The groups, which campaign tirelessly for tougher copyright legislation, are the main collecting societies for songwriters, composers and publishers in Spain. Today they are in absolute turmoil.

Acting on a warrant issued by the anti-corruption prosecutor, police raided SGAE’s headquarters in Madrid with orders to detain and question key executives.

Some of the biggest names possible were arrested including SGAE President Eduardo “Teddy” Bautista (right) who was handcuffed and led away under armed guard, Ricardo Azcoaga (CFO of SGAE) and Enrique Loras (Director General of SGAE).

An hour after police arrived some employees were allowed to leave, but not before their laptops and cellphones had been confiscated. Others were detained for questioning while the authorities seized all computers in the sealed-off building. In total the raids lasted more than 14 hours.

The complaint against SGAE stems back to late 2007 when financial irregularities were discovered in SGAE’s handling of the revenue they collect rights payments and revenue from Spain’s blank media levy. The Asociacion de Internautas (Association of Internet Users) and other groups then raised an official complaint with the authorities.

The complaint alleges that SGAE operatives set up companies and used revenue destined for artists to generate profit for themselves and their families, and that money bound for artists living abroad was diverted to personal Swiss bank accounts.

At the center of the storm is SDAE, the digital rights arm of SGAE. Although a notionally separate entity, SDAE is fully operated by SGAE. It appears that when SDAE was being set up, SGAE hired a for-profit company called Microgenesis as consultants.

Microgenesis describe themselves as “a team of specialists in engineering, consultancy and development, managed by individuals with established experience in the fields of intellectual property, as well as the culture and entertainment industries.”

Microgenesis operated a number of companies which provided various services for SGAE and SDAE, some of them suspiciously registered at SGAE/SDAE’s own office address. The problems only deepen when one learns who is behind Microgenesis.

Jose Luis Rodriguez Neri is Director General of SDAE and ex-director of SGAE. His wife, Maria Antonia Garcia Pombo, is the ex-president of Microgenesis. Partner-Chief Legal Officer of Microgenesis is Eva Garcia Pombo. She is Neri’s sister-in-law.

Along with Microgenesis Partner-Chief Executive Officer Rafael Ramos, majority shareholder Elena Vazquez and Partner-Chief Financial Officer Celedonio Martin, all individuals mentioned in the last two paragraphs have been arrested.

The incestuous nature of the business between SGAE, SDAE, Microgenesis and other connected companies is said to have created an illegal and “beneficial economic relationship” for those involved.

It is a huge irony that SGAE, who have longed called for a file-sharing crackdown under a tougher copyright regime, and their partners Microgenesis, a company that provided pro-copyright and DRM solutions for SGAE, now stand accused of fraudulent activities involving funds that should have been for the exclusive use of those they claim to protect – the artists.

The bank accounts of SGAE, which by law is supposed to act as a strictly non-profit organization, have been frozen.

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

The Coalition quickly backtracked, suggesting they would accept some type of throttling instead, but that fell largely on deaf ears too. Then new Coalition president Aldo Olcese said that the solution would be to go after the country’s 200 torrent sites instead, but this could also prove problematic. Time and again Spanish courts have ruled that sites that link to infringing content are not illegal, providing profits aren’t made directly from any infringement.

But of course, wealthy operations like SGAE aren’t put off by such rulings and instead go after eDonkey and BitTorrent sites privately, often demanding that they are forced to close via injunction in advance of a full court hearing to assess their legality.

One such case involves the eD2K link site elrincondejesus.com. On May 13th the site received a complaint from none other than every Spanish sharing site’s nemesis, SGAE. Alleging Elrincondejesus “abused” its members copyrights, the site’s owner was summoned to appear in court on June 5th.

At this hearing various things would be discussed, but SGAE hoped to get an early decision to suspend the operations of Elrincondejesus immediately, in advance of the full hearing which would happen at a later date.

On his site, the owner commented: “As you know Elrincondejesus.com never had advertising (or has now). I’m innocent and the only thing that I have done is provided links to other sites, like thousands of search engines in the world.”

There would be a month long wait for the court’s decision but today it came.

The judge dismissed SGAE’s request for an immediate shutdown of Elrincondejesus.

“P2P networks, as a mere transmission of data between Internet users, do not violate, in principle, any right protected by Intellectual Property Law,” said Raul N. García Orejudo, a judge in Barcelona. Although some activities are barred, those do not concern P2P he said, noting that there has to be a presumption of innocence.

Speaking with Elmundo.es, attorney Carlos Almeida-Sanchez said: “This is the first time a court clearly states that P2P itself does not violate any rights.”

On possible infringements of the Intellectual Property Act, the court said:

“Adding a work or video recording to Emule, that has previously been converted to a compatible computer file, is not an act of reproduction,” adding that “Copying is not a profitable use, or collective use [such as broadcasting in a store], as these two terms refer to the subsequent use made of the work once downloaded, after the copy.”

Additionally, the Intellectual Property Act describes distribution as needing something tangible, as in distribution via a website for example, which in this case (as it’s P2P) does not exist.

However, the court order recognizes the possibility that public distribution may have occurred but this is difficult to prove, since any sharing could’ve taken place with just one person.

The full trial will take place at a later date.

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

The coalition, headed by SGAE and Promusicae, took the now-common stance of demanding that ISPs implement a “3 strikes” strategy for alleged online pirates, but this was rightly dismissed by the ISPs. The rights holders then came back with a new demand to throttle alleged file-sharers instead. The ISPs refused this request too.

According to Canalejo, the other major reason why negotiations broke down was the failure of the content providers to provide an attractive legal alternative to illicit file-sharing. “Piracy is not a phenomenon that must be pursued and demonized,” he said, while branding the currently provided legal alternatives as “derisory”.

To reduce piracy, the ISPs made the suggestion to the Ministry of Industry that it should create a portal to offer music, movies and games.

“Content providers should have a more entrepreneurial approach. They are defending a traditional distribution model and we’re creating a new business,” said Canalejo.

Noting that any changes should come through awareness and education, Canalejo said that negotiations with rights holder could only resume when the government becomes open about its plans for measures against file-sharing, adding that any measures must “protect Internet users and give legal certainty to ISPs.”

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

Yesterday things took a turn for the sinister. At around 12:00 noon and after a sleepless night, Juan heard a knock at his door and upon answering it he saw five people standing there who gave no other explanation who they were, other than they were from the court. They gave Juan documentation that he didn’t fully comprehend and gave him the impression that they had a warrant to enter his home and make an inspection of his computers and hard drives.

It appears they came looking for the stats from Elitemula and Etmusica which reflect the downloads of music made via links on those sites between September and December 2007.

Juan explains, “They entered my house and I called them to show them where the computers were in the house. I showed them my personal laptop, but they insisted on seeing them all, including my brother’s.”

This wasn’t enough for the unexpected visitors who proceeded to enter every room in the house and even opened up some cardboard boxes in Juan’s bedroom which merely contained personal family belongings.

“A man who identified himself as a ‘computer expert’ reviewed the contents of my personal computers and then tried to access my brother’s computer,” Juan explained. However, since the laptop was password protected the ‘expert’ prompted Juan to provide the password, which he couldn’t since he didn’t know it. After a telephone call to Juan’s brother which understandably worried him, he handed over the password which allowed the ‘expert’ to make a detailed investigation of the laptop. They went on to examine several other hard drives.

After the five individuals had been inside for two hours, Juan finally managed to get lawyer David Bravo on the telephone who, along with Javier de la Cueva, recently defended P2P developer Pablo Soto. David asked Juan to read out the order which supposedly allowed these individuals to enter his home and search it.

Over the telephone, David Bravo confirmed that the text of the order did not authorize entry to Juan’s house or examination of hardware held there. Understandably concerned, Juan asked David to demand that the five people in his home identify themselves.

The first man was a lawyer for Spanish music rights/anti-piracy group SGAE, the second a SGAE computer expert, another a clerk and others unidentified.

At this point David Bravo told Juan to order the individuals out of his home and demanded that they leave all of his property intact. After a long conversation where the SGAE lawyer tried to convince that seizure of hard drives was allowed, David Bravo urged him to leave Juan’s home immediately.

David Bravo gave Juan instructions on how to proceed and offered to appear before the courts as a witness to what had happened. Javier de la Cueva, David’s partner, told TorrentFreak that he will be representing Juan.

In the end the five left Juan’s house and left the hard drives behind, although Juan voluntarily allowed them to take a laptop.

As soon as we have more on this story we will publish an update.

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

This time SGAE targeted Agujero.com, a site which amongst other things offers links to files found on various P2P networks. Defended by lawyers David Bravo and Javier de la Cueva, Agujero.com is protesting its innocence using the same successful defense employed earlier by P2P site Sharemula. However, the increasingly deaf SGAE believes otherwise, claiming that the site operates illegally.

“The entertainment industry has tried to criminalize websites linking to P2P,” Javier de la Cueva told TorrentFreak. “After four years, it seems they have given up with criminal proceedings as it is clear it is not a crime because a link is not a copy nor is it public communication. It is just metadata, data about data. Now they [SGAE] have begun civil claims.”

SGAE told the court that Augujero’s continued operation was so serious that it required an immediate injunction to close it down. In fact, it further insisted that the urgency of the case meant that it was not even necessary for the court to hear the defendant’s side of the story. SGAE insisted that they “had long remained passive” in taking action against Agujero, having been aware of the site’s operations since 2007. Now, in 2009, suddenly everything has become so urgent that they don’t want the site to have a defense in the face of an application for an injunction.

Thankfully the court disagreed with this reasoning and allowed an interim hearing on May 5th 2009, to be attended by both sides.

During the hearing, lawyers for SGAE claimed that Agujero.com infringed the copyright of its members. For the defense, lawyer Javier de la Cueva argued that the site did not, since it only carries links to material hosted elsewhere, a position already declared legal under Spanish law in previous cases. An expert presented by the defense confirmed that the site carried only links and that the only material actually hosted by Agujero is ‘copyleft’ material.

The judge noted that closing the site in advance of a full hearing “might cause irreparable prejudice to the defendant,” and therefore denied SGAE’s application to have the site closed at this stage.

“In the end it could be considered a legal activity,” Javier told TorrentFreak.

To be continued….

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

There can be little doubt, considering the already-massive effort underway to help those affected, that the song will sell as quickly as it can be put into stores and that the result will be that much-needed funds will reach those that need it most. However, elements of the Italian music industry simply couldn’t resist getting in a strike against P2P, when the opportunity arose to do so.

Domani 21/4.09, like any (every) other song, already made its way on to P2P networks and Italy’s answer to the RIAA has wasted no time in taking advantage. FIMI, the Federazione Industria Musicale Italiana, represents around 2,500 companies producing and distributing music in Italy and has been quick to condemn the leak, claiming that file-sharers are downloading the song while essentially trying to avoid giving money to charity, something which I find a little hard to believe.

People who want to give to charity and help a good cause, do so. Those that don’t want to give have made their choice too but of course there is clearly some propaganda value in claiming otherwise. We’ve all heard the untruth “one download equals one lost sale” but this is probably the first time i’ve heard “one download equals one less donation to charity”.

“There are thousands of copies of the song and video made available on P2P networks with tens of thousands of illegal downloads every day,” said the secretary general of Federation Against Music Piracy, Luca Vespignani. In an attempt at escalation, Vespignani says he has reported the situation to Italy’s Guardia di Finanza. “In this case, the damage goes beyond just music piracy, it is damaging a charity,” he said.

Meanwhile, moving west to Spain, aggressive copyright group Spanish General Society of Authors and Editors has been up to its old tricks again and it clearly doesn’t mind ‘damaging a charity’. In December last year we reported how SGAE illegally gatecrashed a wedding in order to gather evidence that the event was avoiding copyright fees due to them. For their trouble, SGAE was fined around $82,000 but now the group has sunk to a new low.

Juanma López Fenoy is a very sick young man who suffers from a degenerative brain disease called Alexander Syndrome. In order to raise money so that Juanma can go to the US to receive treatment, a charity concert was organized, with artists waiving their fees to perform. The concert took place April 25 and raised €56,000 ($75,000) through ticket sales.

Of course, SGAE wanted their piece of the pie – a 10% piece to be exact – in order to cover their copyright fees. After complaints were made against SGAE, the group issued a statement saying that its actions were entirely consistent with copyright laws, which don’t allow anyone to get away with not paying the fees. However, when SGAE’s stance became known publicly, the opposition to their lack of compassion grew too loud for them to ignore.

SGAE issued a statement, saying that although it would still take its 10%, it would make an equivalent voluntary donation back to the fund, effectively canceling it out.

Better late than never, but if SGAE wanted to make a charitable donation it would’ve been in better taste to have done it willingly, rather than under pressure. Here at TorrentFreak we have faith that people are still donating to the earthquake fund willingly too, P2P downloads or not, and they don’t need to be demonized or put under pressure by some copyright group to do so.

Details about making donations can be found here.

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

The copyright holders, the Coalition of Creators represented by the General Society of Authors and Publishers (SGAE), wanted the ISPs to charge their customers extra to cover alleged losses from their activities on P2P networks. Eduardo Bautista, SGAE’s president, recently said that it is the ISPs “civic duty” to cooperate. Unsurprisingly, he also wants repeat infringers to be disconnected from the web.

The mobile operators on the receiving end of these demands – Ono, Orange, Telefónica, Vodafone – can’t reach an agreement with the copyright holders on how to move forward, which is hardly a surprise considering what is being asked of them.

Bautista said he wants to find a solution to the online piracy problem so it remains profitable for authors and publishers to carry on their work. He called on the government to respond “smarter” to the problem. “You can not create a business leaving out the first link,” he said.

The two groups will now present separate proposals to the government. Internet users or consumer groups were not represented in these discussions.

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

The SGAE is the main collecting agency for performance royalties, which it then distributes to artists and copyright holders. Sometimes it goes that ‘extra mile’ to enforce these royalties, as it did in 2005.

The SGAE hired a private investigator to gatecrash a wedding reception in Seville and video it. The video was to be used as evidence that the venue was playing music without paying the fees SGAE felt it should. However, when the case came to trial, the judge threw out the video evidence as it was collected illegally, in violation of the privacy rights of the people at the event. Despite the loss of the taped evidence, the venue was fined €43,179 ($59,200 US) for using the music without paying royalties.

However, that story had a happy ending of sorts. The SGAE was later fined €60,101 ($82,400 US) for the violation of privacy. Excluding court costs, that’s a €16,992 loss for the SGAE, as well as the bad publicity it generated. Yet, in the world of copyright enforcement, if there is weight to be thrown around and fees to collect, it will be done. The head of the SGAE, Pedro Farre, is reported in The Times as saying “Using private detectives to investigate fraud is common. We will carry on doing it.”

The agency was also critical over the ruling that his agency violated the wedding’s intimacy, saying in 2006 that any questions over the legality of the video were “demagogic arguments”, and that the issue should be that the venue was using music illegally, not the legality of the evidence.

Now, in 2008 another similar case is reaching the courts. This time, instead of having a private detective recording the wedding, a tape the SGAE says they obtained from a legitimate attendee will be presented as evidence. Again, at issue is the privacy of the wedding – there is a constitutional right in Spain to one’s own image – which might still invalidate the video. Those at the wedding, after all, have no impact over the venue’s decision regarding licensing, and it’s their right to privacy that the venue’s lawyer, JoaquÍn Moeckel, says is being violated in the case against the Salón de Bodas.

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