Oct 10

Economies of scale

Tag: Informática LegalJoaquim Anguas @ 1:59 pm

If 18th century saw the birth of new ways to produce goods that were later to be referred to as «industry», 2010 is seeing the emergence of a new trend in litigation targeting and management.

Applying economies of scale to litigation is not new, but making it a business model is.

Law firms in UK and USA are taking advantage of the process set in their jurisdictions to help copyright holders getting back the supposed gain they should have got from people making use of P2P technologies to get their work for free.

Focusing on the model, there’s a technical process in which someone (usually an outside company) gathers information from the network related to those who may be infringing.

With this network information, the law firm files a case against a number of “Does” equal to the number of infringers found, in which they request a subpoena to translate the network information to names and addresses (single action, multiple defendants).

The law firm then sends letters to the identified persons offering a settlement to drop the case.

These law firms, the so called “settlement factories”, team up with technical companies to construct as much evidence as possible before filing the case.

But, how reliable is the information used to fill the case? It’s being difficult to know because you have to litigate if you want to discuss about this.

The trend is growing based on an expectancy of revenue. Regarding the number of firms dedicated to these activities and the number of cases filed, the market will find a point of equilibrium.

A factor in the equation too, service providers are starting to resist to subpoenas, trying to put a maximum to the number of requests served per time period.

And the courts; the courts, we’ll see.

More information:


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See also:

News on 873

Single action, multiple defendants and the power of self interest

One Response to “Economies of scale”

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