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Japanese File-Sharing System Developer Guilty of Abetting Copyright Infringement

Kyoto Court Fines Former Tokyo University Researcher 1.5 Million Yen

Tokyo, Hong Kong — Isamu Kaneko, the developer of the “Winny” peer-to-peer (P2P) file sharing system popular in Japan, was found guilty of aiding and abetting the infringement of Japan’s Copyright Law by the Kyoto District Court today.

The conviction was Japan’s first of a developer of file-sharing software used in the infringement of copyright, and Kaneko, formerly an assistant researcher at the prestigious Tokyo University, was fined 1.5 million yen (US$12,832). The “Winny” P2P file-swapping system came to prominence in Japan on November 27, 2003 when police raided the home of Kaneko, known to “Winny” users as “Mr 47”, and shut down his Internet home page.

On the same day, in separate raids, police arrested two men for illegally distributing the Universal Studios film “A Beautiful Mind” and for illegally distributing game software via “Winny”.

Both “Winny” users pleaded guilty and were each sentenced to one year in prison, suspended for three years. The prosecutions were Japan’s first for copyright violations involving the illegal distribution of motion pictures and gaming software via the Internet.

On May 10, 2004, police arrested Kaneko, charging him with aiding and abetting the infringement of Japan’s Copyright Law.

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“In many ways, the Internet represents the distribution dream for copyright owners — true video-on-demand via high-quality streaming or super-fast highbandwidth downloads,” said Mike Ellis, Senior Vice President and Regional Director, Asia-Pacific, Motion Picture Association. “However, the distribution dream is matched by the nightmare of unrestrained global piracy.

“The Internet has become an incredibly important battleground in the fight against intellectual property theft, and for the past three years the Japanese National Police Agency has been in the forefront globally of the fight against Internet piracy, showing that illegal file sharers are not safe from prosecution, and that law enforcement agencies can win against pirates. The message delivered by the Kyoto District Court today is clear: if you illegally share copyrighted materials via the Internet, you will be found out, you will be prosecuted, and you will pay a price for your crimes.”

About Winny
According to a report by NetAgent, a security company in Japan, there were approximately 440,000 to 530,000 “Winny” users as of April, 2006. The ‘Winny’ system, featuring a Japanese-language user interface, is used almost exclusively by Japanese in Japan, and was designed to provide users with some level of anonymity during the file-sharing process, in an effort to protect them from identification and arrest by police.

Rather than serving files from a single location, the system distributes cached copies of user-provided files around the “Winny” network to other users’ computers, facilitating faster downloads of popular titles. Thus, all users of the “Winny” system open their computers up to others’ files, possibly contributing to copyright infringement.

In March 2006, the Japanese government made an unprecedented direct appeal to members of the public and in particular to businesses and government agencies to beware of unauthorized installations by employees of peer-to-peer (P2P) file-sharing software such as “Winny” on corporate networks and personal computers. The appeal followed the widely publicized leakage of confidential data from a number of computers in both the public and private sectors, including organizations critical to Japan’s national security and infrastructure.

Piracy in Japan
Recent estimates of P2P software usage in Japan show that more than 1.2 million people are active P2P file sharers. More than three million people have used P2P software at some point in the past. The most widely used applications are “Winny” and “Share”. Research shows that nearly 50 percent of losses are the result of piracy by people aged 25-39.

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On April 1, 2004, in an effort to strengthen measures against Internet-related crime, Japan’s National Police Agency established a new “Cyber Crime Control Division” within its Community Safety Bureau. The division provides technical support to the information departments of prefectural police stations nationwide.

Piracy in Asia
A comprehensive study aimed at producing a more accurate picture of the impact that piracy has on the film industry including, for the first time, losses due to internet piracy, recently calculated that the MPA studios lost US$6.1 billion to worldwide piracy in 2005. About US$2.4 billion was lost to bootlegging*, US$1.4 billion to illegal copying* and US$2.3 billion to Internet piracy. Of the US$6.1 billion in lost revenue to the studios, approximate $1.2 billion came from piracy across the Asia-Pacific region, while piracy in the U.S. accounted for $1.3 billion. In 2005, the MPA’s operations in the Asia-Pacific region investigated more than 34,000 cases of piracy and assisted law enforcement officials in conducting more than 10,500 raids. These activities resulted in the seizure of more than 34 million illegal optical discs, 55 factory optical disc production lines and 3,362 optical disc burners, as well as the initiation of more than 8,000 legal actions.

*Bootlegging: Obtaining movies by either purchasing an illegally copied HS/DVD/VCD or acquiring hard copies of bootleg movies.
*Illegal copying: Making illegal copies for self or receiving illegal copies from friends of a legitimate VHS/DVD/VCD
*Internet piracy: Obtaining movies by either downloading them from the Internet without paying or acquiring hard copies of illegally downloaded movies from friends or family.

About the MPA: The Motion Picture Association (MPA) represents the interests of major motion picture companies in the global marketplace. On behalf of its Member Companies, the MPA conducts investigations around the world, assists with the criminal and civil litigation generated by such cases, and conducts education outreach programs to teach movie fans around the world about the harmful effects of piracy. The MPA directs its worldwide anti-piracy operations from its headquarters based in Encino, California and has regional offices located in Brussels (Europe, Middle East and Africa), Sao Paulo (Latin America), Montreal (Canada) and Singapore (Asia-Pacific). The MPA’s anti-piracy activities have helped to transform entire markets from pirate to legitimate, benefiting video distributors, retailers, and foreign and local filmmakers alike. The MPA member companies include: Buena Vista International, Inc.; Paramount Pictures Corporation; Sony Pictures Releasing International Corporation; Twentieth Century Fox International Corporation; Universal International Films, Inc.; and Warner Bros. Pictures International, a division of Warner Bros. Pictures Inc.

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