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Piracy The Almighty Buck The Courts

Film Studios Sue 'No Logs' VPN Provider For $10 Million (arstechnica.com) 73

An anonymous reader quotes a report from Ars Technica: LiquidVPN's business model was a fierce one, thriving on the fence of the law. In webpages seen by Ars, the VPN company boasted itself as "the best VPN for torrenting" that would also let you "unblock ISP banned streams," otherwise restricted due to copyright takedown requests. Furthermore, LiquidVPN customers were really in for a treat with "High Quality Popcorn Time Streams" thrown into the mix. And, of course, this was all a "DMCA Free Zone," since, much like any logless VPN provider, Liquid did not have the ability to forward DMCA notices to users downloading infringing content. Except, Liquid listed all of these features on its website explicitly and glamorized all of the possibilities. And imagine doing all these things seven days of the week without the risk of getting caught by your ISP or anyone else, reassured the VPN provider with a "full-refund" guarantee. Transparency can be a good thing when presenting your product, except when your marketing claims surpass the legal gray area.

Unsurprisingly, in March this year, several filmmakers filed a lawsuit with the Florida District Court against LiquidVPN. This month, these plaintiffs are asking the court to issue a default judgment against LiquidVPN for the defendant's failure to plead or show up at the most recent court hearing. According to court documents (PDF), movie production firms argue LiquidVPN should not be extended "safe harbor" protections, as the defendant didn't establish a repeat-infringer policy or appoint a registered DMCA agent. The ask for $9,900,000 comprises the maximum statutory damage amount of $150,000 for each of the 66 works listed in the complaint. Additionally, $1,650,000 has been sought against LiquidVPN for "secondary liability as to DMCA violations." The asks don't stop there, however. The list of demands extends for LiquidVPN to permanently suspend accounts of repeat infringers, dismissing their "no log" policy. But the face of the LiquidVPN website is already nowhere to be seen. For weeks, the homepage has been unreachable, although the client area remains accessible.

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Film Studios Sue 'No Logs' VPN Provider For $10 Million

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  • by AcidFnTonic ( 791034 ) on Tuesday September 28, 2021 @08:14AM (#61840793) Homepage

    I find it absolutely hilarious that Hollywood known for their Shady accounting practices is suing another agency and demanding that they keep better records.

    Perhaps Hollywood should keep better records so they can pay people correctly.

    • I find it absolutely hilarious that Hollywood known for their Shady accounting practices is suing another agency and demanding that they keep better records.

      Perhaps Hollywood should keep better records so they can pay people correctly.

      Some of the most amazing stories to come out of Hollywood are written by the studio's accountants.

    • Pretty sure Hollywood keeps very meticulous records so they can avoid paying people as much as possible. You have to know what subsidiaries to shuffle the money to so you can say you lost money (Also, why you should always go for percentage of gross, rather then percentage of net... They can't really play games with the top line gross number)
      • by aitikin ( 909209 )

        (Also, why you should always go for percentage of gross, rather then percentage of net... They can't really play games with the top line gross number)

        If anyone that is in the position to negotiate with a Hollywood studio for percentage and is coming to /. for negotiating advice, they're already screwed...

      • The recent kerfluffle over Black Widow shows they can play games with the gross as well.

        • That incident is going to change all contracts going forward (and I think scarjo is going to get a settlement out of it)
      • by hawk ( 1151 )

        > They can't really play games with the top line gross number)

        Ahh, but Hollywood has its own *version* of what "gross" is . . . I want to say they call it "adjusted gross".

        See Eddy Murphy's testimony when Art Buchwald sued over being stiffed on "Coming to America"

    • by AmiMoJo ( 196126 )

      What probably screwed them in this case was advertising their VPN service as ideal for "torrenting" and other forms of copyright infringement. It establishes a direct link between copyright infringement and their profits.

      • by Kernel Kurtz ( 182424 ) on Tuesday September 28, 2021 @11:27AM (#61841507)

        What probably screwed them in this case was advertising their VPN service as ideal for "torrenting" and other forms of copyright infringement. It establishes a direct link between copyright infringement and their profits.

        I've torrented Linux distros. Just last week I grabbed a torrent of the free game Xoonotic. Torrents, like knives, guns, cars, or anything else have both legal and illegal uses. Automatically assuming "torrenting" = "copyright infringement" is simply wrong.

        • Sure, but LiquidVPN makes it very clear they're not talking about torrenting Linux distros, using pictures of major movies and talking about PopcornTime and streaming your "favorite TV shows". Hard to claim you're only promoting P2P Ubuntu downloads when you show a poster for Interstellar on your features list. You don't have to assume torrenting = copyright infringement when they explicitly state that's what they mean.

        • by AmiMoJo ( 196126 )

          I agree, but they advertised their service as hiding your identity and being ideal for file sharing, the clear implication being that it would prevent you getting sued or sanctioned by your ISP.

        • by dissy ( 172727 )

          advertising their VPN service as ideal for "torrenting"

          I've torrented Linux distros.

          You use a slow VPN to torrent Linux distros? I'm extremely curious why.

          Most of us use bittorrent for large files because it is faster than a one-to-one http download from a single mirror server.
          Going out of your way to choose a many-to-one download protocol and then funnel it over a <100kb/second VPN seems counter productive to me.
          I highly suspect the direct http download would be faster than this!

          Since it isn't for the speed increase, I'd love to know your use case for this setup.

          • You use a slow VPN to torrent Linux distros? I'm extremely curious why.

            Yes, it is not as fast as the http download, but I'm generally not in a rush and don't mind seeding. Also I routinely get 10Mb/s or more through my VPN. Not nearly as fast as my connection is capable of, but fast enough for most things.

            As well my setup will only allow my torrent client to connect through the VPN. If the tunnel goes down it should be blocked, to avoid any unintentional unsecured sharing. I could use a separate client, or reconfigure it on the fly, but as I said I'm not in a rush.

    • Hollywood is making courts test: If you don't have a record as a vendor, you are obviously guilty by association.

      • Civil trial (which most copyright infringement cases are) don't depend on the standards of guilt required in a criminal trial ("beyond reasonable doubt").

        In a civil trial, you only need to prove you are "more correct" than your opponent.

        • by tlhIngan ( 30335 )

          In a civil trial, you only need to prove you are "more correct" than your opponent.

          Or in this case, you simply don't show up in court and win by default.

          That's what really happened - the owners skipped town, didn't show up for court, so the courts just granted a default judgement. Hollywood is basically just getting everything they asked for because no one bothered showing up, so the courts didn't get to hear a defense and have to make judgements based on what the prosecution says. And generally speaking, t

          • If the defense sent didn't show up to court (and thus summary judgement), how do you imagine the plaintiffs are going to get their hands on the billing and other non-anonymized data? If there are no activity logs on the servers, hitting the upstream service provider with a subpoena isn't going to get very far.

    • Perhaps Hollywood should keep better records so they can pay people correctly.

      Don't confuse cooking the books and writing sneaky contracts with keeping poor records. Hollywood keeps very good records. They use them all the time to show how blockbuster movies make no money after piling on deductions.

  • by Larsen E Whipsnade ( 4686581 ) on Tuesday September 28, 2021 @08:23AM (#61840831)
    If they hadn't emphasized torrents in their marketing, might they be in a better position now?
    • I am probably missing something, but did they mention the type of torrents, or what kind of use for torrents to use their services for? If not, I doubt that they'd have much to go off of alone from that since torrenting is a technology that is in of itself perfectly legal, but if so, well, that would complicate things for them.
      • N E V E R M I N D, I am a dumbass - and didn't read. Note to self: Don't read /. before you've had your coffee, and had your ADD meds kick in.
    • Probably. They could deny they knew anything about it, which they can't now. Plus since they don't keep logs, that's another excuse for not knowing anything about it.
    • yes. like the other literally hundreds of VPN services, they would be just fine. this compromise is decades old and goes back to at least VCRs and audio cassettes. there are non-infringing uses for all of these things, but it is illegal to promote them explicitly for infringing uses.

      whatever one thinks of hollywood and the MPA, these guys were idiots.

  • by ealbers ( 553702 ) on Tuesday September 28, 2021 @09:30AM (#61841025)

    Everyone should be aware, the Warrant Canary on their site is over a year old, not updated, means bad things.

    • by gweihir ( 88907 )

      Basically, Hollywood is doing this for the press, they will not see any money from this. Of course, they will try to spin it as a great vicroty, but it is doubtful people will fall for their lies.

  • risk of getting caught by your ISP or anyone else, reassured the VPN provider with a "full-refund" guarantee.

    You get sued for copyright violation and the VPN comes in and refunds your $7/mo. Wow...that ought to cover the bills.

  • movie production firms argue LiquidVPN should not be extended "safe harbor" protections, as the defendant didn't establish a repeat-infringer policy or appoint a registered DMCA agent

    Those are weird charges. if LiquidVPN is doing their job correctly, they cannot see what users are doing, and hence could not detect infringers anyway.

    That said, it does seem stupid for them to not even show up. That makes a default judgement likely, regardless of the merits of the case.

    IANAL

    • Comment removed based on user account deletion
    • Some countries like Switzerland allow courts to order companies like these to start logging and not tell anyone. So while some providers might have "no logs" at the start, it's hard to trust they haven't been ordered to log.

C'est magnifique, mais ce n'est pas l'Informatique. -- Bosquet [on seeing the IBM 4341]

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