A setback in federal court last week appears to have prompted the law firm spearheading a litigation campaign against accused film pirates on behalf of independent movie studios to abandon a major part of its legal strategy, CNET has learned.

Dunlap Grubb & Weaver wanted to pursue lawsuits against thousands of accused film pirates in Washington, D.C. That won&39't happen.

Dunlap, Grubb & Weaver, the law firm representing makers of such pics as "Far Cry" and Oscar-winner "The Hurt Locker," has filed copyright complaints against thousands of people from across the country this year and sought to pursue those cases in federal court in Washington, D.C., near its base of operations. Among the obstacles facing the firm, however, are the defendants' lawyers who argue that a Washington, D.C., court has no jurisdiction over people living outside of that area.

Last week, in the case brought in March by the makers of the movie "Far Cry," a U.S. district court refused a request by Dunlap Grubb to wait five years before requiring the firm to name and serve all the defendants.

After U.S District Judge Rosemary Collyer refused to give it the five years, Dunlap Grubb said it will change direction. The firm now plans to dismiss the cases against defendants residing outside of the Washington D.C. area, according to Thomas Dunlap, the firm's founder. For the defendants whose cases are dropped, Dunlap told CNET via e-mail: "We plan to sue them in their home jurisdiction--likely the week after Thanksgiving."

Dunlap Grubb told the court that some Internet service providers (ISPs) were holding up their efforts to identify some of the defendants.

"Judge Collyer unequivocally rejected [Dunlap Grubb's] improper attempt to keep thousands of people, most of whom live and work far away from the District of Columbia," said Christina DiEdoardo, an attorney representing some of the defendants. "We are grateful for the court's understanding of the burden that DGW's antics have imposed on our clients."

It's important to emphasize that Collyer has not ruled on the issue of jurisdiction in this case and Dunlap Grubb could bring it up at a later date. But for now, the firm has chosen not to argue the matter in court and will choose instead to bankroll lawsuits in courts across the country, a move that will likely increase the cost of the litigation.

That is exactly what opponents wanted to happen. The techniques employed by Dunlap Grubb angered many of the lawyers representing accused file sharers. The firm took an assembly-line approach to suing thousands of people. In addition to filing suit against all the defendants in a single court no where near many of their homes, the firm also named several thousand defendants in individual suits. According to lawyers at the Electronic Frontier Foundation, an advocacy group for tech users, suing mass amounts of people makes it harder for each individual to have their case evaluated on its own merits.

Collyer's decision could affect Dunlap Grubb's other clients and the impacts may well be felt by adult-filmmakers who have modeled their own litigation campaign against illegal file sharing after Dunlap Grubb's legal strategy. The indie and port studios all say they are seeing their businesses threatened by illegal file sharing. They argue that the court system is the only place where they can combat piracy.

It's interesting to note that Time Warner Cable (TWC) was the source of Dunlap Grubb's frustration.

The cooperation of the ISPs is pivotal for any copyright owner trying to sue individuals for illegal file sharing. The copyright owner must collect the IP addresses belonging to people sharing their film or TV show via peer-to-peer services and then must get a court to subpoena each person's ISP for the person's identity. Many ISPs are cooperating. TWC, however, said in court that to look up all of its customers that Dunlap Grubb has accused of copyright violations would take up too much of the company's time and resources.

A judge agreed and set a minimum number of names for TWC to turn over each month at 28. Dunlap Grubb told Collyer that it would take 58 months for it to obtain all the names it needs from TWC, or slightly less than five years. But Collyer noted that Dunlap Grubb had already obtained a lot of names from other ISPs. What happens to those people

"[Dunlap Grubb's] request is patently unfair and prejudicial to all [defendants] who have been identified by an ISP," Collyer wrote, noting that Dunlap Grubb's problems were not good reasons to delay the legal process for the people whose names Dunlap Grubb had in its possession, many of whom with the firm has begun settlement talks.