Last week the MPAA submitted a list of rogue sites to the U.S. Government. The movie industry group claimed that these sites facilitate massive copyright infringement, and would therefore like to see them shut down with help from upcoming legislation such as the E-Parasites bill.

Aside from naming many of the larger BitTorrent sites, the MPAA’s list also included several so-called cyberlockers. In recent years these file-hosting sites have overtaken BitTorrent in popularity, and this hasn’t gone unnoticed by Hollywood.

The problem with outing these sites as piracy havens is that there’s no clear definition of when a site is “rogue” or not. Last year the file-hosting site RapidShare was branded rogue by the MPAA, but this year they were excluded without explanation. However, an internal MPAA fact sheet that landed on TorrentFreak’s desk may shed some light on their definition of rogue.

Titled “It’s All About the Money: The ‘Business’ Model of Rogue Cyberlockers” the two page document gives an overview of the several affiliate programs some cyberlockers have in place. According to the MPAA these programs motivate users to share copyrighted material, thereby promoting piracy.

“Rogue cyberlockers aren’t just distribution hubs for stolen movies and TV shows – both the users who upload content and the operators who run the sites can earn money from doing so. As Internet video traffic grows, the threat from rogue cyberlockers that profit from stolen content is rising rapidly,” the MPAA writes.

The “fact sheet” continues with various examples of what the MPAA believes to be the clear promotion of copyright infringement. They thereby cite several of the descriptions of the affiliate programs that can be found on cyberlockers such as Putlocker, Fileserve, Bitshare and Uploading.com.

“Rogue cyberlockers feature ‘affiliate’ or ‘partner’ programs that pay uploaders cash for every thousand downloads of uploaded files. Putlocker.com exhorted users to ‘get paid for uploading good content that people want to see.’ Uploading.com promoted the ease of earning money by uploading files: ‘Now every time someone downloads your file you earn up to 2 cents. Relax and watch the money flow!’”

The MPAA further notes that some cyberlockers explicitly encourage their affiliates to share files with as many people, “even strangers,” and that the highest payouts are reserved for large files that are downloaded by users from English-speaking and Central Europe countries.

According to the MPAA it’s even suspected that cyberlockers in general encourage people to sign up for a premium account, a business model that is quite common for online services.

“Rogue cyberlockers induce users to subscribe to the site by restricting download speeds for ‘free’ accounts, as well as limiting the number of files users are able to download per day,” the MPAA writes.

“Rogue cyberlockers profit from selling ‘premium’ subscriptions that typically allow users to avoid restrictions on download speed, intrusive advertising, and artificially-imposed waiting times between downloads.”

The MPAA fact sheet strengthens the above arguments by giving several examples taken from the various cyberlocker sites, but doesn’t always specify why these should be considered as “rogue.” In some cases it raises even more questions than it answers.

We assume that the fact sheet is supposed to act as a bulletin of talking points for MPAA associates tasked with convincing the press, public and lawmakers that “rogue” cyberlockers are up to no good. It will come as no surprise when we hear more “official” MPAA statements on this very topic in the near future.

MPAA Fact Sheet

Source: MPAA Lashes Out Against Rogue Cyberlockers

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The June raids against Kino.to, which involved as many as 250 police and other authorities, dwarfed even the 2006 raids against The Pirate Bay.

Following the event the Kino.to site displayed notices which stated that the site had been “closed on suspicion of forming a criminal organization to commit professional copyright infringement.” While noting that several operators of the site had been arrested, it also criticized the site’s users.

“Internet users who illegally pirated or distributed copies of films may be subjected to a criminal prosecution,” read the warning.

But were the site’s users all criminals hell-bent on destroying the movie industry? According to a report from Telepolis, a recent study found the reverse was true.

The study, which was carried out by Society for Consumer Research (GfK), found that users of pirate sites including Kino.to did not fit the copyright lobby-painted stereotype of parasites who take and never give back.

In fact, the study also found that Internet users treat these services as a preview, a kind of “try before you buy.”

This, the survey claims, leads pirate site users to buy more DVDs, visit the cinema more often and on average spend more than their ‘honest’ counterparts at the box office.

“The users often buy a ticket to the expensive weekend-days,” the report notes.

In the past similar studies have revealed that the same is true for music. People who pirate a lot of music buy significantly more music that those who don’t.

Obviously it would be of great interest to see the report in full, but it appears that is not going to be possible. According to an anonymous GfK source quoted by Telepolis, the findings of the study proved so unpleasant to the company that commissioned the survey that it has now been locked away “in the poison cupboard.”

GfK says it has a policy of not revealing who they conduct research for if their clients don’t want to be exposed. However, they do carry out research for the movie industry. Telepolis go a stage further and call that work “lobbying”.

The GfK source says that the study shows “If you download films, you have an increased interest in the cinema”, which only highlights how stupid it would be for the authorities to carry out their implied threat of prosecuting Kino.to users.

Source: Suppressed Report Found Busted Pirate Site Users Were Good Consumers

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In late February, the Full Bench of the Federal Court in Australia dismissed the movie industry’s appeal against last year’s judgment which found that ISP iiNet did not authorize the copyright infringements of its file-sharing customers.

“While I disagree with the primary judge’s reasoning in significant respects, I am nevertheless of the opinion that his Honour’s decision to dismiss the proceeding was correct,” the ruling from Justice Emmett read. “In my opinion the appeal should be dismissed.”

While the decision was a cause for celebration in some quarters, closer analysis of the ruling left significant room for caution, in that it raised the possibility that under certain future circumstances ISPs could be held liable for infringements carried out by their users. In very basic terms, if the movie industry had provided iiNet with better infringement notices and the ISP had still not acted on them, the outcome of the case may have been different.

The ruling therefore provides guidance on how the movie, music and other copyright-related industries should proceed in future in order to more forcefully back ISPs into a corner on subscriber infringements. However, Australia’s Internet Industry Association (IIA) feels that although some outline parameters have been set by the ruling, further detail is required for affected companies to effectively manage their responsibilities.

“Having closely reviewed the recent decision of the Full Federal Court, we’ve concluded it’s both necessary and appropriate to develop a code of practice to give a wider range of internet intermediaries greater certainty around their legal rights and obligations,” said IIA chief executive Peter Coroneos this morning.

“The iiNet case has provided us with welcome guidance on where responsibilities should begin and end, but falls short in defining reasonable steps intermediaries should take in responding to allegations of infringement by their users. The Code will address this gap.”

Although AFACT’s legal action was squarely aimed at iiNet, IIA’s code will be aimed not only at ISPs but other service providers including web hosts, search engines and social media services.

AFACT has insisted all along that piracy is straightforward thievery by Internet users, but iiNet and indeed IIA’s Mr Coroneos firmly believe that infringement is a result of consumers taking steps to fill a gap between supply and demand. While not condoning piracy, both believe that if the entertainment industries provide better services, change can be brought about.

“Market failure remains a core contributor to the infringement problem,” Coroneous said. “If users have access to more and better content, when, where and in the form they choose to consume it, and at a realistic price, we’re quite confident the motivation for infringement will decline.”

In addition to the development of the Code of Practice, the IIA will renew its efforts to have the so-called ‘Safe Harbor’ provisions in the Copyright Act extended to cover not only ISPs, but other intermediaries. Coroneos said that protections similar to those available under US law do not exist under Australian legislation.

“This has left search providers, social network media, universities, auction sites, hosting and cloud services, corporate networks and others exposed to potential liability for the infringing acts of their users,” he said.

Quite how AFACT will respond to the creation of the Code of Conduct is unclear. IIA and AFACT had talks on the issue in 2007 but they came to nothing.

TorrentFreak

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The Full Bench of the Federal Court in Australia has just dismissed the movie industry’s appeal against last year’s judgment which found that ISP iiNet did not authorize the copyright infringements of its file-sharing customers.

Represented by anti-piracy group AFACT, nearly three dozen Hollywood and local studios took iiNet to court in 2008. In a 2009 trial the ISP was accused of doing nothing to stop its customers downloading films and TV shows but in February 2010 the Federal Court decided that iiNet was not responsible for their activities. An appeal was heard later that year and today the decision was handed down.

Justice Emmett said that the Court continued to agree that the rights of the movie companies had been infringed but could not find in their favor.

“While I disagree with the primary judge’s reasoning in significant respects, I am nevertheless of the opinion that his Honour’s decision to dismiss the proceeding was correct,” the ruling reads. “In my opinion the appeal should be dismissed.”

The ruling itself is an absolutely huge affair and will take a considerable time to digest, but at this early stage it seems quite clear that even after two years of legal battles, this fight is probably still not over.

“Even though the Copyright Owners are not entitled to the relief claimed in this proceeding, it does not follow that that is an end of the matter. It is clear that the questions raised in the proceeding are ongoing,” the ruling reads.

“It does not necessarily follow that there would never be authorisation within the meaning of s 101 of the Copyright Act by a carriage service provider, where a user of the services provided by the carriage service provider engages in acts of infringement such as those about which complaint is made in this proceeding.

“It does not necessarily follow from the failure of the present proceeding that circumstances could not exist whereby iiNet might in the future be held to have authorised primary acts of infringement on the part of users of the services provided to its customers under its customer service agreements.”

Nevertheless, on the thorny demand by AFACT that iiNet should have blindly sent out warnings and suspend customer accounts based on the information it provided, the ruling is clear.

“I do not think [iiNet] could reasonably be expected to issue warnings, or to terminate or suspend particular accounts, in reliance upon any such notice in circumstances where it has been told nothing at all about the methods used to obtain the information which lead to the issue of the notice,” it reads. “Nor should it be up to the respondent to seek out this information from a copyright owner who chooses not to provide it in the first place.”

iiNet chief executive Michael Malone said he was “relieved” at the outcome.

“Our original contention was upheld that we don’t believe we ever authorised or did anything to encourage customers to breach copyright,” he said. “We’ve won at the lower court, we’ve won at the Federal Court now in the appeal, but all this legal action hasn’t stopped one customer from downloading anywhere in Australia.”

“Same as we said last time, invite the rights holders back, let’s make the content available legally and legitimately so customers can get access to it, and let’s find a better way to be able to police those who don’t do the right thing.”

Malone went on to state that the overall problem of deciding to what extent ISPs can be held liable will have to be solved by the government.

AFACT boss Neil Gane was clearly disappointed at the decision.

“It cannot be right that, in effect, the ISP, who has the power to prevent copyright infringement online and admitted they were taking place, does not share the responsibility to stop them,” he said. “Copyright infringement now goes on unabated on the Internet.”

While Justice Emmett and Justice Nicholas dismissed the appeal, Gane said he was encouraged that Justice Jagot had sided with the movie industry.

“We take heart however, that Justice Jagot found for us and that Justice Emmett said that we were successful on many grounds.

“We will be taking our time now to examine the judgment in detail and consider all of our options.”

It is widely believed that the case will now proceed to Australia’s High Court.

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