Liberty Media’s lawyer Marc Randazza went in with all guns blazing, describing Oron as ‘criminals’ who do not qualify for safe harbor under the DMCA. Oron’s funds were frozen but despite a small part later being released, it became clear that the service would have difficulty continuing without access to much, much more.

In early July it became apparent that the companies had been attempting to reach a settlement, details of which were leaked online following a poor redaction of court documents.

There was a significant gap between what Liberty asked for and what Oron were prepared to give. However, while Oron insisted no final agreement had been reached, Liberty felt that at some point a deal had been struck and went on to ask the court to enforce the terms. Yesterday the court did just that.

“There is nothing in the Settlement Letter that indicates that Defendant did not intend to be presently bound by the proposed terms or that a future writing was required,” U.S. District Court Judge Gloria M. Navarro wrote in her ruling.

“The requirement for the Plaintiff’s attorney to sign and return indicates that the parties do agree that all these terms are acceptable and binding. If this was only a proposal of terms there probably would not be a requirement for Plaintiff’s counsel to sign and return.”

Judge Navarro went on to find that the settlement negotiations between Oron and Liberty did amount to an enforceable contract.

“The Settlement Letter written by Defendant was an offer, accepted by Plaintiff when its counsel signed the letter. There was a meeting of the minds as to all material terms on July 5, 2012, when Plaintiff agreed that the settlement would include dismissal with prejudice of [alleged owner and operator of Oron] Mr. Bochenko,” Judge Navarro wrote.

“There settlement includes valuable consideration on the part of both Plaintiff and Defendant. In this case, the Court can compel compliance because there are no uncertain material terms that remain. Accordingly, the Court grants Plaintiff’s Motion to Enforce Settlement.”

That settlement is detailed in court papers as follows:

1. Oron pays Liberty Media $550,000.
. . .
8. Once payment is received by both parties, both proceedings in NV and HK will be
dismissed with prejudice, and in the event that Oron breaks any part of the deal, the
claims may be reinstated via arbitration after a 30 day “notice and cure” period.
. . .
12. Liberty agree to announce publicly that after a careful review of the facts they
believe Oron is protected by the DMCA safe harbor and that a review of the actual files
shows that there never was any child porn on Oron’s site.
. . .
14. Liberty will immediately, once the terms of the agreement are agreed to issue a
letter asking that the HK bank accounts be unfrozen allowing the payment to the
Randazza Trust and then to [former Oron webhosting provider] Leaseweb as well as send a letter to Leaseweb asking them to allow Oron ten (10) days to pay as the settlement of the matter is imminent.

There are at least 19 points to the settlement agreement so as can be seen from the numbering scheme on the items above a significant number are missing from court papers. As previously revealed, Oron were prepared to hand over the identities of its allegedly copyright infringing customers to Liberty and help the studio take legal action against them.

But while the enforcement of the settlement allows Oron to continue with its business in theory, problems remain. Firstly, Oron’s parent company accounts are still frozen, “in order to satisfy any fee award, which may be sought by Plaintiff, but which must be brought within thirty (30) days of this Order.”

Furthermore, as a cyberlocker Oron is currently doing no business at all. The site disappeared from the Internet several days ago, ostensibly to move to a new host, but it is yet to reappear or post any advisory on its homepage.

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

Flava Works, known for winning a preliminary injunction (currently under appeal) in its landmark lawsuit against MyVidster, a case which involved Google, Facebook and even the MPAA, is now targeting two prominent file-hosting services and 26 of their users.

In papers filed at the District Court for the Northern District of Illinois last week, the company accuses FileSonic and Oron of several copyright related offenses.

Among other things, the complaint alleges that FileSonic and Oron are “websites that copy, store, distribute, display, profit from unauthorized copyrighted materials, and/or induce and assist others to infringe copyrighted materials.”

The two cyberlockers are joined by 26 John Doe defendants who allegedly shared links to copyrighted material with each other via several Yahoo groups. It is claimed that through these mailing lists the defendants actively traded links, some of which were uploaded by the defendants themselves.

According to Flava Works the file-hosting sites directly profited from these infringements through their affiliate programs.

The complaint characterizes FileSonic as an “illegitimate” outfit, a description repeated for Oron.

“On information and belief, at all relevant times, Filesonic.com is not a legitimate file storage company. Filesonic.com’s affiliates reward program offered members the opportunity to make money by uploading copyrighted videos.”

“Affiliates members are paid based upon the number of downloads of their posted materials and based upon how many other premium memberships were bought by users accessing Filesonic.com through the member’s links.”

Flava Works goes on to accuse FileSonic, Oron and the Doe defendants on several counts including direct copyright infringement, contributory copyright infringement and inducement of copyright infringement.

The adult company asks for a permanent injunction and temporary restraining order against the defendants. Flava Works further requests statutory, compensatory and punitive damages for the alleged infringements.

It is unclear why Flava Works has singled out these two file-hosting services as the complaint also mentions that Hotfile, Fileserve and Rapidshare were used to share files. Filesonic in particular seems to be an odd choice since the cyberlocker disabled public file-sharing months ago, which led to an exodus of users.

For Oron, this is the second lawsuit brought against the site this summer. Last month adult studio Corbin Fisher sued the company for no less than $34.8 million for alleged copyright infringements. As part of a settlement, Oron then offered to assist the studio prosecute its own users.

Both Oron and FileSonic have yet to respond to the complaint.

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

The rhetoric in court filings has been harsh, with Liberty Media’s lawyer Marc Randazza openly referring to Oron as ‘criminals’ who do not qualify for safe harbor under the DMCA.

After having their funds in the US frozen, Oron unsuccessfully tried to have several hundred thousand dollars released, ostensibly to pay for their legal battles and hosting. A judge agreed to release $100,000 but no more, leading Liberty Media to warn Oron users that the file-hoster could collapse.

But for all the rhetoric and public aggression, more considered discussions were going on behind the scenes last month.

It is already a matter of record that Liberty Media asked Oron for $500,000 to settle the case and that Oron rejected the amount as “unreasonable”. But the negotiations between the two companies went much further than straightforward cash offers – much, much further.

TorrentFreak has learned that on June 23rd Oron offered Liberty Media $50,000, some ten times less than was originally demanded. In addition, Oron said that should an agreement be reached it could become particularly helpful towards the adult studio.

After a request from Liberty, Oron said it could indeed take “both strong and bold measures to keep Liberty Media content off of its servers” by giving Liberty direct and “unfettered” deletion access to its systems.

Then, in order to generate revenue, removed copyright-infringing content could be substituted for links pointing to locations where people could buy official product from Liberty instead.

“Oron will receive no income from such links until Liberty has recouped gross income of $400,000 after which Liberty shall pay to Oron 50% of its profits from said links,” Oron suggested.

There is nothing particularly surprising in the above since similar systems are operated at other file-hosting sites. But this is where things begin to escalate.

Oron also offered to “permanently ban, by email address, PayPal account, IP address or any other reasonable and robust metric, any user who is the subject of even a single Liberty Media takedown notice.” Any user flagged as infringing Liberty’s copyrights would also have their payments frozen by Oron.

Then, in a wakeup call to anyone who thinks that cyberlockers offer almost bulletproof security, at Liberty Media’s request Oron confirmed that should a settlement deal be reached, the company could offer the following:

Oron will assist Liberty in identification and civil prosecution of any parties who have been using Oron to distribute Liberty’s copyrighted material, including but not be limited to, full disclosure of IP addresses, banking information, emails and any other information that may assist in Liberty in such prosecution.

Finally, and to wrap the whole deal up in a neat bow, Oron accepted Liberty Media’s offer to provide “some public relations help for Oron in order to minimize the chance of other lawsuits being brought against it” by stating, contrary to earlier assertions, that Oron does deserve safe harbor under the DMCA after all.

Liberty Media’s offer was dated June 22 and Oron’s counter offer was dated June 23 with a June 25 deadline. General agreement was evident on all major issues except the cash offer. Whether their differences on that point will kill the whole deal remains to be seen.

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

“Oron is cognizant of its role as the vehicle in which infringers act in concert with one another to copy and distribute huge amounts of infringing material,” Corbin Fisher’s lawyers wrote, adding that since Oron only registered a DMCA agent in June 2011, it could not seek ‘safe harbor’ immunity for infringements made before that date.

The immediate effects of the suit were highly damaging for Oron. All company assets in the U.S. and Hong Kong were frozen and payment processors such as PayPal were ordered to stand down. Additionally, the file-hoster’s domain registrar was told to forbid any transfer of the Oron.com domain.

Of course, having no cash is a serious issue for any business, so Oron went back to court to ask for funds to be released to pay for legal expenses and operating costs. The file-hoster asked for roughly $375,000, but Judge Gloria M. Navarro couldn’t see her way clear to granting the full amount.

“Defendants do not provide any itemization or accounting for the Court to consider in making its determination if the amount requested is reasonable. Therefore, the Court authorizes $100,000 U.S. dollars to be released from Defendant’s PayPal account,” Navarro said.

But quickly Oron were back again asking for more money – $355,000 in total. The company said that it needed to pay its hosting company, Netherlands-based LeaseWeb, $75,000 by last evening plus an additional payment of $280,000 by next Monday.

While Corbin Fisher’s language towards Oron has been predictably aggressive, comments and accusations leveled at LeaseWeb are bound to raise eyebrows. Challenging Oron’s need to make such large payments to LeaseWeb, Corbin Fisher’s lawyers directly accused LeaseWeb of conspiracy and/or extortion.

“The evidence put forth by [Oron] shows that these expenses fall far outside of the norm for the industry. Something is amiss. Either Oron is fabricating this newfound need for hundreds of thousands of dollars or LeaseWeb is conspiring with Oron,” XBIZ reports.

“Logic suggests that LeaseWeb is either colluding with Oron to assist Oron in removing hundreds of thousands of dollars from this court’s jurisdiction; extorting Oron; or Oron is not being entirely forthcoming with the court,” Corbin’s lawyers said.

And the criticism of LeaseWeb didn’t stop there. An investigator for the studio said that LeaseWeb is known to “…ignore DMCA notices or at the very least, minimize their impact.”

But Friday brought more bad news for Oron. Judge Gloria Navarro denied the request for extra funds, despite Oron’s warnings that without them their business would not be able to continue.

“If Oron’s servers are shut down for non-payment of those monthly hosting fees its users – 99.9 percent of whom have no connection to this litigation – will lose access to their data,” the company’s lawyers wrote.

Liberty Media, the owners of Corbin Fisher, were quick to pile on the pressure.

“This leads us to believe that Oron neither maintains nor is instituting any backup of user data. Therefore, if there are any legitimate users of Oron out there, Liberty Media Holdings advises them to back up any important files for which they are the proper owner or licensee,” the company wrote in a press release.

So while the lawyers fight, what we appear to be witnessing here is another Megaupload data-loss debacle in the making, in which completely innocent individuals could lose access to their cloud-stored data due to someone else’s legal problems.

But perhaps what is of most concern to Joe Public right now is that despite warning the court that without funds the site could close, Oron have zero warnings on their site or information on the issues the company faces.

Of course, there’s a fine line between causing panic and keeping people informed, and indeed the company may be quietly confident that it will ride out the storm, but people should have the option to take precautionary backups, However, they won’t do that if they don’t think anything is amiss.

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

Last week the feds shut down the popular site accusing its founder and six others of money-laundering and several copyright related crimes. The site’s former users, meanwhile, are left without their files and forced to find a new place to share.

The big question is, where do these millions of people go now?

The RIAA hopes that the people who used MegaUpload to share copyrighted music are turning to iTunes, but this is not the case for everyone. A look at the traffic of some of the MegaUpload alternatives shows that millions have simply migrated to other file-hosting sites.

The graph below shows a sharp increase in traffic for four popular MegaUpload ‘replacements’ since last week. Based on data from various traffic measurement sites, Depositfiles, Uploaded.to, Hotfile and Rapidshare welcomed hundreds of thousands of extra visitors.

The example above is just the tip of the iceberg, as there are many other sites that experienced a surge in traffic including Filepost, Hulkshare, Netload.in, Uploading, zShare.net and many others. Whether the newcomers will remain on board has yet to be seen, but it is clear that millions of former MegaUpload users are migrating to other sites.

As the cyberlocker landscape stands now, 4shared.com remains by far the largest site on the Internet. With an estimated 2.5 billion page views, 4Shared is more than twice the size of MegaUpload before it was shut down.

Needless to say, 4Shared is deeply concerned about the recent developments, but the company also told TorrentFreak that they have nothing to worry about themselves.

“This case has a great negative impact on file storage services and the Internet overall,” a spokesman said, adding that “4shared has some of the most strict house rules among all other file storage services and there’s no need for any changes.”

With many sites still in a state of shock, it might take a few weeks to see what the precise effect of the MegaUpload shutdown is. One thing is for sure though, many of MegaUpload’s former users haven’t given up downloading and sharing just yet.

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