Court Allows Lawsuit Over Abusive Copyright Trolling DMCA Notices To Move Forward

from the keep-an-eye-on-this-one dept

Last summer we wrote about an interesting case involving the latest evolution of copyright trolling, involving Jon Nicolini, who some copyright troll watchers may recognize from his participating in an earlier generation of copyright trolling, when he was a sketchy "forensic expert" for copyright trolling firm CEG TEK. These days, Nicolini runs his own firm, Okularity, which appears to have created a new form of copyright trolling. According to the lawsuit, rather than file lawsuits as the pressure point (as was common in the past), Okularity sends a ton of DMCA takedown notices to social media companies, and then once your account gets taken down, Nicolini pounces and demands huge sums to rescind the notices, so you can get back your account.

As we wrote over the summer, one of Okularity's targets was the well known Paper Magazine, put out by the publisher Enttech Media Group. Enttech said that Okularity sought to have Paper Magazine's Instagram account shut down, and then offered to "settle," demanding a pretty massive sum in the process. The lawsuit alleged violations of DMCA 512(f) which is the (unfortunately) mostly toothless part of the DMCA that is supposed to allow those on the receiving end of bogus DMCA takedowns to fight back. In practice, however, courts have mostly rejected all 512(f) claims, or made it so they're basically impossible to do anything useful with. Because of that, any time we see a 512(f) claim that has legs, we pay attention.

The original complaint also tried to argue that Okularity violated the RICO statute, and long time readers here know what we think of RICO claims. While there did appear to be some unauthorized practice of law happening, there didn't seem to be nearly enough to make a RICO claim -- because there's basically never enough to make a RICO claim. We predicted that the RICO claim would get tossed out, but that the 512(f) claim might live on.

Turns out, we were right.

While the case has had some twists and turns, this week the judge tossed out the RICO claims, but is allowing the 512(f) claims to move forward. Nicolini and Okularity had argued that Enttech's lawyer, Robert Tauler, should face Rule 11 sanctions for ignoring evidence regarding their fair use analysis, but the court rejected those as well. Tauler did have to file a third amended complaint, however, to get to this point, as the court did find the first two complaints somewhat deficient.

But on the key point -- 512(f) -- the court notes that the case can continue, even under the confused Lenz standard in the 9th Circuit, that basically said (1) DMCA filers have to "subjectively" consider fair use to be a "good faith" filing, but (2) automated takedowns may be okay... because we say so. Nikolini and Okularity argued that they do consider fair use before sending notices, while Enttech argued the notices appeared to be totally automated. The court basically says -- Enttech has met the initial burden that the case can move forward.

One key point of contention in this: the takedown letters sent by Okularity do contain a "discussion of infringement and fair use," Okularity claims that shows that it does consider fair use. Enttech responded that every single notice Okularity sends contains an exact copy of this discussion, suggesting no actual analysis is done, and it's just a cut-and-paste. This point is what the judge focused in on:

ENTTech’s allegation that the DMCA notices contained an analysis of infringement and fair use presents a question of first impression with respect to the standard for pleading a claim under § 512(f). Is it sufficient for ENTTech to allege that, notwithstanding the takedown notices’ explicit and extensive fairuse analysis, Defendants did not actually or sufficiently consider fair use before issuing the takedown notices? At first blush, the fact that the DMCA takedown notices contain fair-use analyses—even if those analyses are identical and pro forma—seems to satisfy the requirement to “consider” fair use before issuing a takedown notice. See Lenz, 815 F.3d at 1154. The presence of the purported fair-use analysis in each takedown notice also distinguishes this case from Lenz where the plaintiff alleged that the defendant did not consider fair use at all. Cf. id.

Is ENTTech required to allege additional facts, in view of the appearance that Defendants considered fair use? For example, must ENTTech allege evidentiary facts concerning Defendants’ analytical process or subjective state of mind (the type of facts which, in most cases, are not available to a plaintiff before discovery is taken)? Does the Iqbal/Twombly plausibility standard require ENTTech to aver its own analysis of fair use to support an inference that Defendants merely paid “lip service” to the consideration of fair use? Cf. id. at 1163. Having considered these questions, the Court concludes that ENTTech’s allegations in the TAC are sufficient at this stage of the litigation.

The court points out that the ruling in Lenz supports allowing this case to move forward, saying that it's a factual question whether or not the takedown notice sender had a "good faith belief" that the notice was legit, and therefore, it's up to a jury to decide.

Although Lenz involved a motion for summary judgment, that decision is nevertheless instructive with respect to the issue presently before the Court. Lenz supports the conclusion that the question of whether a copyright owner formed a subjective good faith belief that an alleged infringer’s copying of the work did not constitute fair use is, in most instances, a factual issue that is not appropriate for resolution on a motion to dismiss. “Because the DMCA requires consideration of fair use prior to sending a takedown notification,” the Ninth Circuit held that “a jury must determine whether [the defendant’s] actions were sufficient to form a subjective good faith belief about the [allegedly infringing] video’s fair use or lack thereof.” Id. at 1154. In response to the arguments in the dissenting opinion regarding the propriety of granting summary judgment, the Lenz panel majority explained that the relevant question was “whether the analysis [the defendant] did conduct of the [alleged infringing material] was sufficient, not to conclusively establish as a matter of law that the . . . use of the [copyrighted material] was fair, but to form a subjective good faith belief that the video was infringing on [the] copyright.” Id. at 1154 n.3.

Therefore, because it is generally a factual issue whether the analysis that the defendant did conduct of the alleged infringing material was sufficient, see id., it necessarily follows that to plead a claim under § 512(f), it is enough for ENTTech to allege that Defendants did not consider fair use (sufficiently or at all) before issuing the takedown notices. And that is exactly what ENTTech alleges here. Requiring ENTTech to allege more would effectively impose a heightened pleading standard, see Fed. R. Civ. P. 9(b), and no authority holds that claims under § 512(f) must be pleaded with particularity. Thus, although it may be advisable for a plaintiff like ENTTech to aver additional facts (such as its own analysis of fair use) to support the allegation that a defendant’s fair use analysis was merely pro forma, the Court cannot conclude that ENTTech is required to plead such facts in order to state a plausible claim for relief under § 512(f).

In the grand scheme of things, this is only a small step forward, but it is a step forward for 512(f) -- a part of the law that rarely ever sees any positive news. This doesn't mean that Enttech is likely to win, but it does mean that the courts may crack the door open just ever so slightly in letting people and companies fight back against abusive DMCA notices.

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Filed Under: 512f, copyright, copyright trolling, dmca, extortion, jon nicolini, paper magazine, shakedown
Companies: enttech, okularity


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  • icon
    That Anonymous Coward (profile), 11 Mar 2021 @ 2:10pm

    And yet people will still claim this is perfectly fine, just another thing we have to suffer to protect copyright.

    reply to this | link to this | view in chronology ]

  • icon
    That One Guy (profile), 11 Mar 2021 @ 3:53pm

    Pick ONE

    that basically said (1) DMCA filers have to "subjectively" consider fair use to be a "good faith" filing, but (2) automated takedowns may be okay... because we say so.

    If a bot automatically creates and files a claim there is obviously no room for any consideration, so they had either recently taken a head-first flight down the stairs or they were desperate to not ban bot-created/filed DMCA notices. Not a good look either way.

    That said it really shouldn't matter, because this...

    As we wrote over the summer, one of Okularity's targets was the well known Paper Magazine, put out by the publisher Enttech Media Group. Enttech said that Okularity sought to have Paper Magazine's Instagram account shut down, and then offered to "settle," demanding a pretty massive sum in the process.

    ... should be seen as, and treated as, blatant extortion. Only offering a 'settlement' after an account has had multiple claims filed against it makes it crystal clear that the goal is not protecting a copyright but extorting money from the target using copyright as the threat, and if judges and lawmakers would stop bending over backwards to continue to pretend that copyright makes everything acceptable and legal that should be glaringly obvious.

    reply to this | link to this | view in chronology ]

    • icon
      That Anonymous Coward (profile), 12 Mar 2021 @ 7:11am

      Re: Pick ONE

      But the sacred cow of copyright can not be challenged!

      It costs nothing to send notices.
      There is no punishment for defective/false notices.
      For a small filing fee, you stand to extort a windfall.
      Defending yourself costs almost as much as the settlement & courts almost never award costs if you manage to prevail.
      The bad actors can do it again & again because the law is completely unbalanced & very few platforms are willing to get involved in this shitshow because courts ignore reality & would leave them open to even worse extortion.

      One would think after Prenda & others caught abusing the system & using the courts as an ATM would result in some changes.
      But that will never happen, because the sacred cow must be protected at all costs, as long as we are forced to pay the tab.

      reply to this | link to this | view in chronology ]

  • identicon
    No Name, 11 Mar 2021 @ 6:01pm

    FTPOH

    Copyright is an abomination from the pits of hell.

    reply to this | link to this | view in chronology ]

  • identicon
    Rex 'Hot Battery Projectiles' Tesla, 16 Mar 2021 @ 11:33am

    Isn't even "slender": mere ALLEGATION.

    it is enough for ENTTech to allege that Defendants did not consider fair use (sufficiently or at all) before issuing the takedown notices. And that is exactly what ENTTech alleges here.

    Everything tossed except that ENTTech ALLEGES was no consideration of fair use; it has no evidence, and indeed, it's surely JUST BARELY sufficient "at this [most preliminary] stage" to proceed. ENTTech now has to prove that no person ever glanced at the content in question and said "beyond fair use", AND that any automated system isn't sufficient. All Okularity has to do is IMPLY (preferably without ever admitting any facts that could pin it down) that some person DID so consider, OR its software takes that into account (as, simply by the original name being used: it's therefore manifestly not "transformed").

    So, as in many other cases, is probably just the judge (reluctantly) allowing a technicality of pleading "at this stage", with judge (and me) fully expecting ENTTech to lose, esp given how thin rest of case is.

    Don't hold your breath waiting for sweeping precedent, pirates, that mere alledging that someone didn't consider fair use is a weapon against those enforcing copyright, 'cause it's not and won't be. "Didn't" is very thin substance.

    [Read again slow, trying to find WHAT content is the original basis: not worth digging for, but if ENTTech used ANY by Okularity, then it'll lose, 'cause it's just trying to muddy the water, as indeed Masnick does above.]


    Hope you're all double-masking, staying in, and now injected with mutagen. Techdirt can't afford to lose a single fanboy.

    reply to this | link to this | view in chronology ]


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