Sylvestor Stallone promoting The Expendables at Comic Con 2010 http://flic.kr/p/8qLVby

I was shocked late last week to hear that my neighbor was one of 23,000 people targeted in a copyright infringement lawsuit filed by the copyright trolls at the U.S. Copyright Group (USCG).

I wasn’t shocked that the “bounty hunters” at the firm owned by Dunlap, Grubb, and Weaver (a Washington D.C. law firm) was suing 23,000 people – it was inevitable that another mass lawsuit would be filed by a firm of copyright trolls over files downloaded via BitTorrent.

What shocked me was that my neighbor, who generally exhibits good taste, was accused of downloading a Sylvester Stallone film called The Expendables.

Her house was among the 23,000 targeted in a March 17 ruling by a federal judge in the District of Columbia which gave the USCG permission to demand from ISPs the name, current and permanent addresses, telephone numbers, email, and device Media Access Control (MAC) addresses of those accused of copy infringement.

The suit, filed on behalf of Nu Image, which not coincidentally announced “The Expendables 2” only a few weeks before the subpoenas went out. If you’re unsure how a suit like this works, here’s a simplified summary of the process.

1. Someone uploads (or shares) a copyright protected file. (And copyright protects nearly all films, television shows, and recorded music. Copyright laws protect even material that is free to download for personal use – such as a movie trailer from the Apple iTunes Movie Trailer site.  Put it on your iPod or iPad and watch it, but you could be in troble if you share it on BitTorrent.)

2. The copyright holder – in this case, Nu Image – hires a law firm, which monitors the file sharing site to collect Internet Protocol (IP) address of individuals sharing files.

3. With its collection of IP addresses in hand, the lawyers file a “John Doe” lawsuit, asking a court to order the ISP which was used to connect to the service where the alleged copyright infringement happened to turn over information about  the IP addresses used for the download or file access.

4.  Once they have the IP addresses, the lawyers then seek a court order demanding ISP’s to hand over the defendants’ true identity. (Your ISP – that is the carrier that provides Internet service to your home, business, or mobile device – has the information for billing purposes. It typically includes your name, current and permanent addresses, telephone numbers, e-mail and a MAC address that is uniquely identifiable to a specific device such as a computer, smartphone or tablet.)

5. Once the ISP’s turn over the information, which they must do upon receipt of a court order, the individuals being sued get either a demand letter or a subpoena about the claim.

6. Copyright trolls like USCG usually ask for the maximum $150,000 penalty, knowing that they aren’t likely to get that much from people like my neighbor, who happens to be a retired teacher living on a small pension, social security, and whatever savings she put aside in a career spent pounding basic mathematics into the heads of fifth and sixth graders in an inner city school. So the trolls typically settle for what the law firm’s FAQ on Force.com  calls “a relatively nominal, one-time lump sum payment” intended to discourage future infringement. (People can pay online through the Salesforce.com portal, and many do to avoid going to court where the judgment might be higher than the $1,500 and $2,500 per person paid to settle most claims.)

I suspect my neighbor will pay quickly to avoid having to go to court. I heard about my neighbor’s plight this weekend, and it reminded me of the conversation I had last Friday at work while interviewing a young graphic artist for a position.

I asked her about some images from a famous motion picture that she had used in a game she developed as part of a student portfolio. Knowing the answer in advance, but wanting to see how she’d handle the question, I pointed at one particular image of a Disney character and asked, “How did you get the rights to use that? I always heard it was nearly impossible to get permission to use that character in a computer game.”

“Oh,” she replied. “I didn’t need to get special rights or anything – I don’t profit from this, it’s just a game I made for school and it’s ok to use images like that as long as you don’t profit from them.”

I sighed, internally cursing the art institute that churns out hundreds of graduates each year who have no idea at all about copyright law (yet expect to earn their livings and repay the for-profit school’s exorbitant student loans based on their own copyright protected works).  So I explained gently that it isn’t ever ok to use a copyright image without permission.

Title 17 of the United States Code defines copyright infringement as the unauthorized or prohibited use, copying, replication or distribution of copyright protected works. There isn’t a word in the law about “for profit” or “not-for-profit” or “student” or “classroom” usage of copyright protected works.   It says you can’t use them without permission, period.  Yes, there are transformative works, and Fair Use. But appropriating a Disney character and music and putting them into a video game you post on a website is akin to putting up a neon sign that says, “Please sue me.”

If you didn’t create it yourself (and I don’t mean re-dress a recognizable Disney character in a different-colored costume), pay to license it, or get permission from the copyright holder to use it through a specific license such as Creative Commons, then using it can leave you wide open to a lawsuit.  (The exception is an image that is in the public domain, but do you have the expertise to know what is, and isn’t in the public domain? Me, neither. So I sometimes use images from The Morgue File, and pray that whoever uploaded them WAS certain that they are copyright free.)

The young woman thought for a couple of minutes and said, “OK, well, I guess I’d better delete the files from my website, then.” That seemed like a good idea, as she hasn’t been sued (yet). Removing the file from your system may not be a defense after you’ve been sued.  In fact, the copyright trolls at USCG call that spoilation of evidence in their online FAQ, and sometimes file an additional claim if the movie you’re alleged to have downloaded isn’t found on your system.

There  aren’t many defenses available for copyright infringement. It’s unlikely that the ISP provided her address and contact information in error, and all that’s required to prove the case is that the computer was where the ISP says it was when the download occurred.

And I’m not sure there is any excuse at all for downloading a movie like The Expendables that was at the $1 movie theater in our neighborhood roughly two weeks after it was first released.

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Join me tomorrow — May 19 — for a free webinar on the compliance issues surrounding online and social media marketing.  Details and registration information are online here.