Today, van der Kolk was back in the North Shore District Court before Judge Pippa Sinclair who considered what bail conditions should be set before finally releasing the 29-year-old.

Prosecutor Anne Toohey, the lawyer representing the US government, argued that as the site’s lead programmer, der Kolk was the most likely to try and set up a Megaupload replacement.

Lawyer for der Kolk, Guy Foley, said that was ridiculous, especially given the heavy surveillance his client would be subjected to by the FBI on his release.

Toohey said there was a risk that der Kolk would get in contact with his co-accused in the so-called “Mega Conspiracy” of which there are seven in total. Four are currently in New Zealand and three are in other countries – two of those are still at large.

Foley argued that der Kolk must be at least granted permission to speak with two of his co-accused in New Zealand since they all share the same lawyer and need to communicate in order to mount a defense.

Judge Sinclair decided that the networking expert could indeed be released but under strict conditions. First, der Kolk would be denied Internet access which means that his bail location and anyone living there may not have any devices with online access. Additionally, police were authorized to continuously monitor der Kolk’s ability to get online.

Der Kolk was also banned from speaking with any of his co-accused overseas, although he was given permission to speak with those currently held in New Zealand for the reasons outlined by Foley.

Finn Batato, the 38-year-old from Germany whose bail was granted in principle during January but delayed pending an assessment of his bail address, was also in court today.

The address given by Batato was the residence of Kim Dotcom’s wife, Mona, but she had not yet submitted the required paperwork due to illness. Batato’s hearing will now take place tomorrow.

Meanwhile, a smaller house located alongside ‘Dotcom Mansion’ was seized today by authorities. Dotcom’s heavily pregnant wife and their three children will be allowed to stay in the £3.6m property, at least for now.

Kim Dotcom is scheduled to appear in court February 22nd.

Source: Megaupload Founder’s Home Seized, Co-Defendant Bailed

This change is expected to go into effect before the end of the month. From then on, Pirate Bay users can only download files through magnet links.

The Pirate Bay team told TorrentFreak that one of the advantages of the transition to a “magnet site” is that it requires relatively little bandwidth to host a proxy site. This is needed, because The Pirate Bay is currently blocked in several countries, and more are bound to follow in the months to come.

Without torrents, the Pirate Bay also becomes extremely portable which makes it possible for people to download a personal backup. As we said before, such a copy would easily fit on a thumb drive. Pirate Bay user “allisfine” was intrigued by this idea and decided to find out how small a copy of the torrents site would be.

“I did a complete snapshot of ALL the Pirate Bay torrents, in case somebody wants to close it or something similarly crazy,” he told TorrentFreak.

Using this script, “allisfine” managed to copy the title, id, file size, seeds, leechers and magnet links of 1,643,194 torrents. Comments were not copied to keep the files as small as possible, and the end result is a full copy of all magnet links on The Pirate Bay in a 90 megabytes file, 164 megabytes unzipped.

There is some confusion as to whether the 1,643,194 torrents are indeed a full copy of the site, as The Pirate Bay itself lists 4,199,832 torrents in the footer link on its site. However, the latter stats apply to the number of torrents that are available on several public trackers, The Pirate Bay itself only hosts a fraction of those.

With the release of the copy everyone can now download a personal backup of The Pirate Bay in a few minutes. Although searching the copy isn’t as convenient as using The Pirate Bay itself, there is little doubt that someone else will soon come up with another script that solves this problem.

Recent history has shown that when a site is threatened with shutdown, or censored, the Internet is very quick to come up with a workaround. And with thousands of backups of The Pirate Bay floating around, it will be very hard at this point to get rid of the famous torrent site.

What’s perhaps even more striking is that the greatest arch rival of a billion dollar entertainment industry is nothing more than 164 megabytes of text. Something to think about.

Update: Here’s a copy of 17 million torrents from Bitsnoop.com, pretty much the same format but nicely categorized. It’s only 535 MB.

Source: Download a Copy of The Pirate Bay, It’s Only 90 MB

Just like Google-owned YouTube, RapidShare has been sued for the actions of its users and just like the video giant, has prevailed in court.

But despite the fact that in May 2010 the District Court of California ruled that RapidShare could not be held liable for the actions of its users (after all, RapidShare isn’t uploading the content and always responds to takedown requests), in November that very same year the company had an unwelcome surprise.

In a response to a request from the Office of the US Trade Representative, the RIAA submitted their list of foreign “notorious markets”. RapidShare was included but strangely, just one year later in 2011′s submission, the file-hosting company had been removed.

So how does a site go from being reported as supposedly one of the world’s worst infringers to being given a tacit clean bill of health?

RapidShare attorney Daniel Raimer tells TorrentFreak that their twin approach was to change the negative perception of the company and show, contrary to some rightsholder claims, how the file-hoster really cares about copyright protection.

“We decided to increase our efforts to explain what RapidShare really stands for and how we are spearheading the industry’s efforts to combat copyright infringements,” says Raimer.

In December 2010 it became clear that RapidShare would be taking these efforts right to the very top when the company hired Washington-based lobbying firm Dutko. Their mission:

“Develop and implement a coordinated government affairs/public relations program for RapidShare targeted at Congress, the Administration and the media to help counter negative attacks on the company from U.S. copyright interests.”

Time would show this was money well spent. One year later and the pressure was off.

“The fact that we were not included in the 2011 list is a result of these educational efforts,” Raimer explains.

But does the simple hiring of a lobbying firm guarantee success for a file-sharing site and enable it to avoid a Megaupload-style doomsday scenario? Well, not quite. Convincing rightsholders that protecting their interests is also part of the plan seems equally important.

So, through the prism of the Megaupload takedown and some of the accusations leveled at that site, TorrentFreak asked Daniel Raimer exactly what RapidShare has been doing to show the RIAA and MPAA it means business.

One controversial area is cyberlockers paying users on the amount of times their content gets downloaded, with a German anti-piracy group suggesting recently that good rewards only really come from uploading infringing content. Is it possible to run a “clean” rewards program?

“As you know, RapidShare does not have a rewards program, and the reason for this is pretty simple: we don’t want to be dragged into discussions about ‘clean’ and ‘unclean’ rewards programs. What we want are customers, who appreciate our service and who are willing to pay for it, rather than customers who want to be paid themselves,” says Raimer.

“For more than five years, we have never had any serious outages; we try to establish industry leadership by fighting for privacy and against filtering on an international level.

“There are probably some people out there who don’t care about all that and who are just looking for a service that is paying them for uploading their files. Those people are obviously not the type of customers that we want, which is why they shouldn’t use RapidShare in the first place,” he adds.

Recently, Raimer has gone on record stating that service providers have a ‘moral’ responsibility to do more in the fight against piracy and that RapidShare is being more proactive than some of its competitors. So what exactly is the company doing to satisfy both the law and its own “moral” obligations?

Raimer told us that RapidShare has a well-staffed anti-abuse department that acts quickly on infringement notices and terminates the accounts of users who get caught violating copyrights three times. All fairly standard stuff for a company of RapidShare’s standing, but what about going beyond the call of duty?

Surprisingly, Raimer informs us that their abuse department has another job – to proactively search the Internet for potential infringements occurring on RapidShare’s service.

“We have developed a crawling technology that is constantly watching Internet forums, message boards and warez blogs for information about copyright infringement taking place on our system. The information collected by our software is then being evaluated, verified and processed by our anti-abuse department,” Raimer explains.

“Unfortunately, I cannot tell you any details about how this software works, but what I can tell you is that it is pretty sophisticated and that it is able to break most of the countermeasures that warez sites are using against automatic read-outs.”

This highly proactive anti-piracy stance is certainly intriguing, but will it lead to more friendly terms with rightsholders or will they see it as a chance to keep coming back for yet more concessions?

“I have once heard the sentence that some rightsholders try to create a perpetual motion machine, meaning that they will continue to come up with new demands regardless of what we do. This may certainly be true for some rightsholders who believe that the problem isn’t solved for as long as a single copy of their works can be found on the Internet,” says Raimer.

“Fortunately, most rightsholders turn out to be pretty realistic. Obviously, it is in their interest to protect their business and their copyrights, but they know that there are limits as to what a reputable hosting service can do without hurting its legitimate customer base,” he concludes.

For RapidShare, not hurting legitimate customers means respecting their privacy and not checking over their files. This ultimately means that although the company goes further than the law requires in some areas, RapidShare rejects proactive entertainment industry filtering requests, the Holy Grail of cyberlocker copyright enforcement.

RapidShare is certainly showing all the hallmarks of a responsible file-hosting service that meets its obligations under the law, and those it has set for itself on “moral” grounds. Only time will tell whether rightsholders view the company’s efforts as a strength, a weakness to be exploited, or a standard with which to beat other cyberlocker services about the head.

Source: RapidShare: From “Notorious Market” To Proactive Piracy Eliminator

Today, however, Tribler is more relevant than ever before.

Developed by a team of researchers at Delft University of Technology, the main goal is to come up with a robust implementation of BitTorrent that doesn’t rely on central servers. Instead, Tribler is designed to keep BitTorrent alive, even when all torrent search engines, indexes and trackers are pulled offline.

“Our key scientific quest is facilitating unbounded information sharing,” Tribler leader Dr. Pouwelse tells TorrentFreak.

“We simply don’t like unreliable servers. With Tribler we have achieved zero-seconds downtime over the past six years, all because we don’t rely on shaky foundations such as DNS, web servers or search portals.”

So how does it work?

Like many other BitTorrent clients, Tribler has a search box at the top of the application. However, the search results that appear when users type in a keyword don’t come from a central index. Instead, they come directly from other peers.

Downloading a torrent is also totally decentralized. When a user clicks on one of the search results, the meta-data is pulled in from another peer and the download starts immediately. Tribler is based on the standard BitTorrent protocol and uses regular BitTorrent trackers to communicate with other peers. But, it can also continue downloading when a central tracker goes down.

The same is true for spam control. Where most torrent sites have a team of moderators to delete viruses, malware and fake files, Tribler uses crowd-sourcing to keep the network clean. Content is verified by user generated “channels”, which can be “liked” by others. When more people like a channel, the associated torrents get a boost in the search results.

The latest addition to Tribler is a Wikipedia-style editing system dubbed “Open2Edit,” where users have the option to edit names and descriptions of torrents in public channels. All without a central server, totally decentralized.

According to Dr. Pouwelse, Tribler is fully capable of resisting any pressure from outside, and it will still work when all torrent sites and trackers are gone. It simply can’t be shutdown, blocked or censored, whatever laws politicians may come up with.

“The only way to take it down is to take The Internet down.” Pouwelse told us.

One thing that could theoretically cause issues, is the capability for starting users to find new peers. To be on the safe side the Tribler team is still looking for people who want to act as so called bootstraptribler peers. These users will act as superpeers, who distribute lists of active downloaders.

“Together with software bugs and a code cleanup, that is now our last known weakness,” says Pouwelse.

While the Tribler client only has a few thousand users at the moment, for avid file-sharers it must be a relief to know that it’s out there. No matter what crazy laws may pass in the future, people will always be able to share.

Those who want to give it a spin are welcome download Tribler here. It’s completely Open Source and with a version for Windows, Mac and Linux.

Source: Tribler Makes BitTorrent Impossible to Shut Down

In recent weeks, however, worry about the future has increased drastically among the owners of some of the largest torrent sites. Yesterday, BTjunkie closed its doors for good, and TorrentFreak has learned that at least two other sites in the top 10 have toyed with the same idea.

“There have been talks of shutting our site down, even before BTjunkie did it,” one admin told TorrentFreak on condition of anonymity.

The aggressive actions against MegaUpload – site founder Kim Dotcom was raided by an anti-terrorist squad last month – are frequently mentioned as cause for concern. So much so that several people involved with one of the largest torrent sites on the Internet have already dropped out.

“A couple guys on the staff decided not to be involved anymore with the site after the MegaUpload incident,” the admin told us.

The fact that a German citizen can be arrested in New Zealand upon request from the US authorities signaled that regardless of local laws, people connected to file-sharing sites have become a global target.

“It’s turning into a witch hunt. It is worrying,” said the admin.

The thoughts of this admin are shared by one of the owners of another major torrent site, who told TorrentFreak in private that shutting down has crossed his mind on several occasions.

Things have become more and more complicated in recent weeks. Even those who are as cooperative as possible with copyright holders, by swiftly responding to DMCA takedown requests for example, can’t be entirely sure that they won’t become the next target.

On the other side, however, there are also those who continue undeterred, such as isoHunt.com owner Gary Fung, who is battling in court with the music and movie industries.

“After 6 years of 2 civil lawsuits with MPAA and CRIA, we are still here. None of these events is really new to us. From Lokitorrent to Suprnova, we’ve seen sites we index come and go. And as long as the Free Internet exists, sharing will endure. As will isoHunt,” he says.

Ironically enough, isoHunt’s ongoing legal battle might be what keeps Fung relatively safe. If the authorities planned to launch a criminal investigation against a torrent site it would be strange to pick one that is already involved in a civil lawsuit with a copyright holder.

Besides not being worried about the future, isoHunt’s owner is going on the offensive and is urging the entertainment industries to embrace technology, instead if fighting it.

“Perhaps more than ever, I wish the content industries will wake up to the fact you can’t fight technological progress, that battles maybe won, the war is already lost. Unless Content really starts working with technology to accelerate spread of culture, as the Internet has naturalized it. And make more money than ever in the process,” Fung says.

“Because so-called piracy enabled by the Internet and media consumption is not a zero-sum game, a download does not equal a lost sale, and what pirates really want is not necessarily free as in beer, but free as in speech and convenience.”

isoHunt’s determination to continue operating is shared by Extratorrent‘s admin Sam, whose site became the 5th largest torrent site after BTjunkie folded.

“What happened with MegaUpload is not at all good for the torrent world, but I would say it is impossible to stop the unstoppable. After all, if one site is shut down, a hundred new sites will open,” Sam told TorrentFreak, adding, “We have no plans to shut down,we will continue running as usual.”

Another site that’s not going anywhere is The Pirate Bay, the largest torrent site of all. Although its founders are now very close to serving jail time, the site itself will remain online. In the coming weeks The Pirate Bay will replace .torrent files with magnet links, which makes the site more portable and resilient.

The above shows that the end of BitTorrent is not near, but it’s hard to ignore the changing climate. People who previously saw no problems with running a torrent site are now reconsidering their position. The exact fallout, and whether there will be any newcomers to fill the gaping hole BTjunkie left, will become apparent in the coming months.

Source: Is BitTorrent Done? Major Torrent Sites Consider Shutting Down

We knew that dozens of police swooped on the location in helicopters and we knew they were armed. But what is even more unbelievable is that some of them were from the Special Tactics Group, New Zealand’s elite counter-terrorist force.

STG, nicknamed “Super Tough Guys”, train with the country’s Special Air Force and are sent in to deal with the most violent of offenders. Yet no one in the Dotcom household had any record of violence. Indeed, their main target was a man suspected of online copyright infringement – a computer related offense.

Wayne Tempero, Dotcom’s bodyguard, told 3Newz that the police were armed with assault rifles and sidearms – STG are known to use M4A3 carbines and Glock pistols. Tempero explained that two firearms were held in Dotcom mansion – two shotguns, both his, legal, fully licensed and locked away in safes.

At 06:45 Tempero was woken by a “horrendous noise” and after dressing and running outside he was confronted by a huge cloud of dust being kicked up a helicopter hovering just above the ground.

Tempero, wearing just a t-shirt and track pants with his hands held up, and was ordered by a flak jacket wearing armed officer to lie on the floor. Tempero said that the noise of the helicopter and doors being smashed elsewhere on the property was so loud that if the police did identify themselves, he didn’t hear them.

The armed police went into the indoor play area which had 3 kids inside – one aged 3, one 4 and another 15 months, together with their Filipino nannies. From there they proceeded to one of the nannies’ rooms, kicked the door down and demanded to know if she had any firearms – or bombs.

Tempero said he asked the nanny twice if she was sure they asked if she had bombs – she said she was. “Maybe that’s the kind of thing that Filipino nannies do,” Tempero said.

Outside people were being handcuffed and put on the floor. Two security guards, Tempero himself and the Filipino staff, were placed next to a van containing barking dogs.

Meanwhile the police had gone upstairs and were trying to smash down the door to Kim Dotcom’s quarters. Tempero said Dotcom’s wife tried to give them the security code but they weren’t interested and told her to go downstairs.

Police smashed down three doors to get to Kim and when Tempero was allowed back upstairs, six officers with sledgehammers and a circular saw were trying to smash into what they thought was Dotcom’s hiding place. It was in fact a broken service elevator/dumb waiter (below).

Dotcom had actually followed a prearranged plan formulated by his bodyguard which involved him hiding in the “Red Room” to ensure his safety. Tempero was asked what would have happened if a couple of police had simply turned up and asked for Dotcom to come down.

“He would have complied with everything, we would have sat at the large table, he would’ve probably offered them breakfast and he would have complied with everything,” Tempero said.

“Would he have done anything to destroy the hard drive, to take down Megaupload?” 3Newz asked. “Certainly not, why would he? He would be destroying his defense,” Tempero responded.

Despite the massive police and apparent counter-terrorist operation against him, Dotcom was in the Red Room alone for more than half an hour.

“If Kim had a Doomsday setup where he could delete his harddrive or takedown Megaupload, would there have been sufficient time for him to do that had that been his intention?” questioned 3Newz.

“He could’ve done that within seconds,” said Tempero.

There can be little doubt that Kim Dotcom and the other operators of Megaupload are accused of serious crimes and ultimately a court will decide if they are innocent or guilty. But whatever the scale of the alleged offenses, these are ‘white collar’ issues – computer matters – and whatever he may or may not have done, Kim Dotcom is not a terrorist and has never been accused of being one.

Here’s the excellent 3Newz video report. It’s over 10 minutes long but worth the time.

Judging by the 3Newz reporter’s tone, he’s struggling to see the connection between the alleged offenses and the response by the authorities. And he isn’t the only one.

Source: Elite Anti-Terror Police Went After Megaupload’s Kim Dotcom

Hard Drive Productions sent one such letter to Liuxia Wong last year, claiming that her IP address had been used to share “Amateur Allure Jen” on BitTorrent.

Wong was told by the porn outfit she could be sued for $150,000, but for ‘just’ $3,400 the whole thing could be made to go away. Many might have chosen to settle at this point, but this California resident bit back and went on the offensive.

As noted by FightCopyrightTrolls, Wong hired Steven Yuen, an experienced IP litigator from the EFF’s subpoena defense list, to go after Hard Drive Productions. It could turn out to be a fascinating case.

In a lawsuit filed at the end of January, Wong says that she did not download the work in question and goes on to attack Hard Drive on a number of fronts including harassment.

Hard Drive report the alleged infringement as taking place March 28th 2011, but Wong says the movie in question wasn’t officially registered until April 22nd 2011. The letters, therefore, “were designed to coerce her into settling the case despite the absence of any facts supporting liability against her.”

The lawsuit further claims that in their letter to Wong, Hard Drive insist that the California resident would be liable for infringement even if her router was unsecured and someone else carried out the act without her knowledge. Wong’s suit dismisses that assertion as “erroneous”.

But perhaps most interestingly, Wong is challenging the notion that Hard Drive can own the copyright to its own work – indeed, that porn can be copyrighted at all.

“Article 1, Section 8, Clause 8 of the United States Constitution, known as the Copyright Clause, empowers the United States Congress: ‘To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries,” the lawsuit details, adding:

“Early Circuit law in California held that obscene works did not promote the progress of science and the useful arts, and thus cannot be protected by copyright.”

The lawsuit goes on to state that Hard Drive’s work does not fulfill the above criteria and in fact depicts obscene and criminal acts.

Wong is asking the court to issue an order declaring that not only is she not liable to Hard Drive for infringement, but that the company’s movie is not copyrightable and is illegal due to Hard Drive engaging in “solicitation, conspiracy to commit prostitution, pimping and/or pandering,” during its production.

Finally, a couple of interesting BitTorrent-related points are also raised in the suit. The first is that Hard Drive did not mitigate alleged damages since the company failed to use the DMCA to have monitored torrents taken down. The second involves the company hired by Hard Drive to do the monitoring.

“….Hard Drive…authorized its work to be distributed by its non-California licensed private investigators, who are in violation of California Business and Professions Code…while they were distributing and participating in the distribution of the work, and/or that Hard Drive is guilty of unclean hands due to its and/or its agents’ operation and use of honeypots, and/or the use of a third-party’s services as honeypots,” the suit adds.

In a sea of carbon copy BitTorrent mass-lawsuits, this case shines out as one to watch.

Gov.uscourts.cand.250725.4.0

Source: You Can’t Copyright Porn, Harassed BitTorrent Defendant Insists

The data for our weekly download chart is collected by TorrentFreak, and is for informational and educational reference only. All the movies in the list are BD/DVDrips unless stated otherwise.

RSS feed for the weekly movie download chart.

Source: Top 10 Most Pirated Movies on BitTorrent

The site was never involved in any legal action, and to keep it this way the site’s operators decided to shut the site down for good today. The following message was posted on the BTjunkie homepage a few minutes ago:

“This is the end of the line my friends. The decision does not come easy, but we’ve decided to voluntarily shut down. We’ve been fighting for years for your right to communicate, but it’s time to move on. It’s been an experience of a lifetime, we wish you all the best!”

Talking to TorrentFreak, BTjunkie’s founder said that the legal actions against other file-sharing sites such as MegaUpload and The Pirate Bay played an important role in making the difficult decision. Witnessing all the trouble colleagues got into was cause for a lot of worry and stress, and those will now belong to the past.

That said, BTjunkie’s owner still thinks there might be a future for other BitTorrent sites.

“I really do hope so, the war is far from over for sure,” he told TorrentFreak.

While BTjunkie was never targeted directly by copyright holders, the site was reported to the US Trade Representative (USTR) November last year. Both the RIAA and MPAA listed the torrent index as a ‘rogue’ site that facilitated mass copyright infringement.

BTjunkie is also one of the search terms censored by Google because it’s piracy related, alongside The Pirate Bay, RapidShare, uTorrent and others.

As a result of the decision to shut down BTjunkie, one of the top 5 torrent sites with dozens of millions of users a month is no more. Judging from previous shutdowns like that of TorrentSpy and Mininova, users will quickly find a new home at one of the many alternatives.

Nonetheless, it’s the end of an era.

Source: BitTorrent Giant BTjunkie Shuts Down For Good

A boycott against Big Monopoly will not work. Any noticeable drop in profits will cause them to throw a tantrum at policymakers and complain how their profits are dropping due to piracy, and request harder enforcement of their copyright monopolies at the expense of our civil liberties and the freedom of the net.

Buying more of their products (yeah, right) will not work. Any noticeable raise in profits will cause them to commission reports to policymakers illustrating their grandiose importance to the economy as a whole, suggesting that they are the direct reason for at least several hundred per cent of the gross national product. Therefore, they will argue, they need additional protection as a national interest.

Doing nothing will not work either, as we are constantly on the retreat in civil liberties.

There is no course of action or nonaction that the net or its individuals can take that would cause Big Monopoly to behave differently from today.

Attacking Big Monopoly is simply barking up the wrong tree. It’s a complete waste of effort.

Also, I’m quite concerned at the overall attitude. I see many on the net somehow trying to please the copyright industries – if they weren’t as obnoxious, would the copyright industry perhaps show a more lenient attitude…?

As if!

This attitude, I fear, is one of the most dangerous of all, for it puts the individual in a subservient position to the corporations. Reality is quite different, but we are only as powerful as we believe ourselves to be. Those who see themselves in shackles will behave with restraint. On the other side of that coin, those who refuse to accept any limitation placed upon them will find that most, if not all, limitations can be broken.

Obviously, the copyright industry’s dream is having us – the people – seek its consent for everything we do, just like they have trained politicians to do for over a century. When you discuss boycotts, you are playing straight into their game of thinking that it is the copyright industry’s desires that matter for the task of building a sustainable society.

They don’t. Their desires are irrelevant. As are they.

They are just one entrepreneur among many. The role of any entrepreneur is to construct a use case and a business case that allow them to make money, given the current constraints of technology and society. They don’t get to dismantle civil liberties, even if they can’t make money otherwise.

The target for any action isn’t the copyright industry. That’s just playing into their hands as imagined kings of the hill.

Rather, the target is – and must be – the policymakers. They are the ones who are actually cutting down on our civil liberties, not Big Monopoly. Normally, they see issues like the copyright monopoly and freedom of the net as totally peripheral to policymaking; the topics du jour are the same as they’ve been in the past 50 years: healthcare, schools, energy and defense.

This is both a problem and a blessing.

It is a problem, as they don’t realize the gravity of the situation. Most governments in the West would be completely baffled to realize that people are actually holding rallies for freedom of speech: they would not understand why. As in, “we have that already”. In their minds, we do. In ours, however, it’s being cut away.

But it is also a blessing, as they’re not politically entrenched on the issue, thinking it is peripheral. As most political parties haven’t identified themselves with one side or the other, thinking everybody were in agreement already, the policymakers can be made to turn quickly at little internal cost of prestige.

At the end of the day, there’s just one single thing that politicians care about, and that is their job. Their job must be put on the line over our freedoms of speech, or change will not happen. This was the (very successful) formula behind founding the Pirate Party in 2006.

This is also what we saw with the SOPA/PIPA battle in the United States, as politicians realized that there were a serious amount of votes to be lost or harnessed over freedoms of speech on the net. As that realization sunk in, the copyright industry’s efforts were dead in the water.

In Europe, 250 million people preserving and sharing contemporary culture in disrespect of an immoral and overreaching copyright monopoly is not “a business problem that you can put an end to”. It is a power base of 250 million voters. This is the message that policymakers must be sent in the loud and clear.

Once the policymakers get that message, the copyright industry can make their money any legal way they can or go bankrupt in the process, and nobody will care whichever way they go, not any more than you would care about the tire industry or the glass blowing industry.

Source: The Target Isn’t Hollywood, MPAA, RIAA, Or MAFIAA: It’s The Policymakers

As one of the older torrent sites around, The Pirate Bay has been at the forefront of this copy revolution. But according to the people behind the torrent site, copying bits is just the beginning. The next step is to download stuff you can hold in your hands.

“We believe that the next step in copying will be made from digital form into physical form. It will be physical objects. Or as we decided to call them: Physibles,” said The Pirate Bay last month when they announced a new 3D printing section of their site.

To give people something to work with, a 3D model of The Pirate Bay ship designed by Todd Blatt was one of the first items put up for download. Since then several people have printed it out and have now become the proud owner of a cute 3D printed ship.

The copy above belongs to Canadian Charles Randall. After he read the announcement on TorrentFreak he downloaded the torrent and went straight to Shapeways.com to print a copy for personal use.

“I was entertained by telling shapeways.com that I owned the copyright on the design though, something they force you to accept in order to have the model printed. But I guess, in a way, we all do,” Randall told TorrentFreak. “I debated just putting it up for sale on the site, but despite the Pirate Bay sensibilities, I didn’t want to entangle myself in any weird controversy for trying to sell it.”

Unlike regular downloads on BitTorrent, 3D objects come with a hefty price tag. Using the cheapest materials available, 3D pirates have to invest roughly $100 to get their new toy made.

“The raw price was about $80 for the material, $6.50 for the shipping, and then I had to pay $15 in Canadian duties,” Randall said

What this process has in common with copying bytes, is that it can be quite addictive.

“As for doing more 3D printing, I am tempted to learn Blender in order to start making interesting little things,” Randall told us. “The build quality is super detailed and fairly solid. You can see the patterns from where it was printed, but if I were to build small model pieces it would probably be easy enough to sand them down.”

“The whole thing is an amazing process and just knowing it’s possible has opened the floodgates of my imagination.”

The above response of one of the first 3D ‘pirates’ is just what The Pirate Bay were looking for when they launched their new category. Since the announcement the 3D printing category has grown to 26 torrents, ranging from a 3D printable MPAA Boss Chris Dodd to a Teddy Bear.

These are the first steps in discovering a new future that will one day allow people to print a perfect set of sneakers and spare car parts for a few dollars. The auto industry should be very worried.

Source: First Downloaded and 3D Printed Pirate Bay Ship Arrives

Having never seen anything like it before, James (as we shall call him for now) became hooked, and quickly began to display a trait inherent in many addicted file-sharers.

“I simply couldn’t get enough,” he told TorrentFreak. “It was more fun downloading and sharing the stuff with all my friends then actually using it or playing the actual games.”

Having become inspired by these simple beginnings, James began chatting with other like-minded people on warez sites and ICQ, going on to share warez via PUBS, FTP-enabled servers conveniently left open by companies with more bandwidth than security sense.

Sharing files wasn’t a simple process back then and James took exception when Napster began dumbing down the process.

“We hated it, simply despised it because it made a mockery of the hard work we put in to obtain all these different warez,” he recalls.

But despite these early bad feelings towards Napster, the future would eventually see James become a facilitator of even easier ways of downloading. Not for just his friends, but for more than a hundred thousand people.

After working his way up to become one of the top members on the GraveyardFXP warez board, James says he became a moderator of DelusionalFXP. It was there, on their IRC channel, that he would meet people whose new project would suck him in and change his life forever. At some point along the line, ‘James’ became better known to his peers as StonyVision, and he was invited to join a new project being set up by, among others, a fellow pirate known as Sk0t.

Under Sk0t’s leadership, a torrent site called Elite Torrents was taking shape and preparing itself for an eventual membership of some 130,000 active users. It would also become the only US-based BitTorrent tracker ever to be busted by the FBI and ICE.

After he’d installed BitComet and began sharing content in February 2004, staff on Elite noticed something very appealing about StonyVision – his impressive upload capability. StonyVision told us he’d “followed instructions” on how to use two instead of the regular one modem his cable connection usually allowed, which gave him business-standard upload speeds. When you’re delivering content on BitTorrent, upload bandwidth is king, and Elite wanted some of Stony’s.

But as file-sharers are often heard to complain, you can never have enough bandwidth, so Stony acquired a 100mbit server at The Planet in Texas and began seeding his files from there. Once around 150 of Elite’s users had grabbed his latest release he’d begin releasing his next torrent, usually the very latest movies. His performance eventually meant that he became a member of staff, later going on to organize other Elite Torrents uploaders.

Of course, StonyVision needed content to share and he wasted no time in getting it directly from source – The Scene. He’d gained access to this elite network through his contacts at DelusionalFXP and ended up adding his own server to something called T.O.P. or “Tower of Power” – 53 dedicated 100mbit servers acting as a single giant RAID FTP piracy site. But still Stony needed more.

“At that point I was on four or five top sites, and my main interest was always movies. I loved movies and still do,” Stony explained. “Since my server was tied up I ended up renting two more, one to race with and another for seeding content on Elite Torrents.”

In common with his more old-school peers, Stony saw himself as something of a Robin Hood, “taking from the rich and giving to Average Joe”, and reveled in the positive feedback left by up to 130,000 Elite Torrents users.

But the environment in the United States had become increasingly unfriendly towards The Scene. The FBI and DoJ’s Operation Fastlink was underway and there was a growing fear that torrent sites would be targeted next. Stony sensed the tension and stepped down from the site’s staff around April 2005. He was 19-years-old – and too late.

Elite Torrents and its operators were already being watched and no amount of IP-address obfuscation would prove effective in hiding Stony or his fellow staffers on the site.

“Truth be told I did hide my IP and was the hardest one to find but [the FBI] used the Patriot Act and came up with an asinine amount of money lost to these companies and the movie industry and labeled me as a possible domestic terrorist who was conspiring to commit copyright infringement,” Stony explains.

“I woke up to banging on the door over and over, the dogs started barking. I got up thinking who’s the asshole banging on my door at 6am? Next thing I know there’s 10+ FBI agents in my house. I started laughing at first – I thought it was a joke – until the reality sunk in.”

It was 25th May 2005 and Operation D-Elite, which was to claim several admins and staff members at Elite Torrents, was underway.

“That was the day of days, I was in total and utter dismay and couldn’t even wrap my head around what had happened. I had no clue what was happening to the others. I lawyered up immediately which in itself is a funny story. I opened up the Yellow Pages, looked under ‘lawyer’ and there it was – an ad with a firm that had dealt with computer crime.

“I think I need a lawyer,” Stony told the gentleman on the other end who inquired “Why?”

“Well, the FBI had just raided my house along with a group they called ICE,” Stony responded.

A few awkward seconds of silence was followed by: “How fast can you get here?”

What came next was mountains of litigation and Stony being told to expect the worst – 5 years in prison. The pressure proved too much and Stony went off the rails, turning to alcohol.

In December 2006 he would learn his fate for the uploading of 53 movies, 6 pieces of software and 10 video games. The government demanded a prison sentence in order to deter others from infringement. To Stony’s huge relief, they didn’t get their way.

“Luckily for me I had the most liberal federal judge there was at the time. I was given a fine of $3,500, 6 months house arrest, community service and 3 years probation in which I was not allowed to touch a computer. I had somehow escaped doing time and the U.S attorney was furious.”

But despite avoiding prison, Stony says that he’s still paid a price.

“It’s been the bane of my existence and yet made me who I am. I continued on a self destructive path for quite some time doing crazy things, still working out, getting in bar fights. Truth be told I’ve been to hell and back, stared the devil in the face with its trillions of dollars of influence (RIAA, MPAA) and laughed and walked away.”

Stony says that confessing to a double felony on job applications hinders him, but the support of a new woman in his life has helped tremendously. So how are things today?

“I of course no longer pirate anything anymore as I’m sure I’m still on numerous watch lists. Its simply fun to look every now and again,” says Stony.

“My story isn’t one of inspiration but one of caution. It could happen to anyone out there. I know people are thinking ‘nah, not me’, but that’s what I thought too and now here we are.”

Stony told us that he recently got back online again with his own computer and was inspired by the huge anti-SOPA and PIPA campaigns.

“Thanks to everyone who spoke out on Internet blackout day. It really did give me goosebumps to see people finally stand up and be heard,” he concludes.

Sk0t’s story and those of his fellow operators and uploaders can be found here and here.

Source: Busted By The FBI: The Life Of An Elite Teen BitTorrent Uploader

The dangers and threats of the ACTA treaty are shared by free-speech advocates and access to medicine groups alike. ACTA is seeking to deal with a number of widely differing issues, and hence does not do a good job at any of them. Additionally, there are serious concerns about the collateral damage that ACTA would cause.

Regrettably, concerns by businesses, NGO’s and politicians have not led to a better result. This is partly due to the intransparant way in which ACTA has been established and negotiated. As a democratically elected representative, I believe it is not the role of government to protect outdated business models, and I do believe it is our job to ensure democratic oversight.

Besides zooming in on the details of what ACTA will and will not do, taking a step back and looking at the broader picture is also important. As someone who advocates copyright reform, notably the harmonization of copyright laws in Europe, I do not believe stricter enforcement of outdated systems is helpful or relevant. Enforcement is not even possible in many cases, and not without violating people’s fundamental rights.

Yet there is a big push towards enforcing outdated legal structures of copyright by the entertainment industry. ACTA will lock any signatory country into a system of copyright enforcement, leaving the democratic process disadvantaged to enact necessary reform of our laws to suit the digital age.

The fast development of the information society and all the innovations we have seen in the last 15 or so years have changed the way we live. People can enforce their fundamental rights of access to information, and free speech with the help of the internet. Human rights violations are documented and shared across the world, and the way we access and share information and culture such as news, music and films has changed forever. Most copyright rules were developed for the printing press and codified internationally before radio had even been invented.

Some of the most important EU laws regulating the internet were established before social media and peer-to-peer sharing took off. The E-commerce Directive of 2000 and the Copyright Directive of 2001 were enacted without foresight of the new services which were developed over the last 10 years. Time and time again, it has been proven that the Directives and their national implementations do not suit the digital age that followed directly afterwards. The fragmentation of European copyright puts the EU, which is widely known for its wealth in culture, at a competitive disadvantage in comparison to the United States.

Copyright and E-Commerce need to suit the needs of the advanced information society we now live in. To enable a flourishing Digital Single Market in Europe, we need to analyse case-law of the last 12 years regarding the internet, hear from creators, innovators and consumers. If we want to serve consumers, artists and businesses well, we need to find a new balance in copyright. Every aspect of copyright needs to be discussed: the exclusive rights, limitations and exceptions, collective management, enforcement, etc. Only then should we discuss how to enforce the new found balance on the international arena, such as with ACTA.

ACTA must not be passed. Let’s focus on reform to allow for the opportunities of the internet to bloom, instead of allowing outdated business models to limit the free market, and to criminalize audiences. Additionally, health threats as a result of counterfeit medicine deserve a better solution than ACTA. Join me in voicing your concern with this treaty, so we can establish flexible copyright rules which are fit for the 21st century.

Source: We Need Copyright Reform, Not ACTA!

Leading up to the Super Bowl this weekend, a total of 307 domain names were seized, 16 of which provided access to online streams of popular sporting events.

Commenting on the actions, ICE Director John Morton was quick to declare victory, but perhaps this came a little too soon. Firstrow, one of the largest sites which had several of its domains taken over by the US government, is not planning to give up the ‘battle’ anytime soon.

Quickly after its firstrow.tv, firstrowsports.tv, firstrowsports.net and firstrowsports.com domains were seized, the service was operating as normal under a new domain – Firstrowsports.eu. Talking to TorrentFreak, one of the owners said that the US has stepped out of line by simply taking away their property.

“The US has prided itself on their ‘innocent before proven guilty’ mantra, yet is clearly hypocritical when it comes to this,” the Firstrow co-owner told us. “Numerous times the US has seized domains, before the defendants have been proven guilty in a court of law.”

“What is the point of trying to approve SOPA and PIPA if they do the same without these laws,” he questioned, referring to the pending US bills that would make it even easier to seize allegedly infringing domains.

The response of Firstrow stands in sharp contrast with that of ICE Director John Morton yesterday.

“In sports, players must abide by rules of the game, and in life, individuals must follow the laws of the land. Our message is simple: abiding by intellectual property rights laws is not optional; it’s the law,” Morton said.

This comment forms the base of the dispute. What is the law of the land? The people who operate Firstrow don’t live in the US, and neither are their servers located there. In fact, Firstrow says that their site is perfectly legal where they are based, so they will continue business as usual.

“Since we don’t live in a third-world country here, the courts decide if something is illegal not the entertainment industry lobbies. We will continue until a court decides that the site is illegal, but for now we’ve seen three court decisions on this matter that say it is not.”

Firstrow’s co-owner is referring to the court cases in Spain, where sites that merely link to copyrighted works have been declared legal. Rojadirecta, a site very similar to Firstrow, won in Spanish courts twice.

In the US, however, things work differently. Two operators of streaming sites have already been arrested and await criminal trials. And if the domains are linked to foreigners, the US believes it has the authority to take them over if they are deemed to infringe copyrights.

This stance has raised eyebrows among foreign governments. A few months ago the European Parliament adopted a resolution which criticized US domain name seizures. According to the resolution these measures need to be countered as they endanger “the integrity of the global internet and freedom of communication.”

Yesterday’s actions show that the US authorities are not impressed by the international critique, just as Firstrow refuses to change course after yet another domain seizure. Firstrow says ICE is wasting its time and continues to provide access to sports fans all across the world, who are otherwise unable to see their beloved games.

“ICE must have a lot of spare time if they can waste it on these domain seizures,” Firstrow’s co-owner says. “They should invest time in the real important stuff , instead of chasing people who have no other option than to watch a sports game for free.”

Source: Seized Sports Streaming Site Makes a Blazing Comeback

Dotcom has been held in custody since dozens of police raided his Coatesville mansion last month following a lengthy FBI investigation.

During the day-long hearing before Justice Asher, Dotcom’s lawyer, Paul Davison QC, appealed a decision by Judge McNaughton in the Auckland District Court last week which denied the 38-year-old German national bail.

Judge McNaughton had concluded that with all his resources, Dotcom posed a “significant” flight risk.

The defense said that Dotcom has several health-related conditions – one of which is thought to be diabetes – which cannot be properly dealt in prison, adding that the Megaupload founder wanted to be able to spend time with his wife who is currently carrying twins.

Just because Dotcom had access to a helicopter and private jet, Davison added, it did not follow that he would seek to use them to flee the country.

When it was Dotcom’s turn to take the stand he told the Court that during his high-profile arrest last month, police had assaulted him after finding him in a secure panic-room known as the “Red Room”.

“I was punched in the face, I was kicked down on the floor,” Dotcom said. “One guy was standing on my hand so my nail was ruptured and my hand was bleeding, it was quite aggressive.”

Dotcom also told of how that during his time in prison he had received “funny visits”, phone calls and contacts from people he had never heard of including a succession of women wanting to be his friend.

One unsolicited telephone call claimed he was a prosecutor who in return for receiving some money would help Dotcom get bail

“I immediately said ‘absolutely not’ and I gave the number to the officer,” Dotcom said.

Another, the court was told, was said to be an expert document forger.

“If people were to approach me and to offer such a service, I would tell them to go to hell,” Dotcom said. “I have no desire to run away.”

But lawyer for the United States government, Anne Toohey, said that the chances of the New Zealand resident fleeing were too high, a point on which the court eventually agreed.

Describing Dotcom as “an extreme flight risk”, Justice Asher again denied bail. Dotcom is set to appear in court again on February 22nd for an extradition hearing.

Source: Megaupload Founder Accuses Police of Assault, Denied Bail Again

At the time there was no official announcement from the authorities, but ICE has now confirmed that this, their 10th round of domain seizures, is being branded ‘Operation Fake Sweep.’

In total the authorities took down a record breaking 307 domain names. The majority, 291, sold counterfeit NFL merchandise and the remaining sites allegedly linked to copyrighted streams.

The full list of seized streaming domains is firstrow.tv, xonesports.tv, firstrowsports.tv, firstrowsports.net, firstrowsports.com, hq-streams.tv, robplay.tv, soccertvlive.net, sports95.net, sports95.com, sports95.org, sportswwe.net, sportswwe.tv, sportswwe.com, youwwe.net and youwwe.com.

In addition to the seizures, police also arrested 28-year old Yonjo Quiroa of Comstock Park, Michigan. According to the press release Quiroa is the owner of nine of the sixteen sites, which he operated from his home.

Responding to the arrest and domain seizures, ICE Director John Morton declared victory.

“While most people are focusing on whether the Patriots or Giants will win on Sunday, we at ICE have our sights on a different type of victory: defeating the international counterfeiting rings that illegally profit off of this event, the NFL, its players and sports fans,” Morton said.

“In sports, players must abide by rules of the game, and in life, individuals must follow the laws of the land. Our message is simple: abiding by intellectual property rights laws is not optional; it’s the law.”

NFL’s Vice President of Legal Affairs Anastasia Danias welcomed the support of the authorities.

“We are grateful for Homeland Security Investigations’ tireless efforts in combating intellectual property theft and are pleased to be working along with them and the Indianapolis Metropolitan Police Department on this important issue,” he said.

The controversial seizures which started early 2010 have now resulted in the takeover of 669 domain names. The majority of the sites in question offered counterfeit goods and three dozen were linked to copyright infringements. One domain name has been returned because it was seized by mistake.

Source: Feds Arrest Streaming Site Operator for Copyright Infringement

“I should write a book about doing business in Hong Kong, that’s how good it is. People there leave you alone and they are happy for your success,” he added.

But leaving him alone wasn’t on the agenda of the Hong Kong authorities. In a triumphant January statement they revealed how they had worked with the U.S. Department of Justice and the FBI to “smash a transnational cyberlocker syndicate” – aka Megaupload.

The commitment from Hong Kong Customs was significant. Not only did they invest a year’s worth of investigative manpower, but also supplied 100 officers from their various copyright enforcement divisions to carry out raids on the company.

According to an FT report, authorities there are set to go even further. Later this year, Hong Kong Customs will set up an “electronic crime investigation” center after being called on by media companies to pay closer attention to other cyberlocker-type services operating locally.

The announcement is likely to further unsettle several other file-hosting services that have a presence in the territory such as Filesonic.com, Uploading.com, Uploaded.to, zshare.net, Filepost.com and Hulkshare.com.

Just a couple of days after the Megaupload raids, Filesonic – one of the top 10 file-sharing sites on the Internet – reacted by disabling all 3rd party sharing.

Like Megaupload before it, Filesonic blocks all local IP addresses, presumably in an attempt to avoid local difficulties. But although there is no suggestion that Filesonic has done anything wrong, this type of blockade alone will not ensure it has a quiet life.

Hong Kong authorities described the motivation behind Megaupload’s IP block as “a bid to hinder investigation by law enforcement agencies.” Filesonic told FT that they have “a zero tolerance” approach to piracy.

Uploaded.to, another site with Hong Kong links, reacted to the Megaupload raids by blocking all visitors from the United States. Others have disabled their affiliate programs or taken other measures.

“Targeting the organized and transnational nature of IP infringing activities in the wake of technology development, the Hong Kong Customs will continue to monitor the situation and co-operate with the IPR industry and overseas law enforcement agencies so as to suppress infringing activities effectively,” HK Customs said in a statement.

Whether Customs will follow-up with further action remains to be seen, but in the meantime an Eastern chill is certainly blowing through cyberlocker land.

Source: Megaupload: Hong Kong Mulls Copyright Crackdown

Thus far, neither the Department of Justice nor Homeland Security’s ICE unit have officially commented on the seizures, but it can’t be a coincidence that sports streaming sites are being targeted a few days before the Super Bowl is due to be aired.

The targets of today’s seizure round include Firstrowsports.tv, Firstrowsports.com, Firstrowsports.net and Soccertvlive.net, but more may be added in the coming hours (see update below). The former apparently remains operational via Firstrowsports.eu.

For the first time, seized domains also include the .TV extension as Firstrowsports.tv is now displaying the familiar seizure banner. The .TV domain belongs to islands of Tuvalu, but is operated by the US-based company Verisign.

Last year there was a similar round of domain seizures during the lead up to the largest American sports broadcast. At the time the feds seized a dozen domains including Firstrow.net and Atdhe.net.

Both sites continued to operate under different domain names, several of which have been taken down today.

The seizures in 2011 also targeted domains linked to the website Rojadirecta, owned by the Spanish company Puerto 80. Despite being declared legal by two courts in Spain, the US authorities ruled that Rojadirecta was a criminal operation. The company has been fighting in US courts to get the decision overturned, but so far without luck.

Another target during the seizures last year was ChannelSurfing.net, which was operated by the Texan Brian McCarthy. The 32-year-old McCarthy was later taken into custody on suspicion of criminal copyright infringement, and he is currently awaiting his trial.

The extent of the fallout of the new “Super Bowl Crackdown” will become apparent in the coming days. It will, however, once again fuel the censorship debate which exploded last month with the SOPA/PIPA protests and the MegaUpload shutdown.

Update: ICE statement and arrest.

Source: Feds Seize Sports Streaming Domains in New Super Bowl Crackdown

Unsurprisingly, the entertainment and anti-piracy companies behind the long-running case are celebrating and planning for the future.

“The rule of law has spoken and this is a defining moment in the lengthy discussion of copyright on the Internet,” says Henrik Pontén, lawyer at Antipiratbyrån.

“The Supreme Court has made clear to all involved in copyright violations, including those that provide them with Internet connections, must now assume their responsibilities.”

Local Hollywood lawyer Monique Wadsted said that the final verdict against the defendants in the Pirate Bay case sends a clear signal – those who operate illegal file-sharing services or provide them with Swedish Internet access face prison and substantial damages.

“I assume that the first thing that will happen is that those who continue to operate small or large illegal file-sharing services or provide Internet access to such will voluntarily cease their activities today,” says Wadsted.

Antipiratbyrån say that those who don’t will have to face the consequences.

“With the support of the sentence, Antipiratbyrån will act against the nearly 150 illegal file-sharing services that have a Swedish connection. Legal action will be taken against all that contribute to crime in different ways,” Pontén concludes.

Following the original TPB “guilty” verdict in 2009, Antipiratbyrån tried a similar a tactic when it contacted many sites and ordered them to close. Some did, but most didn’t.

There are indeed dozens of file-sharing sites that are either operated by Swedes, are hosted in Sweden, utilize Swedish bandwidth in some way, or have Swedish domains. Whether or not they will heed this latest warning remains to be seen.

Source: Pirate Bay Verdict SignalsThreat Of Huge New Anti-Piracy Campaign

This means that the prison sentences and fines against the defendants are now final. The Pirate Bay website itself, however, wasn’t part of the trial and will remain operational as normal. That is, unless the US Government chooses to intervene.

In 2010 it was reported that both The Pirate Bay and MegaUpload barely escaped a domain seizure. Although it wasn’t entirely clear at the time, one of the assumptions was that in the case of The Pirate Bay the pending trial against several people involved with the site acted as a roadblock.

Today this last barrier was removed. And with MegaUpload also out of the way, the largest torrent site on the Internet is now a prime target for a domain seizure.

The people running The Pirate Bay are aware of this risk and quickly redirected the site to a Swedish .se domain, outside the reach of US authorities. A Pirate Bay insider confirmed this morning that this was done “just in case ICE has been waiting for the court case to be over.”

Along with the domain change The Pirate Bay team delivered a defiant message.

“2012 is the year of the storm. The Pirate Bay will reach an age of 9 years. Experiencing raids, espionage and death threats, we’re still here. We’ve been through hell and back and it has made us tougher than ever,” they begin.

“Our 3 friends and blood brothers have been sentenced to prison. This might sound worse than it is. Since no one of them no longer lives in Sweden, they won’t go to jail. They are as free today as they were yesterday,” they note, adding:

“In this year of the storm, the winners will build windmills and the losers will raise shelters. So flex your muscles, fellow pirates, and give power to us all! Build more sites! More nets! More protocols! Scream louder than ever and take it to the next level!”

Although it’s clear that The Pirate Bay lost a battle today, the above statements signal that the war is far from over.

Source: The Pirate Bay Moves to .SE Domain To Prevent Domain Seizure

Although Fredrik Neij, Peter Sunde and Carl Lundström all had their prison sentences decreased from the levels ordered at their original 2009 trial, they were ordered to pay increased damages amounting to millions of dollars to the entertainment company plaintiffs.

Hoping to overturn the ruling, the three filed for a hearing of their case at the Supreme Court. Today this request was denied, meaning that the sentences as determined by the Court of Appeal are now final.

Peter Sunde, also known as Brokep, now awaits 8 months in prison. Fredrik Neij, also known as TiAMO, faces 10 months. Businessman Carl Lundström has the lightest sentence of 4 months. All will have to pay their share of a combined 46 million kronor ($6.8 million) in damages.

A fourth defendant, Pirate Bay co-founder Gottfrid Svartholm, was absent from the appeal hearings due to medical circumstances. Having also failed to appear at a subsequent hearing, it was announced last year that the District Court ruling of 2009 against him of 1 year in prison and a share of the damages would be made permanent.

“The verdict is absurd,” said Carl Lundström’s lawyer Per E Samuelsson. “I am disappointed that the court is so uninterested in dissecting and analyzing the legal twists and turns of one of the world’s most high-profile legal cases of all time.”

One of the defendants informs TorrentFreak that they will now appeal at the European Court of Justice. But this, however, won’t prevent the sentences from being executed in Sweden.

Today’s news doesn’t necessarily means that the defendants will have to go to prison. It is common in the Swedish justice system to deduct 12 months from any prison sentence on cases over 5 years old. Since the case in question meets that criteria the Pirate Bay defendants would qualify, but the decision lies with the court.

Even if denied, the Pirate Bay founders still have a few months of freedom before they are required to serve their prison sentences. Also, both Peter Sunde and Fredrik Neij no longer live in Sweden, which may complicate things.

Peter Sunde is disappointed by the Supreme Court decision, which didn’t come as a huge surprise to him.

“Sweden speaks well about caring about the Internets. They spend a lot of money and time on helping activists all around the world. But who are these people that they’re so proud of helping? TPB has been one of the most important movements in Sweden for freedom of speech, working against corruption and censorship,” he says.

“All of the people involved in TPB at some time have been involved in everything from famous leaks projects to aiding people in the arab spring. We’ve fought corruption all over the world. We’ve promoted equal opportunities to poor nations around the globe. We’ve crushed the monopoly on information. Our close ones, many who have helped building TPB, have been mentioned as possible winners of the nobel peace prize.”

“I’m not bragging – I’m saying this to make sure that people understand who’s doing the right thing here. I haven’t seen the entertainment industry help anyone but themselves.”

Despite the fact that sentences are now final, The Pirate Bay website remains online as it was not part of the legal proceedings. However, a few hours after the Supreme Court decision was made public, The Pirate Bay website started redirecting to a .se domain, fearing a possible seizure from the US authorities.

Source: Pirate Bay Founders’ Prison Sentences Final, Supreme Court Appeal Rejected

The Megaupload indictment focused on several issues including alleged payments of cash rewards to known uploaders of infringing material. This prompted some rival services to cancel their affiliate/reward programs altogether and even end 3rd party downloads (Note: Fileserve have since re-enabled sharing).

Last week, TorrentFreak noted that traffic to many rival sites had increased following Megaupload’s demise – including sites like RapidShare that have no rewards program.

Today, however, German anti-piracy outfit GVU said that sites that have removed their rewards programs are now on a downward trend, while those that have maintained them are doing better than ever before.

GVU, which carried out the investigation preceding the record-setting raids on Kino.to last year, note that some linking sites are now removing links to sites that have no rewards programs and replacing them with those that do. The existence of rewards, the group suggests, means that more content is posted, ensuring traffic – and revenue – for both the linking sites and cyberlockers.

While it is fair to say that in some instances the existence of rewards can encourage infringement, GVU are now using this background to call for a review of cyberlocker and hosting provider liability, and are calling for a “reverse burden of proof” to be applied.

“In Germany, Service Providers are (at first) not liable for copyright infringements in content which is uploaded by third persons,” Otto Freiherr Grote of the Wilde Beuger & Solmecke law firm told TorrentFreak this morning.

“But the GVU now demands a reversal of this principle, at least for those filehosters which reward uploaders for uploading very popular files,” Grote adds.

GVU Director Dr. Matthias Leonardy says that while there is authorized content being stored and delivered by hosting services, much of the mass volume consists of unauthorized movies, TV shows and games, and it is this content that draws the bulk of the traffic and generates the revenue.

“Therefore, a file hosting provider must be aware that it promotes this through commission payments to those uploading pirated copies,” Leonardy notes.

On this basis, what Leonardy wants is a review of liability for those file-hosting services offering rewards programs.

It should not be the responsibility of rightsholders and authorities to show that such programs are being abused by infringers [such as is being claimed in the Megaupload indictment], Leornardy says, but the opposite – cyberlockers should be forced to prove that their businesses aren’t based on piracy in order to avoid liability. How this can be achieved remains to be seen.

The German legal system is no stranger to these apparent reverse burdens of proof when it comes to file-sharing cases. Domestic Internet users are responsible for infringements that happened via their accounts, whether they carried them out or not.

Source: Cyberlocker Burden of Proof Should Be Reversed, Anti-Piracy Group Says

Founded in 2009, the file-hosting site allowed users to share files up to 50 gigabytes. Unlike similar services, Ex.ua was completely free to use. The site made money from advertisements and didn’t offer a paid subscription.

Because the site was widely used to share copyrighted files, several international companies including Microsoft, Graphisoft and Adobe filed complaints against the service. After a six month criminal investigation, this resulted in the shutdown of Ex.ua today.

A spokesperson for the authorities confirmed that the service was targeted and said that 200 servers were taken, holding a massive 6,000 terabytes of data.

In addition, sixteen employees were taken in for questioning. At the time of writing it is unclear how many arrests have been made, if any. The authorities did confirm that the site was run by a Latvian citizen.

While Ex.ua has some similarities to MegaUpload and other file-hosting sites, it was also crucially different in several aspects. Ex.ua allowed users to search for files and browse categories such as “MP3″ and “Video,” which is quite uncommon for a cyberlocker.

In 2010, the RIAA reported Ex.ua to the Office of the US Trade Representative, branding it a “pirate haven.” Among other things the RIAA highlighted that users of the site could not only upload, but also search for files on the site.

“This is the largest service in Ukraine and the vast majority of the Internet users in Ukraine use the site to download music and film content. None of the content made available on the site has been authorised by the copyright owners and the site operators are unresponsive to takedown notices as a result there are thousands of music titles available on the site,” the music group wrote at the time.

If found guilty, the operators of the site face up to five years in prison.

Breaking story.

Source: Authorities Shut Down Ukraine’s Largest File-Sharing Site Ex.ua

As of today, the case is still ongoing.

In 2009, a jury found Tenenbaum guilty of “willful infringement” and awarded damages mounting to $675,000. A year later this amount was reduced by 90% when Judge Nancy Gertner ruled that the penalty was excessive and unconstitutional. In 2011 this decision that was reversed after a new hearing at the Court of Appeals.

In yet another appeal, Tenenbaum’s legal team, headed by Harvard law professor Charles Nesson, is asking the court to reduce the $22,500 fine per song to the minimum statutory damages of $750 per song. This request is made on due process grounds.

As expected, the RIAA doesn’t agree with the request and presented its arguments to the court last Friday. But they were not alone – on the same day the Department of Justice also filed a brief with the court, backing the RIAA’s vision on the case.

In a 26-page filing the Department of Justice makes the argument that previous cases, as cited by Tenenbaum’s legal team, do not apply in this instance. It concludes that the due process grounds are not relevant yet and that the damages therefore shouldn’t be reduced before the case continues.

The due process question should only be answered when the court decides that the jury’s award of $22,500 per song is not excessive, according to the Departement of Justice.

“The only circumstance in which the Court can reach Defendant’s due process challenge at this time is if the Court first determines the jury’s statutory damages award is not excessive under the common law remittitur standard. The United States, therefore, does not believe it is necessary at this juncture to address the merits of Defendant’s constitutional claim,” the DoJ writes.

Although this is not the first time the Justice Department has become involved in an RIAA civil case, it remains unclear why they chose to intervene this time. What we do know is that the authorities are very up-to-date with the legal proceedings, as five former RIAA lawyers are now employed by the Department of Justice.

Whether these connections between the Justice Department and the RIAA have increased the likelihood of the authorities getting involved is hard to say. However, it is clear that Tenenbaum and his legal team are up against some serious resistance, and that the US authorities don’t want the student to get off that easily..

To be continued, indefinitely.

Source: Justice Department Backs RIAA Against Pirating Student

It was a significant event – PureTNA had in excess of 1,329,500 members, a tally equaled by Empornium. The reasons for their shutdown remain unconfirmed.

While their members were understandably disappointed, they knew that with a flick of the wrist they would soon be enjoying themselves again on an alternative site. One of the top choices at the time – Cheggit.net.

Cheggit was created back in 2006 by ex-staff and users from Empornium who were disappointed with a controversial takeover by advertising outfit TargetPoint. Cheggit lived on until just a few days ago, when it disappeared. Now it’s back, but the news isn’t good – the end is here for Cheggit.

“Back in December ’11, when I embarked on a ‘bold new vision’ for the site, I thought we could change the site and make everything just work,” says Cheggit’s admin. “But as time went on, it just wasn’t feasible to do that and be in compliance.”

The site’s operator says that taking the decision to close the site wasn’t easy and took several weeks. But unlike some sites that simply close up, say nothing, and leave their communities high and dry, Cheggit’s admin told site members that the tracker is bowing out with an orderly exit for their benefit.

“I wanted to give the community a chance to exchange info and keep hooked up if you wanted to. That’s right….regardless of what you might think, this was done for the community.”

“Best decision? Who knows. But I do know that it isn’t the worst thing that could have happened. I’ve been at this far longer than I care to admit, and it would have sucked to just lop it off,” he notes adding, “As much as this may suck, it doesn’t suck near as much as just going away.”

Cheggit’s admin also assures its users that the shutdown has nothing to do with the FBI, MPAA or ICE, and isn’t a veiled attempt at “a ponzi scheme to relaunch Megaupload.”

It’s been a hard 12 months for adult torrent sites. In April 2011, Pornolab, the world’s largest porn tracker, had its servers seized by Ukranian authorities, but eventually made a comeback.

Source: Cheggit, Long Standing Adult BitTorrent Site, Calls It Quits

From work-related data to personal photos, the raid disabled access to hundreds of thousands, perhaps millions, of files that are clearly not infringing. A recent announcement by the US Attorney now suggests that these files may soon be lost forever.

“We received a letter very late Friday from the US Attorney that declared there could be an imminent destruction of Megaupload consumer data files on this coming Thursday,” MegaUpload lawyer Ira Rothken told TorrentFreak.

Rothken explains that MegaUpload is determined to protect the interests of its users, but that its hands are tied without help from the authorities. The looming data loss is linked to unpaid bills at Cogent Communications and Carpathia Hosting where MegaUpload leased some of its servers.

“We of course would like to think the United States and Megaupload would both be united in trying to avoid such a consumer protection calamity whereby innocent consumers could permanently lose access to everything from word processing files to family photos and many other things that could never practically be considered infringing,” the lawyer told TorrentFreak.

“Megaupload’s assets were frozen by the United States. Mega needs funds unfrozen to pay for bandwidth, hosting, and systems administration in order to allow consumers to get access to their data stored in the Mega cloud and to back up the same for safekeeping.”

MegaUpload has contacted the US Attorney’s office with a request to unfreeze assets including money and domains so users can get access to their personal data. If this doesn’t happen, the consequences for many MegaUpload users and the future of other cloud hosting services will be disastrous.

“If the United States fails at helping protect and restore Megaupload consumer data in an expedient fashion, it will have a chilling effect on cloud computing in the United States and worldwide. It is one thing to bring a claim for copyright infringement it is another thing to take down an entire cloud storage service in Megaupload that has substantial non infringing uses as a matter of law,” Rothken told us.

Meanwhile, MegaUpload users are also taking action themselves. Last week Pirate parties worldwide began making a list of all the people affected by the raids, and they are planning to file a complaint against authorities in the US. The EFF has also taken an interest in the issue, and is sharing data with the international Pirate parties.

For now, however, the more urgent matter is to ensure that the data doesn’t get destroyed.

Update: The data is safe for two more weeks, at least.

Update: Carpathia Hosting sent us the following statement.

“In reference to the letter filed by the U.S. Department of Justice with the Eastern District of Virginia on Jan. 27, 2012, Carpathia Hosting does not have, and has never had, access to the content on MegaUpload servers and has no mechanism for returning any content residing on such servers to MegaUpload’s customers. The reference to the Feb. 2, 2012 date in the Department of Justice letter for the deletion of content is not based on any information provided by Carpathia to the U.S. Government. We would recommend that anyone who believes that they have content on MegaUpload servers contact MegaUpload. Please do not contact Carpathia Hosting.”

Source: MegaUpload User Data Soon to be Destroyed

The data for our weekly download chart is collected by TorrentFreak, and is for informational and educational reference only. All the movies in the list are BD/DVDrips unless stated otherwise.

RSS feed for the weekly movie download chart.

Source: Top 10 Most Pirated Movies on BitTorrent

The ruling was the first to bring broad censorship to the Netherlands and in a response XS4ALL said they were “bitterly disappointed”, noting that fundamental rights had been traded for “commercial interests.”

For BREIN, the Dutch anti-piracy group that started the court case, the verdict wasn’t quite enough. The Hollywood-backed group wasted no time issuing requests for other ISPs to block access to The Pirate Bay as well. Or else.

After internal discussions two large ISPs – KPN and T-Mobile – are now on record stating they will not honor BREIN’s request. This means that millions of Internet users in the Netherlands will still be able to access The Pirate Bay without having to go through proxies.

Speaking out against censorship, both Internet providers state they will only block The Pirate Bay following a court order and that innovation is a better way to deal with the problem of piracy.

“KPN sees the blocking of websites as a drastic measure for which a court order is required,” KPN said in a statement, adding that innovation is needed to curb piracy.

“KPN doesn’t believe a blockade is the right solution. What is needed are robust, attractive business models that are easy to use and offer a fair deal to both producers and consumers of content.”

T-Mobile also said that it will only respond to court orders, while it emphasized the value of an open Internet.

“T-Mobile strongly supports an open Internet and is fundamentally against shutting off access to websites. Dutch law is very clear when it comes to blocking access to the Internet. T-Mobile will only respond to a court ruling, not to demands from a private party such as BREIN.”

If BREIN follows up on threats that were made earlier, both ISPs can expect to be sued by the anti-piracy outfit in the near future. Ziggo and XS4ALL, meanwhile, are expected to enforce the blockade this coming Wednesday, February 1st.

Whether the blockade will have much of an effect is yet to be seen. Judging from what happened in other countries when the site was blocked, users will quickly find ways to route around the blockade to regain access to the world’s largest torrent site.

Source: Dutch ISPs Refuse To Block The Pirate Bay

But what came next was unprecedented, a dramatic reaction in cyberlocker land that took out vast libraries of digital content and capacity. The perception of the established ground rules had been changed, without the passing of a single new law.

FBI, arrests by huge numbers of police, enormous cash and asset seizures overseas, reward program scrutiny, knowledge of payouts to persistent uploaders of infringing content. Extradition. These are things that changed the game.

“If the US government can come for Kim Dotcom it can happen to almost anyone,” a file-hosting operator told TorrentFreak on condition of anonymity. “I’m trying to think of everything I did possibly wrong in the last 3 years and worrying about that and the next 3 years also, if we even have that long.”

For many hosting sites it was time to react – quickly.

Earlier this week we documented the drastic actions taken by services such as Filesonic and Fileserve who shut down all 3rd party sharing and, like many others, closed down their affiliate payout programs. Later we showed how file-hosting competitors such as 4shared, Rapidshare and Hotfile had grown as users hunted for spare capacity.

In the space of a week and the MegaUpload shutdown aside, huge libraries of both legitimate and pirated material were wiped out as filehost after filehost deleted an impossible-to-calculate number of files and closed down thousands of suspected infringing accounts.

And this is where it gets quite interesting.

For more than half a decade Hollywood and the recording industry have spent millions of dollars not so much on actually eliminating illegal content, but getting rid of links to content such as those found on BitTorrent.

But this week, without a single cease and desist being sent, cyberlockers across the globe not only self-deleted vast quantities of files, but in doing so made millions of links across thousands of ‘linking sites’ completely useless too.

For the operators of these linking sites and their uploaders, this week has been very hard work indeed. For some sites it was all too much and the shutters have simply come down.

The problem, it seems, is money. While there is money to be made in torrent sites, the content sharers there are largely altruistic. The cyberlocker scene is more complex and incestuous, with revenue being generated in a handful of basic ways on both legal and illegal content.

Through reward programs, uploaders get paid on the number of times people subsequently download content. Equally, ‘release’ sites can upload the content themselves and get paid like a regular uploader when people download. Reward programs are important for cyberlockers too since they attract customers away from competitors and also give them an incentive to supply content.

Release sites and warez forums send users to cyberlockers to get content and when they get there they are faced with a choice. Download a little, relatively slowly but for free, or pay for a premium account and get lots as quickly as possible. In many cases choosing the first option means that cyberlockers also make more money from advertising.

When various sites shut their rewards programs this week, those uploading purely for the money were hit hard. In fact, many who had cash mounting up in their accounts lost it all – some cyberlockers simply kept the accrued money. While the ‘victims’ were livid, those who hate financially motivated ‘sharing’ commented that justice had been served.

But while it’s clear that some uploaders, often young and in less well-off countries, are ‘sharing’ small time for a few bucks, for some the reward payouts are more important. For many release sites, those rewards pay the server bills.

“We needed the payout and when [filehost name redacted on request] shut down sharing we were all but finished,” one admin of a release site told TorrentFreak. “90% of our content was hosted there. Then they deleted all our files and closed the account. They won’t even speak with us about it. A whole year’s work gone. We shut at the end of the month.”

But like worker ants whose nest has just been smashed apart by angry humans, others are utterly unfazed and just want to know which hosts are still paying out. Despite the climate of fear, quite a few hosts say they are and it’s evident from the links being posted on release blogs that the upload-for-cash crew have noticed them quickly.

Things, however, are still in a state of flux. Some of the filehosts still paying out appear to be offering tiered reward systems with just about every country in the world getting a reasonable deal but with the United States right at the very bottom.

Another interesting rumor, which at the time of writing we have been unable to confirm, is that one of the filehosts who banned 3rd party downloads earlier this week is now re-enabling them. This is something to look out for. Without 3rd party links being operational users are extremely unlikely to sign up for a premium account and this is where the cyberlockers can make good money.

So finally, one has to ask whether the MegaUpload shutdown has damaged the Internet piracy infrastructure. Providing an answer is not easy.

The amount of material coming online has not really reduced – content feeding from ‘The Scene’ is business as usual. Torrent sites are watching on closely, but the public ones tend not to host content, their users do. Cyberlockers are in a mess, but already recovering. Release sites are continuing, albeit with a reduced number of multiple links to the same content.

Perhaps the best test is whether it’s now very hard or impossible to find and download popular content. Not even close.

Source: Mega Aftermath: Upheaval In Pirate Warez Land

If the copyright industry had their way, Google and other search engines would no longer link to sites such as The Pirate Bay and isoHunt. In a detailed proposal handed out during a meeting with Google, Yahoo and Bing, various copyright holders made their demands clear.

The document, which describes a government-overlooked “Voluntary Code of Practice” for search engines, was not intended for public consumption but the Open Rights Group obtained it through a Freedom of Information (FOI) request.

In short, the rightsholders want the search engines to make substantial changes so that pirated content becomes harder to find, or is de-listed entirely. In addition, they want to boost the rankings of licensed content. Below are the three new measures they propose.

• Assign lower rankings to sites that repeatedly make available unlicensed content in breach of copyright
• Prioritize websites that obtain certification as a licensed site under a recognised scheme
• Stop indexing websites that are subject to court orders while establishing suitable procedures to de-index substantially infringing sites

In the document rightsholders explain that they find it inexcusable that some websites – Pirate Bay and Isohunt in particular – are still indexed by all major search engines even though courts have ruled they facilitate copyright infringement.

Not surprisingly, there is no mention of the collateral damage that such a broad filter would bring with it – many artists and other legitimate individuals are known to use these websites to share their works.

The document further details how many of the top search results for music, movies and books currently link to pirated copies. In order to stop this, the rightsholders propose that Google and other search engines systematically assign a lower ranking to possibly infringing pages.

“We propose that in order to further protect consumers and to encourage responsible behaviour among websites, the extent of illegal content on a website should become a factor influencing the ranking of that website in search results returned to consumers,” they write.

This should be doable according to the rightsholders, as Google already influences its search results based on various other criteria, such as the lower rankings that are assigned to so-called content farms.

“Given that Google already de-ranks and de-lists sites that do not meet its own ‘quality guidelines’ or otherwise violate its policies, we do not believe that search engines would face significant legal exposure if they were to de-rank or de-list sites using an objective measure, based on their actions in response to legal DMCA complaints, in pursuit of the legitimate objective of preventing their service being used to facilitate copyright infringement,” they write.

Conversely, it’s argued that search engines should also boost the ranking of legitimate sites for certain ‘relevant’ searches. A list of relevant terms to match to these relevant searches should be provided by pro-copyright groups. In the proposal, the rightsholders give the following example in the case of music files.

“We would propose that prioritisation be enabled for searches that contain any of the following key search terms: “mp3″, “flac”, “wma”, “aac”, “torrent”, “download”, “rip”, “stream” or “listen”, “free”, when combined with an artist name, song or album title contained on a list to be regularly updated and provided to a search engine by a recognised and properly mandated agency representing rights holders for a particular sector, such as BPI.”

Aside from these new proposals, the document also calls on the search engines to improve the censorship measures already in place, such as Google’s keyword filter for their “instant” and “autocomplete” services.

Although the proposal from the rightsholders is not a direct threat as it is a long way from being accepted, it clearly shows that rightsholders see censorship as the way forward. The search engines on the other hand were not impressed and are expected to supply a proposal of their own in a future meeting. Again behind closed doors.

Source: Copyright Industry Calls For Broad Search Engine Censorship

Although Newzbin2 anticipated the result and had already prepared circumvention software to enable BT users to carry on using the site, it still has a key vulnerability – its US-seizable .COM domain. According to the site’s operators, that weakness is now being addressed.

“Newzbin is leaving the American Internet. In a couple of weeks we will cease to use the newzbin.com domain and move to newzbin2.es,” says the site’s Mr White.

“We regret the need to do this but, thanks to the retards in the US Government and the MPA, a ‘.com’ address is no longer viable. Really, any domain controlled by the US government proxy Verisign isn’t viable.”

No exact date has been given for the switch but it will be during the next few weeks. For “legal reasons” the old .COM domain, which Newzbin2′s operators say is currently rented from a 3rd party, will not redirect or even provide a link to the new Spanish domain.

During 2012 it’s expected that the site’s unblocking tool will see wider use as other ISPs are also expected to begin blocking Newzbin2. But according to the site, thus far censorship has had the opposite effect.

“I can’t give exact figures but an executive summary would be that, from our Apache logs, traffic grew steadily over 2011 with a big spike about the time we were blocked; down a little since then, but still at higher levels than ever before,” Mr White told TorrentFreak.

“Overall the MPA’s web blocking has had something of a Streisand Effect on our traffic levels. It seems that they are driving users to us. Our best friend is our worst enemy,” he notes.

Nevertheless, Newzbin2′s operators aren’t simply cruising. Mr White told TorrentFreak that they intend to use the trust they’ve built up in the community to launch a secure VPN service which will not only allow anonymous Internet use, but will also defeat site-blocking measures.

But surprisingly, especially given the astonishing MegaUpload-related developments of the last week, they also intend to launch a cyberlocker service.

“Our reaction to Megaupload and the fallout was twofold. On the one level this is a very important case because if New Zealand extradite Dotcom to the US, which is where the smart money is I reckon, it will be a fascinating exhibition of the MPA’s legal strategy against cyberlockers. It may be the feds prosecuting but we all know that the MPA’s hand is up their puppet ass,” says Mr White.

“The shame for Dotcom was only that he didn’t spend his money on politicians & cops rather than godawful pink Cadillacs. And how INTERESTING that the FBI have shown publicly that they really can backdoor Skype,” he added.

Mr White described the ensuing pandemonium in the cyberlocker market as “like a herd of elephants being frightened by bees” and advised site operators who have done nothing wrong to “man up and show some spine.”

Newzbin2 assure us that their forthcoming service will be “legal from the ground up” but predict their service will receive “sniping from the malodorous content dinosaurs.”

In an uncertain world and even more uncertain cyberlocker market, that last prediction is probably the most certain we’ve heard all week.

Source: Newzbin Dumps .COM, Promises VPN & Cyberlocker Services

Last week the feds shut down the popular site accusing its founder and six others of money-laundering and several copyright related crimes. The site’s former users, meanwhile, are left without their files and forced to find a new place to share.

The big question is, where do these millions of people go now?

The RIAA hopes that the people who used MegaUpload to share copyrighted music are turning to iTunes, but this is not the case for everyone. A look at the traffic of some of the MegaUpload alternatives shows that millions have simply migrated to other file-hosting sites.

The graph below shows a sharp increase in traffic for four popular MegaUpload ‘replacements’ since last week. Based on data from various traffic measurement sites, Depositfiles, Uploaded.to, Hotfile and Rapidshare welcomed hundreds of thousands of extra visitors.

The example above is just the tip of the iceberg, as there are many other sites that experienced a surge in traffic including Filepost, Hulkshare, Netload.in, Uploading, zShare.net and many others. Whether the newcomers will remain on board has yet to be seen, but it is clear that millions of former MegaUpload users are migrating to other sites.

As the cyberlocker landscape stands now, 4shared.com remains by far the largest site on the Internet. With an estimated 2.5 billion page views, 4Shared is more than twice the size of MegaUpload before it was shut down.

Needless to say, 4Shared is deeply concerned about the recent developments, but the company also told TorrentFreak that they have nothing to worry about themselves.

“This case has a great negative impact on file storage services and the Internet overall,” a spokesman said, adding that “4shared has some of the most strict house rules among all other file storage services and there’s no need for any changes.”

With many sites still in a state of shock, it might take a few weeks to see what the precise effect of the MegaUpload shutdown is. One thing is for sure though, many of MegaUpload’s former users haven’t given up downloading and sharing just yet.

Source: MegaUpload Alternatives See Surge in Traffic After Shutdown

Alongside the millions who protest against these increasing censorship initiatives, there’s also a group of people who come up with ways to route around it. One of these projects is the RePress plugin for WordPress.

The plugin is developed by the hosting company Greenhost and allows everyone with a WordPress blog to start a proxy for sites that are censored elsewhere in the world. As an example, Greenhost have setup a Pirate Bay and Wikileaks proxy.

“By adding this plug-in to your WordPress website it will start functioning as a proxy and uncensor any blocked website you’d like,” Greenhost explains. “The only thing you’ll need is a WordPress website and the ability to install new plug-ins. After that you can maintain a list of websites you’d like to keep open freely available on the web.”

One of the main motivations for the plugin’s developers was to provide people in the Netherlands full access to The Pirate Bay when the recent court order is enforced. However, if SOPA or PIPA pass there might also be a need for people in the US to have a tool like this.

“We hope people outside Holland use the plug-in to uncensor piratebay.org, as it is in danger of being blocked in our country after a court-ruling. In the Netherlands we could then uncensor websites for people in oppressive regimes like Iran, Syria or the US after SOPA is passed.”

“[SOPA and PIPA] are said to defend the interests of the Entertainment industry, but will mainly cause grave and undeniable damage to the Open and Free web and all of its users: from the end-consumer to the cutting edge developers and inventors. Our aim is to make this impossible,” the Greenhost team notes.

Although the plugin can’t prevent domain names from being seized, it is indeed a good solution to bypass all of the common blocking measures that are used today.

The RePress initiative is applauded by several politicians, including European Parliament member Marietje Schaake. “This is a fantastic opportunity for human rights activists and a solution for people who face technological censorship and repression,” she told Webwereld.

To those eager to start their own proxy of blocked websites, RePress can be downloaded in the WordPress repository.

Source: WordPress Plugin Unblocks Censored Sites, Including The Pirate Bay

Judge David McNaughton said that the scale of the charges against the MegaUpload founder combined with his significant resources meant that there was a significant risk he could flee, possibly to his birthplace, Germany.

In a later hearing at the same location, lawyer Guy Foley argued that Dotcom’s alleged co-conspirators – Bram van der Kolk, 29, Finn Batato, 38, and Mathias Ortmann, 40 – are of good character and deserved bail.

This morning Judge McNaughton handed down his decision. He granted bail to both Dutch national Bram van der Kolk and Finn Batato from Germany, but denied bail to Ortmann due to financial concerns.

According to Stuff, the FBI’s records show that Ortmann made around $14.5 million from the company between 2005 and 2010, and an additional $3 million in 2011. His accounts, however, show $20.2 million, some $3.5 million more. Ortmann’s lawyer has until tomorrow to come up with an explanation.

Yesterday, Guy Foley described programmer and networking expert Bram van der Kolk as a family man and today his wife Asia expressed relief that he would be coming home.

“I’m just glad my husband is going to be able to play with our baby again,” she said.

Although the Judge granted the pair bail, he ordered them detained for a further week so that their homes could be assessed for surveillance equipment suitability. It’s becoming ever more clear that being monitored is nothing new for these MegaUpload employees.

The US Department of Justice’s indictment showed that the operators of MegaUpload had been subjected to monitoring over the past several years, but a piece of evidence presented in court yesterday revealed not only how far back, but just how deep that surveillance went.

Documents produced by the FBI reportedly show the details of a 2007 Skype conversation between Bram van der Kolk and Mathias Ortmann where they mulled a situation where Kim Dotcom might run off with “the money”.

Although no context was provided by the FBI, Van der Kolk allegedly described the situation with Dotcom more than 4 years ago as “a bit risky” but with Ortmann offering assurances that since Dotcom was “operationally dependent” on the pair he could not “sneak away with the money.”

“What if the shit really hits the fan? Would he take the last little bit of money and take off? He’s good at that,” Van der Kolk replied.

“True,” said Ortmann, “But with his spending nowadays he will attempt to get the shit off the fan, and that’s what he needs us for.”

Dotcom will remain in custody until at least 22nd February.

Source: Two MegaUpload Ops Bailed, But Government Wants Surveillance

Today we can add a VP at one of the major RIAA labels to this list, which is quite unique and yet another game changer.

Speaking for himself, EMI’s VP of Urban Promotions Craig Davis said that the two pending anti-piracy bills are not the way to move forward.

“Personally, I feel that the method they’re using is incorrect. All it will do is cause headaches and issues for everyone,” Davis noted.

While the EMI VP opposes PIPA and SOPA, he does admit that piracy is a problem. However, Davis thinks that the problem can be better solved from within the music industry itself. In other words, the key to solving piracy isn’t legislation, but innovation.

“I do believe that a person should be compensated for their work. I feel that piracy is a big issue, and things like Spotify will assist in combating this problem,” he said.

Reiterating this point, the EMI VP refers to comments that were recently made by Gabe Newell. The Valve co-founder said that piracy is a service issue – once you give people what they want it will mostly disappear.

“Gabe Newell is correct, it’s a service issue not an issue of money. Sales have gone up from sales concerts and merchandise, it’s obvious that our fans still love music. We’re just not giving them their music in an easier way,” Davis noted.

Adding to the above, Davis also commented negatively on DRM in a separate question that he was asked on Reddit.

“Personally I’m not happy with the way DRM is right now. We need to re-evaluate technology to find a better way to give you music,” he wrote.

Davis’ take on the piracy problem stands in clear contrast with the policy of the RIAA, who tend to prefer the repressive approach over innovation. Defining piracy as a service issue, however, is in line with the things we, and many others with us, have been saying for years.

People are happy to pay as long as they get what they want.

This is also illustrated by the fact that people are willing to pay hundreds of millions of dollars for premium access to file-hosting sites, often to download content that’s not available at all legally, or only in inferior quality. In recent years the music industry has caught up quite a bit by removing DRM and launching services like Spotify. But the movie industry is lagging behind, especially outside the US.

Implementing harsh anti-piracy laws and disconnecting file-sharers from the Internet doesn’t change the mismatch between what the public wants and what the industry offers. Improving availability, quality and other service issues can probably make a much bigger impact.

It’s good to see that some people in the industry are well aware of this, but we doubt that the RIAA would make itself obsolete by agreeing.

Source: EMI Boss Opposes SOPA, Says Piracy is a Service Issue

Dotcom, who along with several of his employees was raided by armed police in helicopters the day before, is wanted in the United States on racketeering, copyright infringement and money laundering charges.

The hearing was adjourned until Monday this week with Judge David McNaughton delivering his decision this morning at the North Shore District Court.

Noting the scale of the charges against Dotcom and his considerable resources, Judge McNaughton said he that he had no doubt that fleeing New Zealand could be real possibility for the MegaUpload founder.

Judge McNaughton said that if Dotcom could somehow make his way to his birthplace of Germany, extradition would prove impossible since the country has no such agreement with the United States.

Essentially agreeing with prosecutor Anne Toohey, who had described Dotcom as a “significant” flight risk, Judge McNaughton denied the 38-year-old bail and remanded him in custody until 22nd February.

Dotcom’s lawyer, Paul Davison, QC, said that decision would be immediately appealed to the High Court.

“We were hopeful that the judge would accept our intentions and our arguments and see that there was no risk whatsoever of Kim Dotcom seeking to leave New Zealand.

“All of his assets have been frozen, all of his resources have been taken,” he said as he left court today.

“He’s living here with his wife and family, he has no intention whatsoever of endeavoring to leave New Zealand.”

Also appearing in Court today were Dotcom’s alleged co-conspirators Bram van der Kolk, 29, Finn Batato, 38, and Mathias Ortmann, 40.

In a hearing following Mr Dotcom’s, the lawyer representing the three men, Guy Foley, said his clients did not enjoy the same resources as the MegaUpload founder. Foley said that in the absence of a guilty verdict there should be a presumption of innocence.

He described Batato, as a “fair player” who denies involvement in the alleged conspiracy. Prosecutor Anne Toohey described Batato as a series flight risk who, in common with Dotcom, could seek to flee to Germany.

In defense of der Kolk, Foley described him as a family man who had a wife and child in New Zealand. He added that it was troubling that in evidence submitted to the court the FBI had supplied a photograph of someone else.

Ortmann, said Foley, is “decent, modest, honest and reliable” man who would not flee. Prosecutor Toohey said as a German national, fleeing there was a real possibility.

The decision on whether to grant bail to der Kolk, Batato and Ortmann will be delivered tomorrow.

Source: MegaUpload Founder Again Denied Bail, High Court Appeal Launched

Even today, when more music is being sold than ever before, the RIAA, IFPI and other music groups still lobby hard for draconian measures to curb piracy. Whether it’s SOPA, PIPA or similar legislation as currently being presented in Finland and Ireland, the music industry begs governments to help them out.

One of the countries where these lobbying efforts have paid off is France, where Internet users are now monitored by the state and disconnected if they are caught pirating three times. The big question is whether this law, which costs 11 million euros a year, has any effect at all.

Yes, says the music industry, backing up their claim with a non-peer reviewed academic study. Last week some of the results were already teased to the press, and yesterday they were presented to the public, coinciding with the publication of this year’s Digital Music Report published by IFPI.

We decided to take a look at the two reports, and the only reasonable conclusion we can make is that France’s three-strikes anti-piracy law is not having ANY affect at all. Let’s start off with how IFPI summarizes the results in their report.

“The analysis found that French iTunes sales saw a significant uplift at exactly the period when awareness of Hadopi was at its highest, in Spring 2009, when the law was being debated in the National Assembly.”

This is bogus. The researchers don’t conclude this at all. There is no uplift in sales reported. What the researchers found is that in France, compared to five other European countries, more music was sold through iTunes. Looking at the graph below (from the report), it’s clear that the “uplift” in France before Hadopi was introduced (March 2009) is actually much sharper than the two years after.

Another quote from the IFPI report:

“This effect was maintained throughout the period studied. French iTunes sales were 22.5 per cent higher for singles and 25 per cent higher for digital albums than they would have been, on average, in the absence of Hadopi.”

This is interesting, and indeed pretty much what the researchers conclude. However, as long-time followers of Hadopi and other anti-piracy laws, this conclusion doesn’t feel right. The huge increase in sales reported by the researchers is based on the alleged impact Hadopi had in the year and a half before it went into effect, not after

The following footnote from the researchers is also quite revealing.

“We also estimated the model for the 6 months before and after September 2010, as this was the first month that HADOPI began sending out first notices. In this case, the resulting coefficient was close to zero and statistically insignificant.”

Indeed, when the three-strikes warnings were actually sent out, there was no effect on iTunes sales compared to the control countries. This is unusual, because you would expect that the hundreds of thousands of warnings that went out would have had more of an impact than the ‘news’ that this could happen in the future.

In addition, if we look at the search trends for Hadopi and The Pirate Bay we don’t see a drop in interest for the latter, suggesting that the interest for pirated goods remained stable.

The researchers, however, are convinced that their findings are the result of the “potential implementation” of Hadopi. We find this strange. Could there be an alternative explanation? Let’s have a guess.

At the same time Hadopi was introduced (early 2009) there was a lot of buzz around Spotify in several of the countries that were used as a control group in this study. Could it be that Spotify resulted in relatively less iTunes sales in countries like UK and Spain than in France? This could potentially explain all of the findings reported in the study. And that’s probably just one of the many alternative explanations.

Whatever the case, concluding that expensive privacy-invading legislation such as the French Hadopi is boosting sales is going way too far.

Source: Anti-Piracy Warnings Have No Effect on iTunes Sales

But if you told him back then that you could deliver that letter before he could saddle his horse, he would suspect that either witchcraft or alcohol were at play.

In the 20th and 21st centuries we became more open to the notion that amazing things can be achieved without magic, but occasionally we still fall short in our predictions for the future.

Downloading digital media is so last decade now, even your grandmother can do it, but just a handful of years ago “You wouldn’t download a car” gained traction, a lighthearted meme that took the notion of Internet file-sharing to an intentionally ridiculous level. Several years later, however, it’s not looking quite so outrageous.

Soon, the interest in digital files will take a new direction, not because they transform into music, movies or books, but because they will possess the ‘genetic’ code for physical objects.

“We believe that the next step in copying will be made from digital form into physical form. It will be physical objects. Or as we decided to call them: Physibles,” says The Pirate Bay as they announce a new 3D printing section of their site.

“Data objects are able (and feasible) to become physical. We believe that things like three dimensional printers, scanners and such are just the first step. We believe that in the nearby future you will print your spare parts for your vehicles. You will download your sneakers within 20 years,” they add.

Although free sneakers in two decades sounds intriguing, creating physical objects from digital files is a reality now, as pointed out by 3D printing site Shapeways.

“Being able to download product files is not new, Shapeways has had downloadable models for years, as has Thingiverse and Google Warehouse, but let’s see how this affects the 3D printing IP debate,” the company says on its blog in response to the TPB announcement.

That’s right. The ever-looming copyright bogeyman, just waiting to throw his spanner in the 3D printer works.

In the future, however, instead of Hollywood taking action against 3D object pirates (although Paramount did actually do that in 2011), they could well be outnumbered by just about every major product manufacturer in the world – possibly even some 3D printer manufacturers themselves, since they can already print themselves.

But as pointed out by The Pirate Bay, there are huge potential benefits to be had.

“No more shipping huge amount of products around the world. No more shipping the broken products back. No more child labor. We’ll be able to print food for hungry people. We’ll be able to share not only a recipe, but the full meal. We’ll be able to actually copy that floppy, if we needed one,” they conclude.

So, when the writers at TorrentFreak are (more) old and gray, the children of today’s readers might be browsing The Pirate Bay III wondering which car to download. Or, as the coincidentally relevant (slightly NSFW) SOPA protest song embedded below suggests, even a boat. Or a cow.

Copyright wars? You ain’t seen nothing, baby.

Source: The Pirate Bay Wants You To Really Download A Car

Even most opponents of SOPA/PIPA maintain a common front on this issue: the foreign thief must be stopped. Chris Dodd is right about this: the only public debate is about how.

For the past few years, Kim Dotcom (nee Schmitz) has been the MPAA’s go-to example of the foreign thief. Dotcom is a flamboyant hacker/entrepreneur with a fraud conviction, a penchant for fake names, and a fortune built, like many new media fortunes, in the grey areas of IP law. Megaupload was one of the first cloud storage or ‘cyberlocker’ services, and is routinely ranked in the global top 50 in traffic. There is little doubt that it hosted a lot of infringing media. There is doubt about the extent to which Megaupload encouraged this, and how that affects their liability for infringement.

The Megaupload case has important legal implications. Mike Masnick has a very good rundown, but let’s focus on two. The case will certainly challenge the scope of the “safe harbor” from liability afforded online storage providers—a very important issue in an era of cheap, ubiquitous cloud services. It will also be a front in the government’s (and, more particularly, MPAA’s) push to shift from an ex post model of enforcement, involving notification and takedown requests when infringing content is identified, to an ex ante model based on the surveillance and filtering of user activity.

If this sounds familiar, it’s because it is also fundamentally at stake in SOPA, and raises all the same censorship and free speech issues. Holding Megaupload liable for failing to monitor and filter user activity for infringement, for example, would compel monitoring across a wide range of web services, from search to social media. And that would mark a very fundamental shift in the freedoms associated with the Internet. SOPA and the Megaupload case are part of this long game.

The Megaupload indictment is also a public effort to cast a villain in the file sharing story: to prove that someone, other than consumers, benefits from piracy. Kim Dotcom’s arrest—with all of his luxury cars on prominent display—is about making the case not only for abstract losses to industry but also theft from industry. We’ve repeatedly taken issue with the industry calculation of losses, most of which are fictional. But let’s ask the narrower question. Who is the foreign thief, and how much is he stealing?

As usual when talking about piracy, there are lots of claims but very few hard numbers. The revenue estimates that do circulate in file sharing cases are notable, however, for their miniscule size compared to the 10s or, occasionally, 100s of billions in losses claimed by industry groups. Here are a few examples…

• The Swedish trial of The Pirate Bay trial in 2009 became an occasion for all sorts of competing estimates of revenues. Record industry group IFPI estimated the site’s revenues at $3 million per year. The MPAA described $5 million in revenues. But prosecutors endorsed a much lower number: $170,000 from advertising (against what the defense characterized as $112,000/year in server/bandwidth costs and $100,000 per year in revenue). This is for a site that appears consistently among the top 100 visited sites in the world.
• NinjaVideo, a Brooklyn-based movie indexing site whose owners were arrested in 2011, was alleged by prosecutors to have made $500,000 in 2½ years. After the site began to make money, the four administrators split the revenue, netting around $33,000/year each after expenses. Hana Beshara, the site’s primary owner, was sentenced to 22 months in prison under the US No Electronic Theft (NET) Act.
• Brian McCarthy, the owner of Channelsurfing.net, a Texas-based sports streaming site, was alleged by prosecutors to have made $90,000 over five years. He also faces jail time and fines under the NET Act.
• Immigrations and Customs Enforcement (ICE) made some partial revenue estimates for targets of its 2010 domain name seizure program, Operation In Our Sites, based on information from advertising network Valueclick. According to ICE investigators, Torrentfinder, a BitTorrent site, made about $15,000 in ad revenue from Valueclick over a year in 2008-2009. Onsmash, a music link site, made around $2,500 in 2009-2010.

The ICE numbers aren’t complete accounts, but they met the traditional definition of “commercial” copyright infringement that justified the criminal charge (US District Court Case # 10-2822). What they don’t do is describe a very lucrative or, in any other respects, criminal business.

This is a point we’ve made repeatedly regarding the incentives for criminal involvement in piracy. We see little evidence that there’s much money to be made from it—especially as the costs of setting up and running such sites decline. It’s very likely that the larger sites generate significant revenues from advertising—indeed even in the torrent admin community (see below) it’s assumed that the handful of top sites generate six and even seven-figure revenues annually. But at any given time there are only a few such sites. And even accepting the IFPI estimates, it’s chickenfeed. The top 5 pirated films, for comparison made $2 billion last year. The (non-overlapping) top 5 grossing movies made nearly $5 billion. Piracy generates an overwhelmingly consumer, not criminal, surplus.

It’s easy to see how Kim Dotcom got rich by being an early entrant in the cloud storage market, in the only part of the business that required a lot of large file transfers. (Much the same is true of broadband adoption, for which piracy has always been the early killer app—especially outside the US where legal web services are still underdeveloped.)

As a subscription business selling a scarce commodity, Megaupload’s revenues were many times larger than the largest torrent or link sites. In 2010, execs at Paramount Pictures estimated (in testimony to Congress) its profits at between $41 million and $300 million per year, with the range reflecting different assumptions about its subscription rate. The Justice Department’s recent indictment put the number below the low end of the range—committing to only $175 million in total revenues since 2005–under $30 million/year–and reflecting a roughly 7-1 split between subscriptions and advertising. There are no estimates of how much of this came from legal sources.

In contrast, it’s hard to see how this model remains lucrative. Storage costs are falling rapidly, and there are no barriers to entry or significant network effects. For a comparable market, look to the highly competitive web hosting business rather than search engines or operating systems, which have more characteristics of natural monopolies. Many companies–including Megaupload–already give large amounts of storage away. Many compete for “premium” users, either with inducements or bundling with other services.

The sum of Megaupload’s activities may well satisfy a court that it encouraged large-scale copyright infringement, and therefore should be held liable. But Megaupload’s survival is not the main concern: it’s what happens when all storage is mirrored in the cloud. It’s whether we’ll monitor and police the core features of the web: storage, linking, and search.

The Torrent Admins Survey

Now that the nerds have (provisionally) won the argument that DNS blocking could break the Internet, attention will turn to “follow the money” enforcement strategies—especially those targeting advertising and payment systems. We might ask, in this context, what “follow the money” looks like in a sector where there are few barriers to entry and costs are falling toward zero?

To find out more, we prepared a short survey of torrent site administrators, which was circulated through torrent admin lists and IRC channels by some trusted intermediaries. We received 11 responses to our survey—most of them anonymous; most of them ‘vouched for’ by our partners; and most of them anonymized through various services. We neither asked for nor received identifying information. This is, in other words, a small sample with some big caveats (such as selection bias). Nonetheless, the responses tell an interesting story.

Responses came from a pretty wide spectrum of sites, including:

• 2 that receive over 10 million visits per month
• 2 that receive 2-10 million visits per month
• 2 that receive 500,000 – 2 million visits per month
• 2 that receive 25,000-100,000 visits per month
• 2 that receive less than 25,000 visits per month.
• 1 that did not specify traffic

To provide some reference points, the two current largest torrent sites—the Pirate Bay and Torrentz—receive roughly 88 million visits/month and 46 million visits/month respectively (according to Google Adwords. There are claims that this significantly undershoots traffic on those sites.) Although cyberlocker sites like Megaupload and Mediafire now outdraw torrent sites by a wide margin, the latter remain a good indicator of the cost structure—and costs of entry—of large scale file sharing. BitTorrent is now a thoroughly commoditized technology, running on low cost hardware with freely available software. Cyberlockers are slightly further behind.

How much does running a torrent site cost? The largest site in our survey, with over 10 million visits per month, was also the most expensive. It reported server and bandwidth costs of $25,000-$30,000 per year. Most of the sites operate on less than $10,000 per year. A couple of the smaller ones were under $3,000.

How much money do these sites make, and how? Of the eleven responses, only the largest site used advertising. It reported a roughly break-even operation, with costs covered in most months by advertising. The other ten do not use advertising. These are typically the smaller, private trackers that require invitations to join—a category that nonetheless reaches into the millions of visits per month.

Eight indicated that they meet the majority of their expenses through member donations. Only one indicated that it fully met expenses this way. Only one earned additional income through affiliate links. The balance typically comes out of the pockets of the site administrators.

Although we received less information on staffing, several indicated that they operated entirely with volunteer labor—in a couple cases involving communities of a dozen or more administrators. This is the norm among smaller, private sites.

The picture that emerges from the survey is one of financially fragile but low cost operations, dependent on volunteer labor, subsidized by users and founders, and characterized by a strong sense of mission to make work more widely available within fan communities. Few such sites make or seek to make money. Many are specialized communities exchanging media of particular types, genres, or languages. A site like NinjaVideo began this way, but grew into a larger, revenue-making operation.

Rights holder pressure on payment systems is not new, but it has been ad hoc. Credit card companies were enlisted in the mid 2000s, when the record industry group IFPI waged war against the (nominally legal) Russian pay-download site AllofMP3. Industry threats against safe harbor provisions for payment providers played an important role in this process. No payment provider wants to tangle with industry lawyers on behalf of an accused infringing site, even if there is no legal basis for cutting off service. Few accused sites are able to lawyer up to respond. Strict legality doesn’t make much difference in such contexts. One site administrator showed us a letter from a payment provider terminating service based on a DMCA complaint—a law that makes no such provisions.

SOPA and PIPA legalize these strategies and make them much easier to use. Under SOPA, rights holders gain a strong right of “private action” that allows them to issue cut off letters directly to advertising services and payment systems. The latter must cut off service or face secondary liability for infringement. Under SOPA, moreover, neither the payment system nor the rights holder is liable for damages from any mistaken or overly broad actions. The “safe harbor,” under these circumstances, is repurposed to empower the complainant rather than the user.

Independent of the potential for collateral damage, SOPA and PIPA are best understood as collections of harassment measures for pirate sites, rather than any sort of “solution” to piracy. A loss of advertising revenue would harm some file sharing sites—especially the larger, more public sites that have grown into advertising-dependent commercial operations. The loss of primary payment systems such as PayPal would complicate life for the smaller torrent sites, but wouldn’t cut off revenues: there are many ways to manage the modest donation systems that keep these sites in business.

Some parts of the file sharing ecology, consequently would be vulnerable to payment system attacks. But the overall impact is likely to be low. Much of the file sharing ecology already operates at very low cost, on minimal revenue. Much of the labor is volunteer—with advertising and the “professionalization” of staff a matter of choice rather than necessity. And infrastructure costs are falling.

We talk about the efficacy of enforcement at some length in our Media Piracy report. Many readers have concluded that enforcement doesn’t work. But that isn’t what we say. We say, rather, that we’ve found no evidence that it has worked. The main factors shaping piracy are price, income, and the declining cost of technology–and that will remain the case. But it seems entirely possible that some impact can be bought at a high enough price. The numerous critiques of SOPA and PIPA provide a good idea of that price—a broken, arbitrary, copyright surveillance regime and an Internet culture reorganized around the established content providers.

The Commercial Scale Standard

In most national copyright laws, criminal law applies only to copyright infringement on a “commercial” scale. Traditionally, commercial scale referred not to the number of copies made, but to financial benefit derived from it. (Infringement that doesn’t meet the criminal standard can still be addressed through civil law, as tens of thousands of file sharers in the US and Europe have learned.) In the past 15 years, digital technologies made a mess of this distinction. When copying was capital intensive and required a factory, scale and profit went together. But in an era of ever cheaper copies and storage, the two are delinked. What to do, then, with the commercial standard?

The US response in the 1997 NET Act was to expand the definition of commercial infringement to include the unauthorized digital receipt of anything of value, subject to an exemption up to $1000. Without the for-profit requirement, the door opened—in theory—to criminal prosecution of a much wider array of participants in file sharing. The exchange of a bunch of albums or a few copies of software can easily qualify. In practice, the NET Act has been applied not to consumer-level sharing, but to intermediaries—initially members of mostly non-commercial “warez” groups engaged in cracking software, and more recently to marginally commercial intermediaries like Hana Beshara and Brian McCarthy. (The expanded criminal model is also being exported abroad without the de minimis exceptions, through trade agreements and new enforcement treaties like ACTA).

In our view, this is a bad way to resolve the confusion around the commercial standard. It dramatically expands criminal liability without any corresponding intention of enforcing it. Law enforcement, under such circumstances, becomes arbitrary and easily captured by private parties. Industry lobbying secures funding for enforcement agencies and enforcement agencies return the favor, turning to stakeholders for staffing, planning, and cost sharing. Personnel flows between the two, anchored in the understanding that government service is rewarded later in the private sector.

The US Attorney leading the Megaupload case, for example, is Neil MacBride, former head of enforcement for the Business Software Alliance. The Obama transition brought at least five RIAA lawyers to the Department of Justice. The Megaupload indictment, both in its tone and its kitchen sink approach to infringement, could have been written by the MPAA. The distinction has become a formality.

So what to do? As long as we have a culture organized around copyright, there should be ways to define and police violations of it. But our current definitions needs a rethink. There is ample reason to see unauthorized copying and file-sharing as inevitable in the digital era and more–as inextricable from the core features of general computing and the Internet. The law should recognize this because doing so protects the wider set of freedoms to express and innovate that build on those features. Both individuals and companies should be accorded wide latitude in their use. That said, there is no reason to defend piracy as a profit-making activity.

So one place to start might be to ditch the NET Act and SOPA and restore a narrower commercial scale standard for criminal infringement, along with a less draconian set of penalties for the times when it is invoked. Such a standard would make profit the trigger, and make that the basis for any follow-the-money actions against payment systems or advertisers. This bar could be set high enough to exempt the marginal member-subsidized torrent sites, since these are little more than group implementations of search, store, and link–the building blocks of the web. They cost little today and less tomorrow.

But the bar could also be low enough to encompass sites that start to generate a lot of money. Drawing such distinctions could help restore a useful middle ground—retaining a threshold for enforcement while rejecting both the universal liability envisioned in the Net Act and the universal surveillance implied in SOPA. It would better align the law with the actual capabilities of law enforcement to enforce, and thereby make enforcement less arbitrary. And it would help articulate a much wider zone of personal freedom to copy, based on a recognition of the wider importance of unhindered, unmonitored use the core capacities of the web.

A reinvigorated commercial standard won’t end piracy. Nothing short of a copyright surveillance state would, to any significant degree. But the commercial standard would help drive file sharing into the non-commercial economy, leaving more room for creative, legal, low-cost commercial alternatives. That’s not a sufficient definition of copyright reform, but it may be a necessary step if we’re to bring law into line with the basic economics of our digital culture. The law can’t eliminate piracy, but it can help make it irrelevant.

—

Addendum: Regarding the monetary harm of Megaupload’s activities, the Justice Department characterized it, without explanation, as “well in excess of $500,000,000” since 2006. And although that number is probably meant to impress, it’s somewhat baffling. Even without a per annum breakdown, it comes nowhere near the annual piracy losses claimed by the major industry groups—whether the BSA’s $58 billion loss claims for software losses in 2010 or the “conservative” $26 billion estimate for movie, music, and software piracy from 2007, which lazy journalists still allow to circulate. This for the site that MPAA called “By all estimates… the largest and most active criminally operated website targeting creative content in the world.”

Since we’re using made up numbers here, let’s make up some more–and for the sake of argument, some extremely favorable ones for the Justice Department’s effort to paint Megaupload as the big bad. Posit that all $500 million in losses came in 2011. Posit the $26 billion loss number. Megaupload’s contribution to the pirate economy tops out at 2%.

Source: Meganomics: The Future of “Follow-the-Money” Copyright Enforcement

Quickly after the raids and arrests, top attorney Robert Bennett announced that he would lead the defense for MegaUpload. The New York lawyer has defended many prominent clients in the past but is best known for defending President Bill Clinton during the Lewinsky scandal.

MegaUpload worked with Bennett before the indictment, which means that he is already familiar with the file-hosting site, but now that his work for MegaUpload is more public, other clients of his law firm are apparently taking offense.

A Reuters report cites a source who says that Bennett was ordered to withdraw from the case due to a conflict of interest with another client. Although the name of the client is not mentioned, the most logical conclusion is that one or more entertainment industry companies pulled some strings to get Bennett off the case.

On Friday, Bennett was still determined to bring the case to a good end for MegaUpload. “We intend to vigorously defend against these charges,” he said at the time, but due to “outside” pressure Kim Dotcom and the others will now have to look for another lawyer to represent them. One without conflicting clients nonetheless, a rarity at the top law firms in the US.

One of MegaUpload’s other lawyers, Ira Rothken, said that the file-hoster has not yet found a replacement for Bennett. “Who is or isn’t on the criminal defense team is still being decided,” Rothken said.

Meanwhile, some interesting developments have taken place in MegaUpload’s court case against Universal Music Group (UMG), who had allegedly deleted the Mega Song from YouTube without permission. While that court battle is still ongoing, MegaUpload has now decided to voluntarily dismiss the music group from the list of defendants.

The case against the 100 Doe defendants, which may include other UMG branches, remains intact. Previously, UMG claimed that Megaupload sued the wrong UMG, stating that UMG Recordings is the correct entity since they are the ones dealing with YouTube and other video hosting services.

In the coming weeks, however, the major battle will be the one between the US and the MegaUpload defendants. Considering the people involved and what’s at stake, it promises to be a landmark case in file-sharing history.

Source: MegaUpload Loses Top Lawyer After ‘Outside’ Pressure

Over the past 48 to 72 hours, the operators of many prominent cyberlocker services have been taking unprecedented actions that can not simply be explained away by mere coincidence. The details in the Megaupload indictment clearly have some players in the file-hosting world spooked.

One of the key allegations is that between 2005 and mid 2011, Megaupload ran a program that rewarded users for uploading infringing material. A cited internal email allegedly shows staff members discussing cash payments going to people uploading “full popular DVD rips” and “software with keygenerators (Warez)”.

Although Megaupload stopped paying out rewards in July 2011, that didn’t stop the site from getting raided. Other cyberlocker services are clearly hoping they will be more lucky.

Last evening Filesonic, a top 10 player in the file-sharing world with a billion pageviews a month, not only withdrew its affiliate rewards program, but also banned any third parties downloading files. Simply put, users can now only download files from the service that they uploaded themselves.

But according to reports, there’s no guarantee of that. Account owners report that their files are being mass deleted, that’s if their entire account hasn’t been banned already.

Fileserve, another leading player, also ended its affiliate program this weekend. Additionally, this morning TorrentFreak received news that Fileserve has now joined Filesonic in banning all 3rd party downloads.

Other users of Fileserve are experiencing an even further degraded level of service. Reports describe mass deletion of their uploads and the banning of accounts on apparent ‘Terms of Service’ violations.

As previously reported, Uploaded.to banned all US IP addresses in what appears to be an effort to distance itself from US jurisdiction. Its affiliate program is still listed as operational but the same cannot be said about those run by some of its competitors.

VideoBB and VideoZer have both reportedly closed their rewards program and according to reports have also been mass deleting accounts and huge numbers of files.

Other sites closing their affiliate programs and/or deleting accounts/files include FileJungle, UploadStation and FilePost.

Do you know of other file-hosts/cyberlockers taking similar action? Send us your stories and screenshots to the usual address.

Update: Smaller host UploadBox calls it quits. “All files will be deleted on January 30th. Feel free to download the files you store with UploadBox until this date.”

Update2: Another host, x7.to, shuts down.

Update 3: TorrentFreak has seen evidence that on request PayPal is refunding cash paid to Filesonic over the weekend.

Update 4: FileJungle and UploadStation have disabled all 3rd party downloads.

Update 5: 4shared cancels affiilate program.

Source: Cyberlocker Ecosystem Shocked As Big Players Take Drastic Action

The data for our weekly download chart is collected by TorrentFreak, and is for informational and educational reference only. All the movies in the list are BD/DVDrips unless stated otherwise.

RSS feed for the weekly movie download chart.

Source: Top 10 Most Pirated Movies on BitTorrent

Dotcom, who was raided by 76 armed police in helicopters the day before, is wanted in the United States alongside other key MegaUpload employees on racketeering, copyright infringement and money laundering charges.

Today, he reappeared in court again. Dotcom denied charges of copyright infringement and money laundering and said that he was the victim of a campaign to paint him in the worst possible light.

Dotcom’s lawyer, Paul Davison, told the hearing at the North Shore District Court in Auckland that his client merely ran a site offering online storage for Internet users and had not been involved in any criminal activity. Dotcom’s height and significant frame would only reduce the chances his client would abscond from bail, Davison insisted.

“He is not the sort of person who will pass unnoticed through our customs and immigration lines and controls,” Davison told the court.

The prosecution, pointing to nearly four dozen credit cards found when Dotcom was arrested, said that Dotcom’s significant financial resources meant that fleeing was a real possibility. But despite Davison’s assurances that Dotcom is merely a collector of credit cards, most of which had expired, Prosecutor Anne Toohey persisted.

Dotcom’s resources, multiple identities, multiple passports, and past history of fleeing criminal charges placed him as a flight risk “at the extreme end of the scale,” she said.

Judge David McNaughton said that due to the complex nature of the case he would delay his decision.

On the other side of the world, two other Megaupload operatives have been arrested in Europe. Although currently unnamed, they are believed to be Julius Bencko, 35, Mega’s graphics designer from Slovakia and Andrus Nomm, 32, programmer and head of the development from Estonia.

In the meantime, an immigration scandal is forming around Dotcom’s New Zealand residency. This week authorities there confirmed that it had taken Dotcom’s colorful past into consideration before giving him permanent residency in 2010 – but only after he’d invested NZ$10 million in government bonds.

“The Immigration Act allows for discretion to be exercised in certain cases. In this particular case Immigration NZ weighed the character issue and any associated risk to New Zealand against potential benefits to New Zealand,” the Immigration Service said in a statement at the weekend. Residency was eventually granted to Dotcom under the “investor plus” category.

Judge David McNaughton will deliver his decision on bail no later than Wednesday.

Source: Judge Delays Megaupload Bail Decision, More Site Operators Arrested

According to a shock announcement by the site, all file-sharing functionality has now been disabled, leaving current users only with access to files that they have personally uploaded. Many hundreds of thousands (probably millions) of links all around the web have now been rendered useless, at least temporarily.

But the bad news for the site’s users doesn’t end there. In the last few hours, before file-sharing was disabled, Filesonic also ended its rewards program, meaning that uploaders to the site no longer earn money when people download their files. A moot point perhaps, since no-one will be downloading files anyway.

However, there is the matter of what will happen to the reward money that was sitting in uploader’s accounts before the rewards program was discontinued. Will it be paid out, or will it simply disappear? Many users fear the latter.

While there has been no official explanation from the site as to why the above actions were taken, all eyes are turned towards events of the last week – the closure of Megaupload and the arrest of its founder and management team.

Like Megaupload, Filesonic appears to be based in Hong Kong and it’s clear that the authorities there already worked with the US government to shut down Kim Dotcom’s operations and seize his assets there. Filesonic is also believed to have some US-based servers.

In December, Filesonic announced it had partnered with Vobile, a provider of content identification services. All uploads to the service were said to be being checked for copyright infringement before users were able to share them publicly, although it is unclear if this system was ever implemented by the site.

The events of the last week have turned the cyberlocker world upside down and there is quite literally panic among users and site operators. Stay tuned for our detailed report tomorrow – the Megaupload takedown appears to be a game-changer.

Source: Filesonic Kills File-Sharing Service After MegaUpload Arrests

The “Daddy, I want a pony” tactic goes roughly like this:

Little girl: Daddy, I want a pony! Want pony! Want want want pony!
Dad: Uhm, no, uhm, uhm, no, how about a dog?
Little girl: No no no NO! Want pony! PONY! …Dog? Well, ok then.

At this point the dad thinks, “Phew, that was a close call!”. The little girl on the other hand thinks “Wow, that’s the easiest dog I ever got.” That’s the “Daddy, I want a pony” tactic.

You saw it with the DMCA in the United States, which severely restricted our rights to our own property, and the corresponding InfoSoc directive in the European Union. You see it right now with ACTA, which again shows this “the most offensive, repugnant may be gone” attitude, despite still being a giant leap backwards for human rights. You’ve seen it with the Data Retention Directive.

And each time, we defend and defeat the worst parts, burning our activist reserves way into the red, and then there’s another assault three years later. Plus the fact that while we’re fighting one of these evils, another 11 pass in the background.

The point is, as long as we’re just defending, we will always be on the retreat, and we will always lose. The copyright industry has the initiative and the best we can do is to delay or reduce the damages done. That’s not good enough.

It gets worse. The copyright industry has also gotten the rights to collect levies from trade with unrelated items, notably blank media but as unrelated as game consoles, because they can theoretically be used to copy in legal ways. Did you get that? It does not break the copyright monopoly to copy in these ways, and just therefore the copyright industry is compensated.

Let’s take that again.

The copyright monopoly, as wet a blanket as it may seem, does not cover every conceivable act of copying. There are many acts of copying that are fully legal and not covered. But in the industry’s sense of entitlement, they have demanded — and received — compensation for the areas where their monopoly does not extend. Compensation from taxpayer money to a private industry. For not having a monopoly. Really, can you believe this?

In this compensation scheme, they collect ridiculous amounts of money every year for doing absolutely nothing. A lot of the money goes straight towards the war on our civil rights and to collect yet more taxpayer money in new “Daddy, I want a pony” schemes. For us, it’s a vicious circle. Anybody familiar with incentives knows that it’s an absolutely terrible way of optimizing production to give money to an industry regardless of whether they’re doing the right thing, the wrong thing, or no thing at all.

So, to summarize, the copyright industry has put itself in a position where they get insane amounts of money for doing absolutely nothing, and use that money to buy laws that give them even more money and restrict our freedoms of speech. That is not just unacceptable. That is repulsive.

It comes as no surprise that I think the copyright monopoly is harmful (or at best useless) as a whole, and that creativity, business, and civil liberties would be much better off without it. Having studied the topic for six years straight, I discover more and more arrows that point in this direction.

But I’m also pragmatic enough to realize that if you shoot for the moon and insist on not doing any steps in between, you’re not only never going to the moon, but you’re also never taking a single step forward. Besides, getting a small way to the moon may be enough to give you that great view you really wanted. In the same vein, 99% of the problems with today’s copyright monopoly can be solved with a much smaller reform that is both reasonable, achievable and doable.

When it comes to large matters, after all, you can’t change all of the rules of the game overnight. So let’s shoot for a balanced, reasonable proposal that restores our civil liberties while retaining some of today’s investment incentives in culture.

I’m borrowing this blueprint from the Green group in the European Parliament (where, in turn, it came from the Pirate delegation). Let’s try this for a legislation package in Europe, the United States, Australia, and everywhere else we can:

• It must be made absolutely clear that the copyright monopoly does not extend to what an ordinary person can do with ordinary equipment in their home and spare time; it regulates commercial, intent-to-profit activity only. Specifically, file sharing is always legal.
• Free sampling. There must be exceptions that make it legal to create mashups and remixes. Quotation rights, like those that exist for text, must be extended to sound and video.
• Digital Restrictions Management should preferably be outlawed, as it is a type of fraud nullifying consumer and citizen rights, but at least, it must always be legal to circumvent.
• The baseline commercial copyright monopoly is shortened to a reasonable five years from publication, extendable to twenty years through registration of the work in a copyright monopoly database.
• The public domain must be strengthened.
• Net neutrality must be guaranteed.
• Levies on blank media are outlawed.
• Overall, it must always be clear where the line goes; “the courts will sort it out” areas are not acceptable and tantamount to outlawing.

This reasonable, balanced, achievable, and doable proposal would solve 99% of today’s problems, while still maintaining all four aspects of the copyright monopoly. It solves the witch-hunt on teenagers sharing TV series. It solves the problem with orphan works and restores our access to the cultural heritage of the 20th century. It solves the problem with the copyright industry getting taxpayer money for nothing. On the other hand it still maintains a 20-year commercial monopoly (at the most) for investments in cultural productions, defeating every argument from the copyright industry lobby that the monopoly is needed for more culture to be created.

While I don’t agree with patent monopolies, it’s a good talking point here that if pharma companies can do with a 20-year commercial monopoly (patents), then that term should certainly suffice for Disney and Elvis, too.

This, or something along these lines, is what we need to do. We need to go on the offensive for our freedom of speech.

Source: It’s Time To Go On The Offensive For Freedom Of Speech

First, MPAA CEO Chris Dodd described the blackouts of Wikipedia, Reddit and others as corporate PR stunts which manipulated and exploited the sites’ users.

“Some technology business interests are resorting to stunts that punish their users or turn them into their corporate pawns,” Dodd said.

Then, a few days later when many lawmakers had already dropped their support for the anti-piracy bills, the MPAA’s comments turned even more grim. Talking to Fox News, the MPAA’s boss threatened to stop contributing to politicians who don’t back legislation designed to protect Hollywood.

“Those who count on quote ‘Hollywood’ for support need to understand that this industry is watching very carefully who’s going to stand up for them when their job is at stake. Don’t ask me to write a check for you when you think your job is at risk and then don’t pay any attention to me when my job is at stake,” Dodd said.

Although it’s no secret that the movie industry has a powerful lobby in Washington, explicitly admitting that bribery is one of the tactics the MPAA uses to have their way wasn’t well received by the public. A few hours ago a White house petition was started to investigate Chris Dodd and the MPAA for alleged bribery.

“This is an open admission of bribery and a threat designed to provoke a specific policy goal. This is a brazen flouting of the ‘above the law’ status people of Dodd’s position and wealth enjoy,” the petition reads.

“We demand justice. Investigate this blatant bribery and indict every person, especially government officials and lawmakers, who is involved.”

In just a few hours the petition amassed more than 5,000 votes and this number is increasing rapidly. As a former Senator, Chris Dodd has many friends in Washington so it’s unclear whether the petition will accomplish anything, but if the numbers grow big enough the White House won’t be able to ignore it either.

The MPAA’s response to the PIPA and SOPA opposition this week is a sign that they might be losing control in Washington. At the very least, they are starting to lose their patience and become frustrated, which may not help their cause at this point.

Source: White House Petitioned to Investigate MPAA Bribery

As with their treatment of sovereign nations the world over, the Americans have no qualms about interfering in our domestic politics and local legal systems. The kind of behaviour that, if reciprocated, would swiftly end the alliance. The latest front in this meddling is the crossover between file-sharing and intellectual property.

Individually, Australians can show enormous courage. Currently, an Australian is enduring a lengthy legal battle that may see him end up as an inmate at Guantanamo Bay, or worse.

Julian Assange and the Wikileaks organisation he help found shone a sterilising light on the behaviour of the US Embassy in Australia’s capital, Canberra. For his bravery Australian Prime Minister Julia Gillard, a trained lawyer, prejudiced any future legal action by prematurely labelling Assange’s actions “illegal.” She has since sacked the Attorney-General whose job it was to give legal advice on the Wikileaks matter, but the damage has been done and the comment has never been retracted.

While the Gillard Government was quick to shoot the messenger, it has remained eerily silent on the message – one of potential interference in domestic legal affairs by a foreign power and so-called ally.

The Canberra Wikileaks cables revealed the US Embassy sanctioned a conspiracy by Hollywood studios to target Australian communications company iiNet through the local court-system, with the aim of establishing a binding common-law precedent which would make ISPs responsible for the unauthorised file-sharing of their customers.

Both the location, Australia, and the target, iiNet, were carefully selected. A precedent set in Australia would be influential in countries with comparable legal systems such as Canada, India, New Zealand and Great Britain. Australian telecommunications giant Telstra was judged too large for the purposes of the attack. Owing to its smaller size and more limited resources, iiNet was gauged the perfect candidate.

The involvement of major American studios in the offensive was suppressed. “The case was filed by … the Motion Picture Association of America (MPAA) and its international affiliate, the Motion Picture Association (MPA), but does not want that fact to be broadcasted,” the US Embassy, Canberra wrote. “We will monitor this case … to see whether or not the ‘AFACT vs. the local ISP’ featured attraction spawns a ‘giant American bullies vs. little Aussie battlers’ sequel.”

The Wikileaks cables also revealed a number of Australian political power-brokers were US informers. Prominent union leader Paul Howes and Federal Senator Mark Aribib were both named in the cables as “protected” informants. Both were instrumental in elevating the current Prime Minister to office in 2009 in what many commentators described as a “bloodless coup.”

Had either been caught spilling secrets to any other national government, with the possible exception of Great Britain, they would have seen their reputations destroyed at best. At worst, been put on trial for treason. The mere hint of back-room dealings with Australia’s largest trading partner, China, has toppled political careers.

Senator Arbib was recently promoted to Assistant Treasurer by the Prime Minister he helped put in office. Without further leaks, we cannot know if Arbib still reports to his American handlers.

Prime Minister Gillard made her feelings towards America known when she addressed the US Congress in March, 2011 and proclaimed, somewhat sycophantically, “You can do anything.” This is not the diplomatic language of allies. It is the language of worship.

Many Australians believe we are special, that the US really does hold us in the highest regard, reinforced by frequent utterings from successive US administrations that America “has no better friend” than Australia. Unfortunately, such a reality is challenged by the even more frequent utterings that the US has no better friend than Canada, Great Britain, France, Italy, Israel, Japan, Poland and South Korea.

The “Australian” Federation Against Copyright Theft (AFACT), a consortium of American movie studios with token Australian representation, began legal action against iiNet in November, 2008.

The MPA and US Embassy badly misjudged their target. In tenacious Australian fashion, iiNet put up the legal fight of their lives. AFACT lost the case and all subsequent appeals. Next month, the final episode of this long saga will culminate with a full ruling of the Australian High Court.

AFACT is already preparing for a loss in February by shifting its focus to lobbying the Australian Government directly. The process began behind closed doors late last year when meetings were held between AFACT, linked copyright industry lobbyists, the Federal Attorney-General’s department and a coalition of Australian ISPs. The voting public have not been told what was discussed or what plans have been developed.

If the High Court rules against AFACT and its Hollywood and US Government backers, as every lower court has done thus far, Australia will be faced with a test of national sovereignty. Only Australia’s Federal Parliament can overturn the decision.

With a Prime Minister visibly enamoured with the United States and known informers in the Federal Ministry, there is a strong likelihood any win for iiNet will herald changes in Australian law. It is unlikely those changes will be friendly to an open file-sharing culture.

Source: Australia: US Copyright Colony or Just a Good Friend?

NinjaVideo, at the time one of the Internet’s most popular video portals, was one of the first targets in the now-famous and ongoing Operation in Our Sites.

Five people connected to NinjaVideo were arrested and in September 2011 they were indicted by a federal grand jury. After pleading guilty on September 23rd, yesterday one of the site’s founders was sentenced in Alexandria, Va..

Matthew David Howard Smith, known online as Dead1ne, received 14 months in prison for his activities at Ninja. U.S. District Judge Anthony J. Trenga also ordered Smith to serve two years of supervised release.

Of the total $505,000 said to have been collected by NinjaVideo in ad revenue and donations since its creation in February 2008, Smith is said to have received $172,387. The court ordered Smith to repay this amount and forfeit five financial accounts and previously-seized sundry computer equipment.

When compared to the punishment handed out to NinjaVideo co-founder Hana Beshara earlier this month, Smith was treated relatively leniently. Beshara, known online as ‘Phara’, was sentenced to 22 months in prison followed by 2 years of probation, 500 hours of community service and ordered to repay nearly $210,000.

In contrast to Beshara, 23-year-old Smith appears to have caused the authorities much less of a headache since his guilty plea. After her sentencing, the hugely outspoken 30-year-old Beshara posted comments to Facebook which suggested she had no regrets. The outburst incensed the authorities and she was rushed directly to a local prison to begin her sentence.

Three former operators of NinjaVideo are yet to be sentenced including 34-year-old Joshua David Evans (known online as Wadswerth), 33-year-old Jeremy Lynn Andrew (known online as htrdfrk), and 28-year-old Justin A. Dedemko (known online as Afr1ka). All face a maximum of five years in prison and a $250,000 fine when they are sentenced in the coming months.

Zoi Mertzanis of Greece, known online as “Tik”, is accused of being one the site’s most active uploaders. A warrant is outstanding for his arrest.

Source: Second NinjaVideo Admin Jailed For Copyright Infringement

While the timing came as a huge post-SOPA protest surprise, the fact the site was targeted was not – for many months there have been rumblings behind the scenes that something might be “done” about MegaUpload. Nevertheless, the manner in which the action was taken and the language used by the authorities in doing so was utterly unprecedented.

So the key question this morning is this – What made MegaUpload a rogue site which deserved to be completely dismantled and its key staff arrested? The answers lie in the 72-page indictment and show just how the authorities (with the massive assistance of the MPAA, no doubt) framed Mega’s activities in such a way as to strip it of any protection under the DMCA.

In the U.S., online service providers are eligible for safe harbor under the DMCA from copyright infringement suits by meeting certain criteria. However, the indictment states that member of the “Mega Conspiracy” (capital M, capital C no less) do not meet these criteria because…

…they are willfully infringing copyrights themselves on these systems; have actual knowledge that the materials on their systems are infringing (or alternatively know facts or circumstances that would make infringing material apparent); receive a financial benefit directly attributable to copyright-infringing activity where the provider can control that activity; and have not removed, or disabled access to, known copyright infringing material from servers they control.

Let’s cover the last point first – the apparent non-removal of known copyright material from MegaUpload’s servers. First, a little background on how MegaUpload’s user uploading system worked because this is absolutely crucial to the case against the site.

Mega had developed a system whereby files set to be uploaded by users were hashed in order to discover if a copy of the file already exists on the Mega servers. If a file existed, the user did not have to upload his copy and was simply given a unique URL in order to access the content in future. What this meant in practice is that there could be countless URLs ‘owned’ by various users but which all pointed to the same file.

Megaupload’s “Abuse Tool” to which major copyright holders were given access, enabled the removal of links to infringing works hosted on MegaUpload’s servers. However, the indictment claims that it “did not actually function as a DMCA compliance tool as the copyright owners were led to believe.” And here’s why.

The indictment claims that when a copyright holder issued a takedown notice for content referenced by its URL, only the URL was taken down, not the content to which it pointed. So although the URL in question would report that it had been removed and would no longer resolve to infringing material, URLs issued to others would remain operational.

Furthermore, the indictment states that although MegaUpload staff (referred to as Members of the Conspiracy) discussed how they could automatically remove child pornography from their systems given a specific hash value, the same standards weren’t applied to complained-about copyright works.

In June 2010, it appears that MegaUpload was subjected to a something of a test by the authorities. The company was informed, pursuant to a criminal search warrant from the U.S. District Court for the Eastern District of Virginia, that thirty-nine infringing movies were being stored on their servers at Carpathia Hosting in the Eastern District of Virginia.

“A member of the Mega Conspiracy informed several of his co-conspirators at that time that he located the named files using internal searches of their systems. As of November 18, 2011, more than a year later, thirty-six of the thirty-nine infringing motion pictures were still being stored on the servers controlled by the Mega Conspiracy,” the indictment reads.

The paperworks goes on to accuse MegaUpload of running a program between September 2005 and July 2011 which rewarded users for uploading infringing material.

A citation from an internal MegaUpload email from February 2007 entitled “reward payments” claims to show that at least two key staff members knew that cash payments were being paid to users who uploaded infringing material including “full popular DVD rips” and “software with keygenerators (Warez)”.

Then the indictment starts to throw up some very interesting questions, specifically how the authorities managed to get hold of not just one but many of MegaUpload’s internal company emails (dating back to 2006) to use in the case against them.

It’s certainly possible that the authorities were monitoring MegaUpload’s correspondence but there are also at least two mentions in the indictment of an unnamed person described as “an unindicted co-conspirator”. While prosecutors sometimes use this term to describe people who have been excluded from an indictment on evidentiary concerns, they also use it to describe individuals who have been granted immunity from prosecution.

In any event, these emails are being heavily relied upon since many appear to indicate a knowledge among staff that copyright works were held on the company’s servers. Here’s a sample:

An email from 2006 claims to show how MegaUpload attempted to download large amounts of content from YouTube and appeared by April that year to have obtained 30% of the site’s content. A follow up email in 2007 claimed that “Kim [MegaUpload's founder] really wants to copy Youtube one to one.”

An email from August 2006 titled “lol” contained a screenshot of a MegaUpload download page showing a cracked copy of CD burning software Alcohol 120%.

Other correspondence quoted in the indictment appears to show key staff members sending each other links to copyright works hosted on MegaUpload.

One contained 100 MegaUpload links to content by recording artist Armin Van Buuren. Another, allegedly sent in December 2006 by Kim Dotcom to another staff member, carried a link to a music file hosted on a MegaUpload server entitled “05-50_cent_feat._mobb_deep-nah-c4.mp3”. No context for the sending of these links is given in the indictment.

Other emails show staff asking each other to help locate copies of infringing content including TV series The Sopranos and Seinfeld, and music from a band called Grand Archives. Again, no context is offered in the indictment.

An email sent in July 2008 shows a key staff member reporting an earlier conversation with another entitled “funny chat-log.”

“We have a funny business . . . modern days pirates,” the exchange begins. “We’re not
pirates,” came the reply. “We’re just providing shipping services to pirates.”

But aside from exchanging links to copyright works, the indictment claims that key staff members also uploaded material themselves including a TV show from the BBC and a copy of the movie Taken.

The indictment lists several other examples which are supposed to demonstrate that the admins of MegaUpload knew that their service was being used for the storage and distribution of illegal material.

Emails from customers are cited where they complain that for various reasons they’re unable to watch named copyrighted works. Others ask how to find pirate movies on Mega and are told to go to sites that index Mega-hosted material, such as the ThePirateCity.org, a site seized as part of Operation in Our Sites.

On at least two occasions the indictment reports key MegaUpload staff discussing TorrentFreak articles on seizure operations being carried out by the US authorities.

In one email, Kim Dotcom reportedly stated: “This is a serious threat to our business. Please look into this and see how we can protect ourselfs [sic],” adding, “Should we move our domain to another country, Canada or even HK?”

The indictment separately lists several movies being distributed from MegaUpload’s servers in the United States, all of which were not yet commercially available. There is no indication, however, that MegaUpload’s operators knew they were there.

On face value it would seem that in a handful of cited instances staff at the company did indeed link each other to copyright works, but when the massive scale of the MegaUpload operation is set beside them, their significance is put into a different perspective.

The issue of not taking down content is a fascinating one. MegaUpload is not on its own when it hashes content then allows users to access already-stored versions of the same files. Nevertheless, will taking down a specific URL and not the content itself be enough to appease the courts?

Finally, and despite the assertions of the MPAA, RIAA and the authorities, MegaUpload carried a huge amount of non-infringing content, giving the service itself “substantial non-infringing users”. Nevertheless, all content has now been seized, leaving millions of people and companies without their personal data.

Cyberlocker services and potential startups all around the world will be watching this case like hawks. Seismic doesn’t really come close.

Source: MegaUpload: What Made It a Rogue Site Worthy of Destruction?

Dotcom, a 37-year-old German citizen with joint New Zealand and Hong Kong residency, appeared alongside three other MegaUpload employees – site co-founder Mathias Ortmann, 40, chief marketing officer Finn Batato, 38, and programmer and networking expert Bram van der Kolk, 29.

The hearing in an Auckland district court heard how local police had been working with US authorities since 2011 culminating in raids yesterday on ten private and business locations. Among them was Kim’s residence, Dotcom Mansion, and what happened there resembles something from a movie.

New Zealand police sent 76 officers, some armed, to raid the property which reportedly housed 15 individuals including bodyguards, security staff, women and children.

“Police arrived in two marked police helicopters. Despite our staff clearly identifying themselves, Mr Dotcom retreated into the house and activated a number of electronic locking mechanisms,” Detective Inspector Grant Wormald told the court.

“While police neutralized these locks he then further barricaded himself into a safe room within the house which officers had to cut their way into,” Wormald added.

At the hearing, the first step to being extradited to the United States, all four defendants were denied bail and are due to reappear at another hearing next Monday. Police say there are no intentions of trying the defendants under local laws.

“This particular type of action around internet copyright infringement is a first in New Zealand in terms of an overseas person being attempted to be extradited to the United States,” said Intellectual Property Lawyer Rick Shera, as quoted by TVNZ.

Three other defendants – a German, a Slovakian and an Estonian – all remain at large.

Source: MegaUpload Founder Denied Bail At Extradition Hearing