Next week, MEPs will again vote on the controversial copyright proposals of Article 13.

Critics say the proposed legislation would see platforms such as YouTube compelled to introduce strict upload filters, to prevent unlicensed content being offered to the public. These systems, they say, would stifle creativity and lack the ability to differentiate in situations of fair use.

Those in favor say that YouTube has enjoyed the free ride long enough and must now play fair with other people’s content.

The theory in the music industry is that the enhanced liability regime of Article 13 will force YouTube, their main target, to properly license the music it hosts, at rates more in line with those being charged elsewhere in the industry. Removing safe harbors, insiders say, is the only way YouTube can be forced to compensate artists fairly.

The debate has raged for months – years even – with the music industry on one side and tech companies and proponents of Internet freedom on the other. However, YouTube and owners Google have remained relatively quiet, a little unusual given that they’re the prime targets of the legislation.

Now, however, YouTube Chief Business Officer Robert Kyncl has weighed in on the proposals, warning of a new, more restrictive creative environment should Article 13 pass into law.

“The open internet eliminated the barriers of traditional media gatekeepers and ignited a new global creative economy for creators and artists. It has given anyone with an idea the ability to share their passion, find fans all over the world and build a business,” Kyncl writes on the YouTube Creator Blog.

“Despite best intentions, I believe this may now be at risk as European policymakers prepare to vote on a new European Copyright Directive on September 12. In fact, some parts of the proposal under consideration – and in particular the part known as ‘Article 13’ — potentially undermine this creative economy, discouraging or even prohibiting platforms from hosting user-generated content.”

Kyncl warns that passing the controversial proposal would lead to a stifling of creativity and a negative effect on YouTube users of all kinds.

YouTube creators, in particular, could find their revenues at risk, if the platform is held to higher standards of liability. Critics have long warned that erring on the side of caution would become the standard for sites like YouTube, potentially leading to censorship (filtering) of difficult or questionable content.

YouTube’s Chief Business Officer reiterates once again that his platform has invested in several technologies designed to assist copyright owners. Its Content ID and more recent Content Match systems can identify content for monetization purposes or remove it, at copyright holders’ request.

“Copyright holders have control over their content: they can use our tools to block or remove their works, or they can keep them on YouTube and earn advertising revenue. In over 90% of cases, they choose to leave the content up,” he writes.

“Enabling this new form of creativity and engagement with fans can lead to mass global promotion and even more revenue for the artist. For instance, a growing list of global artists have seen their songs go viral in fan-made dance videos, such as Drake’s ‘In My Feelings’ and Maître Gims’ Sapés Comme Jamais. Dua Lipa got her start singing covers and Alan Walker allowed his track Fade to be used in user generated content and video games, which helped him build a massive global fanbase.”

In informal discussions with music industry insiders this week, TF also questioned why tools like Content ID and Content Match aren’t able to solve the problem of infringing music content being made available on YouTube. We were told that while these systems have their uses, only the enhanced liabilities offered by Article 13 can address the undervaluation of content and ensure that YouTube pays a fair licensing rate for the content it offers.

But while the music industry seeks to render YouTube ineligible for safe harbor protections under the e-Commerce Directive, YouTube is warning that the effects of Article 13 will be felt far beyond the Internet’s most popular video site.

“The Copyright Directive won’t just affect creators and artists on YouTube. It will also apply to many forms of user generated content across the Internet. And that’s why so many other people are raising concerns too,” Kyncl writes.

“Individuals, organizations (like European Digital Rights and the Internet Archive), companies (like Patreon, WordPress, and Medium), the Internet’s original architects and pioneers (like Sir Tim Berners Lee), and the UN Special Rapporteur for free expression have spoken out. Creators across the Internet are standing up for their right to create and express themselves, including Phil DeFranco, LeFloid, and TO JUZ Jutro.”

With that, Kyncl signs off by urging opponents of Article 13 to air their opinions on social media (#SaveYourInternet) and with policymakers via ChangeCopyright.org. The all-important EU vote is set to take place September 12, so expect a crescendo of often acidic debate over the next few days.

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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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