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Category: Copyright

MegaUpload was a 'mega conspiracy,' Justice Department alleges [Updated]

MegaUpload, one of the world's largest file-sharing websites, was shut down Thursday by the U.S. Department of Justice, which accused it of violating piracy and copyright laws.

  In an indictment, the Justice Department alleged that MegaUpload was a "mega conspiracy" and a global criminal organization "whose members engaged in criminal copyright infringement and money laundering on a massive scale."

The Justice Department said MegaUpload, which had about 150 million users, tallied up harm to copyright holders in excess of $500 million by allowing users to illegally share movies, music and other files. Prosecutors said in the indictment that the site's operators raked in an income from it that topped $175 million.

Justice Department indictment of MegaUpload DOCUMENT: Read the indictment against MegaUpload

MegaUpload was just one of the many services that allow for the easy sharing of large files online. Others include sites such as Mediafire and Rapidshare and cloud storage services that allow for shared folders such as Box.net and Dropbox.

One way MegaUpload differentiated itself was with its online marketing campaign that featured celebrities such as rapper/producers Kanye West, Lil' Jon, Sean "Diddy" Combs and Swizz Beats stating in YouTube videos why they loved using the site. Other videos feature tennis star Serena Williams, boxer Floyd Mayweather Jr., Def Jam Records founder Russell Simmons and director Brett Ratner testifying to their use of MegaUpload.

The release of the Justice Department indictment came after dozens of websites, led by tech heavyweights Wikipedia, Craigslist, Mozilla and Google, altered their websites to protest two anti-piracy bills under consideration on Capitol Hill: the Stop Online Piracy Act (SOPA) and the Protect Intellectual Property Act (PIPA).

Critics of the bills say the proposed laws would give the Justice Department the ability to censor the Internet by giving the agency clearance to shut down a site without having to get court approval of an indictment, as it did with MegaUpload. Although the indictment was unsealed Thursday, it was issued by a federal court in the Eastern District of Virginia on Jan. 5, the agency said.

In a statement issued with the indictment,the Justice Department said "this action is among the largest criminal copyright cases ever brought by the United States and directly targets the misuse of a public content storage and distribution site to commit and facilitate intellectual property crime."

The Justice Department said that at its request, authorities arrested three MegaUpload executives -- officially employed by two companies, Megaupload Ltd. and Vestor Ltd. -- in New Zealand, including the site's founder, Kim Dotcom, who was born Kim Schmitz. The agency is also looking to arrest two additional executives.

The indictment charges the two companies with running a "racketeering conspiracy, conspiring to commit copyright infringement, conspiring to commit money laundering and two substantive counts of criminal copyright infringement."

According to the Associated Press, before the MegaUpload site was shut down Thursday, a statement was posted on the site saying the allegations made against it were "grotesquely overblown" and that "the vast majority of Mega's Internet traffic is legitimate, and we are here to stay. If the content industry would like to take advantage of our popularity, we are happy to enter into a dialogue. We have some good ideas. Please get in touch."

Visits to Megaupload.com on Thursday showed the website as unable to load. The Justice Department had ordered the seizure of 18 domain names it linked to the alleged wrongdoing.

[Updated at 3:42 p.m.: As noted by Times reporter Ben Fritz on our sister blog Company Town, the hacker group Anonymous has allegedly lobbed a denial-of-service attack that has temporarily taken down the websites for the Department of Justice and Universal Music as a move in retaliation for the shutdown of MegaUpload. Forbes is reporting that the same attack has struck the sites for the Recording Industry of America and the Motion Picture Assn. of America.]

[Updated at 3:50 p.m.: The Twitter accounts @YourAnonNews and @AnonOps are taking credit on behalf of Anonymous for the web attacks on the websites of the Justice Department, Recording Industry of America, Motion Picture Assn. of America and Universal Music.]

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-- Nathan Olivarez-Giles

Nathan Olivarez-Giles on Google+

Twitter.com/nateog

Bloggers in China sound off on SOPA blackout

Bloggers in China sound off on SOPA blackout

Watching from China, where Web censorship is practically a national hallmark, some can't help but smirk and crack jokes about the controversy raging over Internet freedom in the U.S.

"Now the U.S. government is copying us and starting to build their own firewall," wrote one micro-blogger, relating China's chief censorship tool to the U.S. plan to block sites that trade in pirated material.

The Relevant Organs, an anonymous Twitter account (presumably) pretending to be the voice of the Chinese communist leadership, quipped: "Don't understand the hoopla over Wikipedia blackout in the U.S. today. We blacked it out here years ago. Where are OUR hugs?"

PHOTOS: Sites on strike against SOPA and PIPA

Humor aside, the brouhaha has generated some strong opinions in the country that  Google fled, not the least because opponents of the SOPA and PIPA anti-piracy bills are conjuring Chinese Web censorship to promote their case.

The consensus here, however, appears to be this: Americans should try a minute in our shoes before invoking online Armageddon.

Continue reading »

SOPA blackout: Bills lose three co-sponsors amid protests

Sen. Marco Rubio

Three co-sponsors of the SOPA and PIPA antipiracy bills have publicly withdrawn their support as Wikipedia and thousands of other websites blacked out their pages Wednesday to protest the legislation.

Sen. Marco Rubio (R-Fla.) withdrew as a co-sponsor of the Protect IP Act in the Senate, while Reps. Lee Terry (R-Neb.) and Ben Quayle (R-Ariz.) said they were pulling their names from the companion House bill, the Stop Online Piracy Act. Opponents of the legislation, led by large Internet companies, say its broad definitions could lead to censorship of online content and force some websites to shut down.

In a posting on his Facebook page, Rubio noted that after the Senate Judiciary Committee unanimously passed its bill last year, he has "heard legitimate concerns about the impact the bill could have on access to the Internet and about a potentially unreasonable expansion of the federal government's power to impact the Internet."

PHOTOS: Sites on strike

"Congress should listen and avoid rushing through a bill that could have many unintended consequences," Rubio said in announcing he was withdrawing his support. While he's committed to stopping online piracy, Rubio called for Senate Majority Leader Harry Reid (D-Nev.) to back off plans to hold a key procedural vote on the bill on Tuesday.

Rubio's withdrawal will reduce the number of co-sponsors to 39. Last week, two other co-sponsors, Charles Grassley (R-Iowa) and Orrin Hatch (R-Utah), joined four other Senate Republicans in a letter to Reid also urging him delay the vote. But Grassley and Hatch have not withdrawn their support.

Terry and Quayle were among the 31 sponsors of the House legislation before they withdrew their support Tuesday.

Quayle still strongly supports the goal of the House bill to crack down on foreign websites that traffic in pirated movies, music, medicine and other goods.

"The bill could have some unintended consequences that need to be addressed," said Quayle spokesman Zach Howell. "Basically it needs more work before he can support it."

Terry said that he also had problems with the House bill in its current form and would no longer support it.

Wikipedia, Reddit and about 10,000 other websites blacked out their pages Wednesday with messages warning of the dangers of the legislation and urging people to contact their congressional representatives. Howell said Quayle's office had not seen a major increase in calls or emails Wednesday, but that the piracy bills have been the main issue in recent weeks for people contacting the office.

There has been a "manageable increase" in visits to House member websites Wednesday, said Dan Weiser, a spokesman for the House office of the chief administrative officer.

"It’s possible some users will see a short delay or slow loading of a member's web page," he said.

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SOPA blackout: Who’s gone dark to protest anti-piracy bill?

Wikipedia still accessible during SOPA blackout -- with a little effort

-- Jim Puzzanghera in Washington

Photo: Sen. Marco Rubio (R-Fla.). Credit: Joe Burbank / Orlando Sentinel

CES 2012: Rovi lets movie fans convert DVDs to digital files for a fee

Rovi Digital Copy schematic
At the Consumer Electronics Show in Las Vegas Monday, Rovi Corp. announced what appears to be the first legal tool to convert consumers' DVD collections into digital files that can be played from on online library. It's not exactly iTunes Match for movies, but it's a step in the right direction, with caveats -- lots of them.

One of the main benefits of the digital revolution has been to release music, photos, books and video from their physical bindings, enabling consumers to access their media collections any time, anywhere, on a variety of devices. Those benefits haven't extended to DVDs, however; the discs' anti-piracy software deters people from making functional digital copies of the movies on the discs.

That's "deters," not "stops." It's technically possible to circumvent a DVD's safeguards and copy it, and the software exists to do so. But under federal law, it's illegal to make, sell or distribute such circumvention tools, even if the copy is being made for a legal use. And the Hollywood studios have mounted legal assaults against a series of companies (e.g., 321 Studios and RealNetworks) that have put DVD copying software on the market.

Unlike their ill-fated predecessors, Rovi isn't actually creating copies of DVD movies. Instead, it has created an app for Internet-connected Blu-ray disc players that can read the unique identifier on each DVD or Blu-ray disc, then offer the disc owner the chance to store a copy of that movie online. It won't be free, however; Richard Bullwinkle, Rovi’s chief evangelist, said the studios participating in the service plan to charge a small fee for the stored copy. The fee will be higher for high-definition copies than for standard-definition ones.

The fee is just the first of the caveats. The second is that Rovi's disc identification will work only on Blu-ray players capable of downloading and running a new Rovi application. Bullwinkle wouldn't name the manufacturers that will support Rovi's app, but the possibilities include disc players from Samsung and LG and Microsoft's XBox 360.

The third is that the stored movies will be protected by some form of digital rights management software that limits which devices can stream or download the files. Users won't be able to use the online locker of their choice; instead, they'll have to rely on a service blessed by the studios. Again, Rovi isn't identifying any specific partners yet, but a good bet would be Best Buy's CinemaNow and others that use Rovi's e-commerce technology.

Continue reading »

GoDaddy backs away from piracy bill after pressure from websites

Godaddy

Internet registration service GoDaddy.com has taken itself out of the firing line on one of the Internet community's biggest controversies. GoDaddy had been a vocal supporter of the Stop Online Piracy Act, the bill that would allow media companies to cut off access to alleged foreign piracy sites, a process that opponents say could harm the mechanisms that let information flow online.

But now, after pressure from clients and advocates, GoDaddy is going the other way.

"Fighting online piracy is of the utmost importance, which is why Go Daddy has been working to help craft revisions to this legislation -- but we can clearly do better," said chief executive Warren Adelman in a statement. The company also said that in order to avoid confusion it had "removed blog postings that had outlined areas of the bill Go Daddy did support."

The move came after a flurry of criticism from website owners and Internet companies. On Thursday, the chief executive of Internet comedy syndicate (I Can Has) Cheezburger? wrote that he would pull his 1,000 websites from GoDaddy's service if the company continued to support the legislative bill.

"We love you guys, but #SOPA-is-cancer to the Free Web," Ben Huh tweeted.

Other bloggers quickly posted step-by-step instructionsfor how to remove sites from GoDaddy.

GoDaddy had been listed by the House Judiciary Committee as one of dozens of companiesthat support the bill. That list included a who's who of media conglomerates including News Corp., Time Warner, Sony companies and Universal Music, as well as a number of law firms that represent such companies. (The blog TechDirt has reported that those firms are trying to remove themselves from the list.)

The anti-piracy bill would allow media firms and others to request that the companies that control online data pipelines could shut off access to websites that are alleged to host pirated content. But opponents argue that the law would make it too easy for a small number of powerful media firms to cause too many changes to the intricate network that routes data around the Internet, which could in turn prevent the flow of legitimate information. They also point out that shutting off access to piracy sites wouldn't get rid of the sites themselves.

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-- David Sarno

Photo: A still from a GoDaddy television commercial from early 2011. Credit: The Go Daddy Group Inc.

Grooveshark: the latest test of online safe harbors

Grooveshark
Online music service Grooveshark is swimming in murky legal waters, as evidenced by the copyright-infringement lawsuit that three major record companies are now bringing against the site's owners and several of its executives. Judging from the amended complaint filed Thursday by Universal Music Group, Warner Music Group and Sony Music Entertainment, however, that lawsuit won't be the last in a series of epic battles between tech companies and the entertainment industry over third-party liability. Instead, the case may hinge on the company's employees own efforts to stock the online jukebox.

Grooveshark lets people stream tracks from an online library of millions of songs. Some of those songs -- the ones the company has licensed from EMI, a major record company, and numerous independent labels -- were uploaded by Grooveshark. The rest -- including thousands of unauthorized hits owned by Universal, Warner and Sony -- were uploaded by users in violation of the site's terms of service, company executives say.

The company has long argued that it's not liable for the unauthorized songs because it's protected by the 1998 Digital Millennium Copyright Act. The law provides a safe harbor for companies that give the public a place to store or share material online, provided that they don't know about or benefit financially from the infringements and that they take down infringing material when it's pointed out to them.

If Grooveshark is right, the lawsuit may turn out to be a meaningful battle over a DMCA-compliant site's duties in the face of rampant piracy -- in effect, a rematch of Viacom's unsuccessful lawsuit against YouTube. (Viacom's appeal is pending at the 2nd Circuit Court of Appeals.). But the major labels' complaint seeks to avoid that fight by alleging that Grooveshark doesn't comply with the DMCA and isn't eligible for a safe harbor.

They base their claim on e-mails, internal documents and online comments by someone claiming to be a Grooveshark employee, all of which suggest that Grooveshark executives knew about and profited from the infringements. For example, the supposed whistleblower alleged that the company ordered employees to upload songs from the major labels, including the ones taken down in response to the copyright owners' complaints.

That sort of allegation has been a standard feature of the entertainment industry's lawsuits against online piracy hotbeds. In some cases, such as the suits against Limewire and Grokster, those internal documents helped convince judges. In others, such as Viacom versus YouTube, they didn't.

Continue reading »

Seeking to copy -- legally-- from Blu-ray discs and online media

One of the criticisms of the digital locks used by broadcasters and Hollywood studios is that, in trying to squelch piracy, they can interfere with fair uses of copyrighted material by other artists. And under federal law, it's illegal to circumvent those locks. Chicago-based Kartemquin Films (the subject of the video at top) and other documentary filmmakers won a temporary exemption from that law a year and a half ago, with the help of students at the USC Intellectual Property and Technology Law Clinic and lawyers from Donaldson & Callif of Beverly Hills. Now the clinic and the firm are seeking to extend the exemption to all filmmakers and authors of multimedia e-books.

The 1998 Digital Millennium Copyright Act made it illegal to circumvent "technical protection measures" on DVDs and other digital media. That created a dilemma for filmmakers who wanted to use a snippet from an earlier movie on DVD: Even if the use wasn't infringing, they could still be sued for going around the locks. So even though circumvention tools are widely available online (despite the fact that they're illegal to make or distribute), filmmakers used them at their peril.

That's why documentarians sought an exemption from the Copyright Office in 2009. Recognizing the potentially chilling effects of the anti-circumvention provision, lawmakers had included in the 1998 law a requirement that the office consider granting relief every three years to those whose non-infringing uses were adversely affected. The exemption documentarians won in July 2010 applies only to DVDs, and it expires next year.

In seeking a new exemption, the filmmakers are focused on two problems, said Jack Lerner, a law professor at USC who directs the Intellectual Property and Technology Law Clinic.

Continue reading »

'Star Wars' fans: The Stormtrooper helmet battle is over

Storm_trooper_helmet

The epic battle between a British prop maker and Lucasfilm Ltd. over who has the right to sell Stormtrooper helmets has come to an end.

The five-year war, which took place not in a galaxy far, far away but rather in the legal courts of both America and Britain, began in 2006. That's when Andrew Ainsworth, designer and maker of the original Stormtrooper helmets featured in the classic "Star Wars" movies, began selling replica helmets cast from the original 1976 molds over the Internet. Lucasfilm tried to stop him, saying the helmets were protected by copyright laws.

On Wednesday a British court ruled that while Ainsworth cannot sell the helmets in America, he may continue to make and sell helmets in England.

It all came down to whether the helmets are sculptures, which would make them works of art and therefore covered by British copyright law, or whether they were props and not artwork, which would mean they are covered by a shorter copyright period that has now expired.

Lucasfilm lamented that the court had upheld an "anomaly of British copyright law under which the creative and highly artistic works made for use in films — which are protected by the copyright laws of virtually every other country in the world — may not be entitled to copyright protection in the U.K."

Ainsworth's Stormtrooper helmets, which he sells for as much as 500 British pounds on his website originalstormtroopers.com, do look pretty cool, but we're lamenting that they don't have any of the capabilities we imagined them to have when they were in the films.

Go on Wookieepedia, the Star Wars Wiki, and you'll find that these helmets should have a ton of functionality including advanced breathing filters (which act as protection against chemical and biological attacks, as well as toxins), cooling and atmosphere control systems, and "HUD displaying targeting reticule and weapon information." Ainsworth's helmets, with their hand-painted frown and single ear screw, might look authentic, but they're straight-up white 2.5-mm high-impact styrene.  

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Image: The ANH Hero helmet is billed as the closest reproduction of a real Star Wars ANH Stormtrooper helmet ever on Andrew Ainsworth's website. Credit: Originalstormtroopers.com.  

Bamboom takes over-the-air TV over the top

Bamboom2 Bamboom Labs wants to help people cut their cable cords by putting local TV broadcasts online with all the digital trimmings -- that is, the ability to watch live or recorded shows in high definition on any device with a browser, anywhere a broadband connection is available. It's technologically ingenious, but I can't decide whether it's a service the market has been waiting for or a lawsuit waiting to happen. Or maybe it's a solution to a problem not many people are eager to solve.

The New York-based startup is the brainchild of Chaitanya "Chet" Kanojia, former chief executive of Navic Networks, whose technology in set-top boxes enabled cable and broadcast networks to measure audience demographics and match advertisements to them in real time. His time at Navic taught him that at any given moment, about half of pay TV viewers were tuned in to local broadcast channels. That observation led him to believe that if he could get live broadcast signals to people reliably, with the ability to time-shift shows and watch them on any device, and with the social features of the Internet, they'd be more willing to abandon cable and satellite TV.

Other companies have taken on parts of this challenge. For example, Sling Media makes set-top boxes that let people tune in remotely to the TV service they have at home. And Monsoon Multimedia makes set-tops that combine remote viewing with TiVo-like digital video recording. But those devices build off of the programming that pay TV delivers to homes. Kanojia wanted to let people watch local broadcasts  through the Net without the help of pay TV.

Here's where things get complicated.

Continue reading »

Online TV service Ivi loses a round in court [Updated]

Ivi tv logo A federal judge in New York ordered Internet TV service Ivi to shut down Tuesday, finding that it violated the copyrights of a group of broadcasters and Major League Baseball. It was yet another example of a tech company trying in vain to stretch the boundaries of copyright law to avoid paying as much for content as its more conventional competitors.

Ivi TV captured the broadcasts of 55 stations in Los Angeles, Seattle, Chicago and New York, then retransmitted them through the Internet to subscribers for a fee of just under $5 a month. For an additional 99 cents a month, viewers could pause, rewind and fast-forward shows, although they could not record them for later viewing.

Copyright law gives cable operators the right to carry broadcast stations if several conditions are met, and provided that they pay a small portion of their revenue in royalties. But the law also requires that cable operators abide by Federal Communications Commissions regulations, which (among other things) give broadcasters the right to demand higher fees for retransmission rights.

Ivi argued that it was a cable system entitled to carry broadcast signals, but also that it was an Internet service and so immune from FCC regulation. As such, it argued that it could retransmit stations online while paying royalties -- about $100 a year, according to U.S. District Judge Naomi Reice Buchwald's ruling. Major League Baseball and two dozen broadcasters and studios (including two arms of the Tribune Co., owner of the Los Angeles Times) sued, arguing that Internet-based services aren't cable systems and as such are not entitled to an automatic (or "compulsory") retransmission license.

Buchwald agreed, granting a preliminary injunction against Ivi. She held that Congress created the compulsory license for local cable systems, not national (or global) operators online, and did so within a larger regulatory framework:

Congress legislated with an understanding that the cable systems it was granting a compulsory license to would also be subject to the regulations of the FCC.... [N]o company or technology which refuses to abide by the rules of the FCC has ever been deemed a cable system for purposes of the Copyright Act. Significantly, companies such as AT&T U-Verse, which claim to operate outside of the jurisdiction of the Communications Act, still comply with these rules, most significantly by obtaining retransmission consent.

She also said that if Ivi's interpretation of the law were taken to its logical conclusion, the result would be absurd:

As plaintiffs argue, defendants’ view of Section 111 essentially means that anyone with a computer, Internet connection, and TV antenna can become a “cable system” for purposes of Section 111. It cannot be seriously argued that this is what Congress intended.

Ivi had a number of supporters among pro-technology public-interest groups, which argued that Ivi benefited the public by providing more competition to incumbent cable and satellite TV services. But Buchwald held that the law doesn't hold the door open to online competitors, who cannot enter the market without the permission of the broadcasters whose signals they seek to retransmit.

The company and its allies also tried to persuade the court not to act until the lawsuit could go to trial, arguing that Ivi is too small to divert a meaningful amount of advertising away from broadcast TV in the interim. Buchwald pointedly disagreed:

Defendants cannot seriously argue that the existence of thousands of companies who legitimately  use plaintiffs’ programming and pay full freight means that Ivi’s illegal and uncompensated use does not irreparably harm plaintiffs. Likewise, they cannot contend that since Ivi is small and plaintiffs are large, they should be allowed to continue to steal plaintiffs’ programming for personal gain until a resolution of this case on the merits. Such a result leads to an unacceptable slippery slope.

It's easy to understand why companies like Ivi keep trying to find ways to deliver TV signals despite the limits imposed by time, space and contracts. Live broadcast television remains the most popular video medium in U.S. homes, attracting the biggest audiences and generating the most advertising dollars. Only a few companies have found a way to do so without running afoul of TV industry lawyers -- TiVo and Sling being two good examples. Others, such as ReplayTV and ICraveTV, have not. Buchwald's decision Tuesday was just a preliminary one, but she moved Ivi much closer to the latter category than the former.

[Updated at 2:22 p.m.: Ivi TV Chief Executive Todd Weaver responded to the ruling with a statement. Here's the money quote:

Judge Buchwald's opinion is premised on her statement that ivi is 'not complying with the rules and regulations of the FCC'. This conclusion is simply false, as ivi has met with the all the commisioner's offices of the FCC repeatedly and has received assurances that we are in full and complete compliance. Judge Buchwald makes the legal mistake of misinterpreting the copyright law to instead make communications policy. Communications policy is the province of the FCC and, by basing a judicial copyright decision on communications regulations to be administered by the FCC, the judge is overstepping her constitutional authority.]

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-- Jon Healey

Healey writes editorials for The Times' Opinion Manufacturing Division.

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