LAS VEGAS—In an emergency motion filed with the court Monday in the recently filed copyright infringement lawsuit, Liberty Media v FF Magnat, Defendant Oron.com requested partial relief from provisions contained in the temporary restraining order issued last Thursday by federal Judge Gloria N. Navarro, and a one week extension of time to respond to the court's order. In the alternative, the emergency motion asks that the hearing on the plaintiff's motion for a preliminary injunction be moved up if the court declines to amend the TRO.
AVN.com just learned that the Plaintiff has filed an opposition to this emergency motion and more coverage is forthcoming.
The emergency request was made because of the severity of provisions contained in the TRO, but in doing so, Oron.com, a Hong Kong-based company, also noted that in making the request, it "does not intend to submit to this Court's jurisdiction or to waive any right to challenge jurisdiction and/or improper service. To the contrary, Oron fully intends to raise its challenges to personal jurisdiction and service in its answer to Plaintiff's motion for a preliminary injunction, and also expressly reserves its right under the Federal Rules of Civil Procedure to challenge personal jurisdiction and service by way of a motion to dismiss the complaint in this action."
That aside, Oron asked the court to amend the TRO "to allow Oron access to its funds held by PayPal so that Oron may pay legal fees to defend itself in this action and in a related action brought by Plaintiff in Hong Kong, as well as pay certain limited business expenses that are necessary to keep operating. Oron proposes that the Court allow PayPal to transfer €300,000 (approximately $375,00 U.S. dollars) in Oron's account to the trust account of Oron's outside counsel, Greenberg & Lieberman, LLC of Washington, D.C, and permit those funds to be disbursed to pay legal fees and costs, and business expenses necessary to keep the company operating. In addition, Oron requests a one-week extension of the briefing deadlines and the hearing on Plaintiffs request for a preliminary injunction to enable its counsel to adequately address the significant issues presented by that motion."
If the court refuses to amend the TRO, Oron asked that the hearing on the motion for preliminary injunction be moved up to this Friday, June 29, "so that the issue of the preliminary injunction can be resolved before Oron is required to pay its hosting providers or face the shutdown of its business."
The motion adds that in Hong Kong, where a separate action was filed by Liberty, the "court's order expressly allows Oron to expend funds for it legal defense and necessary business expenses. Oron, however, is prohibited from doing that by this Court's order."
The contention by Oron is that if it is not allowed to access funds to pay business expenses, it will soon be out of business before it even has a chance to defend itself in court. "Oron must pay its hosting providers by the end of this month in order to avoid termination of those hosting services," the motion states. "If Oron's servers are shut down for non-payment of those monthly hosting fees, it will effectively be out of business, and its users—99.9% of whom have no connection to this litigation—will lose access to their data. Given this potential hardship, Oron requests that, if the request to modify the TRO is denied, that the Court advance the hearing so that the preliminary injunction issue can be resolved before the June 30 deadline for payment of those hosting fees."
The motion also contains an allegation of hacking on the part of the plaintiff, Liberty Media. The claim being made is that the order by the court to impede the ability of Oron to access funds contained in various banks and payment services, like PayPal, "was apparently predicated on the allegation that Oron was attempting to transfer funds out of the United States in order to take them out of this Court's jurisdiction, including a copy of an apparently redacted email from PayPal to Oron concerning the transfer of certain funds.
"There is no evidence that the transfer reflected in that email was anything outside the ordinary course of business, since Oron is domiciled in Hong Kong and it would be reasonable for it to transfer its funds there," the motion continues. "Curiously, Plaintiff offers no details as to how it obtained a private email between Oron and its payment service, PayPal, and provides no foundation for that inadmissible document. As Oron will address more fully in its answer to the Order to Show Cause on Plaintiffs request for a preliminary injunction, it appears that the email in question was improperly obtained by 'hacking' into Oron's email accounts. It is inappropriate for Plaintiff to seek relief in equity given that conduct and its own unclean hands.
That accusation is a snapshot of the type of charges and characterizations that are already being leveled by the parties against one another. In another section of the emergency motion, Kahn, in describing the actions taken by Corbin Fisher over the years to battle the widespread infringement of its copyrighted content, Oron attempts to sully its opponent's reputation by including media descriptions of the company as "America's most litigious... porn studio," and adds, "a simple internet search reveals that Liberty Media has filed numerous 'mass defendant' lawsuits alleging copyright infringement against a host of companies as well as hundreds of individuals, including many of Liberty Media's own customers. It appears that Liberty Media is developing a reputation as a 'troll litigator' in the arena of copyright infringement."
FF Magnat attorney David Kahn also expends a few pages outlining the basic arguments it will be making against the issuance of a preliminary injunction, even though the court has ordered the defendants to fie answering papers by 5pm tomorrow.
They are, in brief:
* There are serious questions whether one or more of the defendants can be held liable for copyright infringement (whether directly or indirectly) because the evidence will establish that they fall under the safe harbor provision of the Digital Millennium Copyright Act ("DMCA").
* Plaintiffs claims for contributory and vicarious infringement are similarly flawed. For example, Plaintiff has provided no admissible evidence that Oron had actual knowledge of any of the allegedly infringing activity, and thus cannot be liable for contributory infringement. To the contrary, per the strict terms of service between Oron and its customers, Oron maintains the privacy of its client content.
* Nor has Plaintiff offered any admissible evidence that Oron exercised the requisite control over the alleged direct infringer and/or that Oron derived a financial benefit from the direct infringement.
*Likewise, Plaintiffs claim for inducement of copyright infringement will fail. Plaintiff has not established that Defendants provided a service "with the object of promoting its use to infringe copyright, as shown by clear expression or other affirmative steps taken to foster infringement."
* Another factor to be considered in connection with the proposed preliminary injunction is the balance of the hardships that would be imposed should the preliminary injunction be entered. In addition to the prejudice such an injunction would impose on Oron's ability to fund its legal defense, the proposed injunction would also effectively "shut down" Oron without any finding of infringement on its part.
* There are also serious issues whether Plaintiff can establish irreparable harm. Although Plaintiff suggests that irreparable harm in copyright cases is presumed, see Motion at 6, that is not the law in this circuit. To the contrary, the Ninth Circuit has confirmed that irreparable harm is no longer presumed in copyright infringement cases.
* At the same time, Plaintiff has not presented any evidence to support its claim of irreparable harm. Plaintiff has not established by any admissible evidence that it has and/or will suffer any damages other than a monetary loss. Without more, that is not enough to establish irreparable injury. Moreover, Plaintiff waited months and years to bring suit. Such a long delay undercuts Plaintiffs ability to prove irreparable harm.
* Another issue that will be addressed is that the preliminary injunction sought here is not limited to funds or property that the Plaintiff contends should be turned over to Plaintiff if it prevails. Rather, Plaintiff seeks a preliminary injunction to freeze all of Oron's assets, whatever they may be and wherever they may be located, with no evidence that the assets should belong to the Plaintiff or are in any way involved in this case.
In support of that last argument, the motion contends that "less than one-tenth of one percent of the files stored on Oron's servers are Liberty Media's materials. The remaining 99.9% of Oron's business involves users whose files have nothing to do with Liberty Media and for whom no allegations of copyright infringement have or can be made."
Whether the requests contained in the emergency motion are granted or not, stay tuned for a wild ride.
The emergency motion can be accessed here.
