It’s the third day in Federal Court for the Australian Federation Against Copyright Theft and ISP iiNet. As they continue to pick over the ruling handed down several months ago by Judge Cowdroy, the Court wonders if the appeal will actually solve the copyright infringement dispute between the sides.

For the third day, AFACT, representing the Village Roadshow and several Hollywood studios, and ISP iiNet were back in Federal Court for the appeal in their long-running copyright infringement dispute. Three judges will be required to decide the outcome – should iiNet be held accountable for copyright infringements carried out by its customers?

Yesterday, lawyers for AFACT argued that iiNet had the power to stop its customers infringing on the rights of the studios represented by the anti-piracy group.

Today, iiNet lawyer Richard Cobden detailed why the ISP had not acted on the copyright infringement notices it received from AFACT. He also questioned whether by receiving infringement notifications but doing nothing with them, the ISP should then be considered as an authorizer of those reported infringements.

Referring back to iiNet’s assertion yesterday that disconnecting customers would not be a “reasonable” response to infringement notices, Cobden said that AFACT never asked for a graduated response, only account terminations on the basis of its evidence – evidence which iiNet says is of questionable reliability.

Justice Arthur Emmett went on to voice concerns that the appeal in this case might never solve the dispute between the parties and that copyright infringement might continue whatever the outcome.

Emmett said that if iiNet’s assertion was accepted – that AFACT had failed to suggest “reasonable steps” the ISP could take in response to infringement notices – the anti-piracy group could simply submit new notices with new terms and then sue iiNet again.

“It just seems to me that out there is a commercial solution and there’s nothing we can do that will ultimately resolve this problem,” said Emmett.

However, as noted here, discussions between AFACT, ISPs and the Internet Industry Association (IIA) on the possible introduction of a code of conduct for dealing with infringement took place in 2007 and 2008. Those discussions effectively ended after AFACT announced action against iiNet.

The appeal continues.

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For years, content owners such as record labels and movie studios have been sending copyright infringement notices to Internet users. They hire companies such as DtecNet and BayTSP, who monitor file-sharing networks and automatically send infringement notices to Internet providers. The Internet providers on their turn are legally obliged to forward these to their customers.

Although these copyright infringement warnings are nothing new, little was known about the scope of these operations, until now.

This week the RIAA revealed that, since October 2008, it has sent out infringement warnings to 1.8 million Internet subscribers and 269,609 to colleges and universities in the United States. This translates into an average of well over a million infringement warnings a year.

Since the RIAA stopped pursuing individuals for sharing music online a long time ago, these infringement notices are merely a warning. However, the RIAA is confident that a significant number of the recipients will change their downloading habits once they’re notified.

An RIAA spokesman declined to inform TorrentFreak whether the number of infringement notices sent out are increasing or declining. The RIAA has no hard facts on the effectiveness of the notices either, but told us that university administrators usually see “very few” repeat offenders.

It does indeed seem plausible that some who are warned will think twice before they fire up their BitTorrent client unprotected, especially with all the talk about lawsuits recently. However, the effect of the warning campaigns are not noticeable in the number of file-sharing users and the traffic that they generate. Both are still increasing year after year.

RIAA’s openness with regard to their infringement notices comes right after the US put into effect a new requirement for colleges and universities to stop illicit file-sharing on their networks.

Starting this month, a provision of the Higher Education Opportunity Act of 2008 puts defiant schools at risk of losing federal funding if they don’t do enough to stop illicit file-sharers on their campus.

In recent years colleges and universities had to undertake measures to reduce piracy, and go after students who use file-sharing networks to share copyrighted files. Those who failed to do so will now lose their eligibility for federal student aid.

Effective or not, the new rules have proven to be quite costly for US educational institutions who spend between $350,000 and $500,000 a year to decrease piracy. With continuing doubts, even from the Government, as to whether or not piracy is causing losses to the entertainment industry, one has to wonder if it’s all worth it.

Whether the measures installed at colleges and universities are successful has to be doubted. We’ve reviewed the effectiveness of a few of the measures in the past and they provided little hope. If we add that users of file-hosting services such as Rapidshare and Megaupload are untraceable by the RIAA and its partners, the newly installed anti-piracy measures seem to be just symbolic.

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Two years ago a study by the University of Washington department of Computer Science and Engineering revealed that the evidence gathering software used by some anti-piracy outfits is not really up to par, to say the least.

By spoofing their presence the researchers managed to receive hundreds of infringement notices addressed to a networked printer that never actually shared a file. This showed that the companies involved do not actually verify whether an IP-address connected to a swarm is actually sharing the file they claim it is.

This could spell trouble for the tracking companies that are involved in the recent lawsuits against BitTorrent users, such as in the Hurt Locker cases. If their evidence gathering is as weak as that of the outfits which sent the infringement notices to the university printer, the courts might easily throw these cases out. This might be one of the reasons why copyright holders prefer the quick and easy settlement process instead of a full court battle.

The lack of effort that goes into evidence gathering is quite shocking in some cases. Just a few weeks ago we reported that an employee of a law firm that’s involved in these BitTorrent lawsuits bought such a tool on a rent-a-coder site for between $250 and $750. It only takes one settlement from a BitTorrent user to recoup this investment.

Although an IP-address is not a person, there are plenty of ways to gather more solid evidence that an IP-address was actually involved in a transfer, avoiding many of the false accusations that are common today. One tool that actually produces (more) valid logs is bitAudit. Its programmer, Sam, is currently looking for beta-testers.

As can be seen from the video below, bitAudit gives a detailed and accurate overview of what happens when you fire up your BitTorrent client. The application shows how public transfers on BitTorrent are, but it also reveals that not every IP-address in the swarm might be sharing the file.

TorrentFreak spoke with Sam to find out why he decided to code the application, and to find out what purpose it would serve for the public.

“I’m an engineer and I’ve always liked knowing how things work. All BitTorrent clients I tried didn’t show well what happens behind the scenes so I thought I’d write some code to log things correctly,” Sam explained. He showed the logs to his friends who said they instantly better understood how the BitTorrent protocol works. This all happened about a year ago and Sam shelved the code until recently.

“Then as more news on BitTorrent lawsuits and evidence collection came out, I thought I’d try my code again but as an experiment to see how fast I could generate these logs and exchange pieces with peers,” Sam told us. “It was a fun process and I learned even more and found I had to toss many of the BitTorrent efficiency rules out to generate these logs quickly and efficiently. I even added checksums to ensure the data wasn’t modified/tampered with.”

Rather than shelving his program again, Sam has decided to share it with the public this time round. He’s currently looking for Beta testers to try the application and give him some feedback so he can make some improvements.

“There are a lot of BitTorrent users out there that have a minimal to average understanding of how it works and I see a lot of misinformation perpetuated in forums and comments. bitAudit gives users an inside glimpse into how BitTorrent works and what evidence collection looks like. Knowledge is power and making bitAudit available to the public can only help educate users on how to better and safely use BitTorrent.”

Aside from the application being an eye-opener for some BitTorrent users, it might also do the same for the outfits that are currently working with highly inaccurate tools to gather ‘evidence’ on BitTorrent users. On the one hand this is good news because applications like bitAudit have the potential to reduce many false accusations. But for those who do share files without permission from copyright holders, a better standard of evidence gathering could prove problematic.

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The people who work at the anti-piracy divisions of Warner Bros. and other large media companies have to be experts in file-sharing technology. It is therefore no surprise that Warner Bros. is actively recruiting students for a job as Anti-Piracy Intern, as most students have grown up sharing files.

Warner Bros Entertainment UK is currently offering an internship to “IT literate” students with knowledge of file-sharing networks to assist in the company’s ongoing anti-piracy efforts. The internship deals with both digital and physical piracy and among other things the applicant will have to make trap purchases and maintain accounts at private file-sharing sites.

The intern will further have to scour the Internet for illegally posted Warner Bros. and NBC Universal content and gather intelligence on the sites that offer these pirated goods. One of the more boring tasks listed in the job description is the sending of takedown requests and infringement notices to sites and users.

The full job description taken from the vacancy (pdf) at The University of Manchester reads as follows:

During the 12 month internship, duties will include: monitoring local Internet forums and IRC for pirated WB and NBCU content and in order to gather information on pirate sites, pirate groups and other pirate activities; finding new and maintaining existing accounts on private sites; scanning for links to hosted pirated WB and NBCU content and using tools to issue takedown requests; maintaining and developing bots for Internet link scanning system (training provided); preparing sending of infringement notices and logging feedback; performing trap purchases of pirated product and logging results; inputting pirate hard goods data and other intelligence into the forensics database; selecting local keywords and submitting local filenames for monitoring and countermeasure campaigns and periodically producing research documents on piracy related technological developments. Various training will be provided.

The lucky student who gets the job will receive a £17,500 salary for the 12 month internship that starts July 2010. Applicants are required to study a degree in a computing related discipline and programming experience with Java or JSP and PHP, Perl or Python is seen as a bonus.

We encourage all eligible TorrentFreak readers to apply for this exciting internship and provide us with regular updates on Warner Bros’ anti-piracy efforts. You have to be quick though, the vacancy closes on March 31.

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For years the RIAA and other copyright holders have been sending copyright infringement notices to ISPs, requesting they forward them to their customers. ISPs including Comcast have always kindly complied with these requests, but remained a neutral party.

It therefore came as a surprise when we found out that three major US ISPs – Comcast, Cox and Warner Cable – have been funding research which aims to help copyright holders track down and gather evidence against BitTorrent pirates more efficiently.

Unlike most of the ‘passive’ BitTorrent tracking tools that are in fashion today, BitStalker uses an ‘active’ method through which they can actually prove that the BitTorrent client associated with an IP-address is sharing files. Where the passive methods wrongfully accuse 1 in 10 downloaders, BitStalker promises to avoid such false positives.

The researchers who developed BitStalker further claim (pdf) that their tool is much more effective than the current competition, as it would allow copyright holders to get information on 20 million BitTorrent users for a bargain price of $12.40. What remains unclear, however, is why three large ISPs are interested in funding this project.

It is no secret that the RIAA has been pushing Comcast, Cox and other ISPs to take stricter measures against copyright infringers, including the ultimate sanction of terminating customers’ Internet access. However, thus far the ISPs have largely maintained their neutral position as information carriers.

Whether the funding of BitStalker’s research is a signal that this may change is open for speculation. Another argument for ISPs to join could be that they want to protect their customers from receiving copyright infringement notices in error.

Regarding the BitStalker method of tracking BitTorrent users, we can say that it is not as revolutionary as the researchers portray it. TorrentFreak spoke to several people who are currently operating the largest BitTorrent trackers on the Internet and none of them was impressed by BitStalker’s technology.

If BitStalker is indeed implemented the large scale monitoring will have to be executed from thousands of IP-addresses. Most trackers have rules in place so that one single IP-address will be banned from the tracker if it connects to too many torrents.

Similarly, if BitStalker was put on a cloud service like the research suggests, it wouldn’t take long before these IP-ranges would appear in block-lists, rendering BitStalker useless.

If we add to this that BitStalker’s active BitTorrent tracking method will require users to be ‘connectible’, which a large percentage of users aren’t, this means that it will result in many false negatives. The researchers report that they could only connect to less than half of all available peers, which might be caused in the main by the connectability issue.

Whatever the motivations are for Comcast and the other ISPs to fund this project, the good news is that less people will be accused of uploading something they haven’t. Whether BitStalker will really be that more efficient depends on one’s definition of efficiency. For now, we doubt that it will result in a global BitTorrent crackdown.

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In November 2009, details finally became public concerning the UK Digital Economy Bill, which aimed to turn elements of Lord Carter’s Digital Britain report into law.

Part of the proposals indicated that Internet users would face being monitored by the music and movie industries. Their ISPs would then be required to pass on copyright infringement notices based on evidence supplied by anti-piracy tracking companies.

If file-sharing wasn’t reduced by 70% in 2 years using these ‘educational’ measures, alleged persistent infringers faced the ultimate sanction of being disconnected from the Internet.

The proposals were met with massive opposition, with ISP TalkTalk going as far as threatening legal action over what it says amounts to a breach of human rights.

Adding to the pressure, a petition against the proposals was launched on the Number 10 website demanding;

“We the undersigned petition the Prime Minister to abandon Lord Mandelson’s plans to ban individuals from the internet based on their use of ‘peer to peer’ file sharing.”

The Government has now responded, and for TalkTalk and the countless others who share their views, on the surface it seems like good news, but a closer look reveals a somewhat disappointing result.

In its response the Government says that it wants as many citizens as possible to enjoy the benefits of the Internet and recognizes that technology has changed the way people access media content, in some cases “faster than products and services commercially on offer have developed” – an apparent reference to the superior accessibility of unauthorized downloads.

The Government goes on to say that they take the interests of artists and creators very seriously and have been working hard to find solutions to online copyright infringement. Nevertheless, they will not require ISPs to monitor their users to detect infringements and downloaders will be pretty safe, as is the case now, with detection being focused on those who upload material without permission.

On potential disconnections for persistent file-sharers – the key issue for many – the Government goes on to say:

“We will not terminate the accounts of infringers – it is very hard to see how this could be deemed proportionate except in the most extreme – and therefore probably criminal – cases.”

What categorizes an infringement as ‘criminal’ is open to interpretation, but is likely to mean very large-scale infringement, infringement for profit, or both. So good news then? Well, not quite.

Despite throwing out absolute permanent disconnections as a measure against file-sharers, the Government is still considering other ‘technical’ solutions if the ISP warnings aren’t effective including “band width restriction, a daily downloading limit or, as a last resort, temporary account suspension.”

So we’re back to disconnections again. In terms of time, ‘temporary’ is not defined. Of course, anything less than ‘permanent’ fits the wording. A day? A month? A year?

Another part of the response which has been mentioned several times before and still remains puzzling is this section:

“In the cases of the most serious infringers, if a rights holder obtains a court order, the ISP would have to provide information so that the rights holder can take targeted court action.”

As anyone who has followed the activities of Davenport Lyons and ACS:Law will tell you, the personal details of anyone alleged to have shared a single file can easily be obtained by rightsholders.

Sadly, despite the headline-grabbing statements, it seems that little has changed with this response from the Government.

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Copyright infringement is big business. Lawyers, nefarious anti-piracy outfits, spammers and scam artists make millions off file-sharers every year. These practices continue to expand as some turn out to be more profitable than actually selling music or movies.

One of the more profitable schemes are the copyright infringement notices that include the option to settle the issue for a few hundred dollars or pounds. After the RIAA scored two major victories against individual file-sharers last year, many people are now eager to settle immediately.

Dorin Lucian Dehelean, security analyst at the University of Georgia responsible for forwarding copyright infringement notices to students and staff, saw an opportunity to make a few bucks off these infringement notices himself.

Instead of forwarding an RIAA notice to the person associated with an IP-address, Dehelean decided to contact a female student accused of sharing copyrighted material with an interesting proposition.

According to UGA campus police chief Jimmy Williamson, Dehelean “offered to make the situation go away in exchange for money.” He promised not to inform Judicial Programs, so the student in question would be free from any kind of disciplinary measures the University usually takes in similar cases.

The student in question didn’t have any money and alerted a University employee who called in the police. The police decided to look into the case and sent over an undercover officer who went over to Dehelean, impersonating the student.

After Dehelean accepted the payment he was fired immediately and taken into custody for extortion practices. According to the campus police, Dehelean may have tried the same trick with other students, and they believe that at least one other student paid up.

“We are running down some leads that may lead us to other victims,” Williamson said. “We have information that makes us believe [Dehelean] might have had another transaction.”

If they’re done with their investigation, it might be a good idea to look into the practices of some copyright holders, to discover if these fall into the extortion category as well.

Article from: TorrentFreak, check out our new blog at FreakBits.

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From this year’s State of the Net Conference, Alex Curtis from Public Knowledge is reporting on a panel entitled: “Copyright Strikes: When Has a Pirate Graduated to Internet Exile?”

While the panel consisted of representatives from IFPI, Center for Democracy & Technology, Computer and Communications Industry Association and the UK government. Notably missing were representatives from the RIAA and MPAA. They were present, says Curtis, but unusually observing quietly from the audience.

Those on the panel in favor of the “graduated response” are said not to have shied away from their positions.

In a discussion on whether the punishment fits the alleged crime, Shira Perlmutter, Executive Vice-President of Global Legal Policy at IFPI said sending infringement notices just isn’t enough, adding that termination of a user’s Internet account, however, is preferable to suing them.

When asked if “3 strikes” should come to the United States, Perlmutter pointed to the existence of the DMCA (disabling access to illicit content is already provided for under the legislation) and noted that there are “many conversations going on at different levels.”

Writing on the apparent disinterest in “3 Strikes” shown by the MPAA and RIAA by their lack of participation on a panel such as this, Curtis goes on to list several filings to the FCC which contain pro-disconnection statements by the groups, indicating that they are indeed asking the government to take action. Indeed, Curtis feels that their low profile at this panel points to the existence of “back room deals” already underway and aimed at putting their plans for the US into action.

Given that the music industry has all but given up on their strategy of suing new individuals for file-sharing (the MPAA never really started) and that IFPI has put its full-blown support behind proposed “3 Strikes” legislation in several different countries (even now carefully escalating a campaign in Sweden), it seems likely that at some point the United States will follow.

If it doesn’t come via a government mandate, says Curtis, it could come via a private arrangement between your ISP and content providers. And when you think about it, with all previous plans to end online piracy having failed, there’s very little for the copyright holders left to try. At this stage there can be little doubt that Big Media wants “3 Strikes” to become the global standard.

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Since 2007, UK file-sharers have been threatened with legal action if they refused to pay several hundred pounds in damages for alleged copyright infringements. It started with the respected law firm Davenport Lyons, but when they dropped out as their reputation started to suffer, ACS:Law stepped in.

Although the threats and accusations are often sent to the wrong people due to the shoddy evidence gathering techniques employed, thousands have paid off the copyright holders fearing they would end up being in more trouble if they ignored the threats. The scheme has proven to be profitable for all parties involved, except those receiving the letters.

Leaked documents have shed light on these practices, revealing that the core motivation of the companies involved is simply to generate as much cash as possible.

It will hardly surprise anyone when we allege that ACS:Law and fellow anti-piracy outfits are clearly abusing copyright for profit. However, it is good to see that our views are being supported by several Lords in the UK.

In recent weeks the law firm sending out these mass copyright infringement notices has been discussed in the UK House of Lords. The video below shows Lord Clement-Jones labeling the operation as a scam.

It is surprising that in the UK, copyright holders – some of which have ‘leased’ copyrights from other companies for the sole purpose of cashing in on allegations of file-sharing – can demand the personal details of thousands of alleged file-sharers without having to provide hard evidence. In most other countries this would be prohibited due to privacy concerns.

Lord Lucas has raised this problematic issue, saying that the Lords must do something to ensure that citizens’ personal details are not given out to companies like ACS:Law “willy-nilly”.

Like many file-sharers, some Lords would like to put an end to this copyright abuse, with Lord Lucas accusing the law firm involved of “harassment, bullying and intrusion”. But the criticism of ACS:Law didn’t stop there.

Noting that it could cost around £10,000 for those accused to protest their innocence, but a payment of ‘only’ £500 to make the accusations go away, Lord Lucas called the scheme “straightforward legal blackmail”.

For the public’s sake we hope they come up with a solution to end this madness. In the meantime, anyone accused by ACS:Law can learn exactly how this scheme operates and how to defend themselves efficiently, by downloading the ‘Speculative Invoicing Handbook‘ from consumer group BeingThreatened.

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The copyright infringement case of AFACT – representing several Hollywood studios – and Aussie ISP iiNet (multiple links to all our earlier coverage can be found here, here, here, here and here) is set to conclude today.

Lead barrister for AFACT, Tony Bannon, continued with his aggressive approach to this case by issuing warnings to Australia’s Internet service providers on the issue of copyright infringement.

He said that iiNet and other ISPs who don’t want to handle copyright infringement notices (such as those issued by his clients) are happy to take money from their subscribers, but are shirking their responsibilities. The solution to this, he said, was for them to shut down.

“They [ISPs] provide a facility that is able to be used for copyright infringement purposes. If they don’t like having to deal with copyright notices then they should get out of the business,” he said, as quoted by ITNews.

This reluctance to deal with infringement notices at the behest of the studios has been one of the main points of contention in the case. The studios feel that iiNet should hand infringement notices to their customers and even disconnect them, while iiNet feels that it has no obligation to do so under the law, particularly when acting on the unverified evidence of a 3rd party.

Bannon went on to say that iiNet had made zero effort to deal with even a small percentage of the alleged infringements on their network, commenting: “…they say they can’t send a single notice to anybody, it’s like saying they can’t stop physical violence happening to the person next to them because there’s physical violence happening all around the world.”

Bannon said he believed that terminating a customer or two on allegations of infringement would have sent out a clear message to other potential infringers. But of course, iiNet knows that if they complied with that request the studios would be back saying “you did it there, why can’t you do it here…here….here….here…..”

Bannon went on to say that while iiNet denied it had any control over BitTorrent clients and the potential for users to operate them for infringing purposes, it did have the power to render the software useless.

“But if the user isn’t online there’s nothing the BitTorrent client can do to infringe,” Bannon told the court.

For its part, iiNet sits firmly behind Section 112E of the copyright act:

A person (including a carrier or carriage service provider) who provides facilities for making, or facilitating the making of, a communication is not taken to have authorised any infringement of copyright in an audio visual item merely because another person uses the facilities so provided to do something the right to do which is included in the copyright.

Earlier the Internet Industry Association (IIA) had applied to contribute to the case as amicus curiae, or ‘friend of the court’. Justice Cowdroy decided today that the industry group would have little to add to the case, since the issues it planned to raise had already been covered in detail by iiNet, mostly concerning the ISP’s commitments under the Copyright Act and Telecommunications Act 1997.

Earlier this week at their annual general meeting, iiNet boss Michael Malone gave company shareholders some painful news. The costs of defending the AFACT case had amounted to $4m AUD (approx $3.7m US).

The court proceedings are scheduled to conclude today, but the verdict will not be issued for several months.

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