Rightscorp, Inc.

Rightscorp, Dink.
Public
Traded as RIHT
Industry Digital media
Founded Nevada, September 16, 2009
Founder Christopher Sabec[1]
Headquarters Santa Monica, California, United States
Area served
Key people
  • Christopher Sabec (CEO)
  • Robert Steele (CTO), (COO)
Services Copyright infringement detection and remediation
Website www.rightscorp.com

Rightscorp, Inc. (formerly DigitalRights) is a Los Angeles-based copyright monetization company which protects intellectual property by offering settlement offers to alleged illegal downloaders of videos, music, and video games.[2][3] The company protects the creators and owners of these copyrights through monetization and various legal actions and pursuits.[4]

Services

Rightscorp represents music, movie and print publishers. As of May 20 2014, Rightscorp handled more than 1.5 million copyrights and the subscribers of more than American 70 ISPs have paid settlements to the company, including Charter Communications, CenturyLink and others. [5] [6] Rightscorp COO Robert Steele told Ars Technica that more ISPs are forwarding their notices each month. [7][8][9]

The company works with Hollywood studios such as Warner Bros. [6][7] The company also has over 800 copyrighted film and video titles it now represents, which also includes movies produced outside of the United States and independent films.[10] According to the company, this includes 14 movie titles, including Academy Award winners, that have generated cumulative gross sales in excess of $3.5 billion in film and video sales. [11]

In addition, Rightscorp works with music interests such as BMG Rights Management, which represents such musicians as David Bowie, Kings of Leon, and Will.i.am, to protect intellectual property and copyrights and is a member of the American Association of Independent Music[12][13][14] In addition, the company also represents more than 13,000 copyrights held by Blue Pie Productions[15] and metal/hardcore label Rotten Records[16] During the week of 24 February 2013, the company was also monitoring 13 songs on the Billboard Hot 100.[17] The company acts on behalf of the studio, artist, or copyright holder, often sending form letters which offer the alleged downloader several options for financial restitution.[18] RIghtscorp’s settlements are split 50/50 with its clients.[7]

Typically, Rightscorp sends a settlement notice to the alleged infringing party through their Internet Service Provider (ISP).[19] The settlement notice offers to relieve the legal liability of up to $150,000 per infringement, under the Digital Millennium Copyright Act (DMCA), the current law.[13] The notice provides a settlement option through Rightscorp for $20 per alleged infringement which the company likens to a traffic ticket and Steele described it as the "socially fair way to create a deterrent."[7] Even though the notice works as a settlement offer, the notice is not in itself enforceable by law and the liability of the infringed offender has to be determined by a civil court [20] In November 2014, music publishers BMG and Round Hill are suing Cox Communications for not terminating the accounts of users identified by Rightscorp as being allegedly repeat downloaders.[21]

If the user chooses not to pay and is repeatedly alleged of violated copyright infringements, the ISP may suspend or terminate the subscriber account until a settlement is reached.[12] Torrent website "Torrent Freak" claimed in 2011 that more than 200,000 Bittorrent users were in some stage of a lawsuit for alleged copyright infringement.[22]

Rightcorp utilizes crawlers, which according to Steele and CEO Christopher Sabec, crawls Bittorrent file-sharing sites and finds seeders and their IP addresses over time. Though the company has the seeders’ IP addresses, it requires the ISPs to connect their notices to the seeders.[7] Sabec also says the company can discriminate between actual piracy and unauthorized internet access.[9]

In October 2013 the company went public, trading on the OTCQB under the ticker RIHT.[12] In May 2014 the company announced that it is expanding into Canada [23] and was in Europe investigating expansion in Europe.[24]

The company also announced that it has closed more than 75,000 cases of online copyright infringement.[2][8] According to the company, over 200 ISPs are participating with Rightscorp as of November 201 and tracking 500,000 subscribers on the top 5 ISPs.[25][26]

Class Action Lawsuit

On November 21, 2014 Morgan Pietz of The Pietz Law Firm, together with Drew Pomerance of Roxborough, Pomerance, Nye & Adreani filed a Class Action Lawsuit against Rightscorp Inc, various John Does, and its owners, Christopher Sabec, Robert Steele, and Craig Harmon.[27]

The complaint seeks class certification against Rightscorp for violations of the Telephone Consumer Protection Act, the Fair Debt Collection Practices Act, California’s Rosenthal Act, and Abuse of process for willfully misuse of subpoena power by issuing special DMCA subpoenas, under 17 U.S.C. § 512(h).[28]

Telephone Consumer Protection Act Lawsuit

On February 17, 2015 Plaintiffs Melissa Brown and Ben Jenkins represented by Attorney Sergei Lemberg of Lemberg Law LLC filed a Lawsuit against Rightscorp Inc and its Clients named as John Does 1-10 in the United States District Court for the Middle District of Georgia for Telephone Consumer Protection Act abuses and other violations.[29]

Brown and Jenkins claim that Rightscorp Inc and its Clients violated America’s Telephone Consumer Protection Act by sending automated calls and text messages in their general direction without permission. Evidence shows that Jenkins sent Rightscorp Inc numerous emails instructing Rightscorp Inc to cease their calls, text messages, emails and letter solicitations to him and Brown. Regardless, Rightscorp Inc continued to place calls and text messages to the Plaintiffs’ cellular and home phones. Brown and Jenkins are seeking damages for each alleged violation of the Telephone Consumer Protection Act.[30]

Financial Hardship

On November 14, 2014 Rightscorp filed a Form 10-Q with the Securities and Exchange Commission reporting its Q3 2014 earnings.[31]

The Company reported a total loss of $2.2 million for the first three quarters of 2014 along with a total loss of $6.5 million since 2011.[31]

Security Breach

Security issues with Rightscorp's online payment system surfaced in October of 2014.[32] Due to security gaps with hidden form elements, a Secure Sockets Layer Certificate, and Rightscorp permitting search engine indexing of secure pages; names and address of alleged infringers were publicly exposed including individuals that settled cases with Warner Bros and Miramax Films.[32]

Criticism

Issues have been raised with regard to Rightscorp's practices. Several court cases have ruled that Digital Millennium Copyright Act (DMCA) subpoenas do not require internet service providers (ISPs) to identify their users to the issuer of the subpoena; indeed, an ISP that does provide that information can face sanctions, as can the issuer of the subpoena.[33] The notice sent by Rightscorp prevents a lawsuit for the specific download in the notice; however, because of the language in the notice, paying the settlement is an admission of guilt.[34] Although Rightscorp is then unable to sue for that infringement, not only can they sue and press charges for subsequent downloads, but they have the original settlement as admission of guilt of previous infringement.[34]

Comcast, the largest internet provider in the United States,[35] has continually refused to forward Rightscorp's DMCA settlement notices in the form in which Rightscorp sends them. Comcast removes the threatening language and the settlement offer and instead simply forwards a letter to their customer that basically reads as an incident report.[36]

References

  1. ↑ "Christopher Sabec: CEO at Rightscorp, Inc.". LinkedIn.
  2. ↑ 2.0 2.1 "Copyright Monetization Company Rightscorp Completes Going Public Transaction". Wall Street Journal. October 28, 2013.
  3. ↑ Poe, Michael. "Wireless Internet Router Exposes Provo Woman To Threats, Lawsuit". KUTV.com.
  4. ↑ "RightsCorp Inc.". New York Times.
  5. ↑ "Rightscorp Increases Representation to Surpass 1.5 Million Copyrights". Reuters. Retrieved June 15, 2014.
  6. ↑ 6.0 6.1 "Warner Bros. Ramps Up War on Piracy". The Hollywood Reporter. Retrieved June 15, 2014.
  7. ↑ 7.0 7.1 7.2 7.3 7.4 "You could be liable for $150k in penalties—settle instead for $20 per song". ArsTechnica.com. Retrieved June 15, 2014.
  8. ↑ 8.0 8.1 Sabec, Christopher (May 1, 2014). An Interview with Christopher Sabec. Interview with Karen Tso Geoff Cutmore Steve Sedgwick. Squawk Box Europe. CNBC. London.
  9. ↑ 9.0 9.1 "Rightscorp: A Different Approach to Infringement (CDSA)". CDSA. Retrieved March 16, 2015.
  10. ↑ "Rightscorp Expands Representation in Film and Video Market". NYTimes.com. Retrieved June 15, 2014.
  11. ↑ "Rightscorp Begins Monitoring 14 Film Titles That Grossed Over $3.5 Billion in Sales". Yahoo! Finance. Retrieved June 15, 2014.
  12. ↑ 12.0 12.1 12.2 "Piracy Monitoring and Settlement Firm Goes Public". TorrentFreak. |first1= missing |last1= in Authors list (help)
  13. ↑ 13.0 13.1 Gardner, Eriq (June 7, 2013). "Warner Bros. Ramps Up War on Piracy". The Hollywood Reporter.
  14. ↑ "Rightscorp Joins American Association of Independent Music (A2IM)". marketwatch.com. Retrieved June 15, 2014.
  15. ↑ "Rightscorp Receives Approval to Represent More Than 13,000 Copyrights from Blue Pie Records". nytimes.com. Retrieved June 15, 2014.
  16. ↑ "Rightscorp Secures Agreement with Rotten Records to Monitor Copyrights of Song and DVD Assets". Reuters. Retrieved June 15, 2014.
  17. ↑ "Rightscorp Monitoring Songs on the Billboard Hot 100 for Infringement". marketwatch.com. Retrieved June 15, 2014.
  18. ↑ Roberts, Jeff John (September 23, 2011). "$10 Settlement Offers: The Entertainment Industry’s New Copyright Tactic". PaidContent.org.
  19. ↑ "Warner Bros is Fining File-Sharers Who Use Non Six-Strike ISPs". IncognitoOnline.com.
  20. ↑ http://copyright-infringement-notice.com/
  21. ↑ "Two Music Publishers Suing Cox Over Piracy". The Wall Street Journall. Retrieved November 28, 2014.
  22. ↑ Kiss, Jemima. "BitTorrent: Copyright lawyers' favourite target reaches 200,000 lawsuits". Guardian.
  23. ↑ "Rightscorp Retains Canadian Law Firm To Expand Services Internationally". thestreet.com. Retrieved June 15, 2014.
  24. ↑ "RightsCorp Wants To Bring Its Copyright Protection Methods To The UK". Tech Week Europe. May 6, 2014.
  25. ↑ "Rightscorp Increases Number of Participating Internet Service Providers by Over 33%". Yahoo! Finance. Retrieved November 28, 2014.
  26. ↑ "ISP Liability for Subscriber Infrigements". acquisition-intl.com. Retrieved November 28, 2014.
  27. ↑ Pietz, Morgan (November 21, 2014). "Rightscorp Class Action – Robo-Calls and DMCA Subpoenas". The Pietz Law Firm. The Pietz Law Firm. Archived from the original on November 24, 2014. Retrieved November 24, 2014.
  28. ↑ Mullin, Joe (November 23, 2014). "Class-action suit says Rightscorp makes illegal, harassing phone calls". ArsTechnica. ArsTechnica. Archived from the original on November 24, 2014. Retrieved November 24, 2014.
  29. ↑ Van Der Sar, Ernesto (2015-02-20). "Piracy Settlement Firm Sued Over Intimidating Robocalls and Text Messages". TorrentFreak. Archived from the original on 2015-02-23. Retrieved 2015-02-23.
  30. ↑ Cooke, Chris (2015-02-23). "Rightscorp accused of breaching American communications law with anti-piracy messages". Complete Music Update. Archived from the original on 2015-02-23. Retrieved 2015-02-23. Missing |last1= in Authors list (help)
  31. ↑ 31.0 31.1 Ernesto, Ernesto (November 14, 2014). "Anti-Piracy Firm Rightscorp On The Brink of Bankruptcy?". TorrentFreak. TorrentFreak. Archived from the original on November 18, 2014. Retrieved November 24, 2014.
  32. ↑ 32.0 32.1 Cushing, Tim (October 8, 2014). "Rightscorp's 'Secure' Payment System Exposes Names And Addresses Of Alleged Infringers". TechDirt. TechDirt. Archived from the original on October 15, 2014. Retrieved October 15, 2014.
  33. ↑ Masnick, Mike (April 7, 2014). "Yet Another Copyright Troll Thinks It's Found the DMCA Subpoena Loophole that Slammed Shut Years Ago". techdirt. Archived from the original on April 7, 2014. Retrieved June 3, 2014.
  34. ↑ 34.0 34.1 Cashman, Robert Z. (June 21, 2013). "Is the MPAA giant waking up and luring defendants through their $20 DMCA settlement letters?". TorrentLawyer™ – Exposing Copyright Trolls and Their Lawsuits. Cashman Law Firm. Archived from the original on June 25, 2013. Retrieved June 3, 2014.
  35. ↑ Cassidy, John (February 13, 2014). "We Need Real Competition, Not a Cable-Internet Monopoly". The New Yorker. Condé Nast. Archived from the original on February 14, 2014. Retrieved June 3, 2014.
  36. ↑ Krawczyk, Konrad (December 6, 2013). "Rightscorp is trying to punish pirates, but Comcast isn’t cooperating". digitaltrends.com. Designtechnica Corporation. Archived from the original on January 23, 2014. Retrieved June 3, 2014.

External links