Digital Media

Bryan Wagner, the would-be private detective who helped Hewlett-Packard spy on technology journalists in 2006, will soon be sentenced, according to a story by The Associated Press.

Former HP chairwoman Patty Dunn leaving court in October 2006. Charges of identity theft and conspiracy would later be dropped.

(Credit: Greg Sandoval/CNET News)

Wagner admitted in 2007 to taking part in the spying campaign waged by HP in its attempt to unearth a boardroom leak. The targeted journalists worked for The New York Times, The Wall Street Journal, and CNET News.

Wagner pleaded guilty to identity theft and conspiracy in January 2007 and on Wednesday is due to get a new sentencing date in U.S. District Court in San Jose, Calif., the AP reported.

This will likely close the book on the scandal that fractured HPs board, triggered a congressional investigation, and shocked the tech community. Wagner is one of five people, including Patricia Dunn, the former chairman of HP, charged in California with four felonies, including conspiracy and identity theft. Wagner was one of the people who duped telephone employees into handing over private records belonging to the journalists, HP employees, and the company's board members.

The irony of Wagner's situation is that he pleaded guilty and agreed to testify in exchange for leniency. The problem for Wagner is that the charges against the other four accused, who all denied wrongdoing, were tossed out.

Wagner was arguably the person at the lowest-level of the espionage but is the only one involved that may see jail time.

Charting number of times Wolverine was illegally downloaded on file-sharing sites.

(Credit: BigChampagne)

Outfitted with a skeleton forged from a super alloy, the comic book hero Wolverine is supposed to be indestructible.

After a raw version of the movie "X-Men Origins: Wolverine" leaked to the Web last month, 20th Century Fox is hoping the action pic, which debuts Friday, is nearly as durable.

Hollywood has been in a near frenzy since April 1, when someone--who has yet to be identified--leaked a copy of "Wolverine" to the Web. The fear was that the unauthorized copy would hurt ticket sales. "Wolverine" cost more than $100 million to make.

Some people won't bother to spend money at the theater when they can watch it for free online, goes one argument. Since it hit the Internet, the pirated copy has been downloaded more than 4.1 million times, according to BigChampagne, which does market research that focuses on file-sharing networks.

Another of Hollywood's concerns is that people who download work prints of movies, as was the case with "Wolverine," are seeing incomplete versions. The studios say they're worried some people will be turned off by the unfinished works and that they'll spread word that the movie is a stinker. So far, none of that appears to have happened.

Fandango, the online movie-ticketing services, is reporting hundreds of sold out shows across the country (not all of them sold through Fandango). The Los Angeles Times wrote Friday the film appears headed "toward a solid but not spectacular opening around $85 million."

(Credit: 20th Century Fox)

It's still too early to tell how "Wolverine" will fare in the long run, but the film's early success could be seen as evidence of a claim many in the torrent community make: that a film appearance on the Web can actually help create anticipation around a movie. Certainly, no one so far has attempted to blame an Internet leak for a film that bombed.

"Torrents won't have one iota of impact on the financial results of the film," said Justin Bunnell, founder of TorrentSpy, a formerly popular BitTorrent search engine that shut down after being sued by the film industry. "The torrenting only increased awareness of the film."

Who can argue that the controversy surrounding the leak didn't generate scores of headlines about Wolverine?

"The news cycle was strong (as a result of the leak)," said Eric Garland, BigChampagne's CEO. "This is a big tent-pole movie that would have received a lot of publicity anyway, but it saw a lot of extra headlines and the word-of-mouth wasn't bad. I don't think this movie was badly hurt by this leak."

Bunnell argues that previous films or TV shows that were shared illegally online, such as the "The Hulk" or "Sicko" succeeded or failed in theaters based on their quality.

"The Hulk" (the version starring Eric Bana) leaked to the Web in 2003, shortly before the theatrical release. After a respectable opening weekend, sales went into a nosedive and the movie is considered a financial disappointment. But the film also suffered from critical reviews, so its dismal performance can't be blamed on the leak. (Critics are mixed about "Wolverine.") "Sicko," director Michael Moore's documentary on the health care industry, appeared on the Web a week before being screened in theaters and fared well, relative to other documentaries, at the box office.

"It can be catastrophic to any media company if advanced word is poor," Garland said. "Ultimately, a bad product will always lose out. What's changed is that you always used to get a chance to get that first wave of paying customers through the door. You lose that group if word gets out that the movie isn't any good."

What it comes down to is that most people prefer watching a film on a huge theater screen than watching on a PC or TV, says Bunnell.

"Watching in a theater is a very empowering experience," Bunnell said. "You're watching with your friends, eating popcorn, seeing all the action up close. Even full screen on a computer can't produce that... I think the theater is a great experience and much more fun than watching alone on a computer screen."

LOS ANGELES--Many of the major film studios have gone through a painful round of layoffs and now the industry's trade group is cutting staff, too.

The Motion Picture Association of America, much maligned by file sharers everywhere, has gone through a "significant" round of layoffs, according to a studio source. The source said the layoffs were well over 10 percent and more reductions are expected.

A spokeswoman for the MPAA confirmed the layoffs to CNET News, but declined to provide numbers or percentages. The group battles copyright infringement on behalf of the six largest film studios. How the cutbacks will affect the group's antipiracy efforts is unclear.

The ailing economy is hurting Hollywood and staff cutbacks have occurred at Paramount, Warner Bros., and Disney, as well as others.

The MPAA's leadership is mostly unaffected, said the MPAA spokeswoman. Prior to the layoffs, Dean Garfield, one of the more high profile MPAA attorneys, left the trade group in December to become CEO of the Information Technology Industry Council, a technology-focused trade group.

Some of the members of that tech trade group include HP, Adobe, Dell, IBM, and Cisco.

In 2006, Garfield was accused in a lawsuit filed by TorrentSpy, the now defunct BitTorrent search engine, of hiring a hacker to illegally break into the company's servers to extract confidential information. The MPAA denied the allegations and the lawsuit was later dismissed.

Elsewhere at the MPAA, the group is expected to meet RealNetworks in court again on the RealDVD case on April 1. The MPAA alleges in a lawsuit that the RealDVD software, a technology that enables users to copy films and store them on their hard drives, violates copyright law.

Nearly a year since being ordered to pay the big film studios more than $100 million, TorrentSpy is launching a legal comeback.

On Tuesday evening, TorrentSpy filed an appeal to overturn a judgment issued by U.S. District Judge Florence-Marie Cooper. Last May, Cooper ordered TorrentSpy, which shut its doors as a result of the legal fight with the Motion Picture Association of America, to pay nearly $111 million in damages to the MPAA for infringing the copyright of thousands of films and TV shows.

TorrentSpy was a favorite tool for those seeking bootleg films, but site operators always insisted that its search engine was used for legitimate purposes as well. The appeal was filed in the 9th Circuit Court of Appeals, according to TorrentSpy's attorney, Ira Rothken.

"We're arguing the court was wrong in procedures and wrong in judgment," Rothken told CNET News on Wednesday. "In a one-hour hearing regarding discovery issues, the court terminated the case and didn't give TorrentSpy a trial. We believe the court was wrong and abused its discretion. We believe the court ordered TorrentSpy to do things that (were) in violation of the site's privacy policy, and we believe that the tension between the court's discovery orders and user privacy rights is an important issue on appeal."

A year ago, the judge found that TorrentSpy operators intentionally destroyed evidence in the case, making it impossible for the MPAA to get a fair trial. They had earlier been fined $30,000 for violations of discovery orders and were warned of severe sanctions, if they continued to ignore the orders.

The MPAA had always argued that TorrentSpy's reason for existing was to aid those interested in pirating films.

"TorrentSpy blatantly contributed to, profited from, and induced massive copyright infringement," an MPAA representative said. "Anyone engaging in the same conduct as TorrentSpy would be liable for copyright infringement. The court clearly recognized that TorrentSpy defendants engaged in evidence destruction because they knew that such evidence would prove damaging to them. The sole purpose of TorrentSpy and sites like it is to facilitate and promote the unlawful dissemination of copyrighted content."

The site attempted a series of legal maneuvers to protect the anonymity of visitors. In August 2007, the company cut off access to residents of the United States, presumably to avoid complying with a court order that it turn over users' personal information.

More to come.

With so many czars running around trying to solve the nation's problems in tech, auto and drugs, perhaps Sony should consider hiring a common-sense czar.

Is there any major consumer company around that seems to understand basic customer relations less than Sony? Isn't rule No.1 in the CR manual, "Don't spy on customers?" If so, then rule 1-A must be: "Take extra care to avoid spying on customers' children."

The latest example of Sony's disconnect with the masses came this week when the company's music division was fined for surreptitiously collecting information on children under 13-years old.

On Thursday, Sony agreed to pay $1 million to the Federal Trade Commission for collecting information on 30,000 children without obtaining parental consent. According to the Associated Press, Sony violated the Children's Online Privacy Protection Act when it collected the data from hundreds of fan sites, including those of such musical acts as Kelly Clarkson, Britney Spears and Christina Aguilera.

Sony representatives declined to comment.

Sony's growing list of scandals raises the question of whether anyone at the conglomerate has an ounce of public relations savvy. If they don't, the company should find someone fast and that person's mission should be to smack down overly zealous marketing types who come up with lamebrain ideas like this one.

Or how about the one for last year's promotional party for the PlayStation 2 game God of War II that turned into an international embarrassment for Sony. In keeping with the video game's Greek mythology theme, comely women were hired to prance around topless and feed grapes to partygoers as part of the "theatrical dramatization." If that wasn't over the top enough, the centerpiece of the festivities was a butchered goat that was dressed up to look like the animal's entrails were falling out.

Across the world, animal activists howled and critics blasted the company's "bad taste." Sony apologized and yes, returned the goat carcass to the butcher. (I'm not kidding, that was their response).

Then there was the company's supreme blunder, which also came from the music division.

Before Sony, even some hardcore techies were unfamiliar with rootkits. Now, the two are synonymous. In 2005, Sony loaded MediaMax CD 3 and Extended Copy Protection (XCP) software on music CDs to help boost copy prevention. The software loaded a rootkit malware onto the PC of anyone who loaded the discs. Rootkits are programs designed to hijack control of a computer.

Texas' attorney general filed suit against the company and accused it of loading spyware onto computers. Class action suits were also filed in New York and California. The fallout lasted years.

The rootkit debacle makes this latest child-spying case all the more mind-boggling. Even if you give Sony the benefit of doubt and discount the possibility the company is evil, then what are you left with? Yes, that's right: incompetence.

I have met a lot of smart people from Sony and I have to believe that some of them realize the company is developing a nasty reputation as an enemy of consumer privacy.

The Electronic Frontier Foundation, an advocacy group for Internet users, is expected to argue in court on Tuesday that it's unconstitutional to prevent Americans from suing the telecom companies that allegedly helped the federal government unlawfully spy on them.

The FISA Amendments Act (FAA) gives telecommunications companies retroactive immunity for opening their networks to the National Security Agency. The telecoms can walk away from lawsuits as long as the government claims the request was "lawful" and authorized by the president. Before the law was passed, EFF had brought a lawsuit against AT&T that is before the 9th U.S. Circuit Court of Appeals in San Francisco.

"The flawed (statute) improperly attempts to take away Americans' claims arising out of the First and Fourth Amendments," EFF wrote on its Web site. "(The law) violates the federal government's separation of powers as established in the Constitution, and robs innocent telecom customers of their rights without due process of law."

Opponents have said that the law is an endorsement by both major political parties of illegal surveillance conducted by the Bush administration. Among the U.S. senators who supported the law was President-elect Barack Obama.

Under the law, no lawsuit may proceed against any "electronic communication service provider" if either one of two conditions is met. The first is that the company provided assistance "in connection with an intelligence activity" authorized by the president between September 11, 2001 and January 17, 2007, when the wiretap program was altered to include more judicial oversight.

The second condition involves a company that received a "written request" from the U.S. Justice Department saying the activity was lawful and authorized by the president.

One might expect James Bond's MySpace page to list shaken martinis, Walther PPKs, and Aston Martins among his interests.

While that scenario is a bit far-fetched, agents for the CIA, FBI, and National Security Agency are testing a social-networking site designed for use by analysts within the 16 U.S. intelligence agencies, according to a report on CNN's Web site. Instead of posting thoughts on music and movies, the agents use the site--called A-Space--to share information on terrorist activities and troop movements around the world.

The social networking site has been undergoing testing for months and is expected to officially launch to the nation's entire intelligence community on September 22, CNN reported.

"It's every bit Facebook and YouTube for spies, but it's much, much more," Michael Wertheimer, assistant deputy director of National Intelligence for Analysis, told CNN. "It's a place where not only spies can meet but share data they've never been able to share before. This is going to give them for the first time a chance to think out loud, think in public amongst their peers, under the protection of an A-Space umbrella."

The information posted to the new social network is highly classified and won't be accessible by the general public, CNN reported. Access will be limited to intelligence personnel with the proper security clearance and a reason to be examining particular information. A-Space's creators don't want the network to become a gold mine of sensitive information for future double agents.

"We're building (a) mechanism to alert that behavior. We call that, for lack of a better term, the MasterCard, where someone is using their credit card in a way they've never used it before, and it alerts so that maybe that credit card has been stolen," Wertheimer told CNN. "Same thing here. We're going to actually do patterns on the way people use A-Space."

TorrentSpy may be gone but its attorneys continue to allege in court that the motion picture industry engaged in a spying campaign against the company as well as others, including the Pirate Bay.

TorrentSpy, a BitTorrent search engine that was driven out of business last March as a result of fighting a copyright suit filed by the Motion Picture Association of America (MPAA), is seeking another chance to argue that the MPAA wronged the company when it purchased information obtained from a hacker who had pilfered company e-mail.

A federal judge threw out TorrentSpy's hacker complaint last August, saying it was unclear whether federal wiretapping laws covered the interception of e-mails. On Thursday, TorrentSpy's attorneys filed an appeal with the 9th Circuit Court of Appeals, asking that it reverse the trial court's dismissal of the case.

Included in that heavily redacted legal filing was more detail about the kind of information the MPAA sought from Robert Anderson, who has acknowledged hacking into TorrentSpy's e-mail system. According to TorrentSpy's legal filing, when Anderson initially offered to sell information to the MPAA he promised much.

Anderson wrote to the MPAA: "We can provide the names, address, and phone (numbers) of the owners of Torrentspy.com and Thepiratebay.org--along with evidence, including correspondence between the two companies."

Dean Garfield, an MPAA executive, gave the following testimony, according to the court records: "We were going to get information about the location and identity of the people who were running Torrentspy, as well as information related to a general conspiracy and relationship between Torrentspy and a number of other prominent services including ThePirateBay."

Representatives from the MPAA have always said that Anderson had already obtained the information before offering it to them and told them he had obtained the TorrentSpy e-mails legally. The MPAA did not respond to interview requests.

TorrentSpy's attorney, Ira Rothken, said last August: "We believe that the MPAA, when it paid $15,000 for about 30 pages of e-mails, knew or should have known they were involved in purchasing something in a wrongful manner."