Wednesday, September 29, 2021

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CEO of Major Anti-Piracy Company Arrested in Russia For High Treason
Andy Maxwell, 29 Sep 07:20 PM

Pirate KeyFor the past several years, major cybersecurity company Group-IB has been at the forefront of anti-piracy enforcement in Russia.

In early 2019, the company was the first to report in detail on so-called 'pirate CDNs', specialist content delivery systems that service huge numbers of pirate streaming sites with tens of thousands of movies and TV shows plus supporting artwork and descriptions.

Later that year, Dutch anti-piracy outfit BREIN, the Motion Picture Association (MPA), and the Alliance for Creativity and Entertainment, took legal action against several of the operations listed in Group-IB's reports. These included Moonwalk, a CDN suspected of supplying up to 80% of known Russian streaming portals.

Now, however, Group-IB – which is a partner of both INTERPOL and Europol – has serious legal troubles of its own.

Law Enforcement Search Group-IB's Offices in Russia

According to a statement issued by Group-IB, on Tuesday afternoon Russian law enforcement officers searched its Moscow office and left the same day. At the time the company said that the reasons for the search were unclear but reassured customers and partners that everything was operating as usual.

"The decentralized infrastructure of Group-IB allows us to keep our customer's data safe, maintain business operations and work without interruption across our offices in Russia and around the world," the company said.

With Group-IB's top management and lawyers assessing the situation, the company remained quiet. However, in a fresh statement published Wednesday, Group-IB was able to supply additional information.

Founder and CEO of Group-IB Arrested

Group-IB announced that its lawyers were examining information provided by Moscow's Lefortovo District Court relating to company founder Ilya Sachkov, who was reportedly arrested on Tuesday as part of the raids. A TASS news agency source reveals that the businessman was arrested under suspicion of compromising national security.

"The Lefortovo District Court of Moscow ruled on September 28 to choose custody for a term until November 27 as a measure of restraint for Ilya K. Sachkov suspected of committing a crime stipulated under Article 275 of Russia's Criminal Code ('High treason')," the source said.

Sachkov Reportedly Denies Wrongdoing

Sachkov's case files are reportedly marked as 'classified' but according to a security agency source quoted by TASS, the 35-year-old denies wrongdoing.

"He does not admit the guilt of high treason, which inflicted reputational and national harm to Russia's interests, or that he cooperated with intelligence services of foreign states," the source said.

High treason carries a potential sentence of up to 20 years in prison but Group-IB says it is "confident in the innocence" of its CEO and "his business integrity".

TorrentFreak requested additional information from Group-IB but the company declined to comment beyond its earlier statements.

From: TF, for the latest news on copyright battles, piracy and more.

Court Rejects Trump's Motion to Dismiss 'Electric Avenue' Lawsuit on Fair Use Grounds
Andy Maxwell, 29 Sep 11:50 AM

Donald TrumpWith the 2020 United States presidential election campaign in full swing, then-President Donald Trump seized every opportunity to paint Democratic opponent Joe Biden in an unfavorable light.

Trump's platform of choice was invariably Twitter, where in August 2020 he posted an animated video of a speedy train carrying his campaign logo ahead of Joe Biden on a railroad handcar, struggling to keep up. In the background played the 1982 hit 'Electric Avenue' by Eddy Grant.

The furious British singer-songwriter responded by filing a lawsuit in a New York court, arguing that since Trump had not obtained permission to use the song, its use was an act of blatant copyright infringement.

Trump's Attempts to Have Lawsuit Dismissed

In a motion to dismiss, Trump's lawyers argued that use of the song was allowed under the doctrine of fair use, claiming that Grant created the work for the purposes of 'musical entertainment' and Trump used the work for 'political commentary'. As such, the animation had a "fundamentally different and new purpose" and character from that of the song, meaning that any use was transformative.

Trump's team further argued that the quantity and quality of use of the song in the animation was de minimus since only 17.5% of the track was used. The motion further argued that since no licensing payments were generated, the animation posed "absolutely no threat" to Grant's licensing opportunities or use of the song in derivative markets.

Purpose and Character of the Use

In an opinion and order handed down Tuesday by U.S. District Judge John Koeltl, it is revealed that the Court reviewed the animation and finds the arguments of Trump's legal team largely unconvincing. First up, the purpose and character of the use.

"The defendants argue that the video's use of Electric Avenue was transformative as a matter of law because the video and the song serve different purposes. But the defendants' argument misapprehends the focus of the transformative use inquiry," Judge Koeltl writes.

"While it is true that the animation is partisan political commentary and the song apparently is not, the inquiry does not focus exclusively on the character of the animation; rather, it focuses on the character of the animation's use of Grant's song."

In short, the animation's political purpose does not automatically render the use of any non-political work transformative under fair use. Furthermore, the Judge notes that the best description of the use of Grant's song is "wholesale copying" to support a political ad campaign and there was no attempt to modify the song or comment on the song or its author.

"Moreover, the animation does not use Electric Avenue as a vehicle to deliver its satirical message, and it makes no effort to poke fun at the song or Grant," the Judge adds, noting that the defendants have already admitted that the animation is satire, not a parody of Grant or the song, and have offered no justification for their "extensive borrowing".

The disconnect is so great, the Judge adds, that the animation could have used almost any other song to serve its entertainment goals.

"The fair-use privilege under § 107 is not designed to protect lazy appropriators. Accordingly, the defendants cannot show that the video's use of Electric Avenue was transformative as a matter of law," he adds.

Judge Koeltl also casts doubt on the claim that any use of the song was non-commercial, noting that the "crux of the profit/nonprofit distinction is not whether the sole motive of the use is monetary gain but whether the user stands to profit from exploitation of the copyrighted material without paying the customary price."

Noting that there is a well-established market for music licensing, the Judge writes that the defendants chose to gain an advantage by using Grant's song without paying a licensing fee, meaning that the use was indeed commercial, despite the use being political.

"Because the use was not transformative and appears at this stage to have been commercial, the first fair use factor favors the plaintiffs," he concludes.

Nature of the Work, Amount of Use

Addressing the second fair use factor, where the Court is required to consider the nature of the copyrighted work, Judge Koeltl says that it's clear that Electric Avenue is a creative work and therefore "closer to the core of intended copyright protection" and there is no dispute that the track is published and publicly available. When balancing both aspects, the nature of the song favors the plaintiffs.

In respect of the third fair use factor (the amount and substantiality of the portion used in relation to the copyrighted work as a whole), the Judge notes that the song plays for the majority of the animation, the excerpt used is of central importance to the original song, and the defendants have not explained any purpose for the copying. As a result, this weighs in favor of Grant.

Effect of the Use on the Market for the Original

The final fair use factor asks courts to consider the effect of the use on the potential market for the work that was copied, which requires the balancing of the benefit to the public if the use is permitted and effect on the copyright holder if the use is denied.

Judge Koeltl concedes that the animation is no substitute for the song itself but acknowledges that the use of Electric Avenue may threaten Grant's licensing markets.

"It is plain that widespread, uncompensated use of Grant's music in promotional videos – political or otherwise – would embolden would-be infringers and undermine Grant's ability to obtain compensation in exchange for licensing his music," he writes.

Trump's team argued that Grant offered no evidence that he intends to enter the market for licensing the music to promotional videos but according to the Judge, Grant bears no such burden – the plaintiffs do.

"It is the defendants who bear the ultimate burden of showing a lack of market harm, and they cannot do so based simply on the allegations in the Complaint," his opinion reads.

Turning to the potential benefits to the public of allowing copying under fair use, the Judge notes that ridiculing and lampooning public figures is a rich part of the United States' First Amendment tradition. However, denying Trump will not chill political satire, he simply needed to stay within the law.

"Creators of satirical videos like the one at issue here must simply conform any use of copyrighted music with copyright law by, for example: paying for a license; obtaining the copyright owner's permission; or 'transforming' the chosen song by altering it with 'new expression, meaning, or message'. The creator of the video here did none of that," he concludes.

In summary, the Judge finds that each of the fair use factors weighs in favor of Grant.

"The creator of the video here made a wholesale copy of a substantial portion of Grant's music in order to make the animation more entertaining. The video did not parody the music or transform it in any way. The video's overarching political purpose does not automatically make this use transformative, and the other fair use factors also favor the plaintiffs at this stage."

As a result, Judge Koeltl denies Trump's motion to dismiss (pdf).

From: TF, for the latest news on copyright battles, piracy and more.

 
 
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