Friday, February 4, 2011

TorrentFreak Email Update

TorrentFreak Email Update


ACS:Law and MediaCAT Completely Shut Down Both Their Businesses

Posted: 04 Feb 2011 03:42 AM PST

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In a statement handed to the Patents County Court earlier this month, ACS:Law owner Andrew Crossley delivered some good news for once. The anti-piracy business had all got too much for Crossley – he would now stop chasing alleged file-sharers.

Crossley, in his usual spin-doctor style, tried his best to blame just about everyone else for his downfall but for those who have followed these cases closely it was clear who was to blame. Crossley and client Lee Bowden, owner of copyright troll MediaCAT, had been the architects of their own doom.

With the Patents County Court hearing adjourned by Judge Birss QC, most observers believed that his ruling, which is now due next week, would be the next significant milestone in this whole sorry affair. But for companies that operate as unusually as ACS:Law and MediaCAT, there’s always a surprise in store.

Since TorrentFreak were the first outlet to report on the activities of ACS:Law back in 2008, it’s perhaps fitting that we should now be the ones to break the news of the company’s ultimate demise.

According to a copy of a document obtained by TorrentFreak, which appears to have been sent out by Crossley during the last week, ACS:Law have not only stopped all file-sharing related work as previously reported, but actually shut down completely 31st January 2011.

Furthermore, the document adds that ACS:Law’s only remaining speculative invoicing client – MediaCAT – has also ceased trading.

"Ahead of Judge Birss' judgement due on Tuesday, it would seem to some that Mr Crossley and Mr Bowden are attempting to avoid not just 'judicial scrutiny' but financial responsibility for the flawed claims that they foolishly decided to issue,” consumer group BeingThreatened told TorrentFreak on hearing the news.

“They perhaps hoped that they might gain a judgement which they could use to threaten future letter recipients, instead their greed has led to the exposure of the significant and manifold flaws in the legal and evidential basis of the speculative invoicing scheme they employed.”

There has been recent speculation that MediaCAT may choose to close their business, particularly since they are now facing an application for “wasted costs” following their recent catastrophic legal venture against 27 alleged file-sharers. But even closure may not save the company’s owner from some hefty payouts.

“MediaCAT's status as a private limited company may not protect [Bowden] from personal legal liability for the costs that will be demanded by the defendants of the claims MediaCAT brought,” notes Bench. “ACS:Law was not a limited company in any sense. Mr Crossley will remain entirely and personally liable for all the actions of his firm.”

Joe Hickster, the blogger behind the ACS:Bore blog who has worked tirelessly behind the scenes supporting many people who have fallen victim to ACS:Law and similar companies, welcomed the news.

“The news of the pair’s demise is a vindication for the people who stood strong against ACS:LAW/Media C.A.T,” he told TorrentFreak. “The damage they have caused cannot be overestimated, so it’s great news that their campaign of fear against many innocent people seems to be at an end.”

“With Crossley’s upcoming appearance at the Solicitors Disciplinary Tribunal, a warning has been sent out to those Solicitors who think they can pick up the poisoned baton of Speculative Invoicing.”

Perhaps the big question now is how the closure of ACS:Law and MediaCAT will affect next Tuesday’s court hearing where Judge Birss QC is due to deliver a ruling on the pair’s activities.

“The timing [of the closures] will be no coincidence, but while these actions may have been conceived as a damage limitation exercise, they will do nothing to appease Judge Birss who is already wise to the 'twists and turns' of this scheme and who is unlikely to let the duo's plan work out quite as they perhaps intend," concludes BeingThreatened’s James Bench.

So, the show isn’t over yet. Be sure to tune in here on Tuesday to hear what Judge Birss has to say. And bring some popcorn, this should be very interesting indeed.

US Senator Worries Domain Seizures May Stifle Free Speech

Posted: 03 Feb 2011 01:35 PM PST

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Earlier this week we broke the news that US authorities had started a third round of domain seizures. This time, it turned out that the actions were aimed at sports streaming sites. In total, 10 domain names belonging to 6 websites were handed over to the authorities.

As with previous seizures, the actions of the authorities were met with disbelief by the sites’ owners and their millions of visitors. The owner of Rojadirecta, one of the affected sites, questioned the legitimacy of the seizure since his site has twice been declared legal in Spain. In addition, many further questions were raised.

Today, we learned a little bit more about the justifications for the “Super Bowl Crackdown” after we obtained the affidavit that ICE agent Daniel Brazier sent to the US District Court. However, the request for a seizure warrant is very generic and leaves many questions unanswered.

Luckily, we’re not the only ones who want to find out more about the lack of due process and the need for domain seizures that comply with the DMCA. US Senator Ron Wyden asks the same questions.

In a letter addressed to ICE director John Morton he voiced his concerns, stating that the seizures are “alarmingly unprecedented” and that they could “stifle constitutionally protected speech.” In addition, Senator Wyden asks the following.


1. How does ICE and DoJ measure the effectiveness of Operation In our Sites and domain seizures more broadly — how does the government measure the benefits and costs of seizing domain names?

2. Of the nearly 100 domain names seized by the Obama Administration over the last 9 months, how many prosecutions were initiated, how many indictments obtained, and how were the operators of these domain names provided due process?

3. What is the process for selecting a domain name for seizure and, specifically, what criteria are used?

a. Does the Administration make any distinction between domain names that are operated overseas and those that are operated in the U.S.

b. Does the Administration consider whether a domain name operated overseas is in compliance with the domestic law from which the domain name is operated?

c. What standard does the Administration use to ensure that domains are not seized that also facilitate legitimate speech?

d. What standards does ICE use to ensure that it does not seize the domain names of websites the legal status of which could be subject to legitimate debate in a U.S. court of law; how does ICE ensure that seizures target on the true “bad actors?”

4. Does the Administration believe that hyperlinks to domain names that offer downloadable infringing content represent a distribution of infringing content, or do they represent speech?

5. Does the Administration believe that websites that facilitate discussion about where to find infringing content on the Internet represents speech or the distribution of infringed content? What if the discussion on these websites includes hyperlinks to websites that offer downloadable, infringing content?

6. What standard does DoJ expect foreign countries to use when determining whether to seize a domain name controlled in the U.S. for copyright infringement?

7. Did DoJ and ICE take into account the legality of Rojadirecta.org before it seized its domain name? If so, did DoJ and ICE consult with the Department of State or the United States Trade Representative before seizing this site in order to consider how doing so is consistent with U.S. foreign policy and commercial objectives

8. In an affidavit written by Special Agent Andrew Reynolds, he uses his ability to download four specific songs on the domain name dajaz1.com as justification for seizure of this domain name. According to press accounts, the songs in question were legally provided to the operator of the domain name for the purpose of distribution. Please explain the Administration’s justification for continued seizure of this domain name and its rationale for not providing this domain name operator, and others, due process.

9. Can you please provide to me a list of all the domain names seized by the Obama Administration since January of 2009 and provide the basis for their seizure?

10. Do ICE and DoJ keep a record of who meets with federal law enforcement about particular domain names? If not, would you consider keeping such a record and making it publicly available, to ensure transparency in government and that Operation in our Sites is not used to create competitive advantages in the marketplace?

The questions above cover most of the concerns that were raised among the public, and it will be very interesting to see how ICE’s director responds. Last time he responded to the domain seizures, Morton made quite a few mistakes, so we hope this time around the answers will be more substantial and honest.

Internet Piracy Boosts Anime Sales, Study Concludes

Posted: 03 Feb 2011 07:10 AM PST

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pirateThe Japanese Research Institute of Economy, Trade and Industry (RIETI) has published an elaborate study that examined the effect of piracy on sales and rentals of Japanese anime DVDs. The results are quite remarkable.

While the music and movie industry often make outrageous claims about the disastrous effect of piracy on their respective industries, researchers are still divided. Some researchers claim a considerable loss due to unauthorized sharing, while others have found that the overall effect of piracy is a positive one.

RIETI’s study on the effects of piracy on the sales of anime DVDs in Japan falls in the latter category.

In their paper the researchers examine the effects of YouTube and the popular P2P-network Winny on DVD sales and rentals of Japanese anime episodes.

“Estimated equations of 105 anime episodes show that (1) YouTube viewing does not negatively affect DVD rentals, and it appears to help raise DVD sales; and (2) although Winny file sharing negatively affects DVD rentals, it does not affect DVD sales,” the researchers conclude.

“YouTube's effect of boosting DVD sales can be seen after the TV's broadcasting of the series has concluded, which suggests that not just a few people learned about the program via a YouTube viewing. In other words YouTube can be interpreted as a promotion tool for DVD sales,” it adds.

The results of the Japanese research confirm that piracy does not always have to be associated with a decrease in sales. Similar effects have been observed for music piracy and book piracy as well.

One point of critique based on the main conclusions of the study, is that the observed relation only appears to be correlational. This may mean that the results could in part be influenced by significant third variables such as promotion and overall popularity. Since the report is only available in Japanese we were unable to confirm whether this was taken into account.

The results of the study come at an interesting time. For years anime distributors where considered quite lenient towards piracy, but last week the American anime distributor Funimation announced lawsuits against 1337 alleged BitTorrent downloaders.

Although it’s not expected that one study will change the tune of the copyright holders who are currently pursing alleged pirated in court, the study does confirm that the availability of unauthorized streams and downloads do not necessarily harm sales. Quite the opposite. The challenge for the content producers is to find the sweet spot that will benefit them, and consumers.

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