Law firm quits copyright litigations, claiming that staff have received death threats

The controversial London-based law firm which sent tens of thousands of letters demanding payment from people it accused of illegal filesharing has dramatically quit its copyright litigations, claiming death threats are causing “immense hassle” to the lead solicitor’s family.

Andrew Crossley, the founder and lead solicitor at ACS:Law, announced in a statement to the patents county court in London yesterday afternoon that his firm would no longer be chasing alleged copyright infringers.

“I have ceased my work. I have been subject to criminal attack. My emails have been hacked. I have had death threats and bomb threats,” Crossley said in the statement, read to the court by barrister Tim Ludbrook, who is acting on behalf of copyright licensee MediaCAT. “It has caused immense hassle to me and my family.”

ACS:Law is at the centre of a long-running row over its method of so-called “speculative invoicing”, where thousands of generic letters are sent to internet users it suspects of illicit filesharing. The Solicitors Regulation Authority is currently investigating its practices as hundreds of the accused claim to have been wrongly identified.

In September last year, the personal details of thousands of Britons were leaked online after a crippling attack on ACS:Law’s website. The details, including telephone numbers and addresses, surfaced online during a distributed denial of service (DDoS) attack on the company’s servers. The information commissioner is presently investigating the data breach and could levy a £500,000 fine if ACS:Law is found to have held the information insecurely.

Crossley’s revelation came at the close of yesterday’s patents county court hearing into 27 people accused of illegally sharing copyrighted pornography, of which MediaCAT is the exclusive licensee.

Of the thousands of letters that ACS:Law has sent out to alleged infringers, these 27 cases are the only ones to be heard before a judge. ACS:Law attempted to drop the cases just days before its first court hearing earlier this month, but was told that it first needed the court’s permission.

Judge Birss QC called the situation “absolutely extraordinary”, and said: “I am not happy about this. I get the distinct impression that at every twist and turn there is a desire to avoid judicial scrutiny.

“It seems to be first instinct to avoid judicial scrutiny. There’s been thousands of letters, and only 27 cases have had to be dropped – I doubt that. Copyright infringement is a serious matter, but this is just mindboggling.”

The protracted hearings have been further complicated by the recent emergence of a separate law firm issuing similar payment demands on behalf of MediaCAT, known as GCB Ltd. ACS:Law claims to have no connection with GCB Ltd, other than two of its former employees founded the newly established law firm.

Judge Birss said he had considered banning ACS:Law’s client, MediaCAT, from sending any more payment demands until its claims and claimants are clarified. “It would be an extraordinary order to make,” he added. “But these are extraordinary circumstances”.

The patents court is expected to rule later this week on whether ACS:Law should be allowed to discontinue the cases, and whether the copyright owner – understood to be Sheptonhurst, the owner of the UK’s biggest sex shop chain, Private – has to join proceedings as a claimant.

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Facebook is in court to defend yet another claim to ownership, this time from a web designer cum wood pellet distributor who says a previous contract entitles him to 84% of the company.

Filed in the Supreme Court in New York’s Allegany County last month, the lawsuit details how Paul Ceglia signed a contract with Facebook in April 2003 to design and develop the website TheFacebook.com for an agreed ,000 (£665) fee and a 50% stake in the site.

The contract stipulated, Ceglia claims, a further 1% stake for each day until the site was finished on 4 February 2004. Facebook is valued at an estimated .5bn, so an 84% share would be worth around .46bn.

Following Ceglia’s lawsuit, acting New York Supreme Court justice Thomas Brown issued a temporary restraining order that blocks Facebook from transfering assets. The case has now transferred to a federal court and Facebook is trying to have it annulled.

Facebook dimissed the case as “frivolous” and “outlandish”, said it will fight it vigorously and pointed out that a lawsuit over a contract broken in 2003 is “almost certainly barred” by the statute of limitation.

There are a number of reasons that success for Ceglia sounds unlikely – not least waiting until the site reaches 500 million global users before bringing his case, waiting until the outcome of the (successful) Winklevoss claim and the rather bizarre sidenote that a restraining order was granted against him in 2009 by an attorney who alleged Ceglia had defrauded customers of his wood-pellet fuel business to the tune of 0,000.

But imagine, for a minute, that Ceglia succeeded, and moved in to take 84% of Facebook. We might have a new entrant in the MediaGuardian 100…

Technology news, comment and analysis | guardian.co.uk