Over the past decade, copyright holders have gone after hundreds of thousands of alleged pirates in Germany, demanding settlements ranging from a few hundred to thousands of euros.

The targeted account holder is sometimes the perpetrator, but it could just as easily be another member of the household or even a complete stranger, especially if the Wi-Fi network is unsecured.

This was brought up recently in a case before a District Court Charlottenburg, where a man was accused by the makers of the movie The Call. Law firm Waldorf Frommer demanded 1,000 euros in damages for the alleged infringement, but the defendant denied that he downloaded the film.

Several other people were in the house at the time of the alleged offense, including the man’s adult son, his adult daughter and his sister-in-law. These people all have good computer skills and could, in theory, have downloaded the movie.

The filmmakers argued that the man should be held liable for the alleged infringement on his connection, even when he denies direct involvement, but the court disagreed and denied a request for a thorough investigation.

The District Court of Charlottenburg decided that the father cannot be held liable for damages. The fact that he questioned the other members of the household, which yielded no results, was sufficient in this case.

Law firm Wilde Beuger Solmecke (WBS), which represented the defendant, notes that the man’s respect for private and family life is protected by the EU Charter of Fundamental Rights. As such, he cannot be required to spy on the downloading habits of household members.

“He was not required to document the use of the Internet connection or to investigate the computers for file-sharing software. Such investigation obligations would not be reasonable for him,” the law firm stresses.

“Once again, it has been established that undisturbed marital and family life is protected from harm by the EU Charter of Fundamental Rights, which has a massive impact on the investigation obligations of the subscribers.”

The ruling is in line with recent orders from the German Federal Court of Justice. Last year, the highest German civil court ruled that subscribers are not required to spy on the downloading habits of family members, which was confirmed in a separate order a few months ago.

“Families, in particular, should not be intimidated by law firms. These often make demands for investigations, which the Federal Court of Justice has recently rejected,” law firm WBS concludes.

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For the past several years, anti-piracy outfit Rightscorp has been trying to turn piracy into profit. The company monitors BitTorrent networks, captures IP addresses, then attempts to force ISPs to forward cash settlement demands to its subscribers.

Unlike other companies operating in the same area, Rightscorp has adopted a “speeding fine” type model, where it asks for $20 to $30 to make a supposed lawsuit go away, instead of the many hundreds demanded by its rivals. To date, this has resulted in the company closing more than 230,000 cases of infringement.

But despite the high numbers, the company doesn’t seem to be able to make it pay. Rightscorp’s latest set of financial results covering the three months ended September 30, 2017, show how bad things have got on the settlement front.

During the period in question, Rightscorp generated copyright settlement revenues of $45,848, an average of just $15,282 per month. That represents a decrease of 67% when compared to the $139,834 generated during the same period in 2016.

When looking at settlement revenues year to date, Rightscorp generated $184,362 in 2017, a decrease of 48% when compared to $354,160 generated during the same nine-month period in 2016.

But as bleak as these figures are, things get much worse. Out of these top-line revenues, Rightscorp has to deal with a whole bunch of costs before it can put anything into its own pockets. For example, in exchange for the right to pursue pirates, Rightscorp agrees to pay around 50% of everything it generates from settlements back to copyright holders.

So, for the past three months when it collected $45,848 from BitTorrent users, it must pay out $22,924 to copyright holders. Last year, in the same period, it paid them $69,143. For the year to date (nine months ended September 30, 2017), the company paid $92,181 to copyright holders, that’s versus $174,878 for the same period last year.

Whichever way you slice it, Rightscorp settlement model appears to be failing. With revenues from settlements down by almost half thus far this year, one has to question where this is all going, especially with BitTorrent piracy volumes continuing to fall in favor of other less traceable methods such as streaming.

However, Rightscorp does have a trick up its sleeve that is helping to keep the company afloat. As previously reported, the company has amassed a lot of intelligence on pirate activity which clearly has some value to copyright holders.

That data is currently being utilized by both BMG and the RIAA, who are using it as evidence in copyright liability lawsuits filed against ISPs Cox and Grande Communications, where each stand accused of failing to disconnect repeat infringers.

This selling of ‘pirate’ data is listed by Rightscorp in its financial reports as “consulting services” and thus far at least, it’s proving to be a crucial source of income.

“During the three months ended September 30, 2017, we generated revenues of $76,666 from consulting services rendered under service arrangements with prominent trade organizations,” Rightscorp reports.

“Under the agreements, the Company is providing certain data and consultation regarding copyright infringements on such organizations’ respective properties. During the three months ended September 30, 2016, we had no consulting services revenue.”

Year to date, the numbers begin to add up. In the nine months ended September 30, 2017, Rightscorp generated revenues of $224,998 from this facet of their business, that’s versus zero revenue in 2016.

It’s clear that without this “consulting” revenue, Rightscorp would be in an even worse situation than it is today. In fact, it appears that these services, provided to the likes of the RIAA, are now preventing the company from falling into the abyss. All that being said, there’s no guarantee that won’t happen anyway.

To the nine months ended September 30, 2017, Rightscorp recorded a net loss of $1,448,899, which is even more than the $1,380,698 it lost during the same period last year. As a result, the company had just $3,147 left in cash at the end of September. That crisis was eased by issuing 2.5 million shares to an investor for a purchase price just $50,000. But to keep going, Rightscorp will need more money – much more.

“Management believes that the Company will need an additional $250,000 to $500,000 in 2017 to fund operations based on our current operating plans,” it reports, noting that there is “substantial doubt” whether Rightscorp can continue as a going concern.

But despite all the bad news, Rightscorp manages to survive and at least in the short-term, the piracy data it has amassed holds value, beyond basic cash settlement letters. The question is, for how long?

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Netflix offers a great selection of movies and TV-shows and dozens of millions of people can’t go a week without it.

Netflix is seen as an alternative to piracy. However, since Netflix’s priorities are shifting more to the production of original content, piracy is also a problem.

The streaming service now has its own anti-piracy unit and works with third-party vendors to remove unauthorized content from the Internet. This includes links to their shows in Google’s search results.

While most requests are legitimate, a recent takedown notice targeting “Stranger Things,” was a bit off. Tucked in between various pirate sites, we spotted articles from news sites Express and The Wrap.

Strange?

The Express article has an obvious clickbait title aimed to attract freeloaders: “Stranger Things season 2 streaming – How to watch Stranger Things online for FREE in UK.”

While there are no references to infringing content in the piece, it’s at least understandable that Netflix’ anti-piracy partner “IP Arrow” was confused by it. The Wrap article, however, doesn’t even hint at anything piracy related.

That’s not all though. Netflix’s takedown request also lists the “Stranger Things” subreddit. This community page has nearly a quarter million followers and explicitly forbids any pirated content. Still, Netflix wanted it removed from Google’s search results.

Stranger Things subreddit

To give Netflix and IP Arrow the benefit of doubt, it’s always possible that a link to pirated content slipped through at the time the notice was sent. But, if that was the case they should have at least targeted the link to the full Reddit post as well.

The more likely scenario is that there was some sort of hiccup in the automated takedown software, or perhaps a human error of some kind. Stanger things have happened.

The good news is that Google came to the rescue. After reviewing the takedown notice, the three mentioned links were discarded. This means that the subreddit is still available in Google’s search results. For now.

Reddit itself is also quite skilled at spotting faulty takedown requests. While it’s unknown whether they were contacted directly by Netflix’s anti-piracy partner, the company rejects more than half of all DMCA takedown requests it receives.

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A few weeks ago, Epic Games released Fortnite’s free-to-play “Battle Royale” game mode for the PC and other platforms, which proved to be quite popular.

It also attracted attention from thousands of cheaters, many of whom were subsequently banned. In addition, Epic Games went a step further by taking several cheaters to court over copyright infringement.

One of the accused is Caleb Rogers, who was banned at least 14 times since he started playing. Every time Epic took action, he simply created new accounts under false names and continued to play and cheat at Fortnite.

What Epic Games probably didn’t know is that the cheater in question is a minor. The company likely obtained his name via YouTube or elsewhere, without knowing his real age.

Instead of responding to the complaint through an attorney, it’s the kid’s mother who’s come out in his defense.

“This company is in the process of attempting to sue a 14-year-old child,” Caleb’s mother informs the court.

In addition, she points out that Epic has no proof that her son modified the game and violated copyright law in the process. Perhaps more importantly, she highlights that the EULA, which the game publisher relies heavily upon in the complaint, isn’t legally binding.

The EULA states that minors require permission from a parent or legal guardian, which is not the case here.

“Please note parental consent was not issued to Caleb Rogers to play this free game produced by Epic Games, INC,” the mother writes in her letter.

Epic claims that cheaters cause the company to lose money, but the mother doesn’t buy this since it’s a free game. Instead, she believes that the company is trying to blame her son for its failure to curb cheaters.

“It is my belief that due to their lack of ability to curve cheat codes and others from modifying their game, they are using a 14-year-old child as a scape goat to make an example of him.”

Letter

The cheaters shouldn’t be the ones that are targeted, the mother additionally informs the court. Instead, Epic should go after the websites that offer the cheats themselves.

“The company is in the process of suing a multitude of players for this game Fortnite. Instead of Epic Games INC suing the websites providing the cheat codes, they are going after the individuals using these codes,” she notes.

The boy is accused of using cheat software that injects unauthorized code into the active memory of the game as it runs, not just codes. While he didn’t write the cheat himself, through his YouTube channel he showed others where to download it and asked for donations.

The mother is convinced that the case should be thrown out. Topping it off, she mentions that Epic Games violated the State of Delaware House Bill No. 64 by releasing her son’s personal information, allowing others to do the same.

Epic Games has yet to reply to the mother’s letter. The fact that they sued a 14-year-old boy is a problem though, as minors can’t be sued directly. It’s possible that the game publisher will drop the case for this reason, unless they want to take it up with his mom.

—

The mother’s full letter is available here (pdf).

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Late October 2016, we reported on an alarming situation in Poland, where police had visited hundreds of homes across the country, seizing computers alleged to have been involved in the sharing of a comedy movie titled “Screwed“.

In some cases, police reportedly advised suspects to settle with copyright holders rather than face legal action, something critics felt was particularly inappropriate in an unproven copyright case. Now it appears that history is repeating itself in the region, with people being targeted over downloads of a local thriller titled “Drogówka”.

While this is of concern in itself, the alleged offenses took place via BitTorrent way back in 2013, four whole years ago. Local journalist Marcin Maj at Bezprawnik, who’s also an IT security instructor at Niebezpiecznik, has been documenting the activities of copyright trolls in Poland for some time. He picked up the story this week after he learned that police had seized an alleged file-sharer’s computer.

After speaking with local police, he subsequently discovered that 200 to 300 other people had been given the same treatment.

Maj says that after presenting a long list of questions to authorities, he learned that these seizures have been going on continuously for about a year, following a criminal complaint filed by a law firm. It’s that this point that the uncomfortable nature of this whole operation becomes apparent.

“In 2013-2014, lawyer Artur Glass-Brudziński reported numerous copyright infringements (movie sharing) to the prosecutor’s office, and the prosecutor’s office started to identify people behind the indicated IP addresses,” Maj informs TF.

“It’s important to understand that in the Polish legal system, it’s impossible to sue someone who is unknown to a plaintiff [John Doe]. But you can always start a criminal proceeding.”

Such a criminal proceeding was filed in 2014 but it appears that Glass-Brudziński used the process to gain a secondary advantage.

“As a barrister of the [copyright holder], Artur Glass-Brudziński had access to the prosecutor’s documentation. So he used this to obtain identified names and addresses, without waiting for the end of the criminal proceeding. Those people were just witnesses, but Glass-Brudziński sent thousands of letters to them, suggesting they are suspects, which was not true,” Maj says.

So, in effect, a criminal action was used to gain access to personal details that were subsequently used in civil actions. That’s completely legal and quite common in Poland but many view the process as problematic.

“Polish lawyers see this as something not quite ethical,” Maj reports. “Now Glass-Brudziński faces a disciplinary court because his letters were quite misleading. Regardless of that, however, criminal proceedings are still underway.”

A hearing took place before the Disciplinary Court November 13 but a resolution will take some time to reach since there around 80 people involved in the case. In the meantime the current criminal case continues, with several problems.

For example, it’s quite likely that many people will have changed their computers since 2013, but the police are required to seize the ones people currently have. Also, Maj reports that after speaking to people who received demands for cash payment, many report having had nothing to do with the alleged offenses. But there is a broader problem around such cases in general.

As we reported last year, prosecutors admit that they do not verify the technical processes that the copyright holders use to identify the alleged infringers, meaning that hundreds of members of the public are subjected to property seizures based on untested evidence.

“Polish prosecutors often decide to seize computers just because they got an IP address list from a lawyer. Sometimes even prosecutors don’t want to do that, but copyright owners complain to the courts, and the courts issue an order to seize machines. That’s deeply absurd,” Maj says.

“Many times I have asked prosecutors if they check the method used to track pirates. Many times I have asked prosecutors if they have found evidence on every seized computer. The answers? No. They don’t check the method of tracking pirates, and evidence is found only ‘sometimes’.”

There are clearly mounting problems in Poland with both evidence and discovery-based loopholes providing copyright holders with a significant advantage. While questionable, it’s currently all legal, so it seems likely that as long as ‘victims’ can gain access to private information via criminal cases, the cash threats will continue. It’s a topic covered in a report compiled by Maj and the Modern Poland Foundation (Polish, pdf)

“Computer seizures and our report were discussed in the lower house of the Polish parliament in 2016, at the meeting of the Commision of Digitalization, Innovation and New Technologies. Many politicians are aware of the problem and they declare we should do something to stop bullying and seizures. Unfortunately, it all ended with was declarations,” Maj concludes.

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