Hollywood Studios Agree to Settle Piracy Lawsuit With Dragon Box

Hollywood Studios Agree to Settle Piracy Lawsuit With Dragon Box

Last year, several major Hollywood studios, Amazon, and Netflix filed a lawsuit against Dragon Media Inc, branding it a supplier of pirate streaming devices.

Under the flag of anti-piracy group ACE, the companies accused Dragon of using the Kodi media player in combination with pirate addons. As such, the company facilitates mass copyright infringement, it was argued.

Dragon Box swiftly responded to the allegations by halting its sales. The company later decided to change its business model, moving from a Kodi-addon platform to a subscription-based service called BlendTV.

The box vendor maintained that this was perfectly legal, but the copyright holders clearly disagreed. This prompted Dragon Box to halt its sales again.

That wasn’t the end though. Last month the boxes returned with yet another service called “My TV Hub.” According to the Hollywood studios, this service is not legitimate either. Growing tired of this “whack-a-mole” they asked the court to intervene.

The ACE members requested a preliminary injunction to halt the infringing activity. It appears, however, that this is no longer required. A few days ago, Dragon Box’s attorney informed the court that they’ve agreed to settle the matter.

“Defendants respectfully notify the Court that the parties have agreed in principle to settle the above-entitled case,” attorney Matthew J. Faust writes.

“At this time, the parties are in the process of preparing a settlement agreement and intend to file the documents related to the final disposition of the case within the next few days,” he adds.

The court responded to the filing by vacating all other hearings and deadlines that were on the docket. However, given the history of this case, it’s probably wise to wait until all paperwork is filed before marking it as resolved.

At the time of writing the Dragon Box website remains online. The boxes themselves are no longer listed for sale, but the site does link to a “Blend TV” subscription which prospective users can buy.

A spokesperson for ACE informed us that they would release more information on the matter in the near future. We will update this article when that arrives.

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Sweden’s Supreme Court Slashes Damages Against Pirate Site Operators

Sweden’s Supreme Court Slashes Damages Against Pirate Site Operators

After capturing an audience of millions of visitors since its launch in 2013, January 2015 saw the surprise shutdown of Sweden-based streaming site Dreamfilm.

One of its administrators was detained by the authorities so, in response, the extremely successful site decided to call it quits.

As the case against the site rolled on, four men – aged in their 20s and 30s – eventually had their day in court. While they admitted being involved in the site, none admitted any wrongdoing.

In 2017, however, the Linköping District Court found them all guilty of copyright infringement offenses and sentenced them to between six to 10 months in jail. They were also ordered to pay a fine of SEK 1,000,0000 (US$110,850) to plaintiffs including the Swedish Film Industry, Nordisk Film, and Walt Disney.

As soon became clear, neither side was happy with the result. The defense felt the sentences were too harsh and, of course, the prosecution felt they were too lenient. The case then went to appeal.

Early 2018, the Court of Appeal handed down its decision. Importantly, it was decided there would be no terms of imprisonment to be served due to the previous good character of the defendants.

However, it more than quadrupled the damages from SEK 1,000,000 to SEK 4,250,000 (US$471,112). This damages award, the Court of Appeal ruled, was the amount a hypothetical license to distribute a single sample movie would have cost, had the defendants obtained permission.

Last year it was reported that two of the defendants would take their case to the Supreme Court with a request to determine whether the level of damages could be considered sensible and fair. The Court has now delivered its verdict and it’s good news for the former site operators.

In a summary published this week, the Supreme Court notes that copyright holders are entitled to compensation when people exploit their content. The cost of doing so is usually based on the going rate when someone requests permission beforehand.

However, in the case of pirate sites, there is no going rate, since such platforms don’t ask permission to exploit and would probably be declined, even if they did. As a result, the Court has the task of determining a fair rate of compensation.

“The Supreme Court has come to the conclusion that it is conceivable to point out that a license agreement could have been met between a rightsholder and someone who wanted to use the work in the way that has also happened in the present case,” the Court writes.

“As can be seen from the judgment, however, it may be associated with such difficulties that the fictitious license fee cannot be used as the basis for the compensation that the court must determine. The court may then make an estimate of the reasonable remuneration for the use of the work, taking into account the investigation that the parties have submitted to the court.”

In the end, the Supreme Court decided that it could not use the method offered by the Swedish Film Industry to determine “reasonable remuneration” for the one sample movie dealt with in detail during the case. It, therefore, decided to massively slash the SEK 4,250,000 (US$471,112) award to just SEK 400,000 (US$44,340).

Local anti-piracy group Rights Alliance did not welcome the news.

“This is a very significant claim and only applies to one of the total 950 films in the case. In fact, however, the judgment is wrong because it means that it is cheaper to illegally steal a copyright than to try to negotiate legally,” says Henrik Pontén of Rights Alliance.

“However, it is in line with Swedish law development in the area where one focuses on what the perpetrator could think of paying for his theft. If Sweden is to be a country where the creation of creative works pays off, we must give the victims more importance in these decisions.”

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YouTube Ripper Wins Dismissal of Record Labels’ US Piracy Lawsuit

YouTube Ripper Wins Dismissal of Record Labels’ US Piracy Lawsuit

YouTube rippers are seen as the largest piracy threat to the music industry, and record labels are doing their best to shut them down.

In 2017, YouTube-MP3, the world’s largest ripping site at the time, shut down after being sued, and several other folded in response to increased legal uncertainty.

Not all stream-ripping sites throw in the towel without a fight though. FLVTO.biz and 2conv.com, owned by Russian developer Tofig Kurbanov, remained online despite being sued by several record labels last August.

Where other site owners often prefer to remain in the shadows, Kurbanov filed a motion to dismiss the case. According to the defense, the court has no jurisdiction over the matter. Only a small fraction of the visitors come from the US, and the site is managed entirely from Russia, it argued.

The RIAA labels, including Universal, Warner Bros, and Sony, clearly disagreed. In response, they argued that the operator of FLVTO.biz and 2conv.com downplays the connections to the US and Virginia. Therefore, he should stand trial there.

Yesterday, US District Court Judge Claude M. Hilton ruled on the matter. In a 14-page opinion, he clearly sides with the operator of the YouTube rippers. Kurbanov doesn’t have to stand trial in the US so the case was dismissed.

The ruling is merely about jurisdiction and doesn’t make an assessment of the alleged copyright infringements. The court carefully reviewed how the site operates and found no evidence that they purposefully targeted either Virginia or the United States.

The sites are available in the US and have plenty of visitors there, but that by itself is not enough.

“Even if the Websites’ servers knew exactly where the users were located, any interaction would still be in the unilateral control of the users as they initiate the contacts,” Judge Hilton’s opinion reads.

2conv.com

There could be personal jurisdiction if there’s a “commercial contract” involved. However, that’s not the case here. The site generates revenue from users through advertisements, but that’s not seen as a basis for a commercial contract, the court concludes.

“As the Websites are semi-interactive, the interactions with the users are non-commercial, and there were no other acts by the Defendant that would demonstrate purposeful targeting, the Court finds that Defendant did not purposefully avail himself of the benefits and protections of either Virginia or the United States.

“The Court finds that exercise of personal jurisdiction over Defendant would be unconstitutional as a violation of due process…” Judge Hilton’s opinion adds, before dismissing the case.

In addition, the opinion stresses that without personal jurisdiction the record labels don’t have the option to refile the case in California or elsewhere in the US.

The ruling

Val Gurvits, one of the attorneys who represented the site operator, is thrilled with the outcome. He believes this will also be beneficial to other foreign sites that offer similar functionality.

“This decision goes a long way towards curbing the copyright owners’ misuse of the US legal system to bully foreign website operators,” Gurvits informs TorrentFreak.

In many copyright-related cases, foreign defendants decide not to appear at all, but this case shows that fighting back can pay off.

“All too often plaintiffs file actions in US courts against foreign defendants that have no connections with the US – and all too often foreign defendants are subjected to default judgments for failure to appear in a US court,” Gurvits says.

“We are happy we were able to save our client from having to defend this action in a US court thousands of miles away from where the relevant business activities take place,” he adds.

The major record labels have yet to comment on the outcome. TorrentFreak reached out to the RIAA for a response, but we haven’t heard back thus far.

A copy of the memorandum opinion supporting the dismissal is available here (pdf).

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