Legality of Voluntary ‘Pirate’ Site Blocking Regime Under Fire

In September 2013, a coalition of Portuguese copyright trade groups announced they would file for an injunction to prevent ISPs from providing access to The Pirate Bay. They argued it would not pose a problem, since ISPs already filter to prevent access to criminal content such as abusive images.

It took more than 18 months for the Association for Copyright Management, Producers and Publishers (GEDIPE) to get its way but eventually the Intellectual Property Court gave ISPs Vodafone, MEO and NOS just 30 days to block The Pirate Bay.

While GEDIPE had its victory, the battle was still not won. Each time the group needed a site blocked in future it would have to take ISPs to court, an expensive and time-consuming process. Warning that it would do so if necessary, GEDIPE advised ISPs to enter into discussions to form a voluntary site-blocking mechanism instead.

“It is time to sit down and negotiate blocking measures that don’t require the courts to get involved,” GEDIPE boss Paulo Santos said.

ISPs initially objected to the idea saying that legitimate content could become blocked without legal oversight. Nevertheless, by this summer they were singing a very different tune.

In July the Ministry of Culture announced the signing of a memorandum of understanding between its own General Inspection of Cultural Activities (IGAC), the Portuguese Association of Telecommunication Operators (APRITEL), various rightsholder groups, the body responsible for administering Portugal’s .PT domain and representatives from the advertising industry.

The agreement would see local anti-piracy group MAPINET filing copyright complaints with the Ministry of Culture which in turn would conduct an assessment and then order ISPs to block sites. Importantly, no expensive courtroom argument would take place and no legal judgments would be handed down.

This week the agreement began to bite when 51 domain names connected to sites including KickassTorrents (Kat.cr), ExtraTorrent, Isohunt, YTS and RARBG were ordered to be blocked. However, there are now concerns over the legality of the process.

Speaking with the Economic Daily, intellectual property law expert Leonor Chastre, a partner at the Cuatrecasas, Gonçalves Pereira lawfirm, says he has doubts over the agreement and the actions taken under it.

“There are a number of entities that have signed the memorandum but it does not legitimize the role of the two main entities [the government and MAPINET] so they will not be able to determine what is legal and illegal in this field. The latter is a private entity, susceptible to external influences. What is the representativeness of that association and what is its intention?” he questions.

The argument that only a court is able to decide on the legality of a site is a common one that has played out in countries across Europe. Prolonged legal battles on that very topic have taken place in the Netherlands, Austria and currently Sweden, to name a few, so concerns that Portuguese authorities might be overstepping the mark are hardly a surprise.

Interestingly, MAPINET has a rather different perspective. The anti-piracy group says that laws already exist in the EU for blocking content when it’s deemed to be infringing copyright.

“The implementation of the E-Commerce Directive already includes procedures for removing illegal content,” MAPINET’s Miguel Carretas argues, adding that the purpose of the memorandum is to “regulate the application” of this legal provision.

“[ISPs] already had the power to block access to sites where illegitimacy is demonstrated,” Carretas says.

In response, Vodafone says that it “acts in accordance with the provisions of the law and the Memorandum of Understanding.” Other ISPs, MEO and Cabovisão, declined to comment.

The question now is how these concerns will develop. The most logical route for an intervention is for a site subjected to blocking to take the matter to court. That would be an expensive affair though and could involve challenging not only the government but also copyright holders and ISPs.

Nevertheless, a challenge is not without precedent. In 2013 Rapidgator was blocked in Italy following a broad crackdown on copyright infringement. The company hired local counsel to object and eventually won its case.

Source: TorrentFreak, for the latest info on copyright, file-sharing, torrent sites and ANONYMOUS VPN services.

XE Market Analysis: North America - Oct 28, 2015

The dollar softened fractionally against the euro and yen as markets await the FOMC. EUR-USD lifted north of 1.1050, while USD-JPY ebbed south of 120.30. ECB member Hansson provided a reminder that not all council members are of a dovish mind-set, saying that he doesn't see any "convincing reason" to consider further policy action in December. Japanese retail sales fell 0.2 y/y, but rose 0.7% m/m, up from 0.0% in August, though below the median forecast for a 1.1 y/y gain.

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Spotify Helps to Beat Music Piracy, European Commission Finds

When Spotify launched its first beta in the fall of 2008 we branded it “an alternative to music piracy.”

With the option to stream millions of tracks supported by an occasional ad, or free of ads for a small subscription fee, Spotify appeared to be a serious competitor to unauthorized downloading.

While there has been plenty of anecdotal support for this claim, actual research on the topic has been lacking. A new study published by the European Commission’s Joint Research Centre aims to fill this gap.

In the study researchers Luis Aguiar (IPTS) and Joel Waldfogel (NBER) compare Spotify streaming data to download numbers from the 8,000 pirated artists on torrent sites, as well as legal digital track sales.

Based on this data the researchers conclude that Spotify has a clear displacement effect on piracy. For every 47 streams the number of illegal downloads decreases by one.

This is in line with comments from Spotify’s Daniel Ek, who previously argued that the streaming service helps to convert pirates into paying customers.

“According to these results, an additional 47 streams reduces by one the number of tracks obtained without payment,” the paper reads (pdf).

“This piracy displacement is consistent with Ek’s claim that Spotify’s bundled offering harvests revenue from consumers who – or at least from consumption instances – were previously not generating revenue,” the researchers add.

While that’s good news for the music industry, it doesn’t necessarily mean that more revenue is being generated. In addition to piracy, streaming services also impact legal track sales on iTunes and other platforms.

According to the researchers, 137 Spotify streams reduce the number of individual digital track sales by one. Factoring in the revenue per stream and download, the overall impact is relatively neutral.

“Given the current industry’s revenue from track sales ($0.82 per sale) and the average payment received per stream ($0.007 per stream), our sales displacement estimates show that the losses from displaced sales are roughly outweighed by the gains in streaming revenue.”

“In other words, our analysis shows that interactive streaming appears to be revenue-neutral for the recorded music industry,” the researchers add.

More studies are needed to see how streaming services impact the music industry in the long run, but for now it’s safe to conclude that they do indeed help to beat online piracy, as often suggested.

Source: TorrentFreak, for the latest info on copyright, file-sharing, torrent sites and ANONYMOUS VPN services.

XE Market Analysis: Europe - Oct 28, 2015

The AUD provided the main action in otherwise subdued trade, with the antipodean currency taking a tumble in the wake of sub-forecast Australian inflation data. AUD-USD fell some 80 pips in making a three-week low at 0.7111, taking out its 50-day moving average at 0.7138 on route. Mostly lower stock markets in Asia-Pacific (Japan's Nikkei was an exception) added to a bearish backdrop for the Aussie dollar. The Australian trimmed mean CPI fell to 2.1% y/y in the September quarter, near the RBA's 2% - 3% target range.

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Aurous Offers to Shut Down But RIAA Isn’t Interested

It’s been an eventful month for music discovery tool Aurous. Within days of its October 10 launch, Aurous Group and developer Andrew Sampson were being sued by the RIAA.

“This service is a flagrant example of a business model powered by copyright theft on a massive scale,” the RIAA said.

Shortly after the labels demanded a temporary restraining order. The request, filed by plaintiffs Atlantic Records, Warner Bros, UMG, Sony and Capital Records, was quickly granted by a Florida district court.

Judge Jose E. Martinez declared that Sampson and everyone else associated with the Aurous project were forbidden from “infringing, or causing, enabling, facilitating, encouraging, promoting and inducing or participating in the infringement of, any of Plaintiffs’ copyrights protected by the Copyright Act, whether now in existence or hereafter created.”

Those restrictions including any further making available of the Aurous software in any form but there are now claims that Sampson has already breached the order.

According to a motion filed yesterday by the labels, on October 23 following a request from defendants’ counsel, it was agreed that the defendants would be given more time (until November 13) to respond to the original complaint. In the meantime the temporary restraining order (TRO) would remain in force.

However, the RIAA says that less than two days after the extension was agreed, the defendants “flagrantly violated [the TRO], in the most damaging way possible.”

“Shortly after 1:00 p.m. on Sunday, October 25, Defendants announced that they had publicly released the core ‘back-end’ source code for Aurous, which contains the instructions for exactly how the Aurous software finds, retrieves, and downloads (copies) unauthorized copies of recorded music,” the labels write.

“At 1:07 p.m. Eastern time on Sunday, Defendants sent a tweet from the official Aurous Twitter account announcing that Aurous was now an ‘open source project available on Github’ and providing a link to the Aurous source code repository on the website GitHub.com.”

The tweet and Github posting have both since been removed. However, in their court filing the labels says that they managed to secure copies while characterizing the deletions as an attempt to destroy evidence.

Describing the ‘core’ as the “critical ‘back-end’ source code” powering Aurous, the labels say that by posting the code Sampson breached the terms of the TRO. Furthermore, the labels claim that the release proves that Sampson continued working on Aurous after the TRO was issued in an effort to improve its ability to retrieve and download infringing content.

“There can be no doubt that Defendants did so with the intent of releasing an improved version of the software to the public, notwithstanding this Court’s explicit and unambiguous prohibition against doing so,” they write.

Following the Github release the labels contacted Aurous demanding an end to the violation of the TRO. They also advised the music service that their consent to a delay for the preliminary injunction hearing should now be considered withdrawn.

Counsel for Aurous responded by noting that the breach of the TRO had been accidental and even offered to throw in the towel completely on behalf of his clients.

“Our clients are willing to transfer control of the Aurous domain and anything else you may require including closing the site and all operations (which may have been done already) provide access to their github and social media accounts as early as tomorrow if this proposed settlement can be kept forthwith,” Aurous counsel wrote in an email.

“Our clients have acted in good faith to uphold the proposed settlement agreement and not violate the TRO. Again this is only a misunderstanding that should be bridged in order to serve the best interests of all parties.”

In response the labels dismissed the offer, insisting that the breach had been both intentional and damaging.

“During the five hours or more that Defendants willfully made the core Aurous source code available to the public, while brazenly urging their Twitter followers and other members of the public to visit the repository where it was housed, an unknown number of third parties accessed and copied the source code,” the labels explain.

In the background of this current dispute is Aurous’ response to the RIAA’s allegations that it offers an illegal service.

“The allegations that the purpose of this website is to pirate music is false
and unfounded. Aurous exists for the purposes of bringing together multiple sites all with DMCA takedown capabilities and anti-piracy bylaws,” Aurous’ counsel informed the court.

“Aurous in no way encourages, the downloading or playing of copyrighted music.
Additionally, Defendant maintains a DMCA takedown email. To date, Plaintiff has not submitted any DMCA takedown requests, and simply initiated a lawsuit within days of the website’s publication.”

Aurous says that if the RIAA removed the illegal content from the third-party sites, the Aurous software would not be able to play it. It also claims that the source code released on Github was an old and obsolete version of the software. Nevertheless, the RIAA seems entirely disinterested and is currently overwhelming Aurous with its legal might.

As a result the labels are now asking for Aurous Group and Sampson to be held in contempt of court and punished via monetary sanctions. Perhaps of concern for those who downloaded it, the labels also ask the court to force the defendants to provide a “precise description of when, where, and to whom they disseminated the Aurous application and source code” after the TRO was granted October 15.

While the case is not over yet, the Aurous dream seems well and truly dead. All that remains is to discover how painful it will for those behind the project.

Source: TorrentFreak, for the latest info on copyright, file-sharing, torrent sites and ANONYMOUS VPN services.

XE Market Analysis: Asia - Oct 27, 2015

The dollar started off on a softer footing in early N.Y. trade on Tuesday though recovered its poise as the session progressed, despite weak incoming U.S. data. Durable orders were much softer than forecasts, as was consumer confidence. EUR-USD peaked at 1.1078 after the early data, though eased back into 1.1030 at mid-morning. USD-JPY meanwhile, found support under 120.20, later making its way to 120.46 highs. USD-CAD touched 1.3260, as oil prices made two-month lows, as cable traded under 1.5300.

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EU Adopts ‘Net Neutrality’ Rules, Keeps Loopholes Open

The European Parliament has debated the issue of net neutrality for several years.

The results of these negotiations were included in the Telecoms Single Market (TSM) regulation, which went to a vote this afternoon in Strasbourg.

With support of a majority the rules were passed, as expected. This means that the new rules will become law, replacing existing network neutrality laws in member states of the EU.

However, four proposed amendments that would close various loopholes all failed, much to the disappointment of net neutrality experts and activists.

As a result Europe’s ‘net neutrality’ rules are rather week, allowing prioritized paid services (so-called fast lanes), and slowing down of torrent and VPN traffic, among other things.

This is especially disappointing for member states that have strong net neutrality rules in place, such as the Netherlands and Slovenia, as they may have to implement watered down versions now.

“The European Parliament has avoided making decisions on all crucial points,” Joe McNamee, Executive Director of European Digital Rights, comments on the decision.

“Now, national regulators will have to decide – on abuses imposed through ‘zero rating’, on rules on congestion management, on specialized services and so on,” he adds.

Julia Reda, MEP for the Pirate Party, is disappointed with the vote and hopes that Europeans will hold their elected representatives responsible.

Over the past several weeks many activist groups and digital rights experts supported the SaveTheInternet campaign which encouraged European citizens to share their concerns while asking their representatives to vote in favor of the amendments.

The efforts received widespread support, but not enough to have the majority of parliament members vote for the proposed changes.

Source: TorrentFreak, for the latest info on copyright, file-sharing, torrent sites and ANONYMOUS VPN services.