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The movie industry has seen mixed results from suing individuals for file sharing but continues to clobber BitTorrent search engines.

TorrentSpy, once one of the most popular indexes of BitTorrent files, shut down on Monday following a two-year copyright battle with the Motion Picture Association of America (MPAA). TorrentSpy, accused in a lawsuit of encouraging copyright infringement, finally crumpled under the legal costs.

This can't come as good news to Gary Fung, chief executive of IsoHunt. His company was among a group of torrent-file search engines, which also included TorrentSpy, accused of copyright infringement in a 2006 lawsuit filed by the MPAA. With TorrentSpy gone, the MPAA can now set its sights on IsoHunt.

But Fung points out that TorrentSpy was never able to argue the main copyright issues in court. The presiding judge found in favor of the film studios after ruling that TorrentSpy destroyed evidence. Fung says he is determined to take up the copyright issue to the end. Unlike TorrentSpy, he doesn't care what it costs.

The courts have not yet ruled on whether search tools can be held liable for copyright infringement. Most relevant cases have been settled before going to trial, copyright experts said. It's important to note that IsoHunt and TorrentSpy don't store any unauthorized movie files on their sites but the search engines are often used to find pirated copies.

"There is no reason for us not to see this through. We've come this far," Fung told CNET News.com on Thursday. "TorrentSpy shutting down doesn't mean a victory for the MPAA. The judge declared that TorrentSpy didn't adhere to court procedures. That's different than a judge deciding against the company after hearing their arguments."

But Fung is up against an MPAA legal juggernaut that is playing on its home turf, is fresh off a series of court victories, and has plenty of money. The lobbying group for the six largest movie studios said in a statement on Thursday that it took issue with TorrentSpy's suggestion earlier this week that it lost on a technicality.

"TorrentSpy's characterization of the site's closure as a voluntary decision conveniently ignores the fact that after two years of intense litigation by the major Hollywood studios, a federal court found TorrentSpy liable for copyright infringement," the MPAA said in the statement. "Late last year the court imposed the harshest sanction against the TorrentSpy defendants and ruled in favor of the studios because of TorrentSpy's brazen, continuous, and systematic destruction of evidence and subversion of the judicial process. In short, the ruling meant that TorrentSpy would have to shut down their site sooner or later."

The MPAA's case against IsoHunt is in the U.S. District Court of Central California in Los Angeles, which is perceived by many to be extremely friendly to copyright holders.

Whether that is true, the film industry has racked up plenty of file-sharing victories. Besides TorrentSpy, the MPAA was blamed for driving LokiTorrent and SuprNova.org out of business. And more recently, the MPAA won important legal precedents in the TorrentSpy case.

In June, TorrentSpy was ordered by a federal judge to provide the film studios with user information found in the company's computer RAM. TorrentSpy filed an appeal and argued that data in a computer's RAM was too temporary to be considered "stored information," and that it was impractical for companies to produce such material as part of a civil suit.

In August, the judge denied TorrentSpy's appeal. The decision will conceivably enable the MPAA to gain access to users' personal information in similar cases, say legal experts.

"The demise of TorrentSpy is a clear victory for the content industries," the MPAA said in its statement, "and sends a clear message to operators of other illegal BitTorrent portals that they will not be allowed to operate in the United States without facing relentless litigation by copyright holders."

Fung said he's been fighting the MPAA's attempts to require him to turn over user logs on the grounds that his company is based in Canada, which has stricter privacy laws than the United States.

But the 25-year-old CEO acknowledges that the U.S. and Canadian governments have agreed to honor court decisions in each other's countries.

"IsoHunt is located in Canada and has a slightly different set of circumstances than TorrentSpy," said IsoHunt's attorney, Ira Rothken, who also represented TorrentSpy. "IsoHunt is waiting for the (judge's decision) on a motion for summary judgment. The company is looking forward to defending itself and being the first to go to trial in a search-engine case."

A prolonged legal fight with the movie industry has forced TorrentSpy, BitTorrent's popular search engine, to shut down.

"The legal climate in the USA for copyright, privacy of search requests, and links to torrent files in search results is simply too hostile," said a note on TorrentSpy's front door. "We spent the last two years, and hundreds of thousands of dollars, defending the rights of our users and ourselves... we now feel compelled to provide the ultimate method of privacy protection for our users - permanent shutdown."

In 2006, the largest Hollywood film studios accused TorrentSpy in a lawsuit of encouraging movie piracy. A federal judge ordered the company last June to provide the studios with user information found in its computer RAM.

TorrentSpy, often used by file sharers to find bootleg films, tried a series of legal maneuvers in an attempt to protect the anonymity of visitors. In August, the company cut off access to residents of the United States, presumably to avoid complying with the court order.

In December, the judge in the case found that TorrentSpy operators intentionally destroyed evidence in the case, making it impossible for the Motion Picture Association of America 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 judge ruled against TorrentSpy, which meant that all the company could do was argue over the amount of damages. From that point on, it appeared as if TorrentSpy's days were numbered.

To avoid having to turn over user information to the motion picture industry, the BitTorrent indexing service TorrentSpy cut off access to its site in the United States. Apparently, that wasn't enough to satisfy Hollywood.

According to documents filed with the court last week and reviewed by CNET News.com on Wednesday, the studios still want information on the site's visitors. Lawyers representing the studios--armed with a court order--say TorrentSpy has refused to hand over the data. Because of that, the movie sector wants the judge to throw the book at the company.

"(TorrentSpy) took steps to make the Server Log Data unavailable for the express purpose of avoiding compliance with the (court) order," the movie studios said in documents filed with the court last week. "This claim should be seen for what it is: another illegitimate attempt by defendants to evade authority of this court and the May 29 order."

TorrentSpy was ordered in May to begin tracking visitors' activity and collect information, such as what BitTorrent files users requested as well as the time and date of those requests. This would show whether TorrentSpy users were on the site for legal purposes or whether the service existed to enable piracy.

During the time a judge was reviewing TorrentSpy's appeal to overturn the order, company executives made some adjustments to the site.

Sometime in July, TorrentSpy stopped providing users with cached downloads of BitTorrent files, the technology favored by many for distributing large files over the Web and a favorite of the file-sharing community, according to court documents. This meant that searches for BitTorrent files at TorrentSpy would return only links to third-party sites.

Clicking on those links wouldn't ping TorrentSpy's servers, and as a result, none of the data that the film companies sought would be stored on TorrentSpy's RAM.

Was this an attempt by the company to evade the judge's order?

"The primary reason for the changes was to protect end-user privacy worldwide," said Ira Rothken, TorrentSpy's attorney. "Web sites are allowed to evolve their technology during litigation especially if they evolve to protect user privacy. The irony here is that studios are blowing hot and cold. On one hand they asked in their lawsuit for TorrentSpy in essence to shut down U.S. traffic. When the company did, the plaintiffs complained that TorrentSpy is in violation for not supplying information under the log file order. They're never satisfied."

The studios first filed their copyright lawsuit against TorrentSpy last year.

On May 29, Jacqueline Chooljian, a federal magistrate judge in Los Angeles, ordered TorrentSpy to hand over information about user activity.

TorrentSpy executives told the judge that they never tracked visitors' activity. She responded by telling them to retrieve the information from their servers' random-access memory, or RAM.

In an unprecedented decision, the judge ruled that data found in RAM is a tangible document that can be stored and must be turned over in civil litigation. TorrentSpy argued that RAM is far too ephemeral to be considered "stored data."

In August, TorrentSpy appealed the decision but lost. The company then shut down access to U.S. residents. If TorrentSpy had no U.S. users, then there wouldn't be any information stored in the company's RAM under the judge's purview, legal experts said. Only data on International users would be logged and U.S. courts don't have authority over them.

But the studios didn't go away.

For not complying with the court order, Hollywood has asked the judge to impose evidentiary sanctions against the company, documents show. As part of the sanctions, the studios want the judge to rule that the movies belonging to the studios found on TorrentSpy's site infringed on their copyright. They also want the judge to find that the site has no "substantial noninfringing uses."

This would effectively label TorrentSpy a pirate site and make it very difficult for the company to prevail in its civil trial against the film industry.

Just how long it will take for the judge to rule on the studios' application for sanctions is unclear. Rothken said he expects that she will call for more briefings soon.

BitTorrent search engine IsoHunt is cutting off access in the U.S. to software that enables users to download BitTorrent files, the technology that has become a powerful tool for illegal file sharing.

Gary Fung, IsoHunt's founder, said Wednesday that the decision is a result of a copyright lawsuit hanging over the company's head. The Motion Picture Association of America filed suit against IsoHunt and competitor TorrentSpy last year, accusing them of encouraging copyright violations.

IsoHunt and TorrentSpy, which elected to shut off access to its site last month to U.S. residents, are trying to avoid a court order to turn over user information to the MPAA as part of the legal discovery process.

Both companies have pledged to keep their users' identities a secret. By limiting access to their tools or site, TorrentSpy and IsoHunt say, they won't have any information to turn over.

As for data belonging to past visitors, the sites say they have never stored data for users. In an unprecedented decision, the judge wanted TorrentSpy to begin tracking information found in computer RAM.

A federal judge issued a decision on Monday that would have required TorrentSpy, a BitTorrent search engine, to hand over information about its users had the company not ceased operating in the U.S. a day earlier.

TorrentSpy, accused of encouraging movie piracy in a lawsuit filed by the film industry last year, was ordered in June to provide the studios with user information found in the company's computer RAM. The site, which is often used by file sharers to find bootleg films, had long promised to protect the anonymity of visitors.

TorrentSpy filed an appeal and argued that data in a computer's RAM was too temporary to be considered "stored information," and that it was impractical for companies to produce such material as part of a civil suit. According to court documents, the judge on Monday denied TorrentSpy's appeal.

"The court holds that data stored in RAM, however temporarily, is electronically stored information," wrote U.S. District Judge Florence-Marie Cooper in her 18-page decision.

Ira Rothken, TorrentSpy's attorney, said that as far as the court order goes, if the company isn't doing business in the U.S. there isn't any U.S. records to turn over. Nonetheless, Rothken said TorrentSpy plans to continue the court fight by filing a new appeal with the 9th Circuit.

A spokeswoman with the Motion Picture Assoc. of America (MPAA), the trade group representing the six largest film studios, could not be reached for comment.

While the court's decision may have little impact on TorrentSpy--now that the company has ceased doing business in the U.S.--it could mean a great deal to scores of other companies, according to some experts.

Ken Withers, a legal scholar with the think tank, Sedona Conference, said shortly after TorrentSpy was ordered to turn over user information in June that he feared court's were creating "weapons of mass discovery" and expanding the scope of discovery too far.

But in her decision, Cooper wrote that discovery rules already allow parties in a civil suit to ask for data from "any medium from which information can be obtained." She noted that the rules did not exclude mediums that store information temporarily.

"RAM itself is defined as a storage unit," the judge wrote in her decision. "It is undisputed that the server log data (the movie studios) seek can be copied from RAM in defendant's computers and produced."

There has always been plenty of bitterness between copyright holders and the file-sharing community, but some now contend hostilities have sunk to a new low.

Swedish authorities last week were preparing to shut down The Pirate Bay, according to Peter Sunde, one of the site's founders. Was the site facing closure for helping users find bootlegged music or video files, as the film and music industries have long alleged? No, The Pirate Bay was being accused of distributing child pornography, Sunde said.

The accusation was nothing more than a backdoor attempt to kill off The Pirate Bay since both Sweden and the United States have failed to close the site for allegedly violating copyright law, Sunde claimed in a phone interview with CNET News.com on Monday. Following a wave of media attention over the weekend, Sweden's government has apparently backed down. Sunde quoted from an e-mail sent by a government official that notified the site's operators they would not be accused of distributing porn.

"The government is angry at us because they can't shut us down," Sunde said. "Now they are trying to ruin our reputations."

Sunde called the allegations against the site "unsettling." He worries that the incident might signal a new willingness by the forces warring against copyright infringement to use smear tactics. Swedish authorities could not be reached for comment.

Regardless of whether Sweden was actually trying to close The Pirate Bay, the incident illustrates just how much the file-sharing community distrusts and fears the lobbying groups that represent the film and music industries. A torrent site can't be slow to load anymore without users suspecting Motion Picture Association of America (MPAA) sabotage.

Some of the paranoia may be exacerbated by the entertainment industry's string of recent victories over file sharing.

TorrentSpy, a U.S.-based BitTorrent search engine is fighting a court order to turn over user information to the MPAA. The site's owners have indicated that they would cease operating in the U.S. rather than hand over the data. In what was seen by many as a capitulation to the MPAA, TorrentSpy and competitor IsoHunt both agreed last month to filter copyright material.

At the request of the Recording Industry Association of America (RIAA), the U.S. government's efforts to convince Russia to close AllofMP3.com, a music site that sold unprotected music files without the authorization of record labels, appears to have worked. The site went dark last week, although the operators have apparently reopened under a new name, according to reports.

Another factor is the allegation made by TorrentSpy in a lawsuit filed against the MPAA last year. TorrentSpy claims that the group hired a hacker to crack the company's servers and steal TorrentSpy's trade secrets. The MPAA has denied the accusation.

These are the kind of things that keeps file sharers and some site operators looking over their shoulders.

"I'm very concerned about the (child porn accusations)," Sunde said. "But I'm not frightened. People know this is only a tactic on their part to hurt us.

"I don't think it stops here," he added. "I think it's only going to be worse. We have a fight coming."

Reuters is reporting that Sweden's Justice Ministry proposed legislation on Monday that if passed would give copyright holders the right to demand that Internet Service Providers turn over names of suspected file sharers.

TorrentSpy, the torrent-file search engine accused by Hollywood of aiding copyright violators, plans to remove links from its search results to pirated content using a new filtering system.

FileRights is an automated filtering system created by some of TorrentSpy's founders, including Justin Bunnell, according to a statement released Monday. The technology uses "hash" values to automatically remove links to infringing works from search engines that subscribe to the service.

The move comes as TorrentSpy fights a lawsuit brought against it last year by the major film studios. TorrentSpy suffered a legal blow earlier this month when the judge hearing the case ordered the company to begin tracking user activity.

The privately held company has appealed the decision. Should it lose, Ira Rothken, TorrentSpy's attorney, has said the company would likely shut down access in the U.S. before giving up information about users.

In an interview, Rothken acknowledged that using hash marks to identify copyright content is not foolproof. If a file is altered then the system may not recognize it.

Filtering doesn't necessarily mean an end to the hostilities between Hollywood and the torrent search engines. In 2001, file-sharing system, Napster, launched a filtering system that failed to thwart illegal file sharing enough to satisfy the music industry or the courts. U.S. District Judge Marilyn Hall Patel called their efforts, which according to some accounts only caught half of the illegal files being shared, "disgraceful." The judge eventually ordered Napster to stay shut down until it could block all infringing materials.

It should be noted that illegal file doesn't occur at TorrentSpy or the other torrent engines. People use these sites to locate torrent files that can be downloaded via the file-sharing program BitTorrent. In the lawsuit filed by the film industry in Feb. 2006, TorrentSpy is accused of being a powerful tool for those who pirate intellectual property.

FileRights works like most video filters. Copyright owners handover information about their films or TV shows and the system detects any files containing unauthorized copies. Links to those files are automatically removed.

Any copyright owner, Web site or search engine is welcome to subscribe to the service for free, according to the company's statement. According to Rothken, one of TorrentSpy's competitors, IsoHunt, has agreed to use the filtering system as well.

"With FileRights we used the community networking power of the Web to automate and aggregate the entire copyright filtration process," Bunnell said. "Torrentspy now uses the FileRights cooperative filtering process to filter search results on its popular search engine."

As expected, the Electronic Frontier Foundation plans to file a friends-of-the-court brief in support of TorrentSpy, the search engine accused of copyright violations.

The top motion-picture studios filed a lawsuit last year against TorrentSpy and other search engines that locate torrent files. The studios allege in their suit that these companies simplify the illegal sharing of copyright content.

The magistrate judge hearing the case recently ruled that computer RAM or random-access memory, is a tangible document that can be stored and must be turned over in a lawsuit. If allowed to stand, the groundbreaking decision may mean that anyone defending themselves in a civil suit could be required to turn over information in their computer's RAM hardware. This could force companies and individuals to store vast amounts of data, say technology experts.

The judge has ordered TorrentSpy to create logs detailing users' activities on the site.

Fred von Lohmann, senior staff attorney with EFF, which advocates for the rights of Internet users, said the group has notified representatives from TorrentSpy and the motion picture studios of their intent to file an amicus brief that argues for a reversal of the judge's decision.

He added that EFF is also looking for others to join them on the brief.

"This is the first time the court has found that information found only in RAM is subject to preservation," von Lohmann said. "Companies may be obliged to begin logging and producing information about conversations that occur on digital phones, which are stored on RAM. Nobody is asked to preserve records for analog phone conversations."

Lawyers from the Motion Picture Assoc. of America argue that the law has always found RAM to be electronically stored information and that there won't be any significant impact to others besides those engaged in illegal file sharing.

The movie studios may have discovered a new and powerful weapon in their war on copyright infringement.

The courts have for the first time found that the electronic trail briefly left in a computer server's RAM, or random access memory, by each visitor to a site is "stored information" and must be turned over as evidence during litigation, according to documents seen by CNET News.com.

Jacqueline Chooljian, a federal judge in the Central District of California in Los Angeles, issued the decision while presiding over a court fight between the studios and TorrentSpy, the BitTorrent search engine accused of copyright infringement in a lawsuit filed last year by the film industry. On May 29, Chooljian ordered TorrentSpy to begin logging user activity, including IP addresses, and turn the data over to the Motion Picture Association of America (MPAA).

The judge stayed the order on Friday to allow TorrentSpy time to prepare an appeal, which must be filed by Tuesday. She also allowed TorrentSpy to mask the Internet Protocol addresses of the site's users "at least at this juncture."

This may be the first time that anyone has argued that information within RAM is electronically stored information and therefore subject to the rules of evidence, Chooljian said according to court records. Up to now, many Web sites that promised users anonymity, such as TorrentSpy, believed they need only to switch off their servers' logging function to avoid storing user data.

Should Chooljian's order stand, the decision could force Web sites to rethink privacy precautions.

The Electronic Frontier Foundation called the judge's decision "troubling" and said it could mean that any Web site operator could be compelled to log user activity anytime they faced a lawsuit. In its privacy policy, TorrentSpy pledges not to collect any personal information about users except when they "specifically and knowingly provide such information."

But user data was stored at TorrentSpy, according to Chooljian. The judge said in court documents that this information survived on TorrentSpy's server RAM for about six hours. RAM is defined by Chooljian as "a chip where volatile internal memory is stored."

The judge agreed with the MPAA that the existence of user data in RAM enabled TorrentSpy to retrieve user information. She also wrote that the data was crucial for getting at the truth in the case, according to records.

"There can be no serious dispute that the Server Log Data in issue is extremely relevant," the judge said in her finding.

Concealed evidence?
In one of the most hotly contested disputes so far in the case, the records show that the MPAA accused TorrentSpy of trying to conceal evidence when the search engine began directing visitors to the servers of an outside vendor.

The MPAA claimed that TorrentSpy did this to avoid being in possession of user information as the search engine anticipated receiving a court order, according to records. TorrentSpy denied the accusations and said that the outside vendor was chosen for "significantly faster processing and delivery."

Among the arguments TorrentSpy made against turning over logs was that the law only required the company to produce documents already in possession. It did not ask for the creation of new records.

But that's exactly what the judge was asking the company to do, TorrentSpy's attorneys asserted in court records. Chooljian disagreed.

"Since the information is already in the RAM, then defendants aren't really being asked to create new information," Chooljian wrote.

She also noted that it was not her goal to set a far-reaching precedent with her decision.

"The court emphasizes that its ruling," Chooljian said in the documents, "should not be read to require litigants in all cases to preserve and produce electronically stored information that is temporarily stored only in RAM."

TorrentSpy's other arguments against tracking users were that the costs were too high and that the action would violate user's privacy and hinder free speech. All were rejected.

In response to TorrentSpy's free-speech argument, the judge cited other cases that had established illegal file sharing "qualifies for minimal First Amendment protection."

Should TorrentSpy lose in appeal, it would likely have seven days to produce data logs, according to the court records. The company's attorney, Ira Rothken, said Friday that it is unlikely TorrentSpy would continue operations in the United States if forced to turn over user data.