Business
Commentary: A porn firm that a judge called a ‘copyright troll’ now has Meta in its sights — and it could win
This porn company made millions by shaming the little guys who downloaded its films. But now it’s going after Meta for copyright infringement.
It isn’t often that a lawsuit can make me smile, much less laugh out loud. The latest exception is Strike 3 Holdings vs. Meta Platforms, which is currently unfolding in San Jose federal court.
Two things are amusing about the case. One is that Meta, the giant social media company, is accused of copyright infringement for allegedly downloading 2,400 of the plaintiff’s movies to train its AI bots. If Meta loses, that would be a serious (and in my opinion, deserved) blow against AI companies that have used copyrighted materials without permission.
The second part of the joke is the identity of the plaintiff. Strike 3 Holdings, you see, makes porn. Moreover, for years it has pursued a plainly unscrupulous business model in which it sues individuals for allegedly downloading its movies without permission, and shames them into settling for a few thousand dollars at a pop.
While it is possible one or more Meta employees downloaded Plaintiffs’ videos, it is just as possible…that a ‘guest, or freeloader,’ or contractor, or vendor, or repair person—or any combination of such persons—was responsible for that activity.
— Meta points the finger at others for a porn scandal
Whether or not Strike 3 has a legitimate claim for copyright infringement, it doesn’t deserve your sympathy. The firm was flayed in 2018 by federal Judge Royce C. Lamberth of Washington, D.C., for engaging in what he labeled a “high-tech shakedown … smacking of extortion.” Lamberth called Strike 3 a “copyright troll” and threw out its lawsuit against an unidentified internet user for having treated his court “not as a citadel of justice, but as an ATM.”
When I wrote about this scheme in 2023, I counted more than 12,440 lawsuits that the Los Angeles-based firm had filed in federal courts coast-to-coast. The latest count, according to a Lexis search a defense lawyer ran for me, is more than 21,000. The vast majority were settled and closed within a few months of their filing, an indication that they were never meant to go to trial.
Now Strike 3 appears to have hooked a big fish. In the first significant ruling in its lawsuit against Meta, the firm scored a surprise win: On June 11, federal Judge Eumi K. Lee of San Jose denied Meta’s motion to dismiss the case. Meta’s defense, she wrote, “strains credulity.”
More about that in a moment. First, a few words about the litigants. Meta needs no introduction: Formerly known as Facebook and based in Menlo Park, Calif., Meta recorded a profit of $60.5 billion last year on $201 billion in revenue.
Strike 3 portrays itself as an avatar of “Hollywood style and quality” in its adult films, which it distributes through its streaming websites such as Blacked, Tushy, Vixen and Wifey. It has described Greg Landry, its former owner and house auteur, as the porn industry’s “answer to Steven Spielberg.”
Neither Meta nor Strike 3 responded to my request for comment beyond the claims and defenses in court filings.
As I reported in 2023, Strike 3 has flooded federal courts with cookie-cutter lawsuits alleging that defendants infringed its copyrights by downloading its movies via BitTorrent, an online service on which unauthorized content can be accessed by almost anyone with an internet connection. Its targets generally have been individuals with plenty to lose from being publicly outed as porn viewers.
“Given the nature of the films at issue,” a federal judge in Connecticut observed last year, “defendants may feel coerced to settle these suits merely to prevent public disclosure of their identifying information, even if they believe they have been misidentified.”
Strike 3’s letters to its target defendants have warned that the statutory penalty for willful copyright infringement is $150,000, but offer to make the case go quietly away for a few thousand bucks, which would be a fraction of the cost of hiring a defense lawyer, not to mention the downside of exposing oneself as a porn fiend.
J. Curtis Edmondson, a Portland, Ore., lawyer who won a case against Strike 3, estimated in 2023 that Strike 3 “pulls in about $15 million to $20 million a year from its lawsuits.” But financial data that could validate his estimate hasn’t surfaced in court records.
There’s nothing new about content owners’ aggressive pursuit of copyright infringers. The practice was pioneered by the Recording Industry Assn. of America, when the industry feared that unauthorized downloading of music through programs such as Napster threatened its very existence. From 2003 through 2008, the association sued some 35,000 alleged song pirates.
But it abandoned the strategy because its legal dragnet swept up sympathetic targets such as single mothers and teenage girls, creating a public relations disaster.
There followed the appearance of outright trolls such as Prenda Law Group, which posted porn films online as bait to attract downloaders, whom it then sued in what judges ultimately found to be sham lawsuits. Prenda principal John L. Steele even bragged publicly that Prenda had made nearly $15 million with its lawsuits. U.S. Judge Otis Wright II of Los Angeles put the kibosh to its practice by slapping the Prenda lawyers with stiff sanctions for contempt.
That brings us to Strike 3’s case against Meta, which it filed in July. Strike 3 hasn’t been accused of a Prenda-style fraud, since it does own the films at issue and its right to sue copyright infringers isn’t disputed. But its allegation that Meta downloaded its films to train its AI bots, rather than just for personal enjoyment, is a new wrinkle for an old issue.
Strike 3 says its lawsuit grew out of a separate case in which a witness testified that Meta had downloaded thousands of pirated books to train its LLaMA AI bots — that is, feeding the content into LLaMA for it to use to generate answers to user questions. (Numerous lawsuits have been filed against AI firms alleging similar infringement.)
Strike 3 says that case prompted it to look into whether Meta had downloaded any of its content. It says it discovered that 47 IP addresses owned by Meta — that is, digital identifiers of internet accounts — had downloaded its movies without permission.
In all, Strike 3 alleges, those Meta addresses downloaded at least 2,396 of its movies — almost its entire catalog — more than 6,000 times via BitTorrent. What’s more, Strike 3 says Meta then posted some of that content back onto BitTorrent to take advantage of BitTorrent’s “tit-for-tat” mechanism through which users can obtain faster download speeds by uploading content to the platform.
If Strike 3 were to prevail on all its claims for illicit downloading, it would be entitled to about $360 million in damages, observes Eric Fruits, an Oregon economist who has testified for the defense in some Strike 3 lawsuits.
One might ask why Meta might be downloading porn for any reason, bot-training or otherwise. Meta, in its defense filings, says Strike 3 has offered no proof that Meta, as a corporation, was responsible for the downloading. If it happened, Meta says, it would have been inadvertent.
“Tens of thousands of employees and innumerable contractors, visitors, and third parties access the internet at Meta every day,” it wrote in its motion to dismiss the case. “While it is possible one or more Meta employees downloaded Plaintiffs’ videos, it is just as possible … that a ‘guest, or freeloader,’ or contractor, or vendor, or repair person — or any combination of such persons — was responsible for that activity.” The “sporadic downloads,” Meta says, “exhibit the hallmarks of personal use,” not corporate strategy.
This defense has borne fruit in other Strike 3 cases, in which defendants successfully argued simply having an IP address that was used to infringe wasn’t enough to prove they committed the infringements.
Strike 3 says it can show that the downloads weren’t the work of random users. Some downloads, it says, were coordinated among several Meta IP addresses, all based on the same algorithmic keywords and occurring simultaneously, suggesting that the infringements “took place within Meta’s walls.”
On Dec. 15, 2022, for instance, downloads apparently based on the keyword “teen” involved not only the movies “Teenage Mutant Ninja Turtles” and “Teen Titans Go to the Movies,” but also “Teen Sex Sessions 2” and “Teens love Tats XXX,” according to Lee’s ruling. Other simultaneous downloads swept up episodes of “The Big Bang Theory” and “Ted Lasso” out of order, though a putative human user would probably have downloaded them sequentially.
“It strains credulity,” Lee ruled, “to suggest that these correlations are mere coincidence and the product of individual human selections.” Rather, the use of an algorithm would account for “why pornography was downloaded alongside children’s cartoons and sitcoms. … The odds that multiple people using the Corporate IP addresses … coincidentally torrented the same show, rather than simply streaming it, on the exact same day strains belief.”
The case is still at an early stage. For Strike 3, the lawsuit offers the potential of a big score. But Meta has signaled that it’s not inclined to roll over like a family man caught downloading skin flicks and worrying about his reputation at home and around town.
This time, Strike 3 may have a fight on its hands with a defendant that has money to burn.
Rivian said it’s laying off hundreds of employees, or less than 2% of its workforce, as part of restructuring efforts aimed at making the company profitable for the first time.
The layoffs come one week after the Irvine-based electric vehicle maker began deliveries of its highly anticipated R2 SUV.
The company is hoping that the R2, which is currently only available as a performance version for $57,990, could attract more customers with its lower price tag.
But industry analysts said the performance R2 is still not affordable for many Americans, and investors reacted with disappointment to the first deliveries June 9, with shares falling 7% that day. On Wednesday, Rivian shares gained .33 points, or 2%, to close at $16.26.
The company said a standard version of the R2 starting at $44,990 will become available next year.
The layoffs took effect on Monday and affected Rivian’s service and customer organization employees, including sales and marketing teams. Rivian employed 15,232 people as of December.
“We recently restructured a handful of teams within Rivian as we work to profitably scale our business,” a company spokesperson said.
The laid off employees have been provided with severance packages and are encouraged to apply for other open roles with Rivian, the company said.
Rivian may be trying to reach profitability by saving money on labor, said Ivan Drury, director of insights at Edmunds.
“You have to wonder to what degree they do plan on replacing those people with some level of AI and automation,” he said.
Rivian, which is pouring money into autonomous vehicle efforts including a robotaxi partnership with Uber, has struggled to turn a profit with its luxury EVs.
The layoffs are likely not directly tied to recent reception of the R2, auto analyst Brian Moody said.
“I think that it’s declining interest in new electric cars, and maybe declining interest in expensive things,” he said. “We can surmise that [layoff] process began long before the R2 launch.”
The company lost $3.6 billion last year and recently said it is no longer expecting to meet its 2027 adjusted core profit target.
There has been a broad cooling of the EV market. Major automakers including Honda and Ford have cut back their EV options as excitement for the vehicles has fallen under the Trump administration. A $7,500 EV tax credit for new vehicles expired in September.
Rivian cut 4.5% of its workforce in October, or more than 600 jobs, following the expiration of the credit. The company also laid off about 200 employees in September.
In a recent turnaround, Rivian surprised the market with strong earnings results in February, reporting gross profits for 2025 of $144 million compared with a net loss in 2024 of $1.2 billion. Gross profit is revenue without subtracting the cost of production expenses.
In its earnings release, Rivian credited the swing to “strong software and services performance, higher average selling prices, and reductions in cost per vehicle.”
“The company has never posted a full year’s worth of profit, and this is the one lever they can pull to rightsize things,” Drury said.
Social media company Snap showcased a pair of its $2,195 augmented reality glasses Tuesday, staking a claim in a race to reshape how people interact with computers.
The Santa Monica tech company faces fierce competition as it takes on bigger rivals such as Meta that are dominating the sale of smart glasses and needs to convince more people to buy another gadget. Google is planning to release smart glasses in the fall and Apple is reportedly working on a pair as well.
The announcement also shows how the rising popularity of artificial intelligence-powered tools is fueling the release of hardware beyond the smartphone. While Snap and Google have failed to get consumers to buy smart glasses in the past, tech companies have been doubling down on the idea.
In a speech at the AWE conference in Long Beach, Snap’s chief executive and co-founder Evan Spiegel highlighted how people could do more with its AR glasses, Specs, than with rival products. He views the glasses as the next “major leap in computing.”
People can learn to play the drums, figure out how to fix their car, watch videos and more with the glasses, which are now available for preorder and are expected to ship in the fall. Augmented reality involves overlaying digital objects onto a person’s view of the physical world.
“The smartphone put our lives in our pockets, but augmented reality puts computing into the world where life actually happens, and that is the shift from phones to Specs,” Spiegel said.
Meta sells a variety of AI glasses, including a more expensive pair with a display and wristband that lets people ask questions to an AI assistant and answer calls and texts, along with other tasks. It’s also worked on a prototype of AR glasses called Orion.
Meta has a reputation of incorporating features released by Snap, the parent company of disappearing messaging app Snapchat. That has included a popular feature where photos and videos vanish in 24 hours.
“Those copycats up north aren’t going to be stealing this one,” said Spiegel, as the crowd erupted into applause and laughter.
While smart glasses aren’t as popular as smartphones, sales have grown.
Meta, which has a partnership with Ray-Ban, is leading in the sale of smart glasses without displays, according to the International Data Corporation. Roughly 2.25 million units of these glasses shipped in the first quarter of this year, a 167% jump year-over-year.
“Dethroning the giant that is Meta won’t come easy,” wrote Jitesh Ubrani, an IDC research manager in a post this week about smart glasses. “Meta’s core advantage isn’t just market share; it’s distribution.”
Meta has been expanding its retail footprint, opening up new stores in California.
But Snap will have to convince people that it’s worth paying $2,195 for a pair of AR glasses with more tech features. Spiegel pointed to the hefty price tags of the Mac in 1984 and Apple’s $3,500 mixed-reality headset.
“New computers almost always begin as something that just a few people can really afford,” he said.
On Tuesday, Snap’s share price dropped about 10%, closing at roughly $5.16.
Snap’s big bet on AR glasses comes at a crucial point for the company, which slashed 16% of its full-time workforce, or 1,000 workers, in April to cut costs. Snap this year also ended a deal with AI company Perplexity that was expected to bring the social media company $400 million.
Los Angeles fund manager Capital Group has completed its $210-million purchase of the Bunker Hill skyscraper it already occupied as a renter and vows to continue expanding its downtown presence.
Capital Group was an anchor tenant at Bank of America Plaza, which it will now operate as a landlord. The 55-story tower at 333 S. Hope St. was completed in 1974 and has long ranked as one downtown’s most prominent office addresses. Capital Group has been headquartered there since 1978.
Bank of America Plaza at 333 S. Hope St. was purchased by investment firm Capital Group. The building also houses the firm’s headquarters.
(Robert Gauthier / Los Angeles Times)
The move to buy the building at a substantial discount to its previous value is part of a pattern of well-heeled tenants deciding to become owners instead of renters in recent years as office property values plunged due to the pandemic and a shift to remote work for many companies.
“We knew the best landlord we could possibly have would be ourselves,” said Capital Group Chief Executive Mike Gitlin when the sale was first announced in April.
Bank of America Plaza’s previous owner, Brookfield Properties, defaulted on a $400 million loan and put the building on the market instead of facing foreclosure.
It was the largest office sale in Los Angeles in 2026 and the largest in Los Angeles County since 2023, according to real estate brokerage Colliers, which marketed the property on behalf of the court-appointed receiver.
Potential buyers competing for Bank of America Plaza included both private and institutional investors from the U.S. and overseas, said Mark Schuessler, a broker at Colliers.
Capital Group has been headquartered in downtown Los Angeles since it was founded in 1931, according to Chief Operating Officer Rob Klausner . “We view it as the ideal location to invest in as we bring our Los Angeles based teams together,” he said.
Capital Group is the largest occupant in the building, taking up 350,000 square feet on 14 floors. It plans to gradually take over another five floors as it consolidates employees from other offices downtown and in Santa Monica.
“The best way to ensure a great environment in downtown L.A. is to create what we’re calling a vertical campus” with 2,100 employees, Gitlin said. “It was just this unique opportunity where the price was much lower than it had been historically, and it was for sale.”
Bank of America is also a large tenant in the building and will continue to have its name on top. Other occupants include economic consulting firm Analysis Group Inc., law firm Musick Peeler & Garrett and Alliant Insurance Services.
Capital Group has more than 9,000 employees in 34 offices in multiple countries. It manages $3.4 trillion in assets for millions of wealth management and institutional clients, a representative said.
Owner-users have surged as key players in L.A.’s office market, now accounting for nearly half of all deals, according to real estate data provider CoStar , while institutional investors’ share of purchases has fallen from 45% to 26%.
Office users from the public sector are among the buyers. The city of Los Angeles plans to buy a 35-story tower downtown for use by the Department of Water and Power.
Manulife U.S. Real Estate Investment Trust said in April that it would sell its high-rise at 865 S. Figueroa St. for $92.5 million pending approval from Los Angeles officials. It has an assessed value of $248 million.
Another major public buyer of a downtown office building was Los Angeles County, which in 2024 bought Gas Co. Tower for $200 million, a steep drop from its $632-million valuation in 2020. County officials said at the time that the foreclosure sale was too good a deal to pass up.
The county is gradually moving workers into the 55-story skyscraper at the base of Bunker Hill that was widely considered one of the city’s most desirable office buildings when it was completed in 1991.
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