Goodbye Gary Fung and Isohunt

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The news a couple of weeks ago that Gary Fung, former CEO of BitTorrent site Isohunt had settled a lawsuit brought against him by the Canadian music industry (now known as Music Canada, formerly the Canadian Recording Industry Association-CRIA), for $66 million (CAD) brought back memories of Isohunt’s prominence in past years as one of the leading international websites promoting copyright piracy. It was a dubious distinction for a Canadian website to be up there among the Pirate Bays of this world, those kings of piracy whose principals are usually based in Eastern Europe and whose domain addresses represent parts of the world so obscure that even a geographer would have difficulty finding them on a map. (Yes, there is a domain registry for South Georgia “.gs”, a remote island in the South Atlantic populated full time only by penguins).

Fung was a recent engineering graduate from the University of British Columbia (UBC) living near Vancouver when around 2006 he developed the technology and site that for a time allowed Isohunt to be one of the dominant players in the world of torrent copyright piracy facilitation. According to the MPAA, who sued Fung in 2010 (and secured his agreement to a settlement of $110 million in 2013), Isohunt enabled more than 44 million people to share more than 13.7 million torrent files. It was at one time one of the top 400 Internet sites by traffic on the planet. Other reports had Isohunt’s users totalling more than 70 million before it was shut down as a result of the settlement reached between Fung and the motion picture industry.

In an interview in 2009 with the Canadian daily National Post, Fung claimed that he was “doing this for the future”, although one suspects that the ad revenue generated by the number of users that Isohunt attracted was a big part of that future—until it all caught up with him. In May 2010 a California court enjoined Fung from continuing to engage in further copyright infringement after he was ordered in March of that year to remove copyright infringing material from his website. The 2010 court ruling was upheld on appeal in 2013 leading to the $110 million settlement with MPAA. More important than the cash amount, which media reports speculated was beyond Isohunt’s capacity to pay, was Fung’s agreement to shut down Isohunt. In fact he did so two days before the court-sanctioned deadline. In coming to its decision, the US court found that Isohunt engaged in “inducement” rather than just being the passive search engine that Fung claimed to be, because Isohunt had direct knowledge that pirated material was available on the site and also because Fung profited from the infringement through advertising while having the ability to control infringing activity, yet did not do so.

The lawsuit launched in Canada by the music industry was a separate case under Canadian law, and has now been settled. This marks the end of a long saga that began with a cease and desist letter to Isohunt from the CRIA in 2008, following which Fung decided on a self-declared “pre-emptive strike” by seeking a declaratory judgement in the British Columbia courts that Isohunt was in full compliance with Canadian copyright law. It was, as they say, a “ballsy” (but desperate?) move that did not work, with Fung’s dispute with the music industry finally leading to the settlement last month in which he was prohibited by the British Columbia Supreme Court from operating in future any file-sharing site anywhere in the world.

Sadly, the demise of Isohunt is hardly the end of the ongoing struggle between the content industry and those who work in it, and the purveyors and facilitators of online piracy. Ukrainian Artem Vaulin, the founder of KickAss Torrents (KAT), one of Isohunt’s successors, was just arrested in Poland on a US Department of Justice extradition warrant. KAT is described by the DOJ as “today’s most visited illegal file-sharing website”. Another notorious facilitator of copyright infringement, Kim Dotcom, founder of Megaupload, has been fighting extradition from New Zealand to the US for the past four years. A New Zealand court has ruled in favour of extradition, a decision that is currently on appeal. And so the struggle against online piracy continues. While it is a long and frustrating battle for the content industry, experience has shown that without vigourous enforcement action (combined with other measures such as new market offerings and consumer education for example), the Gary Fungs of this world will continue to take advantage of every possible legal loophole to run a business by free-riding on the talent, energy and capital of the artistic and creative industries.

But perhaps Gary Fung is now a reformed character. In a farewell message, Fung claims to be relieved to be free of litigation and states that he will be directing his attention to new (and hopefully legal) projects such as automating the search for information on the internet through smart phones. I wish him good luck. The man has talent. Perhaps this time around that talent will be directed into more useful endeavours that will support creativity rather than to seeking to destroy the value generated by the work of others.

© Hugh Stephens, 2016. All Rights Reserved.

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