Law firm Gallant Macmillan hoped that the Court would order the ISPs to hand over the identities of tens of thousands of alleged filesharers so that Ministry of Sound can prise cash settlements out of them.

But following the security breach at lawyers ACS:Law, BT and their subsidiary Plusnet refused to cooperate citing data protection concerns. BT’s request for an adjournment of the hearing was granted and was set to resume on January 12th 2011.

However, according to Ministry of Sound, its planned shakedown of file-sharers has been hit with a catastrophic failure. In an announcement today, the label has revealed that BT has deleted most of the records that Ministry of Sound requires for pursuing alleged file-sharers should it have been successful at the January hearing.

In what will be seen as a major and expensive setback for their campaign, the label notes says that it discovered in legal correspondence that BT had failed to preserve over 20,000 of the 25,000 customer records which Ministry of Sound had originally requested.

“Whilst Ministry of Sound were happy to incur substantial legal costs to access 25,000 names it is simply not economic to pursue the 5,000 remaining illegal uploaders,” the company said in a statement.

“It is very disappointing that BT decided not to preserve the identities of the illegal uploaders. Given that less than 20% of the names remain and BT costs have soared from a few thousand pounds to several hundred thousand pounds, it makes no economic sense to continue with this application,” said Ministry of Sound CEO Lohan Presencer.

BT, however, seem puzzled by Ministry of Sound’s announcement.

“We’re surprised at this claim since we provided a similar number of customer details to comply with a court order earlier this year for Ministry of Sound and there was no suggestion then that this was a problem for them,” the company told TorrentFreak in a statement.

“All such information is automatically deleted from our systems after 90 days in accordance with our data retention policy; the Ministry of Sound and its solicitors are well aware of this. Upon request from Ministry of Sound we saved as much of the specific data sought as we reasonably could and any not preserved must have been too old. Our door remains open to Ministry of Sound and any other rights holder who wants to enforce their rights in a fair way through an established legal process.”

Despite the setback, Ministry of Sound CEO Lohan Presencer said the company will persist.

“We are more determined than ever to go after internet users who illegally upload our copyrighted material. We will be making further applications for information from all ISPs. Every time that a track or album is uploaded to the web it is depriving artists of royalties and reducing the money which we can invest in new British talent,” he added.

Although Ministry of Sound endlessly go on about artists suffering and how piracy hinders the nurturing of talent, there is a little known fact about their claims which makes their strategy very unusual indeed – they aren’t claiming for an infringement on music copyrights at all.

Since Ministry of Sound do not own the copyright for the tracks they appear to be requesting cash settlements for, they have presented their case to the court on the basis that they own the ‘intellectual property’ in the album’s tracklisting. That’s right, MoS are claiming copyright infringement on the order of tracks as they appear in their compilation albums.

Of course, not a word of this is mentioned in the settlement offers they send to alleged infringers, the implication all along is that the claim is for music. You couldn’t make it up – but lawyers can and do.

Both Ministry of Sound and their lawyers Gallant MacMillan were subjected to Operation Payback DDoS attacks last month.

Updated: Below is a further statement from BT, sent to TorrentFreak a few minutes ago.

The Ministry of Sound’s decision is clearly a matter for them. It’s a shame though that, in this instance, our concerns over the current process will not be examined by the Court. However, it remains our intention to ensure our broadband customers are adequately protected so that rights holders can pursue their claims for copyright infringement without causing unnecessary worry to innocent people.

BT believes that with appropriate safeguards to protect customers’ rights, confidence in the Norwich Pharmacal process can be restored so that rights holders can feel able to use it to seek redress for online copyright infringement. The safeguards we aim to establish via the Court are on the security of data handling, a threshold for providing a customer’s details based on a minimum number of separate incidents, the tone of contact with broadband subscribers and a reasonable approach to financial compensation sought.

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

The continuation of the hearing between Ministry of Sound Recordings Ltd and ISP Plusnet Plc will go ahead at London’s High Court. Gallant Macmillan hope that the judge, Chief Master Winegarten, will order Plusnet to hand over the identities of hundreds of alleged filesharers so that Ministry of Sound can prise a cash settlement out of them, ACS:Law style.

To give Gallant Macmillan something to think about, on Saturday the leaders of Operation Payback decided on a new target. At 2pm EST (7pm GMT) Sunday October 3rd (yesterday), the website of Gallant Macmillan was destined to become the next target of a DDoS attack, coordinated from the Operation Payback homepage.

But Gallant Macmillan’s web admin had other ideas. Fairly quickly the GMLegal.co.uk site began returning the ‘Invalid Hostname’ error.

“This suggests that an administrator has manually pulled the website off the server, although the domain is still pointing to the same server,” a leader of Operation Payback told TorrentFreak.

Nevertheless, Gallant Macmillan (and their mail service housed on the same server) remained the target but then, shortly before the attack was due to start, the law firm took an unexpected action.

“An hour before the attack, GMLegal.co.uk changed their DNS records to point to 127.0.0.1, effectively surrendering,” we were informed.

But a new target had already been chosen, one that didn’t have any time to prepare. Minutes after 7pm GMT, the website of Ministry of Sound, which ordered the action against alleged file-sharers, was taken offline by a huge DDoS attack. The payment site of the company was also targeted, along with its operations in other countries.

This is the first time that a site that actually makes money from selling music has been targeted in Operation Payback and the attack will have a direct financial consequence for Ministry of Sound which turns over around £80 million worldwide.

At the time of writing, some 12 hours after the attack began, much of MoS’s online operations remain down. If Operation Payback wanted to give MoS something to think about in court today, they will have achieved their aim, especially if the judge doesn’t give them an easy ride.

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

For 3 years threatening letters have been dropping through the doors of UK Internet users warning them that unless they pay up a huge fee, they could be ruined through the courts. As we now know, those threats have continually come to nothing and the lawyers involved have been subjected to unprecedented levels of complaints and bad publicity.

But as they say in Britain, “where there’s muck, there’s brass”, and that’s enough to attract more lawyers and more rightsholders to this most profitable of honeypots.

Last week, BeingThreatened, a consumer group dedicated to supporting those wrongfully accused in these cases, informed TorrentFreak of a new entrant to the market.

According to their website, Gallant Macmillan “is a niche media and litigation law practice with an international focus,” which claims to offer lawyers with skills in “reputation management, commercial litigation and intellectual property.”

The law firm lists many high-profile companies as its clients including The Jerusalem Post, Claims Direct, Ted Baker, Kookai and airport giants Servisair, but of current interest is its work with night club and dance label, Ministry of Sound.

“Unlawful file-sharing is a serious problem for Ministry of Sound, reducing income for the musicians and composers it works with and diminishing the funds needed to invest in new talent,” states the settlement letter sent out to unlucky recipients during the last week.

Accused of sharing the £8.75 Ministry of Sound – The Annual 2010, recipients are given the option to settle out of court for £375, an amount Gallant Macmillan says is intended to cover various costs including damages, evidence collection, dealing with ISPs, court attendances and sending the letter of claim.

“This offer to settle remains open only 21 days from the date of this letter,” warn the lawyers. Failure to comply, of course, means that they “reserve the right” to commence proceedings.

It has been well documented that other lawyers previously involved in this type of work, such as ACS:Law, have been heavily reported both to the government and to organizations such as the Solicitors Regulatory Authority (SRA). Indeed, ACS:Law have proven record-breaking in this respect.

However, when looking at the website set up by Gallant Macmillan (GM) for the purposes of this work, it seems that they have done their homework on the problems and criticisms faced by other companies.

Perhaps in a preemptive move, rather than hiding the fact that they are regulated by the SRA, the company mention it prominently on every page of their site, often twice.

While ACS:Law act on behalf of “middle man” companies behind which rights-holders have the opportunity to shield their identities and reputations to some extent, GM say they will only act for brand owners “who are prepared to sue in their own names” and will not represent companies seeking settlements over porn movies.

GM also appear to be trying to show a more, for want of a better word, ‘humane’ approach to their dealings with settlement recipients.

“We understand that threatening legal proceedings can be distressing. Whilst committed to act in our client’s best interests, we strive to communicate with the recipients of our letters in a respectful and courteous fashion,” write the company.

Although thus far GM only detail a time and date for single infringement on the letters seen by TorrentFreak, the company claim that their focus is the pursuit of what they describe as “multiple offenders”.

A huge criticism of both ACS:Law and previously Davenport Lyons is that the companies make threats of taking people to court but never do. It seems that GM wish to address this too.

“If we are unable to reach an agreement with the recipient of our letters, and still consider that our client has a good claim, we shall sue,” they state. “We recognise that it is not appropriate to make threats of proceedings and to not then follow through with those threats in appropriate cases.”

Another little twist to the approach is that while other lawyers demand that letter recipients delete the material they are accused of sharing from their hard drives, Gallant Macmillan say that as part of the settlement those accused can keep the album they are accused of sharing, in this case a Ministry of Sound compilation. At £375, this must be the most expensive album ever.

Despite the very clear attempts at presenting a more acceptable side to the copyright settlement business, thus far the ‘meat’ of this operation seems to be no different to those that have gone before. It will remain to be seen if Gallant Macmillan will weather the storm that caused lawyers Tilly Bailey and Irvine to jump ship.

All letter recipients are advised to read the Speculative Invoicing Handbook. It was written with earlier cases in mind, but is just as relevant today.

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