After almost seven months from the international operation, led by the FBI, which led to the closure of the cyberlocker giant, along with all 16 domains connected to
it and to the arrest of its funder, we come back to take a look at the case, for some updates.

Mr. Kim Schmitz (better known by his nickname “Kim Dotcom”), father of Megaupload as well as prime suspect of the many alleged offenses brought
against the site (from the massive and repeated copyright infringement to
financial fraud, through a myriad of other serious charges), has recently been
placed under house arrest in his luxurious villa in New Zealand, and is waiting
for the New Zealand High Court to rule over the many requests for his extradition filed by the United States of America, but seems to be already back in business.

First, Dotcom has announced his return to the web with Megabox, a new
subscription platform still under development, which will be specifically designed to allow artists who publish their own content to sell such content with very low costs for intermediation (without resorting to audiovisual collecting societies). Continuity with previous projects shall be guaranteed by the offer of free subscription to Megabox, for the first year, for all former subscribers of Megaupload.

Dotcom takes his second initiative via his Twitter account: through this channel, he has repeatedly accused the FBI and the New Zealand authorities have seized all his properties (both online and real ones) on the basis of “grave procedural errors”, which, if properly evaluated by the judges, would lead, in his opinion, to the immediate declaration of invalidity of the seizure orders themselves. On this front, however, prosecutors have already held that procedural errors have already been fixed, so that nothing said by Dotcom may lead to release his properties from seizure, and that all such properties are being held as “evidences and / or proceeds of crime”.
Meanwhile, the hosting company Carpathia is still holding, by order of the court and despite the hosting contract expired in April, about 25 petabytes of materials pertaining to the Megaupload case.

Schmitz’s last initiative, however, relates to politics. He recently posted a video on YouTube, advertising it via his new website www.kim.com, in which he sings his complaints against the Obama administration, accusing the President of the United States of being “held hostage by the major labels” and fo having carried out projects such as ACTA, SOPA and PIPA to “enslave the web to Hollywood
producers”. “The War for the Web has begun”, states the website, while the video shows images of pro-Anonymous protesters.

Leaving aside the provocative style of the statements declared by the alleged
“file-sharing guru”, the content of the video and of the website themselves seem pretty ambiguous and does not seem to be a prelude to an actual entry in politics: it is difficult, in short, to understand whether the purpose of Schmits is really the one to stand up to become a “champion of freedom for a web without rules”, or if this is not the umpteenth staging orchestrated for the sole purpose of collecting donations to relaunch his activities on the web.”

On 11 July 2012, Michel Barnier, European Commissioner for the Internal  Market and Services, presented during a press conference, the proposal for a
Directive on collective management of copyright and related rights and  multi-territorial licensing of rights in musical works for online uses in the  internal market. Michel Barnier said: “We need a European digital Single Market that works for creators, consumers and service providers. More efficient collecting societies would make it easier for service providers to roll out new services available across borders – something that serves both European consumers and cultural diversity.” He added “More generally, all collecting societies should ensure that creators are rewarded more quickly for their work and must operate with full transparency. This is paramount to sustaining investment in creativity and innovation which will in turn lead to additional growth and increased competitiveness.”

The project comprises two steps: a better functioning of collecting societies in terms of transparency and governance, imposing new rules and facilitating grants of pan-European licences by online music platforms in the Eu Countries.

“Today’s needs are different, collecting societies have to adapt to online demand that is developing at an incredible rate, as well as to the new requirements for transparency and governance. In the past, disc producers bought the rights and sold. Today, if iTunes want to put a song online in the whole of Europe, it has to get the authorisation from 27 entities, not to mention the rights holders. This is what we want to simplify,” the Commissioner explained.

We reminds that in 2010, the European digital music market grew by 22%, compared with only 4% in the US.

The rapporteur at the European Parliament, Marielle Gallo (EPP, France), pledged that this reform will “benefit first and foremost European artists and consumers”. Referring to the proposal, the collecting societies will also have to pay authors and rights holders their due within 12 months.

In Italy, Enzo Mazza, SCF President, declared “it’s an important innovation  in a sector that represent at least 25% of the entire music market in Italy. The Commission established rules of trasparency and governance concerning the
administration of rights that are fondamental in the digital age where rights  are much more fragmented and is even more important that every right’s holder could receive his due based on real use.

The proposals was welcomed by most of the interested parties: among others Sacem in France and Gema in Germany.

We remind that that this Directive is part of the 2011 UE strategy on Intellectual Property Rights.

Today, the Italian Financial Police applied an injunction of the Tribunal of Agropoli, thus arresting, after 6 months of inquiries, the founder of “Italianshare.net” and other notorious audiovisual piracy portals.

Among the crimes contested to “Tex Willer”, nickname of the arrested
49-years old person from Naples, not only the illegal supply of
downloads/streaming contents hosted on cyberlocking websites and P2P networks, but also the unauthorized and illegal sale of personal data of users registered to the seized portals, the illegal use of non-Italian PayPal accounts
registered in the name of unaware figureheads to receive donations and the illegal perception of profits by means of advertising banners over the websites, for a total amount of around 580.000 Euros, plus 83.000 Euros of eluded VAT.

The most grave allegations are those concerning, obviously, the many violations
of copyright, for a total range from 3 to 32 millions of Euro.

The case at hand shows a new stratification of illegal activities, upon the grave one of audiovisual piracy: the user “Tex Willer” made money not only by means of advertising banners over websites created to allow illegal download/streaming of copyrighted material, but also used such websites to collect data from its registered users (usernames, passwords, email addresses, IP addresses) and sold them without any prior consent by the user themselves, totally disdaining copyright and privacy laws.

After many controversies of the last months and protests at the international level  (from those who fight for the freedom of the internet), the Acta – Anti Counterfeiting Trade Agreement – has been rejected from the Eu Parliament last 4^Th July. The vote revealed 39 in favor, 478 against, with 165 abstentions.

Many people said the agreement did not properly balance the rights of private citizens and those of copyright holders.

We remind that negoziations between the countries started in 2007 and the “last version” of the Acta has been signed in Tokyo last January between 22 of the 27 Eu member Countries and eight other Countries: the U.S., Australia, Canada, Japan, Morocco, New Zealand, Singapore, and South Korea. The EU Parliament had to ratify the agreement on 26^th June, but definitely rejects Acta on the 4^th July.

“The vote against Acta”, said Karel De Gucth, “was not one against the protection of intellectual property. On the contrary, Parliament staunchly supports the fight against piracy and counterfeiting, which harm European companies and pose a threat to consumer health and European jobs”.

Many people thought Acta was too vague, “leaving the room for abuses and
raising concern” about its impact on consumers’ privacy and civil liberties,
innovation and the free flow of information. The aim of the Acta agreement is
to combat counterfeiting and piracy of goods such as clothing of luxury brands,
medicines, music, and films. All of this is a worthy enough aim, but Acta ignores what it was designed to achieve.

On the contrary the main cultural industries in Europe signed a press release, that we reproduce above, to explain the reasons of their displeasure to the decision of the Eu Parliament. The signatories to the press release are some of the more than 130 trade federations representing sectors employing over 120 million workers in Europe’s innovative, manufacturing and creative sectors and that have signed a letter of support for ACTA. More information can be found at www.actafacts.com

European manufacturing and creative industries react to European Parliament vote on ACTA

Brussels, 4 July – Europe’s innovative manufacturing and creative industries consider that today’s vote by the European Parliament will be damaging for European intellectual property, jobs and the economy. The decision on ACTA is a missed opportunity for the EU to protect its creative and innovation-based industries in the international market place. “ACTA is an important tool for promoting European jobs and intellectual property. Unfortunately the treaty got off on the wrong foot in the Parliament, and the real and significant merits of the treaty did not prevail,” says Anne Bergman-Tahon, Director of the Federation of European Publishers (FEP), a member of a coalition of over 130 organisations supporting ACTA.

Many MEPs had hoped to wait for the opinion of the Court of Justice before taking a final decision. Frances Moore, CEO of the International Federation of the Phonographic Industry (IFPI), comments that “We now await the ruling of the Court of Justice of the EU, and urge the European Parliament to make effective IPR enforcement a top priority in our external trade policy.”

Intellectual property rights remain the engine for Europe’s global competitiveness and a driver of economic growth and jobs. In the current economic climate, it is particularly crucial to protect these beyond the EU itself. “Europe could have seized the chance to support an important treaty that improved intellectual property standards internationally.
We expect that ACTA will move ahead without the EU, which is a significant loss
for the 27 Member States,” says Alan C. Drewsen, Executive Director of the
International Trademark Association (INTA).

The ACTA discussions are the biggest multi-lateral negotiation to be concluded in the post-Lisbon Treaty constitutional framework. According to Thomas Boué, Director of Government Affairs for the Business Software Alliance (BSA), “the infringement of intellectual property rights is a huge problem in Europe and there is a clear need to advance international norms and best practices for the enforcement of IP. ACTA would serve as an important step forward in raising the global standard for the protection of IP rights. It was unfortunate that the treaty
was held back by inter-institutional differences and concerns over transparency.”

“While we welcome the Parliament’s efforts to be seen as responsive to public concerns, organisations representing sectors employing over 120 million workers in Europe were calling for the adoption of ACTA”, says Jeffrey P. Hardy, Director for ICC’s initiative Business Action to Stop Counterfeiting and Piracy (BASCAP).

“Parliament says no to ACTA but stresses that ’global coordination of IP protection is vital’. We respect their position,” says Johannes Studinger, Head of UNI MEI Global Union. “Indeed, in the global digital economy, sustainable growth of creative industries requires effective enforcement of intellectual property rights. Enforcement policies without a strong international commitment remain ineffective. We call on EU institutions to work together instead of opposing each other and to translate this mutual commitment into effective policies.”

Those debating ACTA have invoked a number of principles and concerns. “The debate around ACTA has unfortunately been framed in terms of censorship and ‘breaking of the internet’ rather than about protecting the economic basis for jobs in Europe,” says Dominick Luquer, Secretary General of the International Federation of Actors (FIA).

“Contrary to many of the statements made, the individual’s fundamental rights are fully respected by ACTA, and we look forward to the Court of Justice assessment in this regard,” says Dara MacGreevy, Anti-Piracy Director of the Interactive Software Federation of Europe (ISFE), representing the European Video Games Industry.

Looking ahead, we believe Europe’s politicians should continue their efforts to protect the intellectual property that underpins our innovative and manufacturing sectors, at home and abroad, online and offline. “We are encouraged by the statements made in the European Parliament that today’s vote was not a vote against intellectual property rights enforcement. Europe’s innovative manufacturing and creative industries are now looking to the other ACTA signatories to protect our rights internationally,’ says Alberto Paccanelli, CEO, President of EURATEX-The European Apparel and Textile Confederation.

The signatories are:

- Acg (The Anti Counterfeiting Group)

- Act (Association of Commercial Television in Europe)

- Aim (European Brands Association)

- Bascap (Business Action to Stop Counterfeiting and Piracy)

- Bsa (Business Software Alliance)

- Euratex (the European Apparel and Textile Confederation)

- Fep (Federation of European Publishers)

- Fia (The International Federation of Actors)

- Ifpi (International Federation of the Phonographic Industry)

- Inta (International Trademark Association)

- Isfe (Interactive Software Federation of Europe)

- Mpa (Motion Picture Association)

- Uni Global Union.