Before responding to this letter, you should retain legal counsel to represent you. Since the ISP has not yet revealed your identity, it is possible that your counsel to make a motion to stop the ISP from doing so, Further, you may have valid defenses to this charge, including that someone else was responsible for the illegal download---of course, it may cost a lot of money to assert these defenses, which is why many people settle these cases at an early stage. You certainly are at risk of being sued in your own name. If you do choose to settle (which might be wise here), you need to make sure that the settlement documents are adequate, that they release you from further liability, and that they preserve your interest in confidentiality. In a situation like this, I strongly advise you to retain counsel to handle this for you.
Some will no doubt argue that you should just ignore this letter and not cave into the "extortion" of the copyright troll. However, the parties and attorneys who bring these suits have a legitimate basis for doing so---they have evidence that your computer's IP address was associated with an illegal download. Since you admit that your router was not password protected, it can reasonably be argued that you were reckless or negligent, and that the illegal download is your fault. Thus, your best bet is to retain counsel to attempt to negotiate a settlement of this matter on reasonable terms.
This is a common problem, and I'm going to provide similar general thoughts to some I have in the past in response to another person. As a general matter, contacting a plaintiff attorney to ask about settlement options won't incriminate someone from a legal standpoint. However, it likely will help the plaintiff lawyer identify you and maybe avoid the necessity of going through the Identification process.
I agree with Mr. Rossi that talking to a copyright lawyer would be best. Unfortunately though, the cost of paying a lawyer in these situations can quickly exceed the cost of settling, as you've probably guessed. I'd suggest seeing if you can find Pennsylvania lawyer (which I'm not) that will help you initially on a limited basis (no more than an hour or two of time) to determine the following:
1) Have you truly received a legiimate settlement offer without your ISP having identified you to the copyright owner? If the offer is legitimate, then settling will generally mean you cannot be sued again.
2) Is this a situation where the plaintiff's attorney has a process set up to settle with defendants quickly and easily based on a standard settlement agreement that is readily available? These types of suits sometimes involve so many defendants and are so "automated" that a defendant can actually settle the matter by paying online with a credit card and signing the settlement agreement electronically.
3) Does the settlement agreement truly release you from all further liability if you pay the settlement amount? This is the most critical question, particularly if you are willing to pay a few thousand dollars and be done with it. Situations involving allegations against hundreds of separate copyright defendants often have standard settlement agreements that a defendant can obtain for review from the plaintiff lawyer's office (usually by talking to a staff member or even by downloading from a website) without too much trouble.
Hope this helps. Because of the economics of settling vs. paying a lawyer to defend you, these situations often don't offer any good options on how to proceed. And, sadly enough, whether a person has truly done anything wrong frequently ends up being irrelevant in the grand scheme of things.
The information provided here is general in nature, is not legal advice, and does not create an attorney-client relationship with Will Montague or Montague Law PLLC.
You are not sure how much a "full blown lawsuit" will cost you; for all you know, the cost to defend may be less than the film company is trying to obtain from you.
Before you do anything, I strongly advise that you consult with an attorney who is located in the state where the lawsuit was filed, and who commonly defends these cases. The EFF maintains a list of such attorneys (link attached). Take the time to call one or two of them, because every attorney will give different advice and each one will have different rates. You may be pleasantly surprised, as they all may not charge as much money as you are anticipating. You don't know until you do the consultation. Good luck.
If you'd like to schedule a free initial consultation, call my office at 407-965-5519. I am licensed to practice in Florida only. My answer does not constitute legal advice or create an attorney-client relationship.
This is a frequent question on Avvo. The easiest and quickest resolution is to pay the settlement fee, but if you want to fight it there are attorneys who specialize in that. Downloading illegal porn and getting caught is embarrassing and that is what the contingent fee copyright attorneys (trolls) are counting on when they write. They know you will probably settle rather than fight. So, either you pay the troll or you pay a defense attorney and worry if you will beat the wrap. Most pay the troll. Your choice.
So far, this is free to you. Until you pay a fee, I am not your lawyer and you are not my client, so you take any free advice at your sole risk. I am licensed in IL, MO, TX and am a Reg. Pat. Atty. so advice in any other jurisdiction is general advice and should be confirmed with an attorney licensed in that jurisdiction.
There's never an answer to the question "should I settle". You need to talk to attorneys who are experienced, and up to date, on this new wave of "copyright troll" lawsuits, find out what your options are, and then pick one. The Electronic Frontier Foundation maintains a state by state list of attorneys who are working on these cases.