Movie Studios Spied On ISP’s BitTorrent Users

Written by enigmax on December 16, 2008 

Last month we reported how seven major Hollywood studios teamed up to sue iiNet, Australia’s third largest ISP. The studios monitored iiNet’s customers using BitTorrent – including a ‘copyright infringing’ subscriber they planted there themselves – and on whose shoulders the case appears balanced.

AFACTThe claim of the Hollywood studios goes like this – they accuse Australian ISP iiNet of “failing to take reasonable steps, including enforcing its own terms and conditions, to prevent known unauthorized use of copies of the companies’ films and TV programs by iiNet’s customers via its network.”

The studios want iiNet to disconnect alleged infringers, but the ISP has refused to do so. Adrianne Pecotic, Executive Director of the Australian Federation Against Copyright Theft said that the studios were forced to sue, since iiNet failed to take action against its customers. The case returns to the federal court shortly, but the lead up to this action proves interesting.

With the approval of AFACT, the Hollywood studios started a secret investigation back in June this year. After employing investigator Aaron Herps (and getting him to join up as an iiNet customer) and Copenhagen-based anti-piracy firm DtecNet for its software resources, they went online from 2 July to 30 October. Herps then actively shared copyright works via BitTorrent in a quest to gather evidence to prove that iiNet authorized the copyright-infringing activities of its own subscribers. But how would they prove this?

After the 18 week investigative period, the studios had collected the IP addresses of many thousands of iiNet subscribers, which were handed over to iiNet boss, Michael Malone, who later commented, “They send us a list of IP addresses and say ‘this IP address was involved in a breach on this date’. We look at that and say ‘well what do you want us to do with this? We can’t release the person’s details to you on the basis of an allegation and we can’t go and kick the customer off on the basis of an allegation from someone else.”

Crucially, the studios felt they had an ace up their sleeve in the shape of their investigator and now iiNet customer, Aaron Herp. Herps’ own ‘infringements’ were reported to iiNet along with everyone else’s, but of course, iiNet took no action against him, bolstering the claims that the ISP knew about piracy, but did nothing about it.

Interestingly, as Herps was actually authorized to share the movies and TV shows by the studios, he committed no copyright infringement, so if iiNet had disconnected him, they would have been acting incorrectly. It’s unclear what bearing this will have on the case.

Instead of taking direct action itself, iiNet handed all the evidence provided by the studios directly to the police. “So we say ‘You are alleging the person has broken the law; we’re passing it to the police. Let them deal with it’,” said Malone.

Ultimately it will be for the court to decide if iiNet ‘authorized’ the infringements, but the claims center around a number of assertions – that iiNet knew that its users were infringing copyright and that it took no action against them (i.e warnings, disconnection), that the ISP did not enforce its own terms of service (no sharing of copyright works) and that this liberal environment encouraged iiNet’s users to share more files.

According to Business Spectator, a hearing will take place tomorrow which will decide a date by which iiNet will have to file a defense, a defense they have promised to mount, vigorously.

Similar to elements of the DMCA, the ISP has a defense under Copyright Act 1968 – Sect 112E: A person (including a carrier or carriage service provider) who provides facilities for making, or facilitating the making of, a communication is not taken to have authorized any infringement of copyright in an audio/visual item merely because another person uses the facilities so provided to do something the right to do which is included in the copyright.

However, the Copyright Act 1968 – Sect 116AH states, “The carriage service provider must adopt and reasonably implement a policy that provides for termination, in appropriate circumstances, of the accounts of repeat infringers.”

However, proving that someone is an infringer takes more than a simple allegation, and it could hardly be considered ‘appropriate’ to disconnect someone on this basis. Time for Justice Dennis Cowdroy to decide.

Previously: Virgin Media to Throttle BitTorrent Users

Next: Top 10 Most Pirated TV Shows on BitTorrent

58 Responses

1 Dec 16, 2008 at 23:23 by mister_playboy

Yet another ridiculous ploy. Pathetic.

2 Dec 16, 2008 at 23:33 by Joe

An ISP taking an ethical and lawful stand against the MPAA crooks? How dare they! What crazy dimension is this?!

3 Dec 16, 2008 at 23:36 by Surreal

So by the Movie Studio’s providing the material, and Herps legally sharing them on the network, anyone who downloaded the materials couldn’t possibly have been doing so illegally. So why would they complain to the ISP that people are downloading movies that they put up there legally for people to download?

How is that infringement?

~Surreal

4 Dec 17, 2008 at 00:05 by kain able

They should take Herps to court for copy right infringment (and disconnect his account), but when this is obviously thrown out the window, along goes the rest of the (A)FACT’s ‘evidence’.

- lol, i did it, i used (A)FACT and evidence in the same sentance!

5 Dec 17, 2008 at 00:09 by Mr. Jones

I think they just shot themselves in the foot here. If Herps is authorized to share, then post #3 is correct, everyone who downloaded from him was in fact doing it legally.

So… The fact that there are people legally sharing files for whatever purposes, how is the consumer supposed to know who is authorized and who is not authorized?

6 Dec 17, 2008 at 00:18 by @3;@5

@3;@5 you are wrong (sadly), authorising him to distribute does not authorise other people to receive and distribute from him.

7 Dec 17, 2008 at 00:21 by Anonymous

More crooked tactics from the MAFIAA.

What else is new?

8 Dec 17, 2008 at 00:28 by Anonymous

“@3;@5 you are wrong (sadly), authorising him to distribute does not authorise other people to receive and distribute from him.”
————————————–

you would think that would have been obvious but pirates, if nothing else, are masters at grasping for straws…

9 Dec 17, 2008 at 00:32 by www.10ch.org

6 Dec 17, 2008 at 00:18 by @3;@5
The thing is that they had no evidence against anyone receiving it. They only have the direct evidence of Herps’ “copyright infringement.”

Of course, if Herps was indeed infringing, someone should sue AFACT for “authorizing”/aiding copyright infringement.

Roze

10 Dec 17, 2008 at 00:49 by Anonymous

Damn…I thought things were better here in Australia. Things are heading towards the “out of hand” area, especially with the government wanting to censor the internet down here. It’s time for change and I hope someone with power sees that and takes the opportunity rather than keep the world wrapped up in legal lawsuits.

11 Dec 17, 2008 at 00:51 by Anonymous

I like how here in Australia we use a 1968 law to govern copyright on the internet.

12 Dec 17, 2008 at 00:53 by baka pinkuu

C’mon, admit it… it’s baloney to say that authorizing the investigator prevents them from making accusations.

But that doesn’t change that iiNet = heroes for taking a stand on “Prove it, we don’t to take your word for it.” And as ww.10ch.org noted, proving that their investigator did something “wrong” doesn’t prove jack about anyone else.

13 Dec 17, 2008 at 00:55 by John Smith

This is uncalled for!

14 Dec 17, 2008 at 01:21 by Mike

It’s time that this copyright Bullshit, is removed from our life.
I do a fair day work for a fair day pay and that’s the end of the story, I do not keep getting pay because people continue to use whatever we make.
I think this copyright is a good invention to steel money from people.

15 Dec 17, 2008 at 01:27 by Anonymous

mike, you’re an idiot. your analogy and your spelling prove it.

16 Dec 17, 2008 at 01:37 by www.10ch.org

@12 Mike
It is also to maintain absolute control, and to give no one else a say, because copyright prevents any distribution or show that is not “authorized” i. e. in their control. In fact, the fact that copyright does/is intended for this is quite obvious.

Roze

17 Dec 17, 2008 at 02:11 by Lachlan Hunt

The MAFIAA, and their Australian counterparts, are unbelievably stupid. I’m quite sure iiNet has a strong case and any reasonable court would dismiss the case against them.

As an Australian myself, I’m appalled that the MAFIAA are beginning to drag us down the same path as they’ve been dragging the USA down for years. I really hope they lose this case, and wish there were some way to really punish them for their actions.

18 Dec 17, 2008 at 03:38 by stfu

“Crucially, the studios felt they had an ace up their sleeve in the shape of their investigator and now iiNet customer, Aaron Herp. Herps’ own ‘infringements’ were reported to iiNet along with everyone else’s, but of course, iiNet took no action against him, bolstering the claims that the ISP knew about piracy, but did nothing about it.”

That is a very important point. How is the isp supposed to know whether a user has a legitimate right to download, how can they be sure that ANYONE is infringing copyright. This point is a case of the industry shooting itself in the foot and almost legitimises the ISP’s position further. If that dude was not breaking any laws, how can they be sure any other user is? I think they should turn this around and make an unreasonable request of their own. I think they should request that the movie industry hand over the ip’s and addresses of every one of their staff so the ISP knows exactly who shouldn’t be downloading. Let’s see how forthcoming they are with information.

19 Dec 17, 2008 at 05:17 by iiNet for the win

Interestingly, as Herps was actually authorized to share the movies and TV shows by the studios, he committed no copyright infringement, so if iiNet had disconnected him, they would have been acting incorrectly.

That right there will should win iiNet the case, if not maybe they could alert the court to the fact that Telstra (also telstra are in bed with fox btw) & Optus who are two major isp’s are not asked to monitor & disconnect there customers.

Good Luck iiNet, i hope the case gets thrown out & the mafiaa look like the fools they are.

20 Dec 17, 2008 at 05:43 by Anonymous

@11

lol, exactly, exactly.

21 Dec 17, 2008 at 09:11 by Diji1

@3: ” So by the Movie Studio’s providing the material, and Herps legally sharing them on the network, anyone who downloaded the materials couldn’t possibly have been doing so illegally. So why would they complain to the ISP that people are downloading movies that they put up there legally for people to download?

How is that infringement?”

What are you – a frikkin moron??

I’m afraid the fact that Herpes was authorised by the copyright holder will have little bearing on this case. It’s perfectly legal – under the terms of the contract he had with iiNet – for the ISP to disconnect him but it is also a fact that he could show them that he was legally authorised to distribute the material.

22 Dec 17, 2008 at 09:17 by Diji1

@19 “Interestingly, as Herps was actually authorized to share the movies and TV shows by the studios, he committed no copyright infringement, so if iiNet had disconnected him, they would have been acting incorrectly.

That right there will should win iiNet the case,…”

Are you an idiot? The ISP is allowed to disconnect customers for any reason they wish, proved or unproved – or don’t you read contracts. Even if you’re assumption was right the facts are he wasn’t disconnected so it’s a moot point. You can’t prosecute an organisation for something they could have done but didn’t.

The lack of intellect from some posters here is breathtaking.

23 Dec 17, 2008 at 10:17 by iiNet for the win

@ diji1
I think you misunderstood my post, i bother to correct you though as it might show your lack of intellect is BREATHTAKING!!

hahahahahahahahaha

24 Dec 17, 2008 at 10:18 by iiNet for the win

@ diji1
I think you misunderstood my post, i won’t bother to correct you though as it might show your lack of intellect is BREATHTAKING ;}

hahahahahahahahaha

25 Dec 17, 2008 at 11:09 by Anonymous

‘Yes! I am a despicable, filthy, villainous pirate, deserving blame and censure, but that pirate is who I want to be!’

- From Monkey Island 3

26 Dec 17, 2008 at 11:09 by LeChuck

‘Yes! I am a despicable, filthy, villainous pirate, deserving blame and censure, but that pirate is who I want to be!’

- From Monkey Island 3

27 Dec 17, 2008 at 11:25 by spiderman

That’s Crazy. Hey, to make some money online, check out
www dot thespidersystem dot ws

28 Dec 17, 2008 at 12:46 by Just Me

Is it Just me or is Demonoid.com down?
Can anyone please answer? Sorry I know this is extremely off topic, but I am desperate to compare notes.

29 Dec 17, 2008 at 12:54 by ju

these retarded american studios have no power in australia. were not sheep farming dumb fucks to be frightened into submission

30 Dec 17, 2008 at 13:24 by charles

I think they are targetting torrent sites now against infringement. What if they were successful in the destruction of torrent sites?

31 Dec 17, 2008 at 13:24 by charles palma

I think they are targetting torrent sites now against infringement. What if they were successful in the destruction of torrent sites? Will this affect the offline industry?

32 Dec 17, 2008 at 13:42 by farmerbrown

So I own my farm)-(record company) and all (produce)-(music) grown there….I authorize my foreman to distribute….(give away) all my crops(music)….but anyone who shows up to take them is breaking a law…hmmm…..Makes no sense to me…does it you?

33 Dec 17, 2008 at 14:03 by Ghostofchris

What a bunch of idiots, the internet is only for piracy, stop fucking around with iiNet, they are one of the best ISP’s in Australia

34 Dec 17, 2008 at 14:44 by unimpressed

Let’s find out where Mr. Herps lives and inform him of our displeasure directly.

35 Dec 17, 2008 at 14:58 by anon2

would the gathering of information in this way be classed as an invasion of privacy and also entrapment?

36 Dec 17, 2008 at 16:04 by ontopofhollywood

lets find out which studios are involved and vow to NEVER buy any of their products even the ones worth paying for. that will shut them up because they will die off like those greedy music production companies that sue thier customers. pathetic….

37 Dec 17, 2008 at 16:08 by uhh

As much as I would like to agree with you TF, its not down to justice.. its down to how much money there gonna pay somebody off..

money rules..

38 Dec 17, 2008 at 16:24 by Roze

That brings to mind – perhaps the ISP should disclose Herps’ personal information to everyone. After all, he might be infringing.

@Diji1 21, 22
That does not seem to have any relevance to whether iiNet should win the case or not.

Roze

39 Dec 17, 2008 at 21:32 by whats your favourite hobby sport

@19
I was thinking the same thing. If this informer was/is working for the media mob. Then why was he not forced to inform the ISP of his /her mission (impossible). He/she was not a acting as a residential customer and had no intention of being a customer(in the sense that they used the account to ONLY gather information on copywrong/all infringement). So what is happening? There should be an apart account made up for these kind of use’s, which should include the words ” this account is only for spying on our customers. Only to be used by the owners of their own I Property and can only search/download/upload their own stuff”
These people have as much if not more power than the police!!!!
p.s my english could be better, sorry.

40 Dec 17, 2008 at 22:49 by Ironic

What a laff, people downloading stuff illegally calling the companies who make the films who are trying to stop these illegal downloads … crooks.

HHAHAHAHHAH

41 Dec 17, 2008 at 22:53 by Anon

http://apcmag.com/why_iinet_will_probably_lose_the_piracy_lawsuit.htm

Here’s an interesting argument that could be scarily true

42 Dec 17, 2008 at 23:14 by I am the law

@farmer brown.. it’s illegal to sell/give away drugs.. it’s not illegal to download music that has been uploaded with the authorisation of the copyright owner in order to prove infringement.. BECAUSE.. wait for it… if the owner is giving it away.. then no infringement has happened.

It’s called catch22 there is no way you can prove infringement by distributing your own material.. which is perfectly legal to distribute in the first place.

In fact doing it and then claiming otherwise is fraudulentI and illegal.. under copyright law.

43 Dec 17, 2008 at 23:23 by Jugar

that will shut them up because they will die off like those greedy music production companies that sue thier customers. pathetic….
http://www.jugargame.com/

44 Dec 17, 2008 at 23:54 by mancfrank

Does any have the ISP to fully check the content of files being download (check it’s copyright and the person has no legal entitlement to share the file). Is there an assumption being made here that any file being shared is automatically pirates material?
I think the ISP can rightly claim they aren’t the police and don’t know a crime is being committed.

45 Dec 18, 2008 at 00:01 by baddchicken

OMFG .this stinks of intrapment im thinking……but then agin what do i know im just a chicken
we will never give up we will never surrender and you will never take us alive

46 Dec 18, 2008 at 02:28 by Chris

I guess channel 7 and the people who organise dvd releases, want Australia to go back to waiting nearly a year for a new show on tv or to go to dvd instead of the new fast track 4 week wait time. Streaming just forced the networks to become competitive which they should have been in the first place.

47 Dec 18, 2008 at 06:36 by Anonymous

“What a laff, people downloading stuff illegally calling the companies who make the films who are trying to stop these illegal downloads … crooks.”

Earth to Captain Dipshit.

Filesharing is a “crime” about on par with jaywalking. The MAFIAA, on the otherhand, pulls shit on a regular basis that would make Enron blush.

So please try again.

48 Dec 18, 2008 at 10:42 by mr plop

the gm of iinet is a legend, iinet is a great isp focussed on customers. interestingly he was critical of the new interweb filter trials and 3 days later he got hit with this.

i love his attitude ‘prove it in court then i will will act’ something to ponder. what recourse do ppl have that get disconnected wrongly?

49 Dec 18, 2008 at 12:01 by Marcos

Dam straight. What happens to the ISP when they potentially disconnect a user based on the flimsy evidence provided by these studios? Haven’t we seen time and time again that an IP Address doesn’t prove anything.

If iiNet loses this case it will be a very sad day for Australians. Compared to Europe and the US we Australians have very limited options when it comes to a choice of ISPs.

We pay shit loads of money for often very slow connections that have a limit on the amount we can download. This is made ever more clear to me as I have spent the last two years living in Europe where I pay almost nothing and have no limit. I download all my movies and TV here as I want them in English and I live in a non-english speaking country.

If these studios want to have any chance at reducing the amount of piracy in Australia they need to do a number of things.

Firstly release there TV shows to Australian TV when the release them to American or European audiences, or at least a lot closer then they do now. Same is true of movies. If I have to wait six months to see the movie in the Cinema or it doesn’t even come to my small town cinema than I am going to download it.

They need to stop attacking there customers and start providing the services which the customers want. I will not deny that I like the free factor but when I am in Australia I often get movies out of the DVD shop as I enjoy browsing the movies on the shelf.

Here where I am now i sometimes even watch a movie in another language with out subtitles because I like going to the movies.

Good luck iiNet

50 Dec 18, 2008 at 12:49 by dan

how can an American organization sue an Australian company? come on federal court don’t let Aus become another state of America

51 Dec 18, 2008 at 14:45 by Schroe

Interesting part here that no one is picking up on. iiNet are only required to disconnect copyright infringers.

Last I checked, copyright infringment is an offence in australia (aka, a crime). And since our country’s legal system is based on the principle of “innocent until proven guilty”, the ISP cannot treat someone as a copyright infringer until AFTER a court determines that the individual is actually guilty. Of course, a court could order them to discontinue service, but that would also require an investigation by an entity legally empowered to do so.

None of this has happened here. All that has happened is a third party has alleged wrongdoing to an organisation which has no responsibility. Essentially calling main roads to report a robbery because the getaway vehicle was using their roads. The only action they could take is pass it on to the police, which iiNet has done.

iiNet is on firm legal and, more importantly, moral ground.

52 Dec 18, 2008 at 15:43 by Anonymous

i wander if they would’ve sued if they did disconect Mr herpes, saying its disrupting a investigation by him being cut off by isp, sounds like a catch 22

53 Dec 18, 2008 at 21:46 by mr plop

i would suggest to read the apcmag article, raises some interesting points. scary really.

54 Dec 19, 2008 at 02:01 by dr dre

lol, so why not sue Wallmart for selling guns to ppl that then; shoot other ppl; kill; robberies?
sue holden for selling cars that go too fast?
sue Macca’s for making people fat?
the list can go on and on.
its a joke.
its only illegal if you sell.

55 Dec 19, 2008 at 02:25 by me3p0

Piracy has been around for generations, whether or not they shut down all torrent sites or not, piracy will continue.

TV and movie studios need to stop wasting money on law suites and put some money into researching ways to embrace technology for what it is: a massive global market.

56 Dec 19, 2008 at 04:01 by Pharaoh

No, it’s not entrapment. It would have to be done by actual police to be entrapment, this investigation was performed by independent third parties with absolutely no standing to legally declare somebody an infringer. That said the action itself would be a textbook definition of entrapment if it actually was done by police.

The movie studios clearly gave permission for their investigator to distribute their wares and therefore anybody who downloads them is within their legal rights. The fact that they are then redistributing it themselves to other peers in the same swarm might be illegal unless you argue that this right was granted implicitly by the uploader because of the protocol he chose to distribute with.

The fact that his IP and those of the peers he legally distributed to was included on the list of infringers makes this a case for the exact opposite of what the studios are saying: it proves that allegations of infringement can and often are incorrect and should not be accepted as legally binding. iiNet would still be within their rights to disconnect anyone on that list, but the ‘evidence’ gathered by the movie studios is completely invalid on its own.

57 Dec 19, 2008 at 09:36 by Anonymous

@ 11 it has been amended many times since 1968.

58 Dec 21, 2008 at 05:52 by Anonymous

And how would shutting down a couple torrent sites cease piracy? Piracy will always be in existence, and, really, just a few lawsuits upon few particular groups of pirates and such won’t do anything. The government should waste its time on something more important than piracy.

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