In May, TF broke the news that Justin Sun, the entrepreneur behind the popular cryptocurrency Tron, was in the process of acquiring BitTorrent Inc.

The San-Francisco based file-sharing company confirmed the interest from Sun, but it took until July before the deal was officially confirmed.

While no formal figures have been publicly released, the deal was reportedly worth $140 million. This figure was later corrected to roughly $120 million by BitTorrent co-founder Ashwin Navin.

While that is still a substantial amount, Tron was not the only company bidding. In fact, there was another cryptocurrency with a desire to take over BitTorrent. The startup Neo, often referred to as the Ethereum of China, put in a higher bid as well.

New details revealed by Coindesk show that Neo Global Capital (NGC), the cryptocurrency’s venture capital firm, was willing to pay $170 million for BitTorrent. This was made up of $115 million for all preferred stock and $55 million of common stock.

This revelation was shared by Neo Blockchain’s head of investment, Weiyu “Wayne” Zhu. Neo planned to use BitTorrent to create a decentralized file-storage system which could be used for blockchain related projects. Despite the higher offer, however, no deal was made.

According to BitTorrent and venture capital firm DCM, which owned most of the preferred stock, Neo’s bid was seen as less favorable. It involved more risk and included a clause that would nullify the entire agreement if the acquisition was not completed in six months.

Documents, seen by Coindesk, state that “the risk of the transaction not being consummated due to the projected closing of such proposed transaction being late in 2018 and [NGC’s] primary assets being cryptocurrency holdings, which required an additional foreign currency conversion prior to the closing of the proposed transaction.”

Neo, for its part, was concerned about the Committee on Foreign Investment in the United States (CFIUS), which could interfere with the acquisition.

In addition, BitTorrent inventor Bram Cohen’s plans to leave the company probably didn’t help, as Neo wasn’t sure whether BitTorrent could deliver what it envisioned without him. As first reported here last month, Cohen moved away from BitTorrent, which means that the company lost its original technical visionary.

“We were not so sure that BitTorrent is technically advanced enough to become the decentralized file project we had hoped it would be,” Zhu said.

In the end, BitTorrent and Tron reached an agreement in February where the latter would pay $90 million for the preferred stock and $30 million for the stock. After finalizing the paperwork, the deal was eventually made public a few weeks ago.

It remains to be seen whether current BitTorrent users will notice any change following the shift in ownership. While the BitTorrent protocol will remain free and open to anyone, Tron now controls the popular uTorrent clients, including the new web version.

The company previously announced that nothing will significantly change in the short term. However, Tron’s founder Justin Sun also said that he plans to add financial incentives for those who seed content, which could, in theory, come to uTorrent as well.

Whatever direction Tron will go in, the core BitTorrent protocol remains open and cryptocurrency free.

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For more than a decade, alleged file-sharers around the world have been pressured to pay significant settlement fees.

These so-called copyright trolling efforts are pretty straightforward. Copyright holders obtain a list of ‘pirating’ IP-addresses and then request a subpoena from the court, compelling ISPs to hand over the associated customer data.

In recent years several news reports have appeared on these cases in the US, Sweden, Denmark and elsewhere. In Canada, things have remained quiet, but that doesn’t mean that these cases don’t exist there.

While the volume of lawsuits is relatively modest, thousands of Canadians have been targeted since 2016. The lawsuits in question are filed by the rightsholders of films such as The Hitman’s Bodyguard, Mechanic: Resurrection, Criminal, London Has Fallen, and Dallas Buyers Club,

These outfits are also active in other countries and many have a connection to Voltage Pictures, another familiar name. Voltage sued over 50,000 Canadian John Does in a reverse class action in 2011. This ‘Hurt Locker‘ case is still ongoing.

After the initial lawsuit, things went quiet, however. In the courts at least.

Initially, the movie companies focused their efforts on the so-called “notice-and-notice” scheme. This allows rightsholders to send settlement requests to alleged pirates through their ISPs. However, no personal details would be exposed. That meant that these could be easily ignored by the accused.

In recent years more than 300,000 of these “notice-and-notice” warnings were sent out by just one law firm, but the total could be over a million. This even grabbed the attention of lawmakers and legal experts.

What’s less known, however, is that in 2016 these movie companies and other rightsholders started taking cases to court again. Court records reveal that at least 16 separate lawsuits were filed since, with some targeting hundreds of people at once.

These cases are similar to the “copyright troll” efforts we see in other countries. They are litigated by the law firm Aird & Berlis and have fewer defendants than the initial Hurt Locker suit. Perhaps that’s why they remained largely under the radar.

The fallout is very real though. While none of the cases have gone to trial yet, some defendants have settled their cases for thousands of dollars.

TorrentFreak reached out to James Plotkin of law firm CazaSaikaley, who represented two defendants. He warns that from a consumer protection standpoint, the biggest problem is ignorance.

For example, many defendants may not realize that these cases are filed against John Does. This means that they are technically not being sued yet unless their name is added to the suit, which rarely happens. But it gets worse.

“I have also seen a number of consent judgments for $5,000. This is the maximum liability under the Copyright Act for non-commercial infringement. I am therefore puzzled as to why individuals would agree to settle for their likely maximum liability at trial,” Plotkin adds.

The latter is a particularly worrisome issue. It means that accused file-sharers admit guilt and agree to pay $5,000, which is the maximum damages amount they could get in court.

“I see no rational basis for paying that amount,” Plotkin notes, suggesting that some defendants are not represented by attorneys who know the ins and outs of IP law.

In most other countries the legal pressure is used to get Internet subscribers to pay a settlement fee. The matter rarely goes to trial. According to Plotkin, the same is likely to happen in Canada.

“It is difficult to say for certain, but I do not think any of these cases will go all the way,” Plotkin tells us.

“The business model so far seems to have been lifting off as many claims and letters as possible in the hopes of scaring out settlements. It has worked. I don’t see why the plaintiffs would jeopardize that by actually litigating one of these claims.”

Thus far the cases have been ongoing for years, without much resistance. Those who are unfortunate enough to get caught up in this should carefully research their options. Unlike the “notice-and-notice” emails, ignoring the legal paperwork is not a good option.

According to Plotkin, it would be wise to consult an attorney instead.

“Get competent legal advice. It is important to understand the legal playing field. Defendants are not helpless in these actions, so ignoring the claim and allowing the plaintiff to proceed in obtaining a default judgment is probably not the best option for most people,” Plotkin notes.

That is the type of advice one would expect from an attorney of course. However, in this case, it is certainly warranted. And the outcome could be positive as well, as Plotkin has already helped one defendant to get rid of the claim, without a settlement.

TorrentFreak also reached out to attorney Ken Clark of the law firm Aird & Berlis, which represents the movie outfits. He couldn’t provide any further details on how many people have been sued thus far and preferred not to disclose any further information.

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Running alongside the incredibly popular torrent site The Pirate Bay, Dreamfilm was a Swedish portal that offered content in the increasingly popular streaming format.

With no fancy software needed, the site enjoyed considerable growth, particularly among locals seeking quick and easy access to the latest local and Hollywood movies.

In January 2015 and after capturing millions of visitors, Dreamfilm announced it would close down after one of its administrators was detained by the authorities.

A month later, apparently in response to the upheaval at Dreamfilm, several other sites fell including the country’s second largest torrent site Tankefetast, torrent site PirateHub, and streaming portal Tankefetast Play (TFPlay). Anti-piracy group Rights Alliance described the four linked sites as Europe’s leading players in file-sharing and streaming.

Four men, aged in their 20s and 30s, were eventually hauled to court, with each admitting involvement but confessing no crimes.

The Linköping District Court found them all guilty of copyright infringement offenses and sentenced them to between six to 10 months in jail. They were also ordered to pay a fine of SEK 1,000,0000 (US$109,500) to plaintiffs including the Swedish Film Industry, Nordisk Film, and Walt Disney.

With all parties dissatisfied with the outcome – sentences too harsh for the defendants and not aggressive enough for the plaintiffs – the case went to appeal. Citing recent clarifications of EU law, the defendants argued that the content offered on the sites was already online and could be accessed in other ways. This, they said, meant the content had not been “made available to a new audience”.

The Court of Appeal, however, sided with the District Court, agreeing that the links on the site targeted a new and unauthorized audience and therefore amounted to copyright infringement. The samples detailed in the case meant that the men committed between 45 and 188 infringements each and were motivated by profit, as determined by the advertising present on the platforms.

Where the Court of Appeal differed in its opinion was on the punishments that should be handed down. The financial penalty was more than quadrupled from SEK 1,000,000 to SEK 4,250,000 (US$465,500) but the immediate jail sentences pressed for and then obtained by the plaintiffs were removed.

Due to the fact that the men were all relatively young, had never been in trouble with the authorities, and were unlikely to offend again, the Court of Appeal wiped out their custodial sentences, replacing them with conditional ones instead.

While this was welcomed by the defendants, the hugely increased damages bill was hard to swallow, despite the movie companies in question originally demanding more than SEK 9,000,000 (US$985,800). The four million damages award, the Court of Appeal ruled, was the amount a hypothetical license to distribute would have cost.

DagensJuridik reports that two out of the four men have now taken their case to the highest court in the land, the Högsta Domstolen (Supreme Court).

Unlike the lower court, the Supreme Court will not determine the guilt or otherwise of the defendants. The hearing will only concern whether the damages award and compensation for the film industry was reasonable when it was set at SEK 4,250,000 (US$465,500).

The Supreme Court will also have no involvement in the conditional sentences previously handed down by the Göta Hovrätt (Court of Appeal). They will stand as previously ordered, with two of the defendants paying daily fines, penalties based on the offender’s daily personal income.

Also under consideration by the Supreme Court is the ruling handed down in the Swefilmer case. In March this year, two men had their sentences increased by the Court of Appeal in Sweden.

After originally being told to serve three years in prison, the main operator of the site had his sentence increased to four years with additional damages on top. The second man’s conditional sentence was augmented with a fine.

Swedish anti-piracy outfit Rights Alliance has long campaigned for harsher sentences for copyright infringement offenses in Sweden, particularly those handed down in connection with file-sharing platforms. It argues that when courts go soft on offenders, it only encourages others to set up similar operations in what is then perceived as a safe(r) haven.

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There’s a bit of a trend emerging in which gaming companies use copyright legislation against cheaters.

Take-Two Interactive Software, the company behind ‘Grand Theft Auto V’ (GTA V), is one of the players. The company has filed several lawsuits in the US targeting alleged cheaters.

In one case, a New York court recently issued a preliminary injunction ordering a man to stop working on and distributing the ‘Menyoo’ and ‘Absolute’ cheats.

The defendant, Georgia resident David Zipperer, didn’t deny his involvement and said he had already ceased working on the cheats. However, he had to find a lawyer as Take-Two was not letting the case go easily.

Following a referral from the EFF, Zipperer received “pro bono” help from attorney Joel Rothman. That didn’t last long. After a failed attempt to transfer the case to another district or otherwise resolve the case, the attorney is withdrawing from the case.

According to the attorney, Take-Two is increasing the costs and time for Zipperer’s defense, to “shake him free” of his pro bono counsel.

“I do not have the resources to go up against Kirkland & Ellis in scorched-earth discovery in a pro bono case. I cannot afford the time and money to fly around the country taking the depositions of Take-Two employees,” Rothman wrote to the court.

The attorney discussed a possible settlement with Take-Two, but the “tens of thousands” of dollars the company wants is not something his client can pay, he says.

“My client has no money. He swore to this Court that the money he earned from selling ‘cheat menus’ was used to support his family, that the money is gone, and that he has none left.

“He is an unemployed day laborer with a ninth-grade education who taught himself to write code. I have told this over and over to Take-Two’s lawyers, but they continue to demand a pound of flesh from Zipperer.”

Rothman, therefore, asked the Court to halt the discovery proceedings for thirty days so his client can find a new attorney, or prepare to represent himself.

Take-Two clearly sees things differently. A day after the attorney’s request was filed the company submitted a scathing reply, painting an opposing picture. According to the company, Zipperer has repeatedly misled the Court regarding his financial situation.

Through a subpoena, they learned that the defendant’s profits exceed $100,000 and that the most recent payment only dates a few months back. Some of the profits were spent on expensive electronic equipment and other personal purchases.

“Mr. Zipperer clearly has significantly more resources than he has repeatedly represented to this Court. We believe that these PayPal records reflect only a small fraction of the proceeds Mr. Zipperer has received from his illegal businesses,” the company writes.

Take-Two says that the case should not be delayed any further, also because there’s a chance that this will help the defendant to hide his assets.

“There are many litigants who need legal services and who legitimately do not have the means to pay for them. Mr. Zipperer is not one of them,” the company informs the Court.

“He is a man that has collected over a hundred thousand dollars by distributing an infringing work that harmed Take-Two and its customers who wanted to play Take-Two’s game without being ‘griefed’.”

After reviewing the submissions from both sides the Court sided with Take-Two (pdf), which means that the case won’t be delayed.

While Take-Two’s approach, in this case, may seem aggressive, it’s not always that way. Earlier this week it settled its case with Christopher Pei, who worked on the Infamous and Menyoo cheats. While Pei admits the infringing activities, both parties agreed to pay their own costs.

Meanwhile, Take-Two also filed a new lawsuit late last week. The company sued (pdf) Florida resident Jhonny Perez, accusing him of copyright infringement by creating and distributing the cheating tool “Elusive.”

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The DMCA’s “repeat infringer” issue is a hot topic in US courts, leading to much uncertainty among various Internet services.

Under the DMCA, companies are required to implement a reasonable policy to deal with frequent offenders.

This applies to residential ISPs but also to websites that host user-uploaded content, such as video and image hosting platforms. Services that fail to implement a repeat infringer policy risk being held liable for the piracy activities of their users.

This is what happened to Cox previously. While the ISP settled its case last week, the issue is not off the agenda. In fact, a related matter is currently before the US Supreme Court.

The petition was submitted by adult content producer Ventura Content. The company previously lost its case against the video upload site Motherless.com, through which hundreds of thousands of copyright infringing videos were made public.

Ventura argued that the sole operator of the site was liable, as he failed to write down the details of the site’s repeat infringer termination policy. However, the Court of Appeals for the Ninth Circuit disagreed.

The fact that the details of the policy were not spelled out doesn’t mean that Motherless has no safe harbor protection, the Court concluded, noting that this may be different for large companies. In addition, Motherless was not required to keep a log of all infringements, as long as the operator keeps track of these in his head.

The adult company was obviously not happy with this outcome. It requested an ‘en banc’ rehearing review of the published opinion, but that was denied as well. The next logical step, therefore, was to take the matter to the Supreme Court.

“Plain and simple, the lower courts are in a state of DMCA disarray,” Ventura writes in its recent Supreme Court petition.

“The result of the DMCA disarray is that abject bootlegging in the offline, brick-and-mortar world remains unlawful, but the same conduct online by an OSP-turned publisher garners absolute summary judgment immunity.”

From the petition

The adult company is asking the Supreme Court to take on the case, noting that various circuit courts have issued conflicting decisions. For example, in the present case an “I Know It When I See It” policy was good enough for a summary judgment in its favor, while MP3tunes was previously denied the same because it failed to monitor users.

Ventura asks the Supreme Court to clearly define a standard which can be uniformly applied by lower courts. At the moment it appears that there is too much room for interpretation, which causes confusion and seemingly conflicting decisions.

This vagueness has been recognized in previous “repeat infringer” cases. To illustrate this, even judges themselves are not clear what a repeat infringer actually is, as the DMCA doesn’t clearly define it.

“How does somebody know a third party is an infringer? ‘Cause you say so?” Judge Shedd previously said in a BMG vs. Cox hearing.

The adult producer obviously hopes that if the Supreme Court takes on the case, which is far from certain, it will work out in its favor. If not, they fear that things will only get worse.

“The lower courts, acting out of a fear of derailing the internet’s development have instead given birth to a new monster: the OSP publisher that is brazenly rich only from others’ content, never pays for any content it publishes, knows the content is infringing, has full control over what is published on its platform, does not have to terminate known repeat infringers because unwritten ‘I Know Repeat Infringement When I See It’ policies suffice, and thus enjoys full immunity from copyright law,” Ventura writes.

“It is time for this Court to bring balance to the DMCA, which never intended, nor facially permits, such staggering dissonance between online and offline liability standards,” the company concludes.

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A copy of Ventura Content’s petition to the US Supreme Court is available here (pdf).

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