Over the past several years the company has targeted a dozen high-profile companies including Google, Amazon, Yandex, Mastercard, Visa, RapidShare, Giganews and Depositfiles.

Earlier this year Perfect 10 continued its legal crusade by filing a lawsuit against Leaseweb, one of the largest webhosting companies on the Internet. According to the publisher, LeaseWeb provided services to several pirate sites, including the now defunct Megaupload.

In the complaint Perfect 10 argued that LeaseWeb is directly responsible for the copyright infringements of its customers, and that the hosting provider failed to take thousands of infringing URLs offline after they were notified via several DMCA notices.

LeaseWeb refuted many of the allegations that were put forward by the magazine publisher. Among other things, the hosting company stated that none of the notices that were sent by Perfect 10 conformed with the DMCA’s requirements. In addition, LeaseWeb denied that it knew about the claimed widespread infringements.

“LeaseWeb USA denies that it has actual knowledge of allegedly ‘rampant infringement’ by any of its customers and that it has committed copyright infringement. LeaseWeb USA denies it has knowingly aided and abetted massive alleged infringers, including megaupload.com,” the hosting company stated in a response.

While the legal battle in court continued, behind closed doors both parties were also discussing the option to end the case without bloodshed. This has now resulted in a settlement agreement and in a joint submission at a federal court in California they asked to dismiss the case.

This is not the first time that Perfect 10 has settled a case early, the same happened in its disputes against Amazon and Depositfiles. It can be assumed that LeaseWeb has paid the magazine publisher some form of compensation, but none of the parties is willing to comment on the terms of the settlement.

LeaseWeb informed TorrentFreak that it has nothing to say on the matter. The magazine publisher couldn’t comment on the case either, noting that the settlement agreement is confidential.

However, Perfect 10′s multi-millionaire founder Norm Zada stresses that piracy remains a massive problem. Talking to TorrentFreak, Zada calls for stricter enforcement against copyright infringers so these type of lawsuits aren’t needed.

“Widespread copyright infringement is hurting millions of people in the creative industries. The world desperately needs some form of Internet police that can deal with the hundreds of billions of dollars of intellectual property that is stolen each year,” Zada says.

“If your car gets stolen, you can call the police. When a person’s livelihood is destroyed by a theft of their intellectual property, there is no one to call. Most victims of intellectual property theft do not have the resources to file lawsuits and should not be required to do so,” he adds.

While the “hundreds of billions” figure is most likely a bit high, Perfect 10 is determined to deal with the problem with all means at its disposal. Since there is no Internet police just yet this most likely means filing another lawsuit, and another.

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

Earlier this month

“Defendants host and provide Internet connectivity and other essential services to websites, including infringing websites operated in California that have infringed tens of thousands of Perfect 10 Copyrighted Works,” the complaint states.

According to Perfect 10, LeaseWeb currently hosts at least eight websites in the U.S. which store their work without permission; Imgchili.net, imgchili.com, imgtiger.com, imgserve.net, Poringa.net, ultraforos.com, ultraforos.net and Galleryworld.info.

LeaseWeb’s former client Megaupload is also prominently mentioned as one of the websites through which copyrighted images were distributed. Megaupload’s servers were located both in the U.S. and Europe.

“The LeaseWeb Defendants have hosted the website megaupload.com on their servers located both in Virginia and in Europe,” the complaint states.

“Megaupload.com allegedly infringed upon Perfect 10’s Copyrighted Works until the website was seized and shut down in or about January 2012 following a federal indictment accusing the website of criminal copyright infringement.”

Perfect 10 argues that LeaseWeb is directly responsible for the copyright infringements of its customers. The company says it sent 22 DMCA notices to LeaseWeb early 2013, identifying 12,220 infringing images, and believes the hosting provider should have taken the URLs in question offline.

Previously Megaupload, who were sued themselves by Perfect 10 in 2011, informed TF that they swiftly responded to Perfect 10′s takedown notices.

“All infringing files Perfect 10 has ever reported to Mega have been removed within hours. We keep track of all DMCA notices and could identify all notifications from Perfect 10 and we have verified that all reported links were disabled within hours,” the company told us.

Perfect 10 nevertheless concludes that LeaseWeb is aware that it hosts infringing websites because of the DMCA notices they, and others, have sent over the years.

The adult company says it suffered significant losses and demands the maximum statutory damages of $150,000 per infringement. With a total of 1256 listed infringements this means that LeaseWeb is facing up to $188 million in damages.

While Perfect 10 doesn’t have a good track record in court, the case will be an important one to determine the liability of hosting providers for their customers’ actions. For that reason alone, it is worth keeping a close eye on the case.

Update: Leaseweb told Tf that the company hasn’t been served yet, and points out that most of the sites mentioned are hosted by the Dutch LeaseWeb Netherlands BV.

“We use the Dutch Notice and Takedown procedure for LeaseWeb Netherlands BV customers which gives an equivalent protection as the DMCA, we therefor do not see why the US would be the correct forum,” the company states.

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

However, while the above relates to copyright liability, there are elements of Hollywood’s anti-piracy teams that believe that ISPs can be on the hook for much, much more.

During the past few days TorrentFreak received documents which show attempts by the UK’s Federation Against Copyright Theft to have streaming video site TheShowDepot.com taken offline. The site was hosted by LeaseWeb in the Netherlands.

“We are requesting the removal of the whole domain from your servers. The website serves no purpose other than to provide access to copyright protected media,” FACT told LeaseWeb in an email, supported by links to 16 episodes of The Big Bang Theory.

LeaseWeb reacted by notifying TheShowDepot of the complaint, warning that a failure “to take appropriate action to prevent future complaints” would result in an IP block of the site’s server.

It’s not clear if TheShowDepot responded “appropriately” or not, but their IP address was eventually blocked by LeaseWeb on November 30. While disabling a whole website based on one complaint might be considered excessive by some, FACT’s veiled threats to LeaseWeb during the course of the exchange will certainly raise the most eyebrows.

“The domain ‘theshowdepot.com’ appears to resolve to IP address 95.211.203.106 which is provided by LeaseWeb B.V,” a FACT ‘Internet Investigator’ told the webhost.

“The fact that LeaseWeb are now aware of this means that should you continue to facilitate the illegal activities of ‘theshowdepot.com’ and accept payment for doing so then ‘LeaseWeb’ may be committing associated money laundering offenses. If the Domain continues to operate whilst being hosted on LeaseWeb servers FACT will consider escalating the action.”

In discussing FACT’s highly unusual claims, LeaseWeb Senior Regulatory Counsel Alex de Joode sent TorrentFreak a clear explanation of where he believes his company’s liability begins and ends.

“LeaseWeb’s general abuse procedure in regard to copyright claims, for content hosted in the Netherlands, follows the agreed upon principles between the content owners, hosting companies (like LeaseWeb), the Dutch Ministry of Economic Affairs and the Dutch Justice department (NTD Code of Conduct),” de Joode explains.

“Under Dutch law, as long as we follow the before mentioned principles, there is NO criminal liability for hosters in the Netherlands. According to the eCommerce Directive the legislative regime in a third country (in this case the UK) can NOT be stricter than the legislative regime in the host country (in this case the Netherlands). Any claim otherwise is unfounded.”

The LeaseWeb counsel told TorrentFreak that his company strictly adheres to the notice-and-takedown (NTD) Code of Conduct in which there is “no room for third party pressure.”

“Either a claim is valid and content is removed, or a claim is not valid and the content remains available. We see therefore no reason to include claims of money laundering in NTD requests, this will only make [FACT's] other claims look suspicious, thus hindering a speedy processing of NTD requests,” de Joode says.

“As far as i’m aware FACT is the only organization that uses these unsubstantiated claims. I do not understand why they would try to strong arm hosting companies in removing potentially infringing websites. If they have a valid a claim a simple, proper NTD request will suffice in having the content removed.”

In comments to TorrentFreak, Arnoud Engelfriet, a lawyer specializing in Internet law at the ICTRecht law firm, notes that FACT’s claim – that TheShowDepot has “no other purpose” than to infringe copyright – has its roots in The Pirate Bay case.

“The Dutch courts treated thepiratebay.org as a site with ‘no other purpose’ than to enable infringement and thus ordered it shut down,” Engelfriet explains.

“However, the money laundering claim is too far-fetched and sounds like legal blustering to me. The argument would be that because the site is infringing copyright, its income is illegal. Any payment to Leaseweb thus must have been made with those illegal monies, and knowingly accepting illegal monies would then be ‘laundering’. Let me be polite and say that I have yet to see a legal authority confirming that argument,” he concludes.

Several days ago TorrentFreak contacted FACT with a request for comment on their controversial claims but we have received no response. In the meantime TheShowDepot has relocated to a new host in Latvia where it remains up – for now.

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

“Who Are You ? Who is but the form following the function of what and what are you is a hosting company with no security,” is the message visitors to Leaseweb.com now see.

The hackers suggest that in addition to defacing LeaseWeb’s homepage, the security breach also affects the hosting provider’s customers.

“Do You Know What That Means ? We Owned All Of Your Hosted Sites. Index On Your Site Is The Prove ;)”

The deface doesn’t show up for everyone. Through Google DNS the regular LeaseWeb site still appears, which might mean that the hack is DNS related.

TorrentFreak sent LeaseWeb counsel Alex de Joode a request for comment via email, but we received a “550 No Such User Here” error in reply. This suggests that the hack may have affected Leaseweb’s email server as well.

It’s unclear whether the data of Leaseweb’s customers, which includes many file-sharing site, has indeed been compromised.

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

Petabytes of user data and backups, mostly from European users, were permanently deleted and the servers were re-provisioned to other customers. Kim Dotcom was outraged by the scandal and said Megaupload specifically requested that the host should preserve the data.

“They deleted petabytes of data in the face of Megaupload’s data preservation notices. Our legal team asked them multiple times not to delete the data while the U.S. court is deciding the pending cases including the rights of our users,” he said.

LeaseWeb counsel Alex de Joode disputed Dotcom’s account of the events, and the company released a statement explaining their actions. According to de Joode, Megaupload showed no interest in the data at all.

“During the year we stored the servers and the data, we received no request for access or any request to retain the data. After a year of nobody showing any interest in the servers and data we considered our options. We did inform Megaupload about our decision to re-provision the servers,” the counsel wrote.

“As no response was received, we commenced the re-provisioning of the servers in February 2013. To minimize security risks and maximize the privacy of our clients, it is a standard procedure at LeaseWeb to completely clean servers before they are offered to any new customer.”

Both sides clearly have different versions of the truth, but who is right? To back up his claims Kim Dotcom decided to share one of the date preservation request emails that Megaupload’s legal counsel sent to LeaseWeb during March 2012, less than a year before the data was deleted, and a similar request from EFF dated April 2012.

“LeaseWeb declined receiving data preservation requests regarding Megaupload servers and here is the proof that they did receive them on several occasions from EFF and the Megaupload legal team,” Dotcom informs TorrentFreak today.

“Megaupload continues to request that LeaseWeb preserve any and all information, documentation and data related to Megaupload – as destruction by LeaseWeb would appear to be in violation of amongst other things the applicable civil litigation data preservation rules and would interfere with evidence in a criminal matter[...],” Megaupload’s counsel Ira Rothken explains in the letter.

The email adds that “In addition, the Mega data on the servers at Leaseweb contain private and sensitive customer data and is subject to applicable privacy and data retention laws. Megaupload is negotiating with the United States to discern feasibility of consumer data access and the conditions for the same.” 

The letter goes on to state that Megaupload is trying to get permission and funds to take over the servers from LeaseWeb, as it tried to do with US-based hosting company Carpathia last year.

“Megaupload would like to try to negotiate an amicable solution to the above legal conundrum with LeaseWeb via a purchase of the servers storing the Mega data and future payments amongst other things – similar to an agreement recently signed by Mega with Carpathia in the US.”

The EFF, who are representing a Megaupload user in the U.S. court case, made a similar preservation request to LeaseWeb USA in April, asking the company not to delete any data.

“We now write to formally request that you preserve that material both for purposes of contemplated future litigation and as a matter of obligation and courtesy to the innocent individuals whose materials have unfortunately been swept up into this case,” the EFF letter reads.

From the above it’s clear that LeaseWeb’s public statement contradicts the data preservation correspondence above, and that despite these requests LeaseWeb decided to wipe the data and re-provision the servers. But there’s more.

Adding to the controversy, Kim Dotcom today informed TorrentFreak that they have additional information the legal team is analyzing relevant to whether LeaseWeb violated the law. The new information allegedly shows that LeaseWeb may have broken applicable law in their handling of the servers after the raid.

“I can tell you that we are contemplating legal action against LeaseWeb,” Dotcom says.

While it’s clear that LeaseWeb’s initial statement in response to the data deletion was not correct, at this point it is impossible for us to report on the basis of the potential legal action. Dotcom says he will reveal more on that later.

LeaseWeb, meanwhile, maintains that it has done nothing wrong. The company operates under Dutch law and says it had no obligation whatsoever to preserve the data any longer than it did. In addition, the company says it informed Megaupload about the re-provisioning in January 2013. It further claims that it never received a lawful proposal to acquire the dedicated servers, as Megaupload suggested in their email.

Responding to LeaseWeb’s claim, Dotcom reveals that in April 2012 the Australian domain registrar INSTRA contacted the hosting company with a proposal to buy the Megaupload servers, to preserve them for later use. However, LeaseWeb allegedly refused to negotiate with the company, who are now one of the main investors in Megaupload’s successor Mega.

Regarding the email about the re-provisioning that Leaseweb says it sent in January, Megaupload’s counsel Ira Rothken informed us that he has no record of ever receiving it.

“Leaseweb was put on written notice repeatedly to preserve data relevant to both pending criminal and civil litigation, including potential civil litigation involving Leaseweb, whether one couches it in terms of e-discovery litigation holds or just being a good corporate citizen we believe that Leaseweb acted inappropriately under the circumstances when they destroyed data,” Rothken tells TorrentFreak.

“If they were really concerned about money they could have backed the data up to tape and made a minimal claim for reimbursement against the millions of dollars in Megaupload’s frozen assets.”

“Ultimately we blame the United States who exercised constructive control over Megaupload’s assets and who had the obligation, resources, and ability to preserve all relevant and exonerating evidence including the data located at Leaseweb and failed to do so,” Rothken adds.

It’s clear that Dotcom, who is still outraged and saddened by the mass data deletion, is determined to get to the bottom of the issue. He hopes that through a court proceeding the truth will eventually come out.

To be continued.

Update: Leaseweb issued a public response stating the Megaupload’s request was made before the servers were stored.

“The MegaUpload request was part of a larger discussion while the servers were still racked. On March 29, 2012 the servers were stored and preserved, the initial MegaUpload request pre-dates this. I see therefor no discrepancy between our statement and the facts,” the company states.

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

At the time Leaseweb was hosting dozens of torrent sites, including Demonoid, mybittorrent.com, btmon.com, btjunkie.org, seedpeer.com, what.cd and waffles.fm. Although Leaseweb decided to appeal the decision, the torrent sites were no longer welcome, and were asked to find a new ISP.

Yesterday the appeal was denied, as the Amsterdam court again ruled that everlasting.nu was facilitating copyright infringement by allowing their users to download copyrighted content via torrents hosted on their site.

Leaseweb’s defense argued that Everlasting was not facilitating copyright infringement, because the torrent files itself are not copyrighted. However, the judge ruled that this was irrelevant, since the files are an essential part of the download process.

Leaseweb’s lawyers further argued that the tracker is not necessary for the download process, that the torrents could be mislabeled, and that there are also BitTorrent clients that do not upload (downloading music and movies is legal in the Netherlands), but their arguments did not impress the judge either.

At the moment it is still unclear what this means for future cases, such as the upcoming court case between Mininova and BREIN. In the ruling the court places a lot of emphasis on the tracker, as an essential component of the infringement process. Mininova does not operate a BitTorrent tracker.

It is however very unlikely that Leaseweb will ever host a BitTorrent tracker again. The ISP that once was a safe haven for most torrent sites is most likely done fighting.

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

Now, even though an appeal in respect of Everlasting.nu is still pending, an emboldened BREIN has moved to get 6 further Leaseweb-hosted torrent trackers shut down, including the popular Araditracker, BitHQ and Peerportal, who between them tracked 9,000 torrents.

In a move which is bound to concern many other administrators who have their sites at Leaseweb, the host has again given up the personal details of the tracker admins. All three named sites have now left Leaseweb (and the Netherlands entirely) and have secured hosting elsewhere in Europe and US but this exodus doesn’t seem to concern BREIN who seem intent on pursuing the owners outside the Netherlands.

Tim Kuik of BREIN said “we have the names and addresses of these administrators, so we can get to these people through our contacts abroad.”

Armed with these names, BREIN says it intends to go after the administrators to force them to compensate content owners for lost revenue and prevent the sites from starting back up again.

With two out of the three sites already fully operational, it looks as if BREIN’s main aim of closing these sites has failed – in the biggest possible way.

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