In move reminiscent of the RIAA’s war on the public during the last decade, hundreds of thousands of Internet users are now receiving demands for cash settlements after allegedly downloading and sharing copyright-infringing content.

Alongside traditional ‘trolls’ such as the now-infamous Malibu Media, US-based Rightscorp Inc. has been recruiting copyright holders to pursue alleged pirates for relatively modest sums. As previously reported, in emails sent via their ISPs, subscribers are asked for $20.00 to settle copyright complaints.

One of the more recent additions to the Rightscorp fold is US-based entertainment company Miramax. The distributor has hundreds of movies in its catalog, with the image below representing just a tiny sample.

As can be seen top right, the Tarantino classic Kill Bill: Volume 1 is a Miramax title and one that is now being handled by Rightscorp. The company has been sending out cash demands to alleged sharers via their ISPs and some have taken to file-sharing sites including The Pirate Bay to send warnings to other potential downloaders.

“I got [a settlement demand] sent to me recently via email. This file is being tracked,” a user of the Pirate Bay explained.

Tracing back the details the user posted in the comments section of a Blu-ray ‘YIFY’ release led TF to the relevant settlement page on the Rightscorp website. As shown below, the company wants $20.00 to settle the case.

The extent to which Miramax has exposed its hundreds of other titles to Rightscorp is currently unknown, but in the particular case detailed above the company won’t be picking up any cash. The settlement page is yet to be filled in suggesting that the recipient simply ignored the demand which, incidentally, was sent to his ISP Charter Communications.

And here lies the problem. Although Rightscorp currently claims to have “closed” 100,000 infringement cases, in the majority of instances recipients are free to ignore the company’s demands since their identities remain a mystery to the anti-piracy outfit.

While thousands have undoubtedly paid up, the company refuses to reveal what percentage do not. Even investors on a recent conference call with the company were told the figures were a trade secret.

While companies like Miramax are testing out the cheap settlement option, there are signs that investor confidence could be much better. Since the company went public (NASDAQ) late 2013, the trend after the first quarter of 2014 is all downhill, with a particularly steep drop off at the end of last month.

The $20 request is an attractive amount for people to put a complaint completely behind them, and Rightscorp clearly know that, but discussions on community sites suggest that file-sharers are beginning to realize that paying up a few bucks might only be the beginning.

Rightscorp often send users a $20 claim for a single track and then once that amount is paid their target discovers that they’re on the hook for the rest of the songs on the album they downloaded, at $20 per track thereafter.

Only time will tell if the Rightscorp strategy will pay off, but if the company finds itself in worsening conditions it wouldn’t be a surprise if the amounts demanded for settlement begin to increase, alongside an even more aggressive pay-up-or-else tone.

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

Unlike regular subpoenas, these are not reviewed by a judge and only require a signature from the Court clerk. This practice raised questions because DMCA subpoenas are not applicable to file-sharing cases, which is something courts determined more than a decade ago.

Perhaps unaware of the legal precedent, most ISPs have complied with the requests. Until last week, when small Texas provider Grande Communications stood up in court after it was asked to reveal the account details connected to 30,000 IP-addresses/timestamp combinations.

Soon after Grande filed its objections Rightscorp decided to drop the request entirely. While ISP is pleased that its customers no longer have to be exposed, the company is not letting Rightscorp off the hook.

In an advisory to the court (pdf) the ISP notes that Rightscorp’s actions suggest that it’s merely trying to avoid having a judge look at their dubious efforts.

“The abrupt withdrawal of the Subpoena is consistent with the apparent desire of Rightscorp and its counsel to avoid judicial review of their serial misuse of the subpoena power of the federal courts,” Grande’s attorneys write.

The ISP still wants Rightscorp to pay for the costs run up thus far. In addition, Grande also believes that sanctions for misusing the federal court’s subpoena powers may be in order.

“The U.S. District Court for the Central District of California may consider ordering Rightscorp and its counsel to show cause why they should not be sanctioned for misusing the federal court’s subpoena powers,” the advisory reads.

The ISP points out that if it hadn’t challenged the subpoena, the personal details of hundreds or thousands of subscribers would have been shared based on a faulty procedure. Since similar requests are being sent to other ISPs, the matter warrants further investigation.

“It appears clear that Rightscorp and its counsel are playing a game without regard for the rules, and they are playing that game in a manner calculated to avoid judicial review. Hopefully, they will not be permitted to continue much longer,” Grande’s attorneys conclude.

Rightscorp’s withdrawal of the subpoena also contradicts earlier comments the company’s CEO Christopher Sabec made to TorrentFreak.

Sabec told us that the company believes that earlier decisions on the legitimacy of DMCA subpoenas in file-sharing cases were wrong, and will be overturned should the issue reach the Supreme Court.

Apparently, this was a veiled threat, perhaps to discourage Internet providers from starting a battle that could get very expensive. Instead, with possible sanctions pending, things may now get expensive for Rightscorp.

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

Some prefer to do it through innovation, while others prefer educational messages, warnings or even lawsuits. Another group is aiming to generate revenue by obtaining lots of small cash settlements.

Rightscorp has chosen the latter model but unlike traditional copyright trolls it uses the DMCA to reach its goal. On behalf of copyright holders such as Warner Bros. they send DMCA notices with a settlement offer to ISPs, who then forward them to their customers.

Not all ISPs are cooperating with this scheme, but for this problem Rightscorp also found a solution. In recent months the company has requested more than 100 DMCA subpoenas, asking smaller ISPs to identify hundreds or thousands of alleged pirates.

These DMCA subpoenas bypass the judge and only have to be signed off by a court clerk. In other words, Rightscorp uses an uncommon shortcut to cheaply and quickly expose the alleged pirates, and nearly all of the ISPs happily complied.

The Texas ISP Grande Communications also received a signed subpoena in the mailbox, listing 30,000 IP-addresses/timestamp combinations of alleged pirates. However, Grande informed the court that it refuses to identify its account holders. Among other things, it argues that Rightscorp abuses the Court’s subpoena power.

“The Subpoena is part of an ongoing campaign by Rightscorp to harvest ‘settlements’ from Internet subscribers (who may or may not have been the users of their accounts at the times and dates in question) located across the nation through an abuse of the subpoena power of the federal courts in California,” Grande’s lawyer writes.

The Internet provider further notes that the anti-piracy company is only issuing these subpoenas to smaller regional ISPs as these are less likely to fight back.

“As can be seen from the PACER listing, Rightscorp has avoided sending subpoenas to any of the national ISPs (such as Verizon, AT&T, or Comcast), but instead has sent subpoenas to regional ISPs in various locations around the nation,” Grande writes.

“Presumably, Rightscorp is hoping that the regional ISPs, with smaller in-house legal departments, will be likely to simply comply with its subpoenas, especially given that those subpoenas bear the signature of the Clerk of the Court.”

Grande then goes on to state that jurisprudence has long-established that DMCA subpoenas can’t be used to identify file-sharers. Instead, Rightscorp should file a copyright infringement lawsuit as many other copyright holders have, so that a judge can properly review the evidence and arguments.

The ISP believes that Rightscorp is trying to bypass the scrutiny of a judge in order to avoid due process from taking place. This should not be allowed and Grande therefore asks the court to quash the subpoena.

“Rightscorp’s purpose in improperly issuing subpoenas under [the DMCA] is clear: to avoid judicial review of the litany of issues that would arise in seeking the requisite authorization from a court for the discovery of the sought-after information, including issues relating to joinder, personal jurisdiction, and venue.”

“In similar contexts and in no uncertain terms, the courts have stated that bypassing procedural rights of individual subscribers in order to harvest personal information en masse from a single proceeding will not be tolerated,” Grande adds.

When we covered Rightscorp’s use of DMCA subpoenas earlier this year, several legal experts indeed said that DMCA subpoenas are not allowed in file-sharing cases. This was decided in a case between Verizon and the RIAA more than a decade ago, and has been upheld in subsequent cases.

Rightscorp CEO Christopher Sabec disagreed, however, and he told TorrentFreak that the court made the wrong decision in the RIAA case. According to Sabec the verdict won’t hold up at the Supreme Court, so they’re ignoring it.

“The [RIAA vs. Verizon] Court case used flawed reasoning in concluding that an ISP such as Verizon is not a ‘Service Provider’ even though it clearly meets the definition laid out in the statute,” Sabec said.

“The issue has actually not been addressed by the vast majority of Circuit Courts. We believe that the decision you cite will be overturned when the issue reaches the Supreme Court,” he added.

Whether Rightscorp is indeed willing to fight this up to the Supreme Court has yet to be seen. For now, however, the alleged pirates are safe at Grande Communications.

It’s worth noting that Grande only has 140,000 customers. The 30,000 IP-address and timestamp combinations appear to include many duplicate entries, so the total number of affected subscribers is likely to be only a fraction of that number.

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

These notices are traditionally nothing more than a warning, hoping to scare file-sharers into giving up their habit. However, anti-piracy outfit Rightscorp has been very active in trying to make the consequences more serious.

The company monitors BitTorrent networks for people who download titles owned by the copyright holders they work for, and then approaches these alleged pirates via their Internet providers. The ISPs are asked to forward Rightscorp’s settlement demands to the alleged infringer, which is usually around $20 per shared file.

The settlement approach is a bigger stick than the standard warnings and according to Rightscorp it’s superior to the six-strikes scheme. And there’s more. The company also wants Internet providers to disconnect subscribers whose accounts are repeatedly found sharing copyrighted works.

Christopher Sabec, CEO of Rightscorp, says that they have been in talks with various Internet providers urging them to step up their game. Thus far a total of 140 ISPs are indeed following this disconnection principle.

“We push ISPs to suspend accounts of repeat copyright infringers and we currently have over 140 ISPs that are participating in our program, including suspending the accounts of repeat infringers,” Sabec says.

During a presentation at the Anti-Piracy Summit in Los Angeles Rightscorp recently pitched this disconnection angle to several interested parties.

By introducing disconnections Rightcorp hopes to claim more settlements to increase the company’s revenue stream. They offer participating ISPs a tool to keep track of the number of warnings each customer receives, and the providers are encouraged to reconnect the subscribers if the outstanding bills have been paid.

“All US ISPs have a free Rightscorp website dashboard that identifies these repeat infringers and notifies the ISPs when they have settled their cases with our clients. We encourage the ISPs to restore service once the matter has been settled and there is no longer an outstanding legal liability,” Sabec told TorrentFreak.

Cutting off repeat infringers is also in the best interests of ISPs according to Rightscorp, who note that it is a requirement for all providers if they are to maintain their DMCA safe harbor.

Rightscorp is indeed correct in stating that Internet providers have to act against repeat infringers. The DMCA requires ISPs to “… adopt and reasonably implement a policy that provides for the termination in appropriate circumstances of subscribers and account holders of the service provider’s system or network who are repeat infringers.”

However, legal experts and Internet providers interpret the term “repeat infringer” differently.

For example, AT&T previously said that it would never terminate accounts of customers without a court order, arguing that only a court can decide what constitutes a repeat infringement. Comcast on the other hand, previously told us that they are disconnecting repeat infringers, although it’s not clear after how many warnings that is.

Nevertheless, Rightscorp claims that their approach has been a great success and proudly reports that 140 ISPs are actively disconnecting subscribers. So does this mean that all U.S. Internet subscribers are at risk of receiving a settlement request or losing their Internet access?

Well, not really.

Most of the larger Internet providers appear to ignore Rightscorp’s settlement notices. Comcast, for example, does forward the notice but takes out the settlement offer. Verizon, AT&T and other major ISPs appear to do the same. Thus far, Charter seems to be the only major provider that forwards Rightscorp’s requests in full.

The 140 ISPs Rightscorp is referring to are mostly smaller, often local ISPs, who together hold a tiny market share. Not insignificant perhaps, but it’s a nuance worth adding.

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

In a recent interview with “That Was Me”, BitTorrent inventor Bram Cohen explained this challenge, as well as the general benefits BitTorrent has to offer.

The interview got some coverage here and there, including at Upstart, where it drew the attention of Robert Steele, Chief Technology Officer at anti-piracy outfit Rightscorp, a company that has made quite a few headlines this year.

Steele was not happy with the positive press coverage BitTorrent received from the media outlets, to say the least. Through Facebook (which uses BitTorrent) he wrote two responses to the article, which are worth repeating for a variety of reasons.

The comments appear to have been made late at night, possibly under influence, so we have left them intact and unedited for authenticity’s sake. Steele starts off by claiming that BitTorrent was designed for only one reason – to distribute pirated content.

“Absolutely ridiculous. Bram Cohen said in 2012 that ‘my goal is to destroy television’. BitTorrent’s architecture and features are designed for one reason only – to assist people in avoiding legitimate law enforcement efforts when they illgally consume other people’s intellectual property,” Steele begins.

It may not come as a surprise that Steele is quoting Cohen out of context. At the time, BitTorrent’s founder was actually referring to his new streaming technology, that would make it possible for anyone to stream video content to a large audience at virtually no cost.

Also, BitTorrent isn’t in any way helping people to avoid law enforcement, quite the contrary. People who use BitTorrent are easy to track down, which is in fact something that Rightscorp is banking its entire business model on.

In the second comment Steele brings in Accel, the venture capital firm that invested millions of dollars in BitTorrent Inc. According to the Rightscorp CTO Accel is also guilty of encouraging piracy, and he suggests that uTorrent should have been equipped with a blacklist of pirate torrent hashes.

“If Accell Partner’s BitTorrent was actually a legitimate business not directly involved in driving and facilitating piracy, they would have a blacklist of copyrighted hashes that the BT client won’t ‘share’. Dropbox does this. Why does Dropbox do this? Because they actually obey the law and respect content creators,” Steele says.

Steele touches on a sensitive subject here, as BitTorrent could indeed implement a blacklist to prevent some pirated content from being shared. TorrentFreak has raised this issue with BitTorrent Inc in the past, but we have never received a response on the matter.

Moving on from this sidetrack, Steele’s tirade in the first comment evolves into something that’s scarily incomprehensible.

“BTTracker software is not needed unless the goal is to enable other people outside of BitTorrent, Inc. to operate the systems that log the ip addresses of infringing computers. Why do they do it that way? Not becuase it is needed to move big files. Dropbox doesnt need trackers. They do it that way because Limewire got sued for hosting those lists.” Steele notes.

From what we understand, Steele doesn’t get why BitTorrent is decentralized, which is the entire basis of the technology. The comment is wrong on so many points that we almost doubt that Steele has any idea how BitTorrent works, or Limewire for that matter.

We surely hope that the investors in Rightscorp, which is a publicly traded company now, aren’t reading along.

Finally, Rightscorp’s CTO suggests that BitTorrent and its backers should be taken to court, to pay back the damage they cause to the entertainment industries.

“Bram Cohen and Accell Partner’s BitTorrent should be held accountable for the wages and income they have helped take from hundreds of thousands of creative workers just like Limewire, Grokster, Aimster, Kazaa and Napster were.”

Right.

From the incoherent reasoning and the many grammar and spelling mistakes we have to assume that Steele wasn’t fully accountable when he wrote the comments. Perhaps the end of a busy week, or the end of an eventful night.

In any case, we’ve saved a copy of the comments below, just in case they are accidentally deleted.

Photo: Michael Theis

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

These cases all follow a familiar pattern. The copyright holder files a lawsuit mentioning several IP-addresses, and asks the court for a subpoena to identify the account holders connected to it.

It’s then up to a judge to decide whether or not the subpoena should be granted. If it is, ISPs usually inform the affected customer who can then appeal the disclosure before a judge. If this fails, the personal details of the subscriber are handed over by the ISP, after which the affected user usually receives a settlement request from the copyright holder.

This is how file-sharing cases have worked for years, and on the surface it appears to be a fair process. However, for piracy monitoring outfit Rightscorp this process is proving too cumbersome. Instead of arguing their case before a judge, they’re using a shortcut that will be of great interest to copyright trolls.

A few weeks ago several people received a settlement request from Rightscorp via snail mail. This is peculiar since the company generally doesn’t know who the account holder is. As opposed to classic copyright trolls, Rightscorp usually sends its settlement requests via DMCA requests.

Perhaps even more worrying, the settlement letter in question mentions a subpoena. Not a regular one, but a DMCA-subpoena, which bypasses the judge and only has to be signed off by a court clerk. In other words, Rightscorp used an uncommon shortcut to cheaply and quickly expose the alleged pirates, and the ISPs in question happily complied.

Wondering why all other trolls aren’t doing the very same thing, we asked several legal experts for advice. Without exception they told us that DMCA subpoenas are not meant to be used against ISPs who only pass through information, only those who actually store content.

This was decided in a case between Verizon and the RIAA more than a decade ago, and has been upheld in subsequent cases.

“The RIAA v. Verizon case clarified that 512(h) subpoenas could only be issued to service providers who hosted infringing content directly on their servers. Because in filesharing cases the allegedly infringing material is stored on users’ systems, 512(h) subpoenas are inapplicable,” Cathy Gellis, a technology lawyer in the San Francisco Bay Area told TF.

So why is Rightscorp using these DMCA subpoenas? We asked the company, and CEO Christopher Sabec said that they believe the court made the wrong decision at the time. According to Sabec the verdict won’t hold up at the Supreme Court, so they’re ignoring it.

“The [RIAA vs. Verizon] Court case used flawed reasoning in concluding that an ISP such as Verizon is not a ‘Service Provider’ even though it clearly meets the definition laid out in the statute,” Sabec told us.

“The issue has actually not been addressed by the vast majority of Circuit Courts. We believe that the decision you cite will be overturned when the issue reaches the Supreme Court,” he adds.

It’s worth noting that for now Rightscorp is avoiding any of the major Internet providers. Below is the list of ISPs that were targeted, which includes Fidelity Communication, Sweetwater Cable and even the City of Wilson. Of course, these smaller organizations are less likely to object.

The cases above make it clear that court clerks have no problem with signing off on these requests. As a result, Rightscorp obtained subpoenas for hundreds of IP-addresses at virtually no cost. In the case of Fidelity Communication alone, court records reveal more than a hundred pages of IP-addresses.

While it seems that Rightscorp is currently the only party to use DMCA subpoenas, it wouldn’t be a surprise if some of the classic copyright trolls now follow suit.

After all, it’s much easier to obtain people’s personal details when a judge isn’t looking over your shoulder.

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

Discovering the real-life identities of pirates is not cheap, and that’s where US-based Rightscorp spotted a gap in the market. By attaching settlement demands to DMCA notices that ISPs are compelled to forward to alleged pirates, Rightscorp can reach alleged infringers without even knowing who they are.

Once a warning letter enters the email inbox of an account holder, he or she is invited to visit the Rightscorp website to settle for around $20.00. Some people simply ignore the warnings and nothing else happens. Others choose to pay $20 for say, a single music track, but sometimes discover that Rightscorp has more demands for the rest of the tracks in the album lined up at $20 a pop.

But while collecting $20 for sending an email might sound like a winner, financial results for 2013 just published by Rightscorp paint a pretty miserable picture.

For the year ending December 31, 2013, Rightscorp reports total revenue of just $324,016. So, presuming all of that revenue came from $20.00 settlements, around 16,200 infringement notices were paid during the 12 month period, or around 311 per week.

While this might seem like a decent return for just sending emails, they don’t just appear out of thin air. Rightscorp has costs, lots of them in fact.

When an Internet user settles with Rightscorp some of this money goes back to companies such as Warner Bros., who give permission for the anti-piracy company to exploit their content to generate revenue. According to Rightscorp, during 2013 it paid a total of $161,868 to these companies. When we compare that amount with total revenue of $324,016, we can see that Rightscorp gives away $10 from every $20 settlement.

On paper it’s money for nothing for the copyright holders, but Rightscorp’s $10 cut just isn’t balancing the books due to the large costs of running the business. Under ‘General and administrative expenses’ the company says it burnt through $1,663,921 in 2013, with ‘sales and marketing’ and ‘depreciation and amortization’ coming in at $275,616 and $33,438 respectively.

Add those all together and Rightscorp cost $2,134,843 to run in 2013, yet it brought in just $324,016, a shortfall of more than $1.8 million. After other adjustments the bottom line shows a loss of $2,042,779 for the anti-piracy company, an amount that would take their share of another 204,278 settlements to balance, providing no other costs increased.

While the company has expansion plans for Canada and has filed for patents to extend its monitoring services to Europe, China, Israel, Japan, Brazil, and India, the elusive aim of turning piracy into profit is still some way off.

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

Companies such as Voltage Pictures favor very big sticks indeed, suing tens of thousands of file-sharers for thousands of dollars each, both in the United States and Canada.

US-based Rightscorp, on the other hand, favor a smaller stick, sending settlement demands to alleged file-sharers for relatively smaller amounts per infringement. Until recently they were confined to the United States, but all that is about to change.

In a move to expand its business model north of the border, Rightscorp has retained Susan Abramovitch, a partner at Gowling Lafleur Henderson LLP, one of Canada’s largest lawfirms. Based in the company’s Toronto office, Abramovitch is described as a leading entertainment lawyer covering disputes in the music, film, television and videogaming industries, among others.

Rightscorp says that Canada represents a new market for its business model and an important step in the company’s international expansion plans. Implying that settlements are now accepted practice in Canada, the company references the recent Voltage Pictures case involving Teksavvy, which saw the ISP ordered to hand over the details of 2,000 alleged file-sharers.

However, while the Voltage case resulted in protracted legal argument and was ultimately subjected to court-ordered constraints, Rightscorp’s settlement demands are designed to circumvent controversial disclosure issues. Alleged infringers are reached via settlement notices attached to regular DMCA-style notices forwarded to them by their ISPs.

In the US, Charter Communications passes on Rightscorp cash demands, but Comcast does not. Will Canadian ISPs comply?

To get a broader idea of how this kind of business model might play out in Canada, TorrentFreak spoke with Canadian law professor Michael Geist.

“Canada has established a notice-and-notice system that allows rights holders to have their notices forwarded to subscribers. However, that system has yet to take effect,” Geist told TF.

“At the moment, there would be no legal obligation on the ISP to forward the notice to the subscriber, though that is likely to change in the coming months.”

When that notice-and-notice system does take effect, Geist says that Canadian law may specify the form notice letters must take.

“The law already identifies specific information to be included in the notice. There is no reference to settlement information or legal demands. If the Canadian government objects to [Rightscorp's] approach, it could use regulations to stop the inclusion of settlement demands in notice letters,” Geist explains.

“Even if it doesn’t, there will be a question of whether the notices are in the proper form if they include information beyond that found in the statute.”

Since local ISP Teksavvy is at the core of the Canadian Voltage Pictures case, TorrentFreak spoke with the company to gauge its reaction to the news that Rightscorp might soon come knocking. Stopping short of an official comment on the business model, the ISP essentially echoed Michael Geist’s sentiments.

“TekSavvy would be within its rights to insist, and would insist, that any notice conform with Canadian law and not over reach the stated guidelines,” the ISP told TF.

Clearly, the main idea of the Rightscorp notices is to generate revenue for both the company and rightsholders, but in passing the notices on ISPs are also incurring costs, which raises other issues.

“The notice-and-notice law permits the government to set a fee for sending a notice that an ISP can charge. At the moment, it does not look like the government will establish a fee, preferring to wait to see how the system develops. Were this [business model] to come to Canada, the government might face increased pressure from ISPs to allow them to charge for their participation in the process,” Geist concludes.

TF approached Rightscorp lawyer Susan Abramovitch who did not immediately respond to our request for comment. The signs are, however, that she could be busy with this work during the months to come.

Photo: Michael Theis

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

In recent months, however, the music industry has shown renewed interest in extracting payments from pirates. In a scheme pioneered by the Santa Monica based firm Rightscorp, several major rightsholders are targeting alleged BitTorrent pirates.

After the company went public last year, this number has been expanding steadily. Rightscorp now says it protects over 1,000,000 copyrights which includes 13 tracks from the most recent Billboard Hot 100.

“We are pleased to announce that we are monitoring and protecting 13 songs on the current Billboard Hot 100,” Rightscorp says.

In common with other works they are protecting, Rightscorp sends settlement requests to U.S. ISPs who are asked to forward them to subscribers. In addition to commercial ISPs, this also includes universities and all other companies that have IP-addresses registered in their name.

“We can confirm that we send notices to every ISP with a registered block of IP-addresses. This includes universities and corporations,” Rightscorp CEO Christopher Sabec told TF.

Thus far the company has received settlements from subscribers of more than 50 ISPs across the country. In the near future it hopes to add more copyright holders to its client base to increase this number.

“We are in discussions with content creators and rights holders of additional copyrighted property including many other tracks in the Hot 100 as the entertainment industry places more value on our unique service,” Rightscorp notes.

Internet users who are caught don’t face bankruptcy, as the settlement demands are usually around $20 per pirated file. The costs can increase quickly though, as an album of 14 tracks results in separate settlement offers for each song.

Below is an example of a notice Charter forwarded to one of its subscribers. It lists John Mayer’s track “Wildfire” from the album “Paradise Valley,” and warns that the recipient may be liable for hundreds of thousands of dollars, unless he or she settles.

“Your ISP account has been used to download, upload or offer for upload copyrighted content in a manner that infringes on the rights of the copyright owner. Your ISP service could be suspended if this matter is not resolved. You could be liable for up to $150,000 per infringement in civil penalties,” the email warns.

Rightscorp notice

Interestingly, John Mayer and his label are not involved in the matter in any way. Instead, the settlement request was sent on behalf of BMG, who bought Bug Music, which has one of the co-writers of Wildfire under contract, as Rightscorp explained to us.

The above brings up an important issue regarding the settlements. Since most copyrighted works have several stakeholders, a settlement with one party doesn’t automatically mean that other interested parties are barred from also seeking settlement. In the example shown above, Sony Music or John Mayer could still sue for the infringement that was settled with BMG.

While many ISPs kindly forward the settlement requests, not all do. Comcast for example, only appears to forward the infringement details and not the part about the settlement. This means Rightscorp’s scheme doesn’t work with the country’s largest ISP.

However, that doesn’t stop Rightscorp from stepping up its efforts. According to the company their system is much more effective than the voluntary “copyright alerts” and with millions of dollars rolling in, they are not expected to change course anytime soon.

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

These notices are traditionally nothing more than a warning, hoping to scare file-sharers into giving up their habit. More frequently, however, they now include a request for a small cash settlement.

Rightscorp is one of the companies that facilitates these settlement demands. The company scours BitTorrent networks for people who download titles owned by the copyright holders they work for, and then approaches these alleged pirates via their Internet providers.

The company partners with prominent copyright holders including Warner Bros. and BMI. On behalf of these clients Rightscorp usually asks for $10 or $20 per infringed title.

Since these settlement requests are concealed in DMCA notices, there is no need to obtain a court order. Under the DMCA ISPs are obliged to forward the notices which means that Rightscorp can contact the alleged pirates without knowing who they are.

While a $20 settlement may sound reasonable, these costs can increase rapidly as Rightscorp sometimes sends out multiple settlement requests for a single torrent. For example, if they catch someone downloading an album with 18 tracks, they send out 18 settlements notices demanding a payment for each infringement.

People who, as a matter of oversight or intentionally, settle for only one of the infringements are then confronted with a scary threat after a few days. In a follow-up email seen by TF, Rightscorp warns that the alleged infringer’s Internet account is now at risk since they have been placed on a list of repeat copyright infringers.

“If you have received multiple notices, your account is on a list that we send to your ISP every week requesting that it be terminated,” Rightscorp warns in their email.

The company adds that many ISPs are following up on Rightscorp’s list, and do indeed terminate accounts that have allegedly downloaded copyrighted material on more than one occasion.

“Many ISPs follow the law 17 USC 512 (i) and terminate service to repeat infringers who we identify. It will stay on that list until you close this matter with us or our client decides to escalate.”

The account termination angle appears to be important for Rightscorp, as it’s also mentioned in several spots on the company’s website. The question is, however, how real these threats are, as there are a few questions regarding Rightscorp’s claim.

Rightscorp notice

The “unpaid” reminders, such as the example listed above, are only sent to people who have settled an earlier infringement and in the process willingly shared their email address with Rightscorp. Since the company sends out settlement requests for each track listed in an album download, they can send a reminder if the person only settled for one of the tracks.

However, if the same IP-address is caught sharing something else a week later Rightscorp can’t accurately claim that this is a repeat infringement. Nor do we expect that downloading an album with a dozen tracks will be seen as repeat infringements by any ISPs.

Rightscorp simply can’t know that unauthorized downloads belong to the same account unless they occur at the exact same time. After all, they only have an IP-address on an infringer, and these tend to change over time.

In other words, it is impossible for Rightscorp to compile an accurate list of accounts that downloaded copyrighted material on multiple occasions. TF contacted Rightscorp hoping to clarify some of the issues above, but we have yet to hear back from the company.

Even if Rightscorp does have an accurate list, it’s very unlikely that any of the larger ISPs will disconnect an account holder without solid evidence of repeated infringements over a longer time period. The Copyright Alerts System for example, allows for up to six warnings for downloads that are at least a week apart and even after the sixth warning there is no rule to close people’s accounts.

Perhaps the threat of having one’s Internet account terminated is not as real as Rightscorp wants alleged pirates to believe?

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