In summer of 2013, TorrentFreak learned that City of London Police had begin sending warning letters to torrent and streaming sites, advising them to shut down or face the consequences.

In December 2013, the launch of the Police Intellectual Property Crime Unit was officially announced, with the news that the unit had secured £2.56m in initial funding from the UK government’s Intellectual Property Office (IPO).

Just a few months later, PIPCU announced the creation of the “ Infringing Website List “, an official blacklist that is regularly used by advertisers in order to disrupt cash flow to allegedly infringing sites. Since then, PIPCU has been involved in dozens of operations against piracy, including modified set-top box and IPTV suppliers, plus counterfeiting operations. More recently, however, another player began making its presence known.

North West Regional Organised Crime Unit

Starting in 2019, the North West Regional Organised Crime Unit (NWROCU) began announcing actions against various entities involved in the Kodi add-on scene and the supply of pirate IPTV

It was fairly clear that NWROCU had become involved in PIPCU-type work and there is now official confirmation that the pair have teamed up to form a brand new police unit focussed on tackling intellectual property crime.

North West Police Intellectual Property Crime Unit

“The City of London Police, the lead force for fraud, has partnered with the Intellectual Property Office and the North West Regional Organised Crime Unit to set up the North West Police Intellectual Property Crime Unit,” City of London Police has now revealed.

“This is an extension of its intellectual property capability, based in the City, which is focussed on intellectual property crime, ranging from copyright offenses to fake goods.”

The unit (‘NWPIPCU’) will combat intellectual property crime in North West England, which has already seen fairly significant action against operators and other players in the pirate device and unlicensed IPTV markets. The unit says it will support existing partners in an effort to disrupt and prosecute existing and new offenders.

And work is already underway.

New Operation Targets IPTV Offenders

Following an investigation, NWPIPCU says that on Thursday March 4, it executed five warrants for IPTV offenses. This resulted in two arrests plus the seizure of electrical items, cash and counterfeit goods. While no further details have been revealed, actions of this type have become increasingly common in recent months.

Last June, Lancashire Police executed a search warrant at a house on Buckley Grove in the seaside resort of Lytham St Annes. Carried out under the Police and Criminal Evidence Act, a 28-year-old man was arrested on suspicion of being involved in the supply of pirate IPTV services and illegal TV streaming devices. High-end cars, expensive jewelry and designer clothes were also seized.

In December, the Lancashire Police Cyber Crime Unit announced it would begin sending warning letters to around 7,000 users of the raided service, warning them that they should stop watching pirate services or face the possibility of prosecution.

NWPIPCU Launch Welcomed By PIPCU and NWROC

“The world of intellectual property crime is constantly evolving and the formation of the North West Police Intellectual Property Crime Unit clearly demonstrates that police, Government and industry are committed to protecting the UK from both established and emerging threats, many of which are now operating from online platforms,” says Superintendent Pete Ratcliffe at City of London Police.

“Intellectual property crime costs our economy hundreds of millions of pounds a year and threatens thousands of jobs. The unit has ongoing investigations with an estimated potential loss to industry of £2.3m. Through launching the NWPIPCU, we are sending out a clear warning to organized crime groups that IP crime won’t be tolerated.”

Superintendent Paul Denn of the North West Regional Organised Crime Unit warns that yesterday’s action against those involved in illicit IPTV represents just the start of a series of operations aimed at discovering the true scale of the IP crime problem in the North West.

The launch of the unit set to carry those out is welcomed by Intellectual Property Office CEO Time Moss.

“We are delighted to be further strengthening our partnership with City of London Police and building a new one with North West Regional Organised Crime Unit,” Moss says.

“Effective collaboration is vital for success in combatting IP crime. We are excited about the vital role the new IP crime hub will play in supporting the already impressive capability of this partnership, helping to reduce counterfeit goods and copyright offenses in the north west.”

From: TF , for the latest news on copyright battles, piracy and more.

In the wake of the RIAA’s effort to have ripping tool youtube-dl removed from Github , YouTube-ripping service Yout.com went on the offensive.

In a complaint filed at a Connecticut court, Yout argued that previous actions by the RIAA against its service, including the delisting of its homepage from Google based on the allegation that Yout circumvented YouTube’s ‘rolling cipher’ technology, were wrongful and damaged its business.

RIAA Fights Back

As reported in January, the RIAA presented a robust response in a motion to dismiss, noting that just because Yout had “figured out” how to defeat the YouTube rolling cipher, that did not make the Technological Protection Measure (TPM) any less eligible for protection under section 1201 versus one that could not be defeated.

“Plaintiff concedes that it ‘encounters’ the rolling cipher and then ‘reads and interprets the JavaScript program’ and ‘derives a signature value’ to access the file,” the RIAA wrote .

“The only reasonable inference to draw from those vague allegations is that the Yout service enables users to avoid or bypass that technological measure—that is the very definition of circumventing a TPM under section 1201.”

Furthermore, in response to Yout’s claims that the RIAA must’ve known that the service did not circumvent technical measures and therefore shouldn’t have filed DMCA notices against it, the RIAA pointed out that under 17 U.S.C. § 512(f) , only misrepresentations regarding alleged copyright infringement are available, not misrepresentations regarding alleged circumvention.

Yout’s Opposition to RIAA’s Motion to Dismiss

In Yout’s latest response, the stream-ripping service reiterates that it does not decrypt, bypass or avoid any measures on YouTube as the necessary information to access streams is freely available to anyone who seeks it. Yout describes that as essentially a “copy/paste” scenario, as provided for by any online content stream.

Yout’s Mere Use of the Signature Value Does Not Violate 17 USC §1201

The company says that the words “avoid” and “bypass” suggest ‘abuse’, countering that what its service actually does it ‘use’ a technological measure, which is an entirely different matter. Citing an earlier case involving DISH Network, Yout says that by utilizing the intended mechanism for decryption, no bypassing, avoidance or bypassing of a system took place.

“Here, the methodology employed by Yout is analogous. Yout utilizes the same signature value freely distributed by any video-sharing website, such as YouTube. This is the exact same signature value that appears to any web browser,” Yout’s response reads.

“Yout need not decrypt, bypass, or avoid anything as these signature values are freely given, and Yout uses the value, not in any cryptic way, but just as it is provided by any video-sharing website to anyone that requests it.

“Anyone can access and use the signature value of any free streaming content’s [sic] using only a browser, without other software, youtube-dl, the Yout service, or any similar tool,” Yout writes.

RIAA has not Identified any Copyrighted Works at Issue

Running with the claim that Yout does not circumvent any effective technological protection measure, the company says that the requirement that circumvention takes place without the permission of the copyright holder is not reached. However, the fact remains that the RIAA has failed to identify any copyrighted works that have allegedly been infringed.

“To prove a violation of § 1201, Defendant’s members must show not only circumvention but that the circumvention results in access to a copyrighted work. However, nothing in the RIAA’s notices references ownership of any specific copyrighted work purportedly protected by the rolling cipher,” Yout’s response reads.

Yout acknowledges that case law potentially raises complications but reminds the Court that the RIAA’s notices clearly accuse Yout of facilitating copyright infringement, specifically contributory copyright infringement. This leads Yout to raise the issue of misrepresentations in the RIAA’s DMCA notices and the music group’s claim that under 17 U.S.C. § 512(f), penalties are only available for misrepresentations regarding alleged copyright infringement.

Settlement Conference Has Been Scheduled

After Yout asked the Court to reject the RIAA’s motion to dismiss, United States Magistrate Judge Robert A. Richardson reported that a video settlement conference had been arranged for May 5, 2021, with both parties ordered to attend.

The Judge’s order requires Yout to have someone attend with full and final authority to dismiss the case with prejudice and to accept any settlement amount or offer. The RIAA must be represented by someone with the authority to commit to a settlement amount.

“The purpose of this requirement is to have in attendance a person with both the authority and independence to settle the case during the settlement conference without consulting anyone not present,” the order reads.

Not less than 14 days before the conference date, the parties are required to begin negotiating the terms of any settlement.

Yout’s Response to RIAA’s Motion to Dismiss / Conference Order here and here (pdf)

From: TF , for the latest news on copyright battles, piracy and more.

A group of connected movie production outfits, including Voltage Pictures and Millennium Funding, has pursued legal action against key piracy players in recent years.

The makers of films such as “Hunter Killer,” “Automata,” and “I Feel Pretty,” went after individual file-sharers, apps such as Popcorn Time and Showbox, and pirate sites including YTS.

This week, the movie companies expanded their efforts by going after a man and company associated with the VPN provider “LiquidVPN.”

Movie Companies Sue VPN Provider

Technically, VPNs are neutral services, much like regular ISPs. In most cases, this means they are not liable for the activities of their users. However, the movie companies argue that that logic doesn’t apply to LiquidVPN.

The complaint lists Michigan resident David Cox and his company SMR Hosting as the defendants. They allegedly operated LiquidVPN until early 2019, after which it was sold to the Puerto Rican company 1701 Management.

In addition to these ‘LiquidVPN defendants,’ as they are referred to, the complaint also lists 100 ‘Does’ who used the VPN service while downloading pirated films.

Update: The same movie companies have now filed a separate lawsuit (pdf) against 1701 Management and its sole shareholder Charles Muszynsky, which they say is the current owner of LiquidVPN. The allegations and demands virtually identical to the ones against the “LiquidVPN defendants,” which are detailed below.

In recent years we have seen several lawsuits against ISPs but, as far as we know, this is the first time a (former) VPN provider has been sued for copyright infringement in the US. The nature of the business is not the main concern, however.

According to the movie companies, the LiquidVPN defendants went further than simply offering a VPN service. They allegedly promoted and encouraged copyright infringement as well.

“Promoting Piracy”

“The LiquidVPN Defendants actively promote their LiquidVPN service for the purpose of movie piracy, including of infringing Plaintiffs’ Works,” they write.

These are serious allegations that are discussed in a lengthy court filing, with a myriad of arguments. Some are stronger than others, but the overall theme is that the VPN specifically appealed to a pirate audience.

For example, with regard to the piracy app Popcorn Time, LiquidVPN started stating that their VPN service could help avoid prison sentences and settlements.

“The LiquidVPN Defendants state their LiquidVPN service can be used to “Watch Popcorn Time without being detected by your ISP and P2P tracking software,” the complaint reads

“The LiquidVPN Defendants further state, ‘Experience everything Popcorn Time has to offer in the United States and the UK. Except the risks’, ‘Stream Content Anonymously. Why bother risking complaints from your ISP, settlement demands, threats and jail time for streaming your favorite TV show’.”

The complaint mentions a variety of other examples where the defendants directly or indirectly referenced copyright infringing activity. This includes a screenshot of Popcorn Time which shows the Millennium film Survivor.

In another example, it mentions that streaming media with Popcorn Time can result in a jail sentence, which can supposedly be avoided with a VPN.

“Avoid Jail Time”

“The LiquidVPN Defendants even blatantly promote their service to be used to stream copyright law [sic] in violation of criminal laws and encourage their users to do so,” the movie companies write in the complaint.

The reasoning is that these public statements ‘encouraged’ the “John Doe” defendants to use LiquidVPN to pirate movies. While the complaint only lists one IP-address, this could have been used by multiple users.

No Safe Harbor

In the US, online service providers can invoke safe harbor protections under certain conditions. However, the movie companies argue that this doesn’t apply to the LiquidVPN defendants, as they failed to terminate repeat infringers despite ample notification.

In addition, the company never had a registered DMCA agent, which is another requirement under the DMCA. On the contrary, LiquidVPN described itself as a DMCA-free zone.

“The LiquidVPN Defendants even promote the fact that their LiquidVPN is a ‘DMCA Free Zone’ as a positive aspect that makes them stand out from competing VPN providers.”

All in all, the movie companies accuse the defendants of contributory and vicarious copyright infringement, as well as various violations of the DMCA. As compensation, the filmmakers demand damages, which can go up to $150,000 per pirated title.

At this point, it’s worth repeating that the defendants – Mr. Cox and SMR Hosting – no longer operate LiquidVPN. This means that the accusations apply to past activities. Whether the movie companies will also sue the present owner is unknown. (update, as mentioned above, the alleged current owner 1701 Management is sued in a separate case)

Site Blocking and Port Blocking

This is particularly relevant when we look at the relief that’s requested. In addition to the damages, the movie companies also want the LiquidVPN defendants to take other actions. This includes terminating repeat infringers and blocking websites.

Specifically, they request an order requiring the defendants to “block subscribers from accessing notorious piracy websites,” to “block ports 6881-6889” which are often used for torrent traffic, and to adopt a policy that “provides for the prompt termination of subscribers that engage in repeat infringements.”

The list of sites to be blocked spans all sites that are covered in the USTR’s notorious markets report. This includes classic pirate sites such as YTS and The Pirate Bay, but also foreign e-commerce platforms such as Amazon.co.uk and Snapdeal.com, as well as the social media site VK.com.

It’s unclear to us how the defendants can comply if they no longer have control over LiquidVPN. However, it’s possible that SMR Hosting still works with the VPN company in some shape or form.

Needless to say, these allegations and requests are quite broad and have yet to be proven in court. It is just one side of the story and the defendants can share their position in court during the weeks to come.

Yesterday, the LiquidVPN website was offline for a few hours but it has come back since. TorrentFreak reached out to a contact who was involved with LiquidVPN at the relevant time but we have yet to hear back.

—-

A copy of the complaint, filed by Millennium Funding, Hunter Killer Productions and Voltage Holdings at the US District Court for the Eastern District of Michigan is available here (pdf)

From: TF , for the latest news on copyright battles, piracy and more.

Peter Sunde was one of the key people behind The Pirate Bay in the early years, a role for which he was eventually convicted in Sweden .

While Sunde cut his ties with the notorious torrent site many years ago, he remains an active and vocal personality on the Internet.

In recent years Sunde has focused on several other projects. His links to the domain registration service Njalla and the Ipredator VPN are well known, and he also hosted the documentary series “ Activisten ” on Finnish television.

Sunde’s Domain Name Business

Sunde is also involved with the domain registrar Sarek , which caters to technology enthusiasts and people who are interested in a fair and balanced Internet, promising low prices for domain registrations

As a business, everything was going well for Sarek. The company made several deals with domain registries to offer cheap domains but there is one element that’s missing. To resell the most popular domains, including .com and .org, it has to be accredited by ICANN .

ICANN is the main oversight body for the Internet’s global domain name system. Among other things, it develops policies for accredited registrars to prevent abuse and illegal use of domain names. Without this accreditation, reselling several popular domains simply isn’t an option.

ICANN Denies Accreditation

Sunde and the Sarek team hoped to overcome this hurdle and started the ICANN accreditation process in 2019. After a long period of waiting, the organization recently informed Sunde that his application was denied.

Needless to say, Sunde was disappointed with the decision and he took his frustration to Twitter a few days ago . Initially, he assumed that the application was denied because ICANN concluded that he ‘lied’ about his background.

The accreditation form requires applicants to tick a box if they have been convicted for fraud or something similar. Sunde didn’t tick this box, as he was convicted for criminal copyright infringement. This ‘error’ was swiftly noticed by ICANN, which is also uneasy with other parts of the Pirate Bay founder’s history.

Ticking Boxes

“After the background check I get a reply that I’ve checked the wrong boxes,” Sunde wrote. “Not only that, but they’re also upset I was wanted by Interpol.”

The Twitter thread didn’t go unnoticed by ICANN who contacted Sunde over the phone to offer clarification. As it turns out, the ‘wrong box’ issue isn’t the main problem, as he explains in a follow-up Twitter thread.

“I got some sort of semi-excuse regarding their claim that I lied on my application. They also said that they agreed it wasn’t fraud or similar really. So both of the points they made regarding the denial were not really the reason,” Sunde clarifies.

ICANN is Not Comfortable With Sunde

Over the phone, ICANN explained that the matter was discussed internally. This unnamed group of people concluded that the organization is ‘not comfortable’ doing business with him.

“They basically admitted that they don’t like me. They’ve banned me for nothing else than my political views. This is typical discrimination. Considering I have no one to appeal to except them, it’s concerning, since they control the actual fucking center of the internet.”

ICANN hasn’t commented publicly on the matter and the organization didn’t immediately respond to our request for further information. However, Sunde tells us that his ‘background’ is obviously the reason for the denial. And copyright plays a role in this as well.

“They said it outright in the phone call, it’s me they don’t feel comfortable with. They said they take Intellectual Property rights so seriously that I can’t join,” Sunde tells us.

Making matters worse, ICANN will also keep the registration fee, so this whole ordeal is costing money as well.

What’s the Real Issue?

While Sunde understands that there are people who don’t agree with his views on certain things, that shouldn’t be a problem here. After all, ICANN is heavily regulated and it could easily revoke accreditation should its policies be violated.

Without an on-the-record statement from ICANN, we can only speculate on what ‘background issues’ the organization is concerned with. There are a few to choose from.

Needless to say, The Pirate Bay has caused ICANN quite a few headaches. Over the years copyright industry groups such as the MPA and RIAA have repeatedly asked ICANN to step in and ban these domains.

Thus far, ICANN has always said that it doesn’t want to ‘police the Internet’ and that courts can deal with this issue. However, the pressure from rightsholders may indirectly play a role here.

Sunde may have upset ICANN in other ways as well. Roughly a decade ago, he promoted a P2P-based DNS system to compete with ICANN’s root-server and bypass its control over the Internet.

Notorious Market?

And then there’s the privacy-oriented domain registration service Njalla, where Sunde is involved as well. Njalla is a legitimate company that helps people maintain their privacy, but copyright holders don’t like it, as it frustrates their enforcement efforts.

Just a few months ago, several rightsholder groups nominated Njalla for the US Trade Representative annual overview of “ notorious markets ,” which may have factored into ICANN’s decision as well.

Whatever the reason, Sunde is clearly disappointed and he has already filed a complaint at ICANN. In addition, he reached out to digital and human rights groups to see if there are more options to appeal.

“I’m talking with the Electronic Frontier Foundation and ARTICLE 19 right now,” Sunde tells us. “And I’ve left a complaint with the ICANN complaints team, but that will likely lead to nothing.”

From: TF , for the latest news on copyright battles, piracy and more.

In September 2019, Super Channel owner Allarco Entertainment filed a lawsuit in Canada’s Federal Court targeting Staples Canada, Best Buy Canada, London Drugs, Canada Computers, several related companies and up to 50,000 ‘John Doe’ customers.

The controversial legal action saw Allarco accuse the retailers and their staff of promoting, encouraging and instructing in the use of set-top boxes that could enable buyers to access copyright-infringing content.

The complaint was supported by 100 hours of undercover recordings that purported to show retailers’ staff showing prospective customers how to use software such as Kodi, or offering advice on where to get devices configured for piracy.

Allarco demanded an injunction to prevent the defendants from “communicating or facilitating the communication” of its works without permission, including by “configuring, advertising, offering for sale or selling Pirate Devices.”

Allarco Ends Federal Court Lawsuit, Launches Another

A month after the lawsuit was filed, Canadian lawyer Howard Knopf wrote that in nearly four decades of being an intellectual property lawyer, he had never seen a more unusual Statement of Claim.

He noted that it claimed copyright infringement in unspecified works, circumvention, making available, unspecified “pirate devices”, trademark infringement, the Criminal Code, through to theft, stealing, interference with the economic and business relations of the Plaintiff, and conspiracy.

After the retailers fought back, Allarco discontinued its Federal Court lawsuit on January 6, 2020. However, Allarco had already filed another similar lawsuit on December 6, 2019, this time at the Court of Queen’s Bench of Alberta (Alberta’s superior court). The complaint added unknown suppliers of ‘pirate’ devices as defendants and demanded CAD$50m in damages.

“It’s too early to speculate about what Allarco will attempt to do and what the Court might let it do about the 50,000 John Doe Customers or the now added John Doe Suppliers and how their interests will be represented if things ever get anywhere near that far,” Knopf wrote at the time.

However, several months later, a new report indicates that matters are now progressing.

Allarco Demands ‘Pirate’ Set-Top Device Ban

Doubling down on its allegations of wrongdoing at the retailers, Allarco is now demanding an injunction from the Court that would prevent them from offering the set-top boxes for sale.

Whether the Court will find such a request reasonable in respect of devices that are used by millions to access entirely legal services such as Netflix is yet to be determined. Allarco, meanwhile, believes that people buy them for only one thing – piracy.

“The only reason why people buy these boxes is to steal content,” says Allarco president and chief executive officer Donald McDonald, as quoted by Globe and Mail.

Interestingly, in common with his counterparts right across the streaming industry, McDonald says that the ‘pirate’ devices – which are largely Android-based and imported from China – are often preloaded with malware that targets consumers and puts their security at risk.

“These devices are dangerous to your home network, dangerous to your personal data and could end up costing you a lot more money in the end,” he says, showing concern for the people his company is hoping to sue.

Retailers Deny The Allegations

Ever since the first lawsuit was filed in 2019, Staples Canada, Best Buy Canada, London Drugs, and Canada Computers have vigorously denied the Allarco/Super Channel allegations. All were reportedly sent cease-and-desist notices before the actions were filed but all claim to have acted within the law.

“We offer technology from reputable manufacturers and leading brands. We take claims of intellectual property infringement seriously, but we believe that Super Channel’s claims are without merit, and intend to defend this action vigorously,” an earlier Best Buy statement reads.

While Staples and Best Buy are opting not to comment at this stage, London Drugs said it would “never intentionally take or condone” any action that would infringe intellectual property rights.

“London Drugs has always respected the rights of content creators and holders of copyright in all forms. We sell products and provide services for many parties engaged in content creation and distribution and recognize and fully support their right to fair compensation,” the company says.

From: TF , for the latest news on copyright battles, piracy and more.

The US Government regularly cautions foreign countries for their lacking copyright policies. However, it has its own issues as well.

Five years ago the US Navy was sued for mass copyright infringement and accused of causing hundreds of millions of dollars in damages.

Software Company Sues US Navy

The lawsuit was filed by the German company Bitmanagement . It’s not a typical piracy case in the sense that software was downloaded from shady sources. However, the end result is the same.

It all started in 2011, when the US Navy began testing the company’s 3D virtual reality application ‘BS Contact’. After some testing, the Navy installed the software across its network, assuming that it had permission to do so.

This turned out to be a crucial misunderstanding. Bitmanagement said it never authorized this type of use and when it heard that the Navy had installed the software on 558,466 computers, the company took legal action.

Hundreds of Millions in Damages

In a complaint filed at the United States Court of Federal Claims in 2016, the German company accused the US Navy of mass copyright infringement and demanded damages totaling hundreds of millions of dollars.

The dispute started when the US Navy decided that it would like to run the software across its entire network. This meant that it would be installed on hundreds of thousands of computers, with “Flexera” software keeping track of the number of simultaneous users.

Bitmanagement didn’t offer such a license by default, so the Navy requested this option separately. These requests took place through a reseller, Planet 9 Studios, which complicated matters. After several back and forths, the Navy was convinced that it had permission, but Bitmanagement later disagreed.

The problem for the Court was that the Navy and Bitmanagement didn’t sign a contract, so there was no direct permission given. This meant that the Court had to review the conversations and exchanges that took place, to determine which side was right.

After reviewing all evidence, the Federal Claims court eventually sided with the US Navy, dismissing the copyright infringement claim .

Bitmanagement Appeals

However, this wasn’t the end of it. Bitmanagement maintained that the Navy clearly committed mass copyright infringement and the company took the matter to the US Court of Appeals for the Federal Circuit, with success.

In an order issued a few days ago, the Appeals Court agrees with pretty much all conclusions of the Federal Claims Court.

The evidence indeed shows that Bitmanagement ‘authorized’ the U.S. Navy’s copying of BS Contact Geo across its network. While this wasn’t formalized in an official contract, the Navy had an “implied license.”

Navy Failed to Track Usage

Based on this reasoning, the lower court dismissed the case. However, the Appeals Court notes that the evidence doesn’t stop there. The implied license also required the Navy to “Flexwrap” the software to track simultaneous users. That never happened.

“We do not disturb the Claims Court’s findings. The Claims Court ended its analysis of this case prematurely, however, by failing to consider whether the Navy complied with the terms of the implied license,” the Appeals Court writes.

“The implied license was conditioned on the Navy using a license-tracking software, Flexera, to ‘FlexWrap’ the program and monitor the number of simultaneous users. It is undisputed that the Navy failed to effectively FlexWrap the copies it made,” the Court adds.

Liable For Copyright Infringement

This failure on the Navy’s part makes the US Government liable for copyright infringement. The Navy simply wasn’t allowed to copy the software on hundreds of thousands of computers without tracking its use.

“Such unauthorized copying is copyright infringement. We therefore vacate the Claims Court’s judgment and remand for a determination of damages,” the Appeals Court clarifies.

This means that the dismissal is off the table and the Navy is liable for copyright infringement after all. The matter will now go back to the Federal Claims court, to determine the appropriate damages amount.

In the original complaint, Bitmanagement argued that it is entitled to at least $596,308,103 in unpaid licensing fees, so this could turn out to be an expensive error.

—

A copy of the order issued by the US Court of Appeals for the Federal Circuit is available here (pdf)

From: TF , for the latest news on copyright battles, piracy and more.

Over the past few days a drama has been developing around the videogame The Sinking City .

Created by Ukrainian development team Frogwares, the company made the unusual step of taking to Twitter to warn consumers NOT to buy the version of its game that appeared on Steam.

In its tweet , Frogwares wrote that it had “not created the version of @thesinkingcity that is today on sale on @Steam. We do not recommend the purchase of this version. More news soon.”

Background: History of Legal Issues

After being released in 2019, The Sinking City was pulled from Steam and other platforms in 2020, with Frogwares stating that it had been forced to end its contract with French publisher Nacon. Frogwares cited breaches of its licensing agreement and according to various reports, Nacon was still collecting revenue from sales of The Sinking City, something which prompted Frogware to pull the plug.

The background is available in an open letter that was published on the Frogwares site in August last year. It stated that in return for a “financial contribution” to the development of the game, publisher Bigben/Nacon were given the rights to commercialize the game on Xbox One, PS4, Steam and Epic Games Store.

“The intellectual property would still belong to Frogwares, which has always been the only producer and owner of its games, including The Sinking City,” the developer wrote.

Frogwares launched legal action against Bigben/Nacon during August 2019 but in October 2020, the Paris Court of Appeal ruled that Frogwares should not have pulled The Sinking City from sale, adding that no further action should be taken until the dispute between the parties had been resolved.

Game Appears on Steam, Disappears, Reappears

In January 2021, Frogwares released The Sinking City on Steam but it was soon pulled , only to be replaced by Nacon last week. That move was met with disappointment from fans, who complained that the version being offered by Nacon was old and incomplete , with “no DLC, no cloud saves, no achievements.”

This reappearance prompted Frogwares to deter fans from buying the version of the game uploaded by Nacon to Steam. Then, in an announcement made yesterday, Frogwares put some additional meat on the bones, stating in a blog post that Nacon had “Cracked and Pirated” The Sinking City.

Frogwares notes that the final decision on whether it is required to deliver a Steam version of The Sinking City is set to be decided by the court “in the next months or even years”. However, it alleges that after giving Frogwares an ultimatum in December to upload a “new Steam master”, Nacon bought a copy of The Sinking City from Gamesplanet and uploaded it to Steam.

Frogwares says it managed to stop this from being distributed but then last week, Nacon uploaded the game to Steam once again.

“So on February 26th 2021 to our great surprise, we found a new version of The Sinking City was uploaded to Steam and launched. But Frogwares didn’t deliver such a version,” the company writes.

“Nacon under the management of its president Alain Falc asked some of their employees, who we even identified, to crack, hack and pirate our game, change its content in order to commercialize it under their own name.”

Frogwares’ Explanation of How ‘Crack’ Took Place

“In order to make changes Nacon had only one way: to decompile or hack the game using a secret key created by Frogwares since the totality of the game’s content is archived with an Epic Unreal Engine encryption system,” the developer continues.

“To be clear this is hacking and when hacking has the purpose to steal a product and make money with it, it’s called piracy or counterfeiting. In order to achieve this goal, programmers with serious skills need to be involved. This is not DIY work by inexperienced people, this is done by programmers who know Unreal engine well.”

Nacon Obtained Encryption Key

Frogwares says that in order to ‘crack’ its game, Nacon needed to obtain the encryption key. The developer says it knows how that was achieved and will inform the French court dealing with the dispute. Frogwares says it carried out its own checks by downloading the version Nacon uploaded to Steam and testing its own key, which worked.

“The hackers didn’t even care to use a different encryption key than the one we created when recompiling,” the company says.

“We therefore opened the packages and we identified immediately in the config files the version that was stolen and hacked: it is a commercial version coming from the site Gamesplanet that was purchased by Nacon like any other player.”

Using information obtained from Steam, Frogwares argues that the ‘crack’ was carried out by someone at Belgian studio Neopica, which was acquired by Nacon in October 2020.

“There are long term damages we need to take care of, Nacon unpacked our data, stole our source code and used it. Nacon can create a new version of The Sinking City using our assets; they can resell, reuse, recycle our content and our tools etc,” Frogwares writes.

“We have to take the measure of what happened now and follow the best path on the legal side to prevent anything like this happening again. The owner of Nacon, Alain Falc will have to face the legal consequences of the decision of pirating and stealing Frogwares property,” the developer concludes.

In a statement, Nacon said it regrets that Frogwares “persists in disrupting the release of The Sinking City” but puts the blame at the developer’s door.

“It was Frogwares who came to Nacon to request financing for the development of the game, and to date, more than 10 million euros have been paid to Frogwares by Nacon. It was Frogwares that relied on our marketing and promotion teams, representing thousands of hours of work and several million euros worth of investment,” the statement reads.

“Now that the game has been fully developed, and published, largely thanks to Nacon’s money and work, Frogwares would like to revise the terms of the contract to their sole advantage. It’s easy to play the victim, but all we seek is that Frogwares respect its commitments both in the contract and as demanded by the courts.”

From: TF , for the latest news on copyright battles, piracy and more.

In November 2019, US broadcaster DISH Network filed a lawsuit in a Texas district court targeting the operators of 15 domains used to illegally stream DISH content to the public.

The domains – Freetvall.net, Freetvall.xyz, Freetvall.me, Freetvall.live, Livetvcafe.com, Livetvcafe.net, Livetvcafe.me, Time4tv.com, Time4tv.net, Time4tv.me, Cricket-tv.net, Crickettv.me, Tv4embed.com, and A1livetv.com – offered a wide range of embedded TV channels, not only from DISH but other broadcasters including Sky and ESPN.

DISH’s Exclusive License to Broadcast in the United States

In its complaint , DISH listed around two dozen channels offered by the network of sites. Through licensing agreements, DISH holds the exclusive rights to distribute and publicly perform the channels in the United States. The sites had no such permission.

As the lawsuit progressed, DISH concluded that all of the sites were operated by one person, who was subsequently named as Nauman Khalid.

DISH claimed that the defendant provided users in the United States with links to unauthorized streams of its protected channels by collecting them from other locations on the Internet and organizing them on his websites. The whole operation was monetized with advertising.

DISH Notified Defendant of Infringement Dozens of Times

During a period spanning several years, DISH notified Khalid “at least” 49 times that he was infringing the company’s rights by providing infringing links to a US audience. DISH backed up this effort by sending similar notifications to Internet services utilized by the sites but Khalid “intentionally interfered” with these by changing providers or using new links.

DISH alleged that Khalid “induced and materially contributed” to offenses carried out in breach of US copyright law. Khalid was served in Pakistan but chose not to participate in the legal action against him in the US. As a result, DISH sought to obtain a default judgment from the court.

Court’s Decision – Direct and Contributory Infringement

In a memorandum opinion and order signed last week, the court found that the works at issue in the suit were authored in countries outside the United States but because those countries are all signatories to the Berne Convention , all are protected under US copyright law. In any event, all works were registered with the US Copyright Office.

In respect of the allegations of direct infringement, the court found that when Khalid provided links that enabled the retransmission of DISH content, that infringed the company’s rights to publicly perform those works. The court further found that Khalid had knowledge of these infringements since he had received at least some of the takedown notices sent by DISH.

Moving to DISH’s allegations of contributory copyright infringement, the court found that by selecting infringing links to channels and by organizing and maintaining them, Khalid “created the audience” to complete the direct infringement carried out by the unlicensed provider of the channels. As such, the allegations of inducement and material contribution were found to valid.

Question of Damages

When claiming damages, DISH had the option to choose actual damages and profits or statutory damages – the company settle on the latter. That meant the broadcaster could obtain $30,000 per infringed work and up to $150,000 if the infringement was committed willfully.

DISH elected to pursue statutory damages for 112 works registered with the US Copyright Office, to the maximum of $150,000 per infringement. The company alleged that even after sending takedown notices, Khalid continued to provide access to the broadcaster’s channels.

In support of its claim for maximum statutory damages, DISH told the court that Khalid had been infringing its rights for between five and nine years, claiming that its channels were viewed over 5.5 million times. The court agreed that the websites had caused DISH to incur substantial losses, adding that the offending was considerable.

“Because of the sheer breadth and duration of the infringement, the failure of Khalid to participate in this proceeding, his willingness to defy almost 50 notices of infringement and to evade service providers’ attempts to halt the infringement, and the likelihood that he profited from the infringement and caused substantial losses of revenue to DISH, the court finds that an award of maximum statutory damages — $150,000 per registered work — is appropriate,” the decision reads.

“Therefore, the total amount of damages that Khalid must pay DISH for the infringement of the 112 registered works is $16,800,000.”

Permanent Injunction

In addition to damages, DISH demanded a permanent injunction and the court was happy to comply. First turning to Khalid and anyone acting in concert with him, the court issued an injunction enjoining all parties from transmitting, streaming, distributing, linking, hosting, promoting or advertising any of DISH’s protected channels in the United States.

Moving to non-parties, such as those providing any kind of technical service enabling the defendant to infringe, the court permanently enjoined all entities providing servers, hosting (including data centers), domain hosting/registration/proxy services, CDNs, advertising and social media, from doing business with Khalid that involves breaching DISH’s rights.

Specifically, the court ordered VeriSign and any other registry or registrar of the listed domains to transfer them to DISH within 48 hours so that the broadcaster may “fully control and use” them. Additionally, registries and registrars were ordered to restrict any future domain names used by Khalid to provide access to DISH works by disabling them within 48 hours of receiving a complaint from DISH.

“Such domain names shall remain disabled so that the websites and content located at the domain names are inaccessible to the public until further order of this Court, or until DISH provides written notice to the registry or registrar that the domain names shall be reenabled,” the order concludes.

The memorandum opinion and order and final judgment can be found here and here (pdf)

From: TF , for the latest news on copyright battles, piracy and more.

Changes in power often present opportunities, including in the US where a new President and Congress were recently sworn in.

Last week, we reported how a pro-copyright coalition took this opportunity to ask President Biden for help in their battle against online piracy .

The copyright holders were particularly critical of big tech companies such as Google and Facebook, accusing them of hiding behind the DMCA’s safe harbor. That should stop, they argued, calling for stricter copyright policies.

Re:Create Wants a Balanced Copyright Law

Not everyone agrees with this stance. In fact, the Re:Create Coalition , which includes members such as the Consumer Technology Association, the American Library Association, the CCIA, and EFF, is in favor of more ‘balanced’ copyright policies.

The coalition sent a letter to the 117th Congress last week, warning that copyright laws and regulations have a downside too. When they go too far, it can harm creativity and stifle free speech.

“Attempts to increase the protections provided by U.S. copyright law may serve an important purpose, but in doing so we must remain mindful that a heavy-handed approach will only stifle free speech, creativity and the economy writ large,” Re:Create writes.

“The U.S. government should seek the appropriate balance in copyright law to unlock the full potential of all people’s innovative and creative spirit,” the group adds.

Unlike many copyright industry groups, Re:Create believes that the DMCA is already balanced and working properly. The notice-and-takedown system is seen as an international standard that protects online services while allowing copyright holders to protect their content.

Protecting the Public by Punishing Abuse

However, the coalition sees some developments of concern. For example, companies such as YouTube allow rightsholders to de-monetize or block content that could be fair use. This stifles free speech.

To prevent these types of ‘abuse’ it should be easier to contest these takedown requests. In addition, there should be penalties for people and companies that abuse the takedown process.

“We recommend that the DMCA’s notice and takedown regime largely be left alone, although there is a need to strengthen the penalties for abusive and fraudulent notices, and to make it easier to file counter-notices on non-infringing content,” Re:Create writes.

The letter also highlights another DMCA-related concern. In recent years several Internet providers have been sued because they failed to terminate “repeat infringers.” As a result, ISPs have implemented stricter termination policies.

Disconnecting Internet Users Isn’t Right

This is a problem, Re:Create warns, as Internet access is a fundamental part of people’s lives. Cutting Internet access to entire households simply based on copyright infringement accusations goes too far.

“Internet access is a necessity in today’s society – being cut off from the internet could mean losing a job or not being able to participate in school fully,” Re:Create writes.

“Just because one household member has had multiple allegations of copyright infringement against them, the whole household should not lose internet access. Copyright law should be amended to ensure that no one loses access to the internet based on allegations of copyright infringement.”

The letter highlights several other issues that Congress may want to reconsider as well. These include broadening DMCA exceptions that allow people to break DRM. In addition, Re:Create warns that the newly adopted Small Claims Act should become ‘opt-in’, instead of ‘opt-out’.

Progress Without Restrictions

All in all, the letter reminds Congress that copyright law isn’t about restrictions. It was originally implemented to “promote the progress of science and useful arts.” This means that fewer restrictions can actually prove beneficial.

“Copyright law, by its very nature, needs to focus on how to best allow this progress to occur. Restrictive rules that strengthen gatekeepers to the creative world and prevent new and different types of creativity go against this Constitutional purpose,” the coalition writes.

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A copy of the letter Re:Create sent to the 117th US Congress is available here (pdf)

From: TF , for the latest news on copyright battles, piracy and more.