Judge Curious If Malibu Media Is Seeding Its Own Files And Engaged In Copyright Misuse

It appears that a judge has begun to get a little more curious about copyright troll giant Malibu Media and how it goes about finding "infringers" to shakedown with settlement agreements. In the past, evidence showed that other similar copyright trolls like Prenda, were engaged in seeding their own content, which would make the file authorized, and thus the shakedown letters a form of "copyright misuse." There have long been rumors that Malibu Media, perhaps in association with the infamous "international men of mystery" running the behind-the-scenes operation out of Germany, may be seeding their own files as well.

Now, as Raul points out, it appears that at least one judge is willing to allow discovery on this point in one of the cases, involving Malibu Media against Matt Guastaferro in a Virginia court, and to examine if Malibu Media has "unclean hands" as a result of this:

In this case, Defendant has alleged that Plaintiff's claims are barred by the [unclean hands] doctrine "as Plaintiff's use of its copyrights violates public policy." ... Such an allegation does not appear to trigger the doctrine because it says nothing of how Malibu Media "encouraged, invited, aided, compounded, or fraudulently induced" Defendant's allegedly wrongful conduct.... Defendant's response to this motion, however, sets forth factual averments that do appear to support his invocation of the doctrine. For instance, he assets that "IPP or another agent of Malibu Media is responsible for initially seeding some of Malibu's content onto BitTorrent in the first place and for facilitating infringing downloads by BitTorrent users" in an attempt "to extract exorbitant sums from individuals for alleged copyright infringement."...

Malibu Media has moved to strike this defense on the basis that he has "not sufficiently alleged copyright misuse." ... In support thereof, he relies upon a recent decision of this Court, in which it granted Malibu Media's motion to strike "because Plaintiff cannot have unclean hands if Defendant did not sufficiently plead copyright misuse." .... The Court respectfully disagrees with this conclusion and considers the defense one that is better suited for resolution following discovery. Indeed, the Fourth Circuit did not premise its decision barring the copyright infringement claim pursuant to the doctrine of unclean hands on an associated defense of copyright misuse.... Thus, the pleading requirement that Plaintiff urges here does not appear to exist.

Accordingly, because Plaintiff is on notice of Defendant's allegations that it "seeded" some of its content onto BitTorrent for the purpose of extracting settlements in the numerous copyright infringement suits that it has filed, the Court will decline to strike this defense as well.

This may not lead to anything, but it's fairly amazing that courts haven't been digging that deeply into Malibu Media's practices in similar cases.

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