Receiving a subpoena letter related to a copyright infringement case from your Internet Service Provider (ISP) such as Comcast or Century link or receiving a demand letter offering to settle your case prior to litigation can be a shock to the system. Most people have never received these letters before and are struggling to figure out what they mean. In short, movie studios or other copyright holders are cracking down on unauthorized file sharing and downloading through computer applications such as Bit Torrent. The unauthorized downloading and file sharing is a violation of Federal copyright law and may be punishable by up to $150,000 fine. The copyright holders generally don’t want to seek such extreme penalties and are only looking to recoup money lost due to the illegal file sharing and to generate income for investors and non A-list actors who receive money from the films. Not everybody involved in the entertainment business is rolling in dough. Just last week I met with an actor who had a small role in Fight Club and was now seeking to declare bankruptcy due to his $30K salary from acting and overwhelming debt.
If you are somebody who has received a letter from your ISP informing you that you are part of a lawsuit and your name will be provided to an attorney or you have received a demand letter offering to settle the lawsuit against you, you have a few options, but none of them are great. In any event, I would encourage everybody to discuss this matter with a qualified copyright attorney to go over your options.
1. You could retain an attorney to file a motion to quash the subpoena to try and prevent your information from being disclosed to the copyright infringement attorney. These motions are usually unsuccessful and your name and information will be disclosed upon filing such a motion. Hiring an attorney can be costly (at least $5,000 according to this Seattle copyright attorney), however some attorneys may be willing to negotiate a settlement on your behalf for an hourly rate.
2. You could settle your case for copyright infringement by calling up the copyright infringement lawyer who filed the case or sending an email wishing to settle. In my experience the copyright holders are willing to settle for less than it would cost to hire a lawyer and go to litigation. Litigation is time consuming and costly and in the end, most cases end up settling out of court.
3. You could choose to ignore all demand letters and attempts to settle your case. This option involves some risk on your part. Generally, failure to settle early on will result in the amount the copyright holder is willing to accept to rise as costs to continue to seek a settlement are incurred. Further, a copyright infringer risks being named as a defendant party in the case which is public record and could face a penalty of up to $150,000 if a default judgment is entered. You can ask your attorney to reivew the cases of Paramount Pictures Corp. v. Davis, 234 F.R.D. 102, 77 U.S.P.Q.2d 1933 (E.D. Pa. 2005); U.S.C.A. Arista Records, L.L.C. v. Tschirhart, 241 F.R.D. 462 (W.D. Tex. 2006); U.S. ex rel. Koch v. Koch Industries, Inc., 197 F.R.D. 488 (N.D. Okla. 1999) and BMG Music Entertainment v. Tenenbaum (D. Mass.) [1:07-cv-11446].
At the end of the day, if you have received one of these letters you will need to make a decision that is best for you. Know that copyright holders need to protect their rights so that they can continue to make films that cost millions of dollars to make and the people working in the entertainment industry need to make a living and earn an income off of the royalties of the works whether you see a movie in the theater, rent from Netflix or download a song on ITunes.