Thousands of accused BitTorrent downloaders - including those of The Hurt Locker - can breathe a sigh of relief as their cases have been dropped. In what can be described as a major victory for those targeted, the complicated nature of these mass-lawsuits has forced the copyright holders to dump nearly all the defendants and rethink their strategy. Slowly, it appears that the US Copyright Group's campaign to turn piracy into profit is crumbling.

At the same time as an Iraq war veteran is suing the makers of The Hurt Locker for ruining his career, the film studio itself is engaging in legal action against people who allegedly shared the movie using BitTorrent.

The studio behind the movie wants to recoup some of their claimed losses and was one of the first to sue thousands of US-based BitTorrent users in the now common mass-lawsuits. Represented by law firm Dunlap, Grubb & Weaver, aka the U.S. Copyright Group (USCG), The Hurt Locker makers and other copyright holders have sued more than 100,000 BitTorrent users since last year.

While the case against the Iraq war veteran is in full swing, The Hurt Locker makers have now announced a cease-fire in the BitTorrent cases. Together with the alleged sharers of Call Of The Wild, Familiar Strangers, The Casino Job and several other films, nearly all The Hurt locker defendants have been dropped from their respective cases (pdf).

The studios behind these films are all represented by USCG, who decided to tell the court that they have dropped all of the John Doe defendants whose details were given out by their ISPs. Although the true reason for this decision is unknown, it appears that recent developments in similar cases may have led to the retreat.

In recent months courts have ruled unfavorably against copyright holders in other mass-lawsuits for improperly joining defendants and filing cases outside of defendants’ jurisdictions. Earlier this year USCG dropped thousands of cases against alleged sharers of the Far Cry movie over the jurisdiction issue.

“This is a huge victory to our clients and the thousands of defendants, and no doubt we will be sending letters of congratulations to our clients in these cases in the coming days,” Texas lawyer Robert Cashman, who represents several defendants, said in a response to the good news.

Although having near 10,000 cases dropped can indeed be called a victory, it has to be noted that the cases have been dropped without prejudice, which effectively means that USCG can file suit against defendants again at a later stage if they so choose. They can, for example, decide to sue the defendants individually in their home states.

Cashman nevertheless characterizes the retreat as a ‘big win’ for the defendants, to whom he reaches out in an assuring tone. “You should feel comfortable considering yourselves dismissed. The numbers are certainly on your side and while the risk of being sued individually is always present, the likelihood of hearing from the plaintiff attorneys ever again is very low.”

One thing is for certain. What at first sight appeared to be a relatively effective and profitable way to turn piracy into a healthy revenue stream has – perhaps fittingly – turned out to be a legal minefield.