The Copykat - Dotcom surprised by criminal charges ........

Remember John Steele, Paul Hansmeier and Paul Duffy, best known from reports as being the attorneys behind controversial 'troll' company Prenda Law ? Well - they are back in the news!  And still annoying judges! However its not all bad news after an Illinois federal judge denied motions for contempt and sanctions against the trio after a defendant in a copyright case said the attorneys for so-called porn troll Lightspeed Media Corp had blocked discovery and lied about being insolvent to avoid attorneys’ fees, saying he had not presented sufficient proof. U.S. District Judge David R. Herndon said that while individual defendant Anthony Smith had “uncovered questionable financial activity” on the part of Lightspeed’s counsel —  Steele, Hansmeier and  Duffy,  — and that the arguments raised and the records cited left the court suspicious of their previous representations, Smith had failed to show enough evidence to have his contempt motion granted. “The court does not believe that Lightspeed’s counsel have conducted themselves in a professional manner,” the opinion states. “However, suspicion is not a sufficient basis for a finding of contempt.” In March, Judge Herndon held the attorneys in contempt for violating a November sanctions order requiring them to pay $188,000 in legal fees and costs to Comcast Cable Communications LLC and AT&T Internet Services and $72,000 to Smith. The court further sanctioned the attorneys in the amount of 10 percent of the original sanction. More on Law 360 here

One of the USA's top cybersecurity and intellectual property officials says he knows how to make sure artists and musicians reap all the benefits from their works – by making illegal streaming of music and movies a felony. “[W]e believe that federal criminal law should be modernized to include felony criminal penalties for those who engage in large-scale streaming of illegal, infringing content in the same way laws already on the books do for reproduction and distribution of infringing content,” Alex Niejelow, an intellectual property and cybersecurity official, wrote in response to an online White House petition.

TV-over-the-Internet startup Aereo has filed for bankruptcy, bringing to a close its long-running copyright battle with US television networks.

Spy Ghana reports that Ghanaian musicians are being asked to get involved in copyright issues; Bessa SimonsVice President of the Musicians Union of Ghana (MUSIGA), has urged up and coming musicians to get involved in copyright related issues saying that most musicians of the older generation retired from music with little because they never took interest in copyright related issues. Bessa was a member of the band Osibisa andd said that that even though the collection of royalties by Ghana Music Rights Organisation (GHAMRO) on behalf of the right owners seems to be in its infant stages, it will get better with the young great musicians pushing it forwards noting “When UK started PRS for music, the first collection was about GBP 1, 900 and they had members up to the tune of 190. Now as we speak, they have collected over GBP £666 million and they are sharing it to about 100,000 musicians; and that is where we want to get to telling musicians "You are the only people who can propel it. So please get interested in the copyright issues”.

The author and creator of Padding Bear, Michael Bond, has revealed that he once considered suing the parents of Top gear presenter Jeremy Clarkson after learning they were selling soft toy versions of the famous bear.  In an interview with The Sunday Times Bond said that he was alerted to the fact that Shirley and Eddie Clarkson were selling the toys when a Surrey shopkeeper called him with the news in the early 1960's. 

Also in the UK, and perhaps unsurprisingly, cross-industry trade body UK Music, working with the Musicians' Union and British Academy Of Songwriters, Composers And Authors, is set to fight the private copy exemption added to British copyright law earlier this year through the courts saying "The MU, BASCA and UK Music welcome the purpose of the new measures, namely to enable consumers to make a copy of their legally acquired music. However, this is a bad piece of legislation as it incorrectly implements the law by failing to include fair compensation for musicians, composers and rightsholders" expaining "The private copying exception will damage the musician and composer community. It contravenes Article 5 (2) (b) of the [European] Copyright Directive which includes a requirement that where a member state provides for such a copyright exception - as the UK now has - it must also provide fair compensation for rights holders".

Judge Denise Cote has denied Microsoft’s request to dismiss a lawsuit filed by Getty Images for copyright infringement resulting from a feature of Microsoft's Bing search tool that allowed people to easily embed digital photographs onto their websites. Court documents filed in New York’s federal court show that Microsoft’s request to dismiss the lawsuit has been denied. In a statement, a Microsoft spokesman said: “We’ve already disabled the Bing image widget beta and believe there is no need for this case to continue.”

And finally - a rather staggering 'confession' from none other than Kim Dotcom, the former boss of Megaupload. The larger than life figure has told an online forum that he underestimated the threat of legal action that's left him fighting extradition from New Zealand to the USA and the 'surprised; 40-year-old said he regretted not taking threats over copyright from the Motion Picture Association of America seriously enough. Dotcom said that he and his advisers had monitored civil copyright cases and never foresaw the likelihood of criminal charges saying "No one ever for a minute thought that anyone would bring any criminal action against us" and "We had an in-house legal counsel. We had three outside firms working for us and not once - and they've reviewed our sites completely - not once had any of them suggested any criminal risk at all." Hmmmmm! 

Mega revelations may make uncomfortable reading for the Dotcom team

The defence team for Megaupload boss Kim 'Dotcom' Schmitz seem to have suffered a bit of a set back against moves extradite Dotcom to the USA to face criminal charges - as alleged new details have emerged about how the Mega system actually worked - and how those behind the platform went about their business.There again, they are only set backs if these allegations are actually true, and that has certainly not been tested or proven as yet. 

Firstly it has been argued that the Megaupload 'takedown' system, which was meant to allow owners of infringing content have their material removed, was not only ineffective - it was allegedly designed to be ineffective. The 'Abuse Tool'  was made available to U.S. copyright holders, and would purportedly remove copyright-infringing material from Mega-controlled servers. All very good and very DMCA compliant, The Abuse Tool allowed copyright holders to enter specific URL links to copyright-infringing content of which they were aware, and they were told by MegaUpload that that the Mega Conspiracy’s systems would then remove, or disable access to, the offending material. However - the Abuse Tool "did not actually function as the copyright owners were led to believe .... because the Abuse Tool only disabled the specific URL link identified, and the Abuse Tool failed to disable access to the underlying copyright-infringing material or remove the file from the server" and indeed would not disable other URL's linking to the same infringing content, even though Mega would have a list of all links to that content. So it was still there - still linked to - and still available.

Secondly,  files released by the U.S. Department of Justice,  to comply with a November order by Judge Liam O'Grady in the U.S. District Court for the Eastern District of Virginia, show multiple conversations about the scope of copyright infringement on the site. The DOJ seized Megaupload in January 2012 and charged owner Dotcom and other defendants with criminal copyright infringement and other crimes. Here's just a few examples of alleged conversations from what has been released:

- In a May 2007 Skype conversation, Megaupload CTO Mathias Ortmann told head software developer Andrus Nomm: "I have a feeling that Kim tolerates a certain amount of copyright violation." Nomm responded "Yep, but not too obvious ones" .... "Since it helps initial growth," to which Ortmann added. "But we must not overdo it."

September 2007, via Skype: "We're modern pirates" said Bram van der Kolk, Metaupload network engineer; Ortmann responded : "We're pretty evil, unfortunately, but Google is also evil, and their claim is "don't be evil." '. To that Van der Kola added : "The world is changing, this is the internet, people will always share files and download their stuff for free, with or without Megaupload."

And finally in March 2009: "We do have legit users" Ortmann said. Van der Kolk responded "Yes, but that's not what we make $ with."

At the end of August Kim Dotcom has resigned as managing director of the cloud hosting company to channel his energies into fighting extradition to the United States, as well as launching a music service, MegaBox, and political party. The party will be launched at a "big event" on 20 January 2014, although John Key, New Zealand's prime minister, said that the new party should be called the "No Hope Party".

Background on the 1709 blog here and here and here.

Dotcom v Web$starr - the big fight

Courtesy of the Hollywood Reporter we have the most public and amusing 'exchange of opinions' yet between the new internet entrepreneurs and the content industry: In the blue Corner .... welcome Kim 'Dotcom' Schmitz, 38 year old boss of MegaUpload, currently on bail in New Zealand awaiting extradition to the USA and now an internet freeedom fighter ..... and in the Red Corner, Bruce 'Web$tarr' Leddy, Hollywood writer and director, and a man with eyes on Dotcom's millions. Here's their rather interesting  exchange of letters: 





Dear Hollywood

The Internet frightens you. But history has taught us that the greatest innovations were built on rejections. The VCR frightened you, but it ended up making billions of dollars in video sales.

You get so comfortable with your ways of doing business that any change is perceived as a threat. The problem is, we as a society don't have a choice: The law of human nature is to communicate more efficiently. And the economic benefits of high-speed Internet and unlimited cloud storage are so great that we need to plan for the day when the transfer of terabytes of data will be measured in seconds.

Businesses and individuals will keep looking for faster connectivity, more robust online storage and more privacy. Transferring large pieces of content over the Internet will become common -- not because global citizens are evil but because economic forces leading to "speed of light" data transfer and storage are so beneficial to societal growth.

Come on, guys, I am a computer nerd. I love Hollywood and movies. My whole life is like a movie.

I wouldn't be who I am if it wasn't for the mind-altering glimpse at the future in Star Wars. I am at the forefront of creating the cool stuff that will allow creative works to thrive in an Internet age. I have the solutions to your problems. I am not your enemy.

Providing "freemium" cloud storage to society is not a crime. What will Hollywood do when smartphones and tablets can wirelessly transfer a movie file within milliseconds?

The very powerful and the very stupid have one thing in common. Instead of changing their views to fit the facts, they try to change the facts to fit their views. The fact remains that the benefits of Megaupload to society outweigh the burdens. But instead of adapting, you imported one of your action-conspiracy movie scripts into the real world. In my view, MPAA CEO and former Sen. Chris Dodd lobbied his friends in the White House to turn me into a villain who has to be destroyed. Due process? Rule of law? Eliminate me and my innovation and worry about the consequences later. Never mind that millions of Megaupload users lost access to cloud data like their wedding photos. Well done, Hollywood, everyone with similar innovations got the message. But wait … You did not read the end of the script.

The people of the Internet will unite. They will help me. And they are stronger than you. We will prevail in the war for Internet freedom and innovation that you have launched. We have logic, human nature and the invisible hand on our side.

As you should have known, our Mega services operated within the boundaries of the law. We had users that spanned from the military to Hollywood to lawyers and doctors. If you are unhappy with that, it is up to you to convince Congress to amend legislation. You tried with SOPA and you failed. As an alternative, you chose to lobby the Justice Department to ignore the law and stage a global show of force and destruction. The only parties a New Zealand court has found to have violated the law in this case are the local police and the FBI.

Regardless of the issues you have with new technologies, you can't just engage armed forces halfway around the world, rip a peaceful man from his family, throw him in jail, terminate his business without a trial, take everything he owns without a hearing, deprive him of a fair chance to defend himself and do all that while your propaganda machine is destroying him in the media. Is that who you want to be?

There can still be a happy ending. I am working on solutions. Just call me or my lawyers. You know where to find me. Unfortunately I can only do lunch in New Zealand.

This open letter is free of copyright. Use it freely.

And in reply, Hollywood director Bruce Leddy, director on the ABC/TBS Cougar Town, penned this to the Hollywood Reporter. Bruce also wrote and directed the feature film The Wedding Weekend and wrote for madtv.


Hey, Kim! 


I read your  letter to Hollywood in The [Hollywood] Reporter, and I'm so happy you want to be friends! I mean, I'm just an average working "Hollywood" guy and I don't have any multimillionaire friends with mansions and Rolls-Royce Ghosts, so being buddies with you would make me soooo much cooler! All this stuff in the press about "who created what" and "who should make money off of whose hard work" is so boring, isn't it? Let's just agree to disagree! BFFs!

I am worried about your assets, though. While you're under house arrest, who's taking care of the mansion and all the sports cars that were purchased with the profits you made -- allegedly! -- from posting Hollywood movies and TV shows on the Internet? Rust can build up quickly on helicopters, so do be careful!

Hey, if you're not available for a while, would you mind if I borrowed one of your super-luxury cars? I mean, when you think about it, they kind of belong to all of us writers, producers, directors, cast and crew who work hard every day to make movies and TV shows but are clearly not as clever as you are about landing the big money by posting other people's products online. I've been working here for 20 years, but I still don't have even one Lamborghini! (I know, embarrassing, right?) It would really mean a lot to me and my family if I could drive around town in one of those bad boys.

Your story is so inspiring. To earn hundreds of millions of dollars without actually ever making anything is just so cutting-edge and futuristic! Hollywood is so "dark ages." In the future, everyone should be like Megaupload: free to profit from what anyone makes, writes, creates, designs or owns in whatever way they can. I say, if Hollywood is going to spend all this time and effort making these movies and TV shows, employing hundreds of thousands of hardworking Americans and union members and then letting a guy like you become a multimillionaire off its work, it's our own damn fault! Holy cow, are we dumb! LOL.

I'm reminded of this guy who found a whole lot of brand-name jeans in a poorly guarded warehouse and then resold them for cheap out of the back of a truck. So smart, right? He didn't have that annoying overhead of making the jeans or of building a store to sell them from. Pure profit, baby! Only bummer was, there aren't any countries where that isn't illegal, so now he's up the river. Boo, FBI!

Personally, I'm tired of being a chump and writing and directing stuff for a decent wage when I could just as easily "share" other people's stuff on the Internet and make huge money off it. So I've decided to start selling all your property on eBay, beginning with your pile of luxury cars. That Mercedes Brabus SV12 alone will easily pay for my kids' college tuitions. I mean, sure, they don't technically belong to me. But if I can find a country where they don't really have rules about that kind of thing yet, I'm going to be living large! Probably change my name to Bruce Web$tarr. Extra "r" for extra RICH! You like it?

And hey, you're right; your life is like a movie. In fact, pirate movies have made like a bazillion dollars recently, and I bet we can get Depp or Cruise or someone on board. Let me know when you're going to be free next, and we'll grab a bite to discuss. I hear New Zealand is lovely. -- Bruce Leddy (aka Bruce Web$tarr)

The Hollywood Reporter can be found here