This porn company made millions by shaming the little guys who downloaded its films. But now it\u2019s going after Meta for copyright infringement. <\/p>\n
It isn\u2019t often that a lawsuit can make me smile, much less laugh out loud. The latest exception is Strike 3 Holdings vs. Meta Platforms, which is currently unfolding in San Jose federal court.<\/p>\n
Two things are amusing about the case. One is that Meta, the giant social media company, is accused of copyright infringement for allegedly downloading 2,400 of the plaintiff\u2019s movies to train its AI bots. If Meta loses, that would be a serious (and in my opinion, deserved) blow against AI companies that have used copyrighted materials without permission. <\/p>\n
The second part of the joke is the identity of the plaintiff. Strike 3 Holdings, you see, makes porn. Moreover, for years it has pursued a plainly unscrupulous business model in which it sues individuals for allegedly downloading its movies without permission, and shames them into settling for a few thousand dollars at a pop. <\/p>\n
While it is possible one or more Meta employees downloaded Plaintiffs\u2019 videos, it is just as possible…that a \u2018guest, or freeloader,\u2019 or contractor, or vendor, or repair person\u2014or any combination of such persons\u2014was responsible for that activity.<\/p>\n
\u2014 Meta points the finger at others for a porn scandal<\/p>\n
Whether or not Strike 3 has a legitimate claim for copyright infringement, it doesn\u2019t deserve your sympathy. The firm was flayed in 2018 by federal Judge Royce C. Lamberth of Washington, D.C., for engaging in what he labeled a \u201chigh-tech shakedown … smacking of extortion.\u201d Lamberth called Strike 3 a \u201ccopyright troll\u201d<\/a> and threw out its lawsuit against an unidentified internet user for having treated his court \u201cnot as a citadel of justice, but as an ATM.\u201d<\/p>\n When I wrote about this scheme<\/a> in 2023, I counted more than 12,440 lawsuits that the Los Angeles-based firm had filed in federal courts coast-to-coast. The latest count, according to a Lexis search a defense lawyer ran for me, is more than 21,000. The vast majority were settled and closed within a few months of their filing, an indication that they were never meant to go to trial. <\/p>\n Get the latest from Michael Hiltzik <\/p>\n Commentary on economics and more from a Pulitzer Prize winner.<\/p>\n By continuing, you agree to our Terms of Service<\/a>, which include arbitration and a class action waiver. You agree that we and our third-party vendors may collect and use your information, including through cookies, pixels and similar technologies, for the purposes set forth in our Privacy Policy<\/a> such as personalizing your experience and ads. <\/p>\n Now Strike 3 appears to have hooked a big fish. In the first significant ruling in its lawsuit against Meta, the firm scored a surprise win: On June 11, federal Judge Eumi K. Lee of San Jose denied Meta\u2019s motion<\/a> to dismiss the case. Meta\u2019s defense, she wrote, \u201cstrains credulity.\u201d <\/p>\n More about that in a moment. First, a few words about the litigants. Meta needs no introduction: Formerly known as Facebook and based in Menlo Park, Calif., Meta recorded a profit of $60.5 billion last year on $201 billion in revenue. <\/p>\n Strike 3 portrays itself as an avatar of \u201cHollywood style and quality\u201d in its adult films, which it distributes through its streaming websites such as Blacked, Tushy, Vixen and Wifey. It has described Greg Landry, its former owner and house auteur, as the porn industry\u2019s \u201canswer to Steven Spielberg<\/a>.\u201d<\/p>\n Neither Meta nor Strike 3 responded to my request for comment beyond the claims and defenses in court filings.<\/p>\n As I reported in 2023, Strike 3 has flooded federal courts with cookie-cutter lawsuits alleging that defendants infringed its copyrights by downloading its movies via BitTorrent, an online service on which unauthorized content can be accessed by almost anyone with an internet connection. Its targets generally have been individuals with plenty to lose from being publicly outed as porn viewers. <\/p>\n \u201cGiven the nature of the films at issue,\u201d a federal judge in Connecticut observed last year<\/a>, \u201cdefendants may feel coerced to settle these suits merely to prevent public disclosure of their identifying information, even if they believe they have been misidentified.\u201d <\/p>\n Strike 3\u2019s letters to its target defendants have warned that the statutory penalty for willful copyright infringement is $150,000, but offer to make the case go quietly away for a few thousand bucks, which would be a fraction of the cost of hiring a defense lawyer, not to mention the downside of exposing oneself as a porn fiend.<\/p>\n J. Curtis Edmondson, a Portland, Ore., lawyer who won a case against Strike 3, estimated in 2023 that Strike 3 \u201cpulls in about $15 million to $20 million a year from its lawsuits.\u201d But financial data that could validate his estimate hasn\u2019t surfaced in court records.<\/p>\n There\u2019s nothing new about content owners\u2019 aggressive pursuit of copyright infringers. The practice was pioneered by the Recording Industry Assn. of America, when the industry feared that unauthorized downloading of music through programs such as Napster threatened its very existence. From 2003 through 2008, the association sued some 35,000 alleged song pirates. <\/p>\n But it abandoned the strategy because its legal dragnet swept up sympathetic targets such as single mothers and teenage girls, creating a public relations disaster.<\/p>\n There followed the appearance of outright trolls such as Prenda Law Group, which posted porn films online as bait to attract downloaders, whom it then sued in what judges ultimately found to be sham lawsuits<\/a>. Prenda principal John L. Steele even bragged publicly that Prenda had made nearly $15 million<\/a> with its lawsuits. U.S. Judge Otis Wright II of Los Angeles put the kibosh to its practice by slapping the Prenda lawyers with stiff sanctions for contempt. <\/p>\n That brings us to Strike 3\u2019s case against Meta, which it filed in July. Strike 3 hasn\u2019t been accused of a Prenda-style fraud, since it does own the films at issue and its right to sue copyright infringers isn\u2019t disputed. But its allegation that Meta downloaded its films to train its AI bots, rather than just for personal enjoyment, is a new wrinkle for an old issue.<\/p>\n Strike 3 says its lawsuit grew out of a separate case in which a witness testified that Meta had downloaded thousands of pirated books to train its LLaMA AI bots \u2014 that is, feeding the content into LLaMA for it to use to generate answers to user questions. (Numerous lawsuits have been filed against AI firms alleging similar infringement<\/a>.)<\/p>\n Strike 3 says that case prompted it to look into whether Meta had downloaded any of its content. It says it discovered that 47 IP addresses owned by Meta \u2014 that is, digital identifiers of internet accounts \u2014 had downloaded its movies without permission. <\/p>\n In all, Strike 3 alleges, those Meta addresses downloaded at least 2,396 of its movies \u2014 almost its entire catalog \u2014 more than 6,000 times via BitTorrent. What\u2019s more, Strike 3 says Meta then posted some of that content back onto BitTorrent to take advantage of BitTorrent\u2019s \u201ctit-for-tat\u201d mechanism through which users can obtain faster download speeds by uploading content to the platform. <\/p>\n If Strike 3 were to prevail on all its claims for illicit downloading, it would be entitled to about $360 million in damages<\/a>, observes Eric Fruits, an Oregon economist who has testified for the defense in some Strike 3 lawsuits.<\/p>\n One might ask why Meta might be downloading porn for any reason, bot-training or otherwise. Meta, in its defense filings, says Strike 3 has offered no proof that Meta, as a corporation, was responsible for the downloading. If it happened, Meta says, it would have been inadvertent.<\/p>\n \u201cTens of thousands of employees and innumerable contractors, visitors, and third parties access the internet at Meta every day,\u201d it wrote in its motion to dismiss the case<\/a>. \u201cWhile it is possible one or more Meta employees downloaded Plaintiffs\u2019 videos, it is just as possible … that a \u2018guest, or freeloader,\u2019 or contractor, or vendor, or repair person \u2014 or any combination of such persons \u2014 was responsible for that activity.\u201d The \u201csporadic downloads,\u201d Meta says, \u201cexhibit the hallmarks of personal use,\u201d not corporate strategy.<\/p>\n This defense has borne fruit in other Strike 3 cases, in which defendants successfully argued simply having an IP address that was used to infringe wasn\u2019t enough to prove they committed the infringements. <\/p>\n