The Alliance for Creativity and Entertainment (ACE), the anti-piracy alliance featuring several Hollywood studios, Amazon, Netflix and other entertainment outfits, has declared war on pirate streaming services.
The alliance is the driving force behind several lawsuits including the one filed against Florida-based IPTV service SET TV early last year.
At the time, SET TV was a popular software-based IPTV service that was also sold pre-loaded with set-top boxes. While it was marketed as a legal service, ACE members framed it as little more than a pirate tool, allowing buyers to stream copyright-infringing content.
"Defendants market and sell subscriptions to 'Setvnow,' a software application that Defendants urge their customers to use as a tool for the mass infringement of Plaintiffs' copyrighted motion pictures and television shows," the complaint read.
Soon after the lawsuit was filed the IPTV service went offline, leaving its 180,000 subscribers behind. But that didn't mean the case against SET TV, its owner Jason Labossiere, and employee Nelson Johnson, was over. ACE pressed on, hoping to get a judgment in its favor.
Without any of the defendants putting up a defense, ACE booked its first victory a few months ago. The media companies submitted a motion for a default judgment against the company SET Broadcast, LLC, which the court granted.
ACE celebrated the victory in public, but the matter wasn't completely closed. The anti-piracy alliance managed to secure a judgment against the company, but not the two employees. To address that, the copyright holders went back to the court requesting another default judgment.
This week the U.S. District Court for Central California granted their request. SET TV owner Jason Labossiere and employee Nelson Johnson, who both failed to put up a defense, were found guilty of willful copyright infringement.
The rightsholders demanded the maximum in statutory damages of $150,000 for each of the 51 infringed works. The Court deemed this appropriate. The mentioned works were just a small sample so the actual damages "would likely be astronomically higher."
As a result, Labossiere and Johnson must pay $7,650,000 in damages. The two are jointly and severally liable, meaning that both can be required to pay the full amount if the other is unable to.
In addition to the damages, the Court also issued a permanent injunction to prevent any future copyright infringement. Among other things, the men are prohibited from operating the Set TV Now service, as well as any website, system, software, or service that is substantially similar.
With judgments against all defendants, the most recent order effectively ends the SET TV lawsuit. However, it's certainly not the end of ACE's legal campaigns.
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A copy of the default judgment granted by U.S. District Court Judge Michael Fitzgerald, is available here (pdf).
Until recently, Boom Media was one of the most active and recognizable 'pirate' IPTV reseller brands available to the public.
Operating in the United States under the name Boom Media LLC, the company acted as a reseller for IPTV subscription services including MFG TV, Beast TV, Nitro TV, Murica Streams, Epic IPTV, Vader Streams, and OK2.
As reported early November, this attracted the unwanted attention of DISH Network and partner NagraStar, who teamed up to sue Boom Media LLC and son and mother team John and Debra Henderson.
The broadcaster claimed that the Boom Media service, which was allegedly operated from John's home, received payments from customers via accounts operated by mother Debra. This operation, DISH said, resulted in willful violations of the company's rights under the Federal Communications Act.
While some of DISH's similar lawsuits have dragged on for some time in court, there's evidence to suggest that in addition to obtaining cash settlements from targets such as Boom, the broadcaster views such litigation as a stepping-stone to further litigation against their associates. And, of course, more settlements.
John Henderson certainly believes this is the case. In an expletive-ridden video posted to YouTube this week, he says that DISH and NagraStar want to break him down in their hunt for information on others involved in the IPTV supply and consumption chain.
He says he's not comfortable with that at all so he wants to take the fight to DISH in order to prevent that from happening. But of course, that will take money – lots of money – and he wants that to be donated by former customers and other interested parties.
"I set up a GoFundMe to help me pay for legal fees. The point of that is i'm gonna take this shit to a trial by jury, that's my intent. So basically, the lawyer just to start is $15,000," he says.
"The basic point is in order for me to get any kind of settlement, I have to turn over information on fucking everything, everything I've ever known, and I'm just not comfortable doing that. Yeah, so you bought [subscriptions to IPTV services through Boom] but they have the right to subpoena Google and PayPal."
The $15,000 to get started is, well, just that. The GoFundMe currently has a target of $250,000 but whether that sizeable amount will cover the costs of lengthy litigation is up for debate. Nevertheless, Henderson says that by biting back, he can stop DISH from getting his customers' details and sending them demands for cash settlements for alleged piracy.
"What they've done with these cookie-cutter lawsuits is that they've turned them into a stream of revenue for themselves. This isn't really about fucking lawsuits and protecting anything at this point, it's about getting information to send you a fucking letter demanding $3,500, which is what they've been doing with everyone.
"Everyone has settled, no one has taken them to trial, so it's going to be interesting to see how it unfolds," he says.
Henderson acknowledges that the legal process is going to cost "a shit-load of money" but if people don't want to support him, "that's fine". However, he warns that these types of cases can set a precedent and handing over the information is something he wants to avoid, to protect everyone in the supply and consumption chain.
"I think I have some valid points why they shouldn't be able to get that information at all. That's really all there is to it, I'm asking for support. I think resellers across the fucking globe should be jumping on this because whatever happens to me, does affect you because now they can say 'we got this from Boom Media', this is the way it worked out, now you must settle," he adds.
Henderson believes that IPTV providers themselves should also take an interest in a successful outcome to the case because if resellers are no longer a legal target, they won't have any reason to give up information on their suppliers.
"The only reason that people are getting snitched on is because resellers are pussies, I mean that's just the way it is," he claims.
Boom Media: We need $250,000 to fight DISH lawsuit
"I have [the GoFundMe] up for $250,000. I know that when TVAddons was going through this, that's pretty much how it went. They just bled them dry," Henderson says.
While TVAddons did have a huge legal dispute with DISH that undoubtedly cost founder Adam Lackman a lot of money, Lackman insists that he never handed over his users' data to DISH. That suggests there may be a way out of Henderson's situation without compromising his suppliers and former customers but only time will tell if a jury trial can deliver the type of victory that avoids that.
If it even gets that far, that is.
While a quarter of a million dollars is a significant sum, Henderson fully expects to face tactics designed to break his ability to fight back. Already he claims that DISH is attempting to get a gag order to prevent him from telling the world "what garbage they are for suing an innocent woman, my mother, knowing goddamn well she had nothing to do with anything."
Until he gets served with a gag order, however, he's not shutting up at all, he insists. Meanwhile, he says that DISH is generating money from a "stupid tax", a reference to all the IPTV and IKS (Internet Key Sharing) users to whom DISH sends letters and receives settlements in return.
The fundraiser's goals
"They [DISH] want everything from me. They want my soul, they want all the information, they want me to roll on everyone, which isn't even really possible but I'm not gonna do it," Henderson adds.
"I'm fully prepared to go to war over this shit but I'm gonna need financial help. Obviously, everyone knows I'm out of business, that's the way it is. I'm not a millionaire, I'm not a billionaire, I'm barely a thousandaire."
Henderson doesn't provide any proof, but claims that Vader Streams – a pirate IPTV provider that was targeted by the MPA-backed Alliance for Creativity and Entertainment earlier this year, "snitched on everyone, they snitched and they rolled over and they gave up everything." Prior to the settlement agreement, Vader said it would not compromise customers.
Henderson says he doesn't want to go down the disclosure route but DISH is on record wanting Boom Media to do just that. In addition to a permanent injunction against the company, it wants Boom's domain name plus "all hard copy and electronic records" regarding persons involved in the entire "Rebroadcasting Scheme".
At the time of writing, the GoFundMe has raised $700 of its $250,000 target.
The original complaint against Boom Media can be found here (pdf)
There are plenty of options for copyright holders to frustrate the operations of pirate sites, but one of the most effective is to attack their domain names.
In recent years, various entertainment industry groups have called on the domain name industry to help out on this front.
As a result, the MPAA signed a landmark agreement with the Donuts registry under which the movie industry group acts as a "trusted notifier" of "pirate" domains. A similar deal was later announced with the Radix registry.
Not all registrars and registries are welcoming these types of voluntary actions. The Public Interest Registry (PIR), which oversees the registrations of .org domains, was previously asked by the RIAA to suspend The Pirate Bay's domain name. However, the organization chose not to do so.
Many registrars and registries don't like the idea of acting as "content police." Instead, they prefer these matters to be handled through the courts instead. This is one of the main reasons why The Pirate Bay, after more than 15 years, is still accessible on its .org domain.
Ironically, the infamous torrent site moved to over a dozen other domains in the past, fearing a .org domain seizure. However, while many other the other domains were suspended or taken by court order, thepiratebay.org stands tall.
The question is whether things will remain this way, as PIR is in the process of being sold to private equity firm Ethos Capital. At the moment, PIR is part of the Internet Society, which is critical of stringent copyright policies, but its new owner may see things differently.
Possible policy changes are also a concern many organizations and groups have. A few days ago, EFF, Wikimedia, Internet Archive, Creative Commons, Demand Progress, and several others, sent a letter to Internet Society President Andrew Sullivan, urging him to stop the sale.
The groups are concerned that Ethos may raise domain name prices and that it will implement rights protection mechanisms. In addition, they caution that domain names could be suspended for alleged illegal activity, without any judicial oversight.
Ethos will have "the power to implement processes to suspend domain names based on accusations of 'activity contrary to applicable law'," the letter reads.
The organizations are concerned that this will put NGOs at risk. However, the same issues are very relevant for The Pirate Bay as well. After all, that will be one of the prime candidates for a voluntary domain name suspension.
Thus far there is no indication that Ethos has any plans to do so. However, if we look closely at the company we do notice something worth sharing. Erik Brooks, the founder and CEO of Ethos Capital, served (or serves) on the board of the Donuts registry.
Yes, that's the same Donuts the MPAA has an agreement with to suspend copyright-infringing domains. Brooks joined the board after that deal was struck, but it's an interesting observation nonetheless.
TorrentFreak reached out to both the Internet Society and Ethos Capital for further details but at the time of writing, we have yet to hear back.
We doubt that The Pirate Bay is worried about any of this. While it may become more likely that they'll lose their original .org domain sometime in the future, the site always has alternatives ready. We have little doubt that they still have a few lined up, just in case.
In the months leading up to the now infamous raid on Kim Dotcom's New Zealand mansion and his cloud storage site Megaupload, the entrepreneur and his associates were under surveillance.
Between December 2011 and March 2012, New Zealand authorities used the Government Communications Security Bureau (GCSB) spy agency to snoop on the private communications of Kim and former wife Mona Dotcom, plus Megaupload co-defendant Bram van der Kolk.
Since the GCSB is forbidden from conducting surveillance on New Zealand citizens or permanent residents in the country, the spying carried out against Dotcom was illegal. The GCSB admitted liability and will at some point pay damages, but Dotcom also demanded access to the recordings.
In 2017, however, the High Court rejected Dotcom's access request, stating that the release of the intercepted communications would not take place. Citing security concerns, the Court said that the public interest in not disclosing the information outweighed the benefits of disclosure.
This denial triggered a claim by Dotcom to the Court of Appeal. The result of that process is now in and it's more bad news for the Megaupload founder.
"The intercepted communications are relevant, and there is a public interest in them being disclosed so they may be put to use in and for purposes of this proceeding. Natural justice and open justice are the two dimensions to the public interest in favor of disclosure," a Court of Appeal statement reads.
However, the Court believes that disclosure is not absolutely necessary for justice to be done in this particular case. Furthermore, it must also weigh the broader public interest and potential fallout that could harm national security, if the GCSB's methods are compromised.
"The GCSB has admitted liability; what is in issue is the quantum of damages for dignitary losses. Summaries of information already disclosed will permit a fair trial in this case. The GCSB's claim that disclosure would harm national security and international relations is well-founded. The balancing exercise favors non-disclosure," the Court concludes.
Increasingly, people are canceling their expensive cable subscriptions, opting to use cheaper Internet TV instead.
While there are plenty of legal options available, there's also a broad offer of easy-to-use set-top boxes, sites, and apps that are specifically configured to deliver pirated content.
There are some free alternatives, but high-quality pirate IPTV services are often sold through a monthly or yearly subscription. This has created an industry that's worth a lot of money. According to a new report from the EU Intellectual Property Office (EUIPO), nearly €1 billion in Europe alone.
This is the result of an in-depth study of the IPTV ecosystem published by the EUIPO this week. The research reveals the prevalence of IPTV piracy, who the main players are, how they operate, and what business models are used.
EUIPO looked at hundreds of allegedly illegal IPTV services and combined this with data from the Eurostat household survey data. Based on these figures, it estimates that pirate IPTV services generated €941.7 million annual unlawful revenue in the EU during 2018.
The research further finds that IPTV piracy is a problem across all EU member states. On average, 3.1% of the EU population access these unauthorized services. This translates to a customer base of 13.7 million users.
However, the scale of the problem varies from country to country. The Netherlands and Sweden have the highest percentage of pirate IPTV users, with 8.9% and 8.5% respectively. In Romania and Bulgaria, it's far less common with 0.7% and 1.3% respectively.
The average subscriber pays a little over five euros per month for a subscription, with rates varying across Europe. Most revenue is generated in the UK, France, and Germany. Together these three countries deliver more than half of the total income, €532 million.
These statistics show that IPTV piracy is a major problem. EUIPO acknowledges this and provides a detailed overview of various actors in the ecosystem, as well as the legal remedies and enforcement options that are available.
EUIPO's definition of IPTV appears to be quite broad, as cyberlockers and the BitTorrent-powered Popcorn Time are mentioned as well. In general, however, most traditional IPTV services rely on direct streaming feeds and playlists.
Regarding enforcement, EUIPO points out that EU law provides the means to go after developers, operators, and vendors of infringing services. Through civil and criminal actions against the alleged offenders, for example, or website blocking injunctions.
In addition, facilitators could technically face legal problems as well. This includes blogs and YouTube channels that show people how to configure pirate devices, for example.
"Depending on the level of involvement in the provision of illegal services, the facilitator can be co-liable for IPR infringement and can be prosecuted for aiding and abetting," EUIPO notes.
Whether individual IPTV users can be easily targeted remains an open question. According to EUIPO, requiring operators of illegal IPTV services to disclose information on their users could be incompatible with EU data protection law.
The study is the most elaborate research into the illegal IPTV market to date. While it doesn't arrive at any concrete recommendations, EUIPO's Executive Director, Christian Archambeau, believes that understanding the ecosystem will help to raise awareness.
"This is a market area in which infringing business models change quickly as they adapt to new technology and business opportunities. This research clarifies the technology used, the complex supply chains and legal issues.
"It also casts much-needed light on a hidden area of an everyday activity, which is being exploited by organized crime, and should help raise awareness among EU citizens," Archambeau adds.
In addition to the IPTV study, EUIPO also released new data on the use of pirated content in EU countries. This reveals that there was a 15% decrease from 2017 to 2018. Music piracy, in particular, dropped very fast, 32% on average across the EU
If US-based anti-piracy groups needed a recognizable local icon to rival the flamboyance of Kim Dotcom, last week they appeared to get one.
Omar Carrasquillo – better known by his YouTube name OMI IN A HELLCAT – is the founder of 'pirate' IPTV service Gears Reloaded. Unlike his counterparts behind similar platforms, however, OMI never hid the fact that he was running one of the most recognizable brands in the business.
OMI's wealth, which included a huge house, the most blingy of jewelry, and a supercar collection to die for, was paraded all over his YouTube channel for everyone to see. But last week it came to an abrupt end. Gears Reloaded unexpectedly closed down and hours later OMI claimed he'd been raided by the FBI and IRS, allegedly for copyright infringement and tax offenses.
When compared to any of OMI's previous videos, his demeanor made it clear that something catastrophic had happened. Nevertheless, in the absence of any confirmation by the FBI, some people complained that the whole thing was an elaborate fake designed to generate clicks.
Today, following a TV report from Fox 29, any notion that the raid existed only in OMI's imagination has been dispelled. In the segment, a Fox 29 reporter is seen knocking on OMI's front door, a home that was previously owned by former Philadelphia Phillies shortstop, Jimmy Rollins.
While the TV crew appears to have received no answer, the channel did manage to speak with some of OMI's neighbors who confirmed what the YouTuber had been saying all along.
"[The FBI] had like bullet-proof vests on and they had guns drawn and they were very slowly approaching the house next door," said neighbor Liz Ware.
In respect of OMI's supercar collection, which some doubters claimed were either still sitting outside or had even been moved by OMI for effect, another neighbor who saw the whole thing recalled what happened.
"They loaded them off one by one through the course of about four or five hours," said witness John Ware, who appears to be OMI's next-door neighbor. "They took all the cars. Probably thirty of them."
Other than OMI's claims, that the case against him revolves around Gears Reloaded and tax issues, there is still no official confirmation of the allegations against him.
Last week the FBI refused to confirm or deny any operation and after prompting by Fox 29 yesterday, still declined to comment. It's believed, however, that OMI is yet to be charged.
Interestingly, in a video posted to YouTube a few hours ago by OMI himself, which shows part of the Fox 29 report, the YouTuber said that just a few weeks ago his people asked the IRS "if they were after him" and he was told they were not. However, he's certainly not happy with the way his accounts were prepared by his tax advisor.
"Back in September when I prepared my taxes, it just didn't look right. I'm a 100% sure of this, I have 100% proof. I'm not just saying it, it just didn't look right. My CPA [Certified Public Accountant] …she had access to all my bank accounts. She was only filing the 1099 [forms] that I received and shit didn't look right," OMI says.
"I [said] 'i'm making more money than what you're filing'. Thank God I didn't sign them because that would've been hiding money, that would've been way worse, way worse. We contacted the IRS to see if they were after me, the IRS sent back a letter to my CPA and said no, they weren't after me."
OMI says that if he hadn't been raided last week, there would be a payment plan in place by now, with around $2 million paid upfront in taxes and the rest paid in installments. Clearly, however, time had already run out and according to OMI, the assessment that streaming is something that won't be acted on probably doesn't stand anymore.
"To all the other streaming services out there, this is proof that this is not considered a great area," he adds.
