Regular Internet providers are being put under increasing pressure for not doing enough to curb copyright infringement.

Music rights company BMG got the ball rolling a few years ago when it won its piracy liability lawsuit against Cox.

Following this defeat, several major record labels including Capitol Records, Warner Bros, and Sony Music filed a lawsuit in a Texas District Court. With help from the RIAA, they sued ISP Grande Communications for allegedly turning a blind eye to its pirating subscribers.

According to the labels, the Internet provider knew that some of its subscribers were frequently distributing copyrighted material, and accused the company of failing to take any meaningful action in response.

The case is now heading to trial, where the ISP might not have a safe harbor defense. However, if it’s up to Grande, the record labels should start the trial without their most important evidence; the “infringement notices” of Rightscorp.

Anti-piracy outfit Rightscorp has a database of close to a billion copyright infringements. While the company’s original business model of automated settlements hasn’t been very lucrative, the notices are gladly used by copyright holders in court.

They were the basis of the BMG v.s Cox lawsuit and in the record labels’ case against Grande they are also front and center.

According to Grande, however, this evidence is unusable. Its attorneys have previously branded it as inaccurate but this month they added an even more damaging claim. The ISP accuses the labels and Rightscorp of destroying vital evidence.

While the notices are all intact, much of the underlying information has been removed. The ISP argues that this makes it impossible to determine precisely how Rightscorp’s system functioned and what information about Grande’s subscribers was collected in each case.

Grande’s attorneys presented their findings to the Texas federal court. They submitted a motion for evidentiary sanctions based on the reported “spoliation” of evidence.

“Plaintiffs and Rightscorp have destroyed all of the evidence necessary to determine how the Rightscorp system operated at any given time relevant to this lawsuit,” Grande’s motion reads.

“Recent depositions establish that Rightscorp, the RIAA, Plaintiffs, and their retained experts are all incapable of providing a cogent and detailed explanation of how the Rightscorp system actually functioned at any point during the relevant time period.”

The missing information includes communications with torrent trackers,
data that show if customers were actively sharing certain files, and data that was used to match downloads to copyrighted works. In addition, Rightscorp is also accused of deleting nearly all records from its call-center.

The ISP is convinced that it’s severely disadvantaged by the destruction of evidence. They risk more than a billion dollars in theoretical damages based on notices of which most of the underlying data is gone.

“Plaintiffs intend to rely heavily on Rightscorp’s notices to prove their infringement case. Yet, the destruction of the evidence underlying those notices seriously compromises Grande’s ability to independently evaluate the accuracy of the process, notices and downloads,” the company writes.

Interestingly, this is not the first time that Rightscorp is accused of spoiling evidence. In the Cox case, the anti-piracy outfit was found to have destroyed source code, which resulted in a monetary sanction.

Grande highlights this history and adds that the current issues are even more significant.

As such, Grande sees no other option than to sanction the record labels. They don’t want any monetary punishments. Instead, they request that the court excludes all Rightscorp evidence from trial, which will make it much harder for the labels to make their case.

“Given Plaintiffs’ and Rightscorp’s destruction of virtually all evidence underlying Rightscorp’s allegations, the only just remedy is the exclusion of the Rightscorp evidence. Because Rightscorp destroyed all of the related and underlying evidence, the Rightscorp notices and downloads have effectively been ‘spoiled’,” they conclude.

The record labels have yet to respond to the allegations, after which the court will rule on the matter.

…

A copy of Grande Communications’ motion for evidentiary sanctions is available here (pdf).

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Preventing or at least reducing the flood of pirated copies of movies and TV shows online remains a priority for entertainment industry companies everywhere.

In the current environment, most public activity is aimed at distributors, such as torrent and streaming platforms. However, hitting those who supply content from higher up the chain is a long-standing but lesser-publicized strategy.

News coming in from Italy indicates that the authorities there have been looking closely at players who they consider to be particularly big fish.

The Guardia di Finanza of Pesaro, a department under Italy’s Minister of Economy, reports a long and complex investigation to target the individuals behind a release group they name as ‘FREE / iNCOMiNG’.

Operating between 2010 to 2016, the group is identified as “one of the main groups operating on the Italian and international scenes.” According to the GdF, ‘FREE / iNCOMiNG’ collaborated with foreign groups to which it supplied copies of movies recorded in Italian cinemas, reportedly accounting for 66% of copies of such movies made available online.

The investigation sought to link camcorded copies of movies with players in the group, an effort that was carried out by the Public Prosecutor of Pesaro in coordination with investigators at the Federation for the Protection of Audiovisual and Multimedia Content (FAPAV).

This led to the identification of four suspects with house searches subsequently executed in four regions of Italy (Marche, Piedmont, Lombardy and Puglia) and the seizure of equipment including PCs, smartphones, and media containing an estimated 800,000 files.

“The subsequent analysis of what was seized allowed us to discover that the group members, after the acquisition of the successful films and the major television series broadcast on pay-per-view channels, took care of the assembly and coding for upload on powerful servers,” the investigators reveal.

“The modified files were advertised on websites that, upon payment, facilitated illegal downloading. The group in question also established significant contacts and collaborations with other foreign release groups, thus succeeding in diversifying the sources of income connected to the illicit copies.”

Anti-piracy group FAPAV welcomed the results of the investigation, particularly in respect of the disruption to the supply of movies illegally recorded in theaters.

“According to our estimates, as far as the first cinematographic releases are concerned, in nine cases out of ten the audio and video source of the pirated files is represented by the unauthorized recordings that take place by ‘release groups’ in cinemas,” said Federico Bagnoli Rossi, General Secretary FAPAV.

“Camcording is, therefore, the primary source of piracy, a phenomenon that should not be underestimated considering the huge damage it causes the entire sector. Such recordings, in fact, are usually realized in the very first days following the release of films in theaters or when the works are in their initial phase of exploitation.”

The cases of the four men, whose identities have not been revealed, are said to have been handed to the authorities for action under relevant laws. At least as far as public piracy release databases reveal, iNCOMiNG ceased releases under that specific name around 16 months ago.

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Generally speaking, DMCA notices are sent by rightsholders to prevent third-parties from sharing their work without permission.

These are often pirated copies of movies, music, or games. However, a takedown notice game developer Ammobox Studios sent to Steam recently is far from typical.

The company asked the game platform to remove their own game “Eximius: Seize the Frontline” after it ran into trouble with its publisher. According to the game developer, the publishing partner, TheGameWallStudios, went dark and stopped making payments.

“Long story short, we had to file a DMCA against our very own game on Steam to wrest it off the Publisher. The DMCA has just kicked in resulting in the game being taken off the Steam Store Page,” Ammobox explained.

Both companies had a publishing agreement, but this was breached according to Ammobox, which notes that no payments were made for the sales of their game on Steam.

Without a publishing agreement, the publisher would indeed violate the DMCA, transforming the previously legal copy on Steam into a pirate version. While this isn’t a typical takedown notice, it certainly had the desired effect.

The game was removed from the store for over a week. While it was no longer for sale, people who previously bought it could still pay it. Then, after nearly two weeks, the developers regained control of their own game, with help from Steam.

“The fraudulent publisher Thegamewall has been removed as publisher in our Steam store page. We would like to thank Steam for assisting us during this terrible ordeal,” Ammobox announced this week.

Back in store

The game developer is pleased with the outcome but the dispute with the publisher is not over yet. There are still payments pending and legal action may follow, the company says.

“We will be working on the possibility of further legal proceeding to recover the money that was and is still currently being withhold for no reason given.

TorrentFreak reached out to the publisher to hear their side of the story but at the time of publication, we hadn’t heard back.

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Last year, several major Hollywood studios, Amazon, and Netflix filed a lawsuit against Dragon Media Inc, branding it a supplier of pirate streaming devices.

Under the flag of anti-piracy group ACE, the companies accused Dragon of using the Kodi media player in combination with pirate addons. As such, the company facilitates mass copyright infringement, it was argued.

Dragon Box swiftly responded to the allegations by halting its sales. The company later decided to change its business model, moving from a Kodi-addon platform to a subscription-based service called BlendTV.

The box vendor maintained that this was perfectly legal, but the copyright holders clearly disagreed. This prompted Dragon Box to halt its sales again.

That wasn’t the end though. Last month the boxes returned with yet another service called “My TV Hub.” According to the Hollywood studios, this service is not legitimate either. Growing tired of this “whack-a-mole” they asked the court to intervene.

The ACE members requested a preliminary injunction to halt the infringing activity. It appears, however, that this is no longer required. A few days ago, Dragon Box’s attorney informed the court that they’ve agreed to settle the matter.

“Defendants respectfully notify the Court that the parties have agreed in principle to settle the above-entitled case,” attorney Matthew J. Faust writes.

“At this time, the parties are in the process of preparing a settlement agreement and intend to file the documents related to the final disposition of the case within the next few days,” he adds.

The court responded to the filing by vacating all other hearings and deadlines that were on the docket. However, given the history of this case, it’s probably wise to wait until all paperwork is filed before marking it as resolved.

At the time of writing the Dragon Box website remains online. The boxes themselves are no longer listed for sale, but the site does link to a “Blend TV” subscription which prospective users can buy.

A spokesperson for ACE informed us that they would release more information on the matter in the near future. We will update this article when that arrives.

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After capturing an audience of millions of visitors since its launch in 2013, January 2015 saw the surprise shutdown of Sweden-based streaming site Dreamfilm.

One of its administrators was detained by the authorities so, in response, the extremely successful site decided to call it quits.

As the case against the site rolled on, four men – aged in their 20s and 30s – eventually had their day in court. While they admitted being involved in the site, none admitted any wrongdoing.

In 2017, however, the Linköping District Court found them all guilty of copyright infringement offenses and sentenced them to between six to 10 months in jail. They were also ordered to pay a fine of SEK 1,000,0000 (US$110,850) to plaintiffs including the Swedish Film Industry, Nordisk Film, and Walt Disney.

As soon became clear, neither side was happy with the result. The defense felt the sentences were too harsh and, of course, the prosecution felt they were too lenient. The case then went to appeal.

Early 2018, the Court of Appeal handed down its decision. Importantly, it was decided there would be no terms of imprisonment to be served due to the previous good character of the defendants.

However, it more than quadrupled the damages from SEK 1,000,000 to SEK 4,250,000 (US$471,112). This damages award, the Court of Appeal ruled, was the amount a hypothetical license to distribute a single sample movie would have cost, had the defendants obtained permission.

Last year it was reported that two of the defendants would take their case to the Supreme Court with a request to determine whether the level of damages could be considered sensible and fair. The Court has now delivered its verdict and it’s good news for the former site operators.

In a summary published this week, the Supreme Court notes that copyright holders are entitled to compensation when people exploit their content. The cost of doing so is usually based on the going rate when someone requests permission beforehand.

However, in the case of pirate sites, there is no going rate, since such platforms don’t ask permission to exploit and would probably be declined, even if they did. As a result, the Court has the task of determining a fair rate of compensation.

“The Supreme Court has come to the conclusion that it is conceivable to point out that a license agreement could have been met between a rightsholder and someone who wanted to use the work in the way that has also happened in the present case,” the Court writes.

“As can be seen from the judgment, however, it may be associated with such difficulties that the fictitious license fee cannot be used as the basis for the compensation that the court must determine. The court may then make an estimate of the reasonable remuneration for the use of the work, taking into account the investigation that the parties have submitted to the court.”

In the end, the Supreme Court decided that it could not use the method offered by the Swedish Film Industry to determine “reasonable remuneration” for the one sample movie dealt with in detail during the case. It, therefore, decided to massively slash the SEK 4,250,000 (US$471,112) award to just SEK 400,000 (US$44,340).

Local anti-piracy group Rights Alliance did not welcome the news.

“This is a very significant claim and only applies to one of the total 950 films in the case. In fact, however, the judgment is wrong because it means that it is cheaper to illegally steal a copyright than to try to negotiate legally,” says Henrik Pontén of Rights Alliance.

“However, it is in line with Swedish law development in the area where one focuses on what the perpetrator could think of paying for his theft. If Sweden is to be a country where the creation of creative works pays off, we must give the victims more importance in these decisions.”

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