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     TorrentSpy Won't Pay $111 Million Court Order

A day after a U.S. judge dinged TorrentSpy with one of the largest fines in copyright history, the lawyer for the torrent-tracking search engine said Thursday the $111 million judgment won't get paid.

Nevis-based Valence Media, the owner of TorrentSpy, filed for bankruptcy protection in England last week "and has no appreciable assets," attorney Ira Rothken said. "This was a Hollywood publicity stunt."

The Motion Picture Association of America sued the search engine in Los Angeles federal court, alleging the site facilitated copyright infringement of Hollywood movies. The MPAA won a default judgment last year after TorrentSpy refused to turn over internal documents, and a federal judge levied the $111 million penalty and ordered the site never to return online.

"It certainly is not a lesson for other search engines to look at what the rules are as they relate to dot-torrent files," Rothken said. "There was no analysis of the copyright."

Elizabeth Kaltman, an MPAA spokeswoman, said "We will pursue enforcement of the judgment."

The legality of torrent-tracking services has never been litigated on the merits in the United States, said Charles Baker, a Houston IP lawyer who defended Grokster and is Limewire's attorney in a case accusing the peer-to-peer software maker of facilitating copyright infringement.

The MPAA, he said, wants "other torrent owners and operators to look at the $111 million figure and say, 'I'm getting out of the business.'"

The TorrentSpy case, Baker said, "is another example of the studios eating these guys to death. They haven't tried the merits of the case."

Gary Fung, the operator and founder of tracking service Isohunt, said the TorrentSpy decision worries him, but he's not going to cave to Hollywood.

"I'm worried," he said. "I wouldn't be able to pay something like a $100 million. I fully know the risk I'm taking."

The United States' largest copyright fine, $115 million, was against the Kazaa file sharing service two years ago.

The MPAA's case against Fung is pending in U.S. District Court in Los Angeles, a case that is likely to set legal precedent in the United States and perhaps abroad on the legalities of torrent-tracking services that the MPAA claims facilitate wanton copyright infringement.

The TorrentSpy penalty is being appealed to the 9th U.S. Circuit Court of Appeals in San Francisco, Rothken said. He has already appealed last year's default judgment in the case that allegedly was built on the back of a hacker who was paid $15,000 to obtain private e-mail and financial information. Both sides are briefing that case.


     Apple passes Wal-Mart

iTunes Store Top Music Retailer in the US

CUPERTINO, California—April 3, 2008—Apple® today announced that the iTunes® Store ( surpassed Wal-Mart to become the number one music retailer in the US, based on the latest data from the NPD Group*. With over 50 million customers, iTunes has sold over four billion songs and features the world’s largest music catalog of over six million songs.

“We launched iTunes less than five years ago, and it has now become the number one music retailer in the world,” said Eddy Cue, Apple’s vice president of iTunes. “We are thrilled, and would like to thank all of our customers for helping us reach this incredible milestone.”

*Based on data from market research firm the NPD Group’s MusicWatch survey that captures consumer reported past week unit purchases and counts one CD representing 12 tracks, excluding wireless transactions. The iTunes Store became the largest music retailer in the US based on the amount of music sold during January and February 2008.

Apple ignited the personal computer revolution in the 1970s with the Apple II and reinvented the personal computer in the 1980s with the Macintosh. Today, Apple continues to lead the industry in innovation with its award-winning computers, OS X operating system and iLife and professional applications. Apple is also spearheading the digital media revolution with its iPod portable music and video players and iTunes online store, and has entered the mobile phone market with its revolutionary iPhone.


     How to get signed... without dealing with Record Labels.

Our favourite Indie newbies Hamfatter have become the first band to sign a deal on Dragon’s Den.

Millionaire Peter Jones signed a £75,000 deal with the Cambridge trio in return for 30% of their profits. The episode, filmed in April, was aired as the first in the new series on BBC 2 on Monday.

All five Dragons wanted to make a deal with the band but manager Jamie and band members Eoin, Jimbo and Mark chose Peter Jones. “Peter Jones simply said ‘I just love music, I don’t play music but I love it.’ And that for me was something big“ said guitarist Jimbo. “…plus he was wearing stripey socks.”

“Plus he was like 7ft tall so he kind of feels like your dad.” added singer Eoin. Jimbo summed up: “Yep, it was 33% music, 33% socks, 33% TALL.” The band see the deal as a revolutionary new business model for the music industry, ignoring the concept of labels. “We don’t get an advance so we’re absolutely skint.” explains Eoin. “But that is literally the only downside. We retain complete creative control over what we do; who we work with, release dates, tour dates, which tracks we choose. Hamfatter Ltd is essentially our own record lab el.”

“Normally record labels would be perfectly in their rights to rip out bits of your songs they don’t like and get somebody else to stick a bit in.” He continues “That way you end up with horrible mutilations of tunes. Hopefully, with Hamfatter Ltd we’ll sign a bunch of other bands and offer them a similar deal; ‘We think you’ve got it, we won’t tread on your toes, here’s a bunch of money, make a load more for us please!’”

The new single is available digitally now and is available on CD and vinyl from August 11th 2008. Keep checking the website for details of new tour dates coming soon


     The Pirate Bay Wants to Encrypt the Entire Internet

The team behind the popular torrent site The Pirate Bay has started to work on a new encryption technology that could potentially protect all Internet traffic from prying eyes. The project, which is still in its initial stages, goes by the name “Transparent end-to-end encryption for the Internets,” or IPETEE for short. It tackles encryption not on the application level, but on the network level, the aim being that all data exchanged on your PC would be encrypted, regardless of its nature — be it a web browser streaming video files or an instant messaging client. As Pirate Bay co-founder Fredrik Neij (a.k.a. Tiamo) told me, “Even applications that don’t supporting encryption will be encrypted where possible.”

Neij came up with the idea for IPETEE back when European politicians were starting to debate a Europe-wide move to DMCA-like copyright enforcement efforts, which were eventually authorized in the form of the Intellectual Property Rights Enforcement Directive in the spring of 2007. “I wanted to come up with something to make it harder for data retention,” said Neij. But he didn’t publish the initial draft proposal until early this month, when the discussion about privacy and surveillance online suddenly became urgent again. The Swedish parliament passed a new law in June that allows a local government agency to snoop on “the telephony, emails, and web traffic of millions of innocent individuals,” as the EFF’s Danny O’Brien put it. Neij promises that his new encryption scheme will be ready before the law takes effect next January.

IPETEE will likely be implemented as an add-on to operating systems like Windows and OS X. It will essentially do its work in the background, handling all incoming and outgoing IP traffic without any further interference from the user.

Let’s say you want to open a video download from a remote machine. IPETEE would first test whether the remote machine is supporting the crypto technology; once that’s confirmed it would then exchange encryption keys with the machine before transmitting your actual request and sending the video file your way. All data would automatically be unscrambled once it reaches your machine, so there would be no need for your media player or download manager to support any new encryption technologies. And if the remote machine didn’t know how to handle encryption, the whole transfer would fall back to an unencrypted connection.

Neij told me that IPETEE could be easily implemented for data transfers between end users, such as files shared through P2P. “The proof-of-concept code will be available both on Windows and Linux,” he explained, but the next step would be to make it scalable and available for operations in a server-based environment so that administrators could use IPETEE to protect their users’ web or email transmissions.

IPETEE could be a big step towards standardizing the encryption of web, email and even VoIP traffic, but it wouldn’t protect against all types of interference. Your ISP could still kill your video downloads via BitTorrent, because newer traffic management solutions can identify P2P transfers by simply looking at the patterns of your uploads and downloads and not at the individual data packets. It could also potentially slow down certain transfers, because it takes time to establish encrypted connections. There might be other flaws in the architecture of the IPETEE system as well, which is why Neij’s team is currently talking to crypto and network experts. But he seemed optimistic that he would have at least a proof of concept implementation ready by the end of the year.

Of course, the Pirate Bay folks don’t exactly have a good track record when it comes to following through with their plans. NewTeeVee alumn Jackson West pointed out back in March that long-planned projects like The Video Bay, the music site PlayBle and a new and secure P2P protocol have yet to be launched, and that’s still true today. Adding an ambitious project like IPETEE to the list doesn’t seem likely to solve that problem, but maybe this time Neij and his crew will overcome their ADD.


     TorrentSpy Dinged $111 Million in MPAA Lawsuit

A federal judge is hitting the shuttered TorrentSpy service with a $111 million penalty for facilitating the infringement of thousands of copyrighted works.

U.S. District Judge Florence -Marie Cooper in Los Angeles, ruling in a case brought by the Motion Picture Association of America, said site operator Justin Bunnell and associates must pay the maximum $30,000 for "each of the 3,699 infringements shown."

The case, producing what is among the largest fines in copyright history, was bolstered after the MPAA allegedly paid a hacker $15,000 for internal TorrentSpy e-mails and correspondence.

"This substantial money judgment sends a strong message about the illegality of these sites," MPAA Chairman Dan Glickman said in a statement.

TorrentSpy, a U.S.-based torrent tacking service, shuttered in March after it lost its case against the MPAA. TorrentSpy did not lose on the merits, but defaulted after it failed to produce internal records.

No U.S. case has squarely addressed the legalities of BitTorrent tracking services, although one case is nearing a resolution.

Judge Cooper ordered TorrentSpy permanently shuttered.

TorrentSpy attorney Ira Rothken was not immediately available for comment. He has appealed the default order to the 9th U.S. Circuit Court of Appeals in San Francisco.

Readers are asking how the judge arrived at $30,000 for each violation. Here is direct language lifted from the Copyright Act:

"...the copyright owner may elect, at any time before final judgment is rendered, to recover, instead of actual damages and profits, an award of statutory damages for all infringements involved in the action, with respect to any one work, for which any one infringer is liable individually, or for which any two or more infringers are liable jointly and severally, in a sum of not less than $750 or more than $30,000 as the court considers just."


     Amazon MP3: Heading Towards British Soil?

Is Amazon readying a launch of its MP3-based store in the United Kingdom? Amazon executives have been visiting British label heads, and are planning a splash later this year, according to a recent Telegraph report. The report called for a launch by the fourth quarter, citing sources familiar with the plans.

The timetable comes as little surprise, especially given broader, international rollout plans. The US-based Amazon MP3 initially launched in September of 2007, and eventually licensed MP3s from all four major labels. That creates considerable momentum for an international expansion, though Amazon has yet to reveal sales figures on its US-based effort.


Related articles (registration required):

"Amazon Plots World Domination; MP3s In Every Language," January 27, 2008

"Amazon Unleashes MP3-Based Music Store, Beta Version," September 25, 2007

"It's Official: Sony BMG Delivers MP3s to Amazon," January 10, 2008