Wikipedia
Spamigation is mass litigation conducted to intimidate large numbers of people. The term was coined by Brad Templeton of the Electronic Frontier Foundation to explain the tactics of the Recording Industry Association of America (RIAA), which files large numbers of lawsuits against individuals for file sharing, and DirecTV, which once filed large numbers of lawsuits against users of smart cards.
Spamigation lawsuits are evidently rather inexpensive to conduct, which results in one source claiming that the RIAA actually makes more money from settlements in these cases than it costs to file the lawsuits. Because of the costs of mounting a legal defense, almost all defendants in these cases tend to settle. The RIAA then uses the money from these settlements to "file more suits."
In Brad Templeton's original message post about spamigation, he said:
The RIAA strategy is an example of a new legal phenomenon that I have dubbed "spamigation" – bulk litigation that's only become practical due to the economies of scale of the computer era. We see spamigation when a firm uses automation to send out thousands of cease and desist letters threatening legal action. We saw it when DirecTV took the customer database for a vendor of smartcard programmers and bulk-litigated almost everybody in it... The RIAA uses systems to gather lists of alleged infringers, and bulk-sues them. It has set a price that seems to be profitable for it, while being low enough that it is not profitable for the accused to mount a defence, as they do not get the economies of scale involved.
Spamigation is similar to a strategic lawsuit against public participation ("SLAPP"), which is filed by a large organization, or in some cases an individual plaintiff, to intimidate and silence a less powerful critic by so severely burdening them with the cost of a legal defense that they abandon their criticism. Spamigation differs in that it aims at stopping an economic activity, in the case of the RIAA's lawsuits the copying of copyrighted material.