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DigiProtect is a controversial anti-piracy company which also acts as a copyright holder in order to ease civil claims against alleged file-sharers in several countries across Europe. They track IP addresses on popular file-sharing networks, obtain the identities behind them and demand cash settlements.

A ruling by a court in Frankfurt on January 29th could now have put DigiProtect’s “Turn Piracy Into Profit” mass-warning business model into jeopardy.

An individual was sent a letter by the lawyer Udo Kornmeier on behalf of DigiProtect. The letter contained accusations of illicit file-sharing including a customary cash payment demand of around 651 euros to cover legal costs based on an infringement claim of 10,000 euros. It was accompanied by a demand to pay a further 150 euros in order to acquire a license from the copyright holder for the material downloaded.

While the file-sharer didn’t contest the 150 euro license fee, he refused to pay the 651 euros legal bill. DigiProtect’s lawyers countered with an offer for him to pay 450 euros plus the 150 euros license fee. Again the file-sharer rejected the offer.

DigiProtect then went on to sue the man for 651.80 euros and the case went to court.

In court the judge asked DigiProtect and its lawyers to open up their books to show what legal costs were actually incurred (and paid) to perform legal actions against the file-sharer and send him the letters. Both DigiProtect and their lawyer refused to submit the information.

During the hearing the judge discovered that the relationship between DigiProtect and its lawyers was covered by an agreement similar to the one it had previously with lawyers Davenport Lyons for their UK operations. The details of that arrangement were leaked out last year by a disgruntled insider and revealed some embarrassing truths about the operation.

DigiProtect and its German lawyer refused to allow the agreement between them to be shown in court which meant that the true costs of pursuing the file-sharer remained unproven.

The judge said that even if DigiProtect had paid 651.80 euros to its lawyers to pursue the file-sharer, these cannot be considered as involuntary damages since DigiProtect paid this fee to its lawyer voluntarily. Therefore the only involuntary damages in this case was the 150 euros rights holder licensing fee.

Due to this lack of transparency, the judge decided that the file-sharer did not have to pay DigiProtect the claimed 651.80 euros legal action costs, only the 150 euros licensing fee.

Clearly, if the lawyers can’t get their sizable share of the spoils in this “Turn Piracy Into Profit” operation, the whole business plan falls down. There was certainly no profit to be made from this file-sharer – time will tell if this effect ripples on to other cases.

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

Ubisoft has announced its new solution to prevent pirates from playing their games. The upcoming DRM will require gamers to be online when playing the game. If no Internet connection is available it means that the game wont work, period.

As with most DRM, Ubisoft’s new anti-piracy solution needlessly hurts legitimate customers. Pirates will always find a way around the access restrictions and will be able to play the game offline without running into trouble. Because of this, Ubisoft’s plans were welcomed with skepticism among fellow game developers.

Gaming magazine Develop has asked several gaming industry figures what they think about Ubisoft’s new DRM. While some are against it and others showed support, the overall sentiment is that DRM itself is not going to stop piracy.

Gusto Games’ Luke Maskell is the most outspoken of them all. “I’m firmly against Ubisoft’s announcement, I think it’s a huge violation of privacy and is only punishing the legitimate customer; the pirates won’t have to worry about being online as they’ll find a way around pretty sharpish,” he commented.

Maskell was not the only one with reservations though. Adrian Hirst, Managing Director at Weaseltron, also stressed that the danger of DRM is that the pirated copy turns into a more desirable product than the retail version.

“Previous draconian attempts at copy protection have only served to outrage our very customers. Copy protection that makes the cracked copy of the game more appealing to the customer than the genuine one threatens to turn them away from purchasing at all,” he said.

Most of the other gaming insiders that were interviewed agreed with this assessment. DRM will only hurt the game if legitimate customers have to face more restrictions than those who choose to download a copy illegally.

“I don’t believe that online DRM on it’s own will ever stop piracy – your game will simply have that functionality stripped out by various hacking groups,” Ben Ward of Bizarre Creations said. “The only way that DRM will be accepted by consumers is if it is delivered inside a service which brings tangible, real-world benefits with it.”

Others were less outspoken against Ubisoft’s new DRM but everyone noted that it will be counter-effective if it’s too obtrusive or cumbersome. To us at TorrentFreak, these different opinions clearly suggest that for a long time the digital entertainment industry has chosen the wrong path to counter piracy.

Instead of trying to add more restrictions to the products they sell to customers, they should add in extra features for those who pay for the product. UbiSoft actually made it half way already by adding several advantages for players who play online, but they’re not quite there yet.

Logged in customers who play Ubisoft’s new games online will be able to save it remotely, so they can continue playing the game on other PCs. Continuing along these lines the company could easily include other benefits and extra features for online players. If they then drop the requirement to play online, they might actually have a superior product compared to the pirated version.

In the end it’s all about finding a way to frame or sell DRM as an advantage instead of a restriction.

The music streaming application Spotify is a great example of how ‘DRM’ can be an advantage. Spotify users can only access music when they’re logged in, which is the ultimate DRM. Still, no one has even brought this issue up because the service offers so many advantages over most other legitimate and illegitimate ways of enjoying music.

If those in the gaming and other digital entertainment industries start thinking in terms of adding benefits for paying customers instead of useless restrictions to keep pirates out, they would have a lot more satisfied customers. Perhaps even more importantly, they could sell a lot more products.

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

Using pirated films as promotional material to sell consumer electronics is nothing new. The John Lewis store has used aXXo rips to sell iMacs in the past and Saturn, Europe’s largest retailer of consumer electronics, showed pirated films to sell Macbooks.

In these previous cases the pirated films were only on display in the stores, but the multinational electronics company LG takes it a step further. The company is selling TVs that have the functionality to accept a connection from an external USB device. This allows customers to enjoy pictures, music and videos directly on their TVs, all with a piracy endorsement from the manufacturer.

In the packaged English language manual, LG does not try to obfuscate the true purpose of this nifty USB feature – playing pirated movies. In the picture below, LG included pirated versions of The Incredibles and The Aviator, while explaining how easy it is to play the films directly on a TV.

LG seems to understand perfectly what customers want, but we doubt that the movie studios will be very excited about this piracy endorsement from the Koreans. Whether the pirated films were included intentionally is unknown, we expect that a company employee simply downloaded the movies off a file-sharing service out of habit or convenience.

Life’s Good isn’t it?

(via Fefe)

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

Written and directed by Jamin Winans, Ink is an indie movie about a mercenary who appears in the dreams of a comatose 8 year old girl. As with most movies, one part of the story was particularly predictable. It was quickly ripped and ended up on BitTorrent.

Just over a week after becoming available online in early November 2009, Ink pushed into TorrentFreak’s chart of top 10 most pirated movies with an incredible 400,000 downloads.

Unlike the majority of Hollywood movie bosses, the creators of Ink – Jamin and Kiowa Winans – decided to embrace their new-found pirate fans after the extra publicity pushed the movie to 16th place on IMDb’s movie meter and boosted DVD and Blu-ray sales. Kiowa wrote to TorrentFreak and said that the movie ending up on BitTorrent was “absolutely” the best thing that could’ve happened to it.

Now, Lars Sobiraj from German news outlet Gulli has interviewed Kiowa to see how things have progressed a couple of months on from the initial excitement.

As previously reported, Ink has been downloaded hundreds of thousands of times, so just how many of those translated into real-world sales? Kiowa says that is really hard to put an exact figure on that – they haven’t sold a DVD or Blu-ray for every download but sales have unquestionably gone up.

Money also came in from other routes too. As the movie gained popularity on BitTorrent, many Ink downloaders suggested that there should be a ‘donate’ button on the movie’s website so that fans could give money freely.

“We put that [donation link] up at the urging of some of the downloaders with the message ‘if you have watched Ink online for free and would like to contribute what you can, click here’,” Kiowa explains.

“Guess what country has been the most generous? Germany! Germans have been twice as generous as Americans so… thank you Germany. We have also shipped a lot of Deluxe Bundle fan packs to Germany so Ink seems to be a big hit there.”

Gulli asked Kiowa if she felt the movie had fallen victim to piracy, a notion she strongly denies.

“I think to say victim is to characterize piracy as an all-together awful thing. The piracy of Ink is unquestionably responsible for its popularity around the world. Sure our trailers have been out for over a year and have had plenty of views outside the US, but we think that 70% of the illegal downloads are coming from outside of the US and we do get a good number of international buyers at our online store every day,” she explained.

Before Ink was pirated, the movie’s IMDb rating was a lowly 12,991. As reported in our earlier article, it reached 16 and even moved up to the 14th position at one stage. Incredibly it has stayed as one of the top 200 movies in the world for the last two months, a feat that would have been impossible without the extra exposure.

Looking forward to future distribution models, Kiowa feels that everything will change during the next 10 years as people demand instant and simple access to media and their TVs and computers merge together into one device.

“That said, I’m not sure what the revenue model will be for films,” she notes. “Hollywood producers are quickly finding out that the instant films start circulating on DVD they will wind up on torrent sites.”

Kiowa broadly puts BitTorrent users into two camps – those who want media in an instant and those who want it for free. Noting that there are those who fall into both categories, she acknowledges the challenges that lie ahead in figuring out a way to make this situation bring revenue to the filmmakers.

“I think a reasonably-priced instant download the moment the movie becomes available would largely cure the piracy issue so we will see how it all shakes out over the next several years,” she adds.

As most observers are aware, many music and movie companies consider torrent sites as entities to be crushed and in recent years have set about a strategy to achieve that. Gulli asked Kiowa if she believes that is the correct strategy to deal with the problem.

While one could argue that non-physical digital formats such as MP3 are part of the reason that piracy has flourished in recent years, Kiowa feels that the invention of the iPod has helped to reduce piracy, largely through the existence of competition from one service – iTunes. The movie industry needs to catch up.

“Until the equivalent of the iPod is invented for film or long-format video files I think that piracy is going to be a huge battle ground, one in which I doubt Hollywood will win,” Kiowa predicts.

“There is always a smarter programmer out there that can move faster than bureaucracy. The film industry really needs to set its sights on overhauling its distribution system. Right now there are horrible things like region-coded DVDs that tie up a film’s rights in various countries and this is what has made the film business plenty of money over the years.”

The industry needs to move its thinking to encompass global distribution, says Kiowa, not concentrate on pushing movies out to dozens of separate territories.

“We are going to keep all the rights to Ink and not give them away country-by-country so that when that iPod-for-movies emerges Ink can be the first film that debuts to the whole world,” she says, adding: “That is the hope anyway.”

Looking to the future, partner Jamin is currently working on scripts for two new films, one a sci-fi psychological thriller called ‘The Frame’ and another a sci-fi fantasy called ‘Myth of Man’.

“For the time being we’re just really happy that Ink is rolling along and gaining fans around the world. How ever people come to the film, we’re just happy that they are watching it, Kiowa concludes.

“As Jamin likes to say, the battle of independent films is not piracy, it’s obscurity. Hey – at least we’re winning that one!”

The full interview conducted by Lars Sobiraj, is available here.

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

Waxy’s Andy Baio has been collecting detailed piracy stats for every Oscar-nominated movie since 2003. Much to the delight of the MPAA, his most recent statistics show that, compared to previous years, fewer Oscar nominees have leaked online.

The statistics for all 2010 nominees, except documentary and foreign films, show that 27 of the 34 films were available on BitTorrent in DVD quality last night. Nearly half of the films have leaked as a screener and 10 of those are estimated to be leaked by Academy members.

Although the majority of the Oscar nominees are available online, the movie industry has certainly scored a small victory. Last year all films leaked in one format or another. On another positive note for the MPAA, the median time for films to leak after their US-release date has nearly doubled to 21 days. In 2003 it took only one day for most films to leak onto the Internet.

On the negative side, there were still 4 films that were available online before they they premiered in US movie theaters. In The Loop, The Hurt Locker, The White Ribbon and The Young Victoria all leaked in advance of their official premiere.

The graph below further shows that there are less retail DVD rips available compared to previous years, 44% versus 100% in 2008 and the years before. As Andy also mentions, this figure may go up a little before the official Oscar award ceremony broadcast.

Although this data suggests that the movie industry is becoming more effective in preventing screeners from leaking online, we have to emphasize that more than a third of the leaks originated from deviant Academy members who like to share the work of their colleagues.

The Oscar screener of Avatar was sent out relatively late, only a few weeks ago. It leaked onto the Internet today and is not included in the graphs above.

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

Avatar has been an enormous success. The film has broken nearly all records at the box-office, and together with The Hurt Locker it was last night’s big winner raking in nine Academy Award nominations.

James Cameron and the rest of the Avatar crew probably cracked open a few bottles of Champagne to celebrate, but today they will wake up with a serious hangover.

Only a few days after the nominations were announced, a DVD screener of Avatar (2D) appeared online. Before today, only a lower quality Telesync copy of the film has been available on BitTorrent and other file-sharing networks.

Ironically, the DVD screener that is now widely available online most likely leaked through one of the Academy Awards voters.

There is no doubt that Avatar will also score big in the list of most downloaded movies this year. The Telesync copy of the film that has been available for over a month was already downloaded by more than two million people.

It is expected that the DVD leak will easily double or even triple these figures. Avatar has been among the most searched for keywords on nearly every torrent site for more than a month already.

Twentieth Century Fox has been extra careful with sending out the DVD-screener of Avatar, as more Academy members received it mid January, just a few days before they had to vote. Although this did delay the leak, it couldn’t be prevented.

How and if the DVD-screener will affect the box-office revenues is up for debate. The film has already grossed more than $2 billion worldwide, which is an absolute record despite the relatively high piracy rate. In fact, high piracy numbers are often an indicator of success at the box-office and vice versa.

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

The Federal Court has today ruled in favor of Aussie ISP iiNet following a copyright infringement case instigated by AFACT, the Australian Federation Against Copyright Theft.

Last year several studios including Village Roadshow, Universal Pictures, Warner Bros Entertainment, Paramount Pictures, Sony Pictures Entertainment, Twentieth Century Fox Film Corporation, Disney Enterprises, Inc. and the Seven Network took legal action against iiNet, claiming that the ISP did nothing to stop its customers from sharing copyright media via BitTorrent.

The ISP refuted the claim with a multi-layered defense, which was heard then adjourned in November 2009.

Passing his verdict today, Justice Cowdroy ruled that while the studio’s copyrights had indeed been infringed upon, iiNet did not authorize the copyright infringing activities of its subscribers and therefore the ISP could not be held responsible.

Notably, Justice Cowdroy said that iiNet had no control over BitTorrent networks and the ISP was covered under so-called “safe harbor” provisions.

“It is impossible to conclude that iiNet has authorised copyright infringement … [iiNet] did not have relevant power to prevent infringements occurring,” Justice Cowdroy said in his judgment.

AFACT had insisited during the original court case that iiNet should forward copyright infringement warnings to its customers on behalf of AFACT members, but the judge ruled that this was not the way copyright infringements should be handled.

Electronic Frontiers Australia said the outcome of the case was the “application of common sense” and Pirate Party Australia also welcomed the decision.

“This is a good decision by Justice Cowdroy, and reflects that there is no legal basis or obligation for any ISP to act in the interest of copyright holders, or to expect that they should disconnect any entity upon allegation of infringement without judicial oversight and due process,” said Rodney Serkowski, Party Secretary.

“Essentially an ISP should be considered similar to the postal service – they simply carry data in the form of packets, and that communication should be considered private,” he added.

In a statement, iiNet said it had “never supported or encouraged breaches of the law, including infringement of the Copyright Act of the Telecommunications Act,” adding that the company had always been a “good corporate citizen and an even better copyright citizen.”

After the huge distraction of this prolonged legal battle, iiNet said it would now like to get on with business, adding that it looks forward to working with the entertainment industry to make content available legally to reduce illicit file-sharing.

AFACT executive director, Neil Gane, said his group was extremely disappointed with the Court’s ruling.

“Today’s decision is a set back for the 50,000 Australians employed in the film industry,” he said in a statement.

“But we believe this decision was based on a technical finding centered on the Court’s interpretation of the how infringements occur and the ISPs’ ability to control them. We are confident that the Government does not intend a policy outcome where rampant copyright infringement is allowed to continue unaddressed and unabated via the iiNet network,” he added.

AFACT will have to pay all of iiNet’s substantial legal costs. Thus far, the group has declined to confirm whether it will appeal the Court’s decision.

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

uTorrent for Windows saw its first public release in September 2005 and soon became the most widely used BitTorrent applications. The client is used by more than 50 million users worldwide and this number continues to rise.

Today, uTorrent version 2.0 was officially released. This new release is built to be more network friendly thanks to the Micro Transport Protocol (uTP) which aims to mitigate network congestion caused by poorly configured BitTorrent clients.

uTP is a new and improved implementation of the BitTorrent protocol which is designed to be more network friendly than its predecessor. The current implementation often causes interference with other applications. This is one of the main reasons why ISPs try to slow it down, or even stop it altogether. uTP aims to solve this problem.

Simon Morris, BitTorrent’s VP of Product Management is quite proud of the end result, and told TorrentFreak that most ISPs have also responded positively to the implementation of the uTP protocol.

“In general the ISPs who we have explained the technology to have been quite pleasantly surprised. There are occasional noisy skeptics who think its something evil, but they are generally poor confused souls who are more interested in selling a centralized vision of the internet rather than the distributed egalitarian system we have today,” Morris said.

“I’m excited about uTP finally arriving at a full scale deployment on the internet and I really hope that ISPs take the time to understand the potential benefits to them before they take decisions about how to manage this new class of traffic on their networks,” he added.

Aside from being gentle to the ISP’s networks, uTorrent 2.0 might also have a beneficial effect on the download speeds of individual users. Since there is less congestion, uTorrent users will experience no slowdowns in web-browsing.

Less congestion and a more efficient use of the network may eventually result in faster download speeds, which means that it will be a win-win situation for both ISPs and uTorrent users.

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

Twitter alleges that a torrent script developer has installed backdoors into his software, allowing it to gain login credentials of users. These credentials have been abused to boost the follower count of unnamed Twitter accounts.

Below is an excerpt of Twitters blog post revealing the threat.

It appears that for a number of years, a person has been creating torrent sites that require a login and password as well as creating forums set up for torrent site usage and then selling these purportedly well-crafted sites and forums to other people innocently looking to start a download site of their very own. However, these sites came with a little extra — security exploits and backdoors throughout the system. This person then waited for the forums and sites to get popular and then used those exploits to get access to the username, email address, and password of every person who had signed up. Additional exploits to gain admin root on forums that weren’t created by this person also appear to have been utilized; in some instances, the exploit involved redirecting attempts to access the forums to another site that would request log-in information. This information was then used to attempt to gain access to third party sites like Twitter.

So, the company blames ’someone’ of installing backdoors in a torrent site script that was sold to prospective torrent sites operators, something that has apparently gone unnoticed for years. The question that comes to mind immediately is, if this is such a serious and widespread threat, why doesn’t Twitter name the source or at least give some examples of affected sites?

All of the popular public torrent sites are custom built and cannot be the source of the exploit. From the information Twitter has made available it seems they could be blaming a private tracker script for the attack – most private trackers also operate forums which matches Twitter’s description of the sites involved.

There are quite a few private tracker scripts out there and the most established ones, such as TBDev and Gazelle for example, have been examined by untold numbers of experts and come free of charge – any suggestion that they could be involved in underhand activity is unthinkable. But there are also a few scripts that are created by middle-men whose reputations are less-easily tested.

Accusations of including back doors and exploits in tracker code are not new. The owner of Template Shares, a site that sells a heavily modified version of the TBDev BitTorrent tracker script, has been accused by several people of installing backdoors which provide access to the user databases of customers’ sites.

Template Shares is used by hundreds of smaller private BitTorrent trackers.

To warn the public, other online services and the operators of the affected torrent sites, it would be appropriate if Twitter gave out some more information. TorrentFreak will continue to look into this case and will post an update if we find out more.

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

Yet again it appears that the music industry in Sweden has used the country’s IPRED legislation to force the police to take action against illicit file-sharers.

Speaking with Swedish Radio, Lars Gustafsson, chief executive of IFPI Sweden, said that recently his group had made 20 complaints against illicit file-sharers, but only five were considered to be on a large enough scale to warrant the police taking action.

The alleged large-scale file-sharers, suspected of making available between 9,000 and 17,000 music tracks each, were raided by police yesterday.

Five different locations including Gothenburg, Docksta, Handen and Upplands Väsby were targeted, resulting in the arrest of a 28 year-old man believed to be the hub owner. According to prosecutor Frederick Ingblad, the man accepted some responsibility but denied the charges.

The others, all accused of copyright infringement offenses, had their equipment confiscated. Ingblad reports that thus far, two have admitted making music available through the hub.

“This business is still too large. There are so many new and good options there is really no reason anymore for people to steal music,” IFPI’s Lars Gustafsson told DN.

Rick Falkvinge, leader of the Swedish Party, was critical of the raids, and of the IPRED legislation which made them possible.

“When the police go in and take people’s private computers because they have shared music, it’s completely wrong,” he said.

“Record companies are running with the same argument that publishers did when libraries came into being. They warned that no one would continue to write books if it was possible to borrow them for free.”

Sweden continues to be one of the most popular countries in the world when it comes to sharing via Direct Connect. Its users are a perfect target for the IFPI, since individuals tend to share their entire music collection in one place, which makes proving large-scale infringement a breeze.

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