By last count, Malibu Media has filed 365 lawsuits across the USA in 2012, suing 6,000 individuals (hat tip to Morgan Pietz, Esq., for the figures). Think of the fear, angst and sleeplessness generated by this hurricane of lawsuits. Also ponder the millions of dollars generated in settlements.

But what if it is all a cruel charade with the lawsuits premised on nothing more than a gigantic fraud targeting the American public and the federal judiciary?

Such is the question presently before the Honorable Judge Michael J. Hluchaniuk in the Eastern District of Michigan in the lawsuit entitled Malibu Media v. John Does 1-13 (MIED 2:12-cv-12586).

Paul Nicoletti

This lawsuit was commenced on June 14, 2012, with the filing of a complaint against the John Does for allegedly engaging in the copyright infringement of 15 pornographic movies, of which Malibu Media possessed the exclusive copyrights.

The attorney representing Malibu Media in this lawsuit is Paul Nicoletti¹. Nicoletti moved for expedited discovery to subpoena from ISPs the personal information of the John Does, so that the extortion game could commence, and on July 9, 2012 Judge Duggan granted the motion. Shortly thereafter, on August 17, 2012, defense attorney, Jeffrey Thennisch, filed a motion to quash on behalf of John Doe #11 in which he first pointed out the fraud of Malibu Media (emphasis and link are mine):

Plaintiff’ copyright registrations … list Malibu Media, LLC as the “employer for hire” on all of the allegedly infringed copyrighted works. 14 out of the 15 of the copyrighted works were created and published either in 2009 or 2010. But Malibu Media, LLC was not registered with the State of California and therefor did not exist as an entity which could be an employer, until February 8, 2011.

Likewise, another defense attorney, Hattem Beydoun, filed a similar motion on behalf of John Doe #1 on August 23, 2012, reiterating the fraud:

The Plaintiff believes and asserts that it acquired ownership of the film copyrights as the “employer for hire” … However, this is impossible as the Plaintiff did not exist until February 8, 2011 and all 15 works were published prior to Plaintiff’s date of creation. Therefore, Plaintiff could not have employed anyone to create the films and cannot claim ownership through 17 U.S.C. § 201(b).

The motions were referred to Magistrate Judge Michael J. Hluchaniuk on August 24, 2012 who on October 5, 2012 made an Order for Supplemental Briefing on this issue because:

Doe # 4 and # 11 invite the Court to issue a show cause order requiring plaintiff to demonstrate it properly owns the copyright interests it is pursuing in this litigation. Plaintiff argues it has standing to pursue such a claim while acknowledging there are some “errors” in the copyright registration process… During oral argument on this motion on September 28, 2012, counsel for plaintiff offered to demonstrate any errors in the copyright registration process had been or will be cured while acknowledging that a plaintiff prosecuting a copyright infringement claim must be the owner of the copyright.

Meanwhile, down in Florida, Nicoletti’s master Keith Lipscomb, was trying to paper over the fraud by miraculously locating 2 undated assignments in which the porn creator, Brigham Field, allegedly assigned his interest in the 15 questionable porn titles (amongst other porn titles for a total of 17) to Malibu Media.

Lipscomb also caused to be filed a bunch of Copyright Office Form CAs for Supplemental Registrations which are all dated September 13, 2012, which he hoped was sufficient to make this obvious fraud disappear.

Nicolletti summarized this frenzied activity to the court on October 19, 2012 as follows:

Malibu Media, LLC owns http://www.x-art.com (“X-Art”), a website where subscribers can join and view movies created and directed by Brigham Field. Each of the 15 movies listed on the Complaint can be found on X-Art. Brigham Field co-owns Malibu Media, LLC with his wife Colette. Malibu Media, LLC was specifically created by Brigham and Colette as a limited liability corporation for X-art on February 8, 2011. Brigham intended for Malibu Media, LLC to own the copyrights for the movies he created and sold via subscription through the X-art website. Because Brigham Field’s current arrangement with the company renders each work as a work for hire, all of the copyrights were mistakenly registered in that fashion. Upon learning of the mistake in the copyright registrations, and realizing that he was the owner of the copyrights and not Malibu Media, Brigham Field, through an assignment agreement, transferred all ownership rights in the copyrights to his company. The transfer was recorded with the United States Copyright Office. ..At the same time, counsel for Malibu Media, LLC filed form CAs with the Copyright Office correcting the registrations. There was a slight delay in filing the form CAs because each form requires a submission of the actual registration certificate. For some of the works, certificates had been misplaced and needed to be reissued, which can take 4 to 8 weeks. Upon receiving the registrations, on September 13, 2012, Malibu Media’s counsel filed the corrections, explaining the error.

There you go! Fraud on the John Does and on the court are nicely swept under the rug, right? Wrong, according to defense counsel, Thennisch, because:

The copyright registrations are defective by reason of the undisputed fact that Malibu Media could not be an “employer for hire” because it did not exist at the time of the registrations. The Supplemental Registrations are insufficient, as a matter of law, to cure these defective copyright registrations. The assignments from Brigham Field to Malibu Media did not assign the right to sue for infringements prior to September 13, 2012 and, accordingly, Malibu Media had no lawful right to sue anyone prior to September 13, 2012 much less settle with any of the John Does. For the sake of argument, assuming the September 13, 2012 Supplemental Registrations cure the defective copyright registrations, Malibu Media had no lawful right to sue anyone prior to September 13, 2012 much less settle with any of the John Does.

This matter is fully submitted and the parties are awaiting Judge Hluchaniuk to make a determination.

It is reasonable to guess that Lipscomb attempted to remedy the fraud and cure the defective copyrights registrations to all of Brigham Field (?) or Malibu Media’s (?) porn titles on September 13, 2012. But what about the in excess of 300 lawsuits filed prior to that date that Malibu Media may not have had the lawful right to file? The millions in settlement monies obtained prior to that date on arguably false pretenses? At the very least Malibu Media is at risk of facing a future class action lawsuit and, at the worse, being subjected to a criminal inquiry. Karma works in mysterious ways.

Followup

¹ As tempting as it is to go off on a tangent pointing out Mr. Nicoletti’s colorful history I will refrain. However a cursory Google search will quickly reveal that this copyright troll is atypical in that individuals and entities have questioned his professionalism and ethics prior to his entry into the odious extortion scam known as copyright trolling.