BitTorrent Inc. released a new version of its client software Thursday, offering a simpler way for people to find, download and share files -- including, for the first time, a way to share them with a select group of friends. It's a potential boon to consumers looking to send high-definition home movies or slide shows to far-flung family members. The gains are more limited, however, for Hollywood studios and other copyright holders.

The BitTorrent protocol speeds up the transmission of files by enabling users to download them from multiple other users simultaneously. That's made it the protocol of choice for file-sharers, particularly for bootlegged movies and song collections. It's a neutral technology, though, and the Hollywood studios made their peace years ago with BitTorrent Inc., which invented the protocol. The company also claims to make the most popular client software for using its protocol; according to Shahi Ghanem, its executive vice president and chief strategist, more than 1 billion copies of those clients have been downloaded, and more than 100 million people use them at least once a month.

On Thursday the company released a beta version of its new client, dubbed Project Chrysalis, designed to make BitTorrent easier to use for consumers and content creators. It's still a work in progress on both fronts, but it's a step forward in several ways.

La Familia drug cartel is selling not just drugs, but also counterfeit Microsoft Office computer software, according the Redmond, Wash., tech giant.

Microsoft showed off unauthorized copies of its Office 2007 software in Paris today which the company said it found for sale in Mexico. The pirated copies of Office were marked with La Familia cartel's rectangular "FMM" logo that the Microsoft says proves the link between the counterfeiting and the organized crime group, according to a Bloomberg report. 

"This is the real side, the scary side of counterfeiting and it plagues the world," said David Finn, Microsoft's associate general counsel for anti-piracy, according to Bloomberg.

Finn displayed the bootleg Microsoft software Friday at the Global Congress on Combating Counterfeiting and Piracy, the report said.

The International Chamber of Commerce said at the Paris event that, in the 20 nations that make up the G-20, the value of counterfeit and pirated goods was an estimated $650 million in 2008, according to Bloomberg.

That number is expected to rise to about $1.77 trillion by 2015, the report said.

Finn, Microsoft's attorney, wrote in a company blog post that, according to an analysis by Mexico's attorney general, drug cartels in Mexico have a "sophisticated distribution network of 180,000 points of sale in stores, markets and kiosks, earning more than $2.2 million dollars in revenue every day."

John Newton of the International Criminal Police Organization (Interpol) said organized crime groups were attracted to counterfeit goods because they are "low-risk, high-profit crimes," Bloomberg said.

ALSO:

Mexico Under Seige -- the LA Times' ongoing series on Mexico's drug war 

Google buys anti-piracy firm Widevine

-- Nathan Olivarez-Giles

twitter.com/nateog

This week's Consumer Electronics Show has been a coming-out party for Ultraviolet, the online video-distribution platform backed by a consortium of major Hollywood studios, device makers, retailers and service providers. But while leaders of the consortium -- the Digital Entertainment Content Ecosystem -- were outlining their plans in a packed conference room at the Las Vegas Convention Center on Thursday afternoon, Bram Cohen was privately demonstrating a new streaming technology based on the BitTorrent file-sharing protocol in a Vegas hotel suite.

The company Cohen co-founded, BitTorrent Inc., also announced Thursday a partnership with Taiwan's Industrial Technology Research Institute, an influential tech R&D center, to develop standards for playing back BitTorrent downloads on a wide range of consumer electronics. It's conceivable that when Ultraviolet-compatible devices hit the market (probably in 2012), some will also bear the logo, "BitTorrent Certified."

That, in a nutshell, is the challenge faced by backers of Ultraviolet. The platform, which the studios hope will breathe life into sluggish sales of downloadable films and TV shows, has to compete with file-sharing software and hosting sites that let people download or stream unauthorized copies of just about anything for free.

Ultraviolet promises a dramatic improvement over the first generation of download-to-own services. But the developments at BitTorrent Inc. show that file-sharing applications are advancing too. And while UV starts from an installed base of zero, more than 20 million people around the world use BitTorrent daily, and more than 100 million use it monthly, BitTorrent Inc. announced earlier this week.

It's important to note that BitTorrent Inc. -- one of several companies that distributes software based on the BitTorrent file-sharing protocol Cohen developed years ago -- doesn't actively encourage piracy, even though that's what most people use the technology for. In fact, the new version of its software, due this spring, will promote more prominently the content that some (typically non-Hollywood) filmmakers and recording artists are distributing via BitTorrent.

Google Inc. is penning the next chapter in the story of electronic books.

Today the Mountain View, Calif., technology giant is unveiling its long-expected "Google eBooks" platform, an e-book store that contains 3 million volumes, most of which are free public domain works.

But hundreds of thousands of Google's e-books will be paid titles from major and minor publishers.  Those will include many bestsellers and, Google says, the vast majority of books already commercially available in electronic form.

By opening its eBookStore, Google is pitting itself squarely against established digital booksellers, including the market leader Amazon.com and relative newcomer Apple Inc.  Google's stated aim -- captured by the slogan "buy anywhere, read anywhere," is to allow users to purchase and read books from as many devices as possible.

The books can be read online -- through a new Google reading interface also launching today. They'll also work on a number of tablet and e-reader devices, including Apple's iPad and iPhone, Android-based smartphones and tablets, and e-ink devices from Sony and Barnes & Noble.

Amazon Kindle users will not be able to purchase new books from Google, though the Kindle will be able to display some of Google's public domain (non-copyrighted) books.

Anti-piracy firm Widevine announced Friday that it has been acquired by Google, providing another sign that Google is trying to burnish its image in Hollywood and among its allies in Washington. Widevine's technology can protect both downloaded content and streams from unauthorized copying — the sort of capability that could make YouTube more appealing to studios as a distributor of high-value programming. It's also well-suited to Google's strategy for extending the Android platform to more devices.

The announcement came a day after Google's general counsel, Kent Walker, revealed plans (on Google's Public Policy Blog) to implement four changes long sought by copyright holders, including moving faster to take down allegedly infringing material and doing a better job deterring pirate sites from selling ads through Google. 

Terms of the Widevine deal weren't disclosed, and Widevine Chief Executive Brian Baker declined to elaborate. A Google spokesman didn't respond immediately to a request for comment. Here's the prepared statement he released Friday:

Widevine is excited to announce that we have agreed to be acquired by Google.

For many years, Widevine has enabled consumers to access digital entertainment content. Through a combination of content protection and video optimization technologies, we've provided consumers with the highest quality Internet video experience while giving them freedom to watch on a variety of devices. With the recent growth of Internet video and network connected devices, it is increasingly important for technology to provide consumers with the capability to watch what they want, when they want, where they want.

By working with Google, we are even further committed to the consumer Internet video experience and to the needs of content owners. Widevine will continue to supply the industry with leading video optimization and content protection solutions. We are excited to have access to Google's vast resources as we continue to improve our products, support our customers, and meet the future needs of consumers, content owners, service providers and device manufacturers everywhere.

Updated, 5:42 p.m.: I overlooked a post on a different Google blog ("The Official Google Blog") that provides a bit more insight from Google about the thinking behind the deal. As suspected, it's about streaming content to multiple devices, on demand. Wrote Mario Queiroz, vice president of product management:

Content creators and distributors are making huge strides in bringing us content in this way, but to do so, many require high-quality video and audio, secure delivery, and other content protection and video optimization technologies. With these tools in place they can easily and effectively give you access to the rich library of content you want to watch, with the immediacy you’ve come to expect.

— Jon Healey

Healey writes editorials for The Times' Opinion Manufacturing Division.

Google, which has been dogged by complaints about pirated content on YouTube and with its new television initiative, seems to be appealing to Hollywood with some major changes to the way it deals with copyright infringement on its search engine over the next several months, making it tougher for websites that flaunt the law and making it harder to find pirated content, it said Thursday.

"There are more than 1 trillion unique URLs on the Web and more than 35 hours of video uploaded to YouTube every minute," Kent Walker, Google's general counsel, said in a blog post. "It's some pretty fantastic stuff -- content that makes us think, laugh, and learn new things. Services we couldn't have imagined ten years ago -- iTunes, NetFlix, YouTube, and many others --- help us access this content and let traditional and emerging creators profit from and share their work with the world."

But along with that content are "bad apples who use the Internet to infringe copyright," Walker wrote.
So Google is looking to respond to those "bad apples" that violate the Digital Millenium Copyright Act, the law that protects sites like Google if they remove infringing content when notified, faster and more efficiently.

The details are still somewhat vague, but Walker said Google will respond to "reliable" takedown requests within 24 hours and build tools to make it easier for copyright owners to submit the requests, improve tools for those who think their content was improperly removed and make it possible to search takedown requests. Google also said it will also block terms closely associated with piracy from appearing in Autocomplete, the search engine's tool that fills in the query box as you type, and prevent violators from using its AdSense product.

In what could be a major step for content creators, Google will experiment with making sites with legitimate content easier to find than sites with pirated content. That could be a game changer if Google makes pirated content hard to find on its search engine, the world's largest.

Related:

Google TV plan causing jitters in Hollywood

-- Jessica Guynn

While companies such as Righthaven try to protect journalists' copyrights by reflexively suing alleged infringers, online monitoring firm Attributor has pursued a different approach: reflexively trying to strike licensing deals, turning infringing websites into authorized, paying outlets for content. On Monday, Attributor announced the results of a trial run of this approach, finding that a simple request to share revenue or remove unauthorized copies of newspaper articles did the trick 75% of the time.

No doubt some news publishers wouldn't be satisfied just to have infringing material removed. Much of what's churned out in the journalism business has a half-life measured in hours, not days; by the time an unauthorized copy is taken off a site (which could have been more than two weeks after the infringement was spotted), much of the public's interest in it may have evaporated anyway.

Nevertheless, it's encouraging to see copyright holders in the publishing business try to emulate what the music industry has done with YouTube, trying to turn third-party distribution from nuisance into new revenue without resorting to the courts. What Attributor does gets at only a portion of the challenge publishers face online -- significantly, it doesn't address the phenomenon of search engines monetizing the interest in news, or aggregators running ads against headlines and short excerpts. But it could reduce the incidence of third parties lifting articles wholesale and monetizing them in direct competition with the publishers' own sites.

Having been ordered by successive juries to pay the major record labels $222,000, $1.92 million and now $1.5 million for illegally sharing 24 songs, Jammie Thomas-Rasset exemplifies how both extreme and random these damage awards are. That's a consequence of Congress providing statutory damages that range from $200 (for an "innocent infringer") to $150,000 per infringement. As Ars Technica's Nate Anderson observed, jurors have no experience with damage awards, and thus have no clue what's reasonable in the grand scheme of things.

It's true that the three sets of Thomas-Rasset's peers in Minnesota who looked at her actions ordered her to pay well above the legal minimum. That doesn't make the damages they ordered rational. There may be some infringers for whom a $1.5-million penalty is entirely appropriate -- a CD or DVD counterfeiting operation, for instance. But a noncommercial file-sharer?

Attorneys for Thomas-Rasset and Joel Tenenbaum, a file-sharer ordered by jurors to pay the labels $675,000 for 30 songs, want the courts to limit statutory damage awards just as they've limited punitive damages. Neither defendant is particularly sympathetic, yet they persuaded the judges in both cases to make dramatic reductions in the amounts they owed. Tenenbaum's penalty was cut to $67,500 in July and Thomas-Rasset's $1.9-million sanction was lowered to $54,000 in January. But the reductions weren't enough to satisfy either defendant.

In the latter case, the Recording Industry Assn. of America offered to accept even less -- $25,000 -- if Thomas-Rasset agreed to have the judge vacate the ruling that slashed her damages to $54,000. She insisted instead on having a third jury consider just the issue of what she should pay the RIAA, which is how $54,000 became $1.5 million. (Thomas-Rasset plans to appeal again.)

Tenenbaum, meanwhile, has appealed his reduced amount, arguing that it's still unconstitutionally high. The RIAA contends that there's no authority for judges to reduce awards that are within the range provided by federal law, and if it prevails Tenenbaum's debt will skyrocket again. But such a ruling would also put the onus on Congress to set more reasonable guidelines for damage awards against noncommercial infringers.

If lawmakers need more reason to scale back the damages for infringers who aren't in the piracy business, they should consider the emergence of companies like Righthaven. Founded by a Las Vegas lawyer, Righthaven has sued more than 160 websites and their operators for what appear to be minor infringements -- essentially, running all or part of individual stories found on the Las Vegas Review-Journal's website. You can read more (much, much more) about Righthaven in a piece I wrote Thursday for the Opinion L.A. blog.

-- Jon Healey

Healey writes editorials for The Times' Opinion Manufacturing Division.

Two Hollywood studios have won a legal victory over a new type of foe in their battle against online piracy: a company that referred advertisements to sites that streamed pirated movies and television shows. But the case was resolved in a way that doesn't set a precedent that could be used against online ad networks -- like, say, Google.

U.S. District Court Judge George H. Wu signed a consent judgment Wednesday ordering Triton Media of Scottsdale, Ariz., to pay $400,000 to Warner Bros. Entertainment and Disney Enterprises. (The defendant is not to be confused with Triton Media Group of Sherman Oaks.) The judgment bars Triton from operating or assisting eight sites named in the studios' original complaint -- free-tv-video-online.info, supernovatube.com, donogo.com, watch-movies.net, watch-movies-online.tv, watch-movies-links.net, thepiratecity.org and havenvideo.com -- and any similar venture.

Lisa Stone, a vice president and senior content protection counsel for the Motion Picture Assn. of America, said the case was the first time the studios had sought to hold a company liable for the infringements committed on sites to which it referred ads. Triton's services "facilitate the infringement and make it profitable," she said, adding, "It knew the types of sites it was dealing with, it drove traffic to the sites."

The case would be more noteworthy if Triton were a typical online ad network. But it isn't.

Five months after finding LimeWire and its former chief executive liable for inducing users to violate the record companies' copyrights, a federal judge on Tuesday ordered the company to pull the plug on its file-sharing network. Although both sides agreed to the terms of the permanent injunction that District Judge Kimba M. Wood signed, neither got what it really wanted out of the months of talks. LimeWire wasn't able to obtain the licenses it needs to start an authorized music service. And the labels didn't get a check from LimeWire and former CEO Mark Gorton to compensate them for almost 10 years' worth of infringements.

And so the lawsuit continues to play out like a movie we've all seen before, with a court ordering the network's operator to do everything in its power to stop users from coming back. At some point in the future, LimeWire might have a legitimate service to offer them, but they'll probably be long gone by the time it does.

Not that people who used LimeWire for free downloads would have been eager to sign up for a paid service -- witness what happened to iMesh when it shifted abruptly from free (and illegal) to paid. And it's hard to fault the labels for wanting to shut off the spigot of bootlegs flowing out of LimeWire as soon as possible, rather than waiting until the licensing negotiations were finally completed.

Yet the labels also demanded that LimeWire settle all the legal issues -- including the industry's multimillion-dollar damage claims -- before they would agree to terms on licenses. That proved to be an insurmountable hurdle. Unless a settlement on damages is reached before then, Wood will hold a hearing in January on how much LimeWire should pay.

One interesting thing about the service LimeWire wants to launch is that it wouldn't be based on the LimeWire network. According to Jason Herskowitz, vice president of product management, the company has nearly finished work on a service that integrates cloud-based music streams into users' personal music collections. The point is to give people a single interface that lets them play and discover music from either source, as well as to download new tracks from LimeWire.

Herskowitz says that existing subscription services in effect force users to ignore the collections they assembled over the years. And while they work with an increasing number of smart phones, their libraries of online songs don't work with iPods that can't connect to the Net. LimeWire wants to lighten the impact on iPod users by letting subscribers download a number of MP3s each month in addition to streaming songs to their connected devices. It's hard to judge how good an offer that would be, though, because the number of free MP3s and the amount of the monthly fee is still being negotiated.

It's worth noting that the latest iteration of the Napster subscription music service as well as Microsoft's Zune Pass service bundle free MP3s with their streams, but neither one has drawn a mass following. On the other hand, LimeWire's file-sharing software had many millions of users -- its software had been downloaded an estimated 200 million times. That base could provide a huge head start toward mass adoption for the new service, if it proved to be compelling.

The injunction, however, appears to put the kibosh on that kind of shortcut to legitimacy. Among other things, it requires the company to disable "all functionality" of its current software and provide users a tool to uninstall it. Again, I understand why the labels want to stop the infringements. But offering users a legitimate LimeWire alternative concurrently with the shut-down would have done more to reduce infringements in the long run than simply telling them to take their piracy elsewhere.

-- Jon Healey

Healeywrites editorials for The Times' Opinion Manufacturing Division.