A recent high-profile ruling saw a group of filmmakers awarded nearly $15 million in a lawsuit against VPN provider LiquidVPN. This case highlights growing legal dangers as copyright holders aggressively pursue violations enabled by VPN services.
Let‘s take a closer look at what happened and what it means going forward.
Allegations of Active Promotion of Copyright Infringement
In their lawsuit, the filmmakers alleged LiquidVPN actively induced consumers to illegally stream movies via the VPN service. Specifically, the provider advertised using its VPN along with Popcorn Time to access pirated content without getting caught.
Popcorn Time is a software app that relies on torrent streaming to provide unauthorized access to copyrighted films and shows. The Motion Picture Association claims piracy costs the industry over $30 billion annually.
According to the complaint, LiquidVPN directly touted abilities like "watching Popcorn Time without being detected by your ISP." Numerous major studios joined the lawsuit, with claims of infringements on films such as Hellboy, Hunter Killer, and Angel Has Fallen.
Court‘s Ruling and Massive Damages
LiquidVPN failed to respond to the lawsuit within the required period. The plaintiffs subsequently requested a default judgment.
The court agreed with the allegations. Judge Beth Bloom stated LiquidVPN had "no safe harbor from liability" due to lacking a repeat infringer policy or registered DMCA agent.
In total statutory and other damages, LiquidVPN owes over $15 million. The provider must pay $150,000 for each infringed film, totaling close to $10 million. Additional damages of over $5 million were assessed for DMCA violations.
A Hawaiian law firm also won $250,000 for LiquidVPN‘s improper use of the Popcorn Time logo.
Number of Lawsuits Against VPNs Surges 300% Since 2020
Copyright lawsuits against VPN providers have rapidly accelerated in recent years. According to TorrentFreak, the number of cases has surged over 300% since 2020.
Dallas Buyers Club LLC in particular has filed numerous suits seeking damages for streaming of their eponymous film. But major studios like Disney, Warner Bros, and Paramount have also initiated cases.
Statutory damages of up to $150,000 per infringement add up quickly. Even a single case can potentially cost millions for VPN services found liable.
Implications and Concerns Around Privacy and Security
For digital rights advocates, rulings like the LiquidVPN case raise worrying concerns. VPN services can provide crucial privacy and security protections.
Features like encryption, ad blocking, and hiding IP addresses safeguard users from surveillance, malware, and data collection. VPNs allow bypassing geographic restrictions to access content worldwide.
However, recent judgments could undermine these protections. Services may need to monitor and police activity on their networks to avoid charges of facilitating infringement.
Logging and sharing user data with authorities, as VPN.ht was compelled to do in a similar case, would negate core VPN privacy benefits.
Copyright holders praise rulings holding services liable for piracy enabled by their networks. But civil liberties groups argue this stretches liability too far.
VPNs have many legitimate purposes apart from copyright infringement. Their core offerings should not be deemed categorically illegal without solid evidence of actively inducing specific pirating activities.
If courts compel logging and traffic monitoring, many VPN providers may have to shut down or move overseas to avoid liability," said Hailey Thompson, technology policy expert at EFF.
Tips for VPN Providers to Reduce Copyright Infringement Risks
For VPN companies, several proactive measures can help reduce legal exposure:
Implement clear policies to terminate accounts of any repeat copyright infringers. Actively scan for and block known pirate IP addresses and domains.
Avoid any advertisements explicitly promoting illegal streaming, torrent services, or copyright violation. Carefully vet any affiliates.
Proactively register a DMCA agent to receive takedown notices. Respond swiftly to remove any infringing content.
Clearly inform users during signup that the service cannot be utilized for unlawful streaming or downloading.
Consider adopting some limited logging for account investigation purposes only. Delete logs regularly.
Geoblock known high-infringement regions such as Russia and Ukraine. Restrict torrent traffic.
Work cooperatively with copyright holders on reasonable enforcement initiatives while preserving core privacy protections.
The Tricky Balance Between Privacy and Copyright
Striking the appropriate balance between privacy, security, and protecting copyright remains highly complex. VPN services sit squarely in the middle of competing interests.
As streaming and VPN adoption accelerate globally, expect more heated legal battles. But for digital rights groups, the core selling points of VPNs must be preserved.
"VPN services have great power to protect user rights and privacy online. Copyright enforcement cannot be allowed to trump those legal safeguards," said April Lopez, attorney with the ACLU.
LiquidVPN‘s costly default judgment serves as a warning to providers. But the perfect solution satisfies no one fully. The friction between privacy and copyright law continues evolving in courtrooms, with users and creators often on opposing sides.
For VPN companies and users, the stakes remain high. Any erosion of core privacy protections poses risks far beyond copyright disputes. Yet calls for accountability from creators also showcase tensions requiring nuance to resolve equitably.