Month: November 2015

Insurer Refuses to Cover Cox in Massive Piracy Lawsuit

cox-logoFollowing a ruling from a Virginia federal court that Cox is not protected by the safe-harbor provisions of the DMCA, the Internet provider must now deal with another setback.

Beazley, a high risk insurance underwriter for Lloyds, is refusing to cover legal costs related to the “repeat infringer” case which goes to trial next week.

It’s a crucial case that could define how Internet providers must handle copyright infringement complaints. At the moment it’s rare for ISPs to disconnect pirating users but the case has the potential to alter the landscape.

The case also exposes Cox to dozens if not hundreds of millions in potential piracy damages plus substantial legal fees. The Internet provider hoped to cover some of the costs under an insurance policy at Lloyd’s but the insurer is refusing to cooperate.

In a request for a declaratory judgment (pdf) Lloyd’s underwriter asks the court to rule that it doesn’t have to cover the costs, which have already exceeded $1 million in legal fees alone.

In the complaint Beazley states that Cox was well aware of the potential liabilities. Rightscorp, the company that sends the copyright infringement notices, had already warned the ISP over its precarious position several years ago.

“By letter dated January 9, 2012, Cox was advised by an agent of copyright holders that if it did not forward those notices to its customers, it would be exposed to claims of contributory and vicarious copyright infringement,” the insurer writes.

Cox, however, refused to forward the millions of notices as they were bundled with settlement demands, which are seen by some as extortion. This refusal eventually lead to the lawsuit filed by music rights companies BMG and Round Hill.

“Cox continued to intentionally ignore the notices and did not forward them to its customers,” the complaint notes.

In light of the above, Beazley argues that the lawsuit is the result of an intentional business policy rather than the act of rendering Internet services, which is what the insurance policy covers.

“…the BMG Claim arose out of Cox’s policy and practice of ignoring and failing to forward infringement notices and refusing to terminate or block infringing customers’ accounts, not acts in rendering internet services.”

In addition Beazley point out that the piracy lawsuit was filed November last year, several days before the December 1, 2014 date the insurance policy began.

If the court grants Beazley’s request for declaratory judgment then Lloyd’s policy will not cover any of the costs related to the lawsuit. This will be a costly setback for the ISP if it loses the piracy lawsuit.

Source: TorrentFreak, for the latest info on copyright, file-sharing, torrent sites and ANONYMOUS VPN services.


Source: TorrentFreak

Cox Has No DMCA Safe Harbor Protection, Judge Rules

cox-logoLast year BMG Rights Management and Round Hill Music sued Cox Communications, arguing that the ISP fails to terminate the accounts of subscribers who frequently pirate content.

The companies, which control publishing rights to songs by Katy Perry, The Beatles and David Bowie among others, claim that Cox gave up its DMCA safe harbor protections due to this inaction.

The case is scheduled to go to trial before a jury next month, but an order just issued by District Court Judge Liam O’Grady already puts the Internet provider at a severe disadvantage.

In his order Judge O’Grady ruled on a motion for partial summary judgment from the music companies, which argued that Cox has not met the requirements for safe harbor protection under the DMCA.

Although Cox does have a policy to disconnect accounts of pirating subscribers, it discarded the copyright infringement notices from the plaintiffs. These notices are bundled with settlement requests, something Cox likens to harassment.

After reviewing the arguments from both sides Judge O’Grady has sided with the copyright holders, as HWR first reported.

“The court grants the motion with respect to defendant’s safe-harbor defense under the Digital Millennium Copyright Act (DMCA). The is no genuine issue of material fact as to whether defendants reasonably implemented a repeat-infringer policy as is required…,” the order (pdf) reads.

Judge O’Grady’s order

coxord

The judge has yet to publish his full opinion motivating the decision and we will follow this up as soon as it’s handed down. However, the ruling makes it clear that Cox is in a very tough spot.

DMCA safe-harbor is a crucial protection for ISPs against copyright complaints. Aside from the liability Cox faces in the case, it also suggests that ISPs should disconnect subscribers solely based on accusations from copyright holders, which affects the entire industry.

Judge O’Grady, who’s also in charge of the criminal case against Megaupload and Kim Dotcom, doesn’t appear to be concerned about any collateral damage though.

Techdirt reports that he previously lashed out against the EFF and Public Knowledge, which submitted an amicus brief in support of Cox.

“I read the brief. It adds absolutely nothing helpful at all. It is a combination of describing the horrors that one endures from losing the Internet for any length of time,” O’Grady said, rejecting the brief.

“Frankly, it sounded like my son complaining when I took his electronics away when he watched YouTube videos instead of doing homework. And it’s completely hysterical.”

To be continued.

Update: EFF Senior Staff Attorney Mitch Stoltz shared the following comment with TorrentFreak, responding to the safe-harbor decision.

“While the judge hasn’t explained the reasons behind his decision yet, it has the potential to encourage more shakedowns of Internet subscribers by Rightscorp and others. Cox shouldn’t be penalized for protecting its customers against abuse.”

“Regardless of last week’s ruling, Cox should prevail in this lawsuit. No court has ever held that simply transmitting data, without more, amounts to a copyright violation.”

Source: TorrentFreak, for the latest info on copyright, file-sharing, torrent sites and ANONYMOUS VPN services.


Source: TorrentFreak

Kim Dotcom Slams U.S. “Bullies” as Extradition Hearing Ends

megaupload-logoDespite criticisms emanating from both sides, it will be difficult to argue that New Zealand has skipped on the amount of time it’s dedicated to the Megaupload case.

Hundreds of hours of legal resources have been expended since the fateful raid on Kim Dotcom’s mansion in 2012 and with 2016 just a few short weeks away, it will soon be determined whether the Internet entrepreneur will be shipped to the United States.

That decision now lies with Judge Nevin Dawson, who today listened to the closing submissions in an extradition hearing that has lasted (some say dragged on) for 10 long weeks after being scheduled for just four.

Both sides have demonstrated only one common ground – each feels they have a solid case and that the other is dead wrong.

Prosecutors acting for the United States say that Megaupload was business built from the ground up for illegal purposes. They argue that Dotcom and fellow defendants Mathias Ortmann, Finn Batato and Bram van der Kolk knew that their users were breaching copyright and even financially rewarded those who infringed the most.

Rather than removing content as the law requires, Megaupload merely removed the links, leaving content intact so that it could live to infringe another day, the U.S. claims. Communications between some of the company’s executives only served to underline the above, with admissions that Megaupload was profiting from 90% infringing files.

The former Megaupload operators see things very differently. From day one they have argued that their Internet business was a legitimate cloud storage service, originally setup to overcome the limitations of sending files via email.

Megaupload was not dissimilar to Dropbox, Dotcom et al argued, and had deals with copyright holders so that any content they wanted removed could be taken down in a timely fashion.

“Not only did Megaupload achieve 99.999% takedown compliance, numerous emails from major content owners thanked us for our compliance,” Dotcom reiterated today.

But despite complying with the laws of the land, Dotcom says that Megaupload was cut down in its prime by an aggressive and malicious U.S. government who from the very beginning has been doing Hollywood’s bidding. Those same authorities closed down his site, seized his funds and then denied him access to a fair trial.

“My defense team has shown how utterly unreliable, malicious and unethical the U.S. case against me is. They have exposed a dirty ugly bully,” Dotcom said this morning.

But allegations of dirty tricks aside, Dotcom and his former associates insist that the very basis of the U.S. case falls on stony ground, that the copyright infringement charges on which all of the other charges are based simply aren’t extraditable offenses. In any event, Internet service providers such as Megaupload can’t be prosecuted for their users’ crimes, they say.

Nevertheless, the reality remains. Dotcom and his former Megaupload operators face charges of copyright infringement, conspiracy, money laundering and racketeering in the United States and after putting up a colossal battle, U.S. prosecutors aren’t likely to be backing down anytime soon.

But for now the fate of the now famous quartet lies in the hands of Judge Nevin Dawson, the man who has sat patiently – sometimes less so – through ten weeks of hearings and hundreds of pages of submissions from both sides in this epic war of words.

“The 10 week extradition hearing has ended. My life is in the hands of Judge Nevin Dawson. He was the Judge who granted me bail. There’s hope!” Dotcom said after the hearing ended today.

When Judge Dawson will deliver his final decision is unclear, but when he does so it will be to an open court in the presence of men facing decades of jail time in the United States.

It will be an agonized wait for both sides but history shows us that no matter which side loses, neither will easily accept defeat. This show is definitely not over yet.

Source: TorrentFreak, for the latest info on copyright, file-sharing, torrent sites and ANONYMOUS VPN services.


Source: TorrentFreak

Hulu Accidentally Leaks Upcoming Fargo Episode

huluImpatient fans of the popular FX series Fargo got lucky today. At least, those who are used to downloading or streaming it without permission.

The seventh episode of season two is scheduled to air tonight but thousands of people have already grabbed a copy from various torrent sites.

The leak originates from Hulu where the video was made freely available this weekend, by mistake. Hulu offers the second season of Fargo with a select cable subscription but the upcoming episode was reportedly listed under season one.

The error was noticed by several people and after roughly a day Hulu took the video down. But by then it was already too late.

This morning several copies of the leaked episode were uploaded onto torrent sites and since then thousands of people have downloaded it. Although some were skeptical, the episode is indeed real and the full version.

Screenshot of the leaked Fargo episode

fargoleak

The leak is unique as the source of the pre-release is an online streaming service. Most TV-show leaks we’ve seen recently come from so-called screener DVDs which are sent out for promotional purposes.

For Hulu, which is owned by media giants NBCUniversal Television, Fox Broadcasting and Disney–ABC Television, the mistake is quite an embarrassment. However, since it happened less than a day before the official premiere the effect of the leak should be limited.

TorrentFreak has asked Hulu for a comment on the news but at the time of publishing we have yet to receive a reply.

Source: TorrentFreak, for the latest info on copyright, file-sharing, torrent sites and ANONYMOUS VPN services.


Source: TorrentFreak