Movie Piracy Giant Egy.best Shuts Down

Movie Piracy Giant Egy.best Shuts Down

To most people in the West, Egy.best may not ring a bell, but in Arabic speaking countries, it’s been a piracy beacon for years.

The site, which proudly boasted a “Made in Egypt” tagline, offered access to pirated copies of movies and TV-shows. These could be downloaded and streamed for free, often with subtitles.

Egy.best was most popular in Egypt where it was among the ten most visited sites in the country. In addition, it was also the number one pirate site in many neighboring countries, including Algeria, Kuwait, Morocco and Saudi Arabia.

This week, however, the site’s operators decided to throw in the towel, without prior warning. Those who access Egy.best today only see the site’s logo, with النهاية. underneath it, which means “the end.”

It’s unclear why the site, dubbed by some as the Netflix for the poor, took this drastic decision.

In a message on the site’s official Facebook account, which has since been removed, the site mentioned that several Egyptian ISPs has started to block the site. Shortly after, the site shut down, but whether there’s a connection remains uncertain.

ISP blockades were indeed put in place recently. They didn’t just target Egy.best, but also other sites including Arab Lions, Akoam, Movies land, Arab Seed, Mazzika Today, Shahid4u, and Cima4up. Some of these switched to new domain names subsequently, but Egy didn’t.

Egy.best

Some people assumed that the blockades triggered the shutdown, but that would be a rather unusual response. This is also what a follow-up message in the Facebook comment section suggests. There, a site operator noted that it’s bigger than just the blocking efforts in Egypt.

Without an official statement on the reason for the shutdown, people can only speculate. The most likely explanation, perhaps, is some kind of legal pressure, but until the operators share more details, that remains a guess.

Whatever the real reason might be, for millions of people the site’s closure is a big blow. Twitter is littered with messages from people mourning the site’s demise. Not just from Egypt, but from many other Arabic speaking countries as well.

“Whoever did it & was reason of closing it [sic], you take some good prayers from many of us in this Ramadan..,” one commenter noted, with someone else adding that “Summer without #egybest will be a sad summer.”

Others expressed their state of mind through memes.

Egy.best’s gone

Considering the massive size of the site, there’s a huge void to be filled and several ‘copycats’ and competitors are eager to jump in. We’ve already seen several people hijacking the #egybest hashtag on Twitter to promote alternative streaming sites and piracy portals.

There’s little doubt that many of Egy.best’s users will ultimately find a new home, but considering the massive response on social media, the original will be missed.

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YouTuber Sends Lawyer After UFC to Stop ‘Unfair’ Takedown Notices

YouTuber Sends Lawyer After UFC to Stop ‘Unfair’ Takedown Notices

Copyright enforcement on YouTube is a growing source of frustration,  particularly the overbroad takedown efforts.

Many channel operators and users have complained about apparent abuse, but most don’t go any further than that. 

John MacKay, owner of the popular channel  “Boxing Now” is an exception. On his channel, MacKay releases videos with post-fight commentary of popular fights. With hundreds of thousands of subscribers, he’s amassed a sizeable audience over the years.

The channel also comments on matches from the Ultimate Fighting Championship (UFC). Since MacKay hasn’t cleared the rights to these broadcasts, he doesn’t use video footage from these fights. Instead, he shows a few still images, commenting on these. 

Nonetheless, the UFC is not happy with his coverage, as the organization has sent five takedown notices targeting Boxing Now’s videos. These are not automated Content-ID flags, but actual takedown notices, which resulted in the videos being removed from YouTube. 

MacKay believes that his work is a clear case of fair use so in response sent counternotices for each takedown. The UFC hasn’t responded to any of these, which meant that YouTube restored the videos. However, at that point, most harm was already done. 

“My videos are most often viewed in the days immediately after a fight, and when UFC has them taken down for a few days with these unfair copyright claims, I lose a lot of viewers and a significant amount of money,” MacKay says, commenting on the issue.

Frustrated by the continued takedowns, MacKay decided to take a stand. He reached out to the Electronic Frontier Foundation (EFF) to help him address the matter. The EFF was happy to oblige and this week attorney Alex Moss sent a letter to the UFC, demanding that it stops sending unwarranted notices.

Boxing Now

In the letter, Moss goes over the four factors of fair use, concluding that all weigh in the channel operator’s favor.  For example, the videos are transformative, only use a few frames of the copyrighted content, and do not compete with the original broadcast.

“Mr. MacKay’s post-fight commentary could not and did not affect the market for a live broadcast or recording of the entire fight. If anything, Mr. MacKay’s use of still images for commentary purposes would likely increase demand for the original,” Moss writes.

The EFF’s attorney points out that the UFC has an obligation to consider fair use before sending a takedown request, as was determined in the Lenz vs. Universal case. The repeated notices targeting Boxing Now’s videos indicate that the UFC has failed to meet this obligation, which harms the channel’s business. 

When the videos are taken down shortly after being posted, MacKay is missing a lot of views and therefore ad revenue. Added to that, the takedown notices also put his channel at risk, as YouTube may terminate accounts after repeat infringements. 

What the UFC’s precise motivation is for the requests is unknown. The EFF’s attorney points out, however, that the UFC also has its own post commentary videos on YouTube and that it’s reducing the competition with its takedown notices.

“We note that UFC also produces YouTube videos containing post-fight commentary, and that Mr. McKay’s videos and UFC’s videos may compete for viewership and advertising revenue. This further suggests that UFC’s takedowns of Mr. McKay’s videos were done in bad faith,” Moss writes.

The channel operator, therefore, demands that the UFC stops issuing unwarranted takedown requests. The EFF requests that the organization confirms this intention before the end of the month. 

“Accordingly, we demand that you cease sending takedown notices for Mr. McKay’s videos that make fair use of still images from UFC fights. Please confirm your agreement to do so by May 28, 2019, ” Moss concludes.

It’s not clear whether the EFF and MacKay plan any legal action should the UFC fail to meet their demand. However, as highlighted a few days ago, the likelihood of a lawsuit over unwarranted takedown notices becomes ever more likely, whether that happens in this case or not.

Speaking with TorrentFreak, Moss says she can’t go into detail about any potential follow-up steps. The EFF’s attorney hopes that the letter has some effect and that the UFC stops sending wrongful takedown notices. 

“It’s not too much to expect copyright owners to consider whether something actually infringes before cutting off people’s access,” Moss tells us.

A copy of EFF’s letter, sent to UFC on behalf of Boxing Now’s John MacKay, is available here (pdf).

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MPAA / ACE Shut Down ‘Pirate’ IPTV Service, Seize Domain

MPAA / ACE Shut Down ‘Pirate’ IPTV Service, Seize Domain

In 2015, the Alliance for Creativity and Entertainment (ACE), a new initiative designed to target existing and developing piracy operations on a global scale, announced its launch.

Headed up by the studios of the MPAA plus Netflix and Amazon, more than 30 international media now complete its ranks, including the likes of BBC Worldwide, Bell Canada, MGM, and Village Roadshow, to name just a few.

In addition to targeting Kodi add-ons and their developers, ACE has made unlicensed IPTV services one of its priorities. This morning we can report that the anti-piracy giant has claimed another scalp.

In the grand scheme, OneStepTV.com appears to have been a relative newcomer. Archives suggest that the service launched in 2018 and grew to offer around 600 TV channels and 20,000 pieces of VOD content (such as movies), for $25 per month or less.

No credit checks…

While many of One Step TV’s customers appeared to have enjoyed the service, a few weeks ago problems appear to have become evident to subscribers looking to renew their package.

A post on Facebook dated April 25, 2019, signaled payment processing issues, one of the most common signs that a platform might be in trouble.

“We have been subscribers for awhile now and like your service very much. We are a little confused and concerned as recently we were told that customers cannot renew their subscriptions anymore,” the post reads.

“Is your business going away, or do you anticipate fixing the payment issue in the near future? We really would like to continue doing business with you.”

A few days later, more serious issues hit the streaming service. With its payment processing suspended, the platform itself disappeared.

One Step TV – gone

One Step TV’s public social media posts don’t give any explanation for the outage but yesterday an ominous change to the service’s homepage gave the clearest indication yet of what may have transpired.

Instead of One Step TV’s sales pitch, visitors to OneStepTV.com are now presented with a message from the Alliance for Creativity and Entertainment. Five seconds later the page redirects to the Alliance’s homepage.

Five seconds before redirect

While a page and redirect like this are very easy to fake (pirate sites frequently display similar pages as April Fool pranks), this one is very different. Not only does the domain redirect to the Alliance’s website as promised, changes to One Step TV’s domain records confirm that the domain has been taken over.

Seized by the MPAA

As the image above shows, the domain is now in the hands of the MPAA and has probably been that way since yesterday morning. The site itself is hosted by Amazon, a founding member of ACE.

All the pieces of the puzzle together strongly suggest that in this format at least, One Step TV is done. It’s not clear if a lawsuit is involved but as far as we can see, none have been filed recently by ACE’s lead members.

While it’s difficult to say for sure, this closure bears the hallmarks of a cease-and-desist and subsequent settlement agreement. Given ACE’s reluctance to talk about such agreements, it seems unlikely there will be a detailed public statement.

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Canadian Parliamentary Report Proposes Tough Copyright Measures

Canadian Parliamentary Report Proposes Tough Copyright Measures

The Canadian Government is currently exploring if and how the current Copyright Act should be amended to better fit the present landscape.

To this end, Canada’s Heritage Committee organized several hearings on remuneration models for artists, where it received input from various stakeholders.

The outcome provides input for the Committee on Industry, Science and Technology’s broader review, which will determine the future course for Canada’s copyright policy.  The Heritage Committee hopes that its findings will be included. 

The report, titled “Shifting Paradigms,” leads to a set of 22 recommendations. These cover a variety of issues ranging from addressing the value gap and holding ISPs accountable, through limiting fair dealing, to extending the copyright term.

These themes are in large part meant to further support creators and copyright holders. Much like the EU’s copyright reform, there is a lot of emphasis on the so-called value gap, i.e the notion that artists don’t currently receive fair compensation for their work.

This is also reflected in the report. For example, the payouts at streaming services such as Spotify are often seen as too low. Similarly, services such as YouTube can distribute music and profit from it, while only paying a small fee to copyright holders.

“The inability of policy to evolve with technology has prevented artists from receiving fair market value for their work. According to witnesses, these outdated rules have diverted wealth from creators to large digital intermediaries on which artistic content is consumed,” the committee writes. 

There are also rightsholders who have highlighted the possible aspects of technology on their industries. Content creators have many new distribution platforms, for example, which can bring in extra revenue. However, it’s clear that creators can use some guidance, which results in the first recommendation.

Recommendation 1: That the Government of Canada increase its support for creators and creative industries in adapting to new digital markets.

Online piracy in general is another major theme. Torrent sites and streaming sites remain a significant problem which is hard to address, for example. In addition, ISPs currently have little incentive to help combat piracy. 

One issue that the Government will look into is whether safe harbor exceptions for ISPs should change, to make these companies accountable for pirating users under certain circumstances. 

Recommendation 5: That the Government of Canada review the safe harbor exceptions and laws to ensure that Internet service providers are accountable for their role in the distribution of content.

More generally, the report also suggests that Canada should do more to tackle online piracy overall. One of the options, as suggested during the consultation, is to criminalize online streaming.

Recommendation 6: That the Government of Canada increase its efforts to combat piracy and enforce copyright.

Not dumb pipes

The recommendations are mostly meant to strengthen the position of rightsholders. This also includes an extension of the copyright term from 50 to 70 years after the creator’s death. This follows requests from several copyright groups and is in line with the new trade agreement with the US and Mexico.

According to the committee, no witnesses expressed outright opposition to extending of the copyright term, which leads to the following recommendation.

Recommendation 7: That the Government of Canada pursue its commitment to implement the extension of copyright from 50 to 70 years after the author’s death.

Large copyright intermediaries are also presented with a setback, which appears to have been largely initiated by Canadian singer Bryan Adams. During a hearing last year, Adams suggested changing the text of the Copyright Act to made it easier for artists to regain their copyrights.

At the moment, Canadian copyright reverts to a creator’s heirs 25 years after “death.” By changing the word “death” to “assignment”, creators will be able to terminate a copyright assignment while they’re still alive. 

This is helpful to artists who sign away their rights to labels early in their career, which they may regret later. The Heritage Committee sides with Adams and includes the following recommendation.

Recommendation 14: That the Government of Canada amend subsection 14(1) of the Copyright Act so that it reads “from 25 years after assignment.

Following more music- and movie-related recommendations, many of which deal with licensing and remuneration, the committee shifts its focus to the publishing industry. 

Specifically, it addresses a commonly heard complaint from publishers that Canada’s fair dealing exemptions are too broad. Currently, schools are allowed to copy texts for educational use, but this should change, the committee argues.

Recommendation 18: That Government of Canada amend the Act to clarify that fair dealing should not apply to educational institutions when the work is commercially available.

All in all its clear that the recommendations made in the report are favorable to copyright holders, who will welcome it with open arms. However, not everyone is positive.

University of Ottawa professor Michael Geist, who has followed the developments closely, describes the report as the most one-sided Canadian copyright report issued in the past 15 years.

“Representing little more than stenography of lobbying positions from Canadian cultural groups, the report simply adopts as recommendations a wide range of contentious proposals: copyright term extension, restricted fair dealing, increased damages, as well as several new rights and payments,” Geist writes.

“There is no attempt to engage with a broad range of stakeholders, much less grapple with contrary evidence or positions.”

While the Heritage committee did hear several witnesses from people with contrasting views, such as Professor Jeremy de Beer, lawyer Howard Knopf, and author Cory Doctorow, these positions were not reflected in the final report.

The Heritage Committee’s recommendations will now be reviewed by the Standing Committee on Industry, Science and Technology, which is tasked the broader copyright review. That report is expected to come out later this year.

As such, there’s still a long way to go before any of these proposals are acted upon, if that’s the case at all.

A copy of the House of Commons Standing Committee on Canadian Heritage ‘s “Shifting Paradigms” report is available here (pdf).

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Aussie Music Industry Wins First Ever Stream-Ripping Site Blocks

Aussie Music Industry Wins First Ever Stream-Ripping Site Blocks

The worldwide music industry is making no secret of its disdain for so-called stream-ripping sites.

Utilizing content culled mainly from YouTube but also other streaming platforms, these services convert streams into downloads, allowing users to permanently store content – usually music – on a local machine.

Earlier this year the fight to curtail the growth of such platforms landed in Australia. Music labels Sony, Universal, and Warner, with assistance from Music Rights Australia and the Australasian Performing Right Association, eventually appeared in Federal Court during April, asking for action against four key players.

2conv, Flv2mp3, FLVto, and Convert2mp3 (full list of domains below) are considered some of the most significant stream-ripping sites. The music industry asked the Court to prevent users of local ISPs from accessing them. None are located in Australia but that’s convenient from a blocking perspective – Australian law requires them to be based overseas.

Lawyers for the music entities argued that the services are all unlicensed and that while some of the platforms indicate that users themselves should obtain licensing to rip content, that was a “meaningless warranty.”

This morning, ComputerWorld reported what observers believed to be the inevitable outcome. Justice Perram of the Federal Court has sided with the record companies and ordered local ISPs to block access to the sites. The order covers Telstra, Foxtel, Optus, TPG and Vodafone, plus subsidiaries, the publication reports.

2conv blocked by TPG (Thanks to AR)

Before last year’s amendments to Australia’s Copyright Act, obtaining an order to have these sites blocked would have been more difficult.

Previously, in order for a platform to be rendered inaccessible by ISPs, it would need to have a “primary purpose of infringing”. Last November’s changes lowered the bar so that sites “with the primary effect” of infringing or facilitating infringement can also be blocked.

Another element that would’ve helped the Court side with the music companies is the fact that all of the targeted platforms have been involved in legal action in other countries.

Convert2mp3 is Germany-based and was previously declared illegal and blocked in a first-of-its-kind case in Denmark. The other three services are all based in Russia, with FLVTO.biz and 2conv.com embroiled in legal action with labels in the United States.

In that action, the platforms have thus far come out on top but from the labels’ perspective (1,2) this is unacceptable. Tofig Kurbanov, the Russian operator of the stream-ripping sites, says that if the record labels want a legal battle, they should have that fight in Russia.

In a reply brief filed at the Court of Appeals for the Fourth Circuit earlier this month, Universal, Warner Bros, and Sony argued that the confrontation should take place in the United States. Previously, US District Court Judge Claude M. Hilton dismissed the case due to a lack of jurisdiction.

It’s clear that the labels in the US and elsewhere are determined to stamp out the stream-ripping threat, wherever it may appear.

As reported here on TF yesterday, the RIAA recently obtained a DMCA subpoena to unmask the operator of stream-ripping site YouTubNow, a platform with an estimated 15 million monthly visits.

The domains to be blocked by ISPs in Australia are as follows:

2conv.com
Flv2mp3.by
Flv2mp3.com
Flv2mp3.org
Convert2mp3.net
Flvto.biz
Flvto.com

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RIAA Obtains Subpoena to Unmask YouTube-Ripping Site Operator

RIAA Obtains Subpoena to Unmask YouTube-Ripping Site Operator

Stream-ripping tools have become a big deal for the music industry over the past several years.

Instead of having to revisit platforms like YouTube, Spotify or Deezer, users of ripping tools or sites are able to download content to their own machines. The labels argue this deprives artists and indeed platforms of revenue while breaching music licensing conditions.

Perhaps the biggest problem is presented by sites that allow people to rip content from YouTube, whether that’s video or audio, or audio alone. While this can be for legitimate purposes, millions use stream-ripping platforms to obtain copyrighted content for free.

One such site is YouTube-ripping service YouTubNow.com. According to SimilarWeb stats, the site currently receives around 15 million visits per month, with the highest share of its visitors hailing from the U.S.

“YouTubNow is a powerful service that allows you to find and download your favorite YouTube videos as well as music tracks quickly, easily and absolutely for free,” the site’s promo material reads.

“It’s an excellent YouTube to MP3 downloader as it makes any soundtrack a separate audio file tailored especially for you!”

This clearly isn’t something the RIAA appreciates. The music industry group targeted YouTubNow last week via a DMCA subpoena directed at the site’s domain name registrar, NameCheap.

In common with a similar process aimed at file-hosting platform NoFile and first reported here on TF, the RIAA filed its request at a federal court in Columbia, demanding that NameCheap hands over the personal details of its client. The Court was happy to oblige.

“We believe your service is hosting [YouTubNow.com] on its network,” a subsequent RIAA letter to NameCheap reads.

“The website associated with this domain name offers files containing sound recordings which are owned by one or more of our member companies and have not been authorized for this kind of use, including without limitation those referenced at the URL below.”

The allegedly-infringing URLS

It isn’t clear whether the RIAA has already filed any DMCA takedown notices with YouTubNow via the email address published on the site. Nevertheless, from the ‘copyright notice’ published on the site itself, YouTubNow claims no responsibility for what users do with the service.

At users’ own risk….

From the wording of the letter sent to NameCheap and the subpoena itself, the RIAA appears more concerned about the entire YouTubNow service, rather than just a few seemingly random URLs.

“The purpose for which this subpoena is sought is to obtain the identity of the individual assigned to this website who has induced the infringement of, and has directly engaged in the infringement of, our members’ copyrighted sound recordings without their authorization,” the RIAA writes.

In addition to demanding the operator’s name, physical address, IP address, telephone number, email address, payment information, account updates and account history, the RIAA suggests a termination of the service’s domain might also be in order.

“We also ask that you consider the widespread and repeated infringing nature of the site operator(s)’ conduct, and whether the site(s)’ activities violate your terms of service and/or your company’s repeat infringer policy,” the RIAA writes.

This is at least the third DMCA subpoena the RIAA has obtained against allegedly-infringing sites in recent weeks. TF previously reported that the group is targeting several ‘pirate’ sites that use Cloudflare and file-hosting platform NoFile.

A copy of the RIAA’s letter, obtained by TF, is available here (pdf)

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Supreme Court Refuses Eminem Publisher’s Case Over Copyright Damages

Supreme Court Refuses Eminem Publisher’s Case Over Copyright Damages

While Kim Dotcom remains embroiled in the largest copyright battle New Zealand has ever seen, the country’s National Party has been facing ‘infringement’ problems of its own.

In 2014 Eminem’s publisher took the National Party to court over alleged copyright infringement of the rapper’s track ‘Lose Yourself’ in an election campaign video.

At the time, the party was led by then Prime Minister of New Zealand John Key, who’s seen as Dotcom’s nemesis. In common with the Megaupload case, the dispute between the National Party and Eminem’s publisher continued to drag on.

The National Party didn’t simply use the track without paying for it. They actually sought professional advice before starting the campaign and licensed a track called Eminem Esque, which is the one they used in the ad.

The party hoped to avoid more expensive licensing fees by using the knock-off song, but the High Court previously ruled that the similarities between Lose Yourself and Eminem Esque are so significant that it breached copyright.

In 2017 the Court ordered the National Party to pay $600,000 for the copyright infringement, an amount neither side was satisfied with. In a subsequent ruling a year later, the Court of Appeal sided with the National Party, reducing the damages to $225,000.

Eminem’s publisher, Eight Mile Style, wasn’t pleased with the outcome and asked the Supreme Court to take it on.

During a hearing two weeks ago the publisher’s lawyer, Gary Williams, told the Court that the damages amount was too low. The rightsholders would have demanded a premium for the song, especially since it was used for political advertising, he argued before the court.

This week the New Zealand Supreme Court decided that it will not allow the appeal, Stuff reports. There is no doubt that the National Party’s use of the track was not permitted, but the Court doesn’t believe an extended legal fight over the damages amount is warranted.

“Given the concurrent findings of fact in the courts below rejecting the contention that the National Party turned a blind eye to the risk of infringement or was reckless, we do not see sufficient prospect of success in an argument that additional damages should have been awarded in this case to justify the grant of leave for a further appeal,” the Court wrote.

This effectively ends the legal battle after five years. The National Party will be happy to move on from this copyright infringement row. For Kim Dotcom, however, the battle continues.

For those wondering if the music used in the National Party’s ad campaign is indeed similar to the original Eminem track, a copy is available below.

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Namecheap Must Identify Nofile.io Registrant Following Piracy Complaint

Namecheap Must Identify Nofile.io Registrant Following Piracy Complaint

There are hundreds of file-hosting services on the Internet, each with their own strengths and weaknesses. 

Nofile is generally known as a no-nonsense service that’s free to everyone. The site launched two years ago and has been building a steady userbase ever since.

Recently, however, the site suddenly stopped working (it came back just hours ago). Checking the domain records revealed that the NS records had been removed, which made it impossible to access the site. The question was, why?

A search through U.S. court records provided some possibly relevant context. It revealed that the music industry group RIAA targeted the site through a DMCA subpoena, directed at Nofile’s domain name registrar Namecheap.

The RIAA requested the subpoena at a federal court in Columbia, which was swiftly signed off by a clerk. The paperwork includes a letter addressed to Namecheap, in which the music group demands detailed information on the customer associated with the file-hosting service’s domain.

“We have determined that a user of your system or network has infringed our member record companies’ copyrighted sound recordings,” the RIAA’s letter reads.

“The website associated with this domain name offers files containing sound recordings which are owned by one or more of our member companies and have not been authorized for this kind of use, including without limitation those referenced at the URL below.”

The URL in question is not just some random piece of music. It points to the upload of a leaked track by rapper ‘Tyler, the Creator,’ titled ‘Earfquake.’

The track has been circulating online for roughly a week. It was uploaded to hosting services such as Nofile.io and shared online through Leakth.is, 4Chan, Reddit, and other platforms. Whether Nofile.io played a significant role in the distribution is unknown, but it could be the site where it first appeared.

In any case, the RIAA would like to find out who’s running the site. The music group requests all electronic information that may help to identify the account holder, including IP-addresses, email, and payment information.

“As is stated in the attached subpoena, you are required to disclose to the RIAA information sufficient to identify the infringer. This would include the individual’s name, physical address, IP address, telephone number, e-mail address, payment information, account updates and account history,” the RIAA writes.

The DMCA subpoena

Shortly after the subpoena was granted Nofile.io became unreachable. When we started writing this article it was still offline but just before publication, it returned. The leaked file the RIAA referenced is still hosted there as well.

Earfquake

Interestingly, this is the second DMCA subpoena the RIAA has obtained in a short period of time. Little over a week ago we reported that the group is also going after several ‘pirate’ sites that use Cloudflare.

Both requests use boilerplate language and only require a clerk’s signature to become enforceable. This makes it a rather cheap and effective option to find out more about site owners so it would be no surprise if we see these more often going forward.

Whether it’s the RIAA’s main goal to shut down the site is questionable though. In this case, the music group will likely be more interested in finding out who uploaded the leaked file, if that’s the source.

A copy of the RIAA’s letter to Namecheap is available here (pdf).

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US Govt. Seizes Millions in Cash & Crypto in Movie Piracy Case

US Govt. Seizes Millions in Cash & Crypto in Movie Piracy Case

Significant legal action against alleged operators of pirate sites have traditionally been carried out with great fanfare.

However, a case underway in federal court in Oregon is a very different beast, particularly given its scale and form.

The case filed in the district court May 6, 2019, reveals the United States government seeking forfeiture of around $4 million dollars worth of cash and cryptocurrency seized on the basis that the owner of the property was involved in a conspiracy to commit copyright infringement and money laundering.

The investigation reportedly began in October 2013 when Homeland Security Investigations (HSI) agents received information from PayPal concerning two websites, Noobroom.com and Noobroom7.com, that allowed subscribers to stream movies and TV shows.

HSI reported these sites to the MPAA which conducted an investigation, concluding that the sites and associated domains Noobroom and Noobroom9 distributed works in breach of its members’ copyrights. Revenue was reportedly generated by subscriptions processed through Stripe and via adverts placed by a company called Lanista Concepts.

In July 2014, the MPAA sent a cease-and-desist notice to Noobroom. Five days later a covert Noobroom user account operated by the Hollywood group received a message advising users that their accounts had been moved to a new website at SuperChillin.com.

After downloading movies from SuperChillin, the MPAA was able to link an IP address to an individual identified as Talon White. The suspect was subsequently linked to two additional sites – movietv.co and Sit2Play.com – which were deemed to be near identical copies of each other. The registrant of Sit2Play was listed as Talon White and an associated email address was determined as belonging to him.

HSI’s investigation continued from 2016 to November 2018 when search and seizure warrants were executed. A declaration by Keith Druffel, a Special Agent of the Internal Revenue Service – Criminal Investigations, reads as follows;

“Based on financial records obtained during the investigation, I determined that White received substantial revenue from the above-listed websites,” Druffel writes.

“In 2018, he was averaging revenue over $500,000 per month. In 2017, White received over $2.2 million. In 2016, White received over $1 million in revenue, and in 2014 and 2015, White received on average about $400,000 a year in revenue.”

According to Druffel, subscribers of the sites paid via PayPal or Stripe, payments that were deposited into bank accounts controlled by White. Information provided by Stripe matched White’s personal information and the account was labeled as “Selling stock tip subscriptions via email.” The IRS claims there is no evidence of any such sales.

78,985 payments of $9.99 were received into the Stripe account between October 2015 and December 2016, amounting to $789,060. A further 7,611 payments of $25.49 ($194,004.39) and 5,348 payments of $44.99 ($240,606.52) made a grand total of $1,223,671.24.

“The above-listed amounts correspond to the listed subscription costs on Sit2Play and Movietv. Therefore, I believe the payments received by Stripe are the subscription fees for the websites,” Druffel adds.

Further analysis of transactions on White’s Stripe account dated between October 2017 and September 2018 revealed a further 396,843 payments of between $9.99 and $44.99 to a value of $6,373,816.57.

“The above listed amounts correspond to the cost of subscriptions to the websites and represent proceeds from the violation of 18 USC § 2319, Criminal Copyright Infringement,” the statement reads.

The investigation found that through August 2018, more than $3m was transferred from the Stripe account to a Wells Fargo account in White’s name and a JP Morgan Chase account held in the name of Viral Sensations, Inc. (VSI), a Nevada entity.

White is alleged to have opened three checking accounts in the name of VSI, over which he had sole signature authority. Through August 31, 2018, one VSI account received payments of more than $5.9 million. The accounts were linked to White and subscriptions from the pirate sites. Funds from one of the Chase accounts were used to buy $1m in cryptocurrency through virtual currency exchange Coinbase.

On November 13, 2018, Mustafa Kasubhai, United States Magistrate Judge for the District of Oregon, approved a search and seizure warrant authorizing a search of White’s residence and seizure of various assets. The warrant was executed two days later, yielding the following;

  • $2,457,790.72 seized from JPMorgan Chase Bank account #1
  • $1,266,650.00 seized from JPMorgan Chase Bank account #2
  • $1,383.68 seized from JPMorgan Chase Bank account #3
  • $200,653.71 seized from JPMorgan Chase Bank account #4
  • $32,921.00 seized in US currency (cash)
  • $1,940.77 seized in US currency (Stripe account)
  • 31.53810677 in BTC (Coinbase account)
  • 1,022.39066800 in ETH (Coinbase account)
  • 5.74017141 in BCH (Coinbase account)

“[I] have probable cause to believe, and I do believe, that White and others known and unknown were involved in a conspiracy to commit copyright infringement and money laundering, in violation of 18 U.S.C. §§ 1957 and 2319 from at least 2013 through November 2018,” Druffel’s statement adds.

On May 7, 2019, District Judge Anna J. Brown issued an order to the IRS to hold the assets until further notice.

“You are hereby commanded to arrest and take into your possession until further order of the Court, defendants, in rem, Assorted Funds,” the Judge wrote.

From a copyright infringement perspective, this case is pretty unusual.

Most civil and criminal cases against pirate sites and their operators involve detailed descriptions of their workings along with finely-tuned claims of various types of infringement. But the focus here appears to be a financial one, for now at least.

A report from Koin.com suggests that the man hasn’t been charged with a crime yet. In an effort to find ou more, TF approached White’s lawyer Rain Minns. At the time of publication we were yet to receive a response.

Related court documents obtained by TF can be found here (1,2,3)

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Judge: Number of ‘Unprovable’ Piracy Cases is Alarmingly High

Judge: Number of ‘Unprovable’ Piracy Cases is Alarmingly High

By filing thousands of lawsuits over the past two years, Strike 3 Holdings swiftly became one of the most active copyright litigants in the U.S.

These cases target people whose Internet connections were allegedly used to download and share copyright infringing content via BitTorrent. In the case of Strike 3, that’s adult content. 

As is common in these lawsuits, Strike 3 only knows the defendant by an IP-address. It then asks the courts to grant a subpoena, allowing it to ask Internet providers for the personal details of the alleged offenders so it can send a settlement request.

There has been some pushback against these requests in certain courts. In the Eastern District of New York, for example, U.S. Magistrate Judge James Orenstein slammed on the brakes recently 

Judge Orenstein denied motions for expedited discovery in thirteen cases. This means that the adult video company can’t get a subpoena to identify the alleged pirates. While we have incidentally seen similar decisions, the motivation, in this case, is worth highlighting.

The thirteen cases

In his order, the Judge writes that allowing Strike 3 to obtain the identities of the account holders creates a risk.

Specifically, it will put Strike 3 “in a position to effectively coerce the identified subscribers into paying thousands of dollars to settle claims that may or may not have merit, so as to avoid either the cost of litigation or the embarrassment of being sued for using unlawful means to view adult material.”

Strike 3 was willing to give the Court assurances by accepting procedural safeguards on how the subpoenaed information can be used. However, considering the company’s history of avoiding judicial oversight, Judge Orenstein prefers not to issue any subpoenas at all. 

And there are more factors at play here. The order mentions that, if subpoenas are issued, it’s likely that Strike 3 will not use the account holders’ details to litigate these cases in court. That’s also backed up by the information the rightsholder shared with the Court. 

Since 2017, Strike 3 has filed 276 cases in the district, but zero have gone to trial.

Of the 143 cases that were resolved in the district, 49 resulted in a settlement and 94 were voluntarily dismissed. The latter number includes 50 cases where Strike 3 wasn’t confident that the defendant is the infringer. In other words, people who are likely wrongfully accused.

From the order

This means that in one-third of the resolved cases, Strike 3 has likely targeted the wrong person. This number is “alarmingly high,” according to the Magistrate Judge. 

“Strike 3 acknowledges that in many cases, the ‘Doe’ it has sued – that is, the subscriber – will prove to be someone other than the person who engaged in the allegedly unlawful conduct the Complaint describes,” the order reads.

“And as it has now revealed in response to my inquiry, the proportion of such unprovable cases is alarmingly high,” Judge Orenstein adds.

This means that Strike 3 is listing many people as Doe defendants, while it knows that quite a few of these are not the actual infringers.

“It is thus apparent that Strike 3 is deliberately asserting claims in a scattershot fashion against a broad array of individuals simply because it is confident that many of them will be liable – even if almost as many of them are not,” the order reads.

This seems to contradict the requirement that copyright holders should have good faith belief in the merit of their claim. While that’s not a violation of the federal rules per se, the Judge sees it as a reason not to issue the subpoenas. 

After all, it is clear that these type of lawsuits are also targeting innocent subscribers.

“While I do not suggest that suing three people because two of them probably committed a provable copyright violation is a technical violation of Rule 11, the certainty that such an approach will impose needless burdens on innocent individuals counsels against a finding of good cause to permit expedited discovery,” the order reads.

Strike 3 also argued that these type of lawsuits are needed to deter others from engaging in copyright infringement. However, the court waved away this argument as well.

Similarly, Judge Orenstein disagrees with Strike 3’s argument that it will be unable to enforce its copyrights if a subpoena is not granted. While this concern is valid, the Judge believes that these types of cases are not the answer, as they are plainly inefficient.

With the latter comment, the order references the work of Idaho Law Professor Annemarie Bridy, who previously published a paper explaining that litigation is not a scalable mechanism to deal with this type of copyright infringement.

In summary, the order delivers a devastating blow to Strike 3 and adds to the recent criticism of these types of lawsuits. If all judges ruled the same way, so-called copyright trolling practice would be finished. However, that’s not the case just yet.

A copy of the order, which dates back a few weeks and has mostly been flying under the radar, is available here (pdf)

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