In recent years, file-sharers around the world have been pressured to pay significant settlement fees or face legal repercussions.

These so-called “copyright trolling” efforts have been a common occurrence in the United States for roughly a decade, and they still are.

Malibu Media, the Los Angeles-based company behind the ‘X-Art’ adult movies, is behind many of these cases. The company has filed thousands of lawsuits in recent years, targeting Internet subscribers whose accounts were allegedly used to share Malibu’s films via BitTorrent.

These cases generally don’t make it to trial and there are several examples where the rightsholder opted to voluntarily dismiss a case when a defendant pushed back. This is also what happened in a lawsuit that was filed against Tim McManus. 

The adult entertainment company named McManus in a complaint last year and later added his company Greenwood Digital as well. However, these defendants were not intent on settling and fought back. They filed a counterclaim for “abuse of process” against Malibu Media and requested discovery. 

The defendants were ready to fight the case on its merits as that would help them to clear their names. However, Malibu Media then decided that it would no longer pursue the case. 

While we have seen such voluntary dismissals in the past, in this case, the adult entertainment company gave a rather unique explanation. It informed the court that it chose not to continue because the defendants are “IT professionals” who know how to hide infringing activity.

“Plaintiff has elected not to pursue its claim against Defendants as present evidence does not support the time and expense that would be incurred in an attempt to bear out Defendants’ infringer status as a direct or contributory infringer as it appears the Defendants are sophisticated IT professionals with the knowledge to hide infringing activity.

“For this reason, and to conserve judicial resources and prevent unnecessary expense for the parties, Plaintiff respectfully requests that this Court dismiss with prejudice Plaintiff’s claim against Defendants,” Malibu Media added.

In essence, Malibu argues that it’s not financially feasible to pursue the matter because the IT company can, presumably, hide any infringing activity despite the evidence it has collected. 

McManus and his IT company deny these accusations and believe that the rightsholder didn’t have any proper evidence to begin with.

They are not happy with this request for a dismissal, as it will make it harder for them to clear their name and get compensated for the costs they have incurred thus far in their defense. They made this clear in a filing submitted to the District Court of New Jersey yesterday. 

According to the defendants, the allegations made by Malibu Media have led to both financial and reputational damage. They request the court to deny the motion to dismiss, allowing the case to be fought on its merits.

“Defendants have been severely prejudiced by being forced to expend substantial sums of money and time to defend against plaintiff’s claims and pursue their Counterclaims.  In addition, by the mere existence of plaintiff’s lawsuit against defendant Tim McManus, Mr. McManus’s reputation and ability to secure business have been negatively affected,” the defendants argue. 

In an additional certification, defendant Tim McManus writes that the case has harmed his reputation. Among other things, he says that the false accusations were brought up by one of his students at Fordham University. 

“It is a challenge explaining to the students that I did not download the titles outlined in the plaintiff’s Complaint. These accusations have harmed my reputation since I cannot say (yet) that I won a favorable judgment in the case,” McManus writes.

McManus stresses that his company is also harmed by the case and wants to fight the allegations in court so he can properly refute the claims. If the case was simply dismissed, as Malibu wants, that wouldn’t be an option. 

It is now up to the court to decide whether this case will be dismissed or whether McManus and his company will have the chance to clear their names and request compensation. 

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A copy of the defendant’s opposition is available here (pdf). The matter is currently scheduled to be discussed in a court hearing later this week.

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During the summer of 2017, several of the largest entertainment industry companies in the world teamed up to create a new anti-piracy coalition.

The Alliance for Creativity and Entertainment (ACE) brought together well-known Hollywood outfits including Disney, Warner Bros, NBCUniversal, media giants such as Sky and BBC, as well as the streaming-based newcomers Amazon, Netflix, and Hulu.

This is without a doubt one of the most prominent copyright enforcement groups in history and one with a clear mission. ACE wants to bring a halt to all forms of piracy but with a specific focus on online streaming, which it sees as a major threat to its industry.

The organization has filed several lawsuits in the US, for example, targeting vendors of pirate streaming boxes. This has been quite effective so far, with Dragon Box settling for $14.5 million TickBox TV agreeing to pay $25 million in damages.

However, behind the scenes, there have been many less visible enforcement efforts as well. ACE regularly reaches out to developers who create ‘add-ons’ and ‘builds’ that are specifically designed to access pirated content through streaming boxes, including those running Kodi.

These efforts are not made public by ACE, but the targeted developers sometimes speak about them in public. Last week, for example, when the Hydra9 repository was targeted, among others. 

“Some in the community got served ACE letters yesterday, including myself. My letter specifically mentions most of my builds, and the Hydra9 repo,” developer ‘Terror’ informed people on Telegram, sharing a cease and desist letter. 

“I have made so many friends in this community and the Hydra9 team has been the highlight of my time making builds. I will likely continue as a skinner/teacher only, after I’m done dealing with ACE,” he added.

The letter in question is similar to those that have gone out to many other developers since 2017. As can be seen below, it comes with a rather impressive list of logos from entertainment industry companies, to which Discovery Inc., Channel 5, and Telefe have yet to be added.

It appears that these efforts have been quite successful but thus far ACE hasn’t said much about them in public. To find out more, we asked the organization whether it could share any data on how many of these requests it has sent out over the past two years. 

While we didn’t get any exact figures from ACE, which clearly doesn’t want to give away too much, the group said that a “significant” number of developers and site operators cooperated after being notified. 

“ACE has sought and obtained voluntary cooperation from a significant number of owners, operators, and developers of sites, add-ons, and services that facilitate piracy,” ACE spokesperson Richard VanOrnum told us. 

ACE targets people throughout the world and says it prioritizes voluntary measures over lawsuits. Through these efforts, it hopes to boost the legal market. Thus far, the media companies behind the group are happy with the results.

“Our members are pleased that the overwhelming majority of owners, operators, and developers of sites, add-ons, and services that facilitate copyright theft voluntarily comply with copyright law upon contact with ACE representatives,” VanOrnum tells us.

“We will execute more planned global actions along these lines and look to continue our success protecting creators around the world,” he adds.

If a cease and desist order is ignored, legal action remains an option. While ACE hasn’t shied away from that in the past, it aims to address issues out of court where possible.

Cease and desist letters are only part of its strategy though. ACE also seeks cooperation from many other players in the ecosystem, including advertising networks, payment processors, cyberlockers, domain name registrars and registries, search engines, online marketplaces, and social media services, to name a few.

ACE hopes to promote legally available content while addressing illegal add-ons and streaming boxes. However, it also has its eyes set on other streaming services, including apps and websites. 

“We are continuously reviewing our strategy and will consider new outreach and enforcement efforts where appropriate,” VanOrnum tells us, again, without giving away any concrete targets.

The group does explain that it has a comprehensive “piracy reduction plan” which tries to incorporate all the major streaming threats.

While the early signs suggest that this plan is paying off, work is far from done yet. New investigations are being launched on a regular basis, which means that the cease and desist letter Hydra9 received, was certainly not the last.

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In case anyone hadn’t noticed, a new series of Game of Thrones started last week. That meant hundreds of articles about the show, especially since this is probably its last hurrah.

We too did our bit, writing earlier this week how the first episode in the series had resulted in a flood of downloads via torrent sites. We’ve been writing about the show in this context for years, so the latest installment probably didn’t come as a surprise.

What will have come as a surprise, to the people who had the misfortune to read it, was an article published on the Daily Mail’s site.

As is customary, the piece was placed to the left of a sidebar of clickable articles focusing on the physical attributes of mainly female celebrities in various states of undress. The piece about Game of Thrones admittedly featured less flesh but sought to be just as outrageous.

With a headline like the one above, this was clearly going to be a knockout story. With huge numbers of Aussies downloading Game of Thrones every week, the prospect of filling the nation’s jails with pirates must have been thought through well in advance by the nation’s authorities.

So who in government had issued the stark warning?

Well, if you’re hoping to find the answer in the article, you can forget it. The piece uses the words ‘jailed’ or ‘jail’ several times, yet not once does it put any more meat on the bones of the headline claim that Game of Thrones downloaders could be seeing the inside of a cell.

It does cite a 7news.com.au report which claims that people “could pay a big price down the line” for pirating the show. However, we’ve been through that article with a fine tooth comb looking for any references to criminal prosecutions of downloaders by Australian authorities, and came up with absolutely nothing.

That leaves us with a few possibilities.

Perhaps the Daily Mail has a source inside the government that supplied the information that warranted a SHOCKING headline but asked the paper to back it up with zero details just to keep everyone on their toes.

To rule that out, TorrentFreak contacted the government, to see if any statement had been made to back up the claims detailed above, specifically concerning the claim that downloaders of Game of Thrones could be thrown in jail.

The Department of Communications and the Arts responded quickly.

“No announcement has been made by government regarding criminal prosecution for breach of copyright law,” the team said.

“Copyright owners have a number of exclusive rights, including the right to control the reproduction of their material and the right to communicate that material to the public, which includes uploading, posting or downloading content online.

“A person might infringe the exclusive rights of the copyright owner of ‘Game of Thrones’ if they upload, stream, download or share unauthorized copies of the program.”

Escalating the downloading of a Game of Thrones episode to a criminal offense would make huge headlines anywhere. However, apart from this single piece in the Daily Mail, no other publication has chosen to republish this unsourced claim as fact. That in itself is telling.

That leaves us with another option, that there’s a secret industry source, that said (off the record, mind you) that anyone downloading Game of Thrones could be subject to incarceration. And this is where things get a bit weird.

“Creative Content Australia executive director Lori Flekser told 7 News the crackdown wasn’t just about stopping revenue loss,” the Daily Mail’s original piece read.

It didn’t attribute the ‘jail’ claims to Flekser, but the implication was there. We doubted that the anti-piracy group would’ve made such a comment, so we checked with Flekser herself.

“You are absolutely correct – this is not something I said or endorse,” Flekser told us.

“Prosecution has occurred where people have profited from the sale of pirated content, such as the reference in that article to the 2017 case of Sydney man Haidar Majid Salam Al Baghdadi who was convicted for his role in the selling of unauthorized access to Foxtel services.”

After Flekser emailed her comments to TF, we checked the Daily Mail article against an indexed copy from the date it was originally published. Interestingly, the publication had removed all references to Flekser but maintained the line that Game of Thrones pirates could be put in jail.

Well, let’s go along with the ‘jail’ charade and consider the feasibility of that.

In Victoria, which covers Melbourne, for example, it costs in excess of AUS$328.00 per day to lock someone up. Last year, Australia had around 42,000 prisoners in total and according to figures published earlier this week, around a million Aussies downloaded the first episode of the new Game of Thrones series – in a day.

If the authorities decided to criminalize downloaders and put even 5% of these people in jail, Australia’s judicial system – if not the whole country – would be in crisis.

Furthermore, if only a tiny proportion of offenders went to jail (let’s say a modest five people), there would be a public outcry, especially when one considers that shoplifting goods up to the value of AUS$600 is often dealt with via an on-the-spot fine resulting in no criminal record.

That presents an uncomfortable third option, that this is a classic and pretty blatant example of fake news. Or, at the very least, an outrageous headline drawing traffic to an article that fails to come up with the goods or back itself up in any way.

Make no mistake, pirating TV shows is illegal in Australia and those also sharing them with others (using BitTorrent, for example) could find themselves having to explain their actions in court in a civil case. Thus far, however, there has been very little sign of that practice making a comeback in the country.

There are also criminal implications for those who commit infringement on a commercial scale, as Flekser told us. But downloading an episode of Game of Thrones doesn’t seem to fit that description for an individual, even if a million Aussies did it collectively this week.

Of course, that’s much less interesting than “everyone’s going to prison”, so let’s find a ridiculous angle and mislead the public instead. Fake news is coming? It’s already arrived.

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Last year, a group of prominent record labels filed a piracy lawsuit against the Russian operator of YouTube-ripping sites FLVTO.biz and 2conv.com.

The labels hoped to shut the sites down, but this effort backfired.

In January, US District Court Judge Claude M. Hilton dismissed the case due to a lack of jurisdiction. The Court carefully reviewed how the sites operate and found no evidence that they purposefully targeted either Virginia or the United States.

The sites are not seen as highly interactive and their interaction with users could not be classified as commercial, the Court concluded.

The record labels didn’t agree with this conclusion and took the case to the Fourth Circuit appeals court. If the verdict stands, the companies believe that Internet pirates will have “carte blanche” to facilitate copyright infringement, as they would be untouchable by U.S. courts.

Tofig Kurbanov, the Russian operator of the two stream-rippers, argued against this last week, hoping to keep the current dismissal in place. Yesterday he received support from the Electronic Frontier Foundation (EFF) which submitted an amicus curiae brief.

The digital rights group takes interest in copyright cases, in particular when they get in the way of people’s ability to freely use technology. In this instance, EFF points out that the stream-rippers provide a neutral technology, that has plenty of legal uses.

“Like a web browser, photocopy machine, or video recorder, the converters at issue in this case are neutral technologies, equally capable of lawful and infringing uses. And lawful uses abound, from saving a copy of a family member’s home video to downloading clips from a TV show as raw material for a critical commentary,” EFF writes.

The digital rights group points out that companies such as the record labels in this suit, seek to control the use and availability of copying. To this end, they file lawsuits against foreign site operators who often don’t put up a defense.

This then allows them to apply for default judgments and broad preliminary injunctions which compel third-party intermediaries such as domain registrars, or CDN providers, to take action. That can be dangerous, EFF notes, as the merits of the case are not thoroughly considered.

“These injunctions, which can be legally problematic, are often granted
without challenge. Through this process, difficult questions about the scope of such injunctions go unanswered,” EFF notes. 

While there have indeed been several default judgments in the past, that was not an issue in the present case. In fact, at this point, it’s irrelevant whether the sites at issue are infringing at all. The case was dismissed based on a lack of jurisdiction, after all.

According to EFF, the District Court made the right choice in doing so and it encourages the Court of Appeals to uphold this decision. Looking at the broader picture, this may act as a safeguard against default judgments in future cases, the group explains.

“Preserving the limits of personal jurisdiction to uphold due process, as the district court did in this case, also avoids default judgments against foreign defendants, and promotes the resolution of complex legal issues on a full record,” EFF writes. 

Focusing on the jurisdiction issue in the case at hand, EFF notes that the court made the right decision. The sites’ terms of use do not constitute a commercial relationship and geo-targeted ads are not enough to establish jurisdiction, the group argues.

On top of that, the websites in question are not “interactive,” as the District Court also pointed out.

“Here, the websites at issue here are semi-interactive; as explained by the
district court, there is no evidence that users exchanged multiple files with the websites, and users do not need to create an account, sign in, or even register in order to use the websites,” EFF writes.

EFF is not the only outside party that has taken an interest in the case. The record labels’ previously attracted support from other major copyright holders. Through amicus briefs,  Hollywood’s MPAA, The Association of American Publishers, and the Copyright Alliance, all argued that the verdict should be overturned.

It is now up to the Fourth Circuit appeals court, to weigh all arguments and ultimately come to a decision.

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A copy of EFF’s Amicus Curiae brief in support of FLVTO.biz and 2conv.com and its operator is available here (pdf).

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