Tor is an anonymity tool and operating a relay or exit point basically means that the traffic of hundreds or thousands of users hit the Internet from your IP-address.

When pirates use Tor, it will then appear as if the traffic comes from this connection. This can lead to liability issues as Oregon resident John Huszar found out the hard way.

Back in 2015, the company behind the movie Dallas Buyers Club, which is known for its vigorous pursuit of online pirates, filed a federal lawsuit against the IP-address 173.11.1.241.

A few months later, this complaint was amended to list “Integrity Computer Services” as the defendant. As part of the proceedings, the filmmakers served a request for admissions, asking the defendant to respond to several statements.

This request remained unanswered, which turned out to be a crucial mistake. Not responding typically means that the court can assume the statements are true. In this case, it included an admission that Huszar unlawfully distributed a copy of Dallas Buyers Club, which seemingly opened the door to a substantial financial claim.

That John Huszar later repeatedly denied that he personally downloaded a pirated copy of the film in follow-up proceedings was irrelevant, according to the filmmakers.

Backed by the admission, Dallas Buyers Club proceeded to file a motion for summary judgment, asking the court to confirm that Huszar did indeed willfully commit copyright infringement.

This issue went to U.S. Magistrate Judge John Acosta earlier this year who, in his report and recommendation, sided with the movie company.

“The court finds the admissions resulting from Huszar’s failure to deny allegations in the operative complaint or respond to requests for admissions clearly establish Huszar willfully infringed on Dallas’s copyrighted material in violation of the Act,” Acosta wrote.

In most cases, these recommendations are accepted by the district court judge. That was bad news for Huszar, as it would make him liable for thousands of dollars in potential damages.

However, the order that came out this week shows that a previously overlooked issue turned the tables in favor of Huszar.

United States District Judge Michael Simon reviewed the objections that were pointed out by the defense, which highlight a crucial issue. When the request for admissions was served back in 2016, Huszar was not named as a defendant. 

At the time the complaint listed his company Integrity Computer Services as the defendant. This was replaced by Huszar in an amended complaint a few months later. However, that meant that the request for admission (RFA) wasn’t directed at Huszar personally.

“The only defendant in the case at that time was simply “Integrity Computer Services,” (no ‘a/k/a’) and that is the only defendant named in the First Amended Complaint,” Judge Simon writes in his order.

“Huszar, therefore, was not the party served with the April 12, 2016 RFAs. The facts sought in those requests thus cannot be deemed admitted by Huszar for failure to respond, and the Court’s order finding such admission is withdrawn.”

As such, the court decided not to adopt the report and recommendation. 

The procedural issue was missed by the defense initially, likely because Huszar was defending himself at the time, but the oversight has saved him for now.

“It is a technical issue that no ‘pro-se’ would likely catch. But RFA’s can affect a case significantly as was clear from the Magistrate’s decision.  This is the error we brought up to the District Court’s attention that led to the ruling in our favor,” Huszar’s attorney J. Curtis Edmondson informs TorrentFreak.

While Huszar escapes a ruling of willful copyright infringement based on the admissions, the case is not over yet. The motion for summary judgment is now reverted back to Judge Acosta for consideration on the merits. 

Huszar’s cross-motion of non-infringement is still on the table. Among other things, Huszar has argued that the evidence gathering software used in this case is flawed and unreliable.

Both sides are now allowed to submit supplement pleadings. Huszar ultimately hopes to prove that he is not guilty and have his legal bills paid. The filmmakers, on the other hand, plan to prove that the Tor exit node operator is guilty and demand damages.

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A copy of United States District Judge Michael Simon’s order is available here (pdf).

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With over 20 million subscribers of its main channel and over 30 million over its entire network, WatchMojo is one of the largest players on YouTube.

The Montreal-based video production company has been around for well over a decade and continues to expand its viewership, despite fierce competition.

While WatchMojo owes a lot of its success to YouTube, the company is also growing increasingly frustrated with rampant copyright abuse on the platform. We’re not talking about people who steal their content, but about companies that unlawfully claim their videos.

These complaints are far from new and we have highlighted these issues repeatedly over the years. However, when a channel the size of WatchMojo sounds the alarm bell, people should pay attention. This includes abusive rightsholders, which could be liable for millions of dollars in damages.

But let’s start with the basis for the recent uproar. Last weekend WatchMojo’s CEO Ashkan Karbasfrooshan published a video in which he exposed some of the worst Content-ID abusers. The video provides several examples of companies that claimed WatchMojo content which, according to the channel, is protected under fair use.

For example, when WatchMojo published a video commenting on an Avengers movie trailer, an outfit called Hexacorp (which does business as Orfium) claimed it, arguing that the trailer’s music was used without permission. Hexacorp represented Ramen Music, which licensed the track to Marvel, but apparently, WatchMojo wasn’t allowed to show it.

WatchMojo disagreed and protested the claim citing fair use. After all, the trailer and music were clearly used for commentary purposes. This worked and Hexacorp eventually let the claim go, but many other channels with less legal knowledge simply accepted the claim, allowing Hexacorp to monetize their videos.

What plays a major role here is that protesting Content-ID claims may eventually lead to copyright notices. These notices can result in “strikes” which can then cause people to lose all content in their YouTube channels. That’s not a risk many channels want to take.

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TorrentFreak spoke to WatchMojo’s CEO who informed us that this is just one of the many examples. Every month they receive hundreds of Content-ID claims across their channels. However, WatchMojo vigorously fights back and prevails on nearly every occasion.

Karbasfrooshan notes that Content-ID abusers come in all shapes and sizes. Some stand out in terms of volume but are quick to let go of claims once a channel protests. Others send only a few complaints but protest when channels push back.

While there’s no doubt that rightsholders should be able to pursue legitimate claims, WatchMojo believes that many see the system as a revenue-generating opportunity. They simply issue thousands of frivolous claims, knowing that many won’t be protested, even though there are clear arguments for fair use.

This means that the rightsholders will scoop up extra revenue with very little expense. After all, most Content-ID claims are automated.

In addition, WatchMojo also signals a possible anti-competitive angle. The channel receives a lot of strikes for content from the music company BMG.  These, again, often target fair use videos and are sometimes issued globally, even though the rights can only be enforced in certain countries.

The full expose is explained in detail in WatchMojo’s video, where Karbasfrooshan highlights that BMG’s parent company, Bertelsmann, also has a stake in ZergNet, which happens to be a direct competitor of WatchMojo on YouTube.

“Bertelsmann, through their investment arm BMDI, has invested in our direct competitor ZergNet, whose assets Looper, Nicky Swift and a bunch of others compete with us for the same audience, fighting for the same ad dollars, competing for the same eyeballs,” WatchMojo’s CEO notes.

Whether the behavior is anti-competitive or not, the overarching problem is that many rightsholders ‘abuse’ the Content-ID system, willingly or not. According to US case law, they are required to consider fair use when issuing takedown requests, something that doesn’t happen very often it seems.

Content-ID is a voluntary system that’s not rooted in law. However, WatchMojo believes that abusive rightsholders are opening themselves up to millions of dollars in potential damages from YouTube channels. One way this could happen is through a class action lawsuit.

Karbasfrooshan floated this idea in his initial video which triggered a lot of response from fellow channel operators. The basic idea is that a group of affected channels files a class action suit against an abusive rightsholder, with the goal of obtaining a settlement for unlawfully claimed and monetized videos.

In a follow-up video, WatchMojo explains in detail how this would work. What is clear, is that the potential damages are massive. According to a calculation made by the channel, rightsholders earned over $2 billion through unlawfully claimed videos over the past several years.

Whether the calculations hold up or not, it is clear that companies that send out a lot of claims against fair use content could theoretically face substantial damages. This, of course, has to be backed up in court, but according to WatchMojo’s CEO, who has plenty of legal experience, it’s a viable option.

“We are now actively exploring taking legal action against a couple of targets where we have built up a lot of evidence of wrongdoing, abuse, and received additional evidence from other channels too,” Karbasfrooshan tells TorrentFreak.

For now, WatchMojo is not ready to serve as a representative plaintiff in a class action suit. It hopes that by highlighting the potential risks for copyright holders, the associated companies will do the right thing and properly consider fair use.

WatchMojo has complained about Content-ID abuse for quite a while and it believes that some type of legal action against an abuser is inevitable. Whether that’s through a class action suit or not.

“It’s a matter of time, if not us, someone will come along and sue and win big,” Karbasfrooshan tells us.

WatchMojo’s CEO has spoken to lawyers who, once they were informed about what was going on, were also convinced that some type of legal action is inevitable.

“I assure you that once I explained how Content-ID worked vs. copyright law, and then how rightsholders abused it, the general consensus was: ok, these rightsholders are going to get sued,” Karbasfrooshan says.

“Now, whether that’s done via a class action suit or a direct lawsuit is a different matter. I think the former is interesting but the latter is practically more likely,” he adds.

Still, Karbasfrooshan hopes that lawsuits are not needed to address this. Ideally, copyright holders should change the way they operate and respect fair use, he says.

And there’s also a major role for YouTube here. They can make a simple change and whitelist channels that have good standing, so these are not harmed by frivolous claims.

“The answer is simple: it’s time for a separate class of channels for those who use the platform in a professional manner,” Karbasfrooshan notes.

The latter angle will be discussed in the third episode of WatchMojo’s four-part series on Content-ID abuse. In addition, the channel will also launch “The FU Show”, where it will break down and discuss fair use (FU) issues in regards to content claims. 

Needless to say, these videos are very informative, and there’s something in there for channel operators as well as copyright holders. 

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With a huge emphasis placed on the unlicensed distribution of music through platforms like YouTube, one might think that enforcement against other sources has taken a bit of a back seat.

However, traditional anti-piracy investigations are alive and well, carried out mostly in the shadows by teams of professionals. It’s relatively rare to hear about these roles in public but a new listing posted by the British Phonographic Industry gives a flavor of the kinds of skills one would need to hold such a job.

Titled ‘Evidence, Intelligence & Investigations Executive (Digital)’, the position currently waiting to be filled at the company is an important one. The BPI represents the interests of Sony, Universal and Warner in the UK, along with more than 400 independent labels.

“Collectively, all those members account for approximately 99 per cent of recorded music consumed legally within the UK each year,” the BPI notes.

The new addition to the BPI’s Content Protection team will have several key responsibilities, such as ensuring the industry group is in compliance with laws and regulations when evidence is collected in the pursuit of pirates.

He or she will also be responsible for investigating online infringement, and as such, will have previous experience of digital investigations and be fluent in the use of case management and forensic tools.

Given the nature of the work, candidates also require a good understanding of piracy and the tools used to carry it out. The same goes for web-hosting, Internet registries (domains etc), content delivery networks (Cloudflare etc) and advertising intermediaries, all of which can be leveraged to disrupt infringement.

Since it’s a primary tool to reduce infringement, enforcing content removal “across a variety of online platforms” will also be a key task. As detailed in our report last year, the BPI is a prolific DMCA notice sender but unlike many outfits operating with huge volumes, also appears to be one of the most accurate. This certainly fits the requirement for the lucky applicant to be “meticulous in work output.”

Another novel aspect is that the successful candidate will be required to manage test purchases, which could conceivably range from subscribing to an online pirate service through to buying a bunch of pirate karaoke DVDs from eBay. Interestingly, this will also entail managing “covert credit cards” and “covert drop addresses”.

But the undercover action doesn’t stop there. Also in the job description is the managing of “covert social media accounts”, which suggests a level of penetration into piracy circles that many believed existed but hadn’t yet seen written down in black and white.

At this point, there are probably quite a few readers thinking that not only does the job sound quite interesting, but they’re also qualified for the position. That might indeed be the case if one can also show expert use of Excel and PowerPoint and “good working knowledge” of IBM i2 and SQL databases. But from there the requirements go on and on.

Preferred candidates will have a background in law enforcement, criminal law, or cyber investigations. They will also be experienced in computer forensics and writing witness statements, utilizing their knowledge of copyright law, of course.

The reasons for this are made fairly clear in the listing. In addition to preparing intelligence and evidence that might be used in the prosecution of pirates, the lucky applicant will also spend one day a week working at PIPCU, the Police Intellectual Property Crime Unit.

There’s little doubt that the BPI will find the right person for the job, but ticking all of the boxes in the listing will be a big ask. Especially when assisting the BPI with its lobbying activities with ISPs and other service providers is also one of the job’s requirements.

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During April the Ukrainian government announced the launch of “Operation Pirates”, an anti-piracy initiative aimed at tackling the rising threat of online piracy.

“We must learn how to respect intellectual works, because at first glance, watching a videotape on a pirate resource does not pose any threat to the security of society,” said Ukrainian cyberpolice chief Sergey Demedyuk.

A memorandum accompanying the initiative was signed by Starlight Media (Ukraine’s largest broadcasting group), Media Group Ukraine (one of the largest media holding companies), TV channel Studio 1 + 1, Discovery Networks, IFPI-member Music Industry Association of Ukraine, and the Ukrainian Anti-Piracy Association.

Since the launch of the campaign, no pirate sites have been reported as fallen. This week, however, police announced that they had successfully taken down four video streaming platforms.

The main casualty was kinogo.co.ua, a site specializing in movies and TV shows. It was one of the most popular sites of its kind in Ukraine. According to SimilarWeb data, the site was good for around 500,000 daily visits in the month before its demise.

Close to 84% of the site’s traffic came from Ukraine, with many of those visitors also going on to visit UAFilm.top, a pirate site operating in the same niche receiving around 100,000 daily visits.

These sites, along with the recently-launched kino-hd.top (200,000 daily visits) and the relatively small kino-hd.top, were all shuttered in the latest operation. Police targeted the location from where the sites were administered and the home addresses of the suspects.

According to Ukraine’s cyberpolice unit, the operators of all four platforms were two brothers, aged 38 and 32, from the Dnipropetrovsk region in eastern Ukraine.

Interestingly, one of the men is reported as working for the government’s State Fiscal Service, which handles taxes, customs, and the fight against tax and customs fraud. As a result, officers also reportedly carried out a search at the suspect’s place of employment, seizing equipment.

As is common with the majority of similar platforms worldwide, the four now-defunct streaming sites are said to have generated revenue via advertising. No exact figures have been released but the authorities suggest income of several thousand dollars per month.

Police say that a pre-trial investigation under Part 3 of Article 176 of the Criminal Code of Ukraine, which deals with copyright and other intellectual property rights violations, is underway. If found guilty, the brothers face fines or imprisonment of up to six years.

In earlier operations carried out this year, Ukrainian authorities shut down more than 60 pirate sites, most operating in the streaming sector.

Meanwhile, the United States Trade Representative (USTR) has opted to keep Ukraine on its latest Priority Watch List published last month.

“Online piracy remains a significant problem in Ukraine and fuels piracy in other markets,” the report reads.

“Pirated films generated from illegal camcording and made available online cause particular damage to the market for first-run movies. In addition, inadequate enforcement continues to raise concerns among IP stakeholders in Ukraine.”

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For more than 15 years and mainly since the rise of BitTorrent-based sharing, sites and platforms offering Hollywood movies or TV shows have been wary of the MPAA.

At any moment, BitTorrent trackers and indexers could find themselves in the group’s crosshairs, targeted by full-blown lawsuits or threats that the same would follow, if infringing activity continued.

But while the threat was real, litigation has always been expensive, sometimes prohibitively so. Furthermore, video content being shared by pirates wasn’t always owned by the studios of the MPAA, allowing many sites to slip through the net.

In June 2017, the MPAA began plugging both of these loopholes with the launch of the Alliance for Creativity and Entertainment (ACE), a huge anti-piracy coalition featuring not only MPAA members, but companies like Amazon, Netflix, CBS, HBO, and the BBC.

After adding Discovery Inc. and two Viacom-owned companies back in March, ACE now has 33 members. This not only means that it’s becoming more and more difficult to run a ‘pirate’ video platform or service without treading on at least one member’s toes, but there are almost three dozen large to huge companies now sharing the financial burden of chasing down pirates.

Now, according to MPAA chief Charles Rivkin, ACE is about to become even more powerful.

In an interview with WorldScreen, Rivkin detailed some of ACE’s achievements so far, such as shutting down 123Movies and taking on TickBox and Dragon Box, companies operating in the so-called ISD (illicit streaming device) market. A case against Omniverse is still ongoing.

“We were able to win in court against pirate operators called TickBox and Dragon Box, and they represent a new threat: the internet streaming devices, the ISDs, that are basically devices that can be purchased completely legally but when loaded with illegal software, can do enormous damage to content. It’s a never-ending fight, but we’re starting to make a big difference,” he said.

“And it’s an existential threat for some of the small and medium businesses that make up the industry. I was speaking to some broadcasters in Paris who said that piracy can be as big as their entire bottom line. And the impact on entertainment companies is huge, so this is a top priority for us.”

That Rivkin mentions 123Movies (Vietnam), then Tickbox and Dragon Box (United States), followed by France (Canal+ is an ACE member), shows that the fight against piracy is going global. ACE has already targeted several Kodi-related platforms and add-ons in the UK since its inception, yet another sign that no important region is off-limits.

If there is business worth doing there, ACE either has it covered already or will have it in hand fairly soon.

“Every major market has a participating member. We’re in the process of dramatically expanding [ACE] even more. It is already the premier global effort to reduce piracy,” Rivkin added.

How this expansion will manifest itself is not yet clear, but it seems likely that ACE will continue with its strategy of ‘loud’ public litigation (such as that taken against TickBox and Dragon Box) and selective ‘quiet’ action against certain players.

Last month, ACE told TorrentFreak that it had “sought and obtained voluntary cooperation from a significant number of owners, operators, and developers of sites, add-ons, and services” that facilitate piracy.

“We will execute more planned global actions along these lines and look to continue our success protecting creators around the world,” ACE spokesperson Richard VanOrnum added.

These ‘quiet’ actions are of course intriguing.

From the limited information available to us, it seems clear that they vastly outnumber the volume of ‘loud’ actions seen thus far and mainly target products with a large audience (Kodi add-ons and builds, for example) but without the obvious commercial element of many ‘pirate’ sites and services.

However, we have received information which suggests that large platforms may not be immune from being presented with settlement agreements, which form part of the process to cease-and-desist.

This complicates reporting because documentation previously seen by TF requires those targeted not to tell anyone apart from their lawyers about the approach to shut down. In return, ACE promises not to make their identities known, meaning that details shared are kept to a minimum.

For example, last week huge IPTV service Vader shut down, stating that it had been approached by companies seeking its closure. The platform didn’t mention ACE directly but if anyone would like them to close down, ACE would be the prime candidate.

We asked ACE if the coalition was behind the closure and a spokesperson promised to send over a statement. Thus far, however, we haven’t received anything back. While a comment may yet be forthcoming, an additional document sent to TF (the veracity of which we haven’t been able to independently confirm), suggests that Vader has been given the opportunity to settle.

If that’s indeed the case, the matter could potentially disappear into the ether, as so many other services and tools have also done in recent times. Either way, we can probably expect much more of this type of action in the future, as ACE’s “drastic” expansion brings in more funds and tentacles in every corner of the world.

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