US courts order first seizure of Android 'app' piracy domains

Out-Law News | 27 Aug 2012 | 12:05 pm | 3 min. read

Three websites which distributed copyrighted smartphone 'apps', or applications, have been shut down by law enforcement authorities in the US, in which the Department of Justice (DoJ) said was the first case involving "cell phone app marketplaces".

The DoJ said that the seizures were the result of "comprehensive enforcement action taken to prevent the infringement of copyrighted mobile device apps" involving international authorities, including those in France and the Netherlands. Visitors to any of the three sites - applanet.net, appbucket.net and snappzmarket.com - will now find a banner notifying them that the relevant domain name has been seized by the authorities and informing them that "wilful copyright infringement" is a federal crime.

"Cracking down on piracy of copyrighted works – including popular apps – is a top priority of the Criminal Division," Assistant Attorney General Lanny Breuer of the DoJ's criminal division said in a statement. "Software apps have become an increasingly essential part of our nation's economy and creative culture, and the Criminal Division is committed to working with our law enforcement partners to protect the creators of these apps and other forms of intellectual property from those who seek to steal it."

As part of the investigation, the DoJ said, FBI agents downloaded "thousands of copies" of popular copyrighted apps from the sites. In most cases, it said, the servers storing the apps sold by the sites were being hosted outside the US. In addition to obtaining evidence stored on those servers from the international authorities, nine search warrants were executed in six different parts of the US including Georgia, Florida, Mississippi and Texas.

The FBI works as part of the National Intellectual Property Rights Coordination Center (IPR Center); a US government partnership made up of 19 member agencies which conducts investigations and coordinates enforcement action relating to intellectual property (IP) theft.

"The theft of intellectual property, particularly within the cyber arena, is a growing problem and one that cannot be ignored by the US Government's law enforcement community," Brian Lamkin, the FBI Special Agent in Charge of the investigation, said. "These thefts cost companies millions of dollars and can even inhibit the development and implementation of new ideas and applications."

Intellectual property law expert Indradeep Bhattacharya of Pinsent Masons, the law firm behind Out-Law.com, said that the announcement reflected a more general international trend among governments "clamping down" on copyright infringement. He said that it would be interesting to see whether the US Government's stance would have any impact on how governments in Europe might react to portals allowing users to sell 'used' apps to third parties, following a recent decision on sales of second-hand software by the European Court of Justice (ECJ).

Bhattacharya said that the July decision, in which the ECJ found that software vendor Oracle's distribution rights were exhausted when that software was sold, opened the way for arrangements where users could sell "apps that they legitimately purchased through legal sources" to third parties. However, he pointed out that the ruling in the Oracle case was based on "particular facts of the Oracle licences that were in issue", and that it "remains to be seen" how the ECJ's decision would be interpreted by national courts.

Although the DoJ said that the seizures were the first involving pirated smartphone apps, US law enforcement authorities have closed down some high-profile file sharing sites in recent months. In January, it seized domain names related to storage site Megaupload following complaints by the Motion Picture Association of America (MPAA) and others. In a statement released at the time, the DOJ said that the sites were part of an "international organised criminal enterprise allegedly responsible for massive worldwide online piracy" which had caused harm to copyright owners worth more than half a billion dollars.

In the UK a group of five internet service providers (ISPs) were ordered by the High Court in May to block their customers' access to file-sharing website The Pirate Bay. The High Court had previously ruled that both the operators of the site and its users were guilty of infringing the copyright of music rights holders. The previous year one of the ISPs, BT, was also ordered to block access to the Newzbin2 website after the Motion Picture Association (MPA) had claimed the site infringed the copyright of six major film studios.

Last month Matt Gemmell, an Edinburgh-based software engineer, suggested that the 'open' nature of the Android operating system had contributed to reports of widespread app piracy. Applications can be installed onto devices running Android, which is part of Google, independently of the 'Google Play' app marketplace. By contrast, applications can only be installed on iPhones and other devices running Apple's iOS operating system independently of iTunes by 'jailbreaking' the device.

In April, games maker Sports Interactive claimed that nine copies of its 'Football Manager' simulation were being illegally downloaded for every legitimate sale. Three months later Madfinger Games, based in the Czech Republic, announced that it would give away copies of a zombie-themed game costing $1 to download for free after seeing "giant" piracy rates, according to the BBC.