Category Archives: CopyFight

Court Kicks Out Copyright Troll Who Has “No Desire To Litigate”

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In yet another mass lawsuit against alleged file-sharers, a California court has said that while it’s sympathetic towards the plight of the copyright holder, it will not assist it to identify BitTorrent users. It’s a shame that technology that enables infringement has outpaced technology that prevents it, the judge wrote, but added that his court won’t work with copyright holders who pursue settlement programs with no intention to litigate.

This particular case, Hard Drive Productions, Inc. -v- Does 1-90, sees the well-known porn company plaintiff follow the now well-trodden copyright troll path.

Gather IP addresses from BitTorrent networks and go to court to obtain the physical identities of those alleged to have infringed their copyrights. From there, approach account holders with an offer to settle for a couple of thousand bucks to make (in almost all cases) an imaginary lawsuit go away.

In this case Hard Drive asked the court to force ISPs to hand over the details of 90 Internet subscribers alleged to have downloaded and shared the movie “Amateur Allure – Natalia” at some point during a 63 day monitoring period.

The court noted that discovery can only be permitted with a court order and after showing “good cause”. The “good cause” standard can be met on four conditions:

(1) the plaintiff can identify the missing party with sufficient specificity such that the Court can determine that defendant is a real person or entity who could be sued in federal court;

(2) the plaintiff has identified all previous steps taken to locate the elusive defendant;

(3) the plaintiff’s suit against defendant could withstand a motion to dismiss; and

(4) the plaintiff has demonstrated that there is a reasonable likelihood of being able to identify the defendant through discovery such that service of process would be possible.

But Judge Howard R. Lloyd had problems, particularly when considering whether the requested early discovery would be “very likely” to reveal the identities of the Doe defendants.

Hard Drive had previously stated that discovery would allow it to “fully identify” each BitTorrent user suspected of violating its copyrights. However, as Judge Lloyd pointed out, while the ISP account holder may have been the infringer, he may also be merely the bill payer. Indeed, anyone with access to the IP address could be the actual infringer.

The court then went on to list all seven of the subsequent “fishing exercise” processes Hard Drive goes through in order to find out who did infringe when the account holder isn’t the person they’re looking for. It was all too much for the court.

“It is abundantly clear that plaintiff’s requested discovery is not ‘very likely’ to reveal the identities of the Doe defendants. Indeed, plaintiff admitted at the hearing that neither it nor any other plaintiff it is aware of has ever served a single defendant in one of these cases where early discovery has been granted,” Judge Lloyd wrote.

And when it came to “good cause” things didn’t improve either.

The plaintiff in the case needed to show all Does to be in the State of California but Hard Drive shot itself in the foot when it admitted that its IP geo-location tool was “…only truly reliable when predicting the country in which an IP address is located.”

Confirming the above, Hard Drive admitted that in other cases where discovery was granted it later found that some of the ISP subscribers did not live in the state where the lawsuit was brought.

The court also had problems with 90 Does being connected together in one lawsuit after Hard Drive admitted that it had no evidence to show that the BitTorrent users ever shared the movie between each other.

“Plaintiff has not shown that the defendants acted in concert simply by appearing in the same swarm at completely different times,” said Judge Lloyd. “Therefore, the court cannot find that ‘a single transaction or series of closely related transactions’ connects these 90 Does and makes joinder proper.”

The court denied Hard Drive its application for discovery of the Doe’s identities and ordered all but one defendant to be severed from the lawsuit. If Hard Drive wants to pursue them it will have to file individual complaints against them.

Judge Lloyd’s summing up will be music to the ears of those who oppose so-called copyright trolls.

“The court realizes that this decision may frustrate plaintiff and other copyright holders who, quite understandably, wish to curtail online infringement of their works. Unfortunately, it would appear that the technology that enables copyright infringement has outpaced technology that prevents it,” Judge Lloyd wrote.

“The court recognizes that plaintiff is aggrieved by the apparent infringement and is sympathetic toward its argument that lawsuits like this one are the only way for it to find and stop infringers. However, the court will not assist a plaintiff who seems to have no desire to actually litigate but instead seems to be using the courts to pursue an extrajudicial business plan against possible infringers (and innocent others caught up in the ISP net).

“Plaintiff seeks to enlist the aid of the court to obtain information through the litigation discovery process so that it can pursue a non-judicial remedy that focuses on extracting ‘settlement’ payments from persons who may or may not be infringers. This the court is not willing to do,” Judge Lloyd concludes.

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BitTorrent Crackdown Center Prepares to Punish Pirates

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In a few months millions of BitTorrent users in the United States will be actively monitored as part of an agreement between the MPAA, RIAA and all the major ISPs. Those caught sharing copyright works will receive several warning messages and will be punished if they continue to infringe. Today the center responsible for administering the scheme announced its Executive Board, which surprisingly enough doesn’t include any neutral executives.

Starting this summer, the Center for Copyright Information (CCI) will start to track down ‘pirates’ as part of an agreement with all major U.S. Internet providers.

Last year the parties agreed on a system through which copyright infringers are warned that their behavior is unacceptable. After six warnings ISPs may then take a variety of repressive measures, which includes slowing down the offender’s connection and temporary disconnections.

The new plan was announced under the name ‘Copyright Alerts‘ last year and will be implemented by all parties by July 12, 2012. As this deadline nears, the CCI today unveiled several key players who are going to lead the group.

Surprisingly, the Executive Board is exclusively made up of representatives from the RIAA, MPAA and the ISPs.

RIAA’s Steven Marks has been appointed as Vice Chairman and General Counsel, MPAA’s Marianne Grant is the Senior Vice President, Comcast’s Alan Lewine is Senior Counsel, Verizon’s Thomas Dailey is Chairman, Viacom’s Daniel Mandil is Associate General Counsel and AT&T’s Brent Olson is Vice President of Public Policy.

For an organization that aims to educate Internet users in a responsible way, consumer rights representatives are completely absent from the Executive Board.

However, the Advisory Board does include public rights advocates including Jerry Berman, the Chairman of the Internet Education Foundation and founder of the Center for Democracy and Technology, and Gigi Sohn, co-founder of Public Knowledge.

The latter says it wasn’t an easy decision to accept the position. Sohn is especially worried about the threat of Internet disconnections.

“I still have concerns about some of the points in the agreement. One of the most prominent is the threat that consumers could have their access to the Internet cut off,” he says.

“I will ask at the appropriate time for the ISPs to promise not to interpret the agreement’s ‘temporary restriction’ provision as allowing for suspension of user Internet accounts. This provision is most troubling because an individual could lose access to the Internet just on the basis of suspicion alone.”

The CCI will be headed by copyright and consumer protection expert Jill Lesser, who will serve as Executive Director. Unlike some members of the advisory board, Lesser is delighted with her appointment and is eager to start sending out the first batch of alerts.

“I am excited to lead CCI as it begins this constructive effort to reduce and deter online copyright infringement in a way that is centered on education and deterrence, not punishment,” she said. “This unprecedented collaboration demonstrates that when content providers and distributors work together we can protect copyright and empower consumers at the same time.”

As expected, CCI is mainly focusing on the educational component of the scheme, but in essence it’s deterrence through punishment.

While we now know a little bit more about the people who will lead CCI, the organization has yet to announce the company that will be responsible for tracking down millions of BitTorrent pirates. Last year sources told us that DtecNet got the lucrative contract, but that was the last we heard of it.

One thing’s for certain, the company that gets the contract will have to be reviewed by an independent expert to see if their evidence gathering techniques pass the scrutiny test. But even when the end-stage tracking evidence is solid, there will always be many wrongful accusations, not least because people run unsecured Wi-Fi networks and ISPs make mistakes.

Those wrongfully accused Internet subscribers have the right to call for an independent review at the cost of a $35 filing fee. These disputes will then be handled by the American Arbitration Association, CCI announced today.

While the CCI is confident that the alerts are an effective way of deterring online piracy we have our doubts. For one, the monitoring system is relatively easy to bypass through a proxy or VPN. Secondly, the multi-million dollar plan only covers a few of the many sources of online piracy.

The millions of U.S. Internet users who download via cyberlockers and streaming portals are not affected by this agreement at all, as these downloads are impossible for third parties to track.

Time will tell who’s right.

The Hypocritical Use of Piracy As a Corporate Weapon

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Rupert Murdoch, media tycoon, founder and Chairman and CEO of News Corporation, has been a fanatical supporter of tougher anti-piracy legislation including PIPA and SOPA in the US. But this week it was claimed that Murdoch’s piracy crusade is a rather hypocritical one, with his News Corporation now at the center of a major piracy scandal in which it’s accused of encouraging piracy to cripple competitors.

Troubled international media giant News Corporation felt the ice crack beneath its feet this week after years of enduring ill winds blowing from phone hacking scandals in the United Kingdom and United States.

The Australian Financial Review and the BBC’s Panorama programme combined to publish a four-year investigation into the operations of News Corporation subsidiaries, unveiling damaging claims of a plot to facilitate and encourage piracy with the aim of crippling pay-television rivals.

The allegations cast shadows across the main-stream media landscape, with implications for the conduct of news outlets and the arguments of anti-piracy lobby groups through to the structure of the pay-television landscape itself.

The reaction of News Corporation’s 81-year-old Australian founder and CEO was swift. Rupert Murdoch used his new love of micro-blogging platform Twitter to rubbish the claims, the publishers and make implied threats of legal action against those raising the allegations.

Murdoch’s sensitivity is understandable. The negative publicity generated by earlier phone hacking scandals could be alleviated in part by suggesting that if immoral – even illegal – activity had taken place, it occurred during the pursuit of journalism, however tawdry or overzealous.

Using piracy as a corporate weapon to damage competitors contains no such narrow mountain trail to the moral high ground. Worse, it undermines a global campaign against piracy led by Hollywood lobby groups such as the MPAA, of whom News Corporation is a major member via its entertainment subsidiary, FOX.

In Australia, the web becomes more tangled, ensnaring a current consultation process to control and limit file-sharing. Leading up to a secretive series of meetings held between the Australian Attorney-General’s department, copyright monopoly lobby groups and internet service providers, News Corporation unleashed an attack on media piracy via its local publications, as noted at the time by us.

The articles were backed by a study commissioned by the Australian Federation Against Copyright Theft (AFACT), of whom News Corporation is a member, again via its subsidiary FOX.

AFACT now has the onerous task of keeping a straight face during the closed-door discussions while it argues for the criminalisation of not-for-profit piracy as a major backer and publicity partner is embroiled in a corporate piracy scandal.

The Australian pay-television market is small compared to its foreign counterparts. Until last week it contained only two major players whom largely broadcast the same limited number of channels. The tiny size of the industry has been blamed on everything from over regulation to rampant file-sharing. The new piracy allegations suggest a more sinister story.

Last Friday, dominant player Foxtel, part owned by News Corporation, came a step closer to acquiring its smaller rival Austar in a $AU1.9 billion take-over which will deliver Foxtel a virtual monopoly of the cable-television market in Australia.

Moves from internet outsiders such as FetchTV, Netflix and local Netflix-clone Quickflix have made inroads into the medium, but all offer limited content and Netflix currently requires Australians to circumnavigate geoblocking. Television content sold via platforms such as Itunes is also routinely geoblocked and/or suffers from unexplained inflated pricing.

The US Embassy in Canberra views limited options for accessing content as a driver of piracy in Australia. Australia’s stunted pay-television market is part of this problem. Many popular television series appear months or years late, or not at all. The free-to-air television market has suffered decades of audience and revenue decline and can no longer afford to regularly syndicate high-cost content.

Australians are left in a shifting half-light of what is globally popular, forever reading about new content online, watching the trailers, inadvertently seeing spoilers in social media – while often being left with no legal way of participating.

The allegations against News Corporation in Australia have not been heard in any court, and may never be – the Australian Federal Police are reluctant to get involved, despite Federal Communications Minister Stephen Conroy urging the claims to be investigated.

If the Panorama and Australian Financial Revue’s claims are substantiated and it is proved one of the largest media corporations in the world engaged in predatory piracy to damage rivals, the fallout will be large. News Corporation bases much of its content sales on securing paywalls and selling entry. Competitors, audiences and governments will not be happy if it is established that News Corporation’s other business model was predicated on coldly and clinically facilitating the piracy of the content of rivals.

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Hotfile Researcher Discredits MPAA-Funded Piracy Study

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The MPAA and file-hosting service Hotfile are ramping up their battle in court. To back up the claim that Hotfile is a piracy haven, the MPAA recently commissioned a study which stated that over 90% of all downloads through the site are infringing. However, in a confidential report obtained by us, a researcher hired by Hotfile points out that the MPAA’s report is both “unreliable” and “unscientific”.

Last year the MPAA started a lawsuit against Hotfile, one of the Internet’s most popular Image is Loading....cyberlocker services.

The site’s popularity is “a direct result of the massive digital theft that Hotfile promotes,” the movie industry group said.

In an effort to back up this claim, the movie studios hired statistician Richard Waterman to discover what percentage of the downloads that occur on the file-hoster are copyright-infringing. Waterman previously conducted similar studies for the RIAA’s lawsuit against LimeWire and that of the MPAA against isoHunt.

Dr. Waterman’s report ultimately concluded that 90.2% of all daily downloads on Hotfile are infringing, opposed to 5.3% that are clearly non-infringing.

Hotfile, however, felt that this report painted an inaccurate description of their daily activities and went on to hire an expert of their own to look into the validity of the report.

The file-hoster commissioned Daniel Levy, Managing Director and founder of Advanced Analytical Consulting Group. His job was to evaluate how representative the MPAA-funded report is for the alleged infringements on Hotfile from the site’s inception up to the start of the lawsuit in January 2011.

We managed to obtain a copy of this confidential report which tears the MPAA-funded study apart. The main conclusion of Dr. Levy is that the Waterman report gives “no scientifically reliable estimate of the incidence of allegedly infringing behavior through the Hotfile website.”

According to Levy the 90.2% is based on a sample of downloads that is not representative for the total number of downloads that occur at Hotfile.

Among other things the Waterman report excludes downloads from nearly half of the world’s Internet users. Downloads via so-called Hotlinks are also omitted, and downloads of files that were submitted by anonymous users were not counted either.

“Dr. Waterman has provided no reliable scientific evidence about the overall population of downloads from the Hotfile website during any time period,” is Levy’s conclusion.

Aside from the claim that the evidence is unreliable, Levy also notes that the Waterman report overlooks the fact that Hotfile is also used for purposes other than downloading alone. As is common for all storage services, a large percentage of files are used for backup and are never downloaded by the public.

“Dr. Waterman has investigated only one aspect of how users employ Hotfile. He has not investigated the storage, file security and backup or single users’ file transfer across locations or devices for self use. Dr. Waterman has not investigated the alleged infringement behavior across the uses of Hotfile,” Levy writes.

Based on the same downloads source as the MPAA used, 54 percent of all files uploaded to Hotfile are never downloaded at all. This is indeed an important distinction to make, but not a flaw in Dr. Waterman’s report as that only looked into actual downloads.

In sum, the Hotfile funded report clearly reveals some issues in the MPAA study which may overestimate the actual infringement on Hotfile. However, whether the “real” percentage of infringing downloads will be lower is impossible to tell.

The MPAA and Dr. Waterman have let the court know that they still stand behind the report, and it’s now up to the judge to decide how to use it.

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