3 Count: Fraud Arrest

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1: Feds Charge Porn-Troll Lawyers in Major Fraud, Extortion Case in Minneapolis

First off today, Stephen Montemayor at the Minneapolis Star Tribune reports that area lawyers Paul Hansmeier and John Steele have been arrested on charges of fraud and extortion for their role in the Prenda Law copyright “troll” scheme that unraveled in 2014.

During the scheme, the two would file “John Doe” lawsuits against suspected copyright infringers of pornographic films in hopes of getting their internet service providers to turn over their identities. When they learned those identities, they would push them for a quick settlements. However, as several of the defendants fought back, it was quickly learned that Hansmeier and Steele were actually the owners of the companies they were suing for, a violation of the law. Furthermore, in many cases, the actively encouraged or assisted the infringement of the work.

The two are accused of collecting about $6 million in settlements. However, after the discoveries, the courts made it difficult for them to proceed. The two have now been arrested on charges of fraud and extortion conspiracy. There has been no comment from the two though at least Hanseier has already been released from custody.

2: Supreme Court Asked If DMCA Safe Harbors Apply to Pre-1972 Sound Recordings

Next up today, Ashley Cullins at The Hollywood Reporter Esquire reports that Capitol Records has appealed its case against Vimeo to the Supreme Court asking the question whether the Digital Millennium Copyright Act of 1996 applies to pre-1972 sound recordings.

Capitol Records sued Vimeo in 2009 alleging that it and its users were infringing the copyright in various artists including The Beatles and The Beach Boys. Since pre-1972 sound recordings are covered under state common law, not federal copyright law, Capitol argued that the DMCA safe harbors did not apply to them. Those safe harbors are what help sites, such as Vimeo, avoid liability when users upload infringing material.

When the issue went before the 2nd Circuit Court of Appeals, the court ruled that the law did apply and now Capitol Records is asking the Supreme Court to look at the question. While the Supreme Court only takes a small fraction of the cases appealed to it, there has been indication the the court is likely to take up this one, including from President Obama’s former solicitor general Don Verrilli, who said there was a good chance.

3: Auction Houses Face Off in Website Data Scraping Lawsuit

Finally today, The Associated Press is reporting that Christie’s Auction House is being sued by Heritage Auctions over allegations that Christie’s scraped more than 11 million items from their database and then published much of it without attribution or permission.

The issue centers around Christie’s subsidiary Collectrium. Collectrium is a digital art collection management and market research firm that was purchased by Christie’s last year. The service claims to provide a searchable database of auctions results from over 1,500 different auction houses. However, Heritage Auctions says that database is built by scraping copyrighted material including descriptions, images and other information.

Heritage Auctions is seeking $150,000 per copyright infringement. The case is actually the second ongoing lawsuit between the two auction houses, the first being over luxury handbag specialists that Heritage claims were induced into breaking their contract with Heritage to go to Christie’s.


That’s it for the three count today. We will be back tomorrow with three more copyright links. If you have a link that you want to suggest a link for the column or have any proposals to make it better. Feel free to leave a comment or send me an email. I hope to hear from you.

The 3 Count Logo was created by Justin Goff and is licensed under a Creative Commons Attribution License.

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