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.
Netflix on Thursday reported higher revenues and profit in the second quarter as it sought to assure investors about its growth prospects.
The streaming giant reported revenue of $12.6 billion in the second quarter, up 13% from a year ago. Net income during the period rose 9% to $3.4 billion.
Netflix said it expects revenue to grow 12% in the third quarter, but lowered its 2026 revenue forecast to $51 billion from $51.4 billion.
The results were roughly in line with what analysts had predicted and were driven by recent price increase and growth in advertising revenue. The latter is expected to reach $3 billion this year, the company said.
In a presentation with analysts, Netflix executives touted global expansion plans.
“We’re entertaining an audience approaching a billion people with still lots of room to grow into our addressable market on every measure,” said Spencer Neumann, Netflix’s chief financial officer, in the earnings presentation. “We believe we’ve got lots and lots of runway for solid growth ahead of us.”
Those comments appeared intended to assuage investors who’ve grown concerned that people could be spending less time on the streaming service as rivals like YouTube gain market share.
Netflix’s share of TV viewing time in the U.S. has steadily declined in recent months as rivals have gained market share, according to Nielsen data.
The streamer represented 7.8% of all TV viewing in the U.S. in April — the lowest percentage since May 2025. It was 7.5% in April 2025, Nielsen said.
By comparison, YouTube has seen its share of the streaming audience grow. YouTube’s TV viewing share in April rose to 13.4%, up from 12.4% a year earlier, Nielsen said.
Some investors fear that if viewership is down, subscribers could cancel the service, which would negatively affect the platform’s growing advertising business. It could also undercut Netflix’s ability to raise prices in the U.S. and other countries.
Those worries have caused Netflix’s stock price to plummet 41% in the last year. The stock closed on Thursday at $74.35 a share, up 1%. In after hours trading, the stock fell 8%.
“The engagement elephant continues to rear its head and investors are on edge that an earlier price hike in a seasonally tough period and lighter content slate could have driven more churn than usual,” wrote Morgan Stanley Research analysts in a research note.
On Thursday, Netflix said in a letter to shareholders it has a sophisticated understanding of its consumers and “we know not all hours are equal” and that engagement on its platform is “healthy.”
“The entertainment industry remains dynamic and competitive,” Netflix told shareholders. “We aim to stay ahead by executing against our three areas of focus: delivering more entertainment value, leveraging technology to improve every aspect of our service, and improving monetization.”
The Los Gatos-based company said it plans to allocate more than 5% of its content spend on live programming this year. Live content has been a key driver for subscriptions, accounting for six of the top 10 new member sign-up days over the last five years, the company said.
In the first half of 2026, Netflix said members watched more than 97 billion hours, up 2% from a year ago. Among the most popular shows: the crime thriller “I Will Find You,” which had 87 million views; and the romantic comedy film “Voicemails for Isabelle,” which garnered 71 million views.
Netflix has been adding new types of content to its platform, including video podcasts to help increase engagement with subscribers during the day.
As part of the diversification efforts, the platform has expanded its portfolio of live programming over the years, including adding NFL games and streaming Major League Baseball’s opening day game.
In 2022, Netflix had also faced investor pressure when it reported declining subscribers for the first time in more than a decade. That pushed the company to delve into other areas including advertising, gaming and cracking down on password sharing.
SpaceX stock dropped below its initial public offering price for the first time on Wednesday, signaling dwindling hype around the Elon Musk company.
Shares dipped below their IPO price of $135 on Wednesday morning for the first time since listing, a humbling loss for the stock, which had skyrocketed more than 50% in its first days of trading last month.
The shares regained some ground later in the day, closing at $135.27.
The initial offering gave the company a market cap of $2.2 trillion, making it one of the world’s most valuable public companies. For a short period, the IPO also made owner Elon Musk the world’s first trillionaire, though his net worth now is about $800 billion.
On July 7, the company was added to the Nasdaq-100 after a rule change allowed companies to join 15 days after their IPOs.
SpaceX raised a total of $86 billion after underwriters exercised their right to sell additional shares, on top of the $75 billion initially raised. It was the largest IPO in history.
SpaceX, based near Austin, Texas, is the leading launch services company in the world, with its Falcon 9 rocket accounting for the vast majority of satellites launched last year.
It is also the leading satellite-based broadband provider with its Starlink service. The extraordinary interest in the IPO was driven by Musk’s plans to make the company an AI leader — including plans to launch orbiting satellite data centers powered by the sun that crunch AI data.
The company’s headquarters moved from Hawthorne to Texas in 2024, but it retains large operations in the South Bay city and blasts off regularly from Vandenberg Space Force Base in Santa Barbara County.
Since the IPO, SpaceX has used its newfound wealth to expand in the AI space.
It announced last month that it was acquiring the AI coding startup Cursor for $60 billion, with the deal expected to close in the third quarter. The San Francisco company, founded in 2022, enables engineers to instruct software in English to run coding tasks autonomously.
Musk also merged his xAI artificial intelligence company into SpaceX earlier this year. The combined entity recently announced it was leasing computing power to rivals Anthropic and Google at two terrestrial data centers it has constructed.
Since the IPO, investors have expressed concerns about the company’s spending plans and debt load.
Even with the volatility of the last month, there’s still more uncertainty to come.
The stock could fall further as locked-up shares held by current and former employees are released.
At least 20% of the shares will be released after second-quarter results are disclosed sometime in the coming months, with all the lockups expiring in December.
But Space X isn’t the only megacap stock to experience ups and downs early on.
Shares of Meta, then named Facebook, fell significantly below the IPO price of $38 before recovering. After its May 2012 launch, shares plummeted by nearly 50% and hit a record low of $19.69 in August 2012.
The company took more than 14 months to rebound, finally surpassing its $38 IPO price in July 2013.
In the latest lawsuit against Paramount Skydance, a corporate shareholder has alleged corruption at the highest levels of the company, which is battling to complete its $111-billion takeover of rival Warner Bros. Discovery to create a new media behemoth.
Controlling shareholders Larry Ellison and his son David have presided over a firm that allegedly made “illegal promises and payments to secure regulatory approval,” for the Ellison family’s Paramount purchase last summer, according to the shareholder lawsuit filed this week in Delaware court.
Larry Ellison allegedly discussed with President Trump how Paramount’s pending Warner Bros. acquisition would result in a shake-up at CNN, states the lawsuit filed by Paramount shareholder Paul Robbins.
“The Ellisons [won] the bidding war for Warner Bros. by promising sweeping changes at CNN and other personal benefits to President Trump,” according to the 59-page complaint.
The case was brought on Robbins’ behalf by the nonprofit Public Integrity Project and the advocacy group Freedom of the Press Foundation, which has been critical of the Trump administration‘s policies toward the media.
The complaint noted that Netflix withdrew from the bidding in February — the same day Co-Chief Executive Ted Sarandos met at the White House with then-Atty. Gen. Pam Bondi and another top official.
The lawsuit suggests Netflix dropped out after recognizing the challenges of dealing with the Trump administration and that Trump always wanted to see the prize go to Paramount because of his close ties to the Ellison family, who have ushered in more favorable news coverage of Trump and the departure of late-night comedian Stephen Colbert.
Robbins does not appear to have firsthand accounts supporting his claims, which are based on public documents and media reports about dealings between the Ellisons and Trump. He has owned Paramount stock since 2021, but the lawsuit does not say how many shares he owns.
He could not be reached for comment.
Paramount, in a statement, pushed back against his claims, saying the “lawsuit recycles allegations that have already been reported and already addressed.”
“As we’ve said consistently: No commitments from either David or Larry Ellison have been made to any government body, state AG or federal agency regarding the future of CNN or any other news property, other than the goal to deliver truth-based journalism,” Paramount said.
It’s the third lawsuit lobbed at Paramount this week. On Monday, California Atty. Gen. Rob Bonta led a coalition of 12 Democratic state attorneys general that filed a federal antitrust lawsuit seeking to block the Paramount-Warner merger due to concerns about consolidation in movie distribution and cable channels.
The Writers Guild of America added another antitrust lawsuit against Paramount on Tuesday, alleging the massive merger would result in fewer jobs and lower pay for writers.
Many in Hollywood are opposed to the deal due to fears that another studio consolidation would bring more layoffs, programming cutbacks and a fragile business environment due to the heavy debt burden — nearly $80 billion — that Paramount would have to take on to buy Warner Bros.
The shareholder lawsuit noted that Paramount participated in a raucous event with UFC fighters on the White House lawn in June to celebrate Trump’s 80th birthday and the nation’s 250th anniversary. Paramount has UFC broadcast rights.
The event came two days after Trump’s Justice Department wrapped its regulatory review of Paramount’s Warner Bros. proposal, giving the merger a key green light.
Justice Department investigators reportedly did not have a chance to express potential antitrust concerns when high-level Justice Department officials closed the inquiry — a major win for Paramount and the Ellisons, the lawsuit states.
“There have been some line attorneys in the DOJ that have reviewed this [merger] and have some concerns,” New York Atty. Gen. Letitia James said Tuesday during a virtual town hall with opponents of the merger. “Their analysis of this particular case was ignored by the front office, if you will, at 1600 Pennsylvania Ave. [the White House] That’s the front office.”
Ellison’s Skydance Media emerged with its deal to buy Paramount two years ago. Previous controlling shareholder Shari Redstone was desperate for an exit and Trump was mounting his White House comeback by battling then-President Biden, then Vice President Kamala Harris.
Trump declined an invitation to appear on CBS’ “60 Minutes,” then under Redstone control. He became infuriated by an October 2024 interview with Harris on “60 Minutes.”
Trump filed a $10-billion lawsuit against CBS (he later upped it to $20 billion). After Trump won the election, he had considerable sway over Paramount because it needed his administration’s approval for the sale to the Ellisons.
Paramount agreed to pay Trump $16 million to end his “60 Minutes” lawsuit, allowing the sale to go forward. The Ellisons acquired Paramount in August, then set their sights on Warner Bros. Discovery, which owns CNN.
“The Ellisons proceeded to remake CBS in the President’s image, bought properties he enjoyed, and even hosted events to honor him,” the lawsuit said. “This helped the Ellisons, but it appears to have hurt Paramount and its media outlets.”
On Wednesday, Paramount said Ellison and other high-level executives had dealings with administration officials but “throughout … the review of the proposed acquisition of Paramount, Skydance has fully complied with all applicable laws, including our nation’s anti-bribery laws.”
In late April, David Ellison hosted an elaborate dinner in Washington to honor the “Trump White House,” according to invitations to the event, “even though President Trump continually insulted journalists at CBS and elsewhere,” the lawsuit said.
On Wednesday, during a confirmation hearing on Capitol Hill, Sen. Cory Booker (D-N.J.) blasted acting Atty. Gen. Todd Blanche for his attendance at the dinner while his agency was reviewing the Paramount deal.
Also on Wednesday, the nonprofit news site ProPublica reported Federal Communications Commission Chairman Brendan Carr has accepted $63,000 in free tickets from CBS in recent years — while Paramount mergers were pending.
Times staff writer Ben Wieder contributed to this report.
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