The key thing to understand is that nobody is being forced to use Magnet links or trackerless torrents. While these long-standing technologies may prove to be the future, they will co-exist with tracker-enabled torrenting for quite some time. For now, nobody will be forced to immediately change their existing downloading habits, although it may be wise to switch to a BitTorrent client that is compatible with these technologies.

In an attempt to clear some of the mystique surrounding DHT, PEX and Magnet links we will walk through all three briefly, hoping to assure those who’ve become confused earlier this week.

DHT

Using DHT instead of trackers is one of the things The Pirate Bay is now trying to encourage, and torrent downloads that rely solely on this technology are often referred to as “trackerless torrents.” DHT is used to find the IP addresses of peers, mostly in addition to a tracker. It is enabled by default in clients such as uTorrent and Vuze and millions of people are already using it without knowing.

DHT’s function is to find peers who are downloading the same files, but without communicating with a central BitTorrent tracker such as that previously operated by The Pirate Bay.

DHT is by no means a new technology. A version debuted in the BitTorrent client Azureus in May 2005 and an alternative but incompatible version was added to Mainline BitTorrent a month later. There is, however, a plugin available for Azureus Vuze which allows it access to the Mainline DHT network used by uTorrent and other clients.

Peer Exchange (”PEX”)

Peer Exchange is yet another means of finding IP addresses. Rather than acting like a tracker, it leverages the knowledge of peers you are connected to, by asking them in turn for the addresses of peers they are connected to. Although it requires a “kick start”, PEX will often uncover more genuine peers than DHT or a tracker.

Magnet links

Traditionally, .torrent files are downloaded from torrent sites. A torrent client then calculates a torrent hash (a kind of fingerprint) based on the files it relates to, and seeks the addresses of peers from a tracker (or the DHT network) before connecting to those peers and downloading the desired content.

Sites can save on bandwidth by calculating torrent hashes themselves and allowing them to be downloaded instead of .torrent files. Given the torrent hash – passed as a parameter within a Magnet link – clients immediately seek the addresses of peers and connect to them to download first the torrent file, and then the desired content.

It is worth noting that BitTorrent can not ditch the .torrent format entirely and rely solely on Magnet links. The .torrent files hold crucial information that is needed to start the downloading process, and this information has to be available in the swarm.

Pirate Bay links cf. Mininova links: When the Magnet link specification first came out, in January last year it called for a particular format (”base32 encoded”). The links that EZTV, Mininova and ShareReactor have displayed for some time all conform to that original specification. In May of last year the specification was changed, in favor of “hex encoding”, and that is the format of the links being displayed by The Pirate Bay. Torrent clients should accept either format.

Compatible Clients

All the main torrent clients: uTorrent 1.8.5, Vuze 4.3.0.2, BitTorrent 6.3, BitComet 1.16, and Transmission 1.76 (and others) support Peer Exchange and DHT (via a plugin in the case of Vuze). Neither BitComet nor Transmission yet support Magnet links but Transmission is planning to include Magnet link support in the upcoming 1.8 release. Bearing in mind that no site, including The Pirate Bay, has yet abandoned support for traditional torrent files, there is plenty of time for support to be added.

We hope that this article has cleared some of the smoke that was generated by The Pirate Bay’s announcements earlier this week. There is no need to panic, cry or be angry, and it’s not a problem if you’re still confused after reading this article. Torrents will still be available and aside from some extra downloading options thanks to sites that add Magnet links, nothing drastic will change in the near future.

Props to ‘Adapa’ for contributing to this article.

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

The case progressed in the Federal Court today, with iiNet barrister Richard Cobden continuing with his closing submissions.

As detailed earlier in the case, after AFACT sent many thousands of copyright infringement notices to iiNet, the ISP responded by sending them to the police. Cobden defended that decision today, claiming that the notices could constitute evidence of copyright crimes.

While the studios had earlier insisted that they would never sanction unlawful investigation methods, ITNews quotes Cobden as saying that in gathering that evidence, it was likely the investigators themselves had also committed offenses, breaching section 132AJ(1) of the Copyright Act.

The barrister said that both investigators committed primary acts of infringement online, and while AFACT had earlier claimed that iiNet users burned copyright material onto DVDs after downloading it, in fact the only evidence of that being done relates to the copies made by AFACT investigators.

Continuing to attack the evidence provided by AFACT and its anti-piracy partner DtecNet, Cobden returned to an earlier assertion that DtecNet investigators did not behave as normal BitTorrent users would. Regular users would allow their torrent client to connect to any peers, but DtecNet filtered out any that weren’t issued with iiNet IP addresses.

ARN quotes Cobden as saying this action was “foolish” as it slowed download times to several days. As we heard earlier in the case, this led to investigators counting the same infringement more than once.

Last week, Cobden argued that AFACT hadn’t provided any evidence that iiNet customers had engaged in copyright infringement as they were only sharing small parts of files (such is the nature of BitTorrent), rather than the “substantial” parts, as required under the law. In order to prove his point, Cobden went on to cite an earlier copyright case.

In 2002, Australian TV station Channel 9 sued Channel 10 citing infringement under the Copyright Act 1968. Channel 10 had broadcast short sections of Channel 9 programs The Today Show, Who Wants to be a Millionaire, Days of Our Lives and Sale of the New Century in their television show called The Panel. The view was that of the 11 segments played, only 3 were long enough to constitute infringement.

As anti-piracy tracking companies such as DtecNet only record an instance of alleged copyright infringement timed to a single second, Cobden is arguing that there is no evidence to prove any “substantial” part of any movie was shared by iiNet users.

Cobden went on to insist that in order to confirm that evidence of infringement provided by AFACT was indeed accurate (before passing notices to their customers), it would be necessary for the ISP to breach copyright.

“If one wanted to check the DtecNet evidence and see on a range of IP addresses supplied by iiNet that infringing material was online, the only way to do it would be to use the BitTorrent client like DtecNet did, construct the parameters of the IP address range, locate the file and compare it to details in the spreadsheets,” said Cobden, as quoted by ITNews.

Cobden said that if iiNet passed unproven infringement notices to its customers, it would face problems if the account holder disputed the claims. After all, iiNet had only AFACT’s word that an infringement had been carried out, but absolutely no proof or other information to have a meaningful discussion on the issue.

It is likely that Cobden will finish his closing submissions next Tuesday 24th. The Internet Industry Association’s application to become a ‘friend of the court’ will be heard on the afternoon of that day, bringing the original date forward by two days.

The case will then end either next Wednesday or Thursday, but readers are advised not to hold their breath for the verdict – it could take several months to arrive.

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

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.

DL then wrote to the individuals demanding several hundred pounds to make the threat of a lawsuit disappear. Some paid up, but many did not, and the only cases DL took to court were against those who didn’t defend themselves.

Generating revenue from porn proves controversial

Then the law firm overplayed its hand and got into bed with DigiProtect, the German piracy exploitation outfit with a catalog of hardcore porn titles to its name. The rights were signed over to the company by the copyright holders so that DigiProtect could use them to generate revenue – lots and lots of revenue.

After mountains of bad publicity, DL withdrew from this business model. In May this year, the exact same scheme reappeared with UK lawyers ACS:Law. TorrentFreak asked company owner Andrew Crossley about the connections between ACS and DL – his reply: “NONE”. However, it was crystal clear that there were many links, not least that staff from DL were now working at ACS:Law directly on these cases – known cyber-squatter Terence Tsang as one example.

We’ve known all along that if those threatened put up a spirited defense and refused to be cowed they were never taken to court, but we had no proof as to the mechanism employed. Then, out of nowhere, months ago someone from inside either Davenport Lyons or DigiProtect leaked lots of sensitive documents to German news outlet Gulli.

Having remained secret until now, the documents made very interesting reading and along with a helping hand from TorrentFreak and armed with the leaked personal details and email addresses of some of the letter recipients, Firebird77 at Gulli was able to confirm the authenticity of the documents.

Document 1 – Ranking alleged infringers in order to decide who to pursue

The first document reveals how the targets are ranked based on an estimation of how likely it is that they will pay up. Each alleged infringer has their details filled in on a form (download here from WikiLeaks). The document shows that despite the claims that an IP address alone is irrefutable evidence of an infringement and will lead to being taken to court, the reality is rather different.

Letter recipients are given a ranking based on many parameters. Does the law firm want to continue to pursue the person? What are the chances of success? A zero would mean “no action” up to ten which would mean the respondent is ripe for maximum pressure. One letter recipient hired Michael Coyle at Lawdit Solicitors to defend him and this earned him a “three”.

One part of the form is entitled “Circumstances” and this is a very surprising section indeed. Despite the “fact” that the law firms supposedly already have solid evidence of infringement that they say will lead to court action if recipients don’t comply, the section seems to show that they make their decisions on who to pursue based on the recipients’ personal circumstances.

One circumstance is labeled “impecuniosity”, i.e the letter recipient is flat broke. Another is whether the recipient is on state benefits – this is expected to be proven by way of copies of benefit books and/or letters. TorrentFreak has evidence that one gentleman was asked to prove that he was indeed disabled in order to make the claims go away. Other circumstances include whether the recipient is a pensioner, a student or a child.

One other circumstance is an eyebrow-raising “out of jurisdiction” (no rightful claim could be made the against the recipient) along with whether or not the individual was aware of that fact.

The form also lists possible defenses that recipients rely on, including the breach of their wireless router, a virus infected PC, not being at home when the infringement occurred, no knowledge of infringement or the possibility that someone else in the location carried out the infringement.

Document 2 – Letter from lawyer Dr Kornmeier from Kornmeier & Partner to Brian Miller at Davenport Lyons

The 14 page document (download from WikiLeaks) details the agreement DigiProtect enters into with rights holders in order to exploit their copyrights for profit.

Included is a section which confirms that the original rights holders sign over the rights to DigiProtect so that they are legally allowed to make the works (hardcore porn movies) publicly available on P2P networks such as BitTorrent. Dr Kornmeier asks: “Does this constitute any problem under UK law?”

According to page 2 of the letter, when the recipient of these letters pay up, the spoils are divided up as follows – 51% to DigiProtect, 37.5% to Davenport Lyons and 11% to DigiRights Solutions. The remaining pages detail the exact business arrangement along with a list of the hundreds of porn movies covered by the agreement.

TorrentFreak discussed the documents with staff at the excellent BeingThreatened.com, a site set up to support and inform those targeted by Davenport Lyons and ACS:Law in the UK.

“These documents confirm what we have long suspected,” they told us. “This scheme is not about getting justice for the rightsholders at all; it is there to fill the pockets of companies like DigiProtect by exploiting many innocent people. Everyone with an IP address has reason to be worried about becoming a victim of these exploitative practices, whether they use P2P networks or not.”

Indeed, John Stagliano, boss of porn company Evil Angel which also worked with DigiProtect, admitted to earning less than £50 from each infringement and told the BBC the scheme “…was completely misrepresented” to him.

Uk consumer magazine Which? earlier reported Davenport Lyons to the Solicitors Regulatory Authority for alleged “bullying”. It will be interesting to see how these documents develop that case.

Thus far just two documents have been made public. Stay tuned for further updates.

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

The case continued in the Federal Court, with AFACT continuing to make its closing submissions, marked by further attempts by barrister Tony Bannon to ruin the credibility of key iiNet witnesses Michael Malone and Steve Dalby.

Referring yet again to iiNet CEO Michael Malone’s earlier and multiple assertions that his company could not disconnect subscribers on mere allegations from a 3rd party, Bannon pointed that Malone had earlier referred to the evidence collected by anti-piracy tracking company DtecNet in a more positive light.

“But when asked the question in cross-examination, the truth is they regarded the notifications as compelling evidence,” said Bannon according to ITNews.

Based on what Bannon tried to insist was a contradiction, that “compelling” and “mere allegations” were incompatible when referring to the same material, Bannon asked the judge to disregard iiNet’s evidence.

Although earlier information about DtecNet’s methods were revealed in a closed-court session, CW reports that the anti-piracy company operated by downloading a portion of a file from iiNet subscribers while recording the IP address, the time of the transfer and the date, the protocol, the client id and a hash value.

Reiterating his earlier claims, Bannon insisted that chief regulatory officer Steve Dalby had deliberately exaggerated his claimed lack of understanding of BitTorrent and the infringement notices sent to iiNet by DtecNet. While Dalby had said that he had waited for AFACT to send more information, in fact internal iiNet email evidence showed that Dalby had discouraged further investigation, he said.

Bannon went on to state that companies like iiNet benefit greatly from illicit file-sharing, since the activity consumes a lot of bandwidth – the commodity the ISP sells to its customers.

Referring to an iiNet press release from late 2008 where the company said it would defend the court case, Bannon said the ISP had stated it could not disconnect a customer on a simple allegation. This, he said, amounted to assuring customers of their safety when carrying out illicit file-sharing.

Earlier in the case, iiNet claimed to have taken “reasonable steps” to deal with infringement on its network, an assertion roundly criticized by Bannon. The AFACT barrister said that iiNet has a technique to limit a subscriber’s access to the Internet if they don’t pay their bills, so this could easily be applied when an allegation of illicit file-sharing is provided by his client.

Bannon also said that since Westnet, the company iiNet had earlier acquired, already had a system in place to notify infringers, it was a “nonsense” to say that iiNet hadn’t got the facilities to deal with AFACT notices.

Bannon went on to tell the court that iiNet’s participation in discussions 4 years ago with the Internet Industry Association to create a code of conduct to deal with copyright infringement allegations, also did not constitute “reasonable steps”, since it didn’t address the “day to day” problems. Furthermore, he said that the overall plan by the ISPs was to aim at “doing nothing”.

Going on to strengthen his claim that iiNet “authorized and encouraged” the infringements of its customers, and in the face of iiNet failing to carry out any actions that could be described as “reasonable steps”, Bannon asserted that this meant that the ISP effectively allowed its subscribers to do whatever they liked on their Internet connection.

The case continues.

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

“It requires very strong and concrete evidence to have these people convicted. We simply could not lift the burden of proof,” said Antipiratgruppen lawyer Mary Fredenslund when explaining the decision to Politiken.

In just a year, four cases against alleged pirates have come before the High Court in Denmark and the overall result for the copyright holders has been negative. Three of the defendants were acquitted due to insufficient evidence, and in the one case where a file-sharer was convicted, the defendant had confessed.

Defense attorney Per Overbeck says that in addition to these outcomes, cases against two of his clients have been dropped in recent years. “Antipiratgruppen has acknowledged that they can not get people convicted without either catching them in the act or threatening them to confess,” Overbeck said. “In practice, this means that without a confession there is no case,” he added.

Per Overbeck and Antipiratgruppen’s assessment that recent High Court rulings make it virtually impossible to get individuals convicted for illegal file sharing are supported by a recent Government report from the Ministry of Culture.

According to the report, IP-addresses can only be used to identify the person paying for the Internet subscription, not the person who actually downloaded the files. The courts have ruled several times that in terms of evidence, an IP-address alone is insufficient to prove guilt.

In one case a defendant walked free after arguing that that someone else must have accessed his wireless router to download copyright infringing material.

Despite these legal setbacks for copyright holders in Denmark, it is worth noting that Danish anti-piracy tracking company DtecNet remains the main partner of the RIAA and other music groups in countries where governments are looking to implement three-strikes policies to get alleged file-sharers disconnected from the Internet.

The evidence DtecNet gathers also consists of just an IP-address. Indeed, there is no known anti-piracy method to discover who is sitting at a particular keyboard, on any particular computer, at any given time.

In the on-going trial of AFACT v iiNet, DtecNet gathered the evidence used in the case. Under cross-examination a computer forensics investigator – who was previously a key witness in the 2004 KaZaA trial – 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.

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.

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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.

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The law is intended to make it easier for copyright holders to obtain the personal details of alleged file-sharers from ISPs, but the ISPs are not handing information over without a fight.

This April, five book publishers handed a request to a local court for information on the owner of an FTP-server that allegedly stored more than 2000 audio books. Although it was a private server and the audio books couldn’t have been made available to the general public, the court ordered the ISP Ephone to hand over the details of the person behind the IP address.

In a response to the negative decision Ephone consulted its customers, asking them whether they should appeal the case or not. Of the 20,000 customers who responded, a massive 99% were in favor of an appeal, so Ephone duly took the case to the Appeal Court.

Yesterday the Appeal Court announced its verdict, which turned out to be a win for the ISP and the alleged copyright infringer. The Appeal Court nullified the earlier decision of the District Court against the ISP, and ruled that Ephone does not have to hand over the details of the FTP owner to the book publishers.

The Appeal Court argued that, even though the FTP server contained copyrighted works, probable cause for copyright infringement had not been proven. Since the server in question required login credentials there was no distribution to the public, the Appeal Court said.

The decision of the Appeal Court was received with huge disappointment by the book publishers, but welcomed by Ephone and the majority of its customers. Still, this decision may not be the end of the first IPRED case as it may still be appealed at the Supreme Court.

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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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The German-based anti-piracy outfit DigiRights Solutions (DRS) recently published an interesting PowerPoint presentation (in German) which shows how copyright holders can make millions from pirates. The document reveals some rather shocking statistics that show how illicit downloads are more profitable than legal downloads.

The presentation starts with some basic information on the various file-sharing networks, and details how the company’s software can detect illegal downloads and automatically send out requests for damages to alleged pirates. Their setup is similar to those at DigiProtect and Logistep who run comparable operations all over the world.

After finding out the addresses of alleged file-sharers they send out requests for damages directly, usually in the range of a few hundred dollars (or in the UK, around £600) per infringement. Thus far, little has been known about the actual profits generated by these operations, but this is exactly what the last part of the DRS presentation covers.

DRS says it generally sends out emails to alleged file-sharers requesting them to pay €450 (650$) per offense. According to the company they get to keep 80% of the money, leaving 20% for the copyright holders. The anti-piracy outfit claims it uses the money to cover their IT costs, administration costs, attorney fees and other costs.

So, for every illegal download the copyright holder gets €90 (130$), and that is where the presentation turns into a marketing talk where the company explains how piracy can be turned into profit. They start by comparing the profitability of legal and pirated downloads.

A legal online purchase of a song brings about €0.60 into the pockets of the copyright holders compared to the €90 per alleged file-sharer that pays up. So, the copyright holders get 150 times more from pursuing filesharers than from selling actual music, the company claims.

However, not everyone who receives a letter will pay up, but DRS says that an impressive 25% of all recipients do without asking questions. This figure is much higher than most people assumed previously.

But we’re wondering off here, let’s talk business.

DRS states that it’s realistic to track and pursue about 5,000 filesharers per month per title. Considering that 25% of those people pay the €90, then the copyright holders would have to to make about 150,000 online sales. Which is equal to the number of sales that are required for a Gold record award in Germany.

Ca-ching!

Companies like DRS have managed to build business models around piracy where the only purpose is to exploit copyright. Thus far they have been active in the UK (with ACS:Law) and Germany, but it’s just a matter of time before they expand their hunting grounds.

DRS and partners are by no means interested in protecting the rights of artists or how to deter people from sharing copyrighted work, it’s a solid cash machine. Undoubtedly it also raises questions whether these extortion practices should be allowed, or whether local governments should intervene.

Thanks Gulli.

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Petter said he fears that the anti-piracy process could cost ISPs a staggering £365m a year – £165m a year more than the £200m the BPI says the industry will lose to online music piracy in 2009. The BT boss went on to label the BPI’s losses assessment as “melodramatic.”

Geoff Taylor, chief executive of BPI, is now hitting back, claiming that Petter has exaggerated his figures too.

Taylor also claims that since February the group’s anti-piracy tracking company (most probably Denmark-based DtecNet) has harvested the IP addresses of 100,000 BT Broadband customers alleged to have been engaged in illicit file-sharing.

The BPI CEO, who says that his group handed the information over to BT, notes that the ISP has done nothing about the problem.

BT says that if the industry wants action against these individuals it should prosecute them, but BPI said that the ISP is shirking its responsibilities.

“It’s shameful for a company like BT to know that a high percentage of the traffic it carries is illegal material but do nothing,” Taylor told The Mirror. “If you operate a commercial service and know it is being used to break the law, taking steps to ensure it is used legally is a cost of doing business.”

However, Taylor’s comments don’t really hold water. BT has hosted more communications in its past and present forms than any other company in UK history, and for many years held a monopoly on telephone communications. BT and every other communications company provides infrastructure which people can use to break all kinds of laws and so far, no-one apart from the entertainment industries feels that carriers should take the responsibility for the actions of others.

The British music industry frustrations are only too clear. They don’t want to take the path of the RIAA and start taking legal action against alleged sharers, so are pressuring ISPs to take action against them instead. ISPs don’t want to be judge, jury and executioner, particularly since there is no legal basis to do so.

So now all eyes are now on the government which will soon have to decide which action to take. Smart money right now is on throttling the connection speeds of file-sharers as an absolute last resort, but this won’t be enough for the music industry, who want outright disconnection or at least a temporary suspension of Internet access.

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On April 1st the new law became active and immediately there was a dramatic drop in Internet traffic, which many observers put down to file-sharers retreating based on a fear of becoming identified.

Indeed, Henrik Pontén from Antipiratbyrån – the Swedish anti-piracy office – said he was convinced. “The majority of all Internet traffic is file-sharing. Because of that, there’s no other explanation for the decrease in traffic than the IPRED law,” he stated.

Then at the end of April, two ISPs – Bahnhof and Tele2 – both announced they would stop logging Internet activity which would seriously hamper the effects of IPRED on their customers.

But despite the massive opposition to the legislation, despite the fear, the huge drop in Internet traffic, the action of ISPs to limit its effects (and The Pirate Bay team releasing iPredator to neutralize it), so far in the battle against music file-sharers, IPRED is a sleeping beast.

Although the music industry promised to use IPRED to go after pirates, it has been a full 6 months since the legislation was introduced and so far, not a single complaint has been made against a file-sharer.

So does this mean that the feared music industry onslaught against P2P users will amount to nothing? Unfortunately, almost certainly not – they are sitting patiently for the wheels to turn in another case.

Previously five book publishers handed a request to a local court demanding information about the owner of an FTP-server where audio books were stored. Although it was a private FTP and the books couldn’t have been made available to the public, the court ordered the ISP Ephone to hand over the personal details of the individual behind the IP-address. Ephone refused, with their CEO describing the evidence submitted as insufficient. The case is under appeal.

Yesterday IFPI chief executive Lars Gustafsson told DN.se that they are simply biding their time to see the outcome of this earlier IPRED action by the publishing industry before going after music sharers, and offered assurances that IFPI cases will come in the fall.

Although there will probably not be the one hundred case promised earlier, Gustafsson still refused to be pinned down on the exact number, instead promising that the complaints will be issued “on a broad front.”

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

The next phase was to write to the individuals and threaten them with legal action, unless they paid several hundred pounds. Some panicked and paid up, most did not. Only a handful of these cases actually went to court and DL won them all, because the individuals didn’t defend themselves.

After masses of bad publicity peaking in a controversy over gay porn, Davenport Lyons appeared to have had enough, and withdrew from this business model to limit the damage to their brand and reputation.

In May, new kid on the block ACS:Law appeared and promptly took over where DL left off, and again, hundreds – maybe thousands – of threatening letters went out, demanding cash payment from alleged file-sharers. But this time things wouldn’t be quite so easy for the lawyers and their clients.

The scheme wasn’t new anymore and various support structures for letter recipients flourished, including forums and dedicated sites such as the excellent BeingThreatened.com. Due to the increased knowledge and awareness brought about through news articles such as those read here on TorrentFreak and on the aforementioned platforms, pay-up rates from those accused fell to as little as 15%, as it became clear that the chances of actually being taken to court were minimal.

But now, after months of being told to “put up or shut up”, it seems that ACS:Law are, if they are to be believed, about to flex their legal muscles and actually litigate against certain individuals. They need their symbolic “head on a pike” to ensure the overall pay up rates make the scheme worthwhile.

“The first batch [of] claims have been prepared and were filed at court on Friday, 4 September 2009. Service of the proceedings will be made by first class post and will be with defendants by Tuesday, 8 September 2009 at the very latest,” the company said in a statement, adding, “The second batch of defendants will be selected on Monday, 14 September 2009.”

While many recipients may have ignored previous correspondence from ACS:Law or DL, individuals receiving documents in the post today or tomorrow (presuming the threats actually come to something) are strongly advised not to ignore them, especially if they are court documents.

Failure to respond to court documents could result in a default judgment being issued in the future and this could prove very costly indeed – possibly mounting to several thousand pounds.

So what should recipients of court documents do? Firstly it would be prudent to seek legal advice – Lawdit Solicitors can offer advice and guidance since they have been assisting people against these claims for some time now, but any lawyer with a sound knowledge of copyright issues will prove invaluable.

For those individuals who maintain they are innocent, a vigorous defense can be mounted against any allegations. In the majority of cases, all ACS:Law will have as evidence is an IP address harvested by an untested system in a foreign country, and that may not be enough to prove their case.

Indeed, the Internet Service Providers Association (ISPA) recently told Which?, “We’re not convinced of the efficacy of the software and not confident in its ability to identify users.”

However, ACS:Law will select potential defendants very carefully and will likely focus on individuals with the weakest cases, have compromised or damaged their defense in some way, or have chosen not to respond to previous letters.

If you receive court documents in connection with an ACS:Law case during the next few days, do not panic. Please feel free to get in touch with us here at TorrentFreak in complete confidence. Your privacy will not be breached and we will point you in the right direction.

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