As a business model, Prenda Law, a law firm, formed AF Holdings. AF Holdings acquired the copyrights to pornographic movies and filed massive copyright infringement lawsuits against anonymous copyright infringers, John Does, for unauthorized downloading. AF Holdings would next seek discovery. Through discovery, it would obtain contact information for account subscribers of the IP addresses from which the porno films were downloaded. It would then contact and negotiate settlements with the subscribers. Lawsuits against defendant subscribers who decided to litigate were dismissed by AF Holdings. According to an article on Prenda Law’s practices, it made about $15 million from the John Doe copyright infringement lawsuits in less than three years.
After the district court judge granted discovery from Internet service providers in one such case, Cox Communications and other Internet service providers appealed, arguing that responding to the subpoenas would be unduly burdensome and that the district court lacked venue and personal jurisdiction over most subscribers. Most of the subscribers resided outside of the district court’s jurisdiction. Obtaining information about Internet subscribers residing outside of the district would allow AF Holdings to pressure those subscribers into settlements without requiring AF Holdings to comply with applicable statutes and court rules.