In December 2015, many so-called ‘screener’ copies of the latest movies leaked online. Among them a near perfect copy of Alejandro G. Iñárritu’s ‘The Revenant’.

Starring Leonardo DiCaprio and slated for a Christmas day release, in a matter of hours the tale vengeance clocked up tens of thousands of illegal downloads.

With such a high-profile leak, it was inevitable that the authorities would attempt to track down the individual responsible. It didn’t take them long.

Following an FBI investigation, former studio worker William Kyle Morarity was discovered as the culprit. Known online by the username “clutchit,” the 31-year-old had uploaded The Revenant and The Peanuts Movie to private torrent tracker Pass The Popcorn.

The Revenant

Uploading a copyrighted work being prepared for commercial distribution is a felony that carries a maximum penalty of three years in prison, so his sentencing always had the potential to be punishing for the Lancaster man, despite his early guilty plea.

This week Morarity was sentenced in federal court for criminal copyright infringement after admitting screener copies of both movies to the Internet.

After being posted online six days in advance of its theatrical release, it was estimated that The Revenant was downloaded at least a million times during a six week period, costing Twentieth Century Fox Film Corporation to suffer losses of “well over $1 million.”

United States District Court Judge Stephen V. Wilson ordered Morarity to pay $1.12 million in restitution to Twentieth Century Fox. He also sentenced the 31-year-old to eight months’ home detention and 24 months’ probation.

According to court documents, Morarity obtained the screeners and copied them to a portable hard drive. He then uploaded the movies to Pass The Popcorn on December 17 and December 19.

“The film industry creates thousands of jobs in Southern California,” said United States Attorney Eileen M. Decker commenting on the sentencing.

“The defendant’s illegal conduct caused significant harm to the victim movie studio. The fact that the defendant stole these films while working on the lot of a movie studio makes his crime more egregious.”

Deirdre Fike, the Assistant Director in Charge of the FBI’s Los Angeles Field Office, said that Morarity had abused his position of trust to obtain copies of the movies and then used them in a way that caused Fox to incur huge losses.

“The theft of intellectual property – in this case, major motion pictures – discourages creative incentive and affects the average American making ends meet in the entertainment industry,” Fike said.

As part of his punishment, Morarity also agreed to assist the FBI to produce a public service announcement aimed at educating the public about the harms of copyright infringement and the illegal uploading of movies to the Internet.

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

Research into online piracy comes in all shapes and sizes, often with equally mixed results. The main question is often whether piracy is hurting sales.

New research conducted by economists from the European Commission’s Directorate-General for Internal Market, Industry, Entrepreneurship and SMEs, tries to find answers for the movie industry.

For a new paper titled “Movie Piracy and Displaced Sales in Europe,” the researchers conducted a large-scale survey among 30,000 respondents from six countries, documenting their movie consumption patterns.

Using statistical models and longitudinal data, they were able to estimate how piracy affects legal sales and if this differs from country to country.

Perhaps unsurprisingly, the findings show that not every pirated movie is a lost sale. Instead, for every hundred films that are first viewed from a pirated source, 37 viewings from paid movies are ‘lost’.

This results in a displacement rate of 0.37, which is still a high number of course, also compared to previous research.

It’s worth noting that in some cases piracy actually has a beneficial effect. This is true for movies that people have seen more than twice.

“Interestingly, we found evidence of a sampling effect: for movies that are seen more than twice, first unpaid consumption slightly increases paid second consumption,” the researchers write.

However, the sampling effect doesn’t outweigh the loss in sales. Overall the researchers estimate that online piracy leads to a significant loss in revenue for the movie industry.

“Using a back-of-the-envelope calculation, we show that this implies that unpaid movie viewings reduced movie sales in Europe by about 4.4% during the sample period,” they write.

This negative effect is driven by a relatively small group of consumers. Roughly 20% of the respondents with the highest movie consumption are responsible for 94% of lost movie sales. Or put differently, the most avid film fans pirate the most.

Interestingly, there are large between-country differences too. In Germany online movie piracy results in ‘only’ a 1.65% loss, this figure is 10.41% for Spain. The UK (2.89%), France (5.73%), Poland (7.21%) and Sweden (7.65%) rank somewhere in between.

According to the researchers, their findings can help policymakers to decide what the best anti-piracy enforcement strategies are. In addition, changes between countries could help to evaluate existing and future measures and inspire future research.

“The estimates that we provide can help policy makers to asses the efficient use of public resources to be spent on copyright enforcement of movies.”

“In particular, since we find that virtually all the lost sales of movies are due to a very small group of individuals, most damages of movie piracy could therefore potentially be prevented with well targeted policies,” the researchers conclude.

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

For more than a decade the IP Crime Group and the Intellectual Property Office have collaborated to produce an assessment of the level of IP crime in the UK. Their annual IP Crime Report details the responses of businesses, anti-piracy groups, and government agencies.

As usual, this year’s report covers all areas of IP crime, both in the physical realm and online. However, it is the latter area that appears to be causing the most concern to participating anti-piracy groups.

“Perhaps the area where IP crime statistics most often reach jaw-dropping levels is in relation to the industries providing digital content,” the report reads.

“During a sample three-month period last year, 28% of those questioned admitted their music downloads in the UK came from illegal sources. Similarly, 23% of films, 22% of software, 16% of TV and 15% of games were downloaded in breach of copyright.”

While noting that illicit music downloads have actually reduced in recent years, the report highlights areas that aren’t doing so well, TV show consumption for example.

“The reasons for the spike in TV copyright infringement appear to be, in part, technological, with ‘unofficial services’ such as uTorrent, BitTorrent, TV catch up apps and established sources such as YouTube offering content without legal certainty,” it adds.

But while several methods of obtaining free TV content online are highlighted in the report, none achieve as much attention as IPTV – commonly known as Kodi with illicit third-party addons.

In her report preamble, Minister for Intellectual Property Baroness Neville-Rolfe describes anti-IPTV collaboration between the Federation Against Copyright Theft, Trading Standards, and the Police, as one of the year’s operational successes. Indeed, FACT say anti-IPTV work is now their top priority.

Federation Against Copyright Theft

“We have prioritised an emerging threat to the audiovisual industry, internet protocol TV (IPTV) boxes,” FACT write.

“In their original form, these boxes are legitimate. However, with the use of apps and add-ons, they allow users to access copyright infringing material, from live TV and sports, to premium pay-for channels and newly released films. Once configured these boxes are illegal.”

FACT say they are concentrating on two areas – raising awareness in the industry and elsewhere while carrying out enforcement and disruption operations.

“In the last year FACT has worked with a wide range of partners and law enforcement bodies to tackle individuals and disrupt businesses selling illegal IPTV boxes. Enforcement action has been widespread across the UK with numerous ongoing investigations,” FACT note.

Overall, FACT say that 70% of the public complaints they receive relate to online copyright infringement. More than a quarter of all complaints now relate to IPTV and 50% of the anti-piracy group’s current investigations involve IPTV boxes.

British Phonographic Industry (BPI)

In their submission to the report, the BPI cite three key areas of concern – online piracy, physical counterfeiting, and Internet-enabled sales of infringing physical content. The former is their top priority.

“The main online piracy threats to the UK recorded music industry at present come from BitTorrent networks, MP3 aggregator sites, cyberlockers, unauthorised streaming sites, stream ripping sites and pirate sites accessed via mobile devices,” the BPI writes.

“Search engines – predominantly Google – also continue to provide millions of links to infringing content and websites that are hosted by non-compliant operators and hosts that cannot be closed down have needed to be blocked in the UK under s.97A court orders (website blocking).”

The BPI notes that between January 2015 and March 2016, it submitted more than 100 million URL takedowns to Google and Bing. Counting all notices since 2011 when the BPI began the practice, the tally now sits at 200 million URLs.

“These astronomic numbers demonstrate the large quantity of infringing content that is available online and which is easily accessible to search engine users,” the BPI says.

On the web-blocking front, the BPI says it now has court orders in place to block 63 pirate sites and more than 700 related URLs, IP addresses and proxies.

“Site blocking is proving a successful strategy, and the longer the blocks are in place, the more effective they tend to be. The latest data available shows that traffic to sites blocked for over one year has reduced by an average of around 80%; with traffic to sites blocked for less than a year reduced by an average of around 50%,” the BPI adds.

Infringement warnings for Internet subscibers

The Get it Right campaign is an educational effort to advise the public on how to avoid pirate sites and spend money on genuine products. The campaign has been somewhat lukewarm thus far, but the sting in the tail has always been the threat of copyright holders sending warnings to Internet pirates.

To date, nothing has materialized on that front but hidden away on page 51 of the report is a hint that something might happen soon.

“A further component of the ‘Get it Right’ campaign is a subscriber alert programme that will, starting by the end of 2016, advise ISPs’ residential subscribers when their accounts are believed to have been used to infringe copyright,” the report reads.

“Account holders will receive an Alert from their ISP, advising them that unlawful uploading of a copyright content file may have taken place on their internet connection and offering advice on where to find legitimate sources of content.”

Overall, the tone of the report suggests a huge threat from IP crime but one that’s being effectively tackled by groups such as FACT, BPI, the Police Intellectual Property Crime Unit, and various educational initiatives. Only time will tell if next year’s report will retain the optimism.

The full report can be downloaded here (pdf)

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

Last December a New Zealand District Court ruled that Kim Dotcom and his colleagues can be sent to the United States to face criminal charges.

This decision was immediately appealed and over the past weeks there’s been a lengthy series of appeal hearings at New Zealand’s High Court.

Represented by a team of lawyers, Kim Dotcom and his fellow Megaupload defendants have argued that the New Zealand District Court failed to give them a fair hearing. The entire case was live-streamed on YouTube and earlier today the final arguments were presented.

Kim Dotcom’s defense lawyer Ron Mansfield repeated several claims that have been discussed over the past several weeks. He argues that the lower court made critical errors in its final ruling and that crucial evidence was overlooked or not considered at all.

One of the main arguments of the United States government is that Megaupload would only disable a URL when it received a takedown notice, not the underlying file. As a result of the deduplication technology it employed, this meant that the file could still be accessed under different URLs.

However, according to Dotcom’s defense, it was a standard practice in the Internet service provider industry to remove just the URL, something copyright holders were apparently well aware of.

“How can a copyright holder have been reasonably expecting Megaupload to take down files in response to takedown notices specifying URLs if the copyright holders knew that the prevailing industry practice was to prevent access by removing the URL, not the file,” Mansfield said.

“The use of deduplication technology by Internet service providers […] was not a secret. It was widespread within the industry and well-known both by the Internet service provider industry and the content industry,” he added.

While various stakeholders disagree on what services such as Megaupload are required to do under the DMCA, removing the URLs only was not something unique to Megaupload.

In addition, Mansfield previously cited the “Dancing Baby” case where it was held that copyright holders should consider fair use before requesting a takedown. This means that removing an underlying file down may be too broad, as fair use isn’t considered for all URLs.

Overall the defense believes that Megaupload and its employees enjoy safe harbor protection and can’t be held criminally liable for copyright infringement. As such, there is no extraditable offense.

Mr. Mansfield closes his argument by highlighting the unprecedented nature of this case, which has been ongoing for nearly five years.

“Today marks 1730 days since 20 January 2012, when the New Zealand police effectively dropped from the sky and conducted the search of Mr. Dotcom’s home. And at that point they then sought about arresting him. The officers were disguised, armed and left him and his family effectively bereft of assets and income,” Mansfield said.

Mr. Mansfield

Mansfield describes the U.S. litigation strategy as an aggressive one and argues that the failure to accept and review critical evidence deprived Kim Dotcom of a fair trial.

“Sportsmanship in a court of law is called fairness and the United States conduct has in our submission both been unlawful and unreasonable and the tactics they have adopted have been unfair and prevented Mr. Dotcom and the other appellants from having the benefit of a fair hearing.”

“He simply has not had a fair go. And we do ask that your honor considers the submissions which have been presented, because, in effect, after that period of time, after 1730 days it would be the first time there is a meaningful judicial assessment of the facts and of the submissions presented,” Mansfield concluded.

While the primary hearings are over, there are still some smaller details to work out and it is expected to take several weeks before New Zealand High Court reaches a decision. However, Kim Dotcom is confident that he’s on the winning site and congratulated his lawyers.

“I like to thank my legal team for an excellent job. My 5 children will grow up around their father thanks to your brilliance. I’m grateful,” Dotcom posted on Twitter a few hours ago.

Whatever the outcome, it’s unlikely that the case will stop at the High Court. Given the gravity of the case, both the United States and the Megaupload defendants are likely to take it all the way to the Supreme Court if the decision doesn’t go their way.

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

As the name suggests, file-sharing is all about sharing. In the old days this would be achieved by having folders full of files that anyone could take. These days, with BitTorrent’s distributed nature, it’s more about sharing content and associated bandwidth.

With that in mind, good torrent etiquette dictates that one always shares at least as much as one downloads. So, if a file is 1GB in size, it’s accepted that the user should try to share 1GB back. This is known as a 1:1 ratio. Those who upload 2GB will achieve a 2:1 ratio and those aiming for 3:1 will need to upload 3GB to others.

Generally, the more people upload the healthier the swarm, so with that in mind BitTorrent Inc. has just introduced an interesting feature to new builds of their uTorrent and BitTorrent clients. It’s called Altruistic Mode and manages to be both straightforward and somewhat confusing.

Essentially, Altruistic Mode is aimed at users who want to absolutely guarantee that they are always maintaining a 2:1 ratio (2GB uploaded for every 1GB downloaded). At first view one might think that the same goal could be achieved by downloading 1GB and letting the client seed 2GB back. However, that relies on others joining the swarm later and as mentioned earlier, Altruistic Mode wants to guarantee a 2:1 ratio, not just aim for one.

So how is this achieved? Well, in normal situations torrent clients always upload as much as they can anyway, so Altruistic Mode achieves its goals by downloading less.

The initially confusing end result here is that people who enable Altruistic Mode could find that due to their client’s insistence on maintaining a 2:1 ratio, the torrent they’re downloading might never complete. It is called Altruistic Mode for a reason and when seen in that light, the importance of a finished download places second to a healthy swarm.

BitTorrent creator Bram Cohen says that the effects of Altruistic Mode on a torrent will depend on how that torrent would behave in the same swarm in regular ‘download’ mode.

– If Download Mode would upload at a greater than 2:1 ratio then an Altruistic Mode peer will have very similar behavior.

– If Download Mode would upload at a ratio between 2:1 and 1:1 then Altruistic Mode will upload less and download a lot less than Download Mode would, resulting in a 2:1 upload to download ratio.

– If Download Mode would upload at a ratio of less than 1:1 then Altruistic Mode will do very little uploading or downloading.

“The precise definition of Altruistic Mode is that it initially downloads two pieces and after that, every time it uploads two pieces worth of data it downloads one more,” Cohen explains.

“This is a simple and reliable strategy for making sure that you never get much worse than a 2:1 ratio. It results in all the behaviors described above, which do have some technical caveats….but the essential message is right in every case.”

Cohen says that a 2:1 ratio was considered a logical choice, particularly given that a 3:1 ratio or higher has the potential to impose severe restrictions on some swarms. Ironically, if too many people decide to act selflessly and turn the feature on in the same swarm, everyone’s download may never complete.

“Going for a higher number [than 2:1] could also cause swarms to no longer have a complete copy of the file if too many peers are in Altruistic Mode, which would harm not just the one peer in Altruistic Mode but other peers as well,” Cohen explains.

“Because of this, we feel that a 2:1 ratio is a sweet spot and aren’t offering any user configuration options for it. You may get ratios of greater than 2:1 in Altruistic Mode, but in those cases you could have used regular Download Mode and gotten the same results.”

For those not familiar with how BitTorrent works (and certainly many casual users), Altruistic Mode is a bit of a head-scratcher, to say the least. And, given the prospect that a download might never complete with it switched on, it seems unlikely that swarms will be inundated with clients using the mode.

Nevertheless, it’s an interesting addition to the uTorrent and Mainline BitTorrent clients and described as “an experiment” that could be further developed.

“If this goes well we may roll out another feature in the future where a peer starts out in Altruistic Mode and later switches to regular Download Mode, which would not change the upload ratio significantly but would help other peers download faster at the beginning, so peers who want to get a complete file eventually but aren’t in a rush can allow other peers who care about getting it sooner to finish first,” Cohen concludes.

Altruistic Mode is available in uTorrent 3.4.9 and above, and BitTorrent 7.9.9 and above. It is turned off by default but can be unlocked in Preferences/BitTorrent and then activated for individual torrents.

More information can be found here.

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