Davenport Lyons, DigiProtect and Evil Angel — criminal scammers?

What do the companies Davenport Lyons, DigiProtect and Evil Angel have in common? They appear to be members of a criminal conspiracy to defraud the public.

Here’s how it works. Evil Angel, also known as “The Evil Empire” and John Stagliano Inc, are a California based company making porn films, founded by John Allen Stagliano, a porn movie actor. Evil Angel contracted with German company DigiProtect for DigiProtect to upload 800 of their films onto P2P networks, including eDonkey, Kazaa and BitTorrent. (A list of titles is here; and translated into English here.)

So far, so legal — it’s perfectly legal for a copyright holder to copy and distribute their works. However, if you read the contract (available here) it’s more sinister than that. Here’s the first two paragraphs:

1. Object of the agreement
LICENSOR is a film maker and a proprietor of the rights of use and enjoymrent and exploitation of pornographic movies. Licensor suffers economic damageas as a result of the illegal exploitation of the movies on so-called peer-2-peer networds. The object of the agreement is the appointment of DigiProtect by licensor to implement suitable measurres to prevent the economic disadvantage licensor is suffereing.

2. Granting of rights
To achieve the purpose outlined in clause 1, LICENSOR grants DIGIPROTECT the exclusive right to make the movies listed in Appendix 1 worldwide available to the public via remote computer networks, so-called peer-2-peer and internet file sharing networks such as e-Donkey Kazaa BitTorrent etc. for the duration of this agreement. The parties agree that additional movies can be added to Appendix 1 with a written supplemental agrreement.

So DigiProtect get the films and put them on P2P networks, harvesting the IP addresses of everyone who downloads them. Then they pass on the IP addresses to Davenport Lyons, a UK-based law firm. Davenport Lyons then send threatening letters to members of the public, accusing them of illegal downloading and threatening to sue them unless they pay £500. Davenport Lyons then share the proceeds with DigiProtect. This is looks like fraud to me because:

(i) if the work was put online by the copyright holder for the then any copying is legal
(ii) Davenport Lyons are claiming it was illegal copying
(iii) this is a lie; Davenport Lyons are therefore comitting Fraud under section (2) of the Fraud Act 2006.

(See also: coverage on TechDirt)