E-Commerce Times Interview With New York Media Attorney John J. Tormey III, Esq. - Massive Hammer Falls On Megaupload

E-Commerce Times Interview With

New YorkMedia Attorney John J. Tormey III, Esq. -

Massive Hammer Falls on Megaupload

http://www.ecommercetimes.com/story/74234.html

By Rachelle Dragani

E-Commerce Times
01/20/12 10:52 AM PT

Megaupload has been shut down by the U.S. Department of Justice, which also arrested several of the site's top executives. The Hong Kong-based file-hosting site was a haven for copyrighted material, according to authorities. The D.O.J. also seized millions of dollars in assets belonging to the business and its managers.

The U.S. Department of Justice on Thursday shuttered Megaupload, a popular file-sharing website, charging seven of its executives with engaging in an international criminal enterprise based on copyright infringement.

Federal authorities called it one of the largest criminal copyright cases in U.S. history. Megaupload, its movie streaming site Megavideo, and its various sister sites were down at the time of publication.

Four of the seven execs charged are now in federal custody, including the site's founder Kim Dotcom (formerly Kim Schmitz). He and Finn Batato, Mathias Ortmann and Bram van der Kolk were arrested in New Zealand Thursday after authorities obtained about 20 search warrants around the U.S., New Zealandand seven other countries. Each of the seven accused, including the three others that remain at large, are charged with five counts of copyright infringement and conspiracy. If convicted, they could face 20 years behind bars.

They will be held at least until Monday, when there is a second hearing scheduled.

Mega Indictment

Megaupload and its corresponding sites had generated US$175 million worth of illegal proceeds, according to the D.O.J., and the losses to copyright owners added up to more than $500 million. Kim Dotcom pulled in $42 million from the site in the past year, according to authorities.

The indictment, issued by a grand jury in Virginia, details some of the reasons the D.O.J. targeted Megaupload. It claims that the site facilitated the trading of some movies even before their theatrical releases, that the site ignored removal notices from rights holders, and that the site's executives were laundering money through a Megaupload rewards program that paid users to upload certain content.

In addition to the arrests, authorities also reportedly seized artwork, electronics, guns and millions in cash from the New Zealand home. Several luxury cars, including a Rolls-Royce Phantom Drophead Coupe and a pink 1959 Cadillac were also seized. As part of the other search warrants, servers, domain names and about $50 million in assets were seized.

The site will now be run by Kaseem Dean, also known as "Swizz Beatz", who is the CEO of the site but wasn't named in the case. His partnership with the site became more well-known last month when Megaupload released "The Mega Song", which featured heavy-hitting entertainment figures such as Kanye West, Will.i.am and Kim Kardashian voicing their support for the site despite its allegedly pirated material.

Some of Megaupload's fans appear to be retaliating. Late Thursday afternoon, websites for the D.O.J., Universal Music Group, the MPAA and the RIAA were down, with the hacker community Anonymous claiming credit.

Representatives from neither the D.O.J. nor Megaupload responded to our requests for comment.

What's Up Next?

The arrests could be the beginning of a lengthy legal battle will likely ensue.

"The New Zealand authorities who arrested the Megaupload folks yesterday have promised cooperation with extradition to the U.S.", [one commentator] told the E-Commerce Times. "There will be lots of legal wrangling and motions to dismiss, to exclude certain items of evidence. Then, probably many months from now, the trial will be held, unless the parties agree to a plea bargain. Whether the defendants will be released on bail is anyone's guess".

For most of that time, the site will probably remain shuttered, and the legal plausibility of re-opening under a different domain name, one that's untouchable by U.S.regulations, is slim.

"At least in the U.S., it's likely that the shutdown of access to the site will continue. I can't say what will happen in other countries, but I'd guess that some of those who are signatory to the Berne Convention [international copyright treaty] will honor the U.S.takedown. It is certainly possible that the site could re-emerge under another domain controlled by another country, but the U.S. Courts could order U.S.-based DNS Service providers to block access there too", said [one commentator].

Concerned over the international nature of the case, several privacy protection advocates, such as the Electronic Frontier Foundation, have condemned the arrest procedure that wound up placing German and Danish citizens residing in New Zealand in the custody of U.S.authorities.

Since the indictment was issued to protect the rights of U.S. copyright holders, however, authorities could obtain worldwide search warrants.

"We're in a world economy now", entertainment lawyer John J. Tormey III told the E-Commerce Times. "Our federal government knows how to pursue, and in some cases take possession of, off-shore assets and off-shore people. The feds may be thwarted trying to reach someone in North Korea, but my bet is that they can reach someone in New Zealand".

Another Privacy Battle

The arrests and seizures occurred in the midst of another federal copyright infringement battle: the fight over the Stop Online Piracy Act, or SOPA. The bill would strengthen the powers of authorities and rights holders to crack down on sites -- even foreign ones -- that are suspected of trafficking in copyrighted content. The bill's opponents say SOPA is too broad, however, and could hurt sites that aren't engaging in illegal activity at all.

The arrests came the day after some of the Web's most popular sites such as Wikipedia and Reddit blacked out to raise awareness of SOPA.

After the arrests on Thursday, the authorities involved said the two cases were not related.

"The timing is ironic, but the investigation has been going on for quite some time. Also, indictments don't usually happen on short notice. I suspect the FBI and U.S. Attorney's office have been planning this for months. But they may have timed the arrests and shutdown of the site to capitalize on the publicity connected to yesterday's site blackouts", said [one commentator].

In zeroing in on Megaupload, the D.O.J. targeted a site with more than 150 million registered users and about 50 million daily hits. In addition, the site has the support of some big names in the entertainment industry, somewhat of a rarity for such an enterprise.

"The infringers just had a real long drink at the trough. A real long swing on the pendulum - now, we're seeing the pendulum swing back", said Tormey. "It's OK to start a new business. It's not OK to start a new business and pretend that the federal law governing the business does not exist. Pretending that the U.S. Copyright Act does not exist will probably turn out to be an extensive and expensive strategic mistake for the Napsters of our day".

Brits Demand Pirate Bay Blockade - Interview With Entertainment Attorney John J. Tormey III, Esq.

BRITS DEMAND PIRATE BAY BLOCKADE -

INTERVIEW WITH ENTERTAINMENT ATTORNEY JOHN J. TORMEY III, ESQ.

Brits Demand Pirate BayBlockade
By Rachelle Dragani
E-Commerce Times
11/07/11 11:02 AM PT
http://www.ecommercetimes.com/story/73695.html

British lobby group BPI wants one of the UK's largest Internet service providers, BT, to ban its customers from accessing file-sharing website The Pirate Bay. The site's been blocked in a handful of countries before, yet it lives on as one of the Web's most popular destinations for those looking to share copyrighted material online.

http://n4g.com/news/883338/brits-demand-pirate-bay-blockade

A coalition of film studios, record labels and media entities led by the UKrecord industry lobby group BPI recently sent a letter to British Internet service provider (ISP) BT demanding that the company block access to The Pirate Bay website.

http://current.com/technology/93533031_brits-demand-pirate-bay-blockade.htm

The group said that if BT doesn't act within two weeks, the matter will proceed to court. BPI is banking on the recent UK court decision regarding Newzbin2, a British file-sharing website recently blocked by court order.

http://www.corkboard.it/posting/show/21302-brits-demand-pirate-bay-blockade

It was the first British website to be blocked for reasons besides carrying offensive material such as child abuse images, and BPI is hoping to capitalize on that decision and get the courts to again demand blocking The Pirate Bay, which provides visitors with files that can be used to share media and data online, including copyrighted works.

http://digg.com/news/entertainment/technology_news_piracy_brits_demand_pirate_bay_blockade

It's not the first time The Pirate Bay has faced such demands since its start eight years ago by a Swedish anti-copyright organization. Lawsuits and raids have led to brief downtimes for the website, as well as restrictions, fines and prison sentences for its creators. The site is blocked in Denmark, Finland, and Italy.

http://www.startaid.com/review/19279486/Brits-Demand-Pirate-Bay-Blockade.html

BT indicated to The Guardian that it would await a court order before blocking any Web content. The Pirate Bay, BPI and BP did not respond to the E-Commerce Times' requests for further comment.

http://sitemarks.in/technology/brits-demand-pirate-bay-blockade/

Copyright Battles

"The effects of illegal downloading and piracy have certainly trickled down to the ranks of the artists and creative community", New York entertainment lawyer John J. Tormey III told the E-Commerce Times. The music industry has been transformed, the TV industry has been transformed, the book publishing industry has been transformed, and the film industry has been transformed."

http://current.com/technology/93533031_brits-demand-pirate-bay-blockade.htm

The producers of copyrighted media whose works are freely traded online have for years said their businesses are directly hurt by piracy. However, as industries start to blend together -- for example, a computer company like Apple could make deals to become a content provider -- there are many more organizations with interests in protecting copyrights.

"If the courts don't support the business of copyright, then we're pulling the rug out from under the ones who are doing it to survive, and it dis-incentivizes creation. From a global perspective, it really puts you in a less competitive place", said Tormey.

http://jtormey.newsvine.com/_news/2011/11/09/8727325-brits-demand-pirate-bay-blockade

No Going Back

Illegal downloads, illicit BitTorrent activity, unauthorized streams and other pirating methods have become so rampant it may be practically impossible for the film, music and television industries to eliminate the phenomenon entirely. If the BPI can get The Pirate Bay blocked, as it has been in other countries, there will likely still be other sites and methods for freely obtaining and sharing copyrighted material.

Since the legal system has to straddle the line between protecting freedom of speech and protecting enterprise, coupled with a technological scene that's advancing quickly, legislation has had a difficult time keeping up.

In order for copyrights to maintain their importance, then, outdated legislation might not be the answer, though it's possible for protections to catch up to technology.
http://bx.businessweek.com/entertainment-industry/e-commerce-news-piracy-brits-demand-pirate-bay-blockade/13322907556411127837-611313eb4c2aa3e6d86d6786d8713c62/

"Carriers are essentially saying they can't control what goes through the door, but the technology exists. The U.S. government has the ability to pick up on certain key words as a weapon against terrorism, so the intelligent powers know that a macro can be set up to pick up material that is harmful - so the technology exists of common carriers to pick up certain file-sharing or illegal activity", said Tormey.

Some record labels or pro-copyright groups also focus on education campaigns to counter the inability of legislation to accomplish widespread bans on illegal file-sharing.

"I'm not sure if legislation can fix the system, but I think education can", [another commentator] told the E-Commerce Times. "We have to do a better job of educating everyone about the importance of copyright because the kind of legislation we see coming out ends up being clumsy and overreaching, putting us in a situation where we end up clamping down on free speech instead of keeping the lines open".

http://blog.mmoga.com/2011/11/brits-demand-pirate-bay-blockade/

Interview With New York Entertainment Attorney John J Tormey III, Esq., By: Steve Veloudos, Zebra Music

Interview With New YorkEntertainment Attorney John J Tormey III, Esq.,

By: Steve Veloudos, Zebra Music http://www.zebramusic.com/

This interview is also posted at:

 

http://www.idnmusic.com/education/interview_with_entertainment_lawyer_john_j_tormey_iii.html

http://www.indie-music.com/modules.php?name=News&file=article&sid=759

http://www.angelfire.com/ky/MaDeuce/tips2.html

Can you briefly go over your work experience as an entertainment lawyer?

I studied law in Los Angeles, but have always practiced law in New York. I am admitted to the New York, California, and D.C. Bars. I worked as an entertainment litigator for about 2 years, including song infringement work, and many other exciting cases.

... Then, I took an in-house law position at Disney for about 4 and a half years.

... Then, I served as senior litigation counsel to Miramax films for about two years.

Finally, the thing that made it all worthwhile - solo law practice.

I like working with artists. My father is a professional actor, and I have played in a number of rock and roll bands. Particularly, I like to work with artists who understand the business aspects of entertainment.

What are your thoughts of having an entertainment lawyer shop a tape of an unsigned band to record labels?

It can work, but clients should be realistic. Music-shopping is a speculative venture, no matter who represents the band, and no matter who shops the music. It takes time and effort.

What are the typical costs associated with a lawyer shopping a tape?

It varies based upon the ambition of the marketing plan. I have had some clients retain me to submit a work to but one entertainment company. And, I have had clients ask me to shop every house in town.

The thing to never forget is that the client alone should decide the expansiveness of the submission plan. Not the rep. The rep should tailor the submission plan to the client's budget.

I bill for time and expenses. Other representatives may work on a percentage basis. I have my own bias, but I tend to believe that those reps that work on a time basis, stay motivated for a longer period of time. But the client has to choose between these methods, ultimately.

Do you think it is important to have a partnership agreement between members for bands?

Not necessarily a "partnership" agreement, in all cases. But yes, some form of written agreement.

And I would word it more strongly:

In my view, it is crazy not to have a signed, written agreement between band members, assuming that the band is going to go anywhere, that is. If you rely on verbal agreements, you will likely be paying some serious litigation fees down the road.

If a band can afford it, they should have the inter-band agreement prepared by a lawyer. And if a lawyer's rate for the work is too expensive, the band should keep looking. (there are many of us out there).

How important do you think it is for an act to register their bands name with the Patent and Trademark office?

Most bands can't afford the cost of taking a trademark registration before the Patent and Trademark Office ("PTO") to completion. The process involves far more than dropping an application in an envelope with a check. The costs can escalate, particularly if a competing claimant challenges the registration.

But there are other trademark-protective steps that can be taken, even short of PTO registration. A good entertainment lawyer can recommend them, depending upon the facts of the situation, and the client's needs and resources.

The real skill is in first choosing a good, trademark-enforceable band name. Few understand how to do that. But yes, if a band can afford a PTO registration, and the intended trademark has been well-chosen, then the band should consider effecting the registration through legal counsel.

Do you think that bands should register their original songs for copyright protection?

You're about to hear more hyperbole from me - it is insane to not register a work of value with the copyright office, especially if the band or artist intends to submit that work to multiple parties that are not personally known.

Will a "poor man's copyright" hold up in court? (mailing a sealed envelope to yourself with a copy of your original songs).

Don't even waste the postage. That practice went by the wayside when the first run of "My Three Sons" went off the air. Pay the minimal fee and register with the U.S. Copyright office instead. Do it the right way. And don't forget to save a copy of what you register, prior to mailing it in to Washington, D.C.. You would be aghast at how many people actually forget to do that.

Are there any other legal guidelines that you would recommend for the unsigned artist?

There are many, and it is hard to cover them all in this context. If there were one guideline to follow, it would be "carefully document every business step you take". Alternatively put, if you care about your career, avoid verbal agreements in the same manner that you would avoid a thunderstorm while playing an electric set at an outdoor gig. Make the other folks put it in writing. If they won't, then you put it in writing. And always at least consider contacting a lawyer before signing anything, or before issuing - or even accepting or receiving - any writings that could affect your rights or your bank account. It's your money. It's your career. Lifeis short. Protect yourself.