Karen Lee: Welcome to Intellectual Property Matters. In this WIPO podcast, we explore the fascinating world of creativity, innovation and intellectual property. Let's listen, learn, and get inspired.
Ben Rylan: Hello, I’m Ben Rylan. Welcome to the third episode of Eye on Copyright Enforcement. Today, we’re looking at the fight against online copyright crime and we will hear from two people who’ve seen more than most of us - and know what it takes to tackle this international web of nefarious activities.
We’ve probably all come across a dodgy download or two. You might have received a suspicious-looking email, or perhaps you were invited to click on a link promising free access to the latest international blockbuster films.
In many cases, these dangling carrots are fairly easy to spot and thus, avoid; but not always. And what’s more, lurking behind these offers of free access to copyright-protected materials is often a vast network of criminal activity stretching much further than that dodgy link.
Later in today’s program, we will hear about what the World Intellectual Property Organization is doing to tackle online copyright crime.
But first we’re heading to London, to hear about what it’s like to be on the frontline of copyright enforcement. Joining me is Detective Sergeant Andrew Masterson from the Police Intellectual Property Crime Unit.
Andrew, tell us a little bit about the mission behind your section of the police force.
Andrew Masterson: We are a dedicated unit that tackles organized crime in relation to IP, so trademarks and copyright offenses. And we look at the disruption as well as arrests and bring those to justice around allowing either sale of the goods or distribution of copyright-infringing materials.
We work online and offline, and we seek new ways to disrupt this organized criminality utilizing a number of policing styles from traditional warrants and arrests and taking people through the court system and judiciary, through to cease and desist, or door knocks, and then also online takedowns and suspensions.
Anything that is of the creative industry, so movies being released either prior to international or national release. We have had cases where studios have been hacked, generally through social engineering of passwords, accessing systems, and then either threaten back the studio that they are going to release it unless they pay a blackmail fee, which we've dealt with in the past and successfully prevented. That was the one of the last expendable films we dealt with. There is also camming, which is what people might consider the traditional scene inside of cinema and filming it and then re-releasing it online. So we deal with those cases.
In relation to the music industry, it is very similar. Either pre-release material or material that's being distributed without authority. And then also into the written world: anything within the publishers sphere, such as materials or books being distributed without access to payment systems. We find that with authors such as popular novels, as well as literature in relation to academia.
We work in partnership with the industries to help target harden, if you like, in this respect. We pass on the lessons that we learned and what we see in relation to people committing these offenses, so that they can educate their staff or the people that represent them in in the industry.
In respect of camming, I know the Motion Picture Association and associated bodies do a lot of work in cinemas where they now have thermal imaging within the cinemas; they have staff trained to look for people filming it. We find in criminality that is very secular, what we might consider quite advanced system where they will start hacking into studios to try to obtain the movies will circle back around to the very basic system of paying someone quite a small amount of money to sit in a cinema. If they can get pre-release on certain titles, then that is worth quite a lot of money to the criminals prior to international release. It is still something we see relatively consistently, but not regularly as we might have done in the past, where it was one of the only methods to obtain such material.
Ben Rylan: Well look, some people might be thinking, these big Hollywood studios, they are not exactly strapped for cash. I am sure they can handle a few illegal downloads. What is your view on that? Also, are there any risks for the users who consume pirated content online?
Andrew Masterson: I'll tell you, one of the myths that I spend a lot of my time trying to dispel is that it is almost seems like a victimless crime, as you say, especially given the studio’s high in values of profits that are reported.
It is actually the dangers to the individual and the consumer. There are users that are very tech savvy that will download or try and access material that will protect themselves. But I would say the vast majority of people would do it without maybe fully understanding the risks.
I would say this is linked to organized crime, it is worth a lot of money to them. So criminals act in a business way. They expose the consumer if you like the person accessing the material to a number of risks, in relation to their own personal data. When we go in these sites, we find that a high volume of them have malware associated with them, that is downloaded to the user's computer, without knowledge, sometimes. They can sit dormant in the background, not infecting your computer.
I remember that years ago, if you had a virus, then you have popup windows and it slowed your machine down and it might even crash it to the point of it not working. We don't see that kind of attack, if you'd like, anymore. This is very sophisticated malware that will sit in the background it will take your personal data and report back.
By just clicking on one of these films or one of these creative works, whether it be audio or books as well, what you actually find is that malwares downloads into your computer, your personal data is taken, and then the criminals use it to either create more sites or to protect themselves while they're committing these crimes.
We view it as kind of the unholy triangle relation to a report that was given where by accessing these sites you expose your personal data, so your details might be used to either start other sites or might be passed on to other fraudsters who might use your details, you know, in an identity theft way. Your bank accounts could be compromised and actually your finances could fund crime directly, or could be used to commit other purchases that you're not aware of and therefore you become a victim of fraud.
And then finally, that malware and that sort of sits in the background. So you might realize you're a victim of fraud, you change your passwords, you try and re-protect yourself, you don't go on these sites anymore, but actually that malware still sitting there still reporting still given the data to these criminals that will then use that to continue to either protect themselves or commit further crime. And I think that's an underrated risk that the majority of people that go on these sites don't really appreciate.
There are also associated risks to the industry, not just loss of revenue directly, but actually where that revenue goes. A lot of the big companies who supply this product to people will invest in community projects, they will invest in local areas and local communities. And unfortunately, we see that funding restricted, as well as content that you might enjoy being reduced.
Ben Rylan: You mentioned that the data stolen from users accessing pirate sites could be used for committing additional crimes. Could you elaborate on the other types of crimes that intersect with copyright-related offenses?
Andrew Masterson: From a criminal point of view, it is very much a business model. If you can expose someone to giving you your details or obtaining funds from them in an illicit way, why would you not reinvest that in further illicit or illegal methods?
So we find on the very basics of it, tax evasion in relation to the funds are obtained through the sites or the side of the products. But then that leads on to the money laundering offenses, proceeds of crime being used to them by other criminal assets, whether that be linked to human trafficking, modern day slavery, guns, drugs, etc.
We found that money from counterfeiting and copyright infringement, it spreads across and is reinvested, if you like, into these areas of crime and again, that's an area that is sometimes either under looked or maybe overlooked in relation to the public perception of how impacted this is.
Recent studies from the IPO in relation to the UK shows impacts of 9 billion pounds a year is lost to the UK revenue and 80,000 jobs are lost each year in relation to illicit trade. It is a big impact to the UK economy and globally. This even bigger recent figures have been at about $1.7 trillion in relation to criminal asset being obtained.
Ben Rylan: For 10 years now, PIPCU has been successfully running an initiative called “Operation Creative”. Can you tell us about the objectives behind that and describe some of its biggest achievements?
Andrew Masterson: Operation Creative, as you mentioned, has been a successful targeting way of looking at piracy sites. We have another operation which is Operation Ashiko that looks at the .uk domain, and we have a good relationship with Nominet in relation to suspending sites based on that domain. But when we came to pirate sites, we found that they were based all over the globe.
We have really good international partnerships, we have really good working relationships with, as I mentioned, private industry, stakeholders, foreign government, but we found that these sites were kind of crossing over a number of different lines of falling between some cracks in relation to legislation in the UK and abroad.
We looked at where the impact is, and how we can make a difference and that's one of the keys to the unit is looking at new ideas with the industry to target this criminality.
Operation Creative looked to protect the UK economy and the creative industries by preventing and disrupting the creative content from being freely distributed online by some of the most high harm piracy sites which were causing significant losses.
And the way we did that was by targeting the revenue: we found that the sites were making money, some of them through donation options, so they had payment options on the sites - which we could look at the financial Institute's to support us.
But where there was advertising on these sites, that is where we found their main revenue stream came from. So the creation of the infringing website lists came about. And what that is, is direct referrals from industry from across the creative industry to look at sites that allow access and therefore make revenue from the people that click on the sites from the advertisements. And the infringing websites listed is what we consider the worst of the worst.
We encourage industry to engage: we encourage them to try and prevent the sites from operating through their own means, and when they can't do that, they refer to us as law enforcement. Through the distribution of this list to over 750 partners, again around the globe, we restrict the visiting to these sites and actually, therefore reduce the revenue.
But we actually do something more than that: we go out to the advertising industry, we get to the Gambling Commission, we go out to the people who are advertising on these sites and we engage with them to reduce the chances of them re-advertising the sites. We help them understand where advertising goes to, because it is not as straightforward as they might pay a company to place an advert on a billboard or on a website. There are lots of algorithms in place that target the demographic that these people are looking for, and therefore it is constantly evolving. And that's what we need to do the same.
We are also trying to protect consumers or unsuspecting consumers, as I mentioned, of the malware and viruses that are downloaded by going on these sites and protecting the brand of being associated with crime. When it first started, we found quite high-end brands being advertised on pirate sites and they were not even aware of this.
This is the education piece, talking to them and engaging to reduce the opportunity for funding. And as such, we were quite unique in our innovation, dealing with piracy both nationally and internationally.
But it is true that collaborative work with private companies, media organizations, and local and international law enforcement allows us to have the success we’ve had.
Ben Rylan: Detective Sergeant Andrew Masterson, thank you. In a moment, we will head to Geneva to find out about the international effort to tackle online copyright crime.
Stay tuned.
You’re listening to Eye On Copyright Enforcement. As we just heard, online copyright crime is, by no means, a victimless crime. There are, in fact, far-reaching consequences that impact many of us.
The Internet is, of course, by its very nature, a global community. To effectively tackle online crime, it requires a coordinated international effort, which is why we’re heading to Geneva.
Thomas Dillon: My name is Thomas Dillon. I am a Legal Counsellor in the Building Respect for IP Division of the World Intellectual Property Organization in Geneva.
Ben Rylan: Thomas, before we go any further. I just want to talk briefly about the business model behind some of these websites that offer access to copyright protected materials. In most cases, they tend to be free: there is no cost to access the content. To put it crudely, what is the business case behind these sites?
Thomas Dillon: Well, their business model is essentially that of old-school commercial TV. They are selling the attention of the people that come to these sites, principally to advertisers. So they are incentivized to have the most up to date and the most valuable pirated content at all times, because that is what draws people.
Unfortunately, the publicity that the legitimate industries use to drive traffic to legitimate sales, of course also advertises the pirate supply. Basically, these websites sell advertising space to advertisers and they make a lot of money out of it.
I think it probably has gotten a bit more difficult because the advertising industry and right holders have realized the importance of advertising to the pirate ecosystem. But of course the pirates have the advantage that their overheads are much lower than the legitimate suppliers, the broadcasters, the film studios. So it is much easier for them to add sufficient revenues to cover their costs and make profit.
Now, I wouldn't say that we really understand exactly what the costs are of running a big pirate site. Obviously it is not insubstantial. A couple of years ago, one of the leading consultancies estimated that the top pirate sites are making millions, literally millions of dollars every year. The most popular was estimated at making nearly 26 million dollars in a year, so you can see that there is a lot of money in pirate business and they clearly do make money out of it.
Ben Rylan: The WIPO operates a fairly ambitious initiative called the WIPO ALERT. Thomas, tell me about that.
Thomas Dillon: Yes, it is very simple, really. Since 2015 onwards, a number of countries began to develop systems for compiling lists of pirate websites and then sharing those lists with the advertising sector. Because the advertisers have systems already for controlling the placement of ads, but they need data to inform those systems. These activities were happening to a greater or lesser extent in some national markets, but there was no system for coordinating that activity internationally.
So in 2017, we started to think about how WIPO could help to coordinate that activity. Because we are an intergovernmental organization, we are not police, we are not INTERPOL, and we are not doing enforcement as such, but our role includes coordination. And this seemed to be an opportunity for us. So WIPO ALERT is a secure website, very secure. And it is used to aggregate lists of copyright infringing websites and apps, which are supplied from national agencies.
We have currently 12 countries or agencies in 12 countries that are members of the system. And we have over 6000 live domains on the platform. Now, we have a cohort of users, some of which are absolutely leading global advertising agencies and they download this data or they consult it live when they are calibrating their advertising algorithms. So that when they are trying to place advertising on a website, they will be able to check whether this website is on one of lists that are aggregated on WIPO ALERT and if is, then decide not to place advertisements on that site and place it somewhere else. So it is really as simple as that. It is a voluntary system, there's no enforcement behind it, but it seems to have attracted the support of quite a few countries and quite a lot of leading advertisers.
We are going to be in a position to make an announcement in July that an important country in Asia is going to be joining our effort. We have well advanced discussions with other countries to join, because there’s essentially a mass effect: once we get to a certain volume of data on the platform, then it becomes really effective, and I think we are we are moving towards that.
Secondly, we want to add features to the database to make it more user friendly, better searching facilities and so forth. Finally, we have a whole new project which we are thinking about, which is still at the feasibility testing stage, which would be based on WIPO ALERT. We are calling it WIPO ALERT PAY amendment, and that would be a cooperation with payment processors, credit card companies, the payment facilitators who are essential to the support of non-advertising supported piracy, because there is some kinds of piracy, in particular live streaming through pirated satellite channels that is supported by subscription. And also you have, of course, the sale of counterfeit goods, and that also is not supported by advertising simply by sales. So we are thinking we might be able to adopt or adapt the structure of WIPO ALERT to this other support for counterfeit activity, namely, credit cards and payment processors.
Ben Rylan: Well, from where I am sitting, it certainly feels as if dodgy downloads have become less common. There used to be a lot of attention paid to file sharing sites, or torrent sites, offering free access to music, films and television series. Now it seems like for a lot of people, it is just become too hard. They prefer to simply pay for a subscription to a few streaming platforms. Is that a fair statement?
Thomas Dillon: Well, first of all, I'm afraid that the level of pirates in the Internet certainly has not gone down very much and the online offer from legitimate sources of course is much better than it used to be. But there still seems to be enormous problem of infringement, which is affecting various industries, including the publishing industry, actually, which increasingly has found itself being the target of piracy.
But I think the answer to your question has to be a balanced one. Obviously, we don't want to lock down the Internet, and it certainly wouldn't be the role of WIPO to advocate for that.
But on the other hand, copyright is the motor essentially of both the entertainment industry and the software industry. These days, the intangible assets of companies in developed countries at least, are worth more than the tangible assets: the factories, the vehicles, the machines. So copyright, and other IP rights like trademarks and patents, these are absolutely the core of the modern economy. If we don't protect them to a reasonable degree, then we are really shooting ourselves in the foot.
As far as copywriters concerned, it is also very important most of cultural diversity, because small and medium sized enterprises in the cultural sphere are very valuable. And in order to maintain a healthy diversity of content, we need them to be able to compete against the big boys and clearly if they are pirated extensively, as soon as they have a successful film, they are going to go out of business. So it is very important for the health of culture and the economy, that we give a reasonable degree of protection to copyright.
Ben Rylan: Thomas Dillon at the WIPO in Geneva, thank you.
And thank you for listening to Eye on Copyright Enforcement, a production of the World Intellectual Property Organization, brought to you with the support of the Ministry of Culture, Sports and Tourism of the Republic of Korea.
I’m Ben Rylan. I’ll be back next time with another conversation on copyright enforcement. I do hope you’ll join me. Until then, goodbye.