Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_15-cv-04441/USCOURTS-cand-3_15-cv-04441-9/pdf.json

Nature of Suit Code: 820
Nature of Suit: Copyright
Cause of Action: 17:101 Copyright Infringement

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United States District Court

For the Northern District of California

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IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

MALIBU MEDIA, LLC,

Plaintiff,

 v.

JOHN DOE SUBSCRIBER ASSIGNED IP

ADDRESS 76.126.99.126,

Defendant. /

No. C 15-04441 WHA

ORDER DENYING PLAINTIFF’S

MOTION TO DISMISS

COUNTERCLAIM

INTRODUCTION

In this copyright infringement action, the copyright owner moves to dismiss the accused

infringer’s counterclaim for declaratory judgment of non-infringement. For the reasons stated

below, the copyright owner’s motion is DENIED.

STATEMENT

Plaintiff Malibu Media, LLC, made and distributed pornographic videos on a

subscription-based website. It has filed 178 copyright infringement actions in our district in the

past year. In the interest of judicial economy, all of Malibu Media’s actions in this district were

assigned to the undersigned judge.

In each of its complaints, Malibu Media named an individual identified only by his or

her Internet Protocol address, which is an identifier assigned to each Internet subscriber by the

subscriber’s Internet service provider. Here, defendant is named as John Doe Subscriber

Assigned IP Address 76.126.99.126. As with all of its other cases, Malibu Media contends that

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 In the more recent wave of cases filed in this district, Malibu Media hired Excipio GmbH to conduct

the investigation.

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defendant used his Internet connection to download and distribute numerous of its copyrighted

works using a file-sharing protocol called BitTorrent. Here, Malibu Media accuses defendant

of infringing 23 works.

The BitTorrent protocol called for splitting large files, such as Malibu Media’s videos,

into many smaller pieces. Once a file was broken down into those pieces, users of the protocol

could then copy and share the pieces of the larger file with each other, and once a user received

all of the pieces of a given file, each of which may have come from a different user, software

(called a BitTorrent “client”) on the user’s computer reassembled the pieces into a complete

file. This scheme facilitated an efficient and decentralized distribution scheme as compared to

sharing a single large file from a single host site. 

Malibu Media hired IPP International UG, which utilized the BitTorrent protocol to

download several of Malibu Media’s own files from the Internet. IPP monitored the IP

addresses of the distributors of each piece of each file it received. Malibu Media alleges that

IPP received at least one piece of each of 23 individual videos from the above-captioned IP

address.1

Malibu Media seeks statutory damages of at least $17,250 for defendant’s alleged

infringement of twenty-three videos ($750 per work), with a potential for much greater liability

if infringement is found to be willful or if the jury finds Malibu Media is entitled to damages on

the higher end of the range provided by statute. 

In his answer, defendant, who is represented by Attorney Joseph C. Edmonson, filed a

counterclaim for declaratory judgment of non-infringement, which mirrors his denial of liability

for Malibu Media’s affirmative claim of infringement. Malibu Media now moves to dismiss

defendant’s counterclaim. This order follows full briefing and a properly-noticed hearing at

which neither side appeared, although the case was called and held over until the end of the

calendar in case counsel arrived late.

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ANALYSIS

Malibu Media argues that defendant’s counterclaim merely repackages his denial of

infringement and thus should be dismissed. It cites various decisions noting that the Court has

no duty to declare the rights and legal relations of interested parties and that the Court

discretion to dismiss counterclaims that are mirror images of the claims. See, e.g., Leadsinger,

Inc. v. BMG Music Pub., 512 F.3d 522, 533 (9th Cir. 2008).

Malibu Media is correct that defendant’s counterclaim is duplicative of his denial of

liability (indeed, defendant’s answer to Malibu Media’s affirmative claim incorporates-byreference the allegations of defendant’s counterclaim and otherwise denies all allegations). 

Malibu Media is also correct that the district court has discretion to dismiss defendant’s

counterclaim. Nevertheless, Malibu Media’s practical arguments for why the undersigned

should exercise that discretion here are unpersuasive.

Malibu Media argues that permitting defendant’s counterclaim to proceed would require

it to file an answer in which it would deny all the allegations and refer back to the complaint. 

This will, however, impose a negligible burden. Malibu Media also contends the declaratory

judgment counterclaim would confuse a jury. Not really, however, a jury would never need to

know that the case involves an affirmative claim of infringement and a declaratory judgment

counterclaim of non-infringement. The jury could render one verdict resolving both claims. 

Malibu Media will suffer no prejudice. 

Malibu Media’s motion seems more like a gimmick designed to allow it an easy exit if

discovery reveals its claims are meritless. Section 505 of Title 17 of the United States Code

provides that a “prevailing party” may be awarded attorney’s fees in a copyright infringement

action; however, when a copyright plaintiff voluntarily dismisses a claim without prejudice, the

defendant is not a prevailing party. Cadkin v. Loose, 569 F.3d 1142, 1150 (9th Cir. 2009). 

Absent defendant’s counterclaim, if events reveal that this case is meritless, Malibu Media

could voluntarily dismiss its affirmative claims without prejudice under Rule 41(a)(2), seeking

to avoid an award of attorney’s fees. If, however, defendant’s counterclaim remains alive, he

will be able to press his counterclaim. 

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A motion to voluntarily dismiss at this stage would only be granted “on terms the court

considers proper,” of course, but a defendant can be rightly concerned over the possibility that a

plaintiff might dodge an attorney’s fee award in a meritless case. A defendant might thus put its

own counterclaim in play.

As Judge Otis Wright stated in Malibu Media, LLC v. John Does 1 through 10, 12-3632,

2012 WL 53832304, at *3–4 (C.D. Cal. June 27, 2012):

The Court is familiar with lawsuits like this one. These lawsuits

run a common theme: plaintiff owns a copyright to a pornographic

movie; plaintiff sues numerous John Does in a single action for

using BitTorrent to pirate the movie; plaintiff subpoenas the ISPs

to obtain the identities of these Does; if successful, plaintiff will

send out demand letters to the Does; because of embarrassment,

many Does will send back a nuisance-value check to the plaintiff. 

The cost to the plaintiff: a single filing fee, a bit of discovery, and

stamps. The rewards: potentially hundreds of thousands of dollars. 

Rarely do these cases reach the merits. 

The federal courts are not cogs in a plaintiff’s copyrightenforcement business model. The Court will not idly watch what

is essentially an extortion scheme, for a case that plaintiff has no

intention of bringing to trial. By requiring Malibu to file separate

lawsuits for each of the Doe Defendants, Malibu will have to

expend additional resources to obtain a nuisance-value settlement

— making this type of litigation less profitable. If Malibu desires

to vindicate its copyright rights, it must do it the old-fashioned way

and earn it.

Many judges have echoed Judge Wright’s concerns about the a “troubling pattern” of abuse

with regard to Malibu Media and other owners of copyrights in pornographic videos. See, e.g., 

Malibu Media LLC v. Austen Downs, No. 14-707 (S.D. Ohio May 26, 2015) (Judge Timothy

Black); Hard Drive Prods., Inc. v. Does 1–90, No. 11-03825 (ECF No. 18 at 11), 2012 WL

1094653, at *7 (N.D. Cal. Mar. 30, 2012) (Judge Howard R. Lloyd); MCGIP v. Does 1–149,

No. 11-02331, 2011 WL 4352110, at *4 (N.D. Cal. Sept. 16, 2011) (Judge Laurel Beeler); On

the Cheap, LLC, v. Does 1–5011, No. 10-4472, 2011 WL 4018258 at *11 (N.D. Cal. Sept. 6,

2011) (Judge Bernard Zimmerman); SBO Pictures, Inc., v. Does 1–3,036, No. 11-4220, 2011

WL 6002620, at *8 (N.D. Cal. Nov. 30, 2011) (Judge Samuel Conti).

Although Malibu Media has mitigated many of the defects identified by Judge Wright,

including by proceeding “the old fashioned way” by suing each defendant in a separate action

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and paying a separate filing fee each time, the vast majority of Malibu Media’s cases have

settled before or very shortly after the initial case management conference. 

The damages exposure in this case, as with Malibu Media’s many other cases, is

significant, so a defendant may feel pressure to settle even a meritless case. Coupled with the

taboo nature of the subject matter, there remains potential for abuse. The availability of

attorney’s fees should any defendant facing a lawsuit against Malibu Media prevail protects

those, such as our defendant herein, who elect to challenge Malibu Media’s case on the merits

instead of accepting a nuisance-value settlement. Indeed, that may be the only factor motivating

such defendants. C.f. Ingenuity 13 LLC v. Doe, Nos. 13-55859, 13-55880, slip op. at 13 (9th

Cir. June 10, 2016) (“Without hope of receiving attorney’s fees for defending sanctions on

appeal, Doe and other victims of abusive litigation would be left with no remedy.”).

Dismissing defendant’s counterclaim would eliminate one avenue for a fee award, and,

as stated, maintaining the counterclaim would cause no prejudice to Malibu Media. 

Accordingly, Malibu Media’s motion is DENIED.

CONCLUSION

For the reasons stated above, Malibu Media’s motion to dismiss John Doe’s

counterclaim for declaratory judgment of non-infringement is DENIED. 

IT IS SO ORDERED.

Dated: June 20, 2016. 

WILLIAM ALSUP

UNITED STATES DISTRICT JUDGE

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