Anti-Piracy Boss Ran a Usenet Site that Agreed to Pay MPAA $15m Damages

by downloadiso on December 12, 2012

Anti-Piracy Boss Ran a Usenet Site that Agreed to Pay MPAA $15m Damages


In February 2006 the MPAA threatened to sue not only isoHunt and the now-defunct TorrentSpy, but also a trio of Usenet indexing sites. After initially promising a war with the MPAA, one of them, BinNews, later caved in and agreed to pay the MPAA $15 million in damages. Interestingly, and in the wake of the NZBMatrix shutdown, it now turns out that BinNews was operated by one of today’s most prominent Usenet anti-piracy bosses.

During the last couple of weeks the closure of Usenet indexing sites Newzbin2 and NZBMatrix caused chaos in the Usenet community. They were the most damaging site shutdowns in more than half a decade.

The previous largest attack against multiple Usenet indexing sites took place six years ago but yesterday came full circle with a somewhat surprising revelation. But first a little history.

With the popularity of file-sharing going through the roof, in early 2006 the MPAA decided to put a dent in the content free-for-all.

In the final week of February the MPAA decided to attack on three fronts by hitting BitTorrent, eDonkey and newsgroup related sites with legal action.

On the BitTorrent front, Isohunt.com, BTHub.com, TorrentBox.com and TorrentSpy were all hit with lawsuits. While isoHunt battles on to this day, TorrentSpy eventually collapsed under the weight of a $110 million damages award. Ed2k-It, the lone eDonkey site targeted, shut down in March 2006.

While action against BitTorrent and eDonkey sites wasn’t exactly new, this set of lawsuits by the MPAA also focused on a brand new target – the up and coming threat of Usenet indexing sites.

“Today’s lawsuits mark the first time the MPAA is taking action against sites that enable users of Newsgroups to easily find and download illegal content,” the MPAA announced at the time. “Newsgroups are electronic bulletin boards which in recent years have become a major source of pirated content as users are able to attach movie, music and games files to their messages.”

The MPAA’s Usenet targets numbered three – NZB-Zone.com, BinNews.com and DVDRs.net. Very quickly DVDRs announced its closure and by April 2006 the very large NZB-Zone had closed its doors too.

BinNews, disappointed by DVDRs’ decision to close, decided to hold its ground. Site operator ‘D9′ assured the file-sharing community that the site had plenty of money in reserve from the subscriptions it had been charging for access to the site, and that a fight would be forthcoming.

In the meantime the site stayed online hosted in Texas, not exactly the best place when the MPAA are knocking. D9 began asking around to see if anyone had any ideas where the site could be placed offshore. While a familiar tactic, history has shown us that relocation has rarely achieved anything for already identified United States’ residents.

Initially, however, there was confusion. Both DVDRs and BinNews expressed dismay that they were being targeted despite having never received any DMCA takedown notices. Plus, despite the announcement in February, none of the sites in question had received a timely official complaint from the MPAA.

In hindsight the delay was probably due to the MPAA waiting to see who wanted a fight. IsoHunt, TorrentBox and TorrentSpy all remained and received their complaints, as did BinNews for their defiance.

In May 2006, the studios of the MPAA – CBS, Columbia, Disney, 20th Century Fox and Warner – filed a complaint in the Northern District of Texas.

“This is a case of willful and rampant infringement of copyright over the Internet. Defendants knowingly enable, encourage, induce and profit from massive online piracy – piracy Defendants could stop but refuse to,” the complaint began.

“Defendants operate a website that enables and encourages users to locate and
download infringing copies of Plaintiffs’ valuable copyrighted motion pictures and television shows for free and without authorization. Defendants operate their website with the express object of promoting its use to infringe Plaintiffs’ copyrights,” it continued.

The rest of the complaint is a familiar read. BinNews was causing Hollywood unbelievable losses and all this was deliberate and lining the pockets of the site’s operators, the MPAA claimed.

“Defendants operate a website that indexes copyrighted motion pictures and television programs and distributes associated NZB files. Defendants’ website is designed to
allow users to quickly and easily locate and download copies of Plaintiffs’ copyrighted works,” they wrote.

“The blatant infringements using Defendants’ website are obvious – and are well-known to Defendants. Anyone who visits the website, including Defendants themselves, can
immediately observe the site’s catalog of infringing files.”

So exactly who were the defendants? According to the complaint – JOSEPH MORGANELLI, BINNEWS, LLC, and DOES 1-8.

Now, to many people in the Usenet scene that first name will sound very familiar indeed. There is a Joseph Morganelli running the Morganelli Group, an anti-piracy company dedicated to bringing about the demise of unauthorized content availability on Usenet. Morganelli does a lot of work for the UFC and it’s acknowledged he does a pretty good job at it too.

“Our mission is clear,” says a mission statement on the Morganelli website. “To use our expertise that we have learned over the past thirteen years indexing Usenet to help those that really need assistance in protecting their products.”

For those still wondering, Morganelli is indeed the same person named in the BinNews lawsuit – he even has the BinNews domain still registered in his name. Now it becomes clear where those Usenet indexing skills came from.

So what caused the change of heart? What prompted the switch from Usenet poacher to anti-piracy gamekeeper? Although there might have been other factors, it must be said that the lawsuit against the MPAA didn’t end well.

Eventually the MPAA, Morganelli and BinNews reached an agreement and on May 16 2007, a consent judgment was signed by Judge Jerry Buchmeyer in a Texas court.

“Defendants Joseph Morganelli and Binnews, LLC hereby stipulate to a Judgment and Permanent Injunction in favor of Plaintiffs and against Defendants,” the judgment began.

The agreement was punishing. Not only would BinNews have to stop infringing plaintiffs’ copyrights now and in the future (and shut down the site if that could not be guaranteed), but also pay damages to the MPAA of a cool $15,000,000.

Now, some five years later, Morganelli is identifying infringing content and having it taken down using similar tools to the ones originally created to put often infringing content in front of BinNews users. That hasn’t gone down well with some Usenet fans.

Just recently, with the Newzbin2 and NZBMatrix shutdowns, the Usenet community is feeling particularly raw and the likes of Morganelli are not popular characters. He will argue that’s because he’s good at his job, which he appears to be, but the sometimes gloating approach he’s taken on Twitter is what appears to have really lit the flames.

Speaking of the demise of NZBMatrix and other sites, Morganelli announced that “Rome is falling on your precious Usenet piracy.” He also engaged with people disappointed with the news, which prompted the outing of his history with BinNews.

The official Twitter account of NZBMatrix signed off with “@morganelli Before we go we just wanted to say: Go fuck yourself scumbag :)”

All of Morganelli’s inflammatory tweets have now been removed and only one remains:

“Honestly, I am done talking. Love me/Hate me. My conviction to stopping piracy will not waiver. This will be my last post re:this,” Morganelli concludes.

The apparent switching of sides illustrated in this article is nothing new. This writer personally knows an ex-cracker who now works with DRM at a major games developer and there are certainly ex-members of the file-sharing community working in anti-piracy companies elsewhere. In day-to-day life it is not unusual to find, say, ex-addicts doing work to help people off drink or drugs.

What these people are doing is using their skill set in an area that pays, and everyone needs to earn a living somehow. That said, stirring up a hornets’ nest when a conflicting and controversial history is just a few clicks away is probably not the best idea.

Morganelli declined our request for a detailed response but offered the following comment.

“There is no earth shattering response coming as it would just become fuel for the mob that wants to see my team fail,” he told TorrentFreak.

“Our attack on Usenet is unprecedented and the mob-like attacks firmly demonstrate their concern.”


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