As reported Wednesday, police in Italy and several other European countries coordinated to take down Xtream Codes, at least one IPTV provider, and more than twenty individuals and related equipment linked to the services.

The precise roles of all these people remain unclear. However, there can be little doubt that emphasis is being placed on the importance of the Xtream Codes management system which, according to law enforcement officials, lay at the very heart of the targeted criminal operation even though the software didn’t supply any content.

This very large operation involved police forces in Italy, the Netherlands, France and Bulgaria. It was coordinated across borders with the assistance of Eurojust, an EU agency that helps agencies from member states to co-operate in criminal matters.

Yesterday afternoon, a press conference took place to explain how the operation panned out, who it had targeted, and to detail various additional pieces of information. It began with Filippo Spiezia, National Member for Italy at Eurojust, explaining that hundreds of officers had been involved in the operation to dismantle the technological infrastructure of a “criminal IPTV network.”

Spiezia confirmed that 181 servers had been taken down and seized and more than 800,000 users (police reported 700,000 earlier yesterday) had been disconnected from the Xtream Codes service when it was taken down.

In what became a common theme throughout the conference with several participants, Spieza sometimes appeared to speak generally about the entire operation, which included the takedown of at least one actual IPTV provider, then sometimes in relation to Xtream Codes alone.

This ambiguity and lack of clarity appear to be causing confusion. For example, Reuters reported the following yesterday:

“The biggest illegal platform shut down on Wednesday, dubbed Xtream Codes, had around 50 millions users worldwide,” Reuters reported, citing Gianluca Berruti of the Italian tax police.

“It sold a bundled pay-TV service that included premium content from Comcast’s Sky Italia, Netflix, Mediaset, Dazn, for a monthly subscription of 12 euros,” it claimed Berruti added.

Again, ‘pirate’ IPTV sellers utilizing the Xtream Codes platform may have been doing just that but, at this stage, the second claim above doesn’t make sense or indeed add up. Fifty million users multiplied by 12 euros a month is a staggering amount of money that wasn’t supported by financial information provided later in the conference.

In common with all of those present at yesterday’s gathering, Filippo Spiezia expressed satisfaction at the success of the international operation, noting that cross-border cooperation had proved invaluable since the investigation began.

“During these months of work at Eurojust, we have adapted to the judicial needs of the Italian authorities….to the specific legal requirements of our new partners. This is the first example of an action conducted with these modalities,” he said.

“Thanks to this action we have sent out a very clear signal to criminals that even in this specific domain, even in this specific area which represents the most advanced form of criminality, we will [respond] to them.”

Vincenzo Piscitelli, Deputy Prosecutor in Naples, painted a picture of small offenses by end-users (pirate IPTV subscribers) fueling “huge illegal activities” behind the scenes.

“So this is why we really tried to hit these organizational structures at the heart and that was done through the investigation that was carried out by the public prosecutor’s office of Naples,” he said.

Next up was Valeria Sico, Public Prosecutor in Naples. Sico spoke quickly and through a translator, so that may account for what at times felt like confusing output. While clearly an expert in law, those looking for clear and specific technical details from the Prosecutor failed to receive them.

Some of what Sico said made sense but the fact that Xtream Codes isn’t normally understood to be an actual provider of illegal streams (although it is undoubtedly used by outsiders to manage them), it’s worth reproducing some of her words in full, to see how muddied this has become.

“There was software created by two citizens of Greek nationality. They have a company which had a legal seat in Bulgaria,” Sico said, confirming the information previously supplied by the Italian authorities.

“So this software enables the disclosure and the transmission of [pirate] TV signals through digital ways to different servers which were constructed by the organizations, by the host providers in the Netherlands and in France.

“Through these servers, the signal – the digital signal – was therefore sent to different IP addresses of final users and these people would then receive the [illegal] television signal in their homes.”

Again, it’s worth reiterating that Sico was speaking through a translator so some context and detail may have been lost but from there, the explanation didn’t really become any more clear.

“For the first time, having identified the company that was producing the software, we went directly to the company that was producing the software so they were enabling people to decrypt the signal,” she said.

“So this is why we also went right to the physical place where the disclosure [broadcast] of the signal would take place within these hosting provider companies in Holland and in France….the signal was broadcast to the company that had created the illegal signal – the software company – and then that was sent to the end-users.”

Again, this isn’t the broadly accepted function of the Xtream Codes system, unless the company itself was also involved in the provision of illicit streams. That claim has been the subject of speculation in the past 24 hours, perhaps based on the Reuters report.

Thankfully, Cybercrime Prosecutor Lodewijk Van Zwieten from the Netherlands kept things fairly simple in his prepared speech.

He began by noting that 93 servers had been taken down in one location in the Netherlands, all of which had targeted the Italian market. This seems to be a reference to equipment operated by the actual IPTV provider shown in the video published yesterday.

According to a chart published by the authorities and reproduced below, it was using the Xtream Codes management software, something which seems to have led the company’s software becoming embroiled in the investigation.

Van Zwieten said that no offenses had been committed by Dutch citizens but confirmed that local Internet infrastructure had been abused by the ‘criminal’ network.

“In the Netherlands, we are proud of the fact that we have a big affordable hosting industry which is very important for our economy but we don’t want these services to be used on a large scale for criminal activities,” he said.

“That is why we find it so important, together with the Dutch hosting industry, to act very diligently against abuse. So it was our pleasure to comply with a request from our Italian colleagues.”

Riccardo Croce, Head of Financial Cybercrime Investigation with the State Police in Italy, said that the “criminal group” (again, no precise explanation of which entities that phrase encompasses) had five million users in Italy alone, contributing to the 2,180,000 euros generated every month in illicit funds.

As highlighted earlier, the figures offered by various parties don’t add up, lack clarity, and as a result, appear to contradict each other.

In common with Sico’s speech, Creco’s was also presented through a translator. However, Creco was absolutely clear that the plan was to get to the “complex mapping of international technological infrastructure and to really hit them at the heart of the infrastructure.”

He spoke briefly about the complex technological network being used to transfer the actual streams but then appeared to touch on the importance of Xtream Codes once again, noting that entities in the chain were able to use a particular service to sell the product to the public.

“Our investigation was based on this, to go to the source level of this illegal signal, to disarticulate completely all servers in various European countries in which the infrastructure existed to replicate these signals,” Creco said.

“And, to hit for the first time, the company that was offering this very interesting support to the criminal infrastructure which put at its disposal these panels, network panels, the computer system through which the multitude of pay channels were able to be sold and resold through a chain of people called resellers throughout Europe so it could end up at the end-users.”

The paragraph above is possibly the clearest description of Xtream Codes’ function from someone in authority since yesterday’s raids. Creco’s statement not only separates the system from the actual provision of illegal streams but describes its function as most people understand it.

While many will argue that Xtream Codes was content-agnostic and capable of being put to plenty of legitimate uses, it’s clear that the authorities do not believe that was the intent at all. Through their statements, as confusing as they were at times, the message seems to be that Xtream Codes was perhaps the most important cog in the wheel.

There are many huge questions now being asked in the unlicensed IPTV community but perhaps the biggest is what information was held on the servers of Xtream Codes at the moment they were seized. They are a potential goldmine of information, not only relating to the many IPTV providers and sellers that used the service but also their customers. The worldwide fallout could be immense.

Importantly, however, Xtream Codes (as popular as it was) is not the only product out there capable of doing this kind of management job. So while the company’s days may already be over, others are already gearing up to fill in the gaps. Whether anyone will want to centralize their data with a vulnerable third-party again will be up for debate, however.

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Every manufacturer of mass-market video gaming consoles has faced the possibility of piracy on their platforms.

The tools to prevent piracy usually come as a two-man team of hardware and software trickery (technological protection measures) but these are often defeated, later if not sooner.

Nintendo, in particular, has been struggling with piracy on its Switch console, facilitated by circumvention tools (particularly SX Pro and SX OS) promoted and made available to users via various websites.

In an effort to tame the threat, Nintendo went to the High Court of England and Wales, requesting an injunction that would prevent subscribers of several major ISPs from gaining access to the sites in question.

As is common in such cases, the ISPs themselves – Sky, BT, EE, TalkTalk, and Virgin Media – were the named defendants in the case. Nintendo (NCL) asked the Court to compel them to block team-xecutor.com, sx-xecutor.com (both operated by Team Xecutor) plus sxflashcart.com and xecuteros.com (previously stargate3ds.org).

Most ISP blocking in the UK is the result of copyright infringement proceedings but Nintendo’s opening drive against the above sites is that they use the company’s trademarks without permission.

Justice Arnold said that in his opinion it is “beyond dispute” that the sites use Nintendo’s marks in order to promote circumvention devices. He also agreed that the devices were made available to the public on the basis they would be used to provide access to infringing content, since they all mention piracy in promotional material.

“The injunction sought is necessary to prevent, or at least reduce, substantial damage to NCL. It appears that substantial sales of the circumvention devices have been made in the UK, that substantial quantities of pirated games have been downloaded in the UK and installed on Switches using the circumvention devices and that NCL has sustained significant losses as a result,” Justice Arnold writes.

“No alternative measures are realistically available to NCL since NCL has been unable to identity the operators of the Target Websites, who may well be abroad.”

The Judge further notes that cease and desist notices sent by Nintendo’s lawyers were ignored by the target sites while hosting providers, “to the extent they could be identified”, also took no action.

While noting that blocking can be easily circumvented, the Judge said that blocking can be effective in reducing traffic to the sites in question, acts as a deterrent, won’t be detrimental to the ISPs’ business, and is therefore a proportionate response to infringement.

The order handed down by Justice Arnold on Tuesday can be obtained here

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Thousands of retailers around the world sell Android-based set-top devices that are able to stream Netflix and other services to customers’ homes.

However, an intriguing lawsuit filed in Canada last week alleges that employees at some companies went too far with their sales promotion pitches by pushing the products for infringing purposes while advising potential buyers on how to pirate content with them.

The lawsuit, filed in Federal Court September 11 by Super Channel owner Allarco Entertainment, targets Staples Canada, Best Buy Canada, London Drugs, Canada Computers, several related companies and up to 50,000 ‘John Doe’ customers.

Allarco Entertainment alleges that one or more of the retailers and their staff (collectively described as “4Stores”) promoted, encouraged, or instructed prospective buyers of Internet streaming devices on how to use and/or modify them to obtain copyright-infringing content. As a result, the devices are described as “Pirate Devices” throughout the lawsuit.

On a website promoting the case, Allarco has published a video as part of its 19-month-long “4 Stores Investigation” which claims to show employees at the defendant companies selling “pirate devices” in a way that contravenes several aspects of local law.

The company says it has 100 hours of undercover recordings to back up its claims. The short video currently available has recordings of alleged staff members advising users to install Kodi, use Google to find Kodi “setup videos”, or even visit other sellers operating elsewhere that will configure the devices for piracy.

Super Channel CEO Don McDonald told CBC that his company showed the video to the four retailers in the spring but that didn’t bring the alleged behavior to an end.

“I wanted them to be step up and be a champion in changing the culture. They didn’t see the light,” he said. “We want the stores to stop. We want the stores to say, ‘Hey this is wrong’.”

While the lawsuit continually describes the set-top boxes as “Piracy Devices” – some of which had Kodi pre-installed – there’s no information in the lawsuit or accompanying video that specifically states that any had dedicated piracy software or services embedded at the point of sale.

That important point will probably become evident as the lawsuit progresses but the complaint does note that “one or more” defendants breached the Copyright Act by “showing pirated programming to customers in their stores.”

The lawsuit itself goes straight for the jugular, reading not dissimilar to many others that have previously targeted sellers of unambiguous dedicated ‘pirate’ devices or services.

“The devices which are the subject of this action have been programmed to steal programming i.e. view the Plaintiffs Programming without authorization and without paying for it,” the complaint reads.

“The 4Stores Defendants or one or more of them have offered for sale, sold, leased and continue to sell or lease Pirate Devices to John Doe Customers and advised, educated, counseled, encouraged, directed, induced, enabled and authorized John Doe Customers to achieve, download, install and operate services that result in the operation of the Pirate Devices and/or that enable and allow the John Doe Customers to access the Infringing Content.”

The complaint, which also references up to 50,000 ‘John Doe’ customers as defendants, states that the 4Stores know their identities and as such, they will “be identified and added as identified parties following disclosure.” Allarco is seeking an order to have these customers served by mail.

The TV company states that the alleged actions of 4Stores detailed above were designed to “encourage and increase” the sale of ‘Pirate Devices’, which would not have been sold had it not been for the “education” provided by the 4Stores staff. When combined, this created or contributed to a culture of “widespread copyright infringement” causing damage to the plaintiff.

The complaint states that the customers of 4Stores who bought such devices and accessed infringing content breached the Copyright Act. At this stage, however, there’s no information that any evidence has been gathered to prove that happened. Nevertheless, the complaint alleges Contributory Infringement by 4Stores as a result of the companies inducing customers to infringe.

Allarco further claims that the 4Stores defendants sold devices that are “designed or produced primarily for the purposes of circumventing a technological protection measure”, and/or “the uses or purposes of which are not commercially significant other than when used for the purposes of circumventing a technological protection measure.”

Finally, there are additional claims that the defendants breached the Radiocommunication Act, Trademark Act (also with damage to goodwill), engaged in intentional interference with business, unjust enrichment, and counseling to commit an offense.

In summary, Allarco is demanding interim, interlocutory, and permanent injunctions including, but not limited to, preventing the defendants from “communicating or facilitating the communication” of its works without permission, including by “configuring, advertising, offering for sale or selling Pirate Devices.”

It also wants the Court to issue a ban on the 4Stores from “teaching, inducing, coaching or demonstrating to others including their own staff, friends and families how to steal or pirate the Plaintiff’s Works.”

The Allarco Entertainment / Super Channel complaint can be found here (pdf)

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Sitting in the heart of Europe geographically but outside the European Union politically, Switzerland is largely free to make its own legislation.

On the copyright front, this has brought the country out of line with standards adopted by its neighbors, something that has drawn criticism from entertainment industry companies, particularly those in the United States.

In 2017, proposals to amend the country’s copyright laws were drafted but they failed to fully address key complaints from the United States Trade Representative (USTR) made on behalf of rightsholders.

A major complaint is that the country’s private copying exception shouldn’t apply to content obtained from illegal sources, i.e pirate copies of movies circulating on peer-to-peer networks such as BitTorrent. The USTR also had issues with the current liability framework for sites and hosting services that facilitate and profit from piracy.

After a long trip through the corridors of power, Switzerland’s National Council adopted amendments to copyright law Monday but at first view, there seems little to please the United States.

First up, regular citizens who download copyrighted content from illegal sources will not be criminalized. This means that those who obtain copies of the latest movies from the Internet, for example, will be able to continue doing so without fear of reprisals. Uploading has always been outlawed and that aspect has not changed.

Second, the drive to have pirate site-blocking introduced into Swiss law has been rejected. Unlike elsewhere in Europe, where the practice is widespread and supported by EU law, ISPs will not be required to block ‘pirate’ platforms as some copyright holders had demanded.

On the hosting and liability front, there will be changes, but at this early stage, it’s unclear how that will play out on the ground.

SwissInfo reports that the reforms will force local hosting providers to remove illegal content from their servers but adds that parliament rejected rules that would compel online platforms to check whether uploaded content is copyrighted.

A “take-down-stay-down” system had been championed (which would presumably require content to be checked against previous takedowns) but elsewhere it’s claimed that the new legal framework “favors self-regulation” to fight piracy at the hosting level.

While an extension from 50 to 70 years copyright protection for musical and photographic works will be welcomed by copyright holders, the failure to outlaw downloading of pirated content for personal use will be absolutely unacceptable to the United States and the MPAA in particular.

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