In 2011 and 2012, the US Navy began using BS Contact Geo, a 3D virtual reality application developed by German company Bitmanagement.

After some initial testing, the Navy agreed to purchase licenses, understanding that these could be used across its network, as long as the number of simultaneous users was limited to a few dozen.

Bitmanagement saw things differently. The software vendor said it never authorized this type of use. When the company was informed that the Navy had installed the software on 558,466 computers, that came as a surprise.

This stance was repeated in a Federal Claims Court complaint filed by Bitmanagement three years ago. The German company accused the US Navy of mass copyright infringement and demanded damages totaling hundreds of millions of dollars.

In the years that followed, both parties conducted discovery. Initially, most of the court documents were made public, but more recently they were shielded from public view. What we do know, however, is that a week-long trial took place in Washington in April.

Following the trial and the post-trial briefs, the Court has now decided to dismiss the copyright infringement claim against the US Government.

“Although Bitmanagement established a prima facie case of copyright infringement, the evidence shows that Bitmanagement authorized the U.S. Navy’s copying of BS Contact Geo version 8.001. Therefore, the Court finds in favor of Defendant, the United States, and Plaintiff’s Complaint is hereby dismissed,” the verdict reads.

In a detailed opinion and order, published this week, Senior Judge
Edward J. Damich explains how this conclusion was reached.

The dispute appears to have begun when the US Navy decided that it would like to run the software across its entire network. This meant that it would be installed on hundreds of thousands of computers, with “Flexera” software keeping track of the number of simultaneous users.

Bitmanagement didn’t offer such a license by default, so the Navy requested this option separately. These requests took place through a reseller, Planet 9 Studios, which complicated matters. After several back and forths, the Navy was convinced that it had permission, but Bitmanagement later disagreed.

What’s clear is that the Navy never had a direct contractual relationship with Bitmanagement, so there was no direct permission given. This means that the Court had to review the conversations and exchanges that took place, to determine which side was right.

Here, the Court concluded that it’s clear that Bitmanagement authorized the Navy to use the software across its network with the network use (Flexera) license.

The evidence shows that Bitmanagement itself offered a custom license and changed the software installer to be used with a Flexera license. Through email communication, the German software company was repeatedly informed about this intended use, which it confirmed.

In addition, Bitmanagement cited the Navy’s ‘networked’ use of its software to a potential customer, with the following statement.

“After five years of testing, approval for the use of the BS Contact Geo on 350,000 PCs of the US Navy took place in May 2013 and central distribution has begun. In a second step, the distribution of the BS Contact Geo on 800,000 PCs in the largest computer network in the world will take place.”

Based on these and many other pieces of evidence, the Court concluded that the US Government can’t be held liable for copyright infringement.

“Together, these interactions unequivocally show that Bitmanagement was not only aware that the Navy planned to install BS Contact Geo “across a broad spectrum of the NMCI realm” but also that Bitmanagement authorized such installations,” the Court writes.

This means that after three years the US Navy has successfully defended the piracy claims. Instead of a potential $600 million judgment in its favor, Bitmanagement has no other option than to retreat.

—

A copy of the order and opinion of Senior Judge Edward J. Damich of the United States Court of Federal Claims is available here (pdf).

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Back in March, US-based author John Van Stry filed a copyright infringement lawsuit against Travis McCrea, the operator of eBook platform eBook.bike.

The direction of the case has been somewhat disorganized but rests on Van Stry’s basic claims that his books appeared on eBook.bike without his permission and weren’t taken down, resulting in breaches of copyright law.

McCrea, on the other hand, says that the DMCA notices he received from the author were deficient, meaning he has no case to answer. In August, a motion for default judgment filed by Van Stry was set aside, as was a motion to dismiss filed by McCrea. At that time, a trial date was provisionally set for June 2020.

This week, McCrea – who is defending himself – filed his answer to the 54-page complaint filed by Van Stry in March. In many respects it covers old ground, such as restating McCrea’s defense under the safe harbor provisions of the DMCA and reiterating the claim that Van Stry’s notices were deficient and thus contributed to any problems he may have faced.

Even more fundamentally, McCrea’s answer states that no evidence has been presented to the Court to back up Van Stry’s claim that eBook.bike ever advertised, imported, or distributed any copyrighted material. On that basis, McCrea denies all the claims to the contrary.

“No files have been submitted for evidence, nothing that proves that infringement actually happened at all, nothing that even shows the files were in fact on the servers,” he writes.

A significant portion of Van Stry’s original complaint focused on McCrea’s character and alleged previous conduct, describing him as having a “proud history of pervasive, blatant, and egregious violations of other persons’ intellectual property rights” as a key figure in the Pirate Party movement.

The complaint adds that McCrea was president/reverend of the Kopimist Church of Idaho – a spin-off from the pro-file-sharing Church of Kopimism which was recognized as a religion in Sweden back in 2012.

“‘Reverend’ McCrea is on record as having said that ‘giving away other people’s intellectual property’ is his ‘religious vocation’,” the complaint noted.

In his answer, McCrea says that none of these things should be taken as evidence that he breaks the law.

“[T]he Plaintiff shows that the Defendant is active politically but does not show a link between the political action and the Defendant’s desire to engage in illegal activities,” McCrea writes.

“The Defense accepts that the Defendant has both religious and political beliefs that deal with the concept of intellectual property laws. However, the 1st Amendment of the constitution protects the Defense for having political and religious beliefs.

“It is no more appropriate to allow the belief in Kopimism and the Pirate Party to be evidence for actually infringing in copyright as it would be to assume Baptists and/or a Republican are going to bomb an abortion clinic.”

Further underlining that someone’s religious beliefs don’t necessarily lead to them following every ‘rule’ to the letter, McCrea states that Leviticus 21:17-24 “essentially” tells follows to “shun ugly people” but Catholic Priests don’t do that. Jacob 2:24-30, he continues, references “plural marriage” but Mormons largely reject that because it’s illegal.

“You can believe in something without practicing it. The defense denies wrongdoing and will make a subsequent motion to have religious references struck from the case,” he adds.

But even with that said, McCrea cites religion as at least part of his defense. Noting that Van Stry has provided no proof of infringement and that in any event eBook.bike is protected under the DMCA, he accuses the author of introducing conjecture of a nature that potentially violates his human rights and ability to practice religion without persecution.

“An argument will be made that in a worst case scenario where the Defendant had failed to adequately address the copyright infringement per the DMCA it was only acting in a way to balance their religious beliefs against the societal laws that also bound them,” the answer reads.

“When a religion is acting without harm to those around them, leeway must be given to allow them to exercise their right to free expression as per the First Amendment.”

In closing, McCrea calls for Van Stry to “take nothing” and judgment to be awarded in his favor, including recovering all costs related to the lawsuit from the author and any additional relief the Court deems appropriate.

McCrea’s answer can be obtained here (pdf)

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Last week the illicit IPTV market was thrown into turmoil when Italian authorities teamed up with law enforcement groups in the EU.

Their operation, dubbed ‘Black IPTV‘, targeted individuals and equipment behind at least one Italy-based IPTV provider. More importantly, however, it also targeted Xtream Codes, a management system utilized by many providers and sellers of IPTV services.

While Xtream Codes claimed to be a content-agnostic system, its popularity in the unlicensed market is hard to understate. With an estimated 5,000 providers of varying kinds on its books servicing around 50 million end-users, its closure had an immediate and dramatic impact.

In the immediate aftermath of the raids, suppliers reported an inability to sign up new customers or renew customer subscriptions. Within several hours, it became clear that anyone reliant on the system would be more seriously affected, with IPTV services going dark and paying customers seeing red.

As soon as news of the raids appeared on our radar, we contacted several previously responsive players in the IPTV market. Precisely zero responded to our requests for comment amid the chaos, which was widespread and by some estimates affected up to 90% of the market. Data from Google Trends does seem to indicate that plenty of people hit its search engine for news.

With no obvious central source for information on the impact of the operation, the day after the raids TorrentFreak contacted Sandvine, a networking equipment company that has previously provided detailed analysis on general Internet and piracy-related traffic.

An external source that requested anonymity told us that due to technical issues the full force of the raid may not be felt until Thursday or Friday, the two days directly after the raids took place. So, we asked Sandvine if the company had noticed any significant drop in illicit streaming traffic during that period – it had.

This week a spokesperson for the company told TorrentFreak that on Friday September 20, Sandvine estimated that illicit streaming traffic had decreased 50% from the levels seen on Thursday, a massive drop by any standards.

That many illicit IPTV providers had been seriously affected by Xtream Codes’ removal from the market didn’t really come as a shock. Equally, it wasn’t really a surprise when providers began to adapt to the loss either.

Slowly but surely, some providers and sellers began migrating to alternative management systems, as detailed in emails to subscribers seen by TF. By Saturday, better news for them began to filter through, with services not only returning but also with subscriber payment and subscription information intact.

Sandvine gave TF a brief list of five providers, all of which went down completely between the 19th and 21st of September. By 21st/22nd all were recovering to a greater or lesser extent, with only one failing to return at all.

That being said, the overall market is huge, so it’s almost impossible to say how many have now returned, in whole or in part. It isn’t difficult to find complaints that services are still down even today but there are also several reports of providers that weren’t affected at all by the Xtream Codes situation.

Typically, there are individuals and groups out there trying to make hay even before the storm clouds have cleared. TF has heard of a handful of hopeful end-users who believed they were paying to access a service that was still up, only to have their ‘supplier’ cut and run.

Equally, we were pointed to a service that claims to be an Xtream Codes replacement but is probably nothing more than an elaborate scam. Since the prices were so high, we didn’t feel tempted to test that theory out.

On the other hand, real Xtream Codes alternatives are out there but how vulnerable they are to similar action will remain to be seen. In particular, one service seems happy to take orders and is reportedly in use by a number of previously stranded providers and resellers.

If nothing else, most of those in the chain should now be more prepared if there’s similar action in the future. Or less surprised at least.

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When Disney announced that it would launch its own streaming service, two years ago, some noted that this would keep piracy relevant.

People had just become used to having access to a broad movie and TV library in one or two places, and any increased fragmentation appeared to be a step backward.

Fast forward to 2019 and Disney is about to launch its new service. At the same time, more and more streaming subscription platforms are coming up with exclusive releases. If you want to see those, you have to sign up.

While that may not be a problem for some, there is an audience of millions who don’t want to or simply can’t pay for a handful of streaming subscriptions. This means that they have to pick the ones they want the most.

That’s the hard reality for modern consumers, at least, for those who don’t want to break the law.

As it turns out, many people are willing to cross the line, and the increased fragmentation of video streaming service is indeed driving people back to pirate sites. This problem may actually be worse than some think, based on new research that was just published by Broadband Genie.

The broadband comparison/advice site conducted a survey among UK streaming users and found that 18% confessed to using pirate sites on the side. However, this number could more than double to 37% if the legal streaming subscription market continues to fragment.

The cost of these services is the driving factor behind the findings. Two thirds (67%) of the surveyed UK streamers feel that they are already paying too much. The average expenditure is roughly £15 a month, where a maximum of £10 is seen as ideal.

Interestingly, those people who consider becoming pirates are not doing so without taking precautions. More than half (60%) of the prospective pirates say they will invest in a VPN to prevent copyright holders from tracing their steps.

Alex Tofts, Broadband Expert at Broadband Genie, notes that we’re still a long way from having all video entertainment in one place. People have options to save costs, through family discounts, for example. But instead, many people prefer to pay for a VPN so they can go the pirate route.

“It’s disheartening that consumers are prepared to turn to streams and file sharing to access the content they want. The price consumers are willing to pay is the equivalent of subscribing to one service,” Tofts says.

Rightsholders, meanwhile, keep repeating that availability is no longer a problem. They are right. In most countries, people can watch pretty much everything they want, but it comes at a price which, according to the survey, they are not willing to pay.

If fragmentation increases most people will still pay for legal services, but an increasing number will additionally use pirate services to watch content that’s otherwise only available at platforms they don’t have access to.

Availability is no longer the key issue. Instead, the focus has shifted to convenience and affordability. The prospect of signing up and using four or even five different streaming service is not affordable for many people, nor is it convenient.

The solution would be to provide universal access to a multitude of services through a single interface at a decent price. That’s what people also get at pirate sites. But this is easier said than done, as it won’t bring in enough revenue, at least not at the subscription rates we have now.

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Streaming has become the preferred way for pirates to enjoy movies and TV-shows which, unwittingly, boosted the profile of the Kodi media center.

The term “Kodi” often shows up in piracy-related headlines and was even banned by Amazon’s app store and removed from Google’s autocomplete suggestions for its links to copyright infringement.

Those who don’t know better may think that Kodi itself is illegal but that’s certainly not the case. The bad reputation is the result of dozens of unofficial addons and builds, which can turn the software into a piracy tool, something the Kodi team can do little about.

While this is well-known to insiders, the people behind Kodi are faced with the piracy stigma pretty much every day. Questions like “is Kodi legal” are often asked and this week the Kodi team makes an effort to answer this question as clearly as it can.

Kodi’s Darren Hill notes that the piracy associations are in large part driven by sources that fail to make the distinction between the Kodi media center and third-party addons. Kodi itself doesn’t offer access to pirated media, but third-party addons can.

“Due to various 3rd party addons, the app has gained an unwanted reputation as being a way to get movies and TV shows for free. This is not helped at all by certain unscrupulous websites and YouTube bloggers who encourage and perpetuate the myth, simply to increase their traffic from web users and earn more cash from the site sponsors,” Hill writes.

Indeed, Kodi related searches on either Google or YouTube return plenty of results that feature its ‘piracy’ capabilities, which are of great interest to a certain audience. On YouTube, there are entire channels dedicated to Kodi piracy, which get millions of views.

The Kodi team isn’t happy with this situation. They stress that their media player is meant to play people’s locally stored media files or to use any of the Kodi-vetted addons. There are no piracy traces or options in the default software.

“As we supply it, Kodi is totally legal,” Hill clarifies.

People who do want to use third-party addons have the option to do so. However, this capability is disabled by default. Those who enable it, do it at their own risk, which, based on the usage numbers, millions of people are willing to take.

That begs the question. If third-party addons are causing all this trouble, why not ban them altogether?

While that seems like a simple step, it’s also one that goes against the very nature of the Kodi project. The Kodi team informs TorrentFreak that it believes in an open ecosystem, much like Android and Windows. Especially since Kodi itself is open-source software (OSS).

“Similar to how Android allows you to install any APK, which can provide 3rd party store access we have a similar belief/idea,” Kodi’s Keith Herrington tells us.

“Our purpose isn’t to be a gatekeeper of how folks use our software. Most OSS is designed to remove these restrictions and barriers to entry, leveling the playing field so anyone can utilize technology how they wish to see it,” he adds.

The intention was never to make Kodi a ‘consumable’ product, although it can be. As an open ecosystem, it’s first and foremost something others can build upon and enjoy. It’s a breeding ground for developers, many of whom contribute to the project.

That there are bad actors is a given by now. Theoretically, Kodi could restrict ‘unsigned’ addons but it doesn’t believe that there’s a safe and constructive manner to do so. Other have tried this, but often without success.

“Google has tried, failed, and then gave up on this, so if a billion-dollar+ company can’t figure this out, I doubt our loosely organized group of volunteers doing this all for fun can, either,” Herrington says.

The last part is something most people forget. Kodi is created and supported by volunteers – it’s not a for-profit operation. While many outsiders have built businesses, legal or not, based on the software, those who code and support the media center do it for free. And people promoting piracy addons are ruining Kodi’s image in the process.

“It’s sad how many ‘social media influencers’ think they’ve ‘helped us’ in some way, by getting us ‘more followers’. That isn’t how this works,” Herrington notes. “Nobody is paid here. Many others are making money off the backs of our hard work, and its a struggle, and it sucks to see how the media treats us.”

The Kodi team does accept donations and every now and then users send over $5 or $10, or even a bit more. This helps the core team to meet up and go to conferences and pay for administrative costs, but not much more than that.

In fact, while we are writing this piece the main Kodi website is down because its “sponsor” Acquia pulled the plug as it was using too many resources. One dedicated server can easily run the website, but apparently that’s already a challenge to get.

Coming back to the third-party addon issue, Kodi’s Darren Hill informs TorrentFreak that the team believes in freedom of choice. Kodi shouldn’t police its users, nor does it intend to.

“We specifically do not tell the user what to do and how to use Kodi, that should be up to them. All we ask is that their choice is an enlightened one, and they fully understand what they are doing. Equally, if there are any repercussions from their actions, then those too are entirely their responsibility,” Hill says.

That outsiders are hurting Kodi’s image is unfortunate, but that doesn’t stop the team from continuing its work. While some rightsholders have threatened legal action, there’s also a growing group that’s better informed and doesn’t blame the media center.

Just recently, the Copyright Alliance made this pretty clear in a submission to the US Customs and Border Protection Bureau.

“While the Kodi system itself is a legitimate media center, the system is open source – meaning that just about anybody can use the device’s original blueprint to create software that configures Kodi boxes to access illegal streams of films and shows that are available online – and unfortunately, they do,” the group wrote.

So, while the Kodi team cautions users to be aware of unlawful third-party addons it’s not going to try to ban them anytime soon. Instead, it will focus on making the media center better. That includes the official addon library, which can use some extra addons.

“We hope someday our curated addon repo will be so good and have so much content that everything a user could want would be available. This is not the case today. We’ve made great strides with our PVR addons, but we’d love to work with any content provider out there, and hope more will reach out,” Kodi’s Keith Herrington concludes.

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