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After being targeted in a copyright infringement lawsuit featuring backbone provider Hurricane Electric, a US-based ISP that operates a VPN service helping people circumvent Internet censorship in Iran, China and Russia has agreed to block several major pirate sites. These include The Pirate Bay, RARBG and YTS but there is plenty of scope for scaling up. Back in June, Hurricane Electic, one of the major network providers and operator of the largest IPv6 backbone, took action to prevent damage to its business. Hurricane provides services to large Internet-focused businesses, including ISPs, which in turn have thousands of customers, all of whom are free to use their connections as they wish. However, a group of movie companies, all of which are known for filing copyright complaints in pursuit of settlement, tried to argue that Hurricane is responsible for the actions of its customers. After obtaining a subpoena, a law firm acting for the companies behind Rambo: Last Blood, London Has Fallen, Dallas Buyers Club, The Hitman’s Bodyguard, and many others demanded that Hurricane should hand over the personal details of its allegedly pirating customers. In response to persistent demands, including to disconnect allegedly infringing customers and pay damages in excess of $500,000, Hurricane Electric filed two lawsuits, one in California and one in Nevada, seeking a declaratory judgment stating that it is not responsible for the infringements of its customers. Or those of their customers. Or their customers’ customers. Amended Complaint Filed in August 2020 In August, Hurricane Electric (HE) filed an amended complaint which in part described the alleged business model of the movie companies targeting its business. “HE is informed and believes and based thereon alleges that multiple Defendants, many of which share the same addresses, managing agents, and/or agents for service, are copyright assertion entities in the business of generating income primarily from threats of infringement lawsuits against legitimate technology companies that have nothing to do with any alleged infringements by unnamed end users of Internet connections,” HE wrote. Describing the defendants as “mere shells” for generating income via threats of copyright infringement lawsuits, HE stated that the move companies have become frustrated by courts awarding limited damages against individual file-sharers so have adopted a new business model of suing entities, like HE, that are “higher up the food chain.” With the main case still rumbling on, an interesting third-party complaint appeared on the docket this week. Featuring Killing Link Distribution LLC, one of the defendants in the HE case and the company behind the Nicholas Cage movie Kill Chain as plaintiff, it targets Sophidea Inc., an Internet service provider. Third Party Lawsuit Against a Hurriance Electric Customer While the company was the subject of several headlines in 2014, little is known about Wyoming-based Sophidea. The third-party lawsuit (filed by Culpepper IP, the same law firm that obtained user data from YTS) says that Sophidea is an ISP operating in California that buys Internet access, IP address and co-location services from Hurricane Electric. The complaint further states that the ISP operates a VPN service through HE, enabling its customers to access the Internet via HE IP addresses. According to Killing Link, users of Sophidea’s VPN service accessed “illicit notorious piracy websites” to download and share pirated copies of movies. “Particularly, Defendant’s users have used this VPN service to download torrent files of Plaintiff’s Work, and pirate Plaintiff’s Work on the Internet via the BitTorrent Protocol Client throughout the world,” the complaint notes. Among the sites allegedly accessed by Sophidea’s customers are YTS, The Pirate Bay, RARBG, 1337x, Fmovies, Cimaclub, RuTracker, and Torrentz2. Interestingly, Killing Link further claims that users also accessed file-hosting sites Rapidgator and Uploaded, plus Russian social networking site VK “to engage in massive piracy”. How this information was obtained isn’t revealed. “Defendant [Sophidea] continued to provide network connections to its users despite receiving notices indicating that Defendant’s users were using the network connection to engage in piracy via, for example, one or more of the above piracy websites,” the complaint reads. The third-party complaint does not seek damages. Instead, the movie company requests preliminary and permanent injunctions to prevent Sophidea from continuing to provide customer access to “infringing material or activity residing at particular online sites.” Complaint Quickly Concludes With Proposed Stipulated Injunction On the very same day that the complaint was filed at a California court, a new document appeared on the docket revealing that everything had been sorted out between the parties. A quick turn around, certainly. But it’s the details of the agreement that are likely to raise eyebrows. According to the stipulated injunction and dismissal, Sophidea provides a VPN service, manned by volunteers, for the purposes of providing uncensored Internet access to people in closed societies. “Many of Defendant’s users are citizens in countries with internet censorship such as Iran, China, Russia and Vietnam, etc. Defendant depends on donations to provide this VPN service and does not make any profit. Defendant has recently operated at a deficit,” it reads. “To protect Defendant’s users from their own governments, Defendant does not require users to log in to use Defendant’s services. Rather, users can download Defendant’s software for free without providing any personal information. To further protect them, and also due to the volume of traffic, Defendant does not log their users’ access, i.e. their IP addresses and websites visited.” Given the background, it seems likely that Sophidea operates its service as a fairly ‘dumb ‘pipe, which means that people are able to access content of their choice, including pirated movies. The company acknowledges that it has been unable to distinguish between “unacceptable and acceptable” usage due to the vast majority of traffic being encrypted. However, since it has respect for US intellectual property rights, it has offered to assist. According to the agreement, Sophidea will be considered in compliance with the order if it blocks site domains, IP addresses, URLs, or any other technical means agreed between the parties. Furthermore, Killing Link will be able to update the block list with any pirate sites mentioned in the USTR’s review of ‘notorious markets’ moving forward, or any site found liable for infringement in a US court. As reported last month, various copyright holders and industry organizations have already nominated Amazon, Facebook, Namecheap, Cloudflare and Peter Sunde’s Njalla service for the next notorious markets list, so life could become even more challenging for Sophidea’s already restricted users.

ON THURSDAY, DISNEY unveiled a plan to add more than 50 new series and original films to its streaming platform, Disney+, over the next few years. Disney’s decision to supersize its streaming offerings mirrors WarnerMedia’s recent announcement that it will release its full slate of 2021 motion pictures directly to HBO Max. Directors and agents are wailing and gnashing their teeth (Christopher Nolan loudest of all) at media companies’ apparent abandonment of theatrical releases. But a different contingent—media pirates—let out a huge cheer at the prospect of so much quality content premiering online next year. As Kim Masters of The Hollywood Reporter noted, “[Warner] is pretending that pirates won’t pounce as soon as these films are streaming on HBO Max,” but pounce, they certainly will. Media piracy has seen several golden ages before, including Napster’s heyday (1999-2002) and The Pirate Bay’s peak years (2003-2008), but Warner and Disney’s new strategies all but assure 2021 will be the dawning of a platinum age. What we’re about to see will go down in pirate lore forever. Despite the media industries’ ongoing attempts to impede internet piracy of films, television episodes, music, video games, and other digital cultural products, the peer-to-peer infrastructure through which millions of users illicitly upload and download copyrighted files has been fully functional for over 20 years. My spouse, Benjamin De Kosnik, and I have developed a suite of tools for sampling BitTorrent activity around specific media files, and our research shows that online piracy was already thriving thanks to streaming. The final episode of HBO’s hit Game of Thrones was downloaded 32 million times over the 15 weeks after its airing, and Disney’s 2020 film Mulan was downloaded 21.4 million times in the 12 weeks after its release. (Our data does not reflect the total size of pirate activity, since each downloaded file can then be distributed and streamed to thousands of viewers.) Historically, pirates have suffered from a “zero-day” problem: When a film debuted in theaters, there were no perfect digital copies of the film that could be circulated; pirates either had to pay to see it in person, watch a low-quality “cam” version (made by someone in a theater covertly recording the movie), or resign themselves to waiting for months until a Blu-Ray release of the movie would be issued. But next year, when all 17 new Warner films premiere on HBO Max, pirates will immediately have perfect copies to share. 2021 will be a piracy bonanza, but there’s no reason to think it will be a one-time jubilee. Rather, it will mark the start of a new era for media corporations. Warner doesn’t stand alone in its decision to drop its planned theatrical releases on its streaming platform right away. Disney shifted first, debuting both Hamilton and Mulan on Disney+ in 2020 when the long-running Covid-19 crisis made cinemagoing either impossible or highly inadvisable. And because of Disney and Warner’s moves this year and next, it’s likely that, post-pandemic, studios will opt to release some big-name titles on streaming and in theaters simultaneously, and will open some titles on streaming only. In other words, the celebration probably won’t be limited to 2021, as pirates will get perfect zero-day copies of many motion pictures beyond next year. One company will be much better positioned than others to profit from these major changes to the media landscape: Disney. Disney is poised to use its Disney+ hits to boost not only streaming subscriptions, but ticket sales for its parks, cruises, concerts, and other live events, whenever those become safe again. In the post-Covid media economy, nearly all content could essentially serve as marketing campaigns for physical, in-person offerings. With so much recorded audiovisual entertainment becoming available relatively cheaply via streaming services or for free, via pirate networks, the one media-related category that seems likely to attract high consumer spending will be physical experiences. People will want to go to places—and do and see and smell and taste and touch things—after a prolonged period of restricted movement and limited socializing. People will also seek to populate their social media feeds with photos and videos of themselves in unique and exciting environments. Disney parks’ attendance was always going to go gangbusters after the pandemic, but with Disney feeding fresh media content to hundreds of millions of households during the pandemic—both via Disney+ and via pirate networks—the Mouse is nurturing a powerful collective longing to enter into Disney-themed spaces as soon as health protocols allow. Which is why I suspect that Disney is deliberately playing into pirates’ hands. By debuting high-profile projects to massive global audiences through both licit and illicit online mechanisms, Disney ensures that an enormous hype machine will immediately promote those projects. It won’t matter that half or more of that machine is powered by pirates, because it will enable Disney properties to drive and define culture, and guarantee that, after Covid-19, massive crowds will pay top dollar to (temporarily) inhabit cultural worlds they have come to love through their screens. It doesn’t matter that Disney surrendered the huge box office that a movie like Mulan could have earned if theaters had been open in 2020. What matters to Disney is that a lot of people watched that movie, even if they didn’t pay for it, and that easy, constant access to its content has grown the fanbase, making fans eager to give Disneyland, Disney World, and Disney Cruises thousands of dollars in 2022. So where is Warner’s park, or Netflix’s park? To reap high profits going forward, media corporations will need to win at both streaming and experiences. Universal has parks, but its streaming service Peacock has yet to gain cultural currency. A wise move on Netflix’s part would be to bid soon (if it hasn’t already) on a movie theater chain like Alamo Drafthouse, which combines the latest in projection and sound technology with a cool retro-nostalgia vibe, and serves high-quality food and drinks throughout each screening. Steven Soderbergh told The Daily Beast earlier this week that he sees an opportunity for large movie chains to become “repertory cinemas” in the future, attracting audiences who want to see classic films in theaters. Even if people can see movies in their homes at low or no cost, they may pay quite a bit for moviegoing as a special event. A wide range of media-themed experiences are similarly likely to gain traction, including meet-and-greets, live performances, panel discussions (such as PaleyFest’s), and conventions (like Comic-Cons), where fans can pay for the privilege of seeing and even meeting creatives and cast members, play with official props, visit set replicas, and otherwise have embodied, theatrical encounters with their favorite actors, directors, characters, and settings—which they can then transform into social media posts in which they, the fans, are the stars. Fan events always served to promote TV series and movies, but in a post-Covid climate, this operation may work in reverse, too: shows and films could be promotions for exciting in-person activations.

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Jaron David McIvor, a software programmer from New Zealand, has had $14.9 million worth of cryptocurrencies seized by the country’s authorities, following a relevant order issued by the High Court. The man was placed under investigation back in 2016 when the New Zealand police received a tip from the US IRS about the operation of a pirate website. McIvor caught the American tax officers’ attention because he was engaging in international money transfers between the USA, New Zealand, Canada, and Vietnam. Eventually, in 2019, he was arrested in his home, at the third time the police visited to investigate. The man was careful not to raise suspicions with his lifestyle, and when the police first visited him, they saw no Lambos parked in the garage or anything denoting wealth. Instead, McIvor was living in a modest rental, giving no indication that he was holding more than $14.9 million in cryptocurrencies and another $581k in the bank. However, the ongoing investigation eventually produced evidence of the seemingly inexplicable existence of these amounts, and the man had to admit it and eventually cooperate with the authorities. The website set up by J. D. McIvor and his brother operated in the United States and received subscription payments via wire transfers, Stripe, and PayPal. His brother’s bank account held another $275k – and he also forfeited $1.25 million in crypto. The court and the investigators have not named the pirate website yet, even though there’s no apparent reason to hide it from the public. As for whether the authorities managed to find and seize the entire amount made by the pirate platform, the judge wrote that they believe the overwhelming majority was forfeited. The judge characteristically stated sanctification with the outcome within the purposes of the Criminal Proceeds Act 2009 and the overall interests of justice. Although a computer software programmer, McIvor has failed to recognize the risk of using PayPal and Stripe, two legitimate payment processors that are open to sharing information with national authorities if they need to. Also, keeping over half a million USD in a bank account linked with your real name was not a smart move at all.

The Danish State Prosecutor has confirmed its role in shutting down two popular torrent trackers and the arrest of the alleged operator of Danishbits. The operator of Nordicbits, who confirmed his involvement, was apprehended in Spain but has sinced passed away. Police, meanwhile, aren't ruling out the possibility that users of the site will be identified. Private BitTorrent trackers are niche sites in most parts of the world but in Denmark they are huge. With millions of views per month, sites such as ShareUniversity and Asgrd are among the most popular sites in the country. This was also the case with DanishBits until it suddenly went offline a few weeks ago. At the time, several sources informed us that the owner was arrested and, this week, official confirmation came in that this is indeed the case. Danishbits Operator Arrested Denmark’s State Prosecutor for Serious Economic Crime (SØIK) announced that a 33-year-old Danish man was arrested in Morocco. This followed an investigation by the authorities, which acted based on a complaint from local piracy group Rights Alliance. The Danishbits investigation, which started in 2016, revealed that the site was run professionally and that the people involved did their best to hide their identities. Payments, for example, were made through cryptocurrency. Despite these efforts, law enforcement officials managed to identify the operator, who was subsequently placed on Interpol’s wanted list. In October, the alleged ringleader of the site was eventually apprehended and jailed in Morocco, from where he will possibly be extradited to Denmark. “It’s very satisfying that the investigation led to both the arrest of the suspected operator and shutting down the network. It succeeded thanks to the sustained collaboration between our specialized investigators, prosecutors, and IT experts,” says Deputy Police Inspector Michael Lichtenstein. Nordicbits Shut Down, Operator Passed Away Danishbits was not the only private tracker to disappear this fall. The same happened to Nordicbits. This site, which was smaller than its competitor, was also reported to the authorities by Rights Alliance in 2018. After a detailed investigation, the authorities identified a 69-year-old Danish man as the operator. The man, who resided in Spain, was apprehended by local police in September. After being questioned the Nordicbits operator admitted his involvement in the site and agreed to shut it down voluntarily. The Danish prosecution intended to take the operator to court. However, the man was seriously ill and recently passed away. Targeting Users? In both cases, law enforcement officials managed to seize data which will be used for further investigation. Deputy Police Inspector Michael Lichtenstein doesn’t rule out that users will be identified as well. “The most important thing is clearly to stop the illegal services, but it can certainly not be ruled out that seized data can lead to the identification of the users of the two illegal networks,” he says. Despite this warning, private torrent trackers continue to flourish in Denmark. The two sites that were shut down had roughly 45,000 registered users, many of whom went to other Danish trackers. Rights Alliance says that the users of these sites know all too well that they are breaking the law. The anti-piracy group is also happy that the authorities will consider follow-up steps. “We are pleased that the announcement of the State Prosecutor for Serious Economic Crime also reflects the importance of an increased focus on users’ illegal behavior,” Right Alliance CEO Maria Fredenslund says. Thus far, however, these users don’t seem to be particularly bothered. After the shutdowns ShareUniversity saw a 500% increase in visits, and Asgrd’s traffic jumped up by more than 750%. Right Alliance informs TorrentFreak that they are aware of the growth of these sites and urges them to give up their illegal activities. If not, they will get the same treatment as DanishBits and NordicBits.

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Following an investigation that began in 2016 at the behest of US authorities, New Zealand's High Court has now ordered the seizure of cash and more than US$21m in cryptocurrencies from a man who helped to develop a movie piracy site. The funds were restrained back in 2019 and in the meantime have gained significant value. Back in 2016, police in New Zealand received information from the Inland Revenue Service in the United States that a movie piracy website was being operated by a local man. According to the IRS, the man and his associates were using online international money transfer services to send remittances between the USA, Canada, New Zealand and Vietnam. What followed was a three-year investigation and a raid on the man in 2019. Police Raid Alleged Movie Pirate’s Home, Seize Crypto Haul In June 2019, police swooped on software programmer Jaron David McIvor, making two visits to his home in New Zealand. The then-31-year-old reportedly lived in a modest rental property with no obvious wealth or expensive assets such as luxury vehicles. Several months later in November 2019, it was revealed that McIvor had cooperated with police, handing over the keys to access $6.2m in cryptocurrencies and NZ$6.2m (US$4.4m) and NZ$800,000 (US$568,320) in banked funds. The assets were seized under the Criminal Proceeds (Recovery) Act. Later that month, police seized a further NZ472,000 (US$335,308) in cryptocurrency and NZ377,000 (US$267,820) in cash from a McIvor ‘associate’, later revealed to be his brother. At the time, Detective Senior Sergeant Keith Kay, head of the Asset Recovery Unit in Waikato, said McIvor had helped to create a movie piracy site (which has still not been named) from which he received significant funds. The site allegedly operated in the United States and when funds were deposited into various bank accounts via wire transfers, Stripe, and PayPal, a money-laundering investigation was launched. After “suspicious activity” was discovered on an account linked to McIvor, the raids and seizures took place. Court Orders Seizure of Cash and Cryptocurrency In a brief judgment handed down by the New Zealand High Court this morning, it is noted the McIvor was investigated for his role in the movie piracy scheme and as a result, significant funds would be forfeited to the state after he admitted profiting from copyright infringement. According to the Court, the Commission of Police ultimately restrained funds in McIvor’s bank account totaling NZ$818,000 (US$581,066) and cryptocurrencies now worth an eye-watering NZ$21 million (US$14.9m). Additional funds “found their way” into his brother’s account too – almost NZ$386,000 (US$274,195) and cryptocurrency now worth NZ$1.77 million (US$1.25 million) “The brothers recently agreed to forfeiture of all crypto-currencies and all but $400,000 (US$284,140). I approved their agreement with the Commissioner on 16 November 2020,” the judge wrote. “I was satisfied this outcome was consistent with the purposes of the Criminal Proceeds (Recovery) Act 2009, and the overall interests of justice. I reached this conclusion because the overwhelming majority of restrained funds were forfeited, and litigation over the balance (of $NZ400,000) would be disproportionately expensive and time consuming. “In short, I considered settlement met the public interest,” he concluded. Movie Piracy Site Still Not Named The High Court judgment makes no mention of any further legal action against McIvor and mentions no ongoing investigations or court cases in respect of his copyright-infringing activities. Neither does it mention the name of the site, which seems a little unusual given the apparent scale of the operation. However, there are some similarities with a case in the United States, also based in movie piracy and involving large volumes of cryptocurrency. Just a month before the crypto seizures in New Zealand, United States authorities confirmed that they had seized around US$4 million worth of cash and cryptocurrency as part of an investigation into alleged movie piracy. That investigation ended last November with a guilty plea from Oregon resident Talon White and the forfeiture of $3.9 million seized from his bank accounts, $35,000 in cash, cryptocurrency worth around $424,000, plus his home in Oregon, then valued at $415,000. On top, White was ordered to pay $669,557 in restitution to the MPAA and $3,392,708 in restitution to the IRS.

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On Wednesday evening, North Carolina Republican Senator Thom Tillis provided more details on his proposed Protecting Lawful Streaming Act, which was attached to the budget omnibus bill to keep the U.S. government running until Dec. 18. Tillis, who is the chairman of the Senate Judiciary Subcommittee on Intellectual Property, emphasized in an announcement that the proposal is not aimed at rank-and-file content creators who stream on platforms such as Twitch and YouTube, but rather large-scale for-profit streaming services that are “criminal enterprises.” The bill “would punish large-scale criminal streaming services that willfully and for commercial advantage or private financial gain offer to the public illicit services dedicated to illegally streaming copyrighted material,” his announcement noted. “The Protecting Lawful Streaming Act would apply only to commercial, for-profit streaming piracy services. The law will not sweep in normal practices by online service providers, good faith business disputes, noncommercial activities, or in any way impact individuals who access pirated streams or unwittingly stream unauthorized copies of copyrighted works,” Thillis wrote. “Individuals who might use pirate streaming services will not be affected.” Tillis went on to say that the shift in streaming entertainment online by U.S. consumers has caused a proliferation of “criminal streaming services” that are “illegally distributing copyrighted material that costs the U.S. economy nearly $30 billion every year.” The release also notes that this proposal is a bipartisan one, with support from “Senators Patrick Leahy (D-VT), Marsha Blackburn (R-TN), Mazie Hirono (D-HI), Catherine Cortez Masto (D-NV), John Cornyn (R-TX), Richard Blumenthal (D-CT), Chris Coons (D-DE), Kelly Loeffler (R-GA), and David Perdue (R-GA).” On Wednesday after it was revealed that the proposal had been shoehorned into an omnibus budget bill to avoid a government shutdown on Friday, Tillis was quick to point out that the bill would not target content creators.