Interview: Funimation Copyright Lawyer Evan Stone

Anime News Network: So, you recently revealed that Funimation has actually negotiated some settlements with people who downloaded One Piece episodes. Can you give a sense of the financial range of these settlements?

Evan Stone: The statutory range of damages for copyright infringement is regulated by Congress, and the floor is [US]$750. A court will never award less than $750 for statutory, willful infringement, and all BitTorrent infringement is willful infringement. Let's be honest, you know what you're doing; it's not an accident. And because BitTorrent involves distribution and reproduction, we figure the penalty should apply to both. It doesn't work specifically that way at law, but that's just kind of our personal take on it. So the demand is $1,500.

ANN: It used to be that Internet Relay Chat (IRC) was where the fansub distribution process really began; do you still keep an eye on that?

ES: We used to bust people on IRC. We'd kill distro bots and stuff like that, if the IRC host was U.S.-based. We don't monitor IRC as much anymore. I had IRC apps on my last two phones, where I would log in from my phone connection rather than a traceable IP address that would identify Funimation or Denton, Texas, and I'd just hang out in channels and look for stuff... but I haven't done that in a while.

ANN: Currently you're dealing with Verizon and Time Warner, who are fighting your John Doe subpoenas over One Piece, right?

ES: All the major ISPs are fighting it, either for bad service or they think the Verizon decision from D.C. [discussed below] should apply here in the fifth circuit. Maybe a judge will buy their argument. I don't know, we'll see. But the ones that haven't moved to quash, we'll be moving to compel.

ANN: Can you say which ones those are?

ES: Comcast, Charter, Cox, Qwest, and AT&T.

In March, I served 49 subpoenas. Seven of those related to previous cases and were served on the seven largest service providers. Then I sent seven more to the seven largest service providers for entirely new instances of infringement, like instances that just occurred this year. So that's the first 14 subpoenas, sent to the top seven providers. And they've been fighting both subpoenas. Then I said, "you know what, I've got news, this is going to be a battle."

They don't want their subscribers to think that they can get sued, because how many people are still gonna pay 53 bucks a month for broadband if they know they're restricted to 100% legitimate activity? That's kind of how I look at it. I mean, most people will. I think roughly 5-10% of their users would say "look, if I can't pirate movies and music, there's no way I'm going to pay fifty bucks." They don't want to lose customers, they don't want their customers sued.

ANN: For the subpoenas that have been successful, have any revealed infringers under the age of 18? Or if you can't answer that specifically, what would theoretically happen in that case?

ES: There aren't as big distinctions in civil law for minors. You see a lot of exceptions in criminal law. But you can sue minors...or "infants". The law refers to someone under the age of 18 as an infant, which is kind of odd. But yeah, they can still be sued. Ultimately the account holder is responsible, and all the people we deal with have signed contracts with their service providers saying "I am responsible for what happens on my account." But if the account holder is going to point us in the direction of whatever member of the household actually committed the violation, we're happy to settle with that member of the household. If our evidence shows that it happened there, and it usually does, and they're totally unwilling to comply— especially if they admit it over the phone, because that happens, we'll have some people say "Yeah, I did it, and we're not going to settle, screw you" —then we'll name them in court. So far we've only named one defendant, and that wasn't for Funimation, it was a separate case.

ANN: How do you deal with the roommate issue, if you can't determine who committed the violation?

ES: That's what joint and several liability is for. Sue everybody in the house.

ANN: How about colleges?

ES: We've dealt with some colleges.

ANN: For Funimation?

ES: Not yet, I don't think I've served any subpoenas to any universities regarding Funimation.

ANN: How do colleges tend to react?

ES: They kinda fight it too, but it depends on the university. Some are more compliant than others.

ANN: Are you guys doing anything for Funimation with regard to YouTube?

ES: Litigation-wise? Not presently. We're discussing the option of prosecuting really egregious uploaders. It all depends...if we end up being able to monetize the content, and it's high-quality content...because sometimes fans are just going to go to user-uploaded content before they go to official content, even if it's a direct rip, that's what they're going to look at. If we've got a really really bad uploader and it's content that we're unable to monetize and it's taking away views, especially if they're routing around the fingerprinting technology that's built into YouTube, making it a manual effort to take that stuff down which is a huge burden on us...then, yeah, we've explored the possibility. We're always a little more relaxed with streaming stuff because there's so much fair use. Like all the AMVs, you see AMVs on streaming sites, you don't see them on RapidShare. RapidShare uploaders, we're going to start prosecuting.

ANN: That includes all the RapidShare-esque clone sites?

ES: Yeah, any of the cyber-locker sites.

ANN: How much is bootlegging a problem in the States?

ES: We go to cons all the time and there are counterfeits everywhere. One outfit, Sun Devil DVD in Arizona, they were busted by the IRS for money laundering or tax evasion and the IRS criminal division seized 10,000 counterfeit DVDs, most of which were our shows. So the IRS was sending me counterfeit DVDs, saying can you confirm that this is not an authentic copy, and sure enough. Those were counterfeits that we had seen show up in both retail stores and online stores. So we know that Sun Devil was a big supplier.

ANN: So where do you find the majority of them? At cons, on eBay?...

ES: Usually at cons. There's a comic book chain in Arizona— and you can totally publish this because they've repeatedly lied to me —Atomic Comics, they have four retail stores, all of which had shelves and shelves of counterfeit DVDs, and a lot of them were Sun Devil DVDs. They were both in Arizona, so it makes sense that they were getting their stuff from Sun Devil.

ANN: What about other bootleg products, merchandise and stuff?

ES: If it's other apparel and accessories and toys and plushies and wallscrolls and other merch, we usually only bust that at cons. We'll scope out stuff in Texas at comic stores and anime stores, if there are anime stores, and tell them "hey, you can't sell this crap."

ANN: And do you find that these people usually know that they're selling counterfeits?

ES: 90% of the time. 90% of the time they know. They know or should know because it'll be dirt cheap. The guys at Atomic Comics are especially hilarious because we actually got them on tape. I went in there as someone else with another witness, went into Atomic Comics and we talked to the clerks and asked "How come these DVDs are so much cheaper than at Best Buy around the corner?"

[He said] "Oh, we get them from Malaysia and other countries where they don't really have copyright laws."

And [I said] "Okay. But aren't there U.S. distributors for these shows, like Viz, or what do you call it, Funimation?"

And the guy's like "Yeah, yeah."

And I go "So as long as those guys don't find out about it then you're okay, huh?"

And he [said] "yeah, exactly." It's like, click. Save. Thanks.

ANN: Have you approached any anime companies outside of Funimation, like Viz?

ES: Other anime companies? No. Viz does not have a track record that would lend itself to end-user litigation. Like, they have the occasional lawsuit against some big entity or website. But Bandai and Funimation sued the same counterfeiter once, and neither of us knew it. It was like three years apart, a company called N Trading out of California— that Discount Anime DVD one. And I know it was the same guy at N Trading when Bandai sued them, and then the complaint looked like it was dismissed, so maybe they settled, and then we sued them later. They had DiscountAnimeDVD and BuyAnimeDVD, and we shut down both of those websites. They had a warehouse that I actually went to in person and shot a bunch of pictures through their office window. They had like 13 employees in the warehouse, it was crazy. They closed the warehouse, and they had a retail store, but the retail store only had legitimate stuff even prior to the warehouse...but they wound up closing it down too, because their real money was from the online store.

ANN: Do you have anything else you'd like to address?

ES: There's a subpoena division in the Copyright Act that no one really uses anymore because of this ridiculous case in 2003. The plaintiffs won the trial case, which was the RIAA vs. Verizon. The RIAA had been serving these Copyright Act subpoenas for five years, because [the subpoenas have] been around since '98. And basically the Copyright Act says, to reduce burden on the courts and make this an efficient process, any copyright holder can serve a subpoena under the Copyright Act on any service provider, exclusively to obtain the identity of an alleged infringer. You can't use it for anything else. A normal subpoena can be used for all sorts of documents and evidence, but the Copyright Act subpoena provision is limited to the identity of an alleged infringer. And the RIAA and the MPAA were using these things for years.

Verizon decided to fight it and so they went to court, and the trial judge was like, "Are you insane? The law is very clear, this is what the subpoenas are for. Yes, you have to respond to these subpoenas. Your arguments are ridiculous and absurd. Quit wasting our time." So [Verizon] appealed it of course, and on appeal Verizon won, and everyone was dumbfounded. The decision basically rested on this notion that if you can't provide information reasonably sufficient to locate the infringing material, then you don't have to respond to the subpoena. And they were saying that since the infringing material is on a user's computer, you can't give us information reasonably sufficient to locate the material. Therefore we don't have to respond to the subpoena. And the appellate court bought it.

So since '03, the RIAA and the MPAA just quit issuing those subpoenas. And that's what beget the John Doe lawsuits that we have now. Because we filed a John Doe lawsuit we're still entitled to serve a regular civil subpoena, but it's really hard. Back then, the RIAA and MPAA— even though BitTorrent was around in '03 —they hadn't really considered the option of joining a whole BitTorrent swarm in one lawsuit. So last year, the guys in Washington D.C. said "yeah, it's BitTorrent, those people all working together. Of course you can join them. And then you can serve your subpoena." So that's when the John Doe suits really exploded.

The Fifth Circuit has not ruled on Copyright Act subpoenas, and I'm like "well, that means the plain letter of the law holds." So I'm going to serve them. And this whole idea that Copyright Act subpoenas can't be used for peer-to-peer pirates is absurd. And since '03 we've seen how bad peer-to-peer piracy has gotten, and arguably it's gotten exponentially worse since '03 since copyright owners haven't had any reasonable means to deal with it. Like, their only option after '03 was to sue individual pirates. And they spend so much money— I read one article that said they spent $64 million to collect $1 million. That was over the span of the few years the study was done. So I'm looking at the statute and going "this is what we should have been doing all along." Copyright Act subpoenas. And the stuff people are reacting to right now are the Copyright Act subpoenas. That's why you don't see anything in the court, you don't see the 35 subpoenas I served for Funimation stuff because there's no record of it. You walk down to any clerk in any court, so says the statute, and they'll sign off on the subpoena as long as it's just to get the identity from the service provider.

ANN: Now, it's theoretically possible to turn off sharing on BitTorrent.

ES: Theoretically possible. If you're not sharing, the tracker will snub you, and most other clients will snub you too. If you're connected long enough and you're not seeding at all, the clients will go boom and the trackers will go boom. But in theory it's possible.

ANN: Can you tell the difference?

ES: We can, yeah. My experts have the parameters by which I wish to conduct these lawsuits, so they know the type of evidence I need for these suits to be most effective. And part of that criteria is that people need to be distributing and downloading, because I think they're the most egregious infringers. Now obviously someone who is seeding for weeks at a time is an even more egregious infringer, so we try to track that too. We've started taking snapshots over time, for how long somebody's been up there. We have a special place for those people.

ANN: Can you tell who the file originated from? Are they a top priority?

ES: Sometimes. We don't put a whole lot of work determining that; if it comes out through discovery then yeah, we're going to prosecute those people to the fullest extent that we can. Those are probably people that we're not going to settle with, someone that's putting it up there first, especially if it's something like One Piece. If you've got a show that's freely available for online streaming, and you're still putting it up on BitTorrent? Especially if it's a rip— if it's a rip you can't claim that "our subs are better." What excuse do you have?

ANN: How about raws? People often download them for AMVs, which you mentioned earlier as being more or less okay.

ES: I don't think we've handled a single suit over raws. I think it's all been subs and dubs. Yeah, to my knowledge. I mean, we still take down the raws, but to my knowledge no raws are the subject of any pending litigation.

ANN: You mentioned rips; are they your focus, or does your work include non-ripped/original fansubs?

ES: Yeah, it does.