dinsdag 28-03-2023

Annual report 2022

The BREIN Foundation provides collective protection of copyright and neighbouring rights for creators, performing artists and the creative media industry such as producers, publishers, broadcasters, distributors and platforms. Affiliated to BREIN are around 30 industry and collective management organisations and their members, together several thousand companies and tens of thousands of creators relating to music, films, series, books, writings, images and games.

“The ratio between illegal use and missed sales is not 1 to 1 but, depending on the sector, can be estimated from 1 to 3 (i.e. every 3 illegal use moments lead to 1 missed legal use moment) to 1 to 5. From a historical perspective, it has been shown that in countries where there is legal supply but no enforcement, at least 80% of the market is in the hands of organised illegality.”

BREIN’s approach targets all forms of illegal supply regardless of the technology used to do so. For example, bittorrent, cyberlockers, usenet, IPTV and websites or social media that link to them, as well as streamripping sites and illegal supply on (auction) sites with classifieds for files and physical carriers including vinyl.

For now, the most popular protocol for illegal use of all kinds of content remains bittorrent, but streaming and download link sites for cyberlockers also find a lot of demand, as well as, for audiovisual content, illegal IPTV subscriptions with Video-On-Demand (VOD). Bittorrent, streaming and link sites generate revenue mainly from advertising, although revenue is also earned from the sale of subscriptions and VPN. Cyberlockers offer premium subscriptions for faster downloads, link sites make content discoverable. Subscription sales are also the main source of revenue for commercial usenet, NZB link sites make the best quality illegal content easier to find and download.

For enforcement, BREIN looks first at the providers, the sites and uploaders that act as sources, and then also at intermediaries such as hosting providers and access providers as well as payment services, advertisers and search engines.

Neutral intermediaries should also help counter illegal use. Most significant in this regard is the dynamic blocking by access providers of user access to popular illegal sites. This was extended in 2022 to the seven most popular illegal bittorrent sites and the main proxies and mirrors for them. BREIN keeps track of this and sends periodic updates to access providers. Due to the ‘one for all’ covenant from 2021, a court order against one of the major access providers is also complied with by the others. Separately, Google also carries out these updates.

“Dutch visits to blocked sites decreases by more than three quarters. Research by Carnegie Mellon indicates an overall decrease in illegal use of 22% after blocking multiple sites and a 10% increase in legal use and even 24% among frequent users.” [i]

N u m b e r s

BREIN carried out the following numbers of enforcement actions in 2022. All actions cover music, video (films and series), books, writings, images and games, unless otherwise stated.

458 investigations completed, 40 ongoing

449 illegal sites/services removed

7 sites (The Pirate Bay, rarbg, 1337x, yts, eztv, limetorrents and kickasstorrents) and 196 (480) proxies/mirrors dynamically blocked on IP and/or DNS [ii]

Google delisted 341 unique domains related to the blocked sites [iii]

328 proxies stopped

19 illegal traders IPTV/VOD subscriptions stopped; 11 ongoing investigations

7 streaming sites taken offline

19 major uploaders, administrators and/or scripters investigated and stopped

36 advertisers on illegal sites addressed [iv]

290,324 Google search results removed [v]

2,869 interventions involving the removal of online classifieds for illegal copies

45 settlements, including 16 ‘knock & talks’ [vi]

8 online cases involving physical media were settled

Decline in notifications to Google

There has been a large drop in the number of Google search results for illegal material reported by BREIN since access providers and Google started blocking access to illegal sites following BREIN’s blocking orders. The ‘delisting’ of entire websites carried out by Google equals millions of search results that are thus no longer visible in the search engine and therefore no longer have to be reported by BREIN. On balance, the number of permanently deleted Google search results has increased to many tens of millions. See also footnote (v).

Decline reporting scam sites

Of the many queries and reports BREIN received from authors, publishers and producers, a total of only six concerned so-called scam sites. This is a significant decrease compared to last year when more than a hundred scam sites were reported to ScamAdviser. BREIN suspects this is due to declining visits to such sites for infringing offers. On scam sites, ‘phishing’ takes place, i.e. consumers are lured with the very latest content to extort payment details from them without the content eventually being delivered because the site does not actually have it.

H i g h l i g h t s [vii]

Criminal

The policy of the Dutch government is that rights holders are primarily responsible for the enforcement of their Intellectual Property. For this purpose, rightholders have set up the BREIN foundation. Criminal investigation and prosecution is the last resort. Understanding has been reached with the Public Prosecutor’s Office and the fiscal police (FIOD) about which types of files are eligible for criminal action. Naturally, no announcements are made about current investigations.

BREIN provided expertise in four cases where local police were investigating copyright infringement.

“The criminal court on appeal ruled that a hosting provider who knowingly provided hand and glove services to a customer who committed criminal offences need not be warned before prosecution.” [viii]

Civil law

New blocking order for six illegal sites, further action pending

BREIN was awarded the dynamic blocking of the six most popular evidently illegal bittorrent sites and proxies/mirrors. Together with The Pirate Bay, these sites are the most popular illegal sources in the Netherlands. The sites rarbg, limetorrents, 1337x and kickasstorrents (KAT) all have all content (music, film, series, books, images and games), except two, yts (yify) and eztv, which focus exclusively on film and series and are originally known as ‘suppliers’ for popcorn time. [ix]

According to the blocking covenant, this time access provider Delta was summoned. BREIN produced 4,000 pages of evidence regarding the infringement and the subsidiarity of the claim. Delta referred to the court’s judgment. In accordance with the covenant, the other access providers also implemented the blocking order, as well as the updates sent periodically by BREIN thereafter. All this was also implemented by Google. Complete blocking of sites from search results significantly increases the effect of blocking.

Targets for a third blocking action have been identified and summoned and relevant evidence has been gathered. The summons to the access provider will be issued in the first quarter of 2023, according to the blocking covenant it will be to KPN.

Actions against Dutch illegal BitTorrent sites

BitTorrent is still the most widely used protocol for illegal exchange of all kinds of popular content. Access is blocked to large international ‘public’ sites that, also due to BREIN actions, have long since ceased to be hosted in the Netherlands. In addition, BREIN goes after closed ‘private trackers’ created and managed for and by Dutch users. The supply and membership of such a site generally amounts to several tens of thousands of torrents (links) and individuals.

“Last year, multiple actions took place against ‘scripters’, who often run the software for multiple sites, and against site owners and uploaders. As a result, the number of known private trackers was reduced from 25 to only a few of significance for the time being.”

Based on information from previous actions, including against a major spider in the Dutch BitTorrent web, BREIN has been able to identify several uploaders and site owners. Settlements range from several thousand to ten thousand euros and more. The owner and scripter of a new site that succeeded a previously taken offline tracker could also be quickly identified and dealt with.

‘Untraceable’ uploader also targeted

In addition, these actions identified and dealt with a major usenet and torrent uploader of illegal files. “They should find you first,” he wrote on a forum. “I’m behind two VPNs so let them search”. On BREIN’s orders, he was visited by the bailiff.

Actions against illegal IPTV

Last year, BREIN again took action against a number of providers of illegal IPTV subscriptions sold separately or together with media boxes. BREIN has since closed more than 375 illegal sellers after the Court of Justice of the EU (CJEU) ruled in the BREIN v Filmspeler case that this type of sale constitutes infringement.

“Research by Bournemouth University shows that the use of illegal IPTV increased by 25% in the EU between 2018 and 2021 but fell by almost 6% in the Netherlands. However, it is still the highest percentage of the population in the EU, at 8.2% while the average is 4.5%.” [x]

Illegal providers are identified and addressed by BREIN. Depending on circumstances, an ex parte order may be extracted and seizures made. One of them had around 25,000 euros worth of i.a. crypto currencies seized. Providers are offered to settle by signing a cease & desist declaration and a compensation of costs.

Fines or, in case of a court order, penalty sums usually amount to €5,000 to €25,000 per day(part) or infringement with ceilings ranging from €100,000 to €500,000. Out-of-court settlements last year included €7,000 for a shopkeeper and €20,000 unconditionally for an online provider. [xi]

If no settlement can be agreed, the provider will be summoned. Last year, an illegal provider was ordered to pay BREIN €25,000 in costs. In a case in which the directors of a ‘Ltd’ were found personally liable for the illegal trade, the settlement amounted to €40,000 unconditionally.

In cases where there is evidence that an illegal provider made a high turnover, a number of rights holders often act as co-claimants in addition to BREIN so that damages can also be claimed. Then a higher amount can be settled. From this, BREIN’s costs are paid first; in practice, there is no money left over besides that.

Actions against illegal Usenet

“The illegal Usenet is creaking under BREIN’s ongoing enforcement actions. Information from previous actions repeatedly leads to identification of other administrators and uploaders from illegal Usenet communities.”

Investigations by BREIN over the past year and a half led to the tackling of 34 administrators and large uploaders, including on spotweb, as well as seven so-called ‘NZB communities’ (indexing sites) that direct users to illegal content on the Usenet. Among others, an administrator in Belgium who considered himself untraceable was sued by BREIN. Settlements with those involved usually amounted to around 10,000 euros per individual. As a result, communities also stopped of their own accord and uploaders threw in the towel because things were getting too hot for them.

Duty of care of commercial Usenet provider

There was also a case before the Supreme Court regarding the due diligence obligations of a commercial usenet provider that sold access subscriptions for its servers. Such providers, even if they can be considered neutral, must take effective measures against infringement to avoid their own liability. [xii]

Warnings to frequent bittorrent uploaders suspended

BREIN wanted internet access providers, including Ziggo, to forward informative warnings to frequent or longer term uploaders (FLU) whose IP addresses BREIN detected. No name, address and residence details were then requested for further enforcement and the IP addresses were deleted. The Ministry of Culture (OC&W) provided funding to measure the effect of the warnings after six months.

However, Ziggo eventually refused to cooperate. In early 2022, the preliminary relief judge ruled that Ziggo would need a licence from the Personal Data Authority (AP) to do so, because the IP address could be regarded as personal data under criminal law in relation to copyright infringement. On appeal, the court ruled that warning anonymous infringers is not enforcement because BREIN could not file a claim in case of non-compliance.

“Warning without taking the case to court is mild and should be possible. Ziggo’s refusal to send them through ensures that infringing customers will face claims immediately. That was not our choice but if we have to we will do it,” BREIN said.

In total, BREIN sent 1157 warnings to all access providers combined in one year. The project was suspended after the summary judgment in early 2022. BREIN decided not to appeal in cassation in view of costs and does not rule out adapting the FLU project to the usual form of enforcement. Then, following a summons, a claim will be filed in case of non-compliance.

Open e-book directory, appeal against Ziggo

BREIN settled with 12 administrators of open directories, which is a file or folder containing illegal files (usually illegal ebooks but in a few cases also films) that is open to other internet users and can be found in various ways. When BREIN can identify the administrator, it addresses him directly. Otherwise, his access provider is requested to forward the summons on the basis of the IP address used. In case of persistent infringement, a claim is submitted.

One case is still pending because Ziggo stopped forwarding BREIN reports.[xiii] The preliminary injunction court held that Ziggo would need a licence from the AP for this too (see aforementioned FLU case). BREIN disputes that. The question is important because it would bring the usual enforcement to a halt. Indeed, such a licence requirement would then also apply to other intermediaries who will not then voluntarily apply for it. The hearing is due in the first quarter of 2023.

Know-Your-Business-Customer (KYBC)

Because illegal platforms operate anonymously and do not respond adequately to summonses, BREIN approaches hosting providers, among others, not only with summonses to take the service offline but also to hand over identifying data. If refused, these will be claimed in court. This data is needed to hold the responsible parties liable and to stop illegal trade. In practice, name and address details provided by a customer often turn out to be incorrect and no or insufficient effort has been made to verify them. In addition, hosting providers offer their services through foreign resellers who make no effort to verify the identity of their customers.

The Digital Services Act (DSA) confirmed CJEU case-law that KYBC applies to online marketplaces but did not extend it to other intermediaries such as hosting providers. This does not mean that such data cannot still be claimed. After all, intermediaries have duties of care and should cooperate in countering infringement even if they are neutral, more so when they play a central role.

BREIN prefers to reach workable agreements between parties. Sometimes that needs a push. In relation to upstream/hosting providers, BREIN brought proceedings against three Dutch providers to obtain a declaratory judgment that they should have verified customer data and should also require this from resellers via a perpetual clause. The defendants have appealed against BREIN’s admissibility. Two of the three providers have since settled with BREIN, with the third still in negotiations.

Police letter to Dutch hosting industry

Police and Justice sent a warning letter with list to Dutch hosting providers about ‘bad hosters’, specifically foreign resellers who openly offer hosting in the Netherlands for criminal activities, which as such includes large-scale copyright infringement. The letter asks the Dutch hosting industry to look critically at their foreign ‘resellers’ and where necessary break or revise contracts. BREIN has reached out to the hosting industry to talk further about this, for which there is some enthusiasm.

Other news

(i) Extensive quantitative research on the ex parte injunction shows that BREIN has become its largest user in the Netherlands. Since 2012, BREIN has successfully used this tool whereby a court order can be issued without the infringer or intermediary being heard by the court in particularly urgent cases.

“It is also notable that BREIN submitted no less than 65 ex parte injunction requests during the period 2012-2021, all of which were granted. While the conditions for granting them are strict and in almost all cases a revocation follows, BREIN is actually very successful in obtaining ex parte injunctions against infringers and in particular intermediaries. On this basis, it can be seen that the ex parte injunction now lends itself only to very urgent cases of piracy.” [xiv]

(ii) Since January 1, 2020, it has been possible to recover damages in collective actions through the Mass Tort Claims Settlement Act (WAMCA). This also includes the prohibition, injunction and declaration-for-right actions that BREIN has been pursuing for years in its own name. Claims dealing with (infringements of) intellectual property and anti-counterfeiting take second place quantitatively with 11 claims, 10 of which were brought by BREIN. N.b. these include only proceedings on the merits and not claims in summary proceedings. See also https://stichtingbrein.nl/wamca/

Footnotes

[i] See: “The effect of Piracy Website Blocking on Consumer Behavior“, Carnegie Mellon University, November 2015; “Website Blocking Revisited: The effect Of The UK November 2014 Blocks On Consumer Behavior“, Carnegie Mellon University, April 2016.

[ii] This is the state on 31/12/22, the year total of blocked unique domains is in brackets. Blocking concerns a dynamic operation, i.e. BREIN monitors this and regularly sends updates for blocking or unblocking especially proxies and mirrors. Since 1 January 2018, this involves thousands of proxies in dozens of updates. Changes to main domains also occur but much less frequently.

[iii] BREIN’s attorney also sends the updates to Google, which then removes the reported domains from its search results.

[iv] This concerns regular businesses and organisations, offers of gambling, prostitution and porn are not followed up.

[v] N.b. BREIN only reports to Google regarding titles notified to it by rights holders. The number of reports is decreasing since the start of blocking illegal sites. Such blocking involves making many hundreds of thousands of search results inaccessible in each case. Cyberlockers and YouTube are only notified by BREIN if requested by a right holder in a concrete case, in 63 and 111 cases respectively last year. Many rights holders also report via their own ‘vendors’ and, in the case of YouTube, licences are also granted.

[vi] N.b. most BREIN cases involve stopping the infringement, usually taking the site, or infringement(s) offline, only in cases where the responsible individual or entity is identified can settlement or litigation take place. A ‘knock & talk’ involves a home visit, often preceded by an ex parte order. A settlement consists of a cease & desist declaration with a penalty sum, compensation for costs and possibly damages.

[vii] In view of privacy regulations, BREIN does not publish domain or company names and aliases or other data when it is traceable to natural persons.

[viii] Court of Appeal of The Hague 23-08-2022 ECLI:NL:GHDHA:2022:1550. N.b. this is not a BREIN case but is of interest for its activities.

[ix] These sites are also blocked in many other countries. Perhaps partly as a result, popcorn-time.tw the largest remaining ‘fork’ threw in the towel in January last year due to ‘lack of enthusiasm’.

[x] In the Netherlands in 2021, 8.2% of the population used illegal IPTV for an average of 5.35 euros per month, which is 68.7 million euros per year. In 2018, it was still 8.9% for 6.82 euros and 93.1 million euros. That is a decrease of 5.8% in illegal usage and 26.2% in illegal sales.

[xi] Settlements take into account the other party’s ability to pay. They often involve a lump-sum payment part, an installment part and a conditional part that becomes due immediately in case of non-payment and recidivism. This unconditional part also depends on the circumstances of the case and in practice is many times higher than the conditional part.

[xii] Given the facts, the Supreme Court surprisingly ruled in Q1 2023 that the commercial usenet provider NSE is a neutral intermediary that does not itself infringe. However, it does need to have an efficient NTD in place when it restarts as well as – as yet unspecified – additional measures to adequately combat infringement on its platform. As may be assumed is general knowledge, the Usenet was originally a discussion forum with newsgroups, but has become a cesspool of illegal offerings since the advent of binaries with which images and sound can be converted into text. Sufficiently combating infringement calls into question the revenue model, which is based on selling subscriptions for access to Usenet servers on which that content is kept available for a long time. So while the Supreme Court’s ruling rejects BREIN’s infringement claim, it gives no cause for relief to commercial usenet providers.

[xiii] Earlier, another major access provider also refused to forward warnings/summons from BREIN to subscribers with open directories anymore. However, it settled in summary proceedings the day before the hearing and agreed to promptly take reported open directories offline under forfeiture of a fine.

[xiv] Thus Prof D.J.G. Visser and C.J.S Vrendenbarg, Leiden University, in ‘Het ex parte bevel’ (The ex parte order) in the book ‘IE-procesrecht. Constant in beweging’ (IP procedural law. Constantly in motion).