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SPEAKER: Imagine you're accused of illegally downloading a pornographic video and violating the owner's copyright. Whether you actually did it or not, you now face a demand to pay several thousand dollars to settle the matter, or you could pay the legal costs of a court battle and have the allegations made public. That's a quandary thousands of people in Minnesota and across the nation have been facing. Martin Moylan reports.

MARTIN MOYLAN: Late last summer, Nate Abshire of Minneapolis received a barrage of calls and letters from Prenda Law. Prenda said it had been retained by a firm identified as Hard Drive Productions and was prepared to sue Abshire for downloading a porn flick without paying for it.

NATE ABSHIRE: I don't remember the title offhand. It was from a website Amateur Allure.

MARTIN MOYLAN: Print a told Abshire that download had been traced to the IP, internet protocol address for his home internet connection. The firm warned Abshire he could face a judgment of $150,000 or more under copyright law if he failed to settle the matter out of court.

NATE ABSHIRE: 3,000 was the amount that they asked for.

MARTIN MOYLAN: Abshire is hardly alone. One watchdog group, the Electronic Frontier Foundation, estimates lawyers for porn merchants have filed lawsuits seeking the identities of a quarter million people with internet addresses to which porn was allegedly illegally downloaded. Anyone downloading copyrighted porn from third-party sites that offer it for free could be targeted in one of these actions. So could folks whose internet connections are used for illegal downloads with or without their knowledge. Many people cough up thousands of dollars to settle regardless of their downloading history, hoping to avoid what could be an embarrassing and expensive lawsuit, not Abshire, though.

NATE ABSHIRE: It would be really difficult to embarrass me legally. I'm typically uncomfortably honest in front of lots of strangers.

MARTIN MOYLAN: The bearded bespectacled Abshire is a stand up comedian whose routines are R-rated. But in any case, he says he didn't even download the video. Maybe someone else hopping on his unsecured internet connection did. So the unabashed Abshire got a lawyer, Scott Flaherty, who took the case to federal court.

SCOTT FLAHERTY: We just wanted the court to say, you're innocent.

MARTIN MOYLAN: The court didn't have to Flaherty says. The other side just caved saying it would be too expensive to pursue a lawsuit.

SCOTT FLAHERTY: When people fight back, as far as I've seen, they're usually successful.

MARTIN MOYLAN: There's a simple reason. Flaherty says, merely associating someone's name with an IP address isn't strong enough evidence to prove that person committed an illegal download. Attorney Chris Sandberg says about 50 Minnesotans have sought his advice after being spooked by accusations they stole video porn.

CHRIS SANDBERG: The business model being used by the attorneys doing these cases is to get people to send them money without going to court.

MARTIN MOYLAN: Sandberg says, many people are baffled by the charges and scared about what can happen to them.

CHRIS SANDBERG: There are folks who are faced with a terrible problem of, do they pay some money for something they didn't do, or do they live with the threat that they would be sued and have to spend far much more than that defending themselves?

MARTIN MOYLAN: A pair of University of Minnesota Law School grads are among the most reviled porn copyright trolls as critics brand them. One of those attorneys is a 2006 grad, John Steele. He says he got the idea to pursue illegal porn downloads when he was in law school.

JOHN STEELE: Me and my partner were the first ones to ever really do it.

MARTIN MOYLAN: That partner was Paul Hansmeier, class of 2007. Steele says he's gone after at least a few thousand people for allegedly downloading pirated porn, and total collections from them are in seven figures.

JOHN STEELE: Maybe a few million dollars.

MARTIN MOYLAN: Steele says he's not involved much in such cases these days and has directed former clients to another attorney he's known for years. Steele insists the cases are legitimate efforts to defend clients rights to get paid for their property.

JOHN STEELE: I'm an attorney. I would say strenuously that we follow the law when we pursue these people.

MARTIN MOYLAN: But a federal judge in California disagrees saying Steele has been part of a deceptive enterprise and has defrauded the court. Early this month, US District Court Judge, Otis Wright concluded Steele and some associates were the de facto owners of some companies formed for the sole purpose of pursuing copyright infringement cases. The judge said the firm's only assets were the copyrights on some pornographic movies. The judge said Steele and associates hired attorneys to prosecute the cases and, quote, "ordered their hired lawyers and witnesses to provide disinformation about the cases and the nature of their operation."

The judge castigated Steele and three other attorneys for, quote, "a form of moral turpitude unbecoming of an officer of the court." The judge also imposed an $81,000 penalty on Steele and other parties. In closing, Wright said he would relay his concerns to all judges overseeing similar cases to relevant State Bar Association's, the IRS, and federal prosecutors. Steele says he's appealing the judge's order. Whatever the outcome, Wright's moral outrage doesn't make porn trolling any less lucrative. Attorney Morgan Pietz who has defended several clients accused of downloading pornography illegally says the threats and attempts to squeeze payments out of people will likely continue.

MORGAN PIETZ: The incentive exists under the Copyright Act for people to try and make millions of dollars suing for infringement of a work of authorship that was never likely to be worth very much of anything at all to begin with. Therefore, it seems like these lawsuits are not going to go away.

MARTIN MOYLAN: And Pietz expects it could be decades before copyright laws are revised. Martin Moylan, Minnesota Public Radio News.