Strike 3 Holdings is an adult pornography company located in California that has literally filed over 10,000 federal court copyright infringement cases across the United States for nearly a decade now. No company files more lawsuits (to my knowledge) than this company does. It goes after many people who work in the tech industry (typically middle-aged men) for downloading and/or sharing their adult movies via Torrent networks. This, they allege, violates their exclusive rights as copyright holders to make copies and distribute their content. Vondran Legal® has handled a good bulk of these cases over the past many years, and settlements can be costly, typically ranging from $5,000-$30,000 or more. Some call these “shame settlements” because no one wants their name associated with their movies, especially in the federal public records docket.
Strike 3 targets users on the torrent protocol (which is used to share large files quickly). They use their technology to track down the IP address for the infringing site. Then, not knowing the identity of the actual subscriber of the internet account, they will file a lawsuit in the local federal court (whether that be in California, Texas, Illinois, New York, Pennsylvania, Ohio, Florida or other states) and seek “early discovery” to find out the name and address of the ISP subscriber. Once they have this, they can conduct due diligence to see if this person owns a home or has a job (via LinkedIn) and other things.
Sometimes the person who is the subscriber of the internet account is NOT the infringer/downloader. This can happen in circumstances such as where:
- The subscriber is a female
- The subscriber is a homeowner who rents the house out (ex. VRBO or AirBnB)
- The subscriber is one of several roommates who did not download their movies
- The subscriber is a fraternity house and no one knows who did the downloads
- The subscriber is a commercial business that offers free WiFi access to guests
There are many situations that can arise, but these are some of the popular ones we have handled for the past 5+ years. This blog is a simple notice to landlords who rent properties to consider having an indemnification clause and a warning/prohibition in their rental agreement or even in the welcome books many landlords leave for their VRBO renters. If a long-term renter engages in illegal downloads, you (the landowner) do not want to find yourself being chased down for a settlement by one of their aggressive regional copyright attorneys.
As I write this blog, I am renting a beachside home, and when I arrived, I saw the “welcome guest book.” In it was the internet password and pages and pages of house rules and regulations (don’t smoke, take out the trash, no loud noise, etc.). One thing I did not see, however, was a warning NOT TO DOWNLOAD COPYRIGHTED CONTENT and that if you DO, that you would be held liable and required to indemnify the owner if there was any legal action initiated against the owner, such as receiving an ISP subpoena notice from companies like Strike 3 Holdings. This is something every property manager and owner should consider before renting out their house, townhome, cabin, seaside mansion, or other property. In fact, I would make sure to put this in the rental agreement itself, as well as the home handbook. This will allow you to hopefully (a) prevent this from happening in the first place and (b) legally require the renter or tenant to take responsibility and defend the action.
While a good IP and real estate law firm such as ours can help craft the proper custom terms, in general, here are 7 key elements every good indemnification agreement should consider including:
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Clear Definition of Parties
Identify the indemnifying party (the one providing the indemnity) and the indemnified party (the one receiving the protection). Be specific to avoid ambiguity.
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Scope of Indemnity
Clearly define what is covered under indemnity. For example:
- Losses or damages (e.g., financial losses, legal fees)
- Claims by third parties
- Specific events (e.g., breach of contract, negligence)
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Exclusions and Limitations
Outline what is not covered, such as:- Gross negligence or willful misconduct of the indemnified party
- Specific types of claims or damages (e.g., consequential or punitive damages)
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Notice Requirements
State the process for notifying the indemnifying party about a claim, including timelines and required documentation.
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Control of Defense
Specify who controls the defense in case of third-party claims:
- Does the indemnifying party have the right to select and manage legal counsel?
- Can the indemnified party participate or veto settlements?
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Cap on Liability
Include monetary caps or limits on the indemnifying party’s obligations to avoid unlimited exposure. -
Survival Clause
Clarify how long the indemnity obligation lasts, especially after the termination of the agreement.
These are only some of the key things to address. There can be others due to your specific setup and needs.
This post was originally published on here
