The latter group has not been very successful in convincing the big labels to change their anti-piracy strategies, but when MC Hammer says STOP they will have to listen.

In a recent interview Hammer commented on the industry’s struggle with piracy and the future of music in the digital age. In Hammer’s view, the RIAA’s legal battles against file-sharers have only alienated buying customers. ”The approach that the music industry took to fight piracy was the wrong strategy,” he said.

Aside from going after individuals, the entertainment industries have also targeted ISPs, for enabling their customers to pirate. The most prominent case at the moment is that of AFACT against iiNet, where the anti-piracy group wants the Aussie ISP to disconnect repeat infringers.

Using a murder and gun analogy to appeal to his fellow rappers, Hammer argues that AFACT is going after the wrong party by targeting the ISP.

”When there is a murder done with the gun, do they go back to the guy who sold the gun at the store and arrest him? No they don’t. They arrest the person who did it. So in this particular case, somebody is stealing content using the freeway. You can’t go back and sue the construction men,” Hammer said.

In addition to calling for a stop to the legal battles, Hammer thinks the music labels should focus more on digital content instead of trying to sell plastic to a generation of people that have never even owned a standalone CD player.

‘Digital files are no doubt not just the future, but the present. I think that it’s [the CD format] on its last legs, it’s on an artificial respirator,” Hammer commented.

“I don’t know what would turn them on about having to go through that terrible exercise of trying to open the packaging – it’s unbelievable when you’re trying to open a CD, right? You need a box cutter … it’s a tough deal to get it open. And once you get it open … you go and upload it to your computer,” Hammer added.

Hammer has a fair point there. Digital sales are breaking records year after year in terms of revenue generated, while the decline in physical CD sales is more likely to be a sign of the times rather than a side-effect of music piracy.

Article from: TorrentFreak, check out our new blog at FreakBits.

The case continued in the Federal Court, with AFACT making its closing submissions and tearing into iiNet witnesses CEO Michael Malone and chief regulatory officer Steve Dalby.

The film industry, represented by chief barrister Tony Bannon, labeled Malone’s evidence as “incredible”, “evasive” and unreliable. Bannon said iiNet gave nothing but excuses for not acting on such notices and that Malone’s assertion that copyright laws should should be changed or an industry code introduced before he could act on infringement notices were “extreme”.

Since only Malone and Dalby appeared for cross-examination on behalf of iiNet, Bannon took the opportunity to criticize the company for not putting forward other staff from the company, who, Bannon claimed, would be better placed to answer the questions during the trial.

Bannon said this had put Malone and Dalby in the position of providing evidence on matters they knew nothing about, citing the pair’s lack of BitTorrent knowledge as a prime example.

“To put forward these two gentleman as the extent of familiarity of BitTorrent in the company is an entirely inaccurate picture of a company which plainly has a mass of technical expertise,” said Bannon, as reported by ITNews.

“It beggars belief that a company which paints itself as an Internet pioneer doesn’t have a level of knowledge within that company that knows exactly how the BitTorrent client works,” he added.

On an earlier claim where the iiNet CEO claimed to understand the BitTorrent protocol by not the operation of a torrent client, Bannon said it was a nonsense, to which insult to injury was added when it was revealed that iiNet operated its own BitTorrent tracker.

Bannon said it was clear to him that the only individuals in the court who claimed to know little to nothing about torrents were Malone and Dalby, but in reality the company understood the system perfectly well. Its motive for this stance, he said, was so that the company could distance itself from the accusations of authorizing the copyright infringements of their customers.

Bannon also heavily criticized Dalby’s evidence when he claimed to have the company’s policy on taking action only against repeat infringers “in his head”, insisting that no such policy exists.

iiNet is also asking the court to find its own terms and conditions both unenforceable and unreasonable, said Bannon as quoted by CW.

Although iiNet has asserted time and again in the case, that if a court ruled that someone had infringed copyright the ISP would disconnect them, the AFACT barrister said that iiNet’s own terms alone gave them the right to disconnect copyright infringers, and dismissed the ISP’s claims that the clause was unenforceable.

AFACT claims that iiNet engaged in secondary acts of infringement when it failed to stop its subscribers sharing illicit files on their network, citing the legal principles established in the 1975 case known as University of NSW v Moorhouse, details of which can be found here.

According to another report, the case could run over into a fifth week to 19th November and beyond to allow enough time for iiNet lawyers to prepare the company’s closing submissions.

The case continues.

Article from: TorrentFreak, check out our new blog at FreakBits.

The case continued Friday in the Federal Court, with iiNet’s chief regulatory officer, Steve Dalby, taking the stand following his first appearance Thursday afternoon.

Yesterday, Dalby recalled having difficulty in understanding some of the terminology utilized by AFACT in the infringement notice spreadsheets it submitted to iiNet.

Dalby told AFACT barrister Tony Bannon that iiNet had told AFACT there was an issue with some items being unclear in the spreadsheets.

“There was no legend associated with this spreadsheet. I had to make an assumption. We asked AFACT for more information,” ITNews quotes Dalby as saying.

Bannon then criticized Dalby for not being specific and expecting AFACT to guess at which terms were not understood, but Dalby pointed out that he expected AFACT to contact the ISP for clarification.

Further discussion took place on the issue of IP addresses and how iiNet allocates them to customers. Time and again, Dalby explained that IP addresses are allocated to a customer account and they do not necessarily represent any particular computer that the customer may use.

In what is becoming a recurring theme, today Dalby told the court that iiNet had no intention of forwarding AFACT’s copyright infringement notices to its customers purely on their allegations.

“Our position was that we should not be doing AFACT’s work,” said Dalby. “If we had received authorization by way of court order, that would have changed our position.”

AFACT went on to tender a draft e-security code of practice from the Internet Industry Association (IIA) created earlier this year. It proposes that in future, ISPs could contact, and maybe even disconnect subscribers, who have malware-ridden computers which negatively affect networks. Despite Justice Cowdroy indicating that its relevance was peripheral to the case and wouldn’t but much use when he comes to make his decision, it was allowed.

Dalby said he believed that iiNet had not been involved in the draft and he was personally unfamiliar with it. CW reports that he had been quoted on the issue in the media, but Dalby said that it was a regular occurrence for the press to call him to comment on issues he was not yet familiar with, and in this particular case his comments were “neutral and non-committal”.

In September we reported that Australia’s Internet Industry Association (IIA) felt it had something to offer these court proceedings. IIA applied to be amicus curiae, a ‘friend of the court’, but AFACT objected, insisting the group would not be impartial and would favor iiNet.

The decision on whether this will be allowed or not has been delayed until next week.

In an indication that AFACT still objects to an IIA appearance, Bannon said that “….there’s a conceivable possibility they don’t want to add anything other than to say ‘hear, hear’,” apparently to the amusement of the court.

AFACT barristers are scheduled to make their closing statements next Monday afternoon.

Article from: TorrentFreak, check out our new blog at FreakBits.

The case continued Thursday in the Federal Court, with iiNet CEO Michael Malone taking the stand for the fourth consecutive day, and possibly his last.

Not unusually for a copyright trial involving BitTorrent, the issue of The Pirate Bay was raised.

Yesterday AFACT barrister Tony Bannon incorrectly suggested that iiNet’s very own BitTorrent tracker’s functionality had been taken down, later to discover that in fact the court’s network blocked BitTorrent transfers.

Bannon indicated that he would like to be able to give a courtroom demonstration of The Pirate Bay Thursday, and the judge agreed that it would be possible to lift the block so he could do so.

According to ITNews, Bannon was today true to his word.

After the demo, Bannon enquired of Malone whether iiNet had a desire for its subscribers to be able to access the world’s largest tracker, “…when the only purpose it serves is providing a way to download unauthorized copies of films?”

This question was met with objection from iiNet barrister Richard Cobden, who argued that customer “desire” was irrelevant to the case. The judge, Justice Cowdroy, was also keen to discover the relevance.

Bannon then became the latest in a long line of movie and music industry lawyers to reveal that should his clients win the case, they will take legal action to have not only the world’s largest tracker blocked from iiNet’s customers, but other similar sites.

He also revealed that around 50% of the alleged copyright infringements in the case came courtesy of The Pirate Bay.

Then Bannon attempted to show that by allowing its customers to access The Pirate Bay, iiNet effectively sanctioned and authorized their infringing activities.

“We seek Mr Malone’s position as to whether or not his customers should have access to sites such as this,” said Bannon.

However, after legal argument, Bannon withdrew the question.

Malone did, however, concede that iiNet had taken no steps to block The Pirate Bay, but qualified this by indicating that the company didn’t possess the means to do so. Bannon asked if it was technically possible and Malone replied that he could achieve a primitive block with additional equipment, but even that could be easily circumvented

“To completely and conclusively block access to The Pirate Bay, I believe it to be beyond our technical capability or of any ISP,” replied Malone.

Asked by Cobden if iiNet had ever blocked any web sites, Malone said the company had not.

This technical inability led to iiNet pulling out of the Australian government’s filtering trials, reports ComputerWorld. Malone has been an outspoken critic of the filtering scheme, labeling it “fundamentally flawed” and saying his company would only participate in the trials to prove that filtering would fail.

The case continues.

Article from: TorrentFreak, check out our new blog at FreakBits.

The case continued Wednesday in the Federal Court, with iiNet CEO Michael Malone taking the stand for the third consecutive day.

Again AFACT barrister Tony Bannon tried to portray iiNet as an encourager of copyright infringement on its network, by referring to iiNet marketing where the ISP measures bandwidth in terms of how much music or TV episodes people can download. Malone said the company did this simply to give a customer an easier barometer by which to measure their consumption.

When questioned on the music aspect, Malone said the company referred to legal downloads, such as those from iTunes. Bannon countered by saying this could not be the case, since iiNet did not count downloads from iTunes towards a customer’s bandwidth quota.

According to iTWire, a welcome email from iiNet to new customers ended with, “Thanks for choosing iiNet. Happy downloading.”

By drawing attention to the above ponts, AFACT hopes to show that iiNet encouraged infringements, thereby losing its safe habor protection as a carrier.

CW reports that AFACT presented press articles regarding the levels of BitTorrent transfers on the Internet, in the context of actions taken by ISPs in order to limit P2P traffic.

In one article, Malone had said that BitTorrent transfers accounted for around 50% of all Internet traffic and admitted in court that BitTorrent had been used on iiNet’s network since it became available. He went on to agree that while much of this traffic involved the transfer of movies and TV shows, he didn’t feel that “..every young person in Australia is downloading illegally using BitTorrent.”

One exchange apparently raised a laugh in the courtroom when Bannon accused Malone of attracting heavy-usage customers in order to boost iiNet profits.

“I would prefer [those customers] go to someone else and let someone else be sued,” said Malone.

“And you’re happy to take their money in the meantime?” Bannon asked.

“Yes,” he replied.

Yet again, Bannon raised the issue of iiNet’s failure to forward AFACT copyright infringement allegations to its customers. However, an email presented from the Internet Industry Association’s Peter Coroneos, indicated that he was concerned that doing so could lead to an assumption that ISPs are responsible for the actions of their customers.

In the email exchange with Malone, Coroneos said it would be preferable and advantageous for all involved if the content owners could provide some legal alternatives.

After Bannon showed the court documentation showing policies in place at rival ISPs to deal with allegations of copyright infringement, Malone again confirmed that iiNet has no formal policy on how to deal with these type of allegations, noting that the company had yet to be presented with evidence of what he described as a “repeat infringer”.

Earlier in the case, Malone had defined a repeat infringer as one who had been proven as such by a court, but Bannon mocked Malone, asking if the iiNet CEO had just heard what he’d said and would he like to think about the question again for a moment.

Malone said he didn’t and Bannon accused him of treating the proceedings as a game.

The case continues tomorrow.

Article from: TorrentFreak, check out our new blog at FreakBits.

Continuing first from yesterday’s proceedings, ITnews reported an exchange between iiNet CEO Michael Malone and movie industry barrister Tony Bannon, over Malone’s understanding of BitTorrent.

Malone told the court that while he had an understanding of the protocol, he had never used uTorrent, the client used earlier by Bannon to give the court a technical demonstration. Bannon’s demo used iiNet’s own tracker (an installation of RivetTracker) which it has used to distributed several press releases which all relate to the trial.

It is difficult to see where Bannon was going with his questioning, but it began with an admittance by Malone that the torrent files were intended to be used by people with access to a BitTorrent client. Malone then denied that the releases were specifically targeted at iiNet customers, noting that anyone can access them

Under further questioning regarding the inclusion of a note in the torrent files dialogue box indicating the files were non-pirated, Malone reiterated that while he had an understanding of the BitTorrent protocol, he did not have experience of the client used by Bannon

Then, with an apparent deafness towards Malone’s perfectly clear response, and demonstrating an apparent ignorance between a BitTorrent client and the BitTorrent protocol, Bannon sought to press Malone into admitting to his 400,000 customers that he didn’t understand BitTorrent.

Again, Malone stated that he didn’t know how to put a comment on a torrent file, but Bannon persisted in trying to get Malone to admit that he knows how uTorrent 1.8.4 works, but Malone said he’d never used it. There could, however, be people in iiNet who had, he conceded.

Bannon then said that in the last 24 hours the torrent file functionality for the press releases had been removed. Malone said that if it had, he certainly hadn’t requested it, asking Bannon how he was attempting to access the Internet, suggesting that a firewall in the court was stopping the transfer.

TorrentFreak’s checks show a single seeder on each torrent and each one worked absolutely perfectly.

Moving on to iiNet’s handling of copyright infringement allegations, iTWire reports that Bannon tried to paint a picture that iiNet’s policy of forwarding AFACT notices to the police was little more than a cynical attempt to pretend that they were dealing with them, when in fact they were not.

For the umpteenth time in this case, Malone said that he was under no obligation to act on mere allegations from AFACT which were not backed up by a court order.

“AFACT was telling us to disconnect customers without further ado,” said Malone. “The question is, what should we do when confronted with illegal activity? And our response is, report it to the proper authorities.”

While iiNet said it had always been policy to forward the notices to the police, ITWire notes that evidence emerged that the company had sent notifications twice, although there was no indication of how many infringement notices were in each batch.

Yesterday Malone said that the evidence provided by tracking company DtecNet’s investigation was “compelling” and should be reviewed by a third party and the courts. In the face of this statement, Bannon asked Malone why he had not taken action based on AFACT’s allegations.

“This is a right,” said Malone, “not an obligation of iiNet.”

These days arguments in favor of anti-piracy action seem almost incomplete with the obligatory reference to child pornography, as we heard in yesterday’s propaganda piece from CBS. This case is no different.

Bannon put it to Malone that if the evidence provided was “compelling” and Malone had received “compelling evidence” that an iiNet customer was accessing child porn, would the company allow the user to do so “day after day?”

Of course, any allegations of this nature would involve the police, and the police or the courts would do the investigation, get the proper paperwork and order iiNet to comply, which they naturally would. Malone said that on mere AFACT allegations of civil infringement (as apposed to an infinitely more serious and jailable criminal offense), such action would not be permitted.

Bannone then pressured Malone to admit that “…you’re happy to tell your customers this from the witness box,” that iiNet will not disconnect subscribers for infringing copyright.

At this point one has to wonder if Bannon is deaf or just plain stubborn. It is absolutely crystal clear to anyone following these proceedings that yes, iiNet will disconnect customers for copyright infringement, providing there has been due process and a court has ruled that disconnection is appropriate.

The case continues tomorrow.

Article from: TorrentFreak, check out our new blog at FreakBits.

Today, iiNet CEO Michael Malone was questioned at length over dealings he had with Westnet, another ISP which was acquired by his company for AUS $81 million in May 2008.

Westnet had developed an automated system to pass on infringement notices from copyright holders to its customers, a process which Malone earlier described as “making more work for no benefit,” and was said to be scathing in defense of due process and consumer rights.

“Taking the opposing argument, a random third party is lodging an unsubstantiated accusation against a customer and you’re passing it on?” wrote Malone in an email to Westnet, continuing, “Your current approach is doing damage to the industry and iiNet’s position on this matter.”

According to itNews, today Malone admitted he had “hit the roof” when he had discovered Westnet’s policy on infringement notices.

When any company acquires another there is often a need to standardize procedures and policies, and with iiNet and Westnet the position was no different. Malone said that whenever he found differences in policies between the two companies he took steps to bring those of Westnet into line with those at iiNet. He also stated that he was unaware that Westnet had failed to follow his instructions and adopt iiNet group policy following the acquisition.

One of the reasons he sought to change the Westnet policy, he said, was to bring the company into line with the position held by the Internet Industry Association on the issue.

Cross-examining Malone on iiNet’s role in providing a broadband service which enabled users to share movies using BitTorrent, senior counsel Tony Bannon for the movie industry referred to infringement notices sent to iiNet for the Sony movie, Pineapple Express.

According to CW, Malone responded that as a mere service provider, iiNet had no way of knowing if any of its customers were engaged in copyright infringement, but could confirm that the individual who allegedly committed the breaches was still an iiNet customer.

The company was not aware, however, if the customer continued to breach copyright.

The case continues tomorrow.

Article from: TorrentFreak, check out our new blog at FreakBits.

While delaying a final decision until the next parliament, Business Secretary Peter Mandelson yesterday confirmed plans to have UK residents accused of illicit file-sharing disconnected from the Internet as a “last resort”.

Preceded by months of sending warning letters with an aim of achieving a 70% reduction in online piracy by 2011, Mandelson claims that only persistent offenders would be affected by the harshest measures – those accused of infringing copyrights multiple times.

However, downloading a single music track constitutes an infringement, so being accused on the basis of three or four tracks downloaded over a period of months could be enough to have an entire household disconnected from the Internet. Hardly the promised “proportionate” response.

While the Business Secretary is insisting that there will be an independent appeals process to ensure that any accusations are accurate, his words aren’t inspiring confidence with Internet service providers.

Yesterday, BT Group made a statement indicating its concern at the government’s proposals, noting its disappointed that ISPs will have to bear some of the costs of the scheme, resulting in increased prices for broadband customers.

As detailed earlier, those costs are likely to spiral to £365m per annum, putting the alleged music industry piracy “losses” of £200m in the shade.

“We are also interested to hear whether or not customers will have some form of fair legal hearing before their broadband supplier is required to take any action against them,” said BT.

TalkTalk, the UK’s second largest ISP, owner of the Tiscali and AOL brands and operator of the Dont Disconnnect Us website, went much further.

“The approach is based on the principle of ‘guilty until proven innocent’ and substitutes proper judicial process for a kangaroo court. What is being proposed is wrong in principle and it won’t work in practice. We know this approach will lead to wrongful accusations,” said Andrew Heaney, TalkTalk’s Executive Director of Strategy and Regulation.

According to a report this morning, TalkTalk is now threatening to launch legal action if Mandelson makes good on his threats and implements any disconnection scheme without due process.

“If the government moves to stage two we would consider that extra-judicial technical measures and would look to appeal the decision because it infringes human rights,” Heaney told The Guardian. “TalkTalk will continue to resist any attempts to make it impose technical measures on its customers unless directed to do so by a court or recognised tribunal.”

One pressing issue that seems to have been completely ignored is the existence of current copyright laws which are already being used to punish alleged file-sharers in the UK.

Companies like ACS:Law are already making accusations against UK Internet users who they claim are infringing the rights of their clients, demanding £600+ for the alleged infringement of a single music track.

Are we to have a dual system where Internet users can be both disconnected by the government and financially punished by private companies for the same offenses? The government should decide which system is to prevail and pick one, changing the law if necessary.

The full proposals for the graduated response scheme will be detailed in the Digital Economy Bill, set to be published later on this year.

Article from: TorrentFreak, check out our new blog at FreakBits.

Then, a little later, Lynton hit back at his critics. He pointed to the leak of an unfinished copy of Wolverine, which appeared on the Internet (from a movie studio source who has never been identified) a month before its official release. As Techdirt pointed out, none of this hurt the movie.

Despite terrible reviews and this “devastating” leak, Wolverine still did very well at the box office, taking $35 million on its first day, beating both X:Men ($20.8m) and X2: X-Men United ($31.2m).

In a guest piece in The Times today, Lynton is complaining again. “Internet piracy means less money to make movies,” warns the headline.

Lynton begins by plugging Sony’s launch tomorrow of Michael Jackson’s This Is It, noting the importance of releasing it simultaneously worldwide.

“If Sony released it only in the US on Wednesday, by late Thursday it would be camcorded, uploaded on to the internet and available free to anyone with a broadband connection,” he said.

While absolutely correct, everyone also knows that the following is also true. The quality would be absolutely dire, Jackson’s singing would be punctuated by the rattling of candy packets and accompanied by a myriad of noisy cinema-goers singing their own version of his songs, probably all in D-Minor. The video would undoubtedly bring a whole new dimension to Black or White. People download this garbage but no-one enjoys it, and for good movies sales are not affected – but I digress.

“Online theft siphons billions of dollars out of the marketplace. That means less money to make movies. Projects get scaled back and others dropped. Some potential blockbusters won’t get made. Some new writers, actors and film-makers won’t get discovered,” writes Lynton, adding;

“Last year the leading Hollywood studios made 162 films — more than 40 fewer than in 2006, and the lowest number in a decade.”

But of course, just counting the “leading” studios doesn’t give the full picture. Even the MPAA’s own stats reveal a slightly different picture;

“The total number of films released domestically in 2008 was up 1.8%, to 610 films.”

So, if one casts the net slightly wider (yes, there is a world outside Universal, Warner, Paramount, Sony and Twentieth Century Fox), things look slightly different.

2004 Total Movies Released: 567 Total Combined Gross: $9,327,315,935
2005 Total Movies Released: 594 Total Combined Gross: $8,825,324,278
2006 Total Movies Released: 808 Total Combined Gross: $9,225,689,414
2007 Total Movies Released: 1022 Total Combined Gross: $9,665,661,126
2008 Total Movies Released: 1037 Total Combined Gross: $9,705,677,862
2009 Total Movies Released: 1177 Total Combined Gross: $7,596,626,766
(2009 figures incomplete, total movies scheduled to be released, gross to date)

Admittedly less money seems to be being made per movie, but that hasn’t resulted in less being made – movie releases are set to almost double from 2004 to 2009.

But in the end, Lynton is arguing that more piracy means that less money goes into the studios’ pockets. But in an Ars Technica piece ‘What piracy crisis? MPAA touts record box office for 2007‘, the stats speak for themselves;

“..data that shows the US box office doing its biggest year of business ever in 2007, growing 5.4 percent over 2006 and bringing in $9.63 billion.”

So maybe 2008 was a disaster? Not quite. In another Ars piece ‘What piracy? Movie biz sees record box office in 2008‘, the stats also speak loud and clear;

“Domestic film box offices broke multiple records this year [2008], grossing an estimated $9.78 billion.”

Even the MPAA’s own stats reveal that the “Worldwide box office reached another all-time high in 2008 at $28.1 billion, an increase of 5.2% over 2007.”

I’m absolutely no statistician, but I simply find Lynton’s claims confusing. I can’t imagine that I’m on my own.

Article from: TorrentFreak, check out our new blog at FreakBits.

Once upon a time there was a popular TV show eD2K link site called The Real World. Of course, it wasn’t long before the site’s popularity caused it have legal problems, and in August 2005 it all came crashing down.

However, just as people recently copied The Pirate Bay when waters started to get choppy, the same thing also happened with The Real World, with the site’s database being shared around on eD2K. Soon after The Free World was born, run by an Austrian national, but that site didn’t last long either and was shut down following MPAA action.

On October 23rd 2005, exactly four years ago today, yet another site came out of the ashes. That site, TV Underground (TVU), remains to this today and claims to be the biggest site for eD2K link TV shows. TVU has a unique feature – it is believed to be the only site to run its very own eD2K server.

“We take pride in running the only P2P server sponsored by the P2P community
and not by some shady porn site,” TVU admin CheGuevara told TorrentFreak. For those interested, stats for the server (currently indexing 8.6million files) can be found here.

While eD2K remains popular, BitTorrent is the current darling of the P2P file-sharing world and is particularly popular with fans of TV shows. This is clearly something the TV Underground team wish to exploit.

“We have launched a new version of our site today to allow users to submit torrents,” CheGuevara told us. “At first we will allow users to submit torrents to seasons that already have eD2K links, but we are planning to expand to torrent-only seasons and per show torrents after the launch.”

So what motivated this development at TVU?

“We love ed2k, but we acknowledge that BitTorrent has it’s own advantages and some users prefer to use that,” they explained.

“Our mission is to spread quality TV Shows to every corner of the world. We think the current system of how the rest of the world has to wait months and years to see a show that has been shown in the US or elsewhere as totally unfair,” CheGuevara notes. “I myself am a big fan of House. It is on Season 6 right now, but where I live they are just only showing Season 4… Fair? No. You get the point.”

TV Underground will have to go a long way in the torrent world to catch up with the likes of EZTV, but with the site currently down because of maintenance, many will be grateful for an alternative.

Article from: TorrentFreak, check out our new blog at FreakBits.

After AFACT dropped the claim that iiNet was a primary infringer by caching copyright works on their servers, according to ZDNet the case will now examine a sample of 20 iiNet customer accounts.

Earlier in the case, AFACT submitted evidence that it claimed showed around 95,000 breaches of the studios’ copyrights by iiNet subscribers. iiNet barrister Richard Lancaster cross-examined AFACT lawyer Michael Williams on techniques used by AFACT’s investigators to count these alleged breaches of copyright.

The recording of these claimed breaches were described by iiNet lawyer Richard Cobden during day two of the trial as a “novel composition and adventurous” and “a dramatic extension of the application of the law”. He then went on to describe AFACT’s claims of 94,942 infringements as “artificially inflated by a contrived process”.

It was then revealed in court that AFACT had probably counted some of the same infringements more than once – if it checked in the morning for infringements and then again in the afternoon, if the same infringement on an individual’s computer was still ongoing, AFACT counted it as yet another infringement, not a single extended one.

Another process AFACT used to record alleged breaches of copyright breach was by using a Reverse DNS Lookup – a process used to determine a domain name associated with a an IP address by using the Domain Name System (DNS) available on the Internet.

iiNet’s lawyer Richard Lancaster said this was not a reliable method since DNS records were often out of date. Lawyer for AFACT Michael Williams agreed this method was “not 100 per cent reliable”.

While re-addressing the possibility that AFACT was relying on evidence which artificially inflated the number of alleged infringements, following cross-examination both AFACT and iiNet conceded that technical issues can cause iiNet subscribers to leave and then reconnect to the network, resulting in the same iiNet users being allocated multiple IP addresses during an online session. If AFACT was tracking these particular users, it would then identify each IP address as a separate infringement, which would inflate their claims on numbers of infringements.

Of course, the accuracy of such evidence is important, since any damages awarded for, say, 50,000 breaches, would be substantially less than 95,000 breaches.

“If the judge finds further down the track that iiNet is guilty of the claims AFACT is making – which I don’t believe they will – because they are seeking damages, the number of offences does matter in terms of the final decision on what the damages will be,” an iiNet spokesman told ARN.

Today’s proceedings bring an end to the first two weeks of hearings in the case. It will resume November 2nd.

Article from: TorrentFreak, check out our new blog at FreakBits.

Today iiNet’s lawyers cross-examined representatives from 20th Century Fox, Disney, Warner and Paramount via video link.

After being accused earlier in the trial of having deals in place with BitTorrent Inc, ZDNet reports that Paramount admitted it had a deal with the company for it to prevent illegal copies of its movies being shared via its BitTorrent software. However, this seems more likely to be a filter applied to search results on the BitTorrent.com site, rather than any obstruction in the software itself. Any notion that BitTorrent Inc spied or spies on users of its software in order to restrict their activities would be a disaster for the company.

Paramount could not confirm if the deal prevented piracy or not but acknowledged that it ran from October 6 2006 until October 6 2008, and had now expired. Paramount had an option to extend it for a further year, but did not.

As mentioned in our earlier coverage, iiNet lawyers suggested that the publishing of studio logos (including that of Paramount) on the BitTorrent.com website could have caused some confusion for potential BitTorrent downloaders.

However, according to a report, Paramount could be set to lodge a formal complaint with BitTorrent Inc over what it described as “unauthorized use” of its logo. This development seems to be somewhat of a cheap shot by Paramount. Their logo has been on the BitTorrent.com site for a very long time (and remains there today) so the ‘revelation’ in court that it exists there should hardly come as a surprise – they were business partners after all.

iiNet lawyers put it to 20th Century Fox anti-piracy boss Ronald Wheeler that making material available online helped to reduce piracy. While he could not confirm that immediately, he did say that because content is available online, it counters the argument that the only way to obtain the content is illegally.

Warner representative David Kaplan confirmed that his company also had a deal with BitTorrent Inc but although he couldn’t be certain, he felt the deal had expired since the MPA hadn’t kept him updated about it.

iiNet lawyers also produced a document which was alleged to be license agreement between Warner and the defunct Wurld Media, to distribute content via P2P. While Kaplan admitted the deal was now dead, he confirmed the authenticity of the document.

A further interesting development came after AFACT chief Neil Gane admitted that his organization’s investigative techniques – hiring someone to pretend to be a regular iiNet customer in order to engage in file-sharing of copyright works with other iiNet customers – could be construed as copyright infringement in itself.

In last week’s court sessions, iiNet lawyers put it to Gane that AFACT could have been involved in condoning copyright infringement, referring to the actions mentioned in the previous paragraph.

Gane admitted that there would have been occasions where AFACT’s own investigators had undertaken an activity which had been described by iiNet lawyers as “an infringement of copyright”.

“And that’s something you will tolerate happening at your own premises?” said iiNet lawyer Richard Cobden.

“It’s an investigative technique,” Gane replied

The case continues.

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After Justice Cowdroy allowed several documents to be used in court yesterday which were used by iiNet’s legal team to cross-examine AFACT witnesses, senior counsel Tony Bannon for the movie industry said he wants to subpoena the Internet Industry Association (IIA) for documents it says relates to meetings held with ISPs in 2006/2007 on how to handle p2p copyright infringement.

The documents are required for further cross-examination of witnesses. Earlier IIA had applied to be a friend of the court, an application to which AFACT objected.

Also revealed in court today is that iiNet is on the brink of launching an online kids entertainment service. Nothing particularly unusual about that, until one learns of iiNet’s business partner – TV company Village Roadshow, one of the litigants in the case. The content will be free to view and iiNet won’t even count the bandwidth its customers use on these downloads.

AustralianIT notes that iiNet was due to announce the service in around a month’s time, but will now launch it this weekend.

A computer forensics investigator who was previously a key witness in the 2004 KaZaA trial, was called by iiNet’s legal team today. Nigel Carson, a key witness for AFACT, was questioned on whether an IP address alone is enough to identify an individual infringer.

Carson admitted that any ISP account could have multiple users in the same household and could have other unauthorized 3rd-party users if a wireless router was compromised.

He further admitted that to accurately identify a precise individual, a court order and police action could be required to interview account holders and other individuals living at the address.

The open court session was also closed for the continuing cross-examination of DtecNet’s CTO Kristian Lockegaard which began yesterday.

The case continues to the end of this week, where there will be a two week gap before the court reconvenes for a further two weeks.

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Today’s evidence included that given by anti-piracy tracking company DtecNet’s CTO Kristian Lokkegaard. The day ended in a closed court session where the inner workings of the company were discussed – if ever there needed to be something discussed completely in the open, this is it, but it wasn’t to be.

Lokkegaard’s cross-examination centered around the question of DtecNet’s operations. When the company tracked BitTorrent users, did it behave in a normal way, as a regular BitTorrent user would?

iiNet lawyer Richard Lancaster put it to Lokkegaard that his company deliberately filtered their connections to other BitTorrent users to ensure that only iiNet customers were tracked. Lokkegaard agreed with this assertion but couldn’t confirm if his company had also filtered by country.

Lancaster put it to Lokkegaard that an ordinary BitTorrent user would not filter IP addresses, but Lokkegaard said this was untrue, saying that users can filter out IP addresses that they don’t want to connect to.

“Users do that to avoid connecting to companies like ourselves. They will typically try to stay away from something that looks like a corporation because a lot of people would potentially suspect them of being a non-private user,” he said.

While there are techniques and software available to enable BitTorrent users to filter connections to other users – for example using a blocklist in conjunction with software such as Peer Guardian – it’s a bit of a stretch to say that “ordinary” BitTorrent users would take such measures.

Indeed, it would be extremely empowering for BitTorrent users to know the IP addresses that DtecNet operate their tracking systems from – to know those would render their entire operation useless, if “ordinary” users took such measures. But they most definitely do not – most “ordinary” users take no measures at all.

When pressed, however, Lokkegaard conceded that it would be unusual for BitTorrent users to take measures in order to only connect to peers on the same ISP.

The same could not be said about AFACT investigator Aaron Herps. When he was cross-examined it was put to him that he had employed an IP address filter which enabled him to connect to only iiNet IP addresses.

“Is that something an ordinary user of uTorrent would use?” said iiNet barrister Richard Cobden.

“Many users do, yes,” responded Herps.

But of course, he didn’t answer the question. While it is completely possible to only connect to BitTorrent users on a particular ISP, “ordinary users” absolutely do not do this. It would be entirely reasonable and true to state that “ordinary users” have no idea this is even possible.

Lokkegaard’s cross-examination will continue tomorrow.

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Yesterday the court heard from iiNet barrister Richard Cobden, who described how
several of the plaintiffs and members of the MPAA had previously entered into contracts with BitTorrent Inc, the source of the official BitTorrent software.

He said that the logos of these studios appeared on BitTorrent.com (placed directly under the ‘free download’ link for the official BitTorrent client) and also on Mininova.

This lead Cobden to declare that the studios “….have engaged, at least from the logos on BitTorrent Inc, in the promotion of BitTorrent, the vehicle for all infringement in this case.”

Today AFACT barrister Tony Bannon criticized iiNet for these claims, describing them as “an excellent example of iiNet’s intent to focus not on legally relevant and factually indisputable matters but to focus on the legally irrelevant.”

Bannon said that the claims show that iiNet wishes to give the court the impression that his clients encouraged the exact same copyright infringement they now complain about in this case, going on to call the claims “legally irrelevant” and noting that the contacts with BitTorrent.com were terminated last year.

While Bannon insisted the details of those contracts are confidential, he was prepared to reveal that they included terms which required BitTorrent Inc to filter out torrents from their search engine which linked to illicit copies of the studios’ movies. He also said that iiNet knew that the contracts had been terminated but had not relayed that fact to the court, or when it spoke to members of the media.

However, an iiNet spokesperson seemed unrepentant. “The fact is the logos are still on the BitTorrent sites and serves the argument we are making, which is a couple of clicks away from where the logos are, you can download things. Part of the argument we are making in relation to all that is when it comes to what are ‘reasonable steps’ for iiNet to take about illegal downloading when they are not even asking BitTorrent to do the same thing?”

Earlier this week, iiNet had presented information to the court which showed that its competitors – other ISPs operating in a similar manner – also did not give in to AFACT demands that they should disconnect their copyright-infringing customers, backing up claims that iiNet had been singled out by the movie industry.

Tony Bannon criticized iiNet for producing this evidence, describing it as meaningless and “….an attempt to take the case outside of the real issues.”

AFACT boss Neil Gane briefly appeared on the witness stand and was questioned by iiNet barrister Richard Cobden. The exchange ended in a dispute over what confidential material can or cannot be used in the case.

Judge Cowdroy will decide on the issue by next Monday when Neil Gane retakes the stand.

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These are the words of singer songwriter James Blunt in The Times today, in response to the opinions of Lily Allen published and republished a thousand times last week. Allen had taken a swipe at Radiohead’s Ed O’Brien and Nick Mason, the Pink Floyd drummer, after they came out and said that file-sharing is beneficial for artists.

Both O’Brien and Mason are members of the Featured Artists Coalition (FAC), which opposes plans by Peter Mandelson to disconnect persistent file-sharers, but they are becoming quite a problem for the rest of the industry.

The major labels, who hold the opposite opinion on the issue of unauthorized downloading, have been in intensive talks with FAC over the last week, trying to reach some sort of consensus on the way ahead. Somehow the music industry needs to show a united front to the government, but at the moment that seems very unlikely. Yesterday FAC said that so far they have failed to find a way forward with the rest of the industry.

“[The] power to demand suspensions of accounts is only achievable through a wide-scale invasion of personal privacy which we believe would result in a dangerous reduction in the rights to protection of the individual. Putting this power in place would reduce the civil liberties of every one of us in the country in order to afford a disincentive threat to a small minority of ‘egregious offenders’. We believe this would be both disproportionate and unenforceable,” said FAC in a statement.

FAC said that while it negotiated with the labels all last week, they cannot be moved from their insistence that file-sharers should be disconnected from the Internet. FAC says it is steadfast in its opposition to this route.

In an attempt to soften their edges and appear less aggressive, UK Music, yet another music industry umbrella organization, has removed the actual word “disconnection” from its press releases and statements. However, even a cursory glance at their current wording shows that this omission is purely cosmetic, instead stating: “…..Ofcom should be granted appropriate and proportionate powers as directed by the secretary of state.” Of course, Ofcom are the people that are being proposed to have the power to disconnect file-sharers.

So as FAC and the British public stand on one side, Peter Mandelson, the record labels and the likes of Lily Allen and now James Blunt stand on the other.

“At long last the Government is looking to legislate to protect the industry,” writes Blunt, while completely forgetting that the UK has some perfectly good copyright laws to deal with, surprisingly, copyright infringement.

“Peter Mandelson is looking to engage the internet service providers who, in my opinion, handle stolen goods, and should take much more responsibility,” Blunt continues, while forgetting that as a carrier, under the law ISPs have no responsibility for the traffic they carry or the actions of their subscribers.

“How this legislation pans out, and if it goes through at all, is critical to the survival of the British music business; critical to thousands of jobs; and critical to our ability to nurture and develop great musicians and the songs and albums that we would hope to listen to in the future,” Blunt concludes.

Bringing in draconian laws to scare the public into buying music is not the answer. Taking away people’s Internet is definitely not the solution. The labels need to realize this and instead provide some high quality all-you-can-eat music services at a price that everyone can afford.

And as UK ISP Virgin Media sends its message to the government that a “heavy-handed, punitive regime will simply alienate consumers” and that “persuasion not coercion” is the key to solving this illicit file-sharing ‘problem’, I’ll end with a few lines from martial artist and best-selling author Geoff Thompson’s book Watch My Back, as he writes about a gang trying to impose their will on others;

This crew had gained respect in the city, but it was respect born through fear; stolen not given. Respect is worthless unless it’s earned. Any half-wit can point a loaded gun and demand respect but it brings hate with it. Real respect encourages co-operation and understanding

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In an attempt to fulfill this need and to convert illegal file-sharers into paying customers, the UK ISP Virgin Media recently announced that it will offer an unlimited music download service to all their subscribers. Such a service would allow customers to download all the music they want and keep it permanently.

Universal and several smaller labels are backing Virgin’s plan, but not all the major labels are as happy. NMA reports that insiders at EMI and Sony Music don’t think that Virgin’s unlimited download service will convert illegal music downloaders into legitimate customers. They say that the model is flawed and will hurt existing digital sales.

“We want to work with Virgin Media as a partner but any deal has to sit comfortably with how we value our assets against how it values its customers,” an EMI insider said. “We have to evaluate each deal as it comes in and make sure we’re happy with the overall value of the proposition.”

An insider at Universal doesn’t think that the worries expressed by EMI and Sony Music are justified, as customers with unlimited access will only download a few dozen tracks per month. On the other hand he stressed that it is vital for the labels to innovate and compete with piracy.

Virgin Media meanwhile is undeterred by the rift between the different labels and will go full steam ahead. They hope to release their unlimited music download service by the end of the year. “We’re forging new ground and want to provide a truly compelling offering for consumers and industry,” a Virgin Media spokeswoman said.

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Despite Global Gaming Factory’s investors getting cold feet and aborting their financial support for the purchase of the world’s largest tracker, on Thursday the company’s shareholders (well, at least the four who attended the meeting) all agreed that the purchase could go ahead.

Less optimistically, Peerialism, GGF’s technology partner, said there would be no business between the companies.

Where the money will come from in the end is anyone’s guess, but CEO Hans Pandeya says he will cover the purchase with his own shares, but right now, it appears he doesn’t even have cash to cover his business or personal debts.

Recently, former GGF board member Johan Sellström said that Pandeya owed him in excess of 6 million kronor ($840,000) and said he was suing to get the money back.

Now, according to a new report, last night Pandeya suffered a serious humiliation, one that he’ll find difficult to put down to the “smear campaign” he said had been orchestrated against him recently.

Having failed to pay a debt of some 780,000 kronor ($110,400) owed to the Swedish tax authorities, yesterday enforcement officers ran out of patience and swooped to seize his assets.

Last night a tow truck took away Pandeya’s car and, as you can see from the screenshot from the Aftonbladet site, what appears to be a pretty nice motorcycle.

We haven’t got a comment from Hans Pandeya, but if we did he would probably say, “Everything is fine and the purchase of Pirate Bay is going ahead as planned.”

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Just a few short months ago, Ernesto and I were toiling for hours and hours every day, neglecting our regular jobs (yes, we’re only part-timers on TorrentFreak and FreakBits) to ensure that our readers had every conceivable detail of the Spectrial, every nugget of information from every source we could find.

No translation was too much trouble, no mountain of RSS too time consuming and no live feed in a foreign language too daunting to decrypt, in order for us to bring the facts of this important case to the world.

On the whole, people were happy that we did so. But things have changed.

The outcome of the Spectrial was open – the defendants could’ve walked away free men, or, as we were all soon to learn, be punished far beyond what any of us expected. Nevertheless, throughout there was hope for a victory – a triumph for the file-sharing masses, a beacon of encouragement for the millions of BitTorrent users.

Because of these hopes and optimism, no-one minded the wall to wall blanket coverage and few complained that every movement of the trial was relayed in high detail.

But now I sense that even amongst the faithful, the hope has gone. People are resigned to the likely reality that rather than the proposed purchase by Global Gaming Factory signaling a new dawn for the site, it really signals the end of The Pirate Bay. Why would anyone from the community enthusiastically read about that?

Rather than being greeted as the savior of the world’s largest tracker, GGF are increasingly seen as an irrelevance. If you believe all the hype, they will soon buy and “legalize” the site, part the oceans, turn lead into gold, feed the users and the music and movie industries, and line their shareholders’ pockets, all with the BitTorrent equivalent of five loaves and two fishes.

Unfortunately for GGF, on the whole the BitTorrent community either doesn’t believe them or in increasingly large numbers, simply couldn’t give a damn.

Whatever GGF does with The Pirate Bay is open to speculation (god, please, no more you say…) but let’s face it – it aint gonna be The Pirate Bay that we know any longer. If anything it will be a largely unrecognizable site whose owners are in bed with the entertainment industries – the very people that have been trying to kill the site for all these years. The same opposition that, on the whole, has united the masses in support for The Pirate Bay.

No longer will people be able to go to the GGF Bay to download yesterday’s TV show or the latest cam of a Hollywood movie. No more will people be able to download the frankly mind-boggling array of other media indexed by the world’s largest tracker or just about any song they fancy – i’ll stake my (ever dwindling) pension on it. Things will have to change, drastically, and that’s the last thing the current users want.

And this is why I believe people have lost interest. Whatever GGF have up their wizard’s sleeve and no matter the magic promised to spurt forth from Hans Pandeya’s wand after the 27th, we aren’t talking about The Pirate Bay any more, merely its domain name. We certainly aren’t talking about The Pirate Bay mentality and definitely not its spirit.

No Gottfrid, no Fredrik, no Peter. No fun publicity stunts.

No flipping the bird to the **AAs – everyone has to be on their best behavior now. Forget anarchy – stand in line nicely and do as you’re told, a lot of money rests on the success of this project and there must be order for the shareholders. Things have to make financial sense now, with all the fun that entails.

The only thing that will remain are the legal threats, and I can’t imagine GGF handling those in the traditional Pirate Bay way – can you?

But yesterday, when I started writing this little opinion piece, something happened. Yet another Pirate Bay story broke – the Swedish authorities had effectively shut down the site. And guess what? Interest in The Pirate Bay peaked again, many of the reader comments expressed those familiar warm feelings towards the site and indeed, towards news about the site.

Momentarily the proposed sale to GGF was forgotten, with the majority of onlookers as enthusiastic as ever. Once again there was unity. But sadly, it’s unlikely to last, because its highly probable that the next piece we write about The Pirate Bay will be about the sale and as explained, most people don’t want to know about it.

So, when the inevitable happens and, as TorrentFreak, we have little choice but to grit our teeth and cover what is happening with the sale, spare a thought for us. We read dozens of these articles every day so that you don’t have to.

Normal service will be resumed around here as soon as possible – just don’t expect anything like normality if GGF acquires The Pirate Bay.

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Perhaps the most insidious aspects of propaganda is that you often don’t know when you’re witnessing it. One of the easiest ways to define it is as something that presents a clear position on a topic, good and bad, with little reference to the facts in an attempt to sway a group of people into believing a certain thing. There are three examples of this to draw on. One is the term ‘intellectual property‘. It’s a term that infers that copyright is a property that can be owned, and by extension, can thus be ’stolen’. In actuality, it is as its name suggests, a right of copying. However, the term ‘Intellectual Property’ continues. It’s also got the secondary aim of making it seem appropriate to lengthen terms, as by terming it property, and not a right to an action, it’s defined as an asset. Assets are easier to ‘protect’ than a right to do something, certainly over a monopoly-control of distribution.

The second is the association with ‘theft‘ and stealing. Copyrights can only be ’stolen’ if the actual rights are taken by someone. That is, if the person who owns the right has the right taken from them by someone else. That is also why copyright cases are not theft cases, although cases treated as such would actually be better, as criminal cases have a lot fewer of the problems identified in part 1, as we have also pointed out in the past. It would also significantly reduce the penalties. As Prof. Lessig pointed out in Free Culture (Pg 190), under California law the biggest penalty for stealing a CD is $1,000 – for infringing the copyright of that same CD it’s $1,500,000 (assuming 10 tracks).

The third and most important, are the oft touted ‘loss figures’ and studies. Every month or two an industry group, or company paid by an industry group publishes a ‘losses due to piracy figure’ or other claim. These figures attempt to quantify the unknown (and unknowable) and give a number that can be used in statements. The problem with all of these numbers is that they’re guesswork and estimation, just dressed up nicely. It’s impossible to tell what people are doing, and how many are actually infringing copyright so any figure on the amount of copyright infringement is just a guess. Then there is the question of how much that infringement impacts sales. So far industry data says it reduces sales, while independent studies show it either doesn’t affect them, or increases them. However, they’re not consistent on how much effect there is – some industry studies vastly contradict others with their values for the same thing (such this example)

Nor is this a new thing. Who can forget then MPAA president Jack Valenti calling the VCR the ‘Boston Strangler’ of the film companies. A few short years later that same Boston Strangler was providing those film companies with the majority of their income. The same thing happens time and time again, player pianos, radio, cable TV, the VCR, and now computers and the Internet. Like Chicken little, the sky didn’t fall down the last few times, and is unlikely to now for those companies, if, as before, they adapt and embrace the new technologies. Else they’ll go the way of the big train companies when 40-ton trucks became common, or saddlers and livery stables when the car was made affordable; an anachronism of old technology.

Of course, at the end of the day it comes down to the law. Again, there’s a problem. When you have politicians that are paid heavily by the copyright industry, or judges that are part of an industry group, then the laws are not going to have a firm basis in reality, nor will there be a fair and impartial evaluation of those laws. In some cases, prominent members of the music industry have been let off their crimes by court systems, such as in Nashville where Universal exec Ken Robold and singer-songwriter John Hiatt have had their traffic offenses dismissed.

Given everything we’ve covered, at least briefly, it’s clear that a fair trial when it comes to P2P will be impossible to be had any time soon.

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