This September, the European Parliament backed the controversial Article 13 proposals, something that was met with a chorus of support from the entertainment industries, the music sector in particular.

The final text of Article 13 is yet to be finalized so the EU Parliament will need to vote again, once that’s completed. However, as Article 13 mutates to address the concerns of opponents, rightsholders have been expressing concern that the changes will actually strengthen the position of major online content sharing service providers (OCSSPs) such as YouTube.

Last week, major rightsholders including the MPA and the Premier League warned that as it stands, Article 13 will create a new safe harbor for services that take measures to prevent infringement. Now, even more dissenting voices are making their opinions known.

In an open letter to the European Commission, Parliament and Council, more rightsholders and content groups including IFPI – a previously staunch supporter of Article 13 – say the proposals are going in the wrong direction.

“We have reviewed the European Commission text/non-papers on article 13 and we have serious concerns about the direction of travel,” the groups write.

“As we reach the very final stages of this process, and negotiators seek to finalize a compromise text, we urge you to remember that the overall aim of the original European Commission proposal was to correct the distortion of the digital market place caused by User Upload Content (UUC) services, which enable users to upload content onto their sites and then profit from the availability of creative content without returning fair revenues to rightsholders, who create and invest in such content.”

The groups say that the solution to the so-called ‘Value Gap’ lies in holding OCSSPs liable for communication to the public when copyrighted works are made available from their platforms while excluding them from the safe harbors available in Article 14 of the E-Commerce Directive.

“We continue to believe that only a solution that stays within these principles meaningfully addresses the Value Gap/Transfer of Value. Moreover, licensing needs to be encouraged where the rightsholders are willing to do so but at the same time not be forced upon rightsholders,” the groups write, noting that proposals that deviate from the above “should be dismissed.”

As things stand, the current proposal text put forward by the European Commission would need “fundamental changes to achieve the Directive’s aim to correct the Value Gap/ Transfer of Value”, the groups note.

Underlining the predicament the entertainment industries now find themselves in, the letter warns that the liability exceptions currently on the table could leave rightsholders in a worse position than they’re in today.

“Any ‘mitigation measures’, should they be offered to OCSSPs, must therefore be clearly formulated and conditional on OCSSPs taking robust action to ensure the unavailability of works or other subject matter on their services,” the groups add.

“To that end, while it may be appropriate for rightsholders or their representatives to give services access to reasonably necessary identifying information concerning unauthorised works or other subject matter, unclear or open-ended provisions potentially obliging rightsholders to play the main role in preventing unauthorized uses of their works fail to provide the necessary legal certainty and therefore fail to provide a meaningful solution to the Value Gap/ Transfer of Value.”

The full letter is available here (pdf)

Update: Julia Reda MEP reports that the trilogue negotiations closed Thursday with no overall agreement but it “still seems like most negotiators want an #Article13 that requires #UploadFilters.”

Also of note is that companies that have a turnover of 10 million euros were previously excluded from the terms of Article 13. Reda says they are now included.

The next trilogue is planned for third week of January, Reda adds. More information here.

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At the start of the year the infamous hacking group Team Xecutor announced an ‘unstoppable’ Nintendo Switch hack.

This made it possible to load pirated games onto the popular console, an opportunity many people have taken advantage of.

Some have taken it a step further by offering Nintendo Switch “modifications” for sale, specifically mentioning the Team Xecuter hack. This is what California resident Mikel Euskaldunak did, according to Nintendo.

In a complaint filed at a federal court this week, Nintendo of America accuses the man and several unnamed accomplices of various counts of copyright and trademark infringement.

The defendants allegedly offered modification devices and physical chips for the Nintendo Switch which bypass Nintendo’s anti-piracy protections.

“This modification is installed in a user’s Nintendo Switch in the form of a circumvention tool along with unauthorized custom firmware. This exploit allows the playing of pirated Nintendo Console Games,” the company writes.

Euskaldunak sold the mods in public through a profile at OfferUp.com. According to the advert, the Team Xecuter mod would allow buyers to play any Switch games they want.

“Just load and play!” In connection with the purchase of “Nintendo Switch Mod Play Switch Games Team Xecuter”, Defendants will “give [the buyer] a free game of [his or her] choice,” it reads.

In addition, the defendant also offered a 64GB SD card containing pirated games which could be loaded through Team Xecuter’s dongle.

“These SD cards will come with any 4-6 (depending on the game size) released Nintendo Switch games of your choice. That is less than the price of a single Switch game.”

The defendant’s OfferUp offer

Nintendo believes that the defendants modified more than 100 Switch game systems. In addition, they are suspected of having access to a large library of Switch games, including dozens of titles that haven’t been released in the US yet.

Interestingly, the sellers are aware that pirating games does not come without challenges. They explicitly warn that games downloaded from the Internet might be tracked and banned by Nintendo.

“Defendants inform customers that Nintendo Console Games can be downloaded from the Internet, but that downloading from the Internet is not recommended because NOA can track the downloaded game and ban the user automatically when going online to play the game,” the complaint reads.

In addition to Nintendo Switch mods and games, the defendants are also accused of selling a modified version of Nintendo’s NES Classic Edition with over 800 games.

In its complaint, Nintendo of America asks the California federal court for an injunction to stop the infringing activity and destroy all pirates games and modded consoles.

On top, the game giant requests damages to compensate the company’s claimed losses.

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A copy of Nintendo of America’s complaint, obtained by TorrentFreak, is available here (pdf).

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Public sharing of movies and TV shows before their commercial release is considered to be one of the most damaging types of piracy.

With no official copies on the market, entertainment companies are unable to compete in what would ordinarily be the most profitable window of opportunity for sales. That’s why, year after year, individuals who leak content early become targets for law enforcement.

Yesterday the Department of Justice revealed that a federal grand jury has indicted five men in four countries on charges that they distributed or offered for sale hundreds of movies and TV shows in advance of their official release. It appears to be one of the most important prosecutions in recent memory.

Malik Luqman Farooq, 30, of the UK, is alleged to have sold access to more than a dozen “stolen pre-release or contemporaneous-release films” over a period of two years. He is alleged to have used online aliases including dark999, codex, and Lucky.

Aditya Raj, an assumed resident of India, allegedly released pirated movies online and was involved in ‘camming’ in India.

Sam Nhance, believed to live in Dubai, United Arab Emirates, allegedly maintained a server on which other members of the group “stored and manipulated” videos for distribution. He used online aliases including SamNhaNc3

Ghobhirajah Selvarajah, who is claimed to live in Malaysia, owned a PayPal account which was used to accept payments from people accessing the movies and to pay server bills. He used aliases including Hunter and Hunter X.

Jitesh Jadhav, another presumed resident of India, was allegedly involved in camcording films in India, including The Amazing Spider-Man 2, X-Men: Days of Future Past, and Dawn of the Planet of the Apes.

Of the five indicted men, only one – Malik Luqman Farooq – has been physically detained by authorities. He was reportedly arrested by City of London Police and is currently awaiting trial in the UK.

None are in U.S. custody but face a seven-count indictment listing conspiracy to commit computer fraud, unauthorized access to a computer, aggravated identity theft, and copyright infringement.

According to the indictment, the group began offending prior to May 5, 2013 and continued to May 20, 2015.

It’s alleged that Farooq, Raj, Nhance, and Selvarajah rented servers from companies including OVH which they used to store pirated copies of movies which had been illegally obtained from servers operated by movie, distribution, and other third-party companies.

Farooq and Jadhav are further accused of obtaining ‘cammed’ copies of first-run movies and acquiring and distributing ‘screener’ copies of movies not intended for public consumption. These and other titles were then offered for sale and also uploaded to the wider Internet.

Details released in the indictment indicate that the authorities gained access to the group’s supposedly private conversations.

In May 2013, for example, it’s alleged that during an online chat, Farooq asked Raj to put him in touch with someone who could camcord the movie The Great Gatsby in India.

During the same month, it’s alleged that Farooq paid an “unindicted co-conspirator” for access to a torrent tracker which was used to obtain pirate copies of copyrighted content.

In June that same year, it’s claimed that Farooq accessed a server in Los Angeles belonging to a movie production and distribution company to obtain trailers for the movie The Wolverine and Turbo, prior to the movies’ official release.

During August 2013, someone illegally camcorded The Smurfs 2 at a cinema in Bhopal, India. The next day, Farooq sold access to that movie to an individual who he believed to be a ‘pirate’ customer. In fact, the person was an investigator for an anti-piracy firm hired by the MPAA.

Months later, between April and July 2014, it’s alleged that Farooq and other co-conspirators accessed the California-based servers of a content-management services company which was used to store and distribute motion picture assets.

From there, using TOR, they downloaded approximately 142 files including the movies Divergent, Godzilla, Seventh Son, Jane Got a Gun, Mortdecai, and the first five episodes of season five of The Walking Dead, all prior to their official release.

Interestingly, the indictment also details how Farooq (or another co-conspirator) obtained a copy of The Expendables 3 prior to its official release. As previously reported, the movie leaked online during July 2014.

The indictment claims the copy was obtained from the previously-mentioned
content-management services company and downloaded via TOR. The copy was then stored on an OVH server with Farooq quickly selling it to the MPAA’s anti-piracy investigator. Many other movies were also sold by Farooq to the investigator, with some of the proceeds ending up in his own PayPal account.

In November 2014, City of London Police announced they had arrested two men in the UK in connection with The Expendables 3 being leaked online. The pair, then aged 36 and 33, are considerably older than Farooq who is reportedly just 30.

However, in April 2015, City of London Police arrested a 26-year-old man at his workplace in Leeds. He was taken to a local police station for questioning, suspected of leaking The Expendables 3. Sylvester Stallone took time out to thank police for their efforts.

“This case is being investigated by U.S. Immigration and Customs Enforcement’s Homeland Security Investigations, which received substantial assistance from the Police Intellectual Property Crime Unit of the City of London Police. U.S. authorities received cooperation from French and Canadian authorities in obtaining evidence stored abroad,” the Department of Justice notes.

The indictment, which details 106 “overt acts”, can be obtained here (pdf) (via Variety)

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Under President Trump, the United States has worked hard to put several new trade deals in place.

The administration is also working on a new trade agreement with the EU for which the US Trade Representative recently asked the public for input.

This week the Computer & Communications Industry Association (CCIA), which includes Amazon, Cloudflare, Facebook, and Google as members, sent in its thoughts.

The submission includes a stark warning against the EU’s proposed copyright reform plans, including Article 13, which could open the door to upload filtering.

It’s no secret that the proposal is a topic of intense debate within the EU. The tech companies, however, warn the US Government that its effects may hurt the US economy as well.

The CCIA cautions that the proposed changes could increase liability for large Internet services by weakening the safe harbor protections provided by current EU law. At the same time, it will be at odds with the DMCA’s safe harbor provisions.

“The proposed Copyright Directive disrupts settled law protecting intermediaries by weakening established protections from U.S. Internet services in the 2000 EU E-Commerce Directive, and by imposing an unworkable filtering mandate on hosting providers that would require automated ‘notice-and-stay-down’ for a wide variety of copyrighted works.

“If adopted, the Directive would dramatically weaken these long-standing liability protections, which suggests that most modern service providers may be ineligible for its protections,” the CCIA says.

The tech companies note that EU officials have identified US companies as the intended targets of these proposals. They fear that the plans will result in implicit upload filter requirements.

“Under Article 13 of the proposal, the Directive now implies that online services must procure or develop and implement content recognition technology. The decision to compel affirmative filtering of all Internet content, including audiovisual works, images, and text, based on that content’s copyright status, is alarming and profoundly misguided.”

According to the latest proposals, Article 13 would not impose a general monitoring requirement. However, it may require Internet services to ensure that infringing content is not reuploaded, which is hard to achieve without automated filters.

The CCIA points out the lack of specifics as another concern. It’s not clear what measures hosting providers and other services will have to implement in order to be safe, they argue.

This uncertainty and the incompatibility with US law is troublesome for the tech companies. They hope that the US Government will keep these concerns in mind while negotiating a new trade deal.

The final text of Article 13 is still being drafted. The latest trilogue meeting will take place later this week. The CCIA cautions the US to keep these developments in mind, noting that they have the potential to harm the US economy.

“The text is currently under negotiation in trilogue. If the final EU reform does include these provisions, there would likely be a corresponding increase in risk for U.S. platforms doing business in the EU, resulting in significant economic consequences for the U.S. digital economy, which depends on the EU market.

“Furthermore, there is likely to be a ripple effect on the rest of the world, given the EU’s international influence,” the CCIA submission adds.

This is only one side of the argument, of course. The RIAA also submitted comments to the US Trade Representative, presenting a different picture.

While the music group doesn’t mention Article 13, it does caution against “overbroad provisions on copyright safe harbors” and the “lack of online platform accountability,” two issues the EU’s copyright reforms aim to address.

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A copy of the CCIA submission is available here (pdf), and the RIAA’s submission can be found here (pdf).

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While regular torrent and streaming sites are still a big hit with online pirates, dedicated IPTV services are becoming increasingly popular with consumers.

These services, which can be difficult to tell apart from official offerings, typically supply access to hundreds of otherwise premium channels at a knockdown price. This disruption is something that broadcasters and rightsholders all over the world are keen to bring to an end.

In particular, there have been many raids around Europe but news is now surfacing of action in Canada, featuring two of the country’s most powerful media companies and what appears to be an unlicensed IPTV provider.

On an unspecified date, Bell and Videotron filed a criminal complaint against IPTV provider Cielo 4K. A website featuring that branding is available here, offering around 250 channels including PPV and adult content while recommending its offer “especially for the residents of the province of Quebec-Canada.”

On October 11, 2018, the Royal Canadian Mounted Police (RCMP) reportedly conducted a search at the residence of a former employee of a Videotron subcontractor in Boisbriand, Montreal. LaPresse reports that dozens of computers and modems plus Bell, Videotron, Roku and DirecTV receivers were seized, totaling some 150 items of hardware.

According to the news outlet, the four people listed as defendants in court documents are not yet facing criminal charges since the RCMP investigation is still ongoing. However, the quartet is suspected of using three Videotron and Bell accounts to receive, capture, and redistribute channels to the public.

“This kind of use makes us believe that the service installed at this residence is used to power an IPTV network broadcasting unauthorized television content,” the plaintiffs state in their claim.

It’s further alleged that the streams were sent to servers operated by OVH Hosting Services, from where they were distributed to the public.

“OVH is also recognized by the telecommunications industry for hosting the majority of IPTV services offering unauthorized television content,” the court documents note, citing a Videotron investigation.

When approached for comment, OVH said it does not discuss the activities of its customers, insisting that as a cloud infrastructure provider it does not have access to customers’ data.

This latest action against Cielo 4K comes as both Bell and Videotron remain embroiled in legal action against Kodi add-on repository TVAddons. It’s been almost 18 months since representatives of the company entered the home of operator Adam Lackman in a search for evidence to support their copyright infringement lawsuit.

This June, bailiffs for the company returned again, looking to seize goods to the value of CAD$50,000 to pay for attorney’s fees.

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