Late July a near perfect copy of The Expendables 3 leaked out onto file-sharing networks a full three weeks before the title was due to appear in theaters.

Within hours 100,000 copies had been downloaded, a figure that developed into millions in the weeks that followed. According to Nu Image, the company behind Expendables 3, more than 10 million people grabbed an illegal copy of the movie before its official August release.

Now, according to Nu Image CEO and founder Avi Lerner, that leak and subsequent box office flop has translated into serious financial implications for the company.

“Everyone wants to hide what happened on Expendables 3, especially the domestic distributors. ‘Don’t talk about it!’ But I’ll tell you there is about $250 million in box office we lost,” Lerner says.

Describing piracy as the “worst situation that ever happened” to the industry, Lerner told HR that something big needs to be done or there won’t be anything left to save.

“The whole film business is going to be the same as the music business. Within five years, we’re not going to have a business,” he said.

Of course, Hollywood tried to “get something done” in 2012 by lobbying intensively for the now-defunct SOPA anti-piracy legislation. But by asking for too much, too quickly, the possibility of knock-on consequences almost universally spooked the tech sector. The result was a huge backlash and the ruination of any chance of passing not only SOPA, but any other similar variant in the near future.

Still, Lerner feels that the buck needs to stop somewhere, and in this case it should be right at the top. Barack Obama isn’t doing enough, the Nu Image CEO says, and that stems from the President’s fear of upsetting the Internet.

“It’s sad because if we had a good president that cared about the film industry he would pass a very simple law, an anti-piracy law, but they don’t want to stop it because they are scared of Google, and he’s scared of all the ISPs,” Lerner says.

Google’s power and money not only scares off the President but Congress too, Lerner adds. Furthermore, plenty of that revenue is coming piracy-related sources, so the company has no incentive stop it.

“Google has no interest to stop [piracy] because the more people download the movie the more traffic they get. And without traffic they don’t get revenue from advertising. So they’re happy there’s piracy in the world,” Lerner insists.

Of course, Google has made some recent anti-piracy overtures with a fairly drastic modification of its search engine algorithms, changes that have hit torrent sites particularly hard. But while Google might have the power and the money, it is not the gatekeeper of the Internet and leaks of movies like The Expendables 3 will happen regularly, with or without the gaming of search engine results in Hollywood’s favor.

In the meantime Google will keep getting blamed for other people’s problems, and not even the White House will be able to do anything about that.

Source: TorrentFreak, for the latest info on copyright, file-sharing and anonymous VPN services.

With 170 million active users BitTorrent Inc. owns one of the most recognizable brands on the Internet.

Needless to say there is plenty of interest in the BitTorrent brand, and in some cases this demand is being exploited by third-party companies. Some of these companies use the BitTorrent name to trick people into downloading their software or buying their services.

Two years ago BitTorrent filed a lawsuit against one of these alleged “scammers,” the German-based company Bittorrent Marketing GMBH.

The German namesake owns the German and European trademarks for BitTorrent and previously registered several related domain names such as Bit-Torent.com, Bit-Torrent.com and Bitorrent.net. Some of these domains have been used to point people to paid products.

“BitTorrent filed this action to put an end to Defendant’s use of BitTorrent’s trademarks to promote what Defendant touts as an ‘advertising affiliate program’ used to ‘post ads and earn commissions..,” the company explained to the court.

In addition, it accused the company of other cybersquatting activities including the interception of confidential email. As the German company failed to respond, BitTorrent Inc. asked the court for a default judgment, which was granted this week.

United States District Judge Beth Freeman ruled that Bittorrent Marketing GMBH is guilty of trademark infringement and awarded $2,230,000 in damages to BitTorrent Inc. In addition, the German company has to sign the 54 disputed domain names over to the California company.

The order

In her order the Judge notes that the use of the trademarks in the United States was “likely to cause confusion,” and considered to be infringing. The court acknowledges that Bittorrent Marketing GMBH offered download products, but concludes that it aimed to deceive BitTorrent users and ransom the domain names.

“Even when Defendant offered digital download products and services on the Infringing Domain Names, such offers were deceptive because paying customers would not actually receive the purchased services,” Judge Freeman writes.

“Such conduct evinces an intent to intentionally diminish the value of Plaintiff’s trademark through customer confusion and frustration and, in turn, force Plaintiff to eliminate such blemishes on its trademark by acquiring the Infringing Domain Names from Defendant,” Freeman adds.

The court order further mentions that the owner of Bittorrent Marketing GMBH repeatedly registered domain names “in an effort to extort money” from BitTorrent Inc.

The damages award is lower than the $100,000 per domain BitTorrent Inc. asked for as Judge Freeman tailored them to an amount she “considers just.” The Judge awarded $35,000 for 38 domain names that incorporate misspellings, $50,000 for 14 domains with the correct “bittorrent spelling” and $100,000 for two domains where it advertised download services.

In addition the German company is barred from using the BitTorrent trademark to advertise its services. The 54 domain names that were at the basis of the dispute will be signed over to BitTorrent Inc within two weeks.

Bittorrent Marketing GMBH’s owner Harald Hochmann has published several statements on Bittorrent.eu telling his side of the story. Talking to TorrentFreak, Hochmann denies many of the allegations.

“The key point is, and that is 100% true, that I have NEVER asked BitTorrent Inc. for millions as BitTorrent Inc’s former CFO and General Counsel Mitchell Edwards declared under oath,” he says.

In addition, Hochmann points out various other flaws and inaccuracies in the order. However, since the company initially failed to reply the company’s response in the U.S. case came too late.

Source: TorrentFreak, for the latest info on copyright, file-sharing and anonymous VPN services.

As one of the leading providers of DDoS protection and an easy to use CDN service, Cloudflare is used by thousands of popular sites across the globe.

This includes many “pirate” sites who rely on the U.S. based company to server loads down.

While Cloudflare may help to keep servers up and running, the U.S. connection also poses a risk of exposure for the owners. Through a so-called DMCA-subpoena, copyright holders only have to ask a court clerk for a signature to be able to demand all personal information of alleged copyright infringers.

This is exactly what Japanese adult magazine publisher KK Magazine has done. After sending three takedown requests to Cloudflare asking them to take down content on the allegedly infringing Javrip.org and Jpav.tv sites, the company obtained a subpoena.

Without oversight from a judge the clerk signed a subpoena ordering Cloudflare to hand over the personal details of the clients connected to these domains including their names, addresses, phone numbers, email addresses, IP-addresses, account numbers, credit card numbers and any other identifying information.

Subpoena to Cloudflare

The magazine publisher’s subpoena doesn’t come out of the blue for Cloudflare. Two weeks ago the Japanese company sent a third takedown notice warning Cloudflare that it may lose its safe harbor protections and become liable for the infringements of its client.

“You/your customer has actively and repeatedly collected, organized and introduced new direct download links containing the infringing videos corresponding to the foregoing Infringing Works. Such actions shall disqualify you from any safe harbors for which you may be eligible under [the DMCA],” KK Magazine wrote.

“Regardless of the nature of the services you may provide, a service provider which fails to implement a repeat infringer policy is ineligible for any safe harbors under [the DMCA]. Based on the infringement activities provided herein, MAGAZINE intends to take necessary legal action.”

Whether Cloudflare has complied with the subpoena is unknown at this point but the company has until next week to respond.

For now both allegedly infringing sites remain up and running through Cloudflare’s servers. However, a notice on the Jpav.tv website suggests that some content was made inaccessible.

“Hello friends ! We re-uploading files was removed. You try download again. thanks!” a broken English notice on the site reads.

Try again…

Source: TorrentFreak, for the latest info on copyright, file-sharing and anonymous VPN services.

Who should be held liable when a torrent site or other file-sharing service fails to take down infringing content following a DMCA-style takedown request?

In most cases the buck stops with the service itself, but some rightsholders would like to extend that liability beyond the sites themselves and onto hosts and other providers of critical infrastructure.

One such experiment was undertaken by Universal Music. In 2013, the German division of the label sent a takedown notice complaining about content indexed by H33T, previously one of the Internet’s largest torrent trackers. This ultimately led to the site being taken completely offline.

The problem began when H33T failed to respond to a Universal Music takedown notice demanding the removal of a link to the Robin Thicke album Blurred Lines. Faced with inaction, Universal obtained an injunction against Key-Systems, H33T.com’s domain registrar.

By order of the court Key-Systems had to end the infringement of Universal’s rights so it took the drastic decision to delete H33T.com’s DNS entries. That not only stopped further infringement but also disappeared the site from the Internet.

The case later ended up at the Regional Court of Saarbrücken and earlier this year a fairly dramatic ruling was handed down. In its judgment the Court found that a domain registrar, in this case Key-Systems, can be held liable for the infringing actions of a site if it is “obvious” that it is committing offenses under copyright law.

Lawyer Mirko Bruess from Rasch Legal, the firm representing Universal, told TF that the decision made perfect legal sense, but Key-Systems weren’t done.

“Let’s just say that this was not the final word in the matter,” their lawyer Volker Greimann said.

Key-Systems took its case to appeal but has not been successful. The Higher Regional Court of Saarbrücken has just rejected the complaint and confirmed the decision of the lower court.

“The judges state that once notified of an obvious infringement, the registrar has to take action to stop the infringement,” Bruess told TF this morning.

“[Key-Systems] argued the infringement was not ‘obvious’ because they were not in a position to make sure that the torrent on h33t.com was actually infringing and that our client owned the rights. The Court disagreed and states that the registrar had to assume that the claims made by our client were correct after contacting the domain owner (their customer) and not getting any response.”

Also of interest was the position the Court took in respect of the power Key-Systems had over its torrent site customer and the terms of service previously established between them.

“The Court also finds that the registrar was legally and technically in a position to stop the infringement. The domain owner was in a clear breach of the registrar’s TOS by running a torrent-site and not reacting to takedown notices. This gave the registrar the opportunity and the obligation to terminate the service by deleting the name from the DNS,” Bruess adds.

Finally, the Court took the view that under the circumstances taking down the entire H33T site following the complaint was not an excessive response.

“The Court argues that the termination of the (complete) site was not disproportionate, because it was in the hands of the domain owner to keep this from happening by reacting to the registrar’s notice and taking down the infringing content,” Bruess notes.

Key-Systems did not immediately respond to TorrentFreak’s request for comment, but Universal Music’s lawyer was clear on the ruling and its implications.

“The Court’s decision gives rights owners another option in the ongoing fight against the illegal exploitation of their content. We will have this in mind when looking at other domains that use our clients’ content without licensing,” Bruess concludes.

Source: TorrentFreak, for the latest info on copyright, file-sharing and anonymous VPN services.

Last month one of the most popular Popcorn Time forks ran into trouble. Out of the blue Time4popcorn.eu had its domain name suspended by the EURid registry.

The developers were informed that the suspension was the result of an ongoing legal investigation into the BitTorrent streaming app, presumably after copyright holders complained.

Aside from losing its domain name and losing nearly all traffic, the domain troubles also affected existing users. Since the Popcorn Time fork required the domain to load the user interface, the application stopped working.

The problems with EURid showed that the domain name was a weak link. The fork quickly moved to a .se domain and over the past several weeks the developers have been working hard to resolve the vulnerability. With the latest 5.0 beta release today they should be able to withstand a domain suspension.

“EURid tried to take us down and instead of doing so, they just opened our eyes and made us better and wiser,” the developers inform TF. “Thank you EURid for making Popcorn Time unstoppable.”

As of now Popcorn Time still appears to rely on some central servers, which may not be truly “unstoppable”. In the future, however, the fork hopes to distribute all data via P2P transfers.

“We’ve built the 5.0 beta so that no one will be able to take it down. Popcorn Time from now on will keep on working as usual even if our domain gets removed, and in the future even the necessary data for Popcorn Time will be transferred purely via Peer2Peer.”

Besides the improved redundancy, the latest beta also includes several other new features. The app has revamped its user interface and added touch screen support, for example. The developers have further added an anime section, a feature many users requested.

Finally, the Popcorn Time fork says it will soon enable the option to continue seeding after a video stops streaming. This means that its users have the option share data for a longer period, so they’re not simply leeching from BitTorrent swarms.

Source: TorrentFreak, for the latest info on copyright, file-sharing and anonymous VPN services.