Being confronted with legal action is daunting. People served with legal documents often worry about what they mean and how much resolving their newfound problem will cost. This is especially true of legal action involving Strike 3 Holdings, LLC.
Strike 3 Holdings is an adult film company known for a litigation model that takes advantage of federal copyright law to solicit settlements from people that illegally download Strike 3’s content. Legal action with Strike 3 has implications for both your financial well-being and your reputation. That’s why these lawsuits are serious and demand immediate attention. In this article, we will explain why your best option is to settle with Strike 3, and break down how much such a settlement might cost you.
What Is a Settlement?
A settlement is an agreement between parties to resolve their dispute privately instead of having a court ultimately decide the matter. The resolution usually involves the payment of money by one party in exchange for the other party discontinuing or avoiding legal action.
Why Am I Being Contacted About Strike 3?
If you have been confronted with legal action involving Strike 3 Holdings, LLC., you have most likely received a notice from your internet service provider that they have been asked to reveal your identity in a lawsuit. They are being asked to provide this information because your IP address was identified as being used to illegally download Strike 3’s adult content. Your IP address has therefore been named as a “John Doe” defendant in a preliminary legal action filed by Strike 3 to find out your identity. To better understand what this all means, consider how Strike 3’s settlement model works.
The Steps in Strike 3’s Settlement Model
Strike 3’s main objective is to get illegal downloaders of their content to pay them. The scheme works because federal copyright law protects Strike 3’s intellectual property rights by allowing them to sue illegal downloaders of their content for tens of thousands of dollars. Once Strike 3 has evidence that someone has illegally downloaded their content, they are almost certain to win if they file a copyright infringement lawsuit. The payment Strike 3 seeks is therefore virtually inevitable. The only remaining questions are how much that payment will be and how it will be obtained, by lawsuit or settlement. Illegal downloaders targeted by Strike 3 are therefore left between a rock and a hard place: pay Strike 3 after a lawsuit or pay Strike 3 in a settlement.
Step 1. Identify IP addresses hosting illegal downloads of Strike 3 content.
The settlement scheme begins with Strike 3 identifying many IP addresses that host illegal downloads of their adult content. Specifically, Strike 3 targets repeat offenders, meaning people that have illegally downloaded multiple files and/or on multiple occasions.
Step 2. File a lawsuit in the State of Florida against the offending IP addresses to discover the subscriber behind the IP address.
Strike 3 next files a lawsuit in Florida (state court), naming thousands of these offending IP addresses as John Doe defendants. The defendants are named as “John Does” because Strike 3 does not know the identities of the illegal downloaders behind the IP addresses. An IP address itself does not indicate the identity of the illegal downloader, and at this point, the IP addresses are all Strike 3 has to work with. The objective here is for Strike 3 to obtain the names of the individuals who subscribe to the internet service represented by the IP address.
Step 3. Demand a settlement or file the case in Federal Court.
Once Strike 3 knows the identities of the illegal downloaders, they try to get each downloader to pay them. While under federal copyright law, Strike 3 can obtain this payment by successfully suing the downloaders in federal court, Strike 3’s preference is that the downloaders agree to pay them in what is known as a settlement. However, if the illegal downloader is not open to paying a settlement, Strike 3 will obtain their payment by filing a lawsuit in Federal Court.
What Are Your Options?
Once you have been confronted with legal action involving Strike 3, your options include:
- Filing a motion to quash
- Doing nothing
- Contesting the lawsuit
At the outset, it is crucial to note that while you technically have many available courses of action, reaching a settlement in your legal dispute with Strike 3 is by far your best option. It is both the least expensive option and the one most protective of your anonymity.
Comparison of Options When Faced With Strike 3 Legal Action
Filing a motion to quash
Initial legal action can be temporarily dismissed
Even if successful, Strike 3 will likely refile the legal action in Federal court, putting you back at square one
You do not have to pay an attorney to represent you
You can end up paying tens of thousands of dollars in damages when Strike 3 gets a default judgement against you
It is far more expensive than settling
Strike 3 can harass you personally when trying to solicit a settlement
Your name is forever tied in public court documents to allegations of illegally downloading adult films
Contesting the lawsuit
You will almost certainly lose
You end up paying at least tens of thousands of dollars in damages
You pay the costs of going to trial for both yourself and Strike 3
It is far more expensive than settling
Your name is forever tied in public court documents to allegations of illegally downloading adult films
You pay far less damages than if the case had gone to court
You do not have to pay the costs of going to trial
Strike 3 cannot harass you directly if you have an attorney representing you
Your anonymity can be retained with respect to the allegations and public court documents
Strike 3 cannot sue you for infringements from before the date of the settlement (if that term is included in the agreement)
Filing a Motion to Quash
Many attorneys will tell you that your first option upon receiving notice that your internet service provider has been subpoenaed is to file a “motion to quash” the subpoena against your internet service provider. When you file a motion to quash a subpoena, you are asking the court to invalidate the subpoena because it is legally invalid. The most common reason a subpoena is legally invalid in this context is for “jurisdictional” reasons, meaning the subpoena is invalid because you have no meaningful connection to the state in which the lawsuit was filed. Generally speaking, if you are not a resident of the state in which Strike 3 files the lawsuit and have no other connection with that state in relation to the dispute, the court does not have the authority to make orders concerning you.
A motion to quash is not an effective step in resolving a copyright infringement dispute with Strike 3. The trouble is that even if your motion succeeds and the case is dismissed, Strike 3 can just fix whatever was wrong with their initial filing and refile the case. For example, if the Florida court dismisses the case because you, the accused infringer, do not live in Florida, Strike 3 can just refile the case in the state in which you do live. So in filing a motion to quash, the best case scenario is that you pay an attorney to engage a legal process just to end up exactly where you began: with your internet service provider being subpoenaed to reveal your identity.
A second option you have when confronted with legal action involving Strike 3 is to do nothing. There are multiple opportunities in the course of the dispute to do nothing, each with its own consequences.
-The first opportunity to do nothing is when you receive notice that you have been sued
The result: Your internet service provider will reveal your identity to Strike 3. Once Strike 3 knows your identity, they will contact you in an attempt to solicit a settlement.
-The settlement phase is the second point at which you can do nothing.
The result: If you refuse to engage in settlement negotiations or ultimately do not agree to a final settlement amount, Strike 3 will proceed with a Federal lawsuit.
-Your third opportunity to do nothing is if Strike 3 continues with a lawsuit.
The result: Not responding to the lawsuit in a timely manner will likely result in Strike 3 securing a “default judgment.” A default judgment is when the person or entity that files a lawsuit wins by default because the person or entity being sued failed to file anything in response. A default judgment in this context will state that you illegally downloaded a certain amount of Strike 3’s adult content and are therefore liable for paying a specific amount of money called “damages.” This can be rather expensive. For context, the federal copyright law permits a court to order a copyright infringer to pay up to $30,000 per “work,” here meaning per video. This amount can increase dramatically if Strike 3 can convince the court that you illegally downloaded their content “wilfully,” which roughly means that you knew or should have known that you were doing so.
As you can see, doing nothing is not a viable option for at least two reasons. First, contrary to the logic that typically motivates this tactic, doing nothing will not result in Strike 3 dropping the matter. In fact, doing nothing at every possible stage usually ends in the worst possible outcome: a default judgment holding you liable for hundreds of thousands of dollars. If you do not pay Strike 3 this money willingly, they have multiple legal avenues to make sure you pay them, such as by garnishing your wages, seizing your property, and placing a lien on your bank account.
Secondly, doing nothing deprives you of your anonymity. Once your identity is revealed to Strike 3, your name is likely associated with Strike 3’s allegations in public court documents. This allows any member of the public to request and gain access to documents containing your identity in connection to Strike 3’s allegations that you illegally downloaded their adult content. Given the sensitive nature of Strike 3’s content, most people find this consequence unacceptable.
Contesting the Lawsuit
A third option is to refuse to settle with Strike 3 and fight the lawsuit in court. This is a bad option because the chances of winning this type of lawsuit are very slim, and you have much more to lose by unsuccessfully contesting the lawsuit than you do by settling.
Regardless of what may seem like extortion, as the owner of the adult films, Strike 3 has a valid legal interest in protecting their intellectual property rights. And, for the most part, Strike 3 only carries out the settlement scheme when they are confident they can prove in a court of law that the accused person illegally downloaded their content. This makes contesting the lawsuit rather futile. It is very unlikely that you can provide enough proof to convince the court that you did not illegally download Strike 3’s content when the opposition has in hand clear evidence of illegal downloads tracking back to your IP address.
The very low probability of successfully defending against this lawsuit should be weighed against the stakes of losing this lawsuit. As mentioned previously, losing a Strike 3 lawsuit can result in you being liable for hundreds of thousands of dollars (or more). On top of this, you will have to pay your attorney’s fees and Strike 3’s attorney’s fees. The total cost of an attorney’s services rises dramatically when a case goes to trial. These expenses are simply not worth it when you are incredibly unlikely to win the lawsuit and have a cheaper option of negotiating and accepting a settlement.
Yet another undesirable consequence of contesting a lawsuit is that you lose the opportunity for anonymity. As discussed previously, a lawsuit ordinarily becomes part of the public record, meaning any member of the public can request and obtain a copy of documents filed in the course of the lawsuit. This is something most people want to avoid, given the sensitive nature of the subject matter of Strike 3 lawsuits.
Your final option is to negotiate and accept a settlement with Strike 3. A settlement in this context would be an agreement to pay Strike 3 an amount of money in exchange for them agreeing to never take you to court over your alleged copyright infringements occurring before the date of the settlement. This is your best option. By settling, you benefit by only paying a fraction of what you would be liable for if Strike 3 successfully sued you and by preventing your name from being publicly tied to the allegations Strike 3 is making against you.
Why you should act quickly – time is not on your side
In addition to the fact that dragging your feet could lead to an embarrassing public lawsuit being filed against you for illegally downloading pornographic content, the more time that passes, and the more legal work and attorney time Strike 3 are required to invest in pursuing the matter, the more money they will expect from you in terms of the settlement (see below). This is why you should engage the services of a defense attorney as soon as possible.
What Happens When You Settle with Strike 3?
The settlement process is relatively straightforward. Your attorney will communicate with the Strike 3 attorney handling your particular case about the possibility of settling the case. Since Strike 3 has a preference for settlements over taking cases to court, they will almost certainly agree to the settlement path. Your attorney will negotiate a settlement agreement with Strike 3’s attorney, and if you accept the terms of that agreement, you will sign it and the case will be resolved. It is important to note that at this point, you will be expected to pay the settlement in its entirety. Strike 3 will not put you on a payment plan nor accept partial payment. Moreover, the settlement process happens rather quickly, often in a matter of about six weeks. This option, therefore, requires your ability to get the money together quickly.
What Are the Terms of a Settlement?
The most important terms of the settlement involve the things being exchanged between the parties. In this case, you, the alleged infringer, are agreeing to pay Strike 3 a sum of money. In exchange, Strike 3 agrees that they will not sue you for any alleged instances of copyright infringement against them from before the date of the settlement.
What Determines the Settlement Amount?
The settlement amount depends on three variables:
- Negotiated infringement penalty per download (P)
- Number of videos (allegedly) illegally downloaded (N)
- Strike 3’s attorney fees (F)
The settlement cost is equal to the negotiated infringement penalty per download (P) multiplied by the number of videos illegally downloaded (N), plus Strike 3’s attorney’s fees (F):
SETTLEMENT AMOUNT = (P x N) + F
“Negotiated infringement penalty per download” refers to the negotiated sum of money you will pay for each illegal download Strike 3 has tracked back to your IP address. In copyright infringement cases, the amount of damages is usually calculated per copyrighted “work” that has been infringed upon. In this case, the copyrighted works are Strike 3’s adult films.
Copyright infringement settlements are structured in much the same way. Your settlement will involve a single rate for each illegal download tracked back to your IP address. Your attorney will negotiate this per download rate with Strike 3. The agreed-upon rate will then be multiplied by the number of illegal downloads Strike 3 is accusing you of. Additionally, the settlement will factor in Strike 3’s attorney fees. As explained above, the later on you settle with Strike 3, the more attorney time and fees need to be spent pursuing the case against you. Conversely, an early settlement means they will be willing to accept less money because they themselves haven’t spent as much money to obtain the ultimate result (a monetary settlement).
What Are the Benefits of a Settlement?
Strike 3’s settlement scheme is designed so that you, the alleged illegal downloader, have your back against the wall. You are practically limited to two options: pay a high amount of damages after a trial or pay a reduced amount of damages by settling. The benefits of settling make it far superior to any other available course of action.
Settlements are far less expensive than what you pay if you lose at trial.
By settling, you end up paying a fraction of what you would owe if Strike 3 successfully sued you for copyright infringement. Under federal copyright law, a copyright infringer can be held liable for up to $30,000 for each copyrighted work they infringe upon. If the court finds the infringement was willful, meaning the infringer knew or should have known they were infringing on a copyrighted work, the possible damages rise dramatically. Settling means paying a discounted rate because it saves Strike 3 the trouble of having to take your case to trial, which is time-consuming and expensive for them.
A settlement closes the matter entirely
One of the terms of your settlement will be that Strike 3 cannot sue you for any copyright infringement from before the date the settlement is signed. This is especially beneficial because Strike 3 will often sue an illegal downloader for only a fraction of the videos they know the person to have illegally downloaded. Without a settlement preventing them from suing for past infringement, they can sue multiple times for separate instances of infringement. For example, they can file one lawsuit for 30 illegal downloads, and then years after winning that suit, they could sue you again for a different 30 illegal downloads they know of. Settling can avoid all this by including a provision forgiving all illegal downloads of Strike 3’s content from before the date of the settlement.
Settling the case early on can protect your anonymity
As long as you settle before your name is included on filed court paperwork, a settlement ensures you maintain your anonymity. In other words, your name will not be publicly connected to allegations of illegally downloading adult films.
What if I Cannot Afford to Pay a Settlement?
In negotiating a settlement with Strike 3, it is possible to convince them to agree to a lower settlement amount than what they ordinarily accept if you do not have the means to pay them. This option is not guaranteed and is limited to people with very low incomes. If you make a six-figure salary, for example, you’ll likely be unable to claim that you have insufficient funds to pay Strike 3.
The question is not whether you can pay them comfortably. This option is really reserved for cases where the accused infringer is subject to such hardship that it is in Strike 3’s interest to accept a lower settlement amount to ensure they collect something for their trouble. Before agreeing to this, Strike 3 will usually ask to see at least two years of tax returns demonstrating very low income.
Do I Need an Attorney?
If you have been confronted with legal action involving Strike 3 Holdings, you absolutely need an attorney. These legal actions progress rapidly, and given the sensitive nature of the allegations and the high amounts of money you can be liable for under federal copyright law, it is crucial to act swiftly and decisively. An attorney with experience handling Strike 3 cases will know precisely whom to contact and how to go about negotiating a fair settlement.
It can feel incredibly unfair to be targeted by Strike 3 and disheartening to hear that your only viable option is to pay them off. However, the benefits of having an experienced attorney negotiate a fair settlement and protect you from having your identity publicly connected to Strike 3’s accusations far outweigh the potential consequences of losing a federal copyright infringement lawsuit and your case becoming part of the public record. The money you pay to settle the case will not be insignificant, but a settlement will permit you to move on with your life relatively unscathed.
Strike 3 Holdings initiates legal action against people they suspect of repeatedly illegally downloading their adult content. They identify these people using computer software that identifies IP addresses that have hosted illegal downloads of Strike 3’s content and subpoenas to reveal the identities behind the IP addresses. Their purpose in suing is to receive payment. They hope to do this by soliciting a settlement, but they are willing to obtain this money through a lawsuit if the accused illegal downloader is not willing to settle.
If you do not respond when your internet service provider notifies you they are being subpoenaed by Strike 3 to reveal your identity, your internet service provider will probably go ahead and reveal your identity to Strike 3, who will then try to get you to pay them a settlement amount. If you do not settle with them, they will sue you and most likely win. If they sue you and you do not respond to them, you will almost certainly lose the lawsuit by default. The court will order you to pay Strike 3 a sum of money, and if you refuse to pay them, Strike 3 can enforce the judgment through various strategies, which can include things like garnishing your wages and selling your assets.
It is not uncommon for the person being targeted by Strike 3 to claim they did not do what Strike 3 is accusing them of. The simple answer is that everyone is responsible for securing their wifi and ensuring it is not being used illegally. Since it is incredibly difficult to prove you are not responsible when an illegal download is tracked back to your IP address, especially when your wifi network is private and password protected, you will most likely be held responsible for the consequences of the illegal downloads. This is why it is crucial for you to secure your wifi and ensure it is not being used for these illegal purposes. One unique circumstance is if you share your wifi with others in the household and someone else in your household does the illegal downloading, but your name is on the wifi account, so Strike 3 comes after you. In this case, practically speaking, you are still most likely responsible, though you can try to ask the actual illegal downloader to take responsibility and help with any settlement costs.
If you or a loved one have been confronted with legal action involving Strike 3 Holdings, LLC., contact Rosenblum Law immediately. These sensitive cases carry high stakes, and time is of the essence. Our dedicated attorneys have extensive experience dealing with Strike 3 and successfully negotiating fair settlements that maintain our clients’ anonymity and protect them from financial ruin. E-mail or call 888-815-3649 for a free consultation.