Probably the biggest story in online piracy scene over the past 12 months has been the massive increase in popularity of piracy-configured set-top devices.

Mostly running Android, these devices are often supplied with software such as the neutral Kodi platform augmented with third-party addons, each designed to receive the latest films, TV shows or live sports, with minimum input from the user.

One of perhaps hundreds of sites involved in these sales was Netherlands-based Filmspeler.nl (Movie Player), an online store that found itself targeted by Dutch anti-piracy group BREIN. Filmspeler’s owners felt that its pre-configured devices were legal, arguing that their sale did not amount to a “communication to the public” as determined by the EU Copyright Directive.

In 2015, the Dutch District Court referred the case to the EU Court of Justice. It was asked to consider whether it’s illegal to sell a product (in this case a media player) with pre-installed add-ons containing hyperlinks to websites from where copyrighted works such as movies, TV shows and live broadcasts are made available without copyright holders’ permission.

A year later, Advocate General (AG) Campos Sánchez-Bordona issued his recommendation to the Court.

Describing how Filmspeler owner Mr. Wullems knowingly added infringing add-ons to Kodi devices, with hyperlinks to content published by known ‘pirate’ sites, the AG added that Filmspeler advertised its media players as ways to watch content without paying. This, he said, amounted to a communication to the public and hence copyright infringement.

But while the AG’s opinion was important, it is the EU Court of Justice’s opinion that holds absolute legal weight. After months of deliberation it handed down its decision a few minutes ago and it’s bad news for purveyors of ‘pirate’ devices all around the EU.

In a long and complex ruling, the ECJ said that a media player with pre-installed addons, accessed through structured menus, grants users “direct access to the protected works published without the permission of the copyright owners” and “must be regarded as an act of communication to the public.”

That large numbers of people have bought these players was taken by the Court to mean that there are an “indeterminate number of potential viewers” involving a large number of people (the public).

On the crucial question of whether the copyright works were transmitted to a “new public”, the Court found that the audience for these devices was not something taken into account by the copyright holders when they first gave permission for their works to be distributed.

Referencing the earlier GS Media case, the ECJ placed emphasis on whether links were offered in the knowledge they were infringing and whether the subsequent communication to the public had a profit element.

“It is common ground that the sale of the ‘filmerspeler’ multimedia player was made in full knowledge of the fact that the add-ons containing hyperlinks pre-installed on that player gave access to works published illegally on the internet,” the decision reads.

“In addition, it cannot be disputed that the multimedia player is supplied with a view to making a profit, the price for the multimedia player being paid in particular to obtain direct access to protected works available on streaming websites without the consent of the copyright holders.

“Therefore, it is necessary to hold that the sale of such a multimedia player constitutes a ‘communication to the public’, within the meaning of Article 3(1) of Directive 2001/29.”

Having determined that such piracy-configured players can be considered infringing by EU member courts, the ECJ goes on to provide greater clarity on the status of copyrighted content streamed on the Internet without copyright holders’ permission.

The ECJ states that reproduction of content may only be exempt from reproduction rights when it fulfils five conditions:

– When the act is temporary
– When it’s transient or incidental
– When it’s an integral and essential part of a technological process
– When the sole purpose of that process is to enable a transmission in a network between third parties by an intermediary or a lawful use of a work or protected subject matter
– The act has no independent economic significance

Since copyrighted works are obtained from streaming websites without obtaining permission from copyright holders, the above standards are not completely met and no copyright exceptions are available. Streaming copyrighted content from an illicit source can therefore be considered illegal.

The Filmspeler case will now head back to the Dutch court but this decision is likely to echo all around Europe and have a notable and immediate effect on pending cases involving ‘pirate’ boxes and illicit streaming.

Update: The two key points from the decision, as published by the ECJ.

1. The concept of ‘communication to the public’, within the meaning of Article 3(1) of Directive 2001/29/EC of the European Parliament and of the Council of 22 May 2001 on the harmonisation of certain aspects of copyright and related rights in the information society, must be interpreted as covering the sale of a multimedia player, such as that at issue in the main proceedings, on which there are pre-installed add-ons, available on the internet, containing hyperlinks to websites — that are freely accessible to the public — on which copyright-protected works have been made available to the public without the consent of the right holders.

2. Article 5(1) and (5) of Directive 2001/29 must be interpreted as meaning that acts of temporary reproduction, on a multimedia player, such as that at issue in the main proceedings, of a copyright-protected work obtained by streaming from a website belonging to a third party offering that work without the consent of the copyright holder does not satisfy the conditions set out in those provisions.

Source: TF, for the latest info on copyright, file-sharing, torrent sites and ANONYMOUS VPN services.

In many European countries it’s a mere formality to order local Internet providers to block access to pirate sites, but this is not the case in Mexico.

In 2015 the Government’s Mexican Institute of Industrial Property (IMPI) ordered local ISP Alestra to block access to the website mymusiic.com.

The website in question was targeted at a Mexican audience and offered music downloads, some of which were shared without permission.

The ISP was not pleased with the order and appealed it in court. Among other things, the defense argued that the order was too broad, as it also restricted access to music that might not be infringing.

A few days ago the case was heard by the Supreme Court of Justice of the Nation, which ruled that the Government’s order is indeed disproportional. Mexican law does allow for blocking orders, but these have to be targeted at specific content instead of the website as a whole.

Mymusiic.com

“Although such [blocking] measures are provided for by Law and pursue a legitimate purpose, the fact is that they do not meet the requirements of necessity and proportionality since the restrictions on the right of freedom of expression must refer to specific content,” Minister Alberto Perez Dayán said.

“Hence the generic bans on the operation of certain websites and systems may violate the human right of freedom of expression,” he added.

The broad request ordered by IMPI equates to censorship and violates the constitution. Minister Perez Dayán compared the proposed blockade with the shutdown of a printing press, for publishing a single work without permission.

With this Supreme Court decision in hand, it will be very difficult for the authorities, or rightsholders, to demand similar blockades in the future. Instead, they will have to resort to targeting specific content, through takedown notices or via more targeted blocking efforts.

Mymusiic.com, the site that got the landmark case started, has quietly disappeared and is no longer operational.

Source: TF, for the latest info on copyright, file-sharing, torrent sites and ANONYMOUS VPN services.

When authorities in the United States and New Zealand shut down Megaupload in 2012, large amounts of data were seized in both locations. The data in the US is currently gathering dust but over in New Zealand yet another storm is brewing.

In the weeks following the raid, hard drives seized from Dotcom in New Zealand were cloned and sent to the FBI in the United States. A judge later found that this should not have been allowed, ruling that the copies in the FBI’s possession must be destroyed.

Like almost every process in the Megaupload saga the ruling went to appeal and in 2014 Dotcom won again, with the Court of Appeal upholding the lower court’s decision, stating that the removal of the clones to the United States was “plainly not authorized.”

At the time Dotcom said that fighting back is “encoded in his DNA” and today he’s taking that fight to the FBI. On Sunday, FBI director James Comey touched down in Queenstown, New Zealand, for an intelligence conference. With Comey in the country, Dotcom seized the moment to file a complaint with local police.

In the complaint shared with TorrentFreak, lawyer Simon Cogan draws police attention to the Court of Appeal ruling determining that clones of Dotcom drives were unlawfully shipped to the FBI in the United States. Since Comey is in the country, police should take the opportunity to urgently interview him over this potential criminal matter.

“As director of the FBI, Mr Comey will be able to assist Police with their investigation of the matters raised in Mr Dotcom’s complaint,” the complaint reads, noting several key areas of interest as detailed below.

Speaking with TF, Dotcom says that since the New Zealand High Court and Court of Appeal have both ruled that the FBI had no authority to remove his data from New Zealand, the FBI acted unlawfully.

“In simple terms the FBI has committed theft,” Dotcom says.

“The NZ courts don’t have jurisdiction in the US and could therefore not assist me in getting my data back. But FBI Director Comey has just arrived in New Zealand for a conference meaning he is in the jurisdiction of NZ courts. We have asked the NZ police to question Mr Comey about the theft and to investigate.”

In addition to seeking assistance from the police, Dotcom says that he’s also initiated a new lawsuit to have his data returned.

“We have also launched a separate civil court action to force Mr Comey to return my data to New Zealand and to erase any and all copies the FBI / US Govt holds. We expect an urgent hearing of the matter in the High Court tomorrow,” Dotcom concludes.

It’s likely that this will be another Dotcom saga that will run and run, but despite the seriousness of the matter in hand, Dotcom was happy to take to Twitter this morning, delivering a video message in his own inimitable style.

In your face Comey, in your face! #FVEY #Queenstown #FBIThieves pic.twitter.com/aJb5MrHKWe

— Kim Dotcom (@KimDotcom) 25 April 2017

<script async src="//platform.twitter.com/widgets.js" charset="utf-8">

Source: TF, for the latest info on copyright, file-sharing, torrent sites and ANONYMOUS VPN services.

With Internet access almost universal across the UK and a young, tech-savvy audience fully clued-up on the wonders of on-demand content, little wonder that new ways to consume content are being gobbled up across the country.

Unfortunately for content providers, those methods aren’t always official. In fact, all signs point to an uptick in illegal content consumption from a range of relatively new devices which excel when it comes to ease of access.

We’re talking about software such as Kodi, the legal media player that can be super-charged to provide a full-on piracy experience. Or custom Android apps like Showbox, Terrarium TV and Mobdro, each capable of delivering premium movies, TV shows and sport, without the user ever paying a penny.

The popularity of illegal streaming has prompted market research firm YouGov to conduct a survey on the consumption habits of Brits, with the company concluding that such services pose a “major threat” to TV subscription brands in the UK.

According to its “Illegal Streaming” survey, just short of five million people in the UK are using pirate TV streaming services. YouGov says that around 10% of the adult population (4.9m people) currently have access to custom Kodi boxes, modified Fire TV sticks, and illegal streaming apps running on smartphones and tablets.

The part that will send shudders down the spines of companies like Sky, Virgin and BT – who are not only ISPs but major content providers too – is that pirate consumers are backing away from premium services.

YouGov says that one out of every seven ‘pirate’ streamers say that their use of unauthorized platforms has caused them to cancel “at least one subscription service.” The market researchers note that the actual number of subscriptions is likely to be lower due to the discrepancy between households and individuals but still, the numbers remain significant.

For now at least, there is a significant number of people who maintain both legal subscriptions and parallel pirate setups. However, YouGov reports that almost a third of pirates (31%) say they will cancel official subscriptions during the next 12 months.

There can be little doubt that the rise of so-called “living room” streaming can be attributed to word-of-mouth marketing, with people finding excitement in the range of content on offer for a negligible outlay. With that in mind, YouGov reports that six out of ten pirates say they intend to promote the availability of unauthorized services to both friends and family.

If the growth that promotion fuels meets YouGov’s expectations, the numbers of people getting into the piracy scene could be significant. The market research company reports that 2.6 million non-pirates say they’re preparing to start using illegal streaming platforms in the future, with 400,000 predicting involvement within the next 90 days.

And here’s the problem. YouGov reports that almost 90% of these non-pirates currently have a subscription to an official TV service but should they get involved, almost half are predicting that they will cancel them within 12 months of obtaining a pirate device.

Over in the United States, it was recently reported that more than half of all millennials regularly use pirate streaming services to watch TV shows or movies. The numbers in the UK aren’t so high, but they remain significant nonetheless. According to YouGov, 18 to 34-year-olds account for 37% of pirate users, around 1.8 million people.

The survey also touched on people’s attitudes towards unauthorized streaming, and it comes as no surprise that many feel the high prices of genuine products justifies the use of illicit alternatives.

Bundled packaging means that people in the UK are often required to spend large amounts of money on channels they don’t even watch, so when cheaper options are made available, few have sympathy for what are perceived to be rich content providers.

Source: TF, for the latest info on copyright, file-sharing, torrent sites and ANONYMOUS VPN services.

Nurturing what appears to be a failing business model, anti-piracy outfit Rightscorp has been on life-support for a number of years, never making a cent while losing millions of dollars.

As a result, every annual report filed by the company is expected to reveal yet more miserable numbers. This year’s, filed two weeks late a few days ago, doesn’t break the trend. It is, however, a particularly interesting read.

For those out of the loop, Rightscorp generates revenue from monitoring BitTorrent networks, logging infringements, and sending warning notices to ISPs. It hopes those ISPs will forward notices to customers who are asked to pay $20 or $30 per offense. Once paid, Rightscorp splits this revenue with its copyright holder customers.

The company’s headline sales figures for 2016 are somewhat similar to those of the previous year. In 2015 the company generated $832,215 in revenue but in 2016 that had dropped to $778,215. While yet another reduction in revenue won’t be welcome, the company excelled in trimming its costs.

In 2015, Rightscorp’s total operating costs were almost $5.47m, something which led the company to a file an eye-watering $4.63 million operational loss.

In 2016, the company somehow managed to reduce its costs to ‘just’ $2.73m, a vast improvement over the previous year. But, despite the effort, Rightscorp still couldn’t make money in 2016. In its latest accounts, the company reveals an operational loss of $1.95m and little salvation on the bottom line.

“During the year ended December 31, 2016, the Company incurred a net loss of $1,355,747 and used cash in operations of $807,530, and at December 31, 2016, the Company had a stockholders’ deficit of $2,092,060,” the company reveals.

While a nose-diving Rightscorp has been a familiar story in recent years, there are some nuggets of information in 2016’s report that makes it stand out.

According to Rightscorp, in 2014 BMG Rights Management accounted for 76% of the company’s sales, with Warner Bros. Entertainment made up a token 13%. In 2015 it was a similar story, but during 2016, big developments took place with a brand new and extremely important customer.

“For the year ended December 31, 2016, our contract with Recording Industry Association of America accounted for approximately 44% of our sales, and our contract with BMG Rights Management accounted for 23% of our sales,” the company’s report reveals.

The fact that the RIAA is now Rightscorp’s biggest customer to the tune of $342,000 in business during 2016 is a pretty big reveal, not only for the future of the anti-piracy company but also the interests of millions of BitTorrent users around the United States.

While it’s certainly possible that the RIAA plans to start sending settlement demands to torrent users (Warner has already done so), there are very clear signs that the RIAA sees value in Rightscorp elsewhere. As shown in the table below, between 2015 and 2016 there has been a notable shift in how Rightscorp reports its revenue.

In 2015, all of Rightscorp’s revenue came from copyright settlements. In 2016, roughly 50% of its revenue (a little over the amount accounted for by the RIAA’s business) is listed as ‘consulting revenue’. It seems more than likely that the lion’s share of this revenue came from the RIAA, but why?

On Friday the RIAA filed a big lawsuit against Texas-based ISP Grande Communications. Detailed here, the multi-million suit accuses the ISP of failing to disconnect subscribers accused of infringement multiple times.

The data being used to prosecute that case was obtained by the RIAA from Rightscorp, who in turn collected that data from BitTorrent networks. The company obtained a patent under its previous Digital Rights Corp. guise which specifically covers repeat infringer identification. It has been used successfully in the ongoing case against another ISP, Cox Communications.

In short, the RIAA seems to be planning to do to Grande Communications what BMG and Rightscorp have already done to Cox. They will be seeking to show that Grande knew that its subscribers were multiple infringers yet failed to disconnect them from the Internet. This inaction, they will argue, means that Grande loses its protection from liability under the safe harbor provisions of the DMCA.

Winning the case against Grande Communications is extremely important for the RIAA and for reasons best understood by the parties involved, it clearly places value on the data held by Rightscorp. Whether the RIAA will pay another few hundred thousand dollars to the anti-piracy outfit in 2017 remans to be seen, but Rightscorp will be hoping so as it’s desperate for the cash.

The company’s year-end filing raises “substantial doubt about the Company’s ability to continue as a going concern” while noting that its management believes that the company will need at least another $500,000 to $1,000,000 to fund operations in 2017.

This new relationship between the RIAA and Rightscorp is an interesting one and one that’s likely to prove controversial. Grande Communications is being sued today, but the big question is which other ISPs will follow in the months and years to come.

Source: TF, for the latest info on copyright, file-sharing, torrent sites and ANONYMOUS VPN services.