In a significant development in the Redbox and Chicken Soup for the Soul Entertainment bankruptcy saga, Grove Street Partners has emerged as the potential buyer of the company’s intellectual property litigation assets for $100 million. These assets primarily consist of rights to pursue copyright infringement lawsuits under the Digital Millennium Copyright Act (DMCA) for hundreds of films previously controlled by Chicken Soup’s subsidiary Screen Media Films. However, this acquisition doesn’t signal a revival of Redbox’s iconic kiosks or the Crackle streaming service, but rather represents a strategic move in the growing field of copyright enforcement litigation.
Grove Street Partners, revealed to be the former identity of Grove Street Funding, specializes in financing and managing copyright infringement cases with a particular focus on DMCA-related litigation. Under CEO Tom Murphy’s leadership, the company employs a distinctive strategy that goes beyond targeting individual file-sharers. Instead, they leverage DMCA notices as legal ammunition to pursue Internet Service Providers (ISPs) for allegedly failing to prevent customer infringement. This approach mirrors tactics outlined in Murphy’s 2021 presentation for American Films, which estimated potential damages ranging from $200,000 to $4 million per film from ISP liability.
The transaction structure requires Grove Street to make five annual installments totaling $100 million, with Murphy confirming the company has secured litigation funding to cover legal fees, digital evidence collection, DMCA notices, and trustee payments. This move occurs against a backdrop of increasing litigation against ISPs, exemplified by the music industry’s $1 billion verdict against Cox in 2019 (though later overturned), highlighting the potentially lucrative nature of such legal strategies. However, the track record for these lawsuits remains mixed, as evidenced by Chicken Soup’s subsidiary Screen Media Ventures’ unsuccessful case against Astound Broadband’s Grande Communications, which was withdrawn without any settlement payment.
While this asset sale progresses, the broader bankruptcy proceedings continue alongside separate lawsuits against Chicken Soup’s former executives alleging corporate mismanagement. These parallel legal battles underscore the complex fallout from the company’s collapse, with the Grove Street acquisition representing just one facet of the ongoing resolution of Chicken Soup for the Soul Entertainment’s extensive corporate obligations and assets.
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Forrás: https://www.theverge.com/tech/791013/redbox-chicken-soup-piracy-lawsuits-ip-sale-grove-street.