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9/13/2007

13:32 PM PST

John Stagliano, Jules Jordan Respond to Kaytel's Declaration of Victory in Piracy Case

--press release

John Stagliano and Jules Jordan announce: We write to address an email that was sent out yesterday by Alain Elmaleh. In support of the adage "hope springs eternal" Elmaleh prematurely and inaccurately declared victory in the federal lawsuit brought against him and his companies by Evil Angel and Jules Jordan Video.

Amazingly, he goes on to portray himself as a victim. When you
consider that he was found liable by a unanimous jury for video piracy,
trademark infringement and violation of Mr. Gasper's right of publicity,
it becomes clear that, if Elmaleh is a victim, he is a victim of his own
greed.

We ask you to please consider the following facts:

1. Last month a federal jury unanimously found that Elmaleh, Kaytel and
Leisure Time Canada all pirated our movies. At trial, Elmaleh and his companies tried to pawn off responsibility on the people they used to make the copies, but the jury didn't buy their excuses because the documents and
testimony showed that Kaytel pocketed all the proceeds from the piracy.

The jury awarded over $16 million in damages - including punitive
damages - against each defendant. That is, the jury thought Elmaleh and
his companies should be punished because their conduct was despicable.

2. The testimony at trial was more than convincing -- it was so
overwhelming that Elmaleh knew he was caught red handed, and fled the
country before the jury could return a verdict. We traced the piracy
from both directions. First we showed where the mastering took place,
and traced the masters to a replicating house in Canada, and
demonstrated that the copies were ordered by, and then sent directly to,
Elmaleh. Then we traced the goods backwards from retail establishments
to a front company run out of Kaytel's warehouse. We traced the money
from sales of the pirated goods to Kaytel's bank accounts.

3. Elmaleh lied to you when he claimed that the "judge OVERRULED the
jury's verdict." That is precisely the kind of statement that led a jury
to completely disregard his self-serving, irrational testimony at trial.

Yesterday, the court issued an order, overturning the verdict on some
of the copyright claims against Elmaleh and his two companies, Kaytel
and Leisure Time, on highly technical legal grounds. What Elmaleh didn't
say in his self serving announcement is that even if these copyright
claims are not reinstated by the Court of Appeals (and we believe we
have an excellent chance of having those claims reinstated), and
even if his legal team is successful in limiting the damages in this
case to only seven million dollars, he has been found liable by a
unanimous federal jury of video piracy, invasion of Mr. Gasper's right
of publicity, and violation of Evil Angel's federally registered
trademark.

It is sad that Elmaleh has missed the point that the jury very forcefully made to him, that he should not pirate goods and then, when caught red handed, lie about it. Further, the Judge's ruling specifically states that Elmaleh, Kaytel and Leisure Time "did not have the right under federal copyright law to distribute the motion pictures in question."


4. The basis for Elmaleh's misguided gloating is itself food for
thought. The jury found that Elmaleh orchestrated a piracy ring, and yet
he brags to you that he survived a few claims based on a technicality, if
the current ruling holds? Is this really something that anyone should be celebrating? We all have a common interest in stopping this kind of blatantly illegal conduct.


5. Elmaleh is hardly in a position of threatening anybody with a "multi
multi multi million dollar lawsuit." He has already lost more than one.
There is a judgment against him and his companies in Canada pertaining
to his piracy of several Mitchel Brother's movies; Behind the Green Door
and Behind the Green Door, the Sequel. He recently settled with Andrew
Blake when he was caught pirating his copyrighted movies.

6. Throughout this case, there were battles won and lost. That's the
nature of litigation. But we have proven what we set out to prove, that
Mr. Elmaleh and his various entities were involved in the systematic and
illegal piracy of our movies. Be assured that we will not shrink from
continuing this war against video piracy.

We intend to seek review of the Court of Appeals to reinstate the balance of our multi million dollar verdict against Mr. Elmaleh and his companies. We intend to aggressively commence collection of whatever portion of the judgment the Court finally approves. We will continue to prosecute any company, to the fullest extent of the law, that we find infringing on our rights.

To the extent any of you have any questions about these issues, or would
care to inspect the documentary evidence we obtained in this case to
determine if any of your product was involved, please feel free to
contact either of us.

Respectfully,

John Stagliano and Ashley Gasper

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