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For the first time ever, the federal government has successfully won a jury verdict against someone accused of illegally downloading music, according to a statement from the U.S. Department of Justice.

A jury in Alexandria, Va, found Barry Gitarts, 25, allegedly a member of Internet music piracy group, Apocalypse Production Crew (APC), was found guilty of conspiracy to commit criminal copyright infringement.

Gitarts faces up to five years in prison, a fine of $250,000 and must make full restitution, according to a statement released by the DOJ.

The Recording Industry Assoc. of America (RIAA), which said it helped develop evidence against APC, applauded the jury verdict.

"For the first time ever, a criminal online music piracy case went to trial, and the jury rendered a swift and unanimous verdict," said Brad Buckles, executive vice president for the RIAA. "The crimes committed here -- as well as the harm to the music community -- are severe, and so are the consequences. We congratulate and thank the U.S. Attorney's office for its work on this case."

APC was among the pioneers in music piracy according to the blog TorrentFreak. The group is considered by many to be the first to coordinate pre-release uploading of MP3 files, TorrentFreak reported. Gitarts is accused of participating in the group for nearly a year, the DOJ alleged. The government has convicted 15 APC members so far.

What is different about Gitarts' case is that unlike any of the other APC members, he decided against striking a plea agreement and took his case to court.

What makes APC members different than average Lime Wire users is the group was sophisticated and specialized in releasing copyright music on the Web, according to the DOJ's statement. Gitarts operated a server where APC members stored hundreds of thousands of song files, the DOJ alleged.

A painstaking examination of how the RIAA goes about its business hunting down file sharers on college campuses is available online.

The Chronicle of Higher Education visited the offices of the Recording Industry Association of America and got a demonstration.

The RIAA employee, who declined to give his or her name for fear of receiving hate mail, said the organization has hired online copyright enforcer MediaSentry to do most of the heavy lifting. MediaSentry writes scripts to automatically hunt for the names of copyright songs and locate the IP addresses of computers sharing files, and forwards the information to the RIAA.

If a university or college is involved, the RIAA sends a takedown notice to campus network administrators. The RIAA says it doesn't target specific schools. It's interesting to note that MediaSentry checks the hashes (identifying marks) on the song files to make sure they match the copyright song. If the marks don't match, the company uses software from Audible Magic to compare sound waves.

There aren't too many surprises about how the RIAA goes after serious offenders, but the story is worth reading.

The entertainment industry's controversial efforts to get universities to be more proactive about policing peer-to-peer piracy have begun to spread from Capitol Hill to the states.

Earlier this year, the U.S. House of Representatives approved a Hollywood-backed proposal buried in a higher education reauthorization bill that would require universities receiving federal financial aid funding to devise plans for "alternative" offerings to unlawful downloading--such as subscription-based services--or "technology-based deterrents to prevent such illegal activity."

That otherwise wide-ranging bill won't become law until House and Senate politicians agree upon a compromise version. Meanwhile, the debate over the proper role of higher education institutions in fighting piracy has shifted to some state legislatures.

On Thursday, what appears to be the first such proposal in the country became law in Tennessee--home to Nashville, the country music capital of the world. A similar measure is currently being considered in Illinois. And California held an "informational hearing" last month featuring a Recording Industry Association of America representative, although no legislation has been introduced there yet.

RIAA spokeswoman Cara Duckworth declined to divulge where else the industry may be planning to push such policies, but she insisted the group views new laws as a last resort.

"If we're asked to participate in conversations by lawmakers, of course we will," she said in an e-mail interview. "But we prefer to be working directly with schools on a collaborative approach to reduce theft."

Still, university administrators gathered at a policy conference in Arlington, Va., this week sponsored by the nonprofit group Educause, which represents higher education institution technologists, suggested they're bracing for the quiet appearance of new bills proposing what they view as overly burdensome and overreaching network management mandates.

"If there is a trend here anywhere, it's that these things tend to fly under the radar," Steve Worona, Educause's director of policy and networking programs, told conference attendees. "Let me alert you once again to raise the consciousness of whoever in your state is tracking (legislation)."

"Technological deterrents" vs. Copyright 101
That was the experience related by Thomas Danford, chief information officer for the Tennessee Board of Regents, a governance organization that covers 19 public colleges and universities inside the state. If it weren't for the close scrutiny of his organization's legislative committee, Tennessee universities may have been stuck with much less savory obligations related to managing peer-to-peer file sharers on their network, he said.

The original version of the Tennessee bill (PDF), which Danford said was penned by a local RIAA lobbyist, would have required universities to effectively play copyright cops on their networks. It dictated that they must employ "effective technology-based deterrents, to prevent the infringement of copyrighted works over the school's computer and network resources, including over local area and internal networks."

That requirement was problematic not only because of its cost, which Danford said was estimated at $14 million, but because many university administrators still question the effectiveness of filtering programs and other technological means designed to detect and block copyrighted works from being exchanged.

"I'm convinced that had we not had this (committee), they probably would've been able to get this through the state house before anyone caught wind of it," putting universities in the tough position of trying to fight the law after the fact, Danford said.

In the end, the Tennessee governor signed into law an amended version of state senate bill 3974 (PDF) that Danford said is more palatable to universities and addresses many of the concerns he outlined.

It requires any higher education institution in the state, whether public or private, to develop and enforce a policy that prohibits its students, staff, and faculty from committing copyright infringement. It also requires schools to make "reasonable" attempts to prevent copyright infringement on their networks if they receive 50 or more infringement notices during a preceding year, but it does not explicitly define what those steps are.

Similar legislation is pending in the Illinois state legislature, except it appears to be stricter at this point. It would require universities to "undertake reasonable efforts to install and implement a technology-based deterrent system to attempt to prevent the infringement of copyrighted works" over its networks if it receives at least 10 infringement notices in a given year. That measure has only been considered in one chamber so far.

University representatives like Educause and fair use advocates like the Electronic Frontier Foundation oppose mandatory use of so-called infringement suppression technologies--such as those made by Red Lambda, SafeMedia, and Audible Magic--because of the cost and perceived flaws associated with those products.

Charles Leonhardt, Georgetown University's principal technologist, told conference attendees that a coalition of 28 schools and higher education consortia known as the Common Solutions Group has vetted those three main vendors of network filtering software and came to the following conclusion: "The current products cannot stop all or even most unauthorized copyrighted material without interfering with networks essential to research and teaching on our campuses."

The solutions on the market today are undesirable because they suppress legitimate network traffic along with pirated works, degrade network performance, and are "very expensive," particularly considering their flaws, Leonhardt said.

Both Leonhardt and Ken Wada, director of IT strategic policy for the University of California at Los Angeles, said the best recipe lies not in technological fixes, but in publicizing and enforcing the university's acceptable network use policy and offering a healthy dose of education about copyright for students.

After all, it bears repeating that universities and the entertainment industry do share one major distinction, Wada said: "We're both creators and consumers of intellectual property."

SAN FRANCISCO--Jeremy Riney, CEO and founder of Project Playlist is optimistic he will eventually license music from the big four record companies.

"There is no money in shutting down companies," says Project Playlist CEO Jeremy Riney

(Credit: Greg Sandoval/CNET News.coml)

He continues to harbor these hopes even after three of the four largest music labels filed a copyright lawsuit against his company last month, he said at the MusicTech Summit on Thursday.

What may be helping Riney keep his cool is that he has hired Jay Berman, the former CEO of the Recording Industry Association of America (RIAA) to help shepherd Project Playlist past copyright issues, according to a source close to the company.

Berman is co-founder of Berman Rosen, a consulting firm that he started with Hilary Rosen, another past RIAA chief.

Project Playlist, founded two years ago, aggregates links to music files and then enables users to listen on an embeddable music player that has found a following among MySpace and Facebook users. In the complaint filed on behalf of all the top music labels save for Sony BMG, which is negotiating with Project Playlist, the RIAA alleges that the majority of the links found at the site lead to pirated music.

Riney said that Project Playlist is covered by the Digital Millennium Copyright Act, which protects operators of Internet services from responsibility for illegal acts committed by users. He points out that his company doesn't host any stolen content on its site, nor does it support piracy. Furthermore, Riney said that if he can't license music legally he will shut his site down.

He might take some comfort in knowing that the labels appear to be using litigation as a way to soften up tech companies at the negotiating table.

In two high-profile copyright cases, Warner Music Group sued Imeem and Universal Music Group sued MySpace and both recording companies dropped the suits and licensed their music after receiving equity stakes.

"There is no money in shutting down companies," Riney said. "There is money in licensing companies and licensing opportunities."

Riney says now he must wait to see how the music industry plays its hand. The labels shouldn't wait too long. The advertising-supported Project Playlist, according to Riney, is profitable.

The RIAA's David Hughes sits next to former IFPI CEO Nic Garnett. To Garnett's right is the MPAA's Fritz Attaway

(Credit: Greg Sandoval/CNET News.com)

LOS ANGELES--News of DRM's death has been greatly exaggerated, according to an executive with the Recording Industry Association of America.

At a time when the top recording companies appear to be phasing out digital rights management (DRM), the RIAA is predicting that the highly controversial software will make a comeback.

"(Recently) I made a list of the 22 ways to sell music, and 20 of them still require DRM," said David Hughes, who heads up the RIAA's technology unit, during a panel discussion at the Digital Hollywood conference. "Any form of subscription service or limited play-per-view or advertising offer still requires DRM. So DRM is not dead."

Hughes just stated the obvious. DRM still exists; one can find it at iTunes, RealNetworks' Rhapsody, and at free-music service SpiralFrog just to name a few. But his statement was startling because the top four music labels have seemingly been warming up to unprotected music files.

Last January, when Sony BMG became the last major recording company to sell DRM-free tracks at Amazon, plenty of observers considered the technology buried. Since then, a growing number of online stores have begun offering at least some open MP3s, including Walmart.com, Zune's Marketplace, Amazon, as well as iTunes.

Not so fast, said Hughes, who predicted that DRM would reemerge in a big way. "I think there is going to be a shift," he told the audience. "I think there will be a movement towards subscription services, and (that) will eventually mean the return of DRM."

Hughes also said that DRM must change so that the public sees it less as a sort of policeman that locks music a way. He would prefer a mode where consumers don't notice DRM at all. "People just want music when they want it," he said. "It's about access. If they get that then they don't care about DRM."

Not everybody on the panel agreed. Rajan Samtani, director of business development at Digimarc Corp., a company that provides watermarking technology, said he worked for ContentGuard, a company that tries to help find less obtrusive ways to implement DRM.

"I think it's time to throw in the towel," Samtani said. "These kids have too many ways to get around DRM."

Fritz Attaway, executive vice president at the Motion Picture Association of America said: "We need DRM to show our customers the limits of the license they have entered into with us."

WASHINGTON--The Recording Industry Association of America's chief voiced skepticism on Tuesday about the need for Net neutrality rules, but warned that the government may need to step in if Internet service providers don't become more proactive in fighting digital piracy.

The House of Representatives subcommittee hearing was further evidence that the now years-old debate over Net neutrality is taking on a new dimension, in which concerns about Internet piracy are entering the debate. Net neutrality, of course, refers to the idea that network operators should be barred from discriminating against or prioritizing Internet content that travels on their pipes.

RIAA CEO Mitch Bainwol told the panel that a Net neutrality bill proposed this year by Rep. Edward Markey (D-Mass.) isn't all bad because it views "unlawful" content, such as copyright-infringing material, as unworthy of protection by Internet service providers. He said he hopes that approach may even help to pressure ISPs to "focus on the piracy problem."

Still, Bainwol said he strongly prefers that the entertainment industry and Internet service providers work together on the piracy question in an unregulated fashion.

"My fear is that legislation will take time," Bainwol said. "We have a problem that is right now."

If private sector action doesn't pan out, Bainwol said the RIAA would return to the committee for its "help" on the matter.

Markey attempted to reassure copyright holders that his bill will do nothing to hamper ISPs' ability to block "unlawful" pirated content, vehemently taking issue with any suggestions to the contrary.

"This whole idea that this legislation helps piracy is 100 percent wrong," Markey said. "It's a red herring. We should put an aquarium out here because there are so many red herrings floating around to mislead about what the intent of Net neutrality is."

The bill that Markey introduced in February would enshrine certain Internet nondiscrimination principles into law--namely, that the government should adopt and enforce "baseline protections to guard against unreasonable discriminatory favoritism for, or degradation of, content by network operators based upon its source, ownership, or destination on the Internet."

As in the past, the effort is mostly supported by Democrats, although Rep. Chip Pickering (R-Miss.) is also a co-sponsor. They argue that it's necessary to keep the Internet open and democratic. Some Republicans on Tuesday argued new laws are unnecessary because of a lack of visible discrimination problems by Internet service providers--because they could harm ISPs' antipiracy efforts.

A 1998 law known as the Digital Millennium Copyright Act, or DMCA, says Web hosts and ISPs aren't generally liable for infringing activity on the part of their users, provided that they don't condone infringement, that they remove infringing material when notified, and that they aren't deriving financial benefit from it. But some ISPs, such as AT&T, are exploring ways to filter their networks for pirated content, even though they arguably aren't legally required to do so.

"It would be remiss for us as a body to interfere in these efforts," said Mary Bono Mack (D-Calif.), the widow of singer Sonny Bono. "I think this bill would do that."

Bainwol, for his part, said he was "heartened" to see that Markey's bill recognizes "that Internet freedom isn't synonymous with a Wild West in which the taking of our property is accepted or, at best, ignored." But he worried that the bill could unwittingly limit forms of "network management" used to police networks for copyright infringement.

His remarks are similar to those made earlier this year by the Motion Picture Association of America, which argued that attempts to prohibit network operators from discriminating against or prioritizing Internet content could limit their ability to police their networks for copyright infringement. Recently, the cable industry, which has long opposed Net neutrality regulations, raised similar concerns.

Steve Peterman, co-creator and executive producer of the hit children's series Hannah Montana, said he strongly condemns piracy, but he argued the Net neutrality bills put forth by Markey and the senators would do nothing to harm those efforts. Peterman spoke on behalf of the Writers Guild of America, which says Net neutrality laws will ensure a diversity of new content can surface without interference from big-media "gatekeepers."

"We don't want (the piracy issue) to be an excuse for limiting our access to the Internet as a means of communicating with an enormous new audience," Peterman said.

The event marked the second hearing on Net neutrality legislation in two weeks. Senate Democrats have also renewed their call for the antidiscrimination rules, with a particular focus on whether the Federal Communications Commission has the necessary authority to take action against network operators found to be interfering unreasonably with their customers' network traffic.

Comcast, which is under investigation by the FCC for its handling of BitTorrent file-sharing traffic, was the focus of a large chunk of the Senate hearing but didn't attract as much attention at Tuesday's House event.

Republicans and some Democrats have long argued that Net neutrality regulations are unnecessary and will stifle the growth of new broadband networks. But Pickering, the bill's co-sponsor, said his measure is necessary because of contentions by Comcast and others that the FCC doesn't have the power to enforce its own broadband principles, which say consumers have the right to access the lawful Internet content and applications of their choice.

"I think this legislation is very helpful," Pickering said, "in that it says very clearly we will codify these principles."

The recording industry's music piracy fight was dealt a setback Tuesday when a federal judge rejected the RIAA's "making available" argument in a lawsuit against a husband and wife accused of copyright infringement.

In Atlantic v. Howell, Judge Neil V. Wake denied the labels' motion for summary judgment in a 17-page decision (PDF), allowing the suit to proceed to trial. The argument--that merely the act of making music files available for download constituted copyright infringement--has been the basis for the Recording Industry Association of America's legal battle against online music piracy.

The RIAA sued husband and wife Pamela and Jeffrey Howell for copyright infringement in 2006, claiming the couple had used Kazaa to make copyrighted files available for download. In a deposition, Jeffrey Howell admitted loading the file-sharing software onto his computer and that the songs listed in the complaint were for personal use but that he had not placed the files in the program's shared folder. He said that the recordings were copies made from CDs he owned placed on the computer for personal use and not copies downloaded from Kazaa.

He also argued that that he was not the one sharing the files, but that it was the computer that was sharing the files.

While the couple lacks legal representation, the Electronic Frontier Foundation said it filed an amicus brief on behalf of the couple (PDF). The EFF argued against the RIAA's "making available" position, saying in a statement that it "amounts to suing someone for attempted distribution, something the Copyright Act has never recognized."

Judge Wake apparently agreed with that position.

"The court agrees with the great weight of authority that section 106(3) is not violated unless the defendant has actually distributed an unauthorized copy of the work to a member of the public," wrote the judge in his order. "Merely making an unauthorized copy of a copyrighted work available to the public does not violate a copyright holder's exclusive right of distribution."

EFF staff attorney Fred von Lohmann called the order the "most decisive rejection yet of the recording industry's 'making available' theory of infringement."

The order is a bit of an oddity in that it's a reversal of an order Wake issued in August, in which he granted the RIAA's summary judgment and fined the Howells $40,850 in penalties and court costs. However, the Howells appealed and the judgment was later vacated.

Kudos to Silicon Alley Insider for answering the question about why Sony BMG was not among the major record labels filing a copyright lawsuit against Project Playlist.

Hilary Lewis at SAI reported that Sony BMG is in negotiations with the music start-up.

On Monday, the Recording Industry Association of America (RIAA) claimed in documents filed in New York that Project Playlist makes it easier for users to find unauthorized reproductions. The company provides an embeddable music player used at MySpace and Facebook and claims not to infringe on intellectual property rights because it doesn't host any music files on its site.

A Sony BMG spokesman declined to comment.

What this indicates is that the top record labels are not always in agreement on how to handle copyright cases.

The recording industry filed a lawsuit on Monday alleging that Project Playlist, a company that provides an embeddable music player used at MySpace and Facebook, has violated its copyright.

According to a copy of the complaint obtained by CNET News.com, the Recording Industry Association of America (RIAA) filed suit on behalf of nine record labels and accuses Project Playlist of making unauthorized reproductions of their music.

"Project Playlist performs and reproduces plaintiffs' valuable works (and induces and enables others to do so) without any authorization whatsoever," the RIAA said in its complaint, "without paying any compensation whatsoever."

"Defendant is well aware that the overwhelming majority of the sound recordings in its index are infringing," the RIAA continued. "The overwhelming majority of the third-party Web sites that host these recordings do so illegally."

In the lawsuit, filed in the U.S. District Court of the Southern district of New York, the RIAA has asked for unspecified damages.

It's unclear why none of the labels belonging to Sony BMG Music Entertainment were named as plaintiffs. The lawsuit said that some of the artists whose music was used without authorization are U2, Eminem, Elton John, The Beatles, Coldplay, and Sheryl Crow.

Representatives from Project Playlist could not be reached. On the company's Web site, Project Playlist said that it is "committed to copyright protection" and does not support illegal copying of music files.

"We make it easy for our users to create a playlist that points to a series of music files hosted on third party Web sites," Project Playlist said on its site. "We do not control those third party Web sites. We do not host music files."

Companies that allegedly facilitate the distribution of pirated content have tried to argue that because they don't host unauthorized files they don't violate copyright. That hasn't stopped the RIAA or the motion-picture industry from filing suit.

The most recent example was TorrentSpy, a popular BitTorrent tracker that closed down last month after fighting a two-year legal battle with the Motion Picture Association of America (MPAA).

The lawsuit against Project Playlist was first reported by Reuters.