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.

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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.