LOS ANGELES—A federal lawsuit filed yesterday sheds light on a new scheme operating in the shadows of the Copyright Act and the DMCA that can get Instagram accounts taken down.
New York City-based Paper magazine alleged in a suit filed yesterday that Okularity Inc. has created software for the express purpose of disabling valuable commercial accounts on social media platforms, in this case Instagram, so that it can then demand extortionate sums from account holders to have the accounts restored.
Okularity, based in Beverly Hills, Calif., is headed by CEO Jon Nicolini, a former software engineer for Copyright Enforcement Group, which worked with Prenda Law, the notorious law firm that extracted settlements from hundreds of people who feared being exposed as pornography consumers.
Through its proprietary software Okularity has developed software that crawls the internet for images that infringe on allegedly protected works, the suit said.
Its software automatically generates and submits DMCA notices to social media platforms, including Instagram, containing an image in Okularity’s database, which comprises inventory from partnering photo copyright clearinghouses BackGrid, Splash and Xposure.
Paper’s lawsuit contends that an editorial mistake prompted Okularity to send “a certain amount” of DMCA notices, which had a devastating effect: On July 8, Instagram shut down Paper’s account that had more than 1 million followers.
“Most social media platforms, including Instagram, have policies whereby accounts are disabled once a certain amount of DMCA notices have been submitted on a particular account,” said the suit, filed at Los Angeles federal court. “Once an account reaches this threshold, Instagram will not reinstate the account until the underlying copyright ‘dispute’ is resolved.”
Given the massive financial incentives provided to “mercenary litigants” by the Copyright Act, would-be claimants have leveraged advances in technology to create economies of scale in pursuing claims, the suit said.
“Okularity does this without any of the investigation, warning, or legal analysis required by the DMCA, let alone any demand letter to the alleged infringer,” the suit said. “Rather, Okularity lies in wait while DMCA notices accumulate to the point where Instagram disables the account. Only then does Okularity begin to negotiate ‘settlement’ for the alleged copyright claims.
“Okularity operates this way because Okularity knows that Instagram is the lifeblood of any digital media company,” the suit said. “Okularity knows that if a business like Paper has its Instagram account disabled, it has a metaphorical gun to the head of the target company, since it also knows that Instagram will not reinstate the account without a resolution of the ‘dispute.’”
According to the suit, Nicolini demanded $4.6 million in exchange for informing Instagram that the dispute was resolved so that Paper could get its Instagram account back.
“Indeed, Mr. Nicolini has been engaged in the development of copyright trolling software since at least 2012, when he worked as chief technological officer for a similar scheme that scraped bit torrent websites for information about users downloading copyrighted pornographic material,” according to a footnote in Paper’s lawsuit.
“The software was used to obtain IP addresses for the individuals who downloaded the material, and who were subsequently threatened with a public lawsuit if they did not pay Mr. Nicolini’s former employer their extortionate demands,” the footnote said. “That rodeo ended with the attorney mastermind [John Steele] being sentenced to 14 years in prison.”
Further, the suit claims, “Nicolini, who is not an attorney, implies that he is an attorney to victims by interpreting the application of the Copyright Act to images, engaging in damages analysis regarding ‘claims’ of his ‘clients’ and by negotiating resolution of legal claims on their behalf.”
“Nicolini operates the scheme with the sole objective to disable social media accounts. Not only is no demand letter needed, the scheme makes it so that its victims come to Okularity, often in a state of desperation, once they realize their asset is being held hostage,” said the suit, which seeks injunctive relief, unspecified damages and attorneys fees.
Paper, in the suit, has sued for violation of the DMCA, RICO violations, intentional interference with economic advantage and unfair competition.
Attorney Robert Tauler, who represents Paper in the lawsuit, told AVN that more individuals and companies with big-number social media accounts should be wary of similar schemes.
“This is happening more and more often,” Tauler said.
Paper’s lawyer noted that Instagram’s suspension policies are somewhat of a mystery.
“I can only speculate as to certain procedures they have,” he said. “But as to DMCA notices, they have to follow the law, which I don’t think had Instagram in mind when it was written.”
Nicolini did not respond to AVN queries about the case by post time.
