YTS Torrent Giant is Part of a Bizarre & Brand New Anti-Piracy Scheme * TorrentFreak

926 logoIt’s public knowledge that sites like The Pirate Bay store IP addresses and other data relating to its users.

Users hope that this data will be handled with care but in 2013, when the site effectively did the unthinkable, many users cheered the site on instead.

In order to assist the criminal prosecution of the infamous lawyers behind the now-defunct Prenda Law copyright troll outfit, The Pirate Bay released user logs that identified the company as the uploader of several movies. This and other evidence put two lawyers behind bars, where both remain today.

Seven years later, users of YTS – which is currently the second most-visited torrent site in the world – have an entirely more worrying scenario to consider because this time around, they are on the receiving end.

FACT: YTS is Handing Over User Data to a Law Firm

This saga has been running for some time but this week we were able to confirm what we’ve long suspected. The operator of YTS is actively handing over personal information about his own users to a law firm in Hawaii, which is acting on behalf of companies behind movies including Hellboy and Rambo: Last Blood.

The background to this ‘partnership’ appears to have its roots in cases where YTS itself was sued by attorney Kerry Culpepper for copyright infringement.

Since or around that time, YTS operator Senthal Vijay Segaran seems to have started cooperating with Culpepper, giving up email and IP addresses to the attorney in support of lawsuits against alleged pirates in the United States.

What we are seeing now, however, is that user data handed over to the attorney by YTS’s operator is being used in emailed threats to alleged users of YTS, demanding cash settlements to make potential lawsuits disappear.

Emailed Pay-Up-Or-Else Threats

TorrentFreak recently obtained an email sent by Culpepper IP to an alleged user of YTS. It begins with three pieces of information; the email and IP address of the recipient, plus the date (but not the precise time) of the alleged infringement. (Note: We have redacted some information to protect the privacy of our source)

It continues by stating that the law firm previously filed a copyright infringement lawsuit in Hawaii on behalf of its clients and “subsequently obtained identifying contact information for many of these users from the YTS website operator, including yours.”

The point of the email, it adds, is one of “courtesy” before legal action is taken that may result in additional costs.

With there being no doubt whatsoever that YTS data is helping to power this campaign, the email claims that the recipient “logged into the website YTS using the email address [redacted] from the IP address [redacted] and illegally downloaded a torrent file for copying our clients’ motion picture…”

In isolation, this claim is interesting. Torrent files contain no copyrighted content and it isn’t illegal to download them as they contain only metadata, i.e data that describes other data. No one has ever been prosecuted for downloading a .torrent file – anywhere, ever. That’s because it does not necessarily follow that the .torrent file downloader subsequently loaded it into a torrent client to download and/or share the work it references.

It is possible for the IP address of a user to be observed sharing the actual content in a torrent swarm if they later chose to do that, but the emailed letter offers no indication that is the case.

To be clear: downloading a torrent file is not illegal, sharing copyrighted content is. And there is a big difference as far as the courts are concerned. That being said, evidence showing the downloading of a torrent file on a specific date via a torrent site account attached to an email address, could also be accompanied by IP address evidence from a torrent swarm. That could be much more compelling in court.

The Options on Offer According to the Emailed Letter

In common with most settlement schemes, the letter seeks a cash payment from the recipient. For privacy reasons, we aren’t detailing the exact amount but it’s around the $1,000 mark. In exchange for paying this amount quickly, the law firm offers a “comprehensive release of all legal claims”, including the recipient not becoming a named defendant in a lawsuit.

Somewhat unusually and for reasons that are not immediately clear, it also demands additional information.

This includes a signed declaration indicating the BitTorrent client used to carry out the alleged infringement, the name of the site or business that promoted that BitTorrent client, and whether the letter recipient has ever received a copyright warning notice from his or her Internet service provider.

One can only speculate as to how this information might be put to use in the future but it certainly sounds like a bigger picture is being formed. Recall, the same law firm – Culpepper IP – is also trying to hold Internet backbone company Hurricane Electric responsible for piracy carried out by BitTorrent users.

Why This Approach is So Unusual

Apart from the operator of one of the world’s largest torrent sites giving up the personal information of his users, it’s worth looking at the structure of how this is taking place.

A $1 million consent judgment from earlier this year between movie companies affiliated with Millennium Media (under the legal guidance of Culpepper IP) and YTS, positively identified India-resident Senthil Vijay Segaran and the UK company Techmodo Limited as the operators of YTS.

So, a UK company runs YTS? Perhaps we should let that sink in for a moment.

Techmodo Limited is officially registered with the government in the UK, with Segaran listed as the sole director. It hasn’t yet filed any meaningful accounts and the same is true for the company of the same name, also operated by Segaran, that was dissolved following a via compulsory strike-off just months earlier.

So, what we appear to have here is an official UK-registered company, which is subject to all relevant local law (both civil and criminal), being identified by plaintiffs in a US-lawsuit as the operator of an illegal site. We use the term ‘illegal’ here as guided by the High Court of England and Wales, which previously determined that YTS and hundreds of similar sites act illegally under civil law (at least) in the UK and should be blocked by local ISPs.

So the big questions must follow. If Techmodo Limited is the operator of YTS and YTS is a site that operates illegally, it seems highly unlikely that Techmodo Limited can legally operate the YTS site in the UK. What charges or challenges it might face are matters for HMRC and possibly even the Police Intellectual Property Crime Unit because, when infringement is carried out in the course of business, it becomes a criminal offense.

Big Questions to Be Answered in Murky and Unchartered Waters

In summary, what we appear to have here is a verifiably illegal site, run through an ostensibly legal entity, collecting and processing private user information, then handing that data over to third-party overseas attorneys/media companies, ones that appear to know the legal status of the site and the company behind it. This, so that people can be approached for payments for alleged offenses that took place utilizing that illegal site.

We can only presume that Culpepper IP and its associates have done their homework, they’re lawyers after all, but this business and/or legal arrangement is unorthodox, to say the very least. If a UK precedent exists determining the legality of the transfer of this kind of user data in these circumstances, we’re completely unaware of it.

If nothing else, the bar seems to be set particularly low when a legal entity, Techmodo Limited, is stated to be the operator of an illegal site, one that’s also supplying private information on alleged infringers that were only able to infringe because the YTS site supplied the torrent files in the first place. Quite remarkable.

Copyright experts, privacy buffs, and company law lawyers on both sides of the pond are invited to write in with an opinion on the implications of this massive conundrum because this goes way, way beyond anything we’ve ever seen before.

Many thanks to TorrentFreak for the breaking news.

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