The case involves a female customer of local ISP Telecom and perhaps dates back well over a year.

Background

The unnamed individual was sent a so-called ‘detection notice’ by Telecom’s copyright infringement team on November 24 2011. The claim, originating from Island Def Jam Music Group (Universal), stated that the subscriber had shared the Rihanna song ‘Man Down’.

Then, on June 19 2012, a second ‘warning notice’ was sent to the same subscriber after the woman was discovered to have uploaded the same track again.

A third ‘Enforcement Notice’ was sent to the individual on July 30 2012, claiming that this time she had been monitored by RCA Records (Sony Music) sharing the Hot Chelle Rae track ‘Tonight Tonight’.

Following this final ‘strike’ the subscriber’s case was filed with New Zealand’s Copyright Tribunal in August 2012. The following month the woman wrote to the Tribunal outlining her explanation for the alleged infringements, accepting the claims on one track but denying another, and stating that she had experienced difficulties shutting her torrent client down.

Confession

“The first song downloaded was a song called Man Down by Rihanna. I accept responsibility for this. I downloaded this song unaware that in doing so from this site was illegal,” she wrote in her submission.

“When this song was downloaded to my computer, a whole uTorrent program downloaded onto my computer..[W]hen I turned my computer on it said that the song was still downloading and maybe that caused the song to register twice as it being downloaded?”

As for the Hot Chelle Rae track, that remains a mystery.

“I can’t claim responsibility for this as it wasn’t done by myself or anyone in this household but if I find the person responsible for downloading this through my internet then I will definitely enforce the consequences behind do so,” she concludes.

Guilty upon accusation (but the confession didn’t help)

Interestingly, the Tribunal noted that there was insufficient evidence in the case for it to make any detailed findings but since there is a “statutory presumption” that each incidence of file-sharing alleged in an infringement notice constitutes an actual infringement of copyright, the Tribunal accepted that illicit file-sharing had taken place.

Calculating the punishment

So, with guilt under current law established, the Tribunal set about the task of a financial punishment. According to regulations, in a downloading case the cost of the infringed products must be considered. Man Down is available of iTunes for $2.39 (US$2.00) and Tonight Tonight at $1.79 (US$1.50).

However, since this case also involves uploading (distribution) there is an additional cost to be considered there. RIANZ wanted to hold the individual responsible for many alleged uploads to other BitTorrent users but the Tribunal wasn’t happy with that suggestion.

“As the [RIANZ] rightly acknowledges, a difficulty in this case is that it is not known how many downloads, if any, were made from the sound recordings uploaded by the account holder. Using current internet detection services the rightsholders were not able to obtain details of the number of persons who downloaded the tracks in issue,” the Tribunal wrote.

With this in mind the Tribunal said it would order the subscriber to pay RIANZ double the iTunes price of Man Down (2 x $2.39) and the same for Tonight Tonight (2 x $1.79) – a total of $6.57 (US$5.49). This aspect of the Tribunal’s decision will be a huge disappointment for RIANZ.

But despite the low penalty to pay to rightsholders, a few more loose ends still had to be tied up. The Tribunal said that the subscriber should pay the costs of sending the warning notices – a total of $50 (US$42.00) – and the Tribunal application fee of $200 (US$167).

The ‘deterrent sum’ – and lack of evidence.

Finally there was the issue of the “deterrent sum”. Three elements are to be considered – the “flagrancy” of the infringement, the effect of the infringing activity on the market for the work and whether the other sums awarded by the Tribunal already constitute a sufficient deterrent.

In this respect RIANZ argued that the fact the subscriber had uTorrent on her computer, had been monitored three times over an eight month period, and that it “defied common sense” that more infringements hadn’t been carried out in that time other than the ones detected. The music group also argued that the first two warnings not to infringe had been ignored by the subscriber.

In response the Tribunal said that the factors listed by RIANZ could be common to most of the cases coming before the Tribunal in future so therefore could not be regarded as “particularly flagrant”. It did accept, however, that the infringements took place over a lengthy period, but noted that the subscriber had a clean record, took responsibility, apologized and engaged with the Tribunal.

In respect of the potentially damaging effect on the market caused by the infringements but with no evidence to back up their claims, RIANZ put forward a report commissioned in 2008 by the IFPI in the UK. It didn’t help their case.

“The Tribunal has felt unable to accord much weight to this UK report,” the Tribunal noted adding that it related to a different BitTorrent client (Azureus as apposed to uTorrent), related to different works, related to entire albums rather than to individual tracks, and is nearly five years out of date.

Decision

With these issues in mind the Tribunal ordered the subscriber to pay a deterrent sum of $120 per infringement to a total of $360 (US$301.00).

Overall the subscriber will have to pay a grand total of $616.57 ($515.64), hardly the amount RIANZ had in mind when they started this whole “3 strikes” machine rolling several years ago.

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

In the first six months of the scheme RIANZ, the Recording Industry Association of New Zealand, sent out 2,766 notices. To date a total of 18 Internet account holders have been referred to the Copyright Tribunal to face fines after receiving their third strike for sharing music. But for RIANZ things haven’t been going well.

In an early test of the system, the first individual who said they would contest their case in person had their case dropped by the labels.

There were several problems. To begin, the first “strike” notice never arrived and the third was sent to the wrong person. Furthermore, the second and third notices both lacked required information, with the latter being wrongfully sent during the “cool-down” period after the second, effectively nullifying the notice.

And now it’s been revealed that the second case to be contested at the Copyright Tribunal has also been withdrawn by RIANZ at the eleventh hour, again after a failure in the warning system.

The case appeared to be fairly straightforward. A female account holder of the ISP Slingshot had used BitTorrent to share a total of 11 songs, of which two (including one by Rihanna) were detailed in the case.

She had been tracked by MarkMonitor, the same company that will spy on alleged copyright infringers in the United States when that scheme finally gets off the ground next year. The company said that the woman had been using the Vuze/Azureus BitTorrent client and had been monitored making the works available between 17 December 2011 and 28 July 2012.

However, since MarkMonitor can only prove that any infringer has uploaded content to them, RIANZ used some educated guesswork for their damages calculations. Relying on similar reasoning to that employed during the first contested case, the music group argued that since the woman had made the music available for such a long period, the tracks must have been downloaded a number of times.

They came to the conclusion that, based on an Envisional study, that the two tracks in question would have been downloaded around 90 times each for every single instance of infringement logged by MarkMonitor. The first track was logged once, the second a total of three times, coming to a grand total of 360 downloads.

After arriving at a figure of $1175 for the hypothetical downloads plus sundries, added to another $3,500 by way of don’t-do-it-again punishment, RIANZ concluded their September 17 claim with a demand $4675.

But despite all the effort and number crunching, the alleged infringer won’t have to pay a penny due to a failure in the system.

The problem appears to be down to the woman’s ISP. Service providers are supposed to make sure that infringers receive their strike notices so they can be “educated”. However, the woman’s ISP, Slingshot, simply sent them to an email account associated with her account. Trouble is, she’d never used the email account, so had therefore received no notices.

Faced with this disaster RIANZ rightly withdrew their claim, but for the second time in two months contesting cases put before the Copyright Tribunal has been shown to be an effective strategy. It’s clearly worth checking to see if something hasn’t been done by the book.

Over in the United States the labels of the RIAA will be watching and learning from these failed RIANZ cases and will be mindful that even when they do their bit, ISPs can still get things wrong. As we know, the “six strikes” scheme has just been delayed yet again – this time until 2013 – time enough, the labels hope, it get this done right straight off the bat.

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

RIANZ, the Recording Industry Association of New Zealand, sent out just 2,766 notices between October 2011 and April 2012. Earlier this month it was revealed that eight individuals would face the country’s Copyright Tribunal and the possibility of fines after receiving their third strike.

All eight individuals were targeted by RIANZ, the Recording Industry Association of New Zealand. Seven of the accused asked the Copyright Tribunal to consider their cases on paper-based evidence alone. An eighth took up the opportunity to appear before the Tribunal in person. However, despite signaling their intention to defend, that is no longer required.

According to information provided by Tech Liberty, the Internet rights group that has been supporting the individual, RIANZ have dropped their case without explanation. The background does however provide some clues.

The alleged infringer, a student in shared accommodation, was the person with responsibility for paying the flat’s Internet account and as such her name was on the bill. She insists she has carried out no file-sharing and doesn’t even know how – Tech Liberty say they had to explain to her how it all works.

The first step on the strikes ladder is when an alleged infringer receives a warning notice from their ISP saying they have been detected file-sharing. That notice, the student insists, never arrived.

The second notice did. This was shown to the student’s flatmates who all protested innocence. The flat’s wireless network was checked for security.

Then a third and final warning arrived but it was addressed to the wrong person. Eventually the ISP (Telecom) withdrew the notice and re-issued it with the correct name. This was followed up by a Ministry of Justice letter informing the student of RIANZ’s claim against her.

The recording group asked for just over NZ $370 (US $303) to cover the costs of the notices and copyright tribunal hearing, plus NZ $1,250 (US $1,024) as a deterrent. However, eyebrows were certainly raised when it came to their claim for the music involved in the case.

The infringements were alleged to have taken place on five tracks with the cost of each measured against their value in the iTunes store, a total of NZ $11.95 (US $9.79). This sounds reasonable enough, but RIANZ were actually claiming for $1075.50 (US $880.96).

“RIANZ decided, based on some self-serving research, that each track had probably been downloaded 90 times and therefore the cost should be multiplied by 90,” says Tech Liberty co-founder Thomas Beagle. “There is no basis in the Copyright Act or Tribunal regulations for this claim.”

When monitoring peer-to-peer networks it is indeed possible for anti-piracy companies to connect an alleged infringement with an IP address. However, it is not possible for them to accurately measure how many other file-sharers an alleged infringer has directly shared material with, over and above their single distribution to the monitoring anti-piracy company.

In addition, other problems remained. Regulations require that the second and third notices specify which notices they carry on from – they didn’t. Furthermore, the error-corrected third notice had additional problems.

“The corrected third and final enforcement notice was sent for an infringement that happened within the 28 day stand down period after the warning notice, which means it was not a valid enforcement notice,” Beagle explains.

With these issues in mind, the student – with Tech Liberty’s help – decided to attend the Copyright Tribunal in person to fight the accusations. But just after she was informed that RIANZ had withdrawn their claim and her case had been closed.

The recording label group gave no reason for their withdrawal but given the outline of the case – and the fact that they had an adversary willing to fight – one might come to the conclusion that they were not prepared to take risks with their very first contested case.

Their lack of transparency will do little to quieten critics of the scheme, who say the process is heavily biased towards rightsholders.

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

RIANZ, the Recording Industry Association of New Zealand, sent out just 2,766 notices between October 2011 and April 2012. The movie industry sent none at all.

In contrast, in France, where a similar “3 strikes” scheme is operated, rightholders have been in overdrive. Between October 2010 and last month they had monitored 3 million IP addresses, had 1.15 million “first strike” notices and nearly 103,000 second warnings sent out.

The problem, Kiwi rightsholders insist, is that it costs too much to send a notice, a problem not experienced in France. But interestingly, and despite the huge difference in the number of warnings sent out, when it comes to summoning individuals to face their final punishments, the two countries are not that far apart, even though the French scheme has been running a year longer.

France has sent out more than a million first strike notices and almost 103,000 second strikes, ultimately sending just 14 cases to French prosecutors. New Zealand has sent out less than 2,800 notices in total, yet as revealed today is already sending 8 people to face the country’s Copyright Tribunal.

All of the individuals are targets of the Recording Industry Association of New Zealand (RIANZ). Their alleged offenses have not been detailed but it is presumed that they were monitored sharing music either on BitTorrent or another similar file-sharing system. All will have already received three “enforcement notices” against their ISP account but failed to modify their behavior.

Three of the individuals are customers of the ISP Telecom, while the remainder are customers of TelstraClear and Slingshot, Fairfox reports.

Seven of the accused have asked the Copyright Tribunal to consider their case on paper based evidence alone. An eighth took up the opportunity to appear before the Tribunal in person, a Justice Ministry spokesman said.

The punishments faced by the eight are more harsh than those faced by their French counterparts. The Tribunal can hand down a NZ $15,000 (US $12,337) fine, in France the maximum is 1,500 euros (NZ $2,368 / US $1,948)

In August the first French conviction was handed down. A 40-year-old man was given a 150 euro fine after he ended up taking the blame for his ex-wife’s file-sharing habits. Punishments in New Zealand are not expected to exceed a few hundred dollars.

The New Zealand notices, at NZ $25 (roughly $20 USD) per shot, are too expensive to send in large numbers and should be around NZ $2 each, rightsholders say. The ISPs, on the other hand, say that they costed their systems to handle large amounts and are now out of pocket. They want the cost of notices to increase. Last month the government said the prices would stay put.

And that might indeed be a good idea. The French send just over 0.0011% of notice recipients for punishment, currently the Kiwis are sending 0.29%, a huge difference.

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

Its outward structure is simple. Internet users who are discovered uploading copyright material are first sent two warnings via their ISP. On receipt of a third, copyright holders can take the Internet account holder to the Copyright Tribunal where they face hefty fines.

If entertainment industry lobbyists were to be believed the legislation couldn’t come soon enough since local artists were being seriously hurt by downloading. But it took a full two months for RIANZ – the Recording Industry Association of New Zealand – to deliver their first batch of just 75 warnings. All of them related to international artists and local artists were completely absent.

Now, more than 6 months after the so-called ‘Skynet’ law was introduced, local ISP TelstraClear has confirmed that one of its customers is the unlucky recipient of a third and final “enforcement” warning, delivered on behalf of RIANZ.

The alleged music pirate now has a week from the date of the notice to lodge a dispute. Failure to do so could lead the individual to be referred by RIANZ to the Copyright Tribunal for a punishment which could include a fine of up to $15,000.

TelstraClear, an outspoken critic of the ’3 strikes’ legislation, confirmed that it had been receiving just 15 notices a week from RIANZ. Nevertheless, that’s a significant amount when compared to those sent to any and all ISPs by the movie industry.

The MPAA-affiliated New Zealand Federation Against Copyright Theft (NZFACT) has sent a grand total of *zero* notices since the new law allowed it do so.

There are a couple of theories as to why this is the case. NBR, who spoke with an industry source who did not wish to be identified, said the size of the market in New Zealand meant it was too small for Hollywood to bother sending notices.

The other theory, which is connected to the first, is related to cost. When an ISP sends out a notice they can charge copyright holders a fee of $25. There is a further cost of $200 to take a case before the tribunal. With thousands of notices sent the costs would soon mount up.

There is speculation that to overcome this cost-related problem, RIANZ have been monitoring file-sharing networks in order to work out who is doing the most infringing and targeting those users first. Proportionately, users will download more individual instances of music than they would movies, making them easier to spot on separate occasions.

The $25 fee is currently being reviewed by the Economic Development Ministry which will have to decide if the level should be increased, reduced, or maintained. NZFACT boss Tony Eaton has asked for them to be thrown out completely, which suggests the movie industry might have more interest in sending notices if they become free.

But according to a report out of the TelCon12 telecommunications conference in Auckland today, ISPs have been bemoaning the costs of preparing the system versus how things have turned out.

“It’s more complex than just, ‘receive information, send notice’,” TelstraClear’s Oonagh McEldowney said, adding, “We’re nowhere near recovering our setup costs.”

An industry source told TorrentFreak that the ISPs budgeted for many more thousands of notices to be pushed through in order to ensure their initial outlays on systems implementation were covered. Being left high, dry and out-of-pocket will not have been well-received.

Update: Scott Bartlett, CEO of ISP Orcon, has confirmed his company has also sent out a ’3rd Strike’ notice.

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

Considering that the legislation received almost universal opposition from anyone not in the music business, it came as no surprise that the parties involved couldn’t come to an agreement. Prime Minister John Key announced that the law would be delayed while a solution is found, noting that they may have to change the law in order to reach one.

But according to Campbell Smith, CEO of RIANZ (New Zealand’s answer to the RIAA) everyone complaining about the legislation is wrong and the music industry is right. Writing in The New Zealand Herald, Smith says that despite the ‘fact’ that the industry has “transformed its business models”, unlicensed music on the Internet is proving a disincentive to those looking to sell music online.

Smith says that the music industry has been working hard to find “proportionate and reasonable solutions” to tackle illicit file-sharing. Noting that in some countries labels take legal action against those uploading music, Smith says that Section 92A “is a better solution for everyone,” although don’t be surprised if that “everyone” is limited to those in the music industry.

Smith says that after looking long and hard for a solution to the ‘problem’, the industry realized that ISPs are in a “unique position to help us protect creative content online,” and feels that it’s the government’s responsibility to force these negotiations on the ISPs, despite the fact that the ISPs aren’t happy about it at all. Seems everyone has a responsibility to the music industry – like it or not.

Turning to what he describes as “sensational propaganda” surrounding Section 92A in the press recently, Smith says that if the law was half as bad as is being reported, he would vote against it himself. Now that would be a sensation.

Going on to the tracking mechanics, he explained that the process of catching an infringer is simple. The labels will log on to public file-sharing ‘sites’ and log the IP addresses of people uploading large amounts of copyright infringing material and report them to their ISP. Further details of how the entire system would operate can be found here.

From a BitTorrent perspective, it will not be as easy to track people sharing vast amounts of music as it is with applications such as LimeWire, since there is no ‘shared folder’. It’s doubtful that the labels will be as selective as they are suggesting, though. Many of the infringement notices being sent out in the UK right now are for just one track and if the labels are pinning all of their hopes on this new system, expect there to be lots and lots of them in New Zealand too.

Smith says that consumers need to be reassured that what is being done is “efficient and proportionate” but it’s difficult to see why any ‘consumer’ should appreciate the fact that privately owned businesses should have a veto over their continued Internet access, or feel that such action is “proportionate”.

Content creators do have the right to protect their work, as much is written in law, but threats and disconnections aren’t going to work. Not only are the public annoyed at the actions of the music industry, but ISPs are being dragged into this ‘war’ too. Expect things to get even more messy.

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