Good news this guy is out of our hair now, but unfortunately the sentence wasn't related to patent trolling and doesn't seem to have set any precedents there. The business model was similar though: create a situation where it's cheaper to pay up than to defend in court, collect, and then weasel around in the court system to stay out of jail... for a while.
Wow because on both sides if you had half a brain a) the lawyers wouldn't have been caught and b) it would be effortless to defend against because there is no proof it was you on your broadband IP unless you flat out admitted it instead of just taking the 5th if it comes to it.
Lawyers could do this all day above board by identifying almost abandonware/media already being shared and buying the rights legitimately and going after sharers without secretly running the sharing themselves.
The premise here was that defending it was a loss for the people in question as it was niche/embarrassing porn stuff. Lawsuits are a matter of public record.
The goal was to make people settle quietly. It worked.
This scheme was an extortion strategy under cover of legal work. That’s something the legal profession was extremely unhappy with and the reason they came down so hard on these people.
The approach seems a variation (in modern times) of the one in Roald Dahl's story "The Bookseller":
https://en.wikipedia.org/wiki/The_Bookseller_(short_story)
which was very likely inspired by a 1935 story by James Gould Cozzens, "Clerical Error".
Though the stories above made leverage on the desire by widows to protect the memory of their recently departed husband, essentially it is the same.
They used John Doe (unnamed party) lawsuits to get the ISPs to release names.
The lawyers were caught because they were greedy - they went after enough people that some of them started unravelling the thread. Some kept at it even when the lawyers offered to drop the cases.
I don't understand what they did wrong exactly. They had the legit rights over the content and they offered actual pirates to settle instead of litigating, to which they agreed. Where is the scam?
Putting it up for download voids those rights (equitable estoppel, clean hands doctrine). Concealing that they had done that was outright fraud on the court. (EDIT: note that I am not a lawyer. Consult a lawyer if this would actually materially affect you.)
There's a lot of nuance not even remotely touched on in that short article on The Register. To accurately cover the Prenda Law fiasco you really have to go deep down the rabbit hole.
There's deliberate fraud, inaccurate targeting, shoddy discovery mechanisms, _numerous_ counts of lying to the court, misrepresentation, etc.
For example, they formed shell companies in other people's names, with forged signatures. Those shell companies were the ones that bought the rights to the movies, then uploaded them to pirate bay etc. to be stolen (itself an illegal act). Those shell companies they created then used Prenda Law as the legal firm, without disclosing the financial ties to the shell company. They used a spray-and-pray attempt through the courts to force ISPs to reveal IP addresses of those downloading the pornographic content (even though that's not entirely accurate), and instead of suing for actual damages, sued for nuisance amounts of money.
* Prenda shell companies like AF Holdings and Ingenuity 13 were created "for the sole purpose of litigating copyright-infringement lawsuits." They have no assets other than the pornographic movies they sue over. And despite their legal trickery using offshore vehicles, "the Principals [Steele, Hansmeier, and Paul Duffy] are the de facto owners and officers."
* Their strategy of identifying IP numbers, issuing subpoenas to ISPs, and sending demand letters offering to settle for about $4,000 "was highly successful because of statutory-copyright damages, the pornographic subject matter, and the high cost of litigation." Steele, Hansmeier and Duffy got "proceeds of millions of dollars due to the numerosity of Defendants." And Wright added, "No taxes have been paid on this income."
* The Prenda lawyers engaged in "vexatious litigation designed to coerce settlement." They showed little desire to actually fight when a "determined defendant" showed up. "Instead of litigating, they dismiss the case," notes Wright. "When pressed for discovery, the Principals offer only disinformation—even to the Court."
* Local California lawyer Brett Gibbs sued on behalf of Prenda and then tried to back away from their scheme to testify against them, but he's still in trouble. Wright states, "Though Gibbs is culpable for his own conduct before the Court, the Principals directed his actions. In some instances, Gibbs operated within narrow parameters given to him by the Principals, whom he called 'senior attorneys.'"
* Finally, the allegations of identity theft look legitimate. Steele, Hansmeier, and Duffy conspired to fraudulently sign the copyright assignment for the adult movie Popular Demand using Alan Cooper's signature, pretending he was an officer of AF Holdings.
* Wright concludes: "Plaintiffs’ representations about their operations, relationships, and financial interests have varied from feigned ignorance to misstatements to outright lies. But this deception was calculated so that the Court would grant Plaintiffs’ early-discovery requests, thereby allowing Plaintiffs to identify defendants and exact settlement proceeds from them. With these granted requests, Plaintiffs borrow the authority of the Court to pressure settlement."
