swarm

AF Holdings, LLC, is an entity organized under the laws of St. Kitts and Nevis that holds by assignment the copyright interest in several adult-oriented films, including Sexual Obsession featuring Canadian performer Sophia Santi, released in 2011 by Heartbreaker Films of Santa Clarita, Calif.

AF Holdings sued Elliot Olivas, alleging that he infringed their copyright interest in the film by entering a BitTorrent swarm and downloading an unauthorized copy of the video and distributing it to others. AF Holdings also brought claims of contributory copyright infringement and civil conspiracy.

Olivas counterclaimed, alleging abuse of process, copyright misuse, and defamation. Olivas also sought a declaratory judgment of non-infringement. AF Holdings moved to strike certain portions of the counterclaims relating to AF's history of bringing infringement actions against BitTorrent swarm peers. Olivas further alleged that AF Holdings did not exist and that the attorneys representing AF Holdings are the real parties in interest.

According to Olivas, AF Holdings is associated with a law firm, Prenda Law, which has brought claims against thousands of BitTorrent users. Olivas asserted that the law firm pressures defendants to settle through a form of blackmail, by threatening to make public the fact that a defendant has downloaded a pornographic film.

Judge Janet Bond Arterton first rejected AF's argument that its prior claims against other defendants were immaterial and impertinent and should thus be struck. According to the court, this allegation was not immaterial because it could be relevant to Olivas's counterclaim of copyright misuse.

Next, the court declined to strike allegations on the basis that they were scandalous. According to the court, the allegations that AF Holdings and its associated individuals and entities had practiced a pattern of blackmail or fraud was not “scandalous.”

Finally, to the extent that the plaintiff took the position that Olivas's allegations were false, an “unfounded conspiracy theory,” those allegations were yet to be proven.

AF Holdings was represented by Daniel Goldsmith Ruggiero of Raynham, Mass. Olivas was represented by Frances Codd Slusarz of Bethel, Conn.

 


Text is available at http://pub.bna.com/ptcj/31201401Aug16.pdf.