CHATSWORTH, Calif.—For several years, AVN has been covering news of the thousands of copyright violation claims filed by Malibu Media, owner of content producer X-Art, against internet users who may have inadvertently downloaded its content, and whom Malibu then threatened to sue for infringement, often using subpoenas to find out the users' physical addresses so it could supposedly serve its suit papers on them. Or rather, they were, until that system was shot down by federal judges who went so far as to label the company (along with one or two others) as a "copyright troll."
But it wasn't just one law firm that Malibu used to press its legal claims. Rather, it used small firms around the country, most notably in Texas, New York and Pennsylvania—and the total number of claims filed since 2015 clocks in at more than 4,700.
Typically, Malibu would somehow identify an "infringer," most often by attempting to trace its IP address, and then offer not to sue him/her/them if the person paid anywhere from a few hundred to a few thousand bucks to the company—usually an amount just a bit less than defending an actual lawsuit would cost. And the company was phenomenally successful at doing this—for a while.
But federal judges have been taking a long, hard look at companies (and their law firms) who make so many infringement claims, seeking users' identities but rarely bringing an actual lawsuit against the purported "infringer"—and over the past few years, they've been denying such subpoena requests wholesale, leaving Malibu in jeopardy of losing what The New Yorker magazine described in 2014 as "about five percent of its income." (The article also noted that Malibu was responsible for 38 percent of all the copyright lawsuits filed in the U.S. in 2014.)
Moreover, as AVN reported last August, a lawsuit filed that month in Los Angeles Superior Court claimed that "Malibu took in $2.8 million in 2018 alone, solely from suing and collecting settlements from internet users accused of illegally downloading Malibu-produced porn," and that two attorneys and their firms claimed that Malibu owed them half of that amount.
But for the past six months, Malibu has been facing what may be an even bigger problem: Florida law firm Lomnitzer Law Firm PA, which says Malibu had hired it to coordinate the efforts of all the smaller law firms or sole practitioners pressing Malibu's claims, but at the end of last year, tried to cut out Lomnitzer as the "middle man" in the proceedings.
"Malibu instructed attorneys in various jurisdictions that were representing Malibu in the nationwide litigation that was being coordinated by [Lomnitzer] to bypass the firm ...z while still expecting [Lomnitzer] to pay court filing fees, process server fees, etc.," Lomnitzer stated in its complaint filed this past January.
At that time, Lomnitzer was looking for $300,000 from Malibu to cover its costs and legal fees—and lo and behold, Malibu failed to answer Lomnitzer's complaint by the deadline to do so in February, so the law firm sought a default judgment for the full amount.
But upon being apprised of the default motion, Malibu quickly did file a response to the complaint, and a trial had tentatively been scheduled for Spring of 2021—until Malibu announced that it had reached a settlement with the law firm for an undisclosed amount, and yesterday, a Florida federal judge signed off on the settlement agreement.
But the story may not be over yet. If the settlement agreement isn't finalized within the next two months, the suit can be reopened—so it'll be interesting to see if Malibu manages to keep that deadline front and center on its calendar.
