‘Mysterious’ company sued to expose billionaire’s Twitter critic. It didn’t go well.

(Reuters) – A company with “mysterious” origins and a “vague” business model tried to use the Digital Millennium Copyright Act to force Twitter to disclose the identity of an anonymous user who criticized private-equity billionaire Brian Sheth.

That strategy backfired in quite spectacular fashion on Tuesday: A San Francisco federal judge concluded that the company’s refusal to disclose details about its own origins and motivations doomed its bid to expose the anonymous Twitter Inc user, @CallMeMoneyBags, who allegedly infringed its copyrights.

The whole case, which attracted passionate amicus briefing on both sides, left U.S. District Judge Vince Chhabria full of doubts and questions about the motives of the copyright owner, Bayside Advisory LLC. In particular, Chhabria queried Bayside’s possible ties to former Vista Equity Partners president Sheth, despite protestations by Bayside counsel that neither Sheth nor MoneyBags’ other billionaire targets own or control the company.

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I’ll get to what Chhabria called the mysterious circumstances of Bayside’s creation, but I want to note that, as a matter of copyright and 1st Amendment law, what’s significant is that the judge took the company’s backstory into consideration at all.

Bayside, represented by Glaser Weil Fink Howard Avchen & Shapiro, insisted throughout the case that most of the details of the company’s origin and operation are irrelevant to its right to find out the identity of the alleged infringer. Its copyrights to the photos in MoneyBags’ tweets are not in dispute, the company said, nor is there any doubt that MoneyBags displayed the photos. That’s enough to establish Bayside’s prima facie case of copyright infringement — which, Bayside argued, is in turn sufficient under the Digital Millennium Copyright Act to entitle the company to compel Twitter to disclose information about the alleged infringer.

But Chhabria concluded that Bayside’s particulars are an intrinsic part of the two-step analysis for a subpoenas to unmask an anonymous online speaker. First, the judge said, Bayside’s business model is a critical factor in determining whether the company has actually alleged a prime facie case of infringement. MoneyBags, after all, is permitted to make fair use of Bayside’s copyrighted photographs. Fair use depends, in part, on whether MoneyBags’ display of the photos impacted the potential value of the works. So, according to Chhabria, “Bayside must offer some explanation for how its financial interests in the copyrights could be harmed by a use like the tweets at issue here.”

But even that’s not enough, the judge said. Rejecting Bayside’s argument that 1st Amendment protections are already built into the Digital Millennium Copyright Act, Chhabria determined that he is required to balance the equities between MoneyBags’ 1st Amendment right to speak anonymously and Bayside’s right to enforce its copyrights. Bayside’s motive for exposing MoneyBags’ identity weighs heavily in that balance, Chhabria said.

The judge found that Bayside’s apparent obfuscation was fatal for the company in both prongs of the test. Because Bayside, a “communications and strategic advisory firm,” offered no more than a “vague” description of its business model, Chhabria said, it failed to disprove MoneyBags’ fair use of the photos. Moreover, Chhabria said, even Bayside’s depiction of its business was dubious, “given the suspicious circumstances” of its push to expose Moneybags’ identity.

According to Chhabria, Bayside was created in October 2020, the same month that MoneyBags posted six tweets featuring suggestive photos of young women and commentary suggesting that Sheth was having an extramarital affair. Within days of the posts, Bayside demanded that Twitter take down the allegedly infringing tweets. (Twitter eventually deleted the photos but left the text of MoneyBags’ tweets intact.)

Chhabria said the timing all seemed suspicious, since Bayside’s first-ever copyright registrations were for the photos in the tweets about Sheth, nor could the judge find any public information about Bayside’s principals, staff or even its offices.

“Is Bayside owned or controlled by someone associated with Brian Sheth?” the judge wrote in Tuesday’s opinion. “Was Bayside formed in response to these tweets? How did Bayside come to acquire these copyrights, and from whom?” Chhabria noted that he asked these questions of Bayside’s counsel at a hearing in May, but the lawyer “would not (or could not) expand on these vague assertions.”

Chhabria floated the idea of an evidentiary hearing “to explore whether Bayside and its counsel are abusing the judicial process in an effort to discover MoneyBags’s identity for reasons having nothing to do with copyright law.” Both sides said they did not want a hearing.

Bayside principal Bert Kaufman refuted the decision’s depiction of his company as “suspicious” or shadowy in an email statement. “Contrary to Twitter’s speculation, [Bayside] was not set up to bring this matter,” the statement said. Kaufman said that he started the company before the MoneyBags tweets about Sheth, and that he represents a range of clients in public affairs and regulatory matters.

Kaufman described Bayside as “a small business trying to vindicate its valid copyrights and those of its other small businesses and creators it works with.” Chhabria’s ruling, he said, “embraced Twitter’s distraction from the core issues and has put at risk the constitutional rights of artists, photographers, sole proprietors, small businesses, and content creators to protect their copyrights and exercise their legal remedies.”

The judge’s opinion, Kaufman added, also contradicted a magistrate judge’s previous decision compelling Twitter to comply with Bayside’s subpoena. “Bayside is disappointed and is evaluating its options,” Kaufman’s statement said.

A Twitter spokesperson declined to comment. Twitter is represented by Perkins Coie.

Paul Alan Levy of Public Citizen, who filed an amicus brief urging Chhabria to balance the 1st Amendment equities, said that if Bayside is right in its interpretation of the Digital Millennium Copyright Act, it may be possible on appeal to disentangle what Levy called the “bizarre” facts of Bayside’s creation from the legal issues.

He’s not convinced the company has much of a shot, though, based on the evidentiary record. “It’s a very unattractive appeal,” Levy said. “They can argue the legal issue but they look like schmucks.”

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