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RIAA Sued By YouTube-Ripping Site Over DMCA Anti-Circumvention Notices

Last Friday, the RIAA caused outraged on the Internet when it filed a complaint that took down the open source software YouTube-DL from Github.

According to the RIAA, the “clear purpose” of YouTube-DL was to “circumvent the technological protection measures used by authorized streaming services such as YouTube” and “reproduce and distribute music videos and sound recordings owned by our member companies without authorization for such use.”

As the debate and controversy over the complaint rages on, a company based in the US that operates a YouTube-ripping platform has filed a lawsuit alleging that similar complaints, filed by the RIAA with Google, have caused its business great damage.

Complaint States That YouTube-Ripping Platform “Time-Shifts”

Filed by Yout LLC. in a Connecticut court, the complaint alleges that its service allows users to enter a link for a video on sites including YouTube. Its browser-based software then gives users the ability to record the audio of a streamed video and store it locally on their hard drives as an MP3.

“By doing so, the user can thereby listen or view the locally stored content when not connected to the Internet and without the necessity of visiting the website on which the original content resides. In essence, Yout allows a user to time shift content,” the complaint reads.

Yout

Yout LLC does not name its service directly in the complaint but the website Yout.com, which lists its address as being in South Windsor, a town in Hartford County, Connecticut, matches the description in the lawsuit.

RIAA Sent “Abusive” DMCA Complaints to Google

Noting that the Yout service never saves users’ time-shited content on its own servers, Yout claims that many users utilize the service for the purpose of recording their own videos. Content creators, on the other hand, encourage their fans to “record and play back their original content” using the platform.

However, starting October 2019, the RIAA reportedly sent at least three notices to Google under 17 U.S.C. § 512(c)(3), claiming that the Yout platform breached the anti-circumvention provisions of the DMCA.

“To our knowledge, the URLs provide access to a service (and/or software) that circumvents YouTube’s rolling cipher, a technical protection measure, that protects our members’ works on YouTube from unauthorized copying/downloading”, the complaints read.

According to the lawsuit, this caused Google to completely delist Yout’s software platform from its search results, rendering it undiscoverable for “many” Internet users. Yout says that the notices sent by the RIAA on behalf of its members allege circumvention violations, claims that are completely untrue.

“Contrary to Defendants’ allegations, Yout’s software platform is not designed to descramble, decrypt, avoid, bypass, remove, deactivate, or impair the YouTube rolling cypher technology.

“In fact, any digital mechanism in place designed as anti-circumvention technology stops Yout users from recording and saving that protected work, thereby demonstrating Yout’s compliance with any anti-circumvention protections in place,” the complaint adds.

Yout Says That the RIAA’s Claims Damaged Its Reputation

Yout’s lawsuit says that as a service designed to allow users to record publicly available media for personal use, at a time chosen by them and without breaching technical measures, it is entirely legal.

“Such time-shifting purposes, absent specific circumvention of technological copyright protections, cannot be the basis for an alleged violation of 17 U.S.C. § 1201. Yout does not violate 17 U.S.C. § 1201.”

By alleging otherwise, however, the RIAA’s notices caused third parties to believe that Yout is engaged in illegal conduct, something the company vehemently denies. Indeed, Yout states that the RIAA acted with “malice” when sending the notices since the industry group intended to harm the company.

Yout Wants Its Business and Tool Declared Legal By The Court

Reiterating that its platform does not act as an anti-circumvention tool, nor one that was primarily designed for the purposes of circumventing a technological measure effectively controlling a copyrighted work, Yout insists that it complies with “any and all” protections in place.

“Based on the foregoing, Yout requests a judicial determination and declaration that Yout’s software platform does not violate 17 U.S.C. § 1201. Such a judicial determination and declaration is necessary to protect Yout from the Defendants’ DMCA Notices, which are causing Yout injury by, among other things, damaging its goodwill and disrupting its business,” the company adds.

Yout Demands Compensation For Abuse of the DMCA

Yout states that the RIAA’s complaints to Google were sent in bad faith, for one of two reasons.

In scenario one, the RIAA simply failed to determine via testing whether the Yout platform actually does circumvent technical measures. In scenario two, the industry group knew that Yout did not circumvent technical measures and did not infringe its members’ rights, but sent the DMCA notices to Google anyway.

In either event, the lawsuit alleges that Yout’s business was damaged due to the RIAA’s claims interfering with the relationships between Yout and its customers, partners, and potential users. As a result, compensation is due.

“As the Defendants knowingly misrepresented circumvention of digital copyright mechanisms and infringement of the Defendants’ rights, the Defendants violated 17 U.S.C. § 512(f),” the lawsuit reads.

In other words, Yout wants to be compensated for the losses caused when the RIAA reported Yout to Google as an infringing service that should be removed or delisted.

“Yout Does Not Circumvent YouTube’s ‘Rolling Cipher'”

In most if not all similar anti-circumvention notices sent by the RIAA to various platforms, the industry group states that “technological measures” can include YouTube’s “rolling cipher”. In Yout’s complaint, the company categorically denies that it circumvents any such measure.

In fact, Yout says that by respecting the rolling cipher, it not only doesn’t infringe the labels’ rights but actually helps to protect them.

“[B]y respecting anti-circumvention technology in place, Yout facilitates protection of the copyrights of the [RIAA member labels’],” the lawsuit reads.

After repeating several times that Yout acts illegally under the DMCA, the RIAA has tarnished the reputation of Yout, the complaint adds. The industry group knew the notices would be published in public (on the Lumen Database) so as a result, the false statements constitute business disparagement.

For this and general defamation, Yout also demands compensation, punitive damages, and a trial by jury.

The complaint can be found here (pdf)

From: TF, for the latest news on copyright battles, piracy and more.

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Cloudflare Counters Mass Piracy Allegations in ‘Thothub’ Lawsuit

Cloudflare is a CDN provider that doesn’t host any copyright infringing material, but several of the company’s customers do.

This has resulted in various copyright infringement allegations, including lawsuits in the US, Europe, and elsewhere.

While Cloudflare positions itself as a neutral intermediary that can’t do anything to stop pirate sites, not all courts agree. Just this month, courts in Germany and Italy ruled that Cloudflare must take action against copyright-infringing customers.

Waidhofer vs. Thothub

In the US, the company is also involved in various copyright infringement lawsuits. One of the most prominent was filed this summer by Deniece Waidhofer, a Texas-based model with millions of followers, who sells sexy pictures of herself online.

Like many others, Waidhofer offers different subscription levels for her photos, charging up to $1,000 per month for the sexiest footage. That sounds like a profitable business, but as with all content published on the Internet, pirates can step in to ruin the party.

Some of her ‘fans’ abuse the exclusive paid access to post her photos in public. This is done in many places, including specialized sites that focus on such exclusive leaks. Up until a few weeks ago, the website Thothub was one of the biggest players in this market.

Copyright Lawsuit Involves Cloudflare

Unhappy with the state of play, Waidhofer took Thothub to court. In a complaint filed at a federal court in California, she accused the site’s alleged operator – who goes by the name “Captain Thotcakes” – and the site’s members of direct copyright infringement.

The claims also apply to several advertisers and Cloudflare, the CDN provider used by the site. Together, these parties are also charged with other claims, including violations of the Racketeer Influenced and Corrupt Organizations (RICO) Act.

Soon after the lawsuit was filed Thothub went offline and it hasn’t come back since. This is an early victory for the model, but it doesn’t mean that the case is over. Cloudflare still has to defend itself against the allegations and a few days ago the company countered these in court.

Cloudflare Wants Claims Dismissed

In a 34-page filing, Cloudflare refutes the allegations. It asks the court to dismiss all claims, describing the lawsuit as a “frivolous” attempt to hold an innocent third-party intermediary liable.

“Plaintiff’s attempt to turn the fact that a single website signed up for Cloudflare’s services online into a wide-ranging criminal conspiracy is frivolous,” Cloudflare writes.

“Plaintiff’s effort to hold Cloudflare liable for copyright infringement that allegedly occurred on Thothub, simply because Cloudflare provided content-neutral infrastructure and security services, lacks any basis.”

Cloudflare stresses that, in her complaint, Waidhofer herself emphasizes that the company’s role is limited to providing services such as infrastructure support, content delivery networking, and DDoS mitigation.

Insufficient Evidence

According to the CDN provider, the copyright infringement allegations can’t be backed up. For example, there is insufficient evidence to show that it purposefully contributed to any infringing activity.

The RICO conspiracy claim fails as well, Cloudflare argues. This requires proof that the companies involved caused Waidhofer harm and that there is a close, direct, and causal connection with Cloudflare’s business activities.

This is not the case here, Cloudflare argues, while pointing the finger at the model’s ‘fans’ who leaked the content.

“Rather, her alleged injury stems from acts of her own subscribers and fans in ‘leaking’ her alleged images, and from acts of Thothub and its users in posting them online and making them available to others,” Cloudflare writes.

Minimal Involvement

The company says it did nothing to purposefully cause these infringements. Even if the company didn’t exist, the ‘pirate’ site could still operate through another CDN provider, or without one.

“Cloudflare does not own or operate Thothub, cannot control what is posted on any given website, and lacks the ability to remove infringing content. Removing Cloudflare’s services would do nothing to remove the content.”

With a timely Halloween reference, the company tries to emphasize its neutral role.

“Cloudflare could not plausibly be considered the proximate cause of any harm flowing from the use of this type of service, any more than a Halloween supply company could be said to have ’caused’ a bank’s losses from masked robbers,” it adds.

Based on these and a variety of other arguments, Cloudflare asks the court to dismiss all claims. This request is now with the court, which will likely hear Waidhofer’s response before making a final judgment.

A copy of Cloudflare’s motion to dismiss is available here (pdf)

From: TF, for the latest news on copyright battles, piracy and more.

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19 ‘YTS Users’ Sued for Sharing Pirated Copies of “Ava”

In recent months we have reported in detail how users of the popular torrent site YTS were sued in US courts.

In several of these cases, information shared by the site’s operator was brought in as evidence. The user info was obtained by anti-piracy lawyer Kerry Culpepper, as part of an undisclosed settlement agreement.

This week the same attorney is back in court representing ‘Eve Nevada LLC,’ the company behind the film Ava, which is shared widely on various pirate sites. Again, YTS is prominently mentioned, but this time things are different.

The complaint, filed at a Hawaii federal court, lists 19 ‘John Doe’ defendants who are only known by their IP-addresses. These addresses were caught sharing the film via public torrent trackers. Specifically, the complaint mentions a file titled “Ava (2020) [1080p] [WEBRip] [5.1] [YTS.MX].”

This title leads the filmmakers to the conclusion that the defendant must have been users of the YTS site. Or as the complaint puts it:

“Upon information and belief, each of the Defendants registered for an account on the YTS website using an email address or installed a BitTorrent Client application on their device that retrieved torrent files from the YTS website.”

ava defendants

This same conclusion, in addition to the fact that defendants downloaded the same file, is also used as an argument to join the 19 defendants in one case. However, based on the information presented, it’s far from clear that at all of these people were indeed YTS users.

Unlike in the other cases, the copyright holder didn’t present any information from the YTS user base, likely because it doesn’t have any. The data-sharing was a one-time arrangement several months ago, long before YTS released the movie Ava.

While it’s possible that the defendants indeed used YTS, they could have easily downloaded the .torrent file from other sites where the same file was made available. Although several torrent sites banned YTS torrents, many haven’t, including the illustrious Pirate Bay.

Whether the defendants are actually YTS users or not may not make much of a difference. At least not for the copyright infringement allegations.

In addition to direct and contributory copyright infringement, the complaint also accuses the defendant of violating the DMCA by altering copyright management information (CMI). In this case, that means distributing the movie Ava with an edited title, which references YTS.

“Particularly, the Defendants distributed the file names that included CMI that had been altered to include the wording ‘YTS’. Defendants knew that the wording “YTS” originated from the notorious movie piracy website for which each had registered accounts and/or actively used,” the complaint reads.

It’s doubtful that any of these cases will be fought on the merits. When the defendant’s personal information is exposed it’s likely that they will receive a settlement request, which is usually around $1,000. Those who refuse to settle can argue their case in court, but that’s going to cost as well. They can eventually win the case, but not without investing in a legal defense first.

As far as we know this is the first time people have been sued for downloading the film Ava. The company Eve Nevada is a new name as well, but one with familiar connections. It’s connected to the broader Voltage Pictures family, which has sued tens of thousands of people over the years.

A copy of the complaint filed at the US District Court of Hawaii is available here (pdf)

From: TF, for the latest news on copyright battles, piracy and more.

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Cloudflare Ordered to Block Pirate Music Site Following Universal Music Lawsuit

CDN company Cloudflare has grown to become one of the most useful and important companies on the Internet, serving millions of websites that in turn serve countless millions of users of their own.

One of Cloudflare’s key aims is to be viewed as a neutral intermediary but that status is being chipped away by elements of the entertainment industries. The problem is that some of Cloudflare’s customers are pirate sites but as a service provider, Cloudflare insists that passing on complaints should be enough.

The music and movie industries, on the other hand, would like Cloudflare to either stop doing business with ‘bad players’ or take more responsibility for their actions.

Cloudflare Won’t Compromise So Legal Action Followed

Cloudflare is tied up in several lawsuits around the world, not for its own actions per se, but for the actions of some of its customers. In Germany there has just been a very interesting development, one that could have far-reaching consequences for how Cloudflare does business there.

Back in February, Germany-based visitors to pirate music site and Cloudflare customer DDL-Music.to were served with a rare ‘Error 451’ by Cloudflare, meaning that the site had been made inaccessible for legal reasons. At the time, no other information had been made public but as the days passed, a clearer picture emerged.

Complaint Filed By Universal Music GmbH

Early June 2019, Universal Music GmbH (Germany) sent a copyright infringement complaint to Cloudflare after finding links on DDL-Music to tracks by German singer Sarah Connor. The files themselves were not hosted by DDL-Music but could be found on a third-party hosting site. Universal asked Cloudflare make the tracks inaccessible within 24 hours but Cloudflare didn’t immediately comply.

In a subsequent response to Universal, Cloudflare denied being responsible for the activities of DDL-Music. It suggested that the label should confront DDL-Music directly, handing over an email address and details of the site’s hosting provider for contact purposes.

What happened in the interim isn’t clear but in December 2019 a hearing took place at the Cologne District Court, during which the court found that Cloudflare could be held liable for the copyright infringements of DDL-Music, if the CDN company failed to take action.

On January 30, 2020, the Cologne District Court went on to hand down a preliminary injunction against Cloudflare, advising that should it continue to facilitate access to the Universal content in question, it could be ordered to pay a fine of up to 250,000 euros ($270,000) or, in the alternative, the managing director of Cloudflare could serve up to six months in prison.

Preliminary Injunction Made Permanent

According to a statement issued late Thursday by German music industry group BVMI, the Cologne Higher Regional Court has now confirmed the judgment of the Cologne District Court. This means that Cloudflare must block access to the pirated music being offered on the website of DDL-Music. While Cloudflare will not be able to comply with that specific order (DDL-Music moved on a while ago) the principle stands. In Germany at least, Cloudflare can be held liable for the infringements of its users.

“Cloudflare offers a so-called CDN (Content Delivery Network), which is misused by structurally copyright-infringing websites in order to evade legal prosecution through anonymization. The Cologne Higher Regional Court has now put a stop to this: It has obliged Cloudflare to block customer content that has been reported to it by rights holders, or otherwise block the customer’s entire website,” BVMI’s statement reads.

Decision Welcomed By the Music Industry as a Tool to Fight Piracy

According to BVMI, the decision of the court is particularly noteworthy since it’s the first time that a higher regional court has confirmed an injunction against “an anonymization service” that conceals the identities of the servers operated by pirate sites. This decision will make that more difficult in future, the group says.

“The decision of the Cologne Higher Regional Court strengthens the position of rights holders in an important field and is a clear signal: A service that helps others to evade legal prosecution through anonymization is also illegal,” comments BVMI CEO, Dr. Florian Drücke.

“The decision is a further success for our industry against offers on the Internet that cause considerable damage to creatives and their partners and whose business models are based on generating considerable income with third-party content without acquiring licenses for this content.”

René Houareau, Managing Director of Law & Politics at the BVMI says the importance of the decision cannot be underestimated.

“Little by little we are getting closer to the modern understanding of the responsibility of all players on the Internet – especially through ambitious court decisions like this one,” Houareau says.

“An anonymization service may not allow third-parties to distribute illegal offers while disguising the identity of the servers of structurally infringing websites. In other words, excuses no longer apply in such cases. The services have to recognize more and more that some smoke screens no longer work.”

The developments in Germany arrive on the heels of a similar court ruling in Italy, which also went against Cloudflare. Following a complaint from TV platform Sky Italy and Italy’s top football league Serie A, Cloudflare is now required to block the domain names and IP-addresses of a pirate IPTV service. In that matter, Cloudflare argued that it merely passes on traffic, but the court wasn’t convinced.

From: TF, for the latest news on copyright battles, piracy and more.

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YouTube Rippers Petition U.S. Supreme Court to Overturn ‘Dangerous’ Precedent

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 others followed voluntarily.

A group of music companies hoped to achieve the same with FLVTO.biz and 2conv.com. The sites’ Russian owner Tofig Kurbanov was taken to court in the United States in 2018, accused of facilitating mass copyright infringement.

Quick Dismissal and Appeal

The music companies were hoping for a quick win but they got the opposite. Kurbanov fought back and before the copyright issues were discussed, the complaint was already dismissed.

A Virginia federal court ruled that the music companies lacked personal jurisdiction as the sites were operated from abroad and didn’t ‘purposefully’ target or interact with US users.

The music companies were not happy with the ruling and appealed the matter at the Fourth Circuit Court of Appeals, with success. The appeals court found that there are more than sufficient facts to conclude that Kurbanov purposefully conducted business in the US, specifically the state of Virginia.

Supreme Court Petition

The outcome of the appeal came as a disappointment to Kurbanov and his legal team. They are convinced that the district court had it right and pointed out several seemingly conflicting jurisdiction rulings in US courts.

To obtain more clarity, they decided to take the matter to the Supreme Court. This week, Kurbanov’s lawyers officially submitted their petition which describes the problem at hand, as well as the questions they would like to see answered.

Specifically, Kurbanov asks the Supreme Court whether his due process rights are violated when he is subjected to the jurisdiction of a US Court, simply because his websites are frequently used there. Also, whether minor internet-based and internet-initiated transactions are sufficient to warrant jurisdiction.

Clashing Precedents

These jurisdiction questions are not new. There are several precedents from similar cases but many of these are contradictory. According to the petition, lower courts are deeply split on some core issues.

For example, rulings from the Fourth, Fifth, Eighth, and Ninth Circuits contradict the Seventh and Tenth Circuits on whether the use of “purely virtual” contacts are sufficient to warrant personal jurisdiction. That is particularly important for Internet-related cases such as this one.

Disagreement also exists on whether having a registered DMCA agent subjects a site operator to the jurisdiction of a US court, as the Fourth Circuit court concluded in this case.

“The Fourth Circuit held that it was jurisdictionally relevant that the Websites appointed a U.S. DMCA agent to receive infringement complaints. This decision conflicts with decisions from other circuits, other Fourth Circuit panels, and this Court, all of which have held the appointment of an agent for service of process is irrelevant,” the petition reads.

Geo-Blocking

Another fiercely contended issue relates to geoblocking. The Fourth Circuit Court of Appeals found that because FLVTO.biz and 2conv.com failed to block US visitors and allowed advertisers to geo-target US citizens, jurisdiction is warranted.

This is a dangerous conclusion, the petition notes. Using the same logic, a US citizen could be subject to the jurisdiction of a Chinese court, if he or she fails to block Chinese visitors.

“If allowed to stand, it will subject website operators to personal jurisdiction in every location where their website is accessible, regardless of whether the defendant has expressly aimed his conduct at the forum or otherwise has the constitutionally required minimum contacts,” the petition explains.

Because of the lack of clarity and disagreement in various courts, Kurbanov hopes that the Supreme Court will take on the matter. These questions come up in many cases and could have widespread consequences, so a detailed ruling would be welcome.

Clarity Is Needed

Evan Fray-Witzer, one of the attorneys representing Kurbanov, is hopeful that the petition will be granted. Not just for his client, but to resolve the present legal uncertainty for all website operators.

“If you operate a website that is popular, then you’re subject to jurisdiction anywhere – and everywhere – that people access the website. And that’s not a precedent that anyone should want to stand because if Kurbanov can be dragged into court here from Russia, then any U.S. citizen who creates a popular website can expect to be dragged into court anywhere in the world,” Fray-Witzer says.

The attorney invites the music companies to join their request. While they are on the opposite side of the argument, they can benefit from more clarity as well.

“If the record companies are so certain that the Fourth Circuit got this question right, then they should be anxious for the Supreme Court to take up the case. We invite them to join our petition and ask the Supreme Court to weigh in on these crucial jurisdictional questions. But I’m not holding my breath that they’ll do so.”

A copy of the petition for writ of certiorari, submitted to the US Supreme Court, is available here (pdf).

From: TF, for the latest news on copyright battles, piracy and more.

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Judge Recommends to Deny $250,000 Claim Against YTS Sites and Apps

Earlier this year, Hawaiian anti-piracy lawyer Kerry Culpepper turned some of the most popular piracy brands into a powerful anti-piracy tool.

The attorney, who is listed as director of the company ’42 Ventures,’ registered several piracy-related trademarks, including ‘YTS’ and ‘Popcorn Time.’

The company, which was founded last year, legally claimed these marks and uses them on a website that doesn’t draw any significant traffic. What did get people’s attention, however, were the enforcement actions that followed.

Shortly after the trademarks were granted, Culpepper managed to suspend the Twitter account of a popular Popcorn Time fork. He offered to return it in exchange for a Popcorn Time licensing deal, which failed.

Trademark Lawsuits Against YTS Sites and Apps

In addition, the attorney also filed a trademark infringement lawsuit on behalf of 42 Ventures. The lawsuit targeted the operators of yst.lt, ytsag.me, yts.ae, ytsmovies.cc, yts.ms, as well as apps such as “Y Movies,” “YTS Movies Library” and “YTS movies.”

The people behind these sites, who are believed to be from India, China and Egypt, used the YTS brand as a promotional tool. This isn’t uncommon, as YTS has been a popular pirate brand for years, after originally belonging to a long-defunct release group.

Over the past weeks, one of the site operators agreed to settle the trademark infringement matter for $200,000, on paper. The other four didn’t respond to the allegations at all, which prompted the lawyer to request default judgments of $250,000 against all defendants.

“Defendants purposefully utilize Plaintiff’s YTS mark in their domain registrations and app names in order to mislead consumers about the origins of its goods and services as connected to Plaintiff, resulting in a substantial loss of income, profits, and goodwill,” Culpepper informed the court.

42 Ventures Requests Default Judgment

Since none of the defendants showed up in court there was little to stop a victory, except for the court itself, it now appears.

In a ‘findings and recommendations’ issued this week, US Magistrate Judge Wes Reber Porter recommends the court to deny the $250,000 damages request and dismiss the complaint because the court lacks personal jurisdiction.

For a court to decide over a defendant, it should have the right to do so. This is usually not a problem when a US citizen is taken to court in the US but, in this case, the defendants are foreigners. That changes everything.

The court can only issue a judgment when it’s shown that the defendants “purposefully directed their activities towards the United States.” Here, Judge Porter is not convinced that this is the case.

According to Culpepper, the trademark-infringing YTS sites and apps were available in the US, used US-based services including domain registrars, and used US-based payment providers, among other things.

Judge Doesn’t Believe Court Has Jurisdiction

Judge Porter doesn’t dispute these facts but doesn’t agree that this is sufficient to show that the court has personal jurisdiction.

“The Court finds that Defendants’ use of United States-based companies for webhosting and domain name services and for paying for those services is insufficient to show that Defendants aimed their allegedly infringing acts at the United States,” Porter writes.

The Judge notes that in some cases people simply choose to work with US-based companies because they are the biggest brands in their industries, or have a monopoly. Not because they’re from the US.

“Indeed, as other district courts have recognized ‘it is more accurate to say that [the defendant] utilized Apple and Google because they arguably have a virtual monopoly on the channels in which developers can distribute application-based software—not because they have offices in [the United States]’.”

If this logic indeed applies, then all foreigners with a Gmail account would subject themselves to the jurisdiction of US courts, which is something Judge Porter doesn’t agree with.

Two of the defendants also used advertising services, cookies and web beacons, to gather information about individual visitors, some of whom are from the US. Culpepper brought this in as another argument to show that the court has jurisdiction but that was disregarded as well.

“Finally, the Court finds that Plaintiff’s allegations regarding Defendants Mav and Shan collecting information about users on their websites is insufficient to show that these Defendants have done engaged in ‘conduct directly targeting the forum’.”

Judge Recommends Dismissal

All in all, Judge Porter concludes that the court lacks personal jurisdiction over the defendants. He therefore recommends denying the motion for a $250,000 default judgment and suggests a dismissal of the entire case.

This recommendation has yet to be adopted by the court in a final ruling and can be contested by Culpepper. However, the first signs don’t look positive for the trademark owner.

In closing, it is worth pointing out that YTS.mx, which is by far the most popular YTS site, wasn’t targeted in this trademark case. However, the same lawyer previously negotiated copyright infringement settlements with the site’s owner, totaling well over a million dollars.

A copy of the findings and recommendations published by US Magistrate Judge Wes Reber Porter is available here (pdf)

From: TF, for the latest news on copyright battles, piracy and more.

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US Case Against KickassTorrents in Trouble as Alleged Operator Flees Poland

During the summer of 2016, Polish law enforcement officers arrested Artem Vaulin, the alleged founder of KickassTorrents.

The then 30-year-old Ukrainian was apprehended at a local airport. He was later taken into custody and around the same time the infamous torrent site went dark.

Criminal Prosecution of KickassTorrents

The arrest was part of a U.S. criminal case which also listed two other men as key players. At the time, KickassTorrents (KAT) was the most-used torrent site around, so the authorities couldn’t have hit a more prominent target.

The criminal case meant the end of the torrent site, but also the start of a slowly progressing legal battle for the defendants. After being held in a Polish prison cell for nearly ten months, Vaulin was released on bail in 2017.

He soon moved to a rented apartment in Warsaw where he enjoyed relative freedom and, most importantly, the company of his wife and son. Meanwhile, the extradition proceedings continued.

Four years on, the case remains pending without any significant progress. There was an early court decision which held that the alleged KAT operator can be extradited, but that decision had yet to be confirmed. Based on new developments, it’s unclear whether that final decision will ever come.

Alleged KAT Founder Skips Bail

According to new information received by TorrentFreak, Vaulin is no longer in Poland. This was confirmed by United States Attorney John R. Lausch Jr., who just informed the federal court in Illinois that their suspect is ‘missing.’

“According to information recently received from the Polish Ministry of Justice, defendant Artem Vaulin has left Poland in violation of his release conditions, and his current whereabouts are unknown,” Lausch writes in a brief status update.

vaulin status update

The release was not without conditions. Vaulin was not allowed to leave the country, for example, and was under police supervision. However, according to the authorities, these conditions were violated recently and the $108,000 bail was forfeited.

“According to the Polish Ministry of Justice, however, Vaulin has left the country and his bail was forfeited by the District Court in Warsaw on August 26, 2020. As such, extradition proceedings in Poland are no longer continuing,” the US Attorney adds.

Vaulin’s Legal Team Withdraws

We reached out to Val Gurvits of Boston Law Group, one of the attorneys who represented Vaulin in the US case. Gurvits said that he was just informed of these new developments by the US Government. His team hasn’t heard from Vaulin.

“We are not in touch with Mr. Vaulin and we will be withdrawing from the case,” Gurvits tells us.

It’s not clear why Vaulin left Poland or where he is now. However, based on this new information, it is not unlikely that the criminal prosecution in the US may never start. Without defendants, it can’t continue.

In addition to Vaulin, the US Government also indicted two other Ukrainian men in the KickassTorrents conspiracy. These defendants, Oleksandr Radostin and Ievgen Kutsenko, remain at large after four years.

From: TF, for the latest news on copyright battles, piracy and more.

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‘Nintendo Sued Team-Xecuter Without Knowing It’

Last week, the US Department of Justice indicted three alleged members of Team-Xecuter.

The group, whose modchips and software solutions help to facilitate game piracy, has long been a thorn in the side of Nintendo.

The authorities didn’t mention any involvement from the Japanese gaming giant in its investigation. However, considering the close eye that it kept on Team-Xecuter, the company was likely consulted down the line.

Nintendo Sued Switch Hack Stores

The timing of the criminal prosecution is interesting as well. It follows legal action in which Nintendo worked to shut down ROM sites and stores that sell Team-Xecuter products. In fact, one of the stores that Nintendo has an ongoing case against, Axiogame.com, is believed to be operated by Team-Xecuter.

Axiogame.com is one of the stores Nintendo sued in May. That case, which lists nine defendants in total, was filed against “John Does” as the operators are unknown. After filing the lawsuit Nintendo did its best to identify those running it, but without success.

Axiogame = Team-Xecuter?

The US Government appears to know more. Although all claims have yet to be proven, the Team-Xecuter indictment links Axiogame.com to game piracy conspiracy.

“The enterprise also sold its circumvention devices directly to individual consumers through its own online platforms. For example, LOUARN and CHEN sold modchips through an online marketplace called axiogame.com. This website sold modchips developed by the enterprise in addition to a variety of gaming accessories,” it reads.

After the criminal prosecution was announced Axiogame.com and Maxconsole.com, a review site also believed to be operated by Team-Xecuter, remained online. However, that changed yesterday and, at the time of writing, both can’t be reached.

Court Grants Injunction Against Switch Hack Stores

Nintendo has booked a victory of its own against Axiogame and the other online stores after a Washington federal court granted its request for a default judgment and permanent injunction.

The permanent injunction requires the store operators to stop any infringing activity, destroy any infringing products, and hand over their domain names. The injunction also applies to third-party services, including hosting companies and domain registrars and registries, who can be compelled to shut the sites down as well.

nintendo injunction

The injunction covers the sites Anxchip.com, Axiogame.com, Flashcarda.com, Mod3dscard.com, Nxcard.com, SXflashcard.com, TXswitch.com, Usachipss.com, Lowbr.com, Masterpl.com, Brujoon.com, Agresu.com, as well as any successors that may appear.

Axiogame.com’s downtime doesn’t appear to be a direct result of the injunction, as the site was already offline before it was issued. It seems more likely that it’s related to the criminal prosecution.

It will be interesting to see whether Nintendo will act on the information that was made public through the indictment. Now that it knows who’s allegedly behind Axiogame.com, it can replace the “John Doe” defendant with actual names.

A copy of the default judgment and injunction obtained by Nintendo against the various stores is available here (pdf)

From: TF, for the latest news on copyright battles, piracy and more.

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US Criminal Prosecution Casts Doubt Over Team-Xecuter’s Future

Hacking group Team-Xecuter has long been a thorn in the side of major gaming companies.

The group offers hardware and software solutions that allow people to install and play unofficial games – including pirated copies – on various consoles, including the popular Nintendo Switch.

Team-Xecuter often defended its work by pointing out that their products are not necessarily pirate tools. They are supporters of the ‘right to repair’ movement and back people who want to play homebrew games on their devices for personal use.

The affected game companies disagree, with Nintendo in front. The Japanese game company has been chasing down Team-Xecuter for years and a few months ago the company took several online stores to court for selling Team-Xecuter products. Last week, these enforcement efforts reached a new level when the US Government launched a criminal prosecution of three of the group’s members.

Team-Xecuter’s Future

Despite the criminal prosecution, Team-Xecuter’s website remains online. Other services, which are allegedly operated by members of the same conspiracy, are up and running as well, including Axiogame.com and Maxconsole.com.

This doesn’t mean that there are no issues at all. In recent days several people reported problems while activating their Team-Xecuter licenses. However, this problem appeared to be just temporary.

xecuter license

Following the news about the criminal prosecution, some third-party vendors removed associated products from their stores. That said, these remain available elsewhere and installation support is still available as well.

To find out more about their future plans, we reached out to Team-Xecuter over email. This message wasn’t delivered due to a technical problem, suggesting that not everything is running completely smoothly at the moment.

What we do know is that there are more people involved in the group than just the three who were indicted. The others may be able to continue business as usual, or not. Since we can only speculate at the moment, we decided to focus on the US Government’s allegations.

The Defendants

Over the past several days, we’ve combed through the legal paperwork of which we will provide an overview below. It has to be stressed that, at this point, all claims against the defendants have yet to be proven.

Max Louarn (48, France) aka MAXiMiLiEN, aka Julien Ambroise

The first defendant is Max Louarn, a 48-year-old French national who was arrested in Canada where he is being held in custody. Louarn is seen as the leader of Team-Xecuter. He made important business decisions, arranged investors and financing, and oversaw product development and the wholesale distribution chains.

Louarn is a familiar name in the game hacking scene and describes himself as an “officially retired hacking pioneer.” His work reportedly dates back well into the last century when he was linked to the warez group PARADOX. In 1993 he was arrested in a Nintendo piracy case, after which he fled to Spain.

That was not his only run-in with the law. Two years later he was arrested in Washington for his involvement in a credit card fraud and was accused of reselling 3,000 stolen credit cards. This eventually led to a sentence of five years and eight months for the then 23-year-old.

In 2005, Louarn’s name showed up again in federal court records, with Sony accusing him of operating Divineo, a company through which he sold modified Playstation devices and modchips. Sony eventually secured a judgment of more than $5 million in statutory damages against Lourn and Diveneo.

Yuanning Chen (35, China) aka Yuan Ning Chen, aka Velison Chen, aka 100+1, aka Jingui Chen

35-year-old Yuanning Chen from China is the only defendant who’s still at large. According to the indictment, Chen was involved in the management of a manufacturing and distribution company where Team-Xecuter’s hardware was made.

The company, “China Distribution,” was labeled as the official wholesale distributor of several circumvention devices. In addition, Chen was also operating the Axiogame.com store, which remains online today.

Gary Bowser (51, Canada) aka GaryOPA

The third defendant, Gary Bowser, was arrested in the Dominican Republic last month and he has since been deported to the US. Bowser is allegedly responsible for the development of circumvention devices. He was also in regular contact with resellers.

Bowser is best known through his nickname GaryOPA, the supposed operator and a frequent writer on the website “MaxConsole,” which regularly reviewed Team-Xecuter hardware and other hacking tools.

Team-Xecuter’s “Fragmented Approach”

The indictment sees the Team-Xecuter conspiracy as a broad enterprise that included many sites, products, and organizations that are not publicly associated with the group. This is less efficient to manage but was used to isolate all parts from enforcement threats.

“The enterprise used this fragmented approach to protect the overall enterprise in the event that one device or brand were to be targeted by gaming companies, financial institutions, and law enforcement,” the indictment reads.

This fragmented setup involved, among other things, various third-party developers and hackers, operating the distribution chain through a Chinese company, facilitating sales through Axiogames.com, and promoting the products through Maxconsole.com.

garyopa

To hide the identities of the people involved Team-Xecuter relied on reverse proxies and bulletproof hosting providers. In addition, communication channels were mostly encrypted, using PGP and apps such as Signal and Telegram for sensitive messages.

The indictment stresses that the success of the business relied on the availability of pirated games. To make sure that this was in order, they allegedly “created” and “supported” ROM sites, which were then highlighted on MaxConsole.

“Accordingly, the enterprise undertook efforts to create and support online ROM libraries that could be used by the enterprise’s customers. The enterprise directed users to ROM libraries through the enterprise’s website, maxconsole.com,” the indictment reads.

Tapped Communications

Several claims in the indictment are backed up by internal communications from and between the defendants. How the US Government obtained this isn’t clear, but it seems to confirm the various connections. For example, Louarn sent the following note to an alleged co-conspirator.

“You are always panicky about things and not taking time to analyze and see the big picture to make real money. First, obviously we know how to host. Just for sites you know we own, we have Maxconsole, Team-xecuter etc. which are 1000 times more traffic than your site ever had.

“Second, of course[,] Axiogame will be back up, it is already back but we have some issues which I am trying to understand. Axlogame has over 200 orders per day…”

Another email, sent by Louarn to Chen, goes into detail about payments requested by chip developers, asking Chen if it’s possible to put up some pre-orders or pay them in another way.

Bowser, for his part, sent an email to a business partner detailing how he was responding to enforcement efforts by Nintendo.

“They have been trying hard to crack down on everything, removing ‘roms’ from various sites which devices like Classic2Magic need, but we have [a] plan in the works to have secure links to these retro rompacks on [a] protected server, so it will not be a problem.”

Investigators Purchased Devices

The investigation into Team-Xecuter started years ago. The indictment mentions several occasions where investigators from the Western District of Washington bought devices that were trafficked by members of the conspiracy.

This includes the Team-Xecuter branded SX Lite, SX Core and SX Pro, all jailbreaking solutions for the Nintendo Switch. Investigators bought an SX Pro kit from an ‘authorized’ seller in July 2018, and several others later on, which they installed on separate Switch consoles.

Other devices, allegedly trafficked by the conspiracy, include the “Gateway 3DS” and the “Stargate” for the Nintendo 3DS, the “TrueBlue Mini” for the Playstation Classic, and the Classic2Magic, for Nintendo’s SNES. Copies of these devices were all bought by investigators.

According to the allegations, the defendants were aware of the illegality of the devices. In order to frustrate enforcement efforts, they would use false merchandise descriptions, tariff classifications, and value descriptions.

For example, defendant Louarn advised his co-conspirator Chen to declare a shipment of circumvention devices as memory card adaptors, with a value of $0.20 each.

The Charges

While not all individual claims would be seen as criminal necessarily, the indictment argues that taken together, it clearly is a criminal conspiracy.

In total, the three defendants each face 11 felony counts, including conspiracy to commit wire fraud, wire fraud, conspiracy to circumvent technological measures and to traffic in circumvention devices, trafficking in circumvention devices, and conspiracy to commit money laundering.

If proven, these can lead to lengthy prison sentences. For now, however, all defendants are presumed innocent, until the opposite is proven in court.

A copy of the indictment, as released by the US Department of Justice, is available here (pdf)

From: TF, for the latest news on copyright battles, piracy and more.

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Megaupload Lawsuits Remain on Hold Until 2021, Or (Much) Later

There are a few recurring themes TorrentFreak has covered over the past decade, with the Megaupload case being a prime example.

For those who haven’t been around long enough, Megaupload was once one of the largest file-sharing empires on the Internet. It was founded in 2005 and grew exponentially in the years that followed.

The site first made mainstream headlines late 2011, when it released the Megaupload song, a PR stunt of epic proportions that took the Internet by surprise.

Mega PR

While copyright holders had just framed the site as the largest piracy threat on the Internet, top artists and celebrities including Alicia Keys, Kanye West, Snoop Dogg, Kim Kardashian, Will.i.am and even boxer Floyd Mayweather endorsed the site.

The video was viewed millions of times in a matter of hours and became a smash hit. Universal Music swiftly pulled the video offline with a dubious copyright claim, which only increased its popularity, adding to the embarrassment.

What the Megaupload team didn’t know, however, is that American and New Zealand law enforcement officials were already planning to take the site down for good.

Megaupload Takedown

Barely a month after the Megaupload song came out, helicopters and armed police forces were storming the New Zealand mansion of the site’s founder Kim Dotcom. They acted on behalf of the US, which announced a criminal prosecution into the Megaupload conspiracy.

Today, nearly nine years have passed but Kim Dotcom and his former colleagues are still fighting a legal battle in New Zealand to prevent their extradition to the US, for which the final decision has yet to be issued.

While all parties await the outcome, the criminal case in the United States remains pending. The same goes for the civil cases launched by the MPA and RIAA in 2014, more than six years ago.

Lawsuits Remain on Hold

Since the civil cases can potentially influence the criminal proceedings, Megaupload’s legal team previously asked to put these cases on hold, and last week they requested another extension, which was swiftly granted by the federal court in Virginia.

megaupload stay order

With no objections from the MPA and RIAA, it is no surprise that the stay until April 2021 was granted. If anything, these motions serve as a bi-annual reminder of the lack of progress in the Megaupload case.

How Much Longer?

The extradition process in New Zealand may very well continue for several more years. And in the event that the defendants are extradited, it can take much longer before the criminal case concludes. This means that 2021 may eventually become, 2022, 2025, 2030, etc.

A few years ago there were concerns that the long delays could result in the destruction of evidence, as some of Megaupload’s hard drives were starting to fail. However, after the parties agreed on a solution to back-up and restore the files, this is no longer a problem.

There have also been attempts to make it possible for millions of former Megaupload users to retrieve their personal files. However, in recent years there hasn’t been any update on this front, and it’s unlikely that this will change anytime soon.

By now it’s pretty clear that the original Megaupload site will never return. However, the Megaupload song lives on.

From: TF, for the latest news on copyright battles, piracy and more.