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The California-based software company Quest is suing Nike for copyright infringement. Nike stands accused of using pirated software keys which are generally only available through unauthorized sites. The software company uncovered the alleged copyright infringements during an audit and states that Nike refuses to purchase the additional licenses. Virtually every piece of software is cracked and made available on the Internet, through a myriad of pirate sources. These are generally visited by regular people out to save a few bucks, but according to Quest Software, pirated license keys found their way to Nike’s office as well. The company, known for developing a variety of database software, filed a lawsuit in an Oregon federal court this week, accusing Nike of copyright infringement. Both parties have had a software license agreement in place since 2001, but during an audit last year, Qwest noticed that not all products were properly licensed. “That audit revealed that Nike had deployed Quest Software Products far in excess of the scope allowed by the parties’ SLA,” Quest writes in their complaint, filed at a federal court in Oregon. Quest keeps a database of all valid keys and found that Nike used “cracked” versions, which are generally circulated on pirate sites. This is something Nike must have been aware of, it adds. “The audit also revealed that Nike had used pirated keys to bypass the Quest License Key System and made unauthorized copies of certain Quest Software Products by breaking the technological security measures Quest had in place,” Quest writes. “Upon information and belief, to obtain a pirated key for Quest Software Products, customers must affirmatively seek out and obtain pirated keys on download sites known to traffic in counterfeit or illegally downloaded intellectual property, such as BitTorrent.” Pirated keys? When the software company found out, it confronted Nike with the findings. However, according to the complaint, Nike refused to purchase the additional licenses that were required for its setup. This prompted Quest to go to court instead. At this point, it’s not entirely clear to Quest how many pirated keys were used on Nike computers. That’s something the company would like to find out during the discovery process. Quest is certain, however, that its customer crossed a line. It accuses Nike of copyright infringement, breach of contract, and violating the DMCA’s circumvention provisions. The company requests an injunction restraining Nike from any infringing activity and demands compensation for the damages it suffered as a result. The exact height of these damages will have to be determined at trial. — A copy of the complaint is available here (pdf). https://torrentfreak.com/nike-sued-for-running-pirated-software-100426/

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A supplier of piracy-enabled Kodi boxes being sued by Sky TV in New Zealand for almost US$1m has been sold to a mystery Chinese buyer for an eye-watering US$8.8m. That's the claim from founder Krish Reddy who says that the company will shut down within 90 days with the loss of six jobs. It's a spectacular end to an always controversial and sometimes ridiculous story. Back in 2016, an article appeared in Kiwi media discussing the rise of a new company pledging to beat media giant Sky TV at its own game. My Box NZ owner Krish Reddy told the publication he was selling Android boxes loaded with Kodi software and augmented with third-party addons. Without any hint of fear, he stated that these devices enabled customers to access movies, TV shows and live channels for free, after shelling out a substantial US$182 for the box first, that is. “Why pay $80 minimum per month for Sky when for one payment you can have it free for good?” a claim on the company’s website asked. Noting that he’d been importing the boxes from China, Reddy suggested that his lawyers hadn’t found any problem with the business plan. “I don’t see why [Sky] would contact me but if they do contact me and … if there’s something of theirs that they feel I’ve unlawfully taken then yeah … but as it stands I don’t [have any concerns],” he said. At this point, Reddy said he’d been selling the boxes for just six weeks and had shifted around 80 units. To get coverage from a national newspaper at this stage of the game must’ve been very much appreciated but Reddy didn’t stop there. In a bulk advertising email sent out to 50,000 people, Reddy described his boxes as “better than Sky”. However, by design or misfortune, the email managed to land in the inboxes of 50 Sky TV staff and directors, something that didn’t go unnoticed by the TV giant. With Reddy claiming sales of 8,000 units, Sky ran out of patience last April. In a letter from its lawyers, the pay-TV company said Reddy’s devices breached copyright law and the Fair Trading Act. Reddy responded by calling the TV giant “a playground bully”, again denying that he was breaking the law. “From a legal perspective, what we do is completely within the law. We advertise Sky television channels being available through our website and social media platforms as these are available via streams which you can find through My Box,” he said. “The content is already available, I’m not going out there and bringing the content so how am I infringing the copyright… the content is already there, if someone uses the box to search for the content, that’s what it is.” The initial compensation demand from Sky against Reddy’s company My Box ran to NZD$1.4m, around US$1m. It was an amount that had the potential rise by millions if matters got drawn out and/or escalated. But despite picking a terrible opponent in a battle he was unlikely to win, Reddy refused to give up. “[Sky’s] point of view is they own copyright and I’m destroying the market by giving people content for free. To me it is business; I have got something that is new … that’s competition,” he said. The Auckland High Court heard the case against My Box last month with Judge Warwick Smith reserving his judgment and Reddy still maintaining that his business is entirely legal. Sales were fantastic, he said, with 20,000 devices sold to customers in 12 countries. Then something truly amazing happened. A company up to its eyeballs in litigation, selling a commodity product that an amateur can buy and configure at home for US$40, reportedly got a chance of a lifetime. Reddy revealed to Stuff that a Chinese investor had offered to buy his company for an eye-watering NZ$10 million (US$7.06m). “We have to thank Sky,” he said. “If they had left us alone we would just have been selling a few boxes, but the controversy made us world famous.” Reddy noted he’d been given 21 days to respond to the offer, but refused to name the company. Interestingly, he also acknowledged that if My Box lost its case, the company would be liable for damages. However, that wouldn’t bother the potential investor. “It makes no difference to them whether we win or lose, because their operations won’t be in New Zealand,” Reddy said. According to the entrepreneur, that’s how things are playing out. The Chinese firm – which Reddy is still refusing to name – has apparently accepted a counter offer from Reddy of US$8.8m for My Box. As a result, Reddy will wrap up his New Zealand operations within the next 90 days and his six employees will be rendered unemployed. Given that anyone with the ability to install Kodi and a few addons before putting a box in the mail could replicate Reddy’s business model, the multi-million dollar offer for My Box was never anything less than a bewildering business proposition. That someone carried through with it an even higher price is so fantastic as to be almost unbelievable. In a sea of unhappy endings for piracy-enabled Kodi box sellers globally, this is the only big win to ever grace the headlines. Assuming this really is the end of the story (and that might not be the case) it will almost certainly be the last. https://torrentfreak.com/under-fire-kodi-box-company-sold-to-chinese-investor-for-us8-82m-180426/

SOUTH African companies paid almost R5,2 million (about 422 000) in damages for using unlicensed software in 2017, up from R3,6 million in the previous year. This is according to data from the BSA | The Software Alliance, the non-profit, global trade association created to advance the goals of the software industry and its hardware partners. BSA is formerly Business Software Alliance. The significant increase in unlicensed software payments, which includes settlements as well as the cost of acquiring new software to become compliant, is the result of more accurate leads from informers, said Darren Olivier, Partner at Adams & Adams, legal counsel for BSA. In 2017 BSA received 281 reports in South Africa alleging the use of unlicensed software products of BSA member companies - this up considerably up from 230 leads in 2016. "BSA's recent social media campaign also helped to create awareness among local companies about the need to comply with existing legislation in order to avoid legal action," Olivier said. While the average settlement paid by companies in 2017 was around R36 094, in some cases the amount owed was far greater, as is evidenced by Shereno Printers, a print and design company based in Gauteng, which ended up paying a hefty settlement amount of R260 000 last year in an out of court settlement. Aside from settlements, companies also paid more than R2,6 million in licenses purchased to legalise their unlicensed software. The ramifications of software piracy extend beyond financial implications as it also results in potential job losses and loss in tax revenue. "This is not to mention the financial and reputational damage brought about by security breaches and lost data," commented Olivier. As unlicensed software has not been updated with the latest security features, it leaves businesses vulnerable to cyber attack. This is a particular problem for companies operating in South Africa where economic crime has recently reached record levels, according to the Global Economic Crime Survey. It is reported 77 percent of South African organisations have experienced some form of economic crime. Instances of cybercrime totaled 29 percent of economic crimes reported. BSA has thus encouraged all businesses to ensure they have effective software asset management (SAM) practices in place.

Piracy is a crime, or so the media and tech industry loves to keep reminding people. This is largely ignored by both the distributors and users of pirated products, but recently, at least one party has learned how serious this crime really is. An e-waste recycler was just sentenced to 15 months in prison for illegally selling restore CDs of Microsoft’s Windows operating system. Eric Lundgren, 33, is a well-known e-waste recycler who became renowned for his innovations in the industry. He created a facility that basically turned old devices that have been discarded into entirely new gadgets. In keeping with this concept of reusing stuff that was just thrown away, the recycler also decided to do the same thing with discarded Windows restore discs and now he’s going to prison for it, The Washington Post reports. The discs are usually thrown away despite their importance in helping users recover their OS on their computers when they get corrupted in any way. It seems people are more content with simply buying new units, which gave Lundgren the opportunity to use the discs he has collected for a little profit. Selling the discs to computer repair shops for a small amount of money, the idea was basically to provide the OS restore ability to customers who might need it. Unfortunately, U.S. Customs managed to catch a shipment of the discs and charged Lundgren with conspiracy to traffic in counterfeit goods. The case wouldn’t have involved such a heavy punishment as a prison sentence had Microsoft not argued against Lundgren’s position that the discs were worthless to the company anyway. The tech giant said in a letter and via a witness that selling the discs could potentially hurt its bottom-line. Microsoft even accused Lundgren of selling the discs at $25 each, which is simply not true, Engadget reports. This is the full price of the discs when they come with the actual operating system. Lundgren was charging nowhere near that amount and for trying to turn a profit while recycling e-waste, he is being punished with a prison sentence.

A lawyer sued a unit of Nippon Telegraph and Telephone Corp. on Thursday, demanding the network operator halt its plan to block access to websites that allow visitors to read pirated comics and books. The lawyer, Yuichi Nakazawa from Saitama Prefecture near Tokyo, said in the first known such lawsuit that NTT Communications Corp.'s policy to block access to three sites providing hyperlinks to sites offering pirated publications is a violation of the secrecy of communications, which is banned by Telecommunications Business Act. NTT said Monday it will block access to the websites in line with a recent government request. A government panel decided on a tentative plan earlier this month to address internet piracy, urging network operators to voluntarily cut off connections to such sites. The move has raised concerns among legal scholars that such network access control could run afoul of Article 21 of the Constitution, which guarantees the secrecy of communication. The Telecommunications Business Act also obliges services providers to protect the secrecy of communications. According to the complaint filed with the Tokyo District Court, Nakazawa, who uses an internet service provided by NTT Communications, claims that the provider will violate his secrecy of communications because it would need to know the content of customers' communications to block access to the sites. The lawyer said NTT Communications' plan lacks ground as there is also no provision allowing it in the contract agreement. "It is necessary to restrict sites of pirated publications but that does not mean you can do anything. We should have sufficient discussions for an appropriate measure, including revising the law," Nakazawa said. NTT Communications declined to comment, saying it has not yet confirmed the complaint. It said there is no change in its plan to block access to the sites.

A man has been ordered to pay £45,000 in fines and damages for the illegal distribution of Sky Sports. It’s the latest in a string of convictions and co-incides with World Intellectual Property Day (April 26). Waqas Rasheed shared streams from (the then) Sky Sports 1 and Sky Sports 2. These streams were found on IPTVdonations.com, an illegally run IPTV subscription service. He claimed to have “inadvertently” created the streams whilst trying to access Sky content online for free. However, the Judge ruled Rasheed’s apparent lack of intention was not a defence in law. “This result is an excellent example of just how serious an issue illegal streaming is,” said Kieron Sharp, CEO of the intellectual property protection organisation FACT. “This case in particular highlights that ignorance is not a defence and digital piracy is not a grey area. If you are accessing content for free that you’d usually pay for, or you’re creating the streams online to allow others to do so, you are breaking the law.” The distribution of content over the Internet has by far outstripped smart card piracy as the most-common form of copyright theft within pay-TV. It is illegal to stream content that others pay for. Ignorance of the law is not a defence,” said Neil Parkes, Media & Intellectual Property Partner at law firm Foot Anstey.

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