Friday, May 28, 2010

Adventures in settlement confidentiality

Kudos to Eriq Gardner of THR, Esq. for his coverage of the series of suits against individuals accused of downloading and "sharing" independent films via BitTorrent. Gardner links to the settlement page for those seeking to settle their claims regarding the film Far Cry. The page, set up by Dunlap, Grubb & Weaver, the Leesburg, VA law firm representing the plaintiffs, includes a link to the settlement agreement itself. In sum, the potential defendant agrees to pay $1,500 and cease infringing, in exchange for a promise by the copyright owner not to sue.

The agreement also includes a typical confidentiality clause, whereby the settling party acknowledges that "the terms of this Agreement" are "STRICTLY CONFIDENTIAL" and "MAY NOT be disclosed to any other party except legal counsel, including but not limited to internet or on-line forums." And there's a $15,000 liquidated damages provision in the event of breach. Fair enough. But doesn't the fact that the law firm that drafted the settlement agreement posted it to the &#@*&!*% Internet tend to undermine, just a wee bit, its demand that the terms be kept "STRICTLY CONFIDENTIAL"?


  1. &#@*&!*%

    A clear understatement if ever I saw one.

    I must admit being taken somewhat aback by Clause 5 to the document. Seriously, a blank agreement is online with all of the salient terms filled in other than the name, address, credit card number, etc. of an alleged infringer. How the plaintiff could possibly be damaged such that liquidated damages are appropriate elludes me entirely since the only information that would be disclosed is that personal information pertaining solely to the alleged infringer.

  2. Hey,

    What are your thoughts on whether or not the spider that nabs the IP addresses of people in the bit torrent swarm (and the IP addresses themselves) can be authenticated? Since the spider can't actually prove what string of 1's and 0's was being transferred, nor can the ISP (who can only take note that SOMETHING was being transferred and not exactly what it was), will this sort of evidence stand? It seems like we're placing a lot of trust in the movie firms when there's a pretty large margin for error.

  3. Do you really think that liquidated damages provision is enforceable? I think there's some serious doubt that it is intended as anything other than as a penalty for breach rather than a good faith effort to calculate actual damages that flow from the breach. If it is really the former, it is not enforceable.

    Which is all a way of saying that an agreement to keep something confidential is only as good as the remedy that would be available for its breach. Given that so often the damage that would flow from the breach would be entirely speculative, there often is no remedy.


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