Problems had been building for more than two years. Swedish anti-piracy group Rights Alliance (Antipiratbyran) had built up an interest in Sparvar, a site directed at a largely Swedish audience. In early 2012 following action against a private site known as Swepiracy, Rights Alliance warned that Sparvar was on their list of targets.

Until this week, however, Sparvar had been hosted in Canada with Montreal-based Netelligent Hosting Services. For some time it had been presumed that hosting a torrent site is Canada is legal, a notion that was recently backed up by Netelligent president Mohamed Salamé.

“[As] long as there are no violations of our [acceptable use policy], we take no actions against torrent sites which are still legal in Canada,” Salamé told TF.

Nevertheless, the Royal Canadian Mounted Police (RCMP) still took action against Sparvar. How did this come to pass?

A source familiar with the case who agreed to speak on condition of anonymity told TorrentFreak that Netelligent was served with a data preservation order by the RCMP who were working together with authorities in Sweden.

In the first instance Netelligent were gagged from informing their client about the investigation, presumably so that no data could be tampered with. Netelligent was then sent a hard drive by the RCMP for the purposes of making a copy of the Sparvar server. This was to be handed over to their authorities.

We’re led to believe that Netelligent put up a fight to protect their customer’s privacy but in the end they were left with no choice but to comply with the orders. And here’s why.

MLAT, or Mutual Legal Assistance Treaty agreements, enable countries to gather, share and exchange information in order to enforce the law. Since 2001, Canada has had an MLAT with Sweden and since there was a criminal investigation underway in Sweden against Sparvar, Canada and Netelligent were legally obligated to provide assistance in the case.

So what does this mean for other sites hosted in Canada? Well, according to our source anyone running a site should be aware of the countries that Canada has MLAT agreements with, just in case another country decides to launch a case.

Those countries can be found here but they include everyone from the United States to Australia, from China to Russia, and many countries across Europe including the UK, Netherlands, Spain, Poland, France and Italy.

Finally, our source informs us that while cooperation in criminal cases has obviously been requested before, to the extent of his knowledge this is the first time that a torrent site has been a target.

Source: TorrentFreak, for the latest info on copyright, file-sharing and anonymous VPN services.

“It is hard to avoid the conclusion that Canada remains a magnet for sites whose well-understood raison d’être is to facilitate and enable massive unauthorized downloading of pirated versions of feature films, TV shows, recorded music, entertainment software, and other copyright materials,” the IIPA wrote.

These claims are actually the tip of a very large iceberg. It’s indeed true that some large public torrent sites are at least partly hosted on Canadian soil but mildly under the radar are also dozens of private tracker communities, many of which have happily operated from Canada for many, many years.

The overall impression is that Canada is one of the safest countries in which to put a file-sharing site, but developments yesterday cast a shadow over that notion.

With 10,000 members, Sparvar.org (Sparrows) was a reasonably sized private site. Aimed largely at a Swedish audience, Sparvar had enjoyed Canadian hosting on an IP address belonging to Montreal-based Netelligent Hosting Services, a company that has welcomed many similar sites in the past. Sometime in the past 24 hours, however, Sparvar disappeared from the Internet.

Soon after a rumor began circulating that Sparvar had been raided by the police. That version of events has now been confirmed by Scandinavian anti-piracy outfit Rights Alliance.

Update: Netelligent confirm action against Sparvar’s server, but deny any raid took place. See update below.

“Police in Canada have seized a server belonging to the illegal file-sharing service sparvar.org. Sparrows was a secret service with some 10 000 registered members. The server was located in Canada, but the activity was directed mainly against Sweden,” the anti-piracy group says.

“Behind the complaint stands Rights Alliance which has long been monitoring and documenting this business. The investigation is continuing with a focus on identifying the perpetrators. The seized server will be analyzed.”

The action against Sparvar shows that Rights Alliance have long memories. More than two years ago following their action against private site Swepiracy, Rights Alliance warned of further action to come, specifically naming Sparvar as a target.

That the group can conduct its work across borders, especially into Canada where it was believed there was a more torrent friendly environment, will come as a surprise to the many other sites hosted there under similar circumstances.

Canada has been paying more attention to IP issues in recent years, enacting the Copyright Modernization Act in 2012 and subsequently introducing a bill designed to strengthen IP enforcement. Following these efforts the United States shifted Canada from the Priority Watch List to the standard Watch List in this year’s Special 301 Report. How much further Canada is prepared to go remains to be seen.

Update: TorrentFreak has been informed by Netelligent president Mohamed Salamé that the police action against Sparvar was carried out in an orderly cooperative fashion with authorities and was not the product of a raid.

“The fact of the matter is we are a datacenter hosting all sorts of customers downstream from us. And as long as there are no violations of our AUP, we take no actions against torrent sites which are still legal in Canada,” Salamé explains.

“We also don’t get ‘raids’ as we have a very professional relationship with all agencies on the federal and provincial level to address the issues. And by professional relationship I mean that we do not just give out information or hardware just because they are law agencies. We make sure their requests are legitimate and that they have subpoenas, court orders, or warrants before complying with any of their demands.”

A separate source familiar with the case informs TorrentFreak that contrary to claims by Rights Alliance, no hardware was seized. It appears that a server was indeed cloned but that was in response to an official order to preserve data following a request by Swedish and Canadian authorities.

Source: TorrentFreak, for the latest info on copyright, file-sharing and anonymous VPN services.

The IIPA, which includes a wide range of copyright groups including the MPAA, RIAA, BSA and ESA, has listed its complaints against a whole host of countries. As in previous years, Canada was discussed in detail with the recommendation to put it on the 2014 Special 301 ‘watch list’.

One of the main grievances against Canada is that the country offers a home to many sites which the copyright industries label as “rogue” businesses. This includes the recently shut down isoHunt.com as well as other popular torrent sites such as torrentz.eu and kickass.to.

“Even after the shuttering of Isohunt, Canada is still the home to some of the world’s most popular Internet sites dedicated to piracy, including torrentz.eu and kickass.to, which garnered rankings of third and second place, respectively, on one of the most widely accessed listings of the world’s most popular illicit BitTorrent sites,” IIPA writes.

The copyright holders further mention the linking sites cuevana.tv, free-tv-video-online.me, and solarmovie.so as having Canadian connections, as well as the smaller torrent sites fenopy.se and monova.org. Without proper enforcement action against them, Canada remains very attractive to these allegedly infringing sites, they claim.

“It is hard to avoid the conclusion that Canada remains a magnet for sites whose well-understood raison d’être is to facilitate and enable massive unauthorized downloading of pirated versions of feature films, TV shows, recorded music, entertainment software, and other copyright materials,” IIPA writes.

“The largest of these Canadian-hosted sites attract scores of millions of unique visitors every month, and their corrosive effects on legitimate markets are felt worldwide,” they add.

The United States should encourage Canada to take action against these sites, the industry groups recommend. Without proper action the country will not just remain a safe haven for infringing websites, but also a breeding ground for new generations of Internet pirates.

According to the IIPA, current policies have resulted in widespread piracy among Canadian Internet users, with instances twice as frequent as in the United States.

“In this environment, it is not surprising that Canadians continue to demonstrate a formidable propensity to patronize illegal online sources of copyright material, thus stunting the availability and growth of legal alternatives,” IIPA writes.

“A report released in September 2012 found that, on a per-capita basis, Canadians download more unauthorized music than residents of any other country, and two-and-one-half times as much as Americans,” the groups add.

“Canadians continue to demonstrate a formidable propensity to patronize illegal online sources of copyright material, thus stunting the availability and growth of legal alternatives.”

The industry groups further recommend that Internet providers should partner with copyright holders to tackle the ongoing piracy problems. While some ISPs already forward infringement notices to their customers, they note that repeated infringers go unpunished.

Due to this “glaring weakness” the current copyright infringement warnings sent out by some ISPs are not believed to be very effective.

“Although more and more notices of infringement are sent by right holders and forwarded by service providers to their customers each year, the providers do not even correlate the notices with individual subscribers to know which are repeat infringers,” IIPA writes.

“To treat the first-time violator identically with the serial offender jeopardizes any deterrent effect the notices might otherwise achieve,” they add.

The groups recommend that the U.S. Government urges Canada to implement “strong legal incentives” for local ISPs to take action against these persistent pirates by teaming up with copyright holders.

The above is just the tip of the iceberg for Canada. Among other things, the groups also call for stronger border protections and hefty jail sentences for copyright infringers.

This is not the first time that Canada has been called out on copyright. Based on similar recommendations the U.S. Government has placed its northern neighbor on the intellectual property watch-list for several years in a row.

The IIPA’s full 2014 Special 301 recommendation report is available here. This also includes assessments from more than two dozen other countries, including Argentina, Brazil, China, Italy, Russia, Spain and Switzerland.

^{Photo: Sébastien Launay}

Source: TorrentFreak, for the latest info on copyright, file-sharing and anonymous VPN services.

While the new law introduces great improvements in terms of fair use and non-commercial file-sharing, the “notice-and-notice” provisions are more problematic, especially for VPN providers and their customers.

Under the new law Internet providers and VPN services are required to forward copyright notices they receive from rightsholders to their customers. To be able to do so, the companies have to retain access logs for a minimum of six months so the pirating customers can be identified. Providers who do not comply face damages up to $10,000.

Specifically, the law requires providers to “[...] retain records that will allow the identity of the person to whom the electronic location belongs to be determined, and do so for six months [...].” Failing to forward a notice may result in “[...] statutory damages in an amount that the court considers just, but not less than $5,000 and not more than $10,000 [...].”

The new logging requirements in combination with a notice policy and fines are a disaster for VPN providers, and that’s not an overstatement.

The mandatory data retention is expected to lead to a customer exodus as it makes it impossible for providers to guarantee people’s anonymity, a key feature of any VPN service.

In addition, it will require VPN providers to implement an extensive logging and notice policy to deal with takedown notices. This will prove to be quite costly or simply impossible, especially for smaller companies that are sometimes run by individuals.

For example, many VPN providers assign shared IP-addresses to their customers, so even if they wanted to there is no option to accurately identify a copyright infringer. For these companies the only option will be to shut down, or move the company outside of Canada.

TorrentFreak contacted University of Ottawa professor Michael Geist, who signals two main issues for VPN providers. On the one hand there are the resources that come with the implementation of the new provisions, and on the other there is the privacy issue for VPN users.

“First, are the resources needed to comply with a notice-and-notice system. These can be significant and it is disappointing that the government has decided not to consult on potential fees for notices. The law gives them the right to establish a fee, but it seems as if they will not do so, at the last for the time being,” Geist tells TorrentFreak.

“Second, on the privacy issue, notice-and-notice does not require disclosure of the identity of the subscriber. The additional logging of user information does create a new privacy issue, however. This is particularly sensitive given the recent Snowden disclosures and the growing interest among Internet users to safeguard their privacy.”

In a blog post Geist further highlights that the Government’s tone on the notice-and-takedown provisions recently shifted. Initially it was meant to be balanced and functional for both copyright owners and internet intermediaries, but the scale has slowly tipped towards the interest of copyright holders.

“It is our goal that a system be in place that is both balanced and functional; but, most importantly, it must endeavour to deter infringement,” the latest version reads.

The Canadian Government currently invites stakeholders to voice their opinions through the public consultation, and it might be wise for VPN providers and users to voice their concerns. There is currently no date set for the implementation of the notice-and-notice provisions.

Source: TorrentFreak, for the latest info on copyright, file-sharing and anonymous VPN services.

“Pay us a cash settlement,” the trolls advise, “or we’ll make your life a misery.”

While Canadians are known for their love of online file-sharing, in contrast they have engaged in their pastime largely unhindered for more than a decade. But a court ruling last week has the potential to change the landscape in the largely sharing-tolerant country.

The case involves NGN Prima Productions Inc, a Canadian company active in the US copyright troll scene gathering cash settlements from alleged sharers of its action movie “Recoil.”

Not content with trolling within the confines of the U.S., recently NGN filed a lawsuit in the Federal Court in Montreal.

The company claimed that data collected by anti-piracy company Canipre between September 1 and October 31 showed that 50 IP addresses allocated to four ISPs – 3 Web Corp., Access Communications Co-Operative Ltd., ACN Inc., and Distributel Communications Ltd – had engaged in copyright infringement of Recoil.

To this end, the ISPs should be ordered to hand over the names and addresses of the subscribers in question so that NGN could pursue them for damages, the company insisted.

On Monday November 19 the Federal Court in Montreal granted the request and ordered the four ISPs to hand over the data within two weeks, in Microsoft Excel format and encrypted on a CD.

Barry Logan, managing director of Canipre, says that this event marks the beginning of serious copyright enforcement in Canada. He claims that over the past five months his company has collected data on one million Canadians engaged in BitTorrent sharing and the decision of the Federal Court means that each one could face a damages claim in court.

Of course, what these individuals will actually receive is a letter from Logan’s paymasters at the movie and music studios asking them to settle the case for cash instead. It will come as no surprise that Canipre also works with the porn industry.

“I don’t think we have to limit this to just teenagers downloading Justin Bieber’s last record,” he said. “We represent a lot of mature titles that would be of interest to the 30/40/50 crowd.”

But while the United States has punishing statutory damages of $150,000 per item infringed, non-commercial statutory damages in Canada are capped at CAD$5000 ($5,038 US) meaning the fear factor will be considerably smaller.

Will Canadians feel compelled to pay? We may soon find out.

Source: TorrentFreak, for the latest info on copyright, file-sharing and anonymous VPN services.

Specifically, he lists the following provisions gained by Canadian Citizens.

• The addition of education, parody, and satire as fair dealing purposes.
• The creation of a non-commercial user generated content provision that creates a legal safe harbour for creators of non-commercial UGC (provided they meet four conditions in the law) and for sites that host such content.
• The adoption of several new consumer exceptions including time shifting (recording of television shows), format shifting, and the making of backup copies.
• Changes to the statutory damages rules that distinguish between commercial and non-commercial infringement. The law now includes a cap of $5000 for all non-commercial infringement. The change reduces the likelihood of lawsuits against individuals for non-commercial activities and would apply to educational institutions engaged in non-commercial activity and significantly reduce their potential liability for infringement.
• The inclusion of an exception for publicly available materials on the Internet for education. This covers the content found on millions of websites that can now be communicated and reproduced by educational institutions without the need for permission or compensation.
• The adoption of a technology-neutral approach for the reproduction of materials for display purposes. The current law is limited to manual reproduction or on an overhead projector. The provision may be applicable in the online learning context and open the door to digitization activities.
• The implementation of a distance learning provision, though use of the exception features significant restrictions that require the destruction of lessons at the conclusion of the course.
• The inclusion of a restrictive digital inter-library loans provision that will allow for digital transmission of materials on an inter-library basis, increasing access to materials that have been acquired by university libraries.
• A new exception for public performances in schools, which will reduce licensing costs for educational institutions.

Many of these are laws people elsewhere take for granted, or which have been assumed to have already been legal by Canadians (such as format- and time-shifting).

However, the most important part might well be the $5000 cap for non-commercial infringement. It will not only prevent any massive awards, such as those in the Tenenbaum and Thomas cases, but will significantly hinder any attempts by copyright trolls (who now know that no matter what, they won’t be getting any $1.5M awards)

There is still more to come in the bill, especially with a public consultation over the proposed notice-and-notice rules, but it’s a good start, especially from a bill that had some really bad analogies when being debated.

Source: TorrentFreak, for the latest info on copyright, file-sharing and anonymous VPN services.

However, the banner campaign for the Department of Finance’s Economic Action Plan that went on display this week was not supposed to show up on The Pirate Bay.

The Ottawa Citizen reports that The Pirate Bay ran the ads but that the site wasn’t targeted intentionally. Instead, the feds are quick to point the finger at one of the advertising networks they teamed up with.

“The Department of Finance did not purchase ad space on The Pirate Bay web site. We did however, include four ad networks in our media buy (Bell Media, Canoe, Microsoft, Yahoo),” The Department of Finance explains.

According to the Finance Department the advertising networks they work with follow strict guidelines and have “brand safety filters” in place. However, somewhere down the line a mistake was made and the feds point their finger at Yahoo.

“Each network confirmed that this site is not owned by them and that the appearance of the ad on this site is unauthorized. However, upon further research it was determined that some banner ads were appearing with an ‘ad choices icon’ which traces back to Yahoo,” the department states.

However, Yahoo! say they have conducted a thorough investigation into the misplaced banner and conclude that actually Sympatico is to blame.

“We have confirmed that Yahoo! was not responsible for the EAP ad showing up on The Pirate Bay. We have been able to trace the ad to Sympatico who were responsible for this ad’s appearance on the site, and they have been notified of the issue so they can take the appropriate actions.”

And so the finger pointing continues.

The Pirate Bay has witnessed the drama with a smile and has even considered plastering their entire site, especially the home page, with ads for Economic Action Plan. There’s no way the Department of Finance can stop that.

But first they have to buy a boat and loads of rum using the Canadian tax dollars generated by the ads.

Source: TorrentFreak, for the latest info on copyright, file-sharing and anonymous VPN services.

These fees, paid to collection group RE:Sound, will be in addition to those already paid to SOCAN (the Society of Composers, Authors and Music Publishers of Canada), and on top of the fees Canadians already pay when buying blank media.

In their decision, the CCB said:

“The use of recorded music is popular at sporting events, concert performances, festivals and fairs, parades, circuses and many other types of public entertainment. Authors of this music have been paid royalties for decades; performers and makers of sound recordings have yet to receive any compensation in this respect.”

The new tariffs target things like Karaoke bars (between $86.06 and $124/year based on days of operation), and parades ($4.39 per float per day, with a $32.55 minimum). Meanwhile weddings and conventions will have to pay per day (starting at $9.25), depending on the number of attendees.

Adding to the strong money-grab vibe, is the fees doubling if there’s dancing there. And while reporting for these events is typically on the honour system, like the Spanish SGAE, they have a team of licensing professionals (aka salesmen)

“Recorded music is a vital part of the business model for many live events,” said Martin Gangnier, Re:Sound’s Director of Licensing said in a press release, “and, indeed, it is impossible to imagine a fashion show, festival, parade or karaoke bar without music.” Perhaps because without music the last two would more be accurately termed ‘Marches’ and ‘bars’.

He also noted that the record companies would be one of the main recipients of these fees “to which they are entitled”, while artists would only get money if they were members of one of the member organisations (but money will be collected on their works still).

It’s only the latest in a series of ways to try and keep the income stream to the major labels going devised by collection societies, which has also included proposals to charge truck drivers to pay tariffs to listen to their radios, billing ISP’s in case subscribers play music, and claiming royalties for bathroom fittings. And as a last resort, there’s always bribery (although we’re not suggesting it in this case)

Source: TorrentFreak, for the latest info on copyright, file-sharing and anonymous VPN services.

In it, MP Dean Del Mastro tries to make a comparison for format shifting, and why it’s ‘bad‘, using socks.

“It’s like going to a clothing store and buying a pair of socks and going back and saying by the way it wasn’t socks that I needed, what i really wanted was shoes. So I’m just going take these, I’m gonna format shift from socks to shoes and I’m not gonna pay anything because it was all for my feet,” he says.

Of course he gets it COMPLETELY wrong.

If you wanted to explain format shifting using socks accurately, you’d do something more along the lines of:

Say you bought a pair of socks, and took them home. But then your hands are cold not your feet. Format shifting would mean you could use the socks elsewhere, and for the same purpose – to keep an extremity warm – by putting them on your hands.

Del Mastro’s comparison is so ludicrous though, that other MP’s are quick to laugh, we can only hope AT him.

Not that is new territory for his party either, as Conservative colleague James Moore has made countless poorly informed statements when talking on copyright bills, such as calling all opponents of C-32 (c-11′s predecessor) ‘radical extremists‘.

**CORRECTION** An earlier version of this story identified the speaker as James Moore, when it was actually Dean del Mastro. We apologize for the mistake.

Source: TorrentFreak, for the latest info on copyright, file-sharing and anonymous VPN services.

In its yearly report on countries that are not doing enough to protect the U.S. copyright industry, Canada is listed on the Priority Watch List with China, Russia, Ukraine and a handful of other countries.

The Special 301 Report reads:

“Canada remains on the Priority Watch List in 2012, subject to review if Canada enacts long-awaited copyright legislation. The Government of Canada has given priority to that legislation. The United States welcomes that prioritization and looks forward to studying the legislation once it is finalized, and will consider, among other things, whether it fully implements the WIPO Internet Treaties, and whether it fully addresses the challenges of piracy over the Internet.”

Other countries are more lucky.

Spain, for example, has been taken off the list after it implemented a harsher copyright law. Last December the US ambassador threatened to put Spain on a trade blacklist if the country failed to pass a SOPA-style site blocking law.

Weeks later the new law passed.

Critics of the yearly “shame” report note that the Trade Representative is not balanced, and that the report is a pressure tool to further the interests of a few big media companies.

“Once again the U.S. Trade Representative has produced a fact-free report that ignored any point of view except that of big media companies,” says Rashmi Rangnath, director of Public Knowledge’s Global Knowledge Initiative

We are distressed that countries which have yet to pass harsh legislation being pushed around the world remain on the watch lists, while countries which give in to U.S. pressure, such as Spain, are removed when they pass punitive legislation,” he adds.

Source: TorrentFreak, for the latest info on copyright, file-sharing and anonymous VPN services.