Lawsuit Targets Online Movie-Swapping

PC World

A new lawsuit filed in federal court accuses 20,000 people of illegally downloading and sharing movie content over the Internet. The court action, filed by the U.S. Copyright Group on behalf of the copyright holders, is part of a strategy to monetize file sharing "through the United States Federal Courts...demand letters and subpoena process," according to a video on savecinema.org, the company's Web site. The USCG is also planning to bring a second lawsuit against another 30,000 defendants accused of illegal movie file sharing, according to The Hollywood Reporter.

The First Case

For its first attempt to win financial compensation from file sharers, the USCG is working with small, independent film producers to sue individuals over the illegal downloading of five movies: "Steam Experiment," "Far Cry," "Uncross the Stars," "Gray Man," and "Call of the Wild 3D." A second case against a further 30,000 file sharers will include another five films whose titles have not been disclosed, according to THR.

So far, major Hollywood studios and trade associations like the Motion Picture Association of America have not signed up with the USCG's plans. Instead, the major industry players are waiting to see what happens with the USCG's initial cases before considering action to bring in the attorneys and recoup costs from illegally traded major motion pictures, according to THR.

If Hollywood does go after file sharers, this wouldn't be the first time. In 2004, the MPAA sued some traders of copyrighted content to try and deter unauthorized movie sharing, and the MPAA has been a party to actions against file-sharing sites and services like KaZaA (2001), Grokster (2005), The Pirate Bay (2008), and Torrent Spy (2008).

The US Copyright Group

The USCG describes itself as a "collection of lawyers and IT consultants that work together to monetize distribution channels." Those "distribution channels" include file-sharing technologies like BitTorrent and sites like The Pirate Bay and IsoHunt.

What's interesting about the USCG is that this company is trying to create a business model around pursuing file sharers. Instead of rights holders and professional organizations initiating a campaign against users--as the Recording Industry Association of America famously did--the USCG approaches distributors and rights holders to empower the USCG to go after file sharers on the rights holder's behalf. In a way, the USCG is acting kind of like a private copyright police force that profits off the misdeeds of Internet users.

To find users, the USCG is employing a technology successfully used in Europe; it identifies file sharers by their Internet Protocol (IP) addresses, when the illegal downloading took place, and whether the downloaded content was copyrighted material. An IP address is a unique identifier that is specific to a single Internet connection behind which can be one computer, such as a home connection, or many devices, such as an office or other place of business.

Will the Real John Doe Please Stand Up?

The problem with bringing legal action against users is that ultimately you have to identify who the miscreant file sharers are.

To obtain a user's actual identity, the USCG is filing what are called John Doe lawsuits against people identified solely by their IP addresses. After the suit is filed, the USCG can then issue subpoenas to Internet Service Providers to obtain the identity of the customer behind a particular IP address. The problem is ISPs are often reluctant to reveal customer information, and have been known to fight these subpoenas in court.

However, ISPs have also been known to work with rights holders in the past. In 2009, several providers agreed to help the Recording Industry Association of America, by serving warning notices to users who were downloading copyrighted music. But deliver warning notices based on an IP address is a far cry from revealing a customer's identity.

The other problem is that an IP address can be easily masked or hidden by using a proxy server, which makes discovering the identity of a file sharer more difficult.

Deja Vu All Over Again

The actions by the USCG are reminiscent of many past attempts to obtain compensation for rights holders through litigation. In 2009, the RIAA abandoned this strategy after several court setbacks, Congressional scrutiny, and a negative public reaction to its actions.

Whether the USCG will fare better remains unclear. The USCG's plan is incredibly ambitious in that it hopes to be a significant deterrent against the practice of illegal file sharing, according to the company's About page. "Research suggests that once a copyright infringer is forced to pay settlement damages far in excess of the actual cost of the stolen content," the USCG writes. "He will never steal copyrighted material again. Through these methods, the US Copyright Group has the ability to recover losses for our clients and stop film piracy on a massive scale."

The Electronic Frontier Foundation, a consumer advocacy group, isn't buying the USCG's argument. In a recent blog post, the EFF said the USCG's cases show that "copyright law has become unmoored from its foundations." The EFF also says that "copyright should not line the pockets of copyright trolls intent on shaking down individuals for fast settlements a thousand at a time."

RealNetworks Settles Copyright Suit

Information Week

The Motion Picture Association of America had claimed that Real's software illegally circumvented anti-piracy technology embedded in DVDs. 

RealNetworks has agreed to kill its DVD-copying software and pay $4.5 million in settling a copyright-infringement lawsuit filed by Hollywood studios.

As part of the settlement announced Wednesday, the provider of online entertainment services also agreed to drop its appeal of a San Francisco federal court ruling that barred RealNetworks from distributing or supporting RealDVD or any other technology that enables the duplication of the studios' copyrighted content.

RealNetworks also agreed to turn off the metadata service that provides DVD cover art and movie information to the roughly 2,700 ReadDVD customers. The company said it was in the process of refunding the purchase price of the product.

Bob Kimball, president and acting chief executive of RealNetworks, said in a statement that the company was "pleased to put this litigation behind us."

"Until this dispute, Real had always enjoyed a productive working relationship with Hollywood," Kimball said. "With this litigation resolved, I hope that in the future we can find mutually beneficial ways to use Real technology to bring Hollywood's great work to consumers."

In August 2009, U.S. District Judge Marilyn Hall Patel barred RealNetworks from selling RealDVD, ruling the technology violated Hollywood studios' copyrights and the licensing agreement RealNetworks had with the studios' copyright-protection group.

The 2008 lawsuit filed by Viacom and the Motion Picture Association of America claimed that RealDVD illegally circumvented the anti-piracy technology embedded in DVDs. The DVD Copy Control Association, which licenses Hollywood-sanctioned copyright-protection technology, joined the suit later, claiming RealNetworks was also in violation of its DVD CCA license.

The settlement was announced less than two months after RealNetworks Chief Executive Rob Glaser stepped down, saying that after 16 years at the helm, it was time to hand over day-to-day operations to someone else. Glaser remains chairman of the company.

Glaser resigned his post shortly after the resignation of chief operating officer John Giamatteo.

Viacom: 'Fair Use Works for Us'

Ars Technica

Viacom is unlikely to sue bloggers for posting their own clips of The Daily Show or The Colbert Report, contrary to reports floating around on the Internet. 

The company clarified its position to Ars on Thursday, noting that it tries to be as permissive as possible when it comes to fair use and that individual bloggers have never been on the studio's radar.

The confusion began when the Hollywood Reporter ran a story on Wednesday titled "Viacom will sue bloggers who post unauthorized 'Daily Show' clips," quoting Viacom spokesperson Tony Fox. "Yes, we intend to do so," Fox was quoted saying. "My feeling is if (websites) are making money on our copyrighted content, then that is a problem."

We reached out to Viacom's VP of PR Jeremy Zweig to confirm whether this position was true. After all, as numerous parties have pointed out, both The Daily Show and The Colbert Report make liberal use of clips from other networks that undoubtedly fall under fair use, and it seemed as if Viacom was willing to go after the little guy in order to ensure that no one got a single penny of revenue except for Viacom. This, however, was not the case.

"The headline is completely wrong," Zweig told Ars. He emphasized that the company has always been fairly open with fair use and that its policy has not changed. "Frankly, fair use works for us. I can't recall a time we've ever sued a blogger for the use of a Comedy Central clip, and there's no reason to believe that would be more likely today."

It's likely that Fox was referring to larger commercial websites that repost episodes without using the official embed tool from Comedy Central. In that case, it's not hard to see why Viacom would go after those whose sole purpose is to make money (via banner ads) by hosting Viacom's content, but according to Zweig, individual users have never been on the company's radar.

The news follows Hulu's announcement earlier this week that the two shows would disappear from its own site as of 11:59pm PST on Tuesday, March 9. Hulu said that the two shows have had "very strong results" over the past 21 months, both in terms of viewership and advertising revenue, but that the team at Comedy Central decided to pull out after a series of (apparently unsuccessful) discussions to keep the shows on Hulu.

The decision has been a controversial one among fans of the shows who also like Hulu. The shows will remain online, of course, but at TheDailyShow.com and ColbertNation.com, forcing regular Hulu users to add new stops along the information superhighway if they want to continue watching the same shows.

Still, online ad revenue is already not great compared to traditional TV, and Hulu has been struggling lately to fill some of its ad spots with much of anything. (Regular watchers know that the charity ads are just filler, and sometimes, you even get a black screen that simply says there are no ads to show for the time being.) Even though Hulu claims the two shows have been doing well lately, Comedy Central still has to split its revenue with Hulu, and in times like these, any split is probably too much.

This isn't to say that Stephen Colbert and John Stewart won't be showing up on Hulu again in the future, though. Part of the reason Hulu was so amicable in its announcement was undoubtedly to ensure that talks will continue and the shows might come back one day. After all, Hulu has been working on a plan to start charging for content—possibly by way of subscription or sticking the most popular shows behind a paywall. If Hulu manages to roll out such a service and it takes off with users, Viacom and Comedy Central may be open to bringing the shows back to take advantage of the new revenue stream. 

New Access To Getty For Flickr Photographers

from cNet

Yahoo's Flickr site has deepened its relationship with photo-licensing power Getty Images so photographers can nominate their own photos for inclusion in Getty's Flickr Collection.

Previously, Getty decided which images it believed were commercially viable, and since the program launched in July 2008, it has put together a collection of more than 60,000 commercial images. Now photographers, instead of just being able to indicate that they're willing to be contacted by Getty, can actively submit a portfolio of images.

"A submission should include exactly 10 images that represent what you consider to be the best of your work. The Getty Images creative team will evaluate submissions based on style, subject matter, and technical skill," Andy Saunders, Getty's vice president of creative imagery, said in a statement. "If some or all of the photos--or other images from your photostream--are selected for the Flickr Collection on Getty Images, you will receive an invitation via FlickrMail. This invitation will clearly show Getty Images' initial selection of images and introduce the enrollment process."

The partnership is an interesting confluence between the old-school world of stock photography and the nouveau era of digital photography and the Internet. With digital SLRs and the Internet, high-quality photos are easier to come by, leading to the arrival of several "microstock" companies that sell photos on a royalty-free and relatively inexpensive basis. It's hurt professional stock photographers, but it's provided extra income to any number of enthusiasts and amateurs.

Flickr never launched its own microstock site, despite an abundance of enthusiasts contributing photos, but the Getty partnership does mix a commercial ingredient into the Yahoo photo-sharing site's operations.

The easy availability of photos at Flickr and other sites can lead to copyright infringement troubles. On Tuesday, Toyota USA apologized for using Flickr photos without permission:

Toyota apologizes for pulling images from Flickr without photographer permission. Images from a handful of photographers appeared on a Toyota site for five days. We're working quickly to reach out to the individual photographers involved. Until then, the images have been removed, and corrections have been made to the process of pulling images from Flickr.

So it's clear that some Flickr photos have business value, whether for their professional quality or their everyman snapshot flavor.

Getty and Flickr won't disclose any details about their business relationship, but here's what Flickr has to say about how the finances work for photographers:

Flickr has a business relationship with Getty Images, though we've never publicly discussed the specifics of the deal. Regarding the photographers, Getty Images will be the exclusive distributor of select Flickr members' content, and in turn, Getty Images will facilitate the license of such photography and will pay the royalties directly to the members. This will be a direct relationship between Getty Images and each Flickr contributor.

Flickr photographers will be asked to sign a Getty Images contributor contract, if they agree to have their images licensed for commercial use, that will specify rates for rights-managed and royalty-free royalties, as applicable. Rates for royalty-free imagery are 20 percent; rates for rights-managed (images) are 30 percent. These are directly in line with royalty rates that (Getty's) existing contributors receive.