Kim Dotcom has been associated with many things over the years, but one enduring theme has been wealth – and lots of it.

Even in the wake of the now-infamous raid on his New Zealand mansion and the seizure of millions in assets, somehow Dotcom has managed to rake in millions. Or did he also have some stashed away?

It’s an important matter for Hollywood. The businessman’s continued lavish lifestyle diminishes the financial pot from where any payout will be made should they prevail in their copyright infringement battles against the Megaupload founder.

The studio’s concerns were previously addressed by Judge Courtney, who had already ordered Dotcom to disclose to the Court the details of his worldwide assets. The entrepreneur filed an appeal but that hearing would take place in October, a date beyond the already-ordered disclosure date.

Dotcom took his case to the Court of Appeal in the hope of staying the disclosure order, but in August that failed.

Dotcom complied with the ruling and subsequently produced an affidavit. However, he asked the Court of Appeal to overturn the decision of the High Court in order to keep the document a secret from the studios. That bid has now failed.

Following a ruling handed down this morning by the New Zealand Court of Appeal, Dotcom’s financial information will soon be in the hands of adversaries Twentieth Century Fox, Disney, Paramount, Universal and Warner Bros.

Court of Appeal Judges John Wild, Rhys Harrison and Christin French ordered the affidavit to be released to the studios on the basis that the information could only be used in legal proceedings concerning the restraining of Dotcom’s assets. And with a confidentiality clause attached to the affidavit, the public will not gain access to the information.

Another setback for Dotcom came in respect of who pays the bill for proceedings. The Megaupload founder’s attempt at avoiding costs was turned down after the judges found that having already supplied the affidavit as required, Dotcom’s appeal was not likely to succeed.

And there was more bad news for Dotcom in a separate High Court ruling handed down in New Zealand today. It concerns the extradition cases against not only him but also former Megaupload associates Finn Batato, Mathias Ortmann and Bram Van Der Kolk.

The theory put forward by Dotcom is that the United States and New Zealand governments had politically engineered his downfall in order to extradite him to the U.S. To gather evidence showing how that happened, Dotcom and the other respondents made a pair of applications to the extradition court (the District Court) requesting that it make discovery orders against various New Zealand government agencies, ministers and departments.

The District Court declined so the respondents sought a judicial review of that decision claiming that the Court acted unfairly and erred in law. In today’s ruling, Justice Simon France said there was no “air of reality” that political interference had been involved in Dotcom’s extradition case.

“It is, as the District Court held, all supposition and the drawing of links without a basis,” the Judge wrote.

“Nothing suggests involvement of the United States of America, and nothing suggests the New Zealand Government had turned its mind to extradition issues. These are the key matters and there is no support for either contention.”

Judge France said that as respondents in the case, the United States were entitled to costs.

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

This week we have four newcomers in our chart.

22 Jump Street is the most downloaded movie for the second week in a row.

The data for our weekly download chart is estimated by TorrentFreak, and is for informational and educational reference only. All the movies in the list are BD/DVDrips unless stated otherwise.

RSS feed for the weekly movie download chart.

Ranking	(last week)	Movie	IMDb Rating / Trailer
torrentfreak.com
1	(1)	22 Jump Street	7.6 / trailer
2	(…)	How to Train Your Dragon 2	8.2 / trailer
3	(5)	The Purge: Anarchy	6.6 / trailer
4	(3)	Stretch	6.8 / trailer
5	(2)	Transformers: Age of Extinction	6.1 / trailer
6	(…)	Planes: Fire & Rescue	5.8 / trailer
7	(…)	The Giver	6.7 / trailer
8	(…)	Annabelle	5.9 / trailer
9	(4)	Sex Tape	5.2 / trailer
10	(9)	X-Men: Days of Future Past	8.4 / trailer

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

It often helps to understand present time by looking at history, and seeing how history keeps repeating itself over and over.

In the late 1700s, the United Kingdom was the empire that established laws on the globe. The United States was still largely a colony – even if not formally so, it was referred to as such in the civilized world, meaning France and the United Kingdom.

The UK had a strictly protectionist view of trade: all raw materials must come to England, and all luxury goods must be made from those materials while in the UK, to be exported to the rest of the world. Long story short, the UK was where the value was to be created.

Laws were written to lock in this effect. Bringing the ability to refine materials somewhere else, the mere knowledge, was illegal. “Illegal copying”, more precisely.

Let’s look at a particularly horrible criminal from that time, Samuel Slater. In the UK, he was even known as “Slater the Traitor”. His crime was to memorize the drawings of a British textile mill, move to New York, and copy the whole of the British textile mill from memory – something very illegal. For this criminal act, building the so-called Slater Mill, he was hailed as “the father of the American Industrial Revolution” by those who would later displace the dominance of the UK – namely the United States. This copy-criminal also has a whole town named after him.

Copying brings jobs and prosperity. Copying has always brought jobs and prosperity. It is those who don’t want to compete who try to legislate a right to rest on their laurels and outlaw copying. It never works.

We can take a look at the early film industry as well. That industry was bogged down with patent monopolies from one of the worst monopolists through industrial history, Thomas Edison and his Western Electric. He essentially killed off any film company that started in or at New York, where the film industry was based at the time. A few of the nascent film companies – Warner Brothers, Universal Pictures, MGM – therefore chose to settle as far from this monopolist as possible, and went across the entire country, to a small unexploited suburb outside of Los Angeles, California, which was known as “Hollywoodland” and had a huge sign to that effect. There, they would be safe from Edison’s patent enforcement, merely through taking out enough distance between themselves and him.

Yes, you read that right – the entire modern film industry was founded on piracy. Which, again, lead to jobs and prosperity.

The heart of the problem is this: those who decide what is “illegal” to copy do so from a basis of not wanting to get outcompeted, and never from any kind of moral high ground. It’s just pure industrial protectionism. Neo-mercantilism, if you prefer. Copying always brings jobs and prosperity. Therefore, voluntarily agreeing to the terms of the incumbent industries, terms which are specifically written to keep everybody else unprosperous, is astoundingly bad business and policy.

I’d happily go as far as to say there is a moral imperative to disobey any laws against copying. History will always put you in the right, as was the case with Samuel Slater, for example.

For a more modern example, you have Japan. When I grew up in the 1980s, Japanese industry was known for cheap knock-off goods. They copied everything shamelessly, and never got quality right. But they knew something that the West didn’t: copying brings prosperity. When you copy well enough, you learn at a staggering pace, and you eventually come out as the R&D leader, the innovation leader, building on that incremental innovation you initially copied. Today, Japan builds the best quality stuff available in any category.

The Japanese knew and understand that it takes three generations of copying and an enormous work discipline to become the best in the world in any industry. Recently, to my huge astonishment, they even overtook the Scottish as masters of whisky. (As I am a very avid fan of Scottish whisky, this was a personal source of confusion for me, even though I know things work this way on a rational level.)

At the personal level, pretty much every good software developer I know learned their craft by copying other people’s code. Copying brings prosperity at the national and the individual levels. Those who would seek to outlaw it, or obey such unjust bans against copying, have no moral high ground whatsoever – and frankly, I think people who voluntarily choose to obey such unjust laws deserve to stay unprosperous, and fall with their incumbent master when that time comes.

Nobody ever took the lead by voluntarily walking behind somebody else, after all. The rest of us copy, share, and innovate, and we wait for nobody who tries to legislate their way to competitiveness.

About The Author

Rick Falkvinge is a regular columnist on TorrentFreak, sharing his thoughts every other week. He is the founder of the Swedish and first Pirate Party, a whisky aficionado, and a low-altitude motorcycle pilot. His blog at falkvinge.net focuses on information policy.

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

On Friday news broke that luxury brand company Richemont had succeeded in its quest to have several sites selling counterfeit products blocked by the UK’s largest ISPs.

The landmark ruling, which opens the floodgates for perhaps tens of thousands of other sites to be blocked at the ISP level, contained some surprise information on the costs involved in blocking infringing websites. The amounts cited by Justice Arnold all involve previous actions undertaken by the movie and music industry against sites such as The Pirate Bay and KickassTorrents.

The applications themselves

The solicitor acting for Richemont, Simon Baggs of Wiggin LLP, also acted for the movie studios in their website blocking applications. Information Baggs provided to the court reveals that an unopposed application for a section 97A blocking order works out at around £14,000 per website.

The record labels’ costs aren’t revealed but Justice Arnold said “it is safe to assume that they are of a similar magnitude to the costs incurred by the film studios.”

In copyright cases, 47 sites have been blocked at the ISP level = £658,000

Keeping blocked sites blocked

When blocking orders are issued in the UK they contain provisions for rightsholders to add additional IP addresses and URLs to thwart anti-blocking countermeasures employed by sites such as The Pirate Bay. It is the responsibility of the rightsholders to “accurately identify IP addresses and URLs which are to be notified to ISPs in this way.”

It transpires that in order to monitor the server locations and domain names used by targeted websites, the film studios have hired a company called Incopro, which happens to be directed by Simon Baggs of Wiggins.

In addition to maintaining a database of 10,000 ‘pirate’ domains, Incopro also operates ‘BlockWatch’. This system continuously monitors the IP addresses and domains of blocked sites and uses the information to notify ISPs of new IPs and URLs to be blocked.

“Incopro charges a fee to enter a site into the BlockWatch system. It also charges an ongoing monthly fee,” Justice Arnold reveals. “In addition, the rightholders incur legal costs in collating, checking and sending notifications to the ISPs. Mr Baggs’ evidence is that, together, these costs work out at around £3,600 per website per year.”

If we assume that the music industry’s costs are similar, for 47 sites these monitoring costs amount to around £169,200 per year, every year.

Costs to ISPs for implementing blocking orders

The ISPs involved in blocking orders have been less precise as to the costs involved, but they are still being incurred on an ongoing basis. All incur ongoing costs when filtering websites such as those on the Internet Watch List, but copyright injunctions only add to the load.

Sky

The cost of implementing a new copyright blocking order is reported as a “mid three figure sum” by Sky, with an update to an order (adding new IP addresses, for example) amounts to half of that. Ongoing monitoring of blocked domains costs the ISP a “low four figure sum per month.”

BT

According to the court, BT says that it expends 60 days of employee time per year implementing section 97A orders via its Cleanfeed system and a further 12 days employee time elsewhere.

Each new order takes up 8 hours of in-house lawyers’ time plus 13 hours of general staff time. Updates to orders accrue an hour of costs in the legal department plus another 13 hours of blocking staff time.

EE

For each new order EE expends 30 minutes of staff time and a further three hours of time at BT whose staff it utilizes. Updates cost the same amount of time.

EE pays BT a “near four figure sum” for each update and expends 36 hours employee time each year on maintenance and management.

TalkTalk

TalkTalk’s legal team expends two hours implementing each new order while its engineers spend around around two and a half. Updates are believed to amount to the same. The company’s senior engineers burn through 60 hours each year dealing with blocking orders amounting to “a low six figure sum” per annum.

Virgin

Virgin estimates that Internet security staff costs amount to a “low five figure sum” per year. Interestingly the ISP said it spent more on blocking this year than last, partly due to its staff having to respond to comments about blocking on social media.

And the bills are only set to increase

According to Justice Arnold several additional blocking orders are currently pending. They are:

- An application by Paramount Home Entertainment Ltd and other film studios relating to seven websites said to be “substantially focused” on infringement of copyright in movies and TV shows

- An application by 1967 Ltd and other record companies in respect of 21 torrent sites

- An application by Twentieth Century Fox Film Corp and other film studios in respect of eight websites said to be “substantially focused” on infringement of copyright in movies and TV shows

But these 36 new sites to be blocked on copyright grounds are potentially just the tip of a quite enormous iceberg now that blocking on trademark grounds is being permitted.

Richemont has identified approximately 239,000 sites potentially infringing on their trademarks, 46,000 of which have been confirmed as infringing and are waiting for enforcement action.

So who will pick up the bill?

“It is obvious that ISPs faced with the costs of implementing website orders have a choice. They may either absorb these costs themselves, resulting in slightly lower profit margins, or they may pass these costs on to their subscribers in the form of higher subscription charges,” Justice Arnold writes.

Since all ISPs will have to bear similar costs, it seems likely that the former will prove most attractive to them, as usual.

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

Over the past few months City of London Police have been working together with copyright holders to take on sites that provide or link to pirated content.

The Police Intellectual Property Crime Unit (PIPCU) uses a variety of measures to achieve its goals. This includes sending requests to registrars requesting the suspension of allegedly infringing domain names.

The sports streaming site Fromhot, also known as Sportlemon and Frombar, was one of the most recent targets of the latter strategy. The “franchise” has well over a million visitors per month but some of these went missing after the Frombar.com domain was suspended.

The streaming site does remain operational from several alternative domain names, which now point to Fromhot.com, but interestingly enough the site can no longer be accessed from the UK.

A few days after its main domain was suspended the sport streaming site decided to block all visitors from the UK. It appears that this measure was taken in the hope of avoiding further actions from PIPCU.

TorrentFreak contacted the people behind the site for a comment on the unusual measure, but we have yet to hear back.

Frombar is not the first sports streaming site to be targeted by PIPCU. In May, PIPCU had the domain of the Cricfree.tv streaming portal suspended but its operator was able to bring the site back under a new domain.

In addition to the domain suspensions PIPCU also had several sports streaming site operators arrested. TorrentFreak previously revealed that the operator of BoxingGuru.co.uk, boxingguru.eu, boxingguru.tv and nutjob.eu was arrested during April.

This was followed by the arrest last month of 27-year old Zain Parvez, who allegedly operated CoolSport.se, CoolSport.tv and KiwiSportz.tv. Parvez was described as the head of an “industrial scale” sports streaming operation but all charges against him were dropped earlier this week.

Whether the blockade of UK traffic will keep PIPCU at bay has yet to be seen. The notice posted on the seized Frombar.com still notes that the site is “under criminal investigation.”

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