Internet Book Piracy
Page 22
CHAPTER 25
Major Accomplishments in the Battle Against Piracy Crimes
NOW THAT NUMEROUS FEDERAL, STATE, local, and international organizations have teamed up to take on the intellectual property pirates, with much of the leadership from the FBI and Intellectual Property Rights Coordination Center, what are their major accomplishments? While the January 2012 Megaupload/Kim Dotcom takedown made big headlines, numerous other website seizures, arrests, and convictions have occurred. However, due to little notice from the major media, the general public is unaware of these actions. But in the future, more media attention and a greater public awareness would help to increase involvement by the public, such as in providing leads to websites featuring pirated books.
To date, much of this law enforcement effort has targeted the pirates of counterfeit goods, films, and software, not books. But these successes show what is possible, setting the stage for focusing on book pirates in the future. As described in a series of IPR Center, DOJ, and ICE reports and press releases, these are the major results in the battle against online piracy since 2010, when this war against Internet piracy heated up:
1. In 2010, the DOJ and ICE launched the first-ever US government program for seizing websites—called Operation In Our Sites—that provided pirated content or sold counterfeit products. ICE had five major operations, resulting in the seizure of 125 domain names, and over half of them (eighty-four) were forfeited to the US government. Then, based on a court order permitting a banner display, a banner was placed on each site announcing seizure by the US government and explaining that willful copyright infringement is a federal crime subject to punishment for copyright theft and distribution or trademark violations. Since June 2010, when these sites were first seized, the sites showing the warning banner had over fifty million hits (http://www.iprcenter.gov/reports/ipr-center-reports/2011-joint-strategic-plan-on-intellectual-property-enforcement/view).
2. In February 2010, President Obama signed Executive Order 13565 establishing two intellectual advisory committees chaired by the Intellectual Property Enforcement Coordinator (IPEC). These committees included “a Cabinet-level committee comprised of the heads of the departments responsible for intellectual property enforcement and a committee comprised of Senate-confirmed Government officials from those departments” (http://www.iprcenter.gov/reports/ipr-center-reports/2011-joint-strategic-plan-on-intellectual-property-enforcement/view).
3. Also in February 2010, US Attorney General Eric Holder announced the formation of a Department of Justice Task Force on Intellectual Property to fight intellectual property crimes “by coordinating with State and local law enforcement partners, and with international counterparts” (http://www.iprcenter.gov/reports/ipr-center-reports/2011-joint-strategic-plan-on-intellectual-property-enforcement/view).
4. In October 2012, the Department of Justice made an increased commitment to protecting intellectual property by announcing $2.4 million in grants to thirteen jurisdictions around the United States to help them enforce the criminal laws related to intellectual property theft (http://www.justice.gov/css-gallery/gallery-ip-towson2012.html#1).
5. Ambassador Ronald Kirk and the Office of the United States Trade Representative issued a 2012 Special 301 Report, drawing on information obtained from global US embassies and interested stakeholders. The report provided information on the state of intellectual property protection and enforcement around the world, showing how the battle had become a worldwide effort. For example, some of the major events occurring in 2011 and early 2012 were the following:
• Malaysia passed copyright amendments that significantly strengthened its protection of copyrights and its enforcement against piracy, such as establishing a mechanism for Internet service providers to cooperate against piracy over the Internet.
• The US removed Spain from its Watch List because of Spain’s recent efforts towards IPR protection and enforcement, such as adopting the “Ley Sinde,” a law to combat Internet copyright piracy.
• The Philippines enacted specialized IPR procedural rules to improve judicial efficiency in IPR cases.
• Russia enacted a law to establish a special IPR court by February 2013 and amended its Criminal Code to reduce the criminal threshold for copyright. It also began criminal proceedings against interfilm.ru, an infringing website, and the court made civil findings against vKontakte, Russia’s largest social networking site, for copyright infringement.
• China established a State Council–led leadership structure, headed by Vice Premier Wang Qishan, to lead and coordinate IPR enforcement across China. Additionally, China’s leadership began measuring the performance of province level officials in enforcing intellectual property rights in their regions.
• In 2011, the Global Intellectual Property Academy (GIPA), a division of the US Patent and Trademark Office, designed to produce education and training on IPR protection and enforcement, trained over 5,300 foreign IP officials from 138 countries through 149 separate programs. Among the attendees were IPR policy makers, judges, prosecutors, customs officers, and examiners. Post-training surveys indicated that 79 percent of the attendees reported taking some steps to implement policy changes in their organizations to support IPR efforts.
• In 2011, the Department of Homeland Security’s Bureau of Customs and Border Protection conducted regional border training programs that focused on IPR enforcement in Morocco, El Salvador, Thailand, and India.
• The National IPR Coordination Center worked with Interpol to conduct training programs in eleven countries and conducted three advanced IPR training sessions at the US International Law Enforcement Academies (ILEAs) in Thailand and El Salvador for participants from twenty-two countries.
6. The Department of Commerce’s Commercial Law Development Program (CLDP)—which provides training to foreign lawmakers, regulators, judges, and educators—worked with over thirty-five governments and conducted cooperative programs in Central and Eastern Europe, the Commonwealth of Independent States, the Middle East, Africa, and Asia to better adjudicate IPR cases. The CLDP also organized interagency IPR enforcement programs in the Ukraine and Pakistan, as well as regional programs with Armenia, Georgia, Turkey, Kenya, and the East African Community member states (http://www.iprcenter.gov/reports/digital-and-online-ip-theft/2012-special-301-report/view).
While it may seem surprising that the US agencies are making such a widespread outreach to work with countries around the world on IPR training and enforcement strategies, such efforts are necessary because all piracy, including book piracy, is now a global problem. For example, Megaupload was based in New Zealand, but had servers in Hong Kong as well as Virginia. The Bookos.org website, which illegally listed eighteen of my books, is based in Panama. And the Internet piracy gangs have outposts and representatives all over the world.
As the 2012 Special 301 Report describes the problem:
“Piracy over the Internet is a significant concern in many U.S. trading partners … U.S. copyright industries also report growing problems with piracy using mobile telephones, tablets, flash drives, and other mobile technologies. In some countries, these devices are being pre-loaded with illegal content before they are sold. In addition to piracy of music and films using these new technologies, piracy of ring tones, apps, games, and scanned books also occurs. Recent developments include the creation of ‘hybrid’ websites that offer counterfeit goods, in addition to pirated copyright works, in an effort to create a ‘one-stop-shop’ for users looking for cheap or free content or goods. The United States will work with its trading partners to combat these growing problems, and urges trading partners to adequately implement the WIPO (World Intellectual Property Organization) Internet Treaties, which provide tools necessary for protecting copyrighted works in the digital environment” (http://www.iprcenter.gov/reports/ipr-center-reports/2011-joint-strategic-plan-on-intellectual-property-enforcement/view).
In particular, the United States is seeking to work with numerous trading partner
s to strengthen their legal regimes, enhance enforcement, and encourage them to implement the WIPO Internet treaties, which provide protection against circumventing technological protection measures. Additionally, the US is encouraging its trading partners to enhance their enforcements efforts, such as by “strengthening enforcement against major channels of piracy over the Internet, including notorious markets; creating specialized enforcement units or undertaking special initiatives against piracy over the Internet; and undertaking training to strengthen capacity to fight piracy over the Internet” (http://www.iprcenter.gov/reports/ipr-center-reports/2011-joint-strategic-plan-on-intellectual-property-enforcement/view). The list of trading partners singled out for special encouragement for improvement includes about two dozen countries that range from larger countries like Canada, China, India, Italy, Switzerland, Mexico, and Russia to smaller countries like Belarus and Brunei. And the selected countries span the globe, including countries in North, Central, and South America, Europe, and Asia.
In turn, these efforts show a major commitment by US government agencies to fight the Internet pirates, although the general public has little awareness of these efforts. This government commitment, in the United States and other countries, has been building in the last few years and is much needed, since intellectual property theft has become such a big global business. To some extent, individuals and publishers can fight back through takedown notices and litigation; but the problem has become so big that a crackdown on pirates as criminals is needed by governments across the globe.
Now this global crackdown seems to be happening, as international teams increasingly act together against some of the worst criminals. In effect, these battles in individual nations have become a global war on piracy. Governments are realizing the need to work together, given the negative effect of piracy on not only individual victims, but on the society as a whole. Piracy results in huge amounts of money lost not only from the lack of legitimate sales but as well as unpaid taxes to the government. Numerous other problems arise from individuals buying substandard counterfeit merchandise, which can include books plagiarized from authors and reissued under other names.
CHAPTER 26
Arrests and Convictions for IP Crimes: the Imagine and Ninja Video Cases
ASIDE FROM THE FANFARE THAT accompanied the raid on Megaupload and arrest of Kim Dotcom associates, many other arrests and convictions have occurred with little public notice due to the investigations by ICE—the US Immigration and Customs Enforcement agency—the largest investigative arm of the Department of Homeland Security. Commonly, ICE is associated with immigration fraud and uncovering and deporting illegal immigrants, but they have also played a major role in discovering copyright infringement and other intellectual property crimes, which have resulted in arrests, prosecutions, convictions, and sentences to jail time.
As described in a series of press releases, about 20 percent of their cases involve IP infringement (33 out of 174 cases between September 1, 2011, and June 3, 2013), while others mainly involve counterfeit products, including phony drugs. So far, these arrests do not include pirated books, but in the future, ICE investigators could easily go after the book pirates, using the same kinds of techniques used to obtain these other convictions (http://www.ice.gov/news/releases/index.htm?top25=no&year=all&month=all&state=all&topic=12). The following are some examples of these copyright infringement cases:
1. Numerous members of the “IMAGINE” piracy group were sentenced to prison terms after an ICE investigation. Beginning on April 18, 2012, four leading members of the IMAGINE group, described as “an organized online piracy group seeking to become the premier group to first release Internet copies of new movies only showing in theaters,” were indicted. Before they were shut down, the group operated between September 2009 and September 2011 as the most prolific motion picture piracy release group on the Internet.
One of the first to plead guilty on May 9 was Sean M. Lovelady, of Pomona, California, who admitted that he went to movie theaters near his home and secretly used receivers and recording devices to copy the audio track of the movies. Then, he synchronized the audio with an illegally obtained video file of the movie to create a complete movie file to share over the Internet among the IMAGINE group members and others. The case was successfully prosecuted by attorneys in the Criminal Division’s Computer Crime and Intellectual Property Section; Lovelady faces up to five years in prison, a fine of $250,000, and three years of supervised release.
On June 22, Willie O. Lambert of Pittston, Pennsylvania, pleaded guilty to similarly capturing the audio track, soon to be followed on July 11 by, Gregory A. Cherwonik of Canandaigua, New York; they face the same punishment. Then, August 29, the group leader Jeramiah B. Perkins of Portsmouth, Virginia, pleaded guilty to conspiring to willfully reproducing and distributing tens of thousands of infringing copies of movies before they were commercially released on DVD, and he faces the same penalties as the others. Among other things, Perkins took the lead in renting computer servers in France and elsewhere and registered domain names for the group. He opened email and PayPal accounts to receive donations and payments from persons downloading or buying the pirated copies. Plus, Perkins directed and participated in using recording devices in movie theaters to secretly capture the audio soundtracks and synchronize them with the illegally recorded files. One additional conspirator, Javier E. Ferrer of New Port Richey, Florida, was charged on September 13.
On November 2 and 29, the four were sentenced—Lambert to thirty months in prison, three years of supervised release, and $449,514 in restitution; Lovelady to twenty-three months in prison, three years of supervised release, and $7,000 in restitution; Cherwonik to forty months in prison; and Perkins, the group leader, to sixty months in prison, three years of supervised release, and $15,000 in restitution. Subsequently, Ferrer pleaded guilty on November 12 and was sentenced on April 10, 2013, to twenty-three months in prison, three years of supervised release, and $15,000 in restitution.
2. In another big case, part of the first phase of an Operation in Our Sites investigation, five individuals were charged on September 9, 2011, in Alexandria, Virginia, for their involvement with the NinjaVideo website, which operated from February 2008 until law enforcement shut it down in 2010. According to the indictment, the site provided millions of website visitors with the ability to illegally download infringing copies of copyright-protected movies and television programs in high-quality formats. Many of the movies were still playing in theaters, while others had not yet been released. Reportedly, the website offered many copyrighted movies free of charge, while customers had access to a greater selection of copyrighted materials for a “donation” of at least $25. In addition, the website gained significant revenue through advertising. Allegedly, the defendants collected more than $500,000, while the website operated for 2.5 years and infringed upon millions of dollars of copyrighted movies, TV programs, and software products.
Among those charged were Hana Amal Beshara of North Brunswick, New Jersey, and Matthew David Howard Smith of Raleigh, North Carolina, identified as the service’s founders and administrators; Joshua David Evans of North Bend, Washington and Zoi Mertzanis of Greece, allegedly two of the most active uploaders of copyrighted material; and Jeremy Lynn Andrew of Eugene, Oregon, who allegedly headed up security for the website. Over the next few months, Beshara and Smith pleaded guilty to conspiracy and criminal copyright infringement, and faced sentences of up to five years on each count. The remaining defendants opted for a jury trial, scheduled for February 6, 2012. Beshara, who had personally received over $200,000 from the operation, also agreed to forfeit any earnings that had been seized, which included cash, an investment brokerage account, two bank accounts, a PayPal account, and one Internet advertising account. Eventually, Evans—called the “Head God” of the uploaders—also admitted to both uploading his own content and supervising other uploaders, pleading guilty to one count each of conspiracy and criminal copyright infringement; he agreed
to pay back the $26,660 he received from the operation. Two other men, Jeremy Lynn Andrew of Eugene, Oregon, who earned $5250 from the scheme, and Justin A. Dedemko of Brooklyn, New York, who earned $58,0004, pleaded guilty to a single count of conspiracy for their role in uploading infringing content on the Internet. Additionally, Dedemko played a role in marketing and talking to companies about placing ads on the NinjaVideo website. As part of his plea, he agreed to return the $58,004 he received. Meanwhile, an arrest warrant was issued for Zoi Mertzanis of Greece.
Then, in January 2012, Beshara, known as “Queen Phara” on the Internet and the public face of NinjaVideo, was sentenced to twenty-two months in prison for criminal copyright conspiracy, along with two years of supervised release, five hundred hours of community service, repaying the $209,827 she personally received from her work at NinjaVideo, and forfeiting several financial accounts and computer equipment involved in the operations. Subsequently, Matthew Smith received fourteen months in prison, two years supervised release, and was ordered to pay back about $172,000 that he earned from the site. Though the government sought a prison term for Andrew, the court eventually sentenced him to three years probation, finding that he wasn’t motivated primarily by monetary rewards (http://torrentfreak.com/tag/ninjavideo).
Ironically, when Beshara was released from prison in April 2013 to a half-way house with a requirement that she find a job, stay in home detention for two months, and spend the next two years under supervised release, she came out defiant. She attacked Hollywood for its inflated budgets and ridiculous salaries, blaming Hollywood’s practices for the prevalence of piracy. In fact, she announced plans to remain an advocate for the free media movement (http://arstechnica.com/tech-policy/2013/04/ninjavideo-link-site-founder-out-of-prison-wants-to-lead-free-media-movement).