Back in April, the Alliance for Creativity and Entertainment (ACE), an anti-piracy partnership forged between Hollywood studios, Netflix, Amazon, and more than two dozen other companies, sued Florida-based Set Broadcast, LLC.

The entertainment industry companies accused Set Broadcast of running SET TV, an unauthorized IPTV service offering otherwise subscription TV channels and media without appropriate licensing.

“Defendants market and sell subscriptions to ‘Setvnow,’ a software application that Defendants urge their customers to use as a tool for the mass infringement of Plaintiffs’ copyrighted motion pictures and television shows,” the complaint reads.

Despite the legal pressure, SET TV had remained online but that all changed last week when it suddenly disappeared. In response to customer complaints, SET TV implied that technical issues might be to blame and it would eventually return.

However, a filing with a California District court this week reveals that the SET TV ride appears to be over.

“Setvnow is no longer available. It is no longer marketed and subscriptions are no longer sold,” lawyers for Set Broadcast, LLC reveal in their filing.

What follows is a point-by-point addressing of each issue raised in the ACE complaint, with three features catching the eye: acceptance that they offered a content service, claims that they lack knowledge and information on a large number of points, plus repeated use of the word ‘deny’ whenever infringement is mentioned.

Set TV begins by admitting that it sold subscriptions to its service and acknowledging that marketing material detailed in the ACE lawsuit looks familiar. It also concedes that it encouraged users to download and install the Setvnow software on various devices. The company also agrees that it sold a hardware box that was, at least in part, designed to work with the Setvnow service.

However, in response to claims of marketing efforts informing “customers who want more of a cable box experience” that for just $89, they can “simply turn it on and watch TV” without having to do anything more than “PLUG AND PLAY,” the defendants claim to lack knowledge or information.

From here, at least as far as a technical rebuttal to ACE claims go, the responses are relatively blunt and often repetitive to read.

First up, ACE claimed that defendants sold illegal access to their copyright works, but that’s something Set Broadcast flatly denies.

ACE also noted that while the service provided “hallmarks of using authorized streaming services” such as a friendly interface, customers only paid money to Set Broadcast, not the copyright owners. Set Broadcast says it has no knowledge of how customers perceived the service but admits to not paying any money to ACE “for the Setvnow service.”

To the next dozen points, Set Broadcast claims to have “no knowledge or information”, mostly in response to basic statements of fact such as who the plaintiffs are and where their offices are located.

In response to the claim that defendant Jason Labossiere is the owner and operator of Set Broadcast, LLC, Set Broadcast issues a flat denial but offers no additional information. Further details concerning Nelson Johnson, a manager at Set Broadcast, are also picked over, with questions raised over his employment status and place of residence.

From here, Set Broadcast addresses a number of statements made by ACE members regarding who the plaintiffs are, what they do, and what content they own. On each count, Set Broadcast claims to have no knowledge or information, which makes for fairly bland and unconvincing reading.

That being said, Set Broadcast doesn’t shy away from responding on a number of crucial issues. The company acknowledges that promotional material produced by the plaintiffs, showing that the SET TV service offered 500 channels and “thousands” of “on demand” options for $20, is theirs.

It also admits to selling subscriptions and concedes that the SET TV software facilitated streaming of “captured content”, including live content, and delivered it to Setvnow users. The company also admits to using third-party sources for on-demand content.

But despite admitting to many of ACE’s claims over the marketing and provision of the service, whenever the plaintiffs used the word “infringing” to describe the nature of the content delivered to users, Set Broadcast has a one-word response.

“Defendants’ customers use Setvnow for intended and unquestionably infringing purposes, most notably to obtain immediate, unrestricted, and unauthorized access to unauthorized streams of Plaintiffs’ Copyrighted Works,” ACE wrote.

“Deny,” came the response.

“Defendants promote the use of Setvnow for overwhelmingly, if not exclusively, infringing purposes, and that is how their customers use Setvnow,” ACE added.

“Deny,” Set Broadcast repeats.

With a distinct pattern emerging, there’s no need to detail the one-word response to each of ACE’s allegations including that the defendants willfully and intentionally induced and contributed to the infringement of their rights and that ACE members are entitled to damages and Defendants’ profits in amounts to be proven at trial.

The claim that ACE members are entitled to attorneys’ fees plus preliminary and permanent injunctions are also given the same two-syllable treatment. However, at the end of the filing, Set Broadcast springs into life, detailing three affirmative defenses against all of ACE’s charges.

First up, Set Broadcast claims that ACE failed to mitigate damages. Second, the company states that “Plaintiffs’ claims are barred to the extent Plaintiffs have forfeited or abandoned copyright or failed to comply with necessary formalities.” Finally, Set Broadcast suggests it could be an “innocent infringer”.

“Damages are limited under 17 U.S.C. § 504(c)(2) because Defendants ‘were not aware and had no reason to believe that [their] acts constituted an infringement of copyright’,” Set concludes.

Since SET TV is now apparently a thing of the past, it will be interesting to see how this case develops. While Set Broadcast flatly denies any infringement of ACE members’ rights, it doesn’t deny that it’s been running a pay service which facilitates the delivery of third-party content to its customers.

The big questions now are whether the case will ever head to a full trial and if the defenses cited by SET TV provide more than a sliver of hope for the company.

—

A copy of Set Broadcast’s response to ACE’s complaint is available here (pdf)

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Soon after the turn of the century, P2P consumption of unlicensed media quickly dominated the file-sharing landscape.

The BitTorrent protocol emerged as the unchallenged kind of peer-to-peer transfers and for many years no rival could get anywhere near its level of market saturation.

Then, soon after the turn of the decade, the tide began to turn. With cheaper, faster bandwidth becoming increasingly available to a broader user base, opportunities to stream content directly from websites gathered unprecedented momentum. What began several years earlier as a relatively niche activity, soon turned into a content monster.

This critical shift in consumption habits was interesting on several fronts, not least since it made piracy accessible to relative novices via the growing Internet-enabled set-top box market.

As a result, illegal streaming is now considered one of the major threats, but various pro-copyright groups are concerned that current legislation doesn’t go far enough to tackle those involved in supply.

The problem was summed up in April 2015 testimony before the House Judiciary Committee by then-Register of Copyrights Maria Pallante.

“Currently, criminals who engage in unlawful internet streaming can only be charged with a misdemeanor, even though those who unlawfully reproduce and distribute copyrighted material can be charged with a felony,” Pallante said.

“This distinction makes no sense. As streaming becomes a dominant method of obtaining content online, unlawful streaming has no less of an adverse impact on the rights of copyright owners than unlawful distribution.”

In a new paper published by the Free State Foundation (FSF), a think tank founded in 2006 which receives regular donations from the MPAA, streaming is again described as a misdemeanor offense and one that should be taken more seriously to protect copyright holders.

In its report ‘Modernizing Criminal Copyright Law to Combat Online Piracy’, FSF notes that copyright holders face difficulties prosecuting mass-scale willful infringement via civil lawsuits. So, to give them the assistance they require, Congress should upgrade piracy via streaming to a felony offense.

“Congress should update criminal copyright law to better address growing copyright piracy taking place through online streaming sites and enabled by illicit streaming devices,” FSF writes.

“Currently, willful copyright infringement via online streaming is only a misdemeanor, whereas willful infringement via digital downloading is a felony when statutory minimums are satisfied.

“This disparate treatment of streaming and downloading has no principled basis. Consumers increasingly access copyrighted video and music through streaming.”

FSF states that punishments for misdemeanor copyright infringement (willful infringements of exclusive rights other than reproduction and distribution) include up to a year of prison and a fine of up to $100,000, or both.

Punishments for felony copyright infringement usually include up to five years in prison or a $250,000 fine, or both. Due to its scope, the latter option for serious offenses is viewed by FSF as a more significant deterrent that can better protect copyright holders.

“By making willful infringement of multiple or high value copyrighted works via online streaming a felony, Congress would empower law enforcement to better combat black market online traffickers in copyrighted content,” FSF adds.

In addition to the more severe sentencing of those who stream to the public, FSF would like to see law enforcement given more tools to catch them in the act in the first instance. In some quarters, its suggestions are likely to be viewed as extremely controversial.

“Additionally, Congress should consider providing federal law enforcement with more tools, including the authority to seek wiretaps to obtain evidence of suspected criminal copyright activities, to combat online piracy. Similar wiretap authority already exists in the case of theft of trade secrets and economic espionage,” FSF writes.

The report isn’t specific as to which players should be disrupted via such legislation, but repeated references to piracy-enabled set-top boxes, addon-enabled software, hosting services and others in the streaming ecosystem indicates a tendency towards plugging loopholes across the board in a largely untested and still-developing market.

What also seems clear is a desire to shift enforcement costs onto the state, rather than them being carried entirely by copyright holders who would otherwise have to engage in difficult and expensive civil litigation.

“Despite suffering substantial harm on account of online piracy, copyright owners are often ill-equipped and financially unable to combat such piracy through civil lawsuits,” FSF reports.

“Pirates of copyrighted content are not often amenable to service of process and to civil litigation. Unsurprisingly, many technically sophisticated online piracy operations are designed to avoid accountability to copyright holders and to the civil justice system.

“Thus, circumstances clearly exist in which the civil justice system is inadequate or unable to address or combat online piracy operations.”

While the terminology used in the FSF report can at times suggest a tightening of the law against those who stream to the public and those who consume streaming content, it eventually makes clear that such legislation should be directed “to online traffickers in copyrighted content, not individual Internet users.”

It also states that “reasonable safe harbor provisions” should exist for online service providers to receive immunity from criminal and civil liability, providing they remove or disable access to infringing content when advised by a rightsholder.

Considering the donations FSF receives from the MPAA, it’s probably safe to assume that the report’s recommendations are broadly aligned with those of the Hollywood group. In that respect, it’s interesting that the studios feel that current law exposes them in some way.

Thus far, tools to tackle administrators of pirate streaming sites in the US don’t appear to have been lacking but perhaps there is currently a little too much room for maneuver.

The full report can be downloaded here (pdf)

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To protect copyright holders, YouTube uses an advanced piracy recognition system that flags and disables videos which are used without permission.

This system, known as Content ID, works well most of the time, but it is far from perfect.

It’s not well equipped to determine whether content deployment is protected under ‘fair use’, and in some cases it even views white noise or birds chirping as piracy.

Over the past several days, an even more worrying trend has appeared. Several popular YouTube accounts including those belonging to ‘MIT OpenCourseWare‘ and the ‘Blender Foundation,’ have suddenly had all their videos blocked.

People who try to watch one of the freely available MIT courses on YouTube get the following message, which typically appears if an uploader doesn’t have the rights to show content locally.

“This video contains content from MIT. It is not available in your country.”

The message appears in all locations that we were able to check, suggesting that it may very well apply worldwide. In any case, on social media there’s no shortage of people mentioning that they can no longer access the courses.

Blocked courseware…

The issue hasn’t gone unnoticed by MIT’s OpenCourseWare team which is investigating the matter, without pointing fingers.

“You may have noticed that we are having some trouble with our videos! Please stand by. The elves are working around the clock to fix the issue,” they write, referring people to non-video content in the meantime.

Interestingly, the MIT case doesn’t appear to be an isolated incident. Another organization that was hit by the same mysterious blocking efforts is the Blender Foundation.

The nonprofit organization, which is leading the development of the open source 3D content-creation application Blender, has also had its videos blocked.

Ton Roosendaal, Chairman of the Blender Foundation, noticed the issue on Saturday and contacted YouTube. “This is most probably an error from their side,” Roosendaal said.

At the time of writing, the issue still hasn’t been resolved.

What the heck…

Both organizations have verified YouTube accounts and many subscribers, which makes them high profile targets. However, two days have passed and it’s still unclear what’s going on.

The blocking message is part of YouTube’s piracy filter system, but why it was triggered is unknown. As the original publishers, both certainly have the right to publish the videos in question.

Looking even further, we were able to spot dozens of accounts which show similar “blocking” messages. They include verified ones, such as India’s Press Information Bureau, soccer club Sparta Praha, and England Rugby.

TorrentFreak reached out to YouTube to ask why the videos of these accounts have been blocked but at the time of publication, we had yet to hear back. Something appears to be awfully wrong though.

The timing of the incident is interesting, to say the least. This week there’s an important vote scheduled in the European Parliament, which will determine the course of EU copyright law.

One of the most contested changes is the so-called “upload filter,” which is detailed in Article 13 of the copyright reform proposal. According to opponents, such YouTube-like piracy filters are a threat to free speech.

These apparent “mistakes” show that there is a point to that.

Ironically, even French politicians, who were expected to vote in favor of the upload filters, may now reconsider their stance after YouTube temporarily disabled their account following three copyright strikes.

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Assisted by police in France and the Netherlands, the FBI took down the “pirate” Android stores Appbucket, Applanet, and SnappzMarket during the summer of 2012.

During the years that followed several people connected to the Android app sites were arrested and indicted, resulting in prison sentences for some.

SnappzMarket’s Scott Walton was handed a 46-month prison sentence for conspiracy to commit copyright infringement, and his colleague Joshua Taylor was sentenced to a 16-month term.

While some defendants pleaded guilty in order to get a reduced sentence, not all did. David Lee, a California man linked to Applanet, decided to fight the case instead, and not without success.

The US Government had charged Lee with aiding and abetting criminal copyright infringement (pdf). In addition, he was charged with conspiring to infringe copyrights and violating the DMCA’s anti-circumvention provision.

As the case progressed, it became clear that the U.S. Government’s evidence wasn’t as strong as initially thought. Before the trial even started, the prosecution voluntarily dropped the criminal copyright infringement charge.

What remained was the conspiracy charge, but after hearing evidence and testimony from both sides of the case, the jury was unable to issue a unanimous decision. As a result, the case ended in a mistrial two years ago.

The Department of Justice did not let the case go though. Soon after the mistrial, it informed the court that it would re-try Lee. This second trial was delayed a few times but never took place.

Instead, the US Government asked the court to dismiss the indictment against the alleged pirate app store operator, without providing any context. This request was granted earlier this week, which means that Lee is relieved of all charges.

It is not clear what moved the US to dismiss the case. TorrentFreak contacted both Lee’s lawyers and the US Department of Justice for comment, but at the time of publication, we have yet to hear back.

However, with the indictment dismissed, Lee can close this chapter of his life after nearly six years.

Indictment dismissed

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Founded around the turn of the last century, Soulseek is a small dinosaur in the file-sharing world.

Created by former Napster programmer Nir Arbel, the application swiftly turned into a tight community of music fans, which is still active today.

Over the years Soulseek operators Nir and Roz Arbel have seen other file-sharing tools come and go, but all this time they remained dedicated to their principles. Despite its name, Soulseek had long found its purpose.

While it kept a relatively low profile, Soulseek is not immune to the “stigma” that comes with being a file-sharing tool. In 2015, PayPal cut off its ability to collect donations, claiming that sharing tools required pre-approval, even though that policy didn’t exist when it signed up.

Soulseek is not a profit-oriented platform but donations are welcomed. Without PayPal, this became a challenge, but luckily for the developers, the Electonic Frontier Foundation (EFF) was able to intervene.

February 2016 everything returned to normal when the PayPal account was restored, for a while at least. Earlier his year, PayPal apparently changed its mind and booted the application once again.

Soulseek operator Roz Arbel was told that the application violated the payment service’s acceptable use policy and that ‘pre-approval’ was required for ‘file-sharing’ tools. It was pretty much the same recycled argument from years before.

Faced with this deja-vu, Soulseek turned to EFF for help once again, but this time PayPal wouldn’t budge.

“PayPal made it clear that they’re not willing to offer Soulseek financial services any longer. The company did give the Arbels access to their funds and tax documentation, after a request from EFF,” the digital rights group writes.

EFF asked whether PayPal’s latest ban was linked to a concrete copyright complaint, but the payment processor didn’t provide any further information. It just confirmed that Soulseek was banned, apparently for good.

This stance doesn’t come as a complete surprise. PayPal is widely known for its aggressive stance towards BitTorrent sites, Usenet providers and file-hosting services after all.

While some cases may be clearer than others, EFF sees the Soulseek example as a clear illustration of financial censorship.

“What the Arbels are experiencing is a form of financial censorship that has, unfortunately, become increasingly widespread. Following the law isn’t enough—PayPal apparently expects a small message board service with a file-sharing function to do far more than the law requires.”

“PayPal explained to us that they will cut off sites that ‘allow for the transfer or download of copyrighted material.’ Taken literally, that’s a staggeringly broad claim,” EFF writes.

EFF points out that pretty much all content on the Internet is automatically copyrighted. Still, there are thousands of online services that allow people to share it. Downloading copyrighted material is also possible on Dropbox and Google Drive, for example.

In PayPal’s policy, the company suggests that merchants must have a procedure to both “monitor” the files on their service and “remove or otherwise prevent access” to copyright-infringing work. Perhaps that’s where Soulseek goes wrong, but that wouldn’t be fair according to EFF.

“If payment processors were to cut off Internet services simply because they could be used for copyright infringement, a huge swath of the web would lose the ability to accept payments,” EFF writes.

“As a matter of policy, Soulseek respects its users’ privacy by not surveilling their conversations or file exchanges. Violating users’ privacy shouldn’t be the price of entry for using a payment processor.”

It’s clear that Soulseek and PayPal have parted ways. While EFF may not be able to change that, it encourages PayPal and other Internet companies to be more transparent about when and how often they terminate accounts due to complaints from governments or copyright holders.

PayPal’s file-sharing service policy

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