World famous nightclub and independent music label Ministry of Sound have been forced to suspend their planned shakedown of tens of thousands of alleged file-sharers. The company had planned to send 25,000 letters demanding hundreds of pounds in compensation to customers of Internet service provider, BT. However, BT has deleted more than 20,000 of those records which now makes the identification of the account holders impossible.

MinistryThe continuation of a hearing between Ministry of Sound Recordings Ltd (MoS) and ISPs Plusnet / BT went ahead in London’s High Court in last month.

Law firm Gallant Macmillan hoped that the Court would order the ISPs to hand over the identities of tens of thousands of alleged filesharers so that Ministry of Sound can prise cash settlements out of them.

But following the security breach at lawyers ACS:Law, BT and their subsidiary Plusnet refused to cooperate citing data protection concerns. BT’s request for an adjournment of the hearing was granted and was set to resume on January 12th 2011.

However, according to Ministry of Sound, its planned shakedown of file-sharers has been hit with a catastrophic failure. In an announcement today, the label has revealed that BT has deleted most of the records that Ministry of Sound requires for pursuing alleged file-sharers should it have been successful at the January hearing.

In what will be seen as a major and expensive setback for their campaign, the label notes says that it discovered in legal correspondence that BT had failed to preserve over 20,000 of the 25,000 customer records which Ministry of Sound had originally requested.

“Whilst Ministry of Sound were happy to incur substantial legal costs to access 25,000 names it is simply not economic to pursue the 5,000 remaining illegal uploaders,” the company said in a statement.

“It is very disappointing that BT decided not to preserve the identities of the illegal uploaders. Given that less than 20% of the names remain and BT costs have soared from a few thousand pounds to several hundred thousand pounds, it makes no economic sense to continue with this application,” said Ministry of Sound CEO Lohan Presencer.

“We are more determined than ever to go after internet users who illegally upload our copyrighted material. We will be making further applications for information from all ISPs. Every time that a track or album is uploaded to the web it is depriving artists of royalties and reducing the money which we can invest in new British talent,” he added.

Although Ministry of Sound endlessly go on about artists suffering and how piracy hinders the nurturing of talent, there is a little known fact about their claims which makes their strategy very unusual indeed – they aren’t claiming for an infringement on music copyrights at all.

Since Ministry of Sound do not own the copyright for the tracks they appear to be requesting cash settlements for, they have presented their case to the court on the basis that they own the ‘intellectual property’ in the album’s tracklisting. That’s right, MoS are claiming copyright infringement on the order of tracks as they appear in their compilation albums.

Of course, not a word of this is mentioned in the settlement offers they send to alleged infringers, the implication all along is that the claim is for music. You couldn’t make it up – but lawyers can and do.

"There is a huge Digital Single Market for audiovisual material. The problem is that it is illegal, and it is not monetised," said Digital Agenda Commissioner Neelie Kroes earlier this year. "We have effectively allowed illegal file-sharing to set up a single market where our usual policy channels have failed."

ACS:Law, the law firm that has terrorized untold thousands of alleged file-sharers in the UK, has quit the anti-piracy business. The company made the announcement in a hearing at the Patents County Court yesterday set to a backdrop of scathing comments by a senior judge who said he found their cases “mind boggling”.

Last week we reported in detail on the 17th January directions hearing ordered by Judge Birss QC at the Patents County Court.

In a hearing punctuated by mounting criticism of both ACS:Law and their client MediaCAT, Judge Birss found himself “astonished” by their conduct as the pair tried to discontinue cases against 26 alleged file-sharers at the 11th hour.

Yesterday all parties were back in court again to find solutions to various problems, including the joining of copyright owners to the action (see previous articles for detail) and the addressing of various procedural failings.

Today we bring you our report with the invaluable help of consumer group BeingThreatened.com, who were present at the hearing and have been supporting victims of ACS:Law’s predatory legal actions since they began.

Perhaps the biggest news is that if ACS:Law is to be taken at its word, the company is now done with trying to extract money from alleged file-sharers.

After beginning with owner Andrew Crossley and a couple of assistants, in order to cope with the huge amount of settlements the company grew out to employ around 16 people. Following the catastrophic email leak, those people have either left or been made redundant by the firm. Rising insurance costs have also taken their toll since the leak, from a low of £15,000 to a crippling high of £120,000.

Crossley did not deliver this welcome news to the court in person. While present in the court during the morning session, in common with last week’s hearing he claimed he needed to help family members who had been involved in a recent accident.

The court carried on with its afternoon session without him, with Judge Birss QC condemning the conduct of ACS:Law and MediaCAT, accusing the pair of “trying to minimise the amount of [judicial] scrutiny” placed on their work, a reference to the failed default judgment attempts earlier this year.

It has long been suspected that ACS:Law and MediaCAT pursued this “speculative invoicing” business purely for profit purposes. Judge Birss QC put it to MediaCAT that their attempt to withdraw the previously mentioned 26 cases was so that the scrutiny of “inconvenient judges” could be avoided which would enable them to go back to sending pay-up-or-else letters.

The ever problematic issue of MediaCAT not being the copyright holder of the works they seek settlement on raised its head again. Judge Birss QC asked MediaCAT’s barrister Tim Ludbrooke if he accepted that his client has no right to bring infringement proceedings without joining together with the copyright holders.

“There was little doubt among those present in the courtroom that MediaCAT was lacking the appropriate rights to proceed — which might include the step of discontinuation — alone,” BeingThreatened’s spokesman James Bench told TorrentFreak.

Judge Birss QC noted that if MediaCAT was allowed to discontinue the outstanding cases, it could simply pick up where it left off and continue sending letters. Then the rather inconvenient specter of GCB Limited raised its head.

As detailed in our earlier article, GCB Limited burst onto the scene a couple of weeks ago claiming to be MediaCAT’s new ‘agent’ in these settlement letters matters. ACS:Law, it was declared by company owner Andrew Crossley, had absolutely nothing to do with them.

GCB’s exit was as quick as their entry. The company controversially aborted their business with MediaCAT within a couple of days. Nevertheless, Judge Birss QC mentioned the company in court and this led to a revelation – Crossley was forced to admit that GCB Limited had been set up by two of his former employees.

“If I had a suspicion before, seeing the GCB letter makes it plain,” said Judge Birss QC.

“Aren’t you flirting with abuse of the court?” he asked MediaCAT, while going on to describe these events as “mind boggling”.

According to James Bench, things then took a turn for the bizarre. In an attempt to distance himself from the “inept” settlement letters, MediaCAT barrister Tim Ludbrook told the court: “I promise that I had no part in writing either of these documents,” a statement which led to laughter in the courtroom. Those present knew who had likely drafted them.

After five long hours, Judge Birss QC announced he would deliver his ruling later this week on whether or not MediaCAT can discontinue the cases without being joined by the copyright holders and whether there has indeed been an abuse of process.

“Solicitor Andrew Crossley’s statement that this work has brought him ‘immense hassle’ should sound alarm bells with others that might have considered similarly exploitative schemes,” said BeingThreatened’s James Bench in a statement last night.

“The problems he has brought upon himself however, pale into insignificance against the distress caused by the campaign of legal threats that he has carried on against innocent broadband account holders for his own personal profit.

“The speculative invoicing of Andrew Crossley and his counterparts which have dropped by the wayside, Davenport Lyons, Tilly Bailey Irvine and Gallant Macmillan, was never about protecting copyright; this was never about piracy. We have heard in court today about the 65% of proceeds that Mr Crossley earned from each letter of claim. This scheme was simply an attempt by Mr Crossley and his conspirators to get-rich-quick in an exploitative scheme where the vulnerable were targeted with unfounded accusations and demands for cash in settlement of claims which had no basis in law.

“In addition to his upcoming appearance at the Solicitors’ Disciplinary Tribunal, Judge Birss will now also consider if Mr Crossley is guilty of entering into a champertous agreement with rights holders.

“The public, and today the justice system, have demonstrated that they will not tolerate
attempts by the greedy and unprincipled to bully the public for their own personal gain, and under the banner of copyright protection.”