Digital Gridlock Announcement

Wednesday, August 25, 2004

 

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Good afternoon.

The protection of America's intellectual property is a priority for the Department of Justice. In March of this year, I announced the creation of an Intellectual Property Task Force to examine how the Department can better protect the innovative and creative capacity of our economy.

One month later, with Operation Fastlink, the Department launched the largest global enforcement action ever taken against the theft of intellectual property over the Internet.

Operation Fastlink focused on the highly organized, international online theft networks known as Warez ("wares") groups. Warez groups are often the original sources for most of the stolen movies, music, games and software that filter down through more commonly used methods of distribution, such as peer-to-peer networks.

Today, I am announcing the first federal enforcement action ever taken against criminal copyright theft on peer-to-peer networks. Today's enforcement action is a natural progression in our comprehensive effort to combat theft of intellectual property over the Internet.

This morning, the Federal Bureau of Investigation executed six search warrants in Texas, New York, and Wisconsin at five residences and one Internet service provider. Today's action is part of an investigation known as Operation Digital Gridlock.

Operation Digital Gridlock is an ongoing criminal investigation conducted by the FBI's Washington Field Office, the U.S. Attorney's Office for the District of Columbia, and the Computer Crime and Intellectual Property Section of the Justice Department's Criminal Division.

Operation Digital Gridlock is an investigation of the illegal distribution and reproduction of copyrighted music, movies, software, and games, over peer-to-peer networks. In today's enforcement action, federal agents seized computers, software, and computer-related equipment.

Operation Digital Gridlock is targeting illegal file trafficking of copyrighted material over peer-to-peer networks using Direct Connect software. These networks belonged to a group known as "The Underground Network."

"Peer-to-peer" or "P2P" refers to a type of file-trading network. A group of computer users with the same networking software program can connect their computers with each other through the Internet and directly access, download and copy files from one another's hard drives.

While there are legal uses for P2P networks, such networks are used frequently for the illegal distribution and trafficking of copyright-protected music, movies, games, software, and published works.

The peer-to-peer networks investigated in Operation Digital Gridlock consisted of individuals who were required to make available for theft a minimum of between one to 100 gigabytes of digital files. To understand the volume that represents, just one gigabyte of information holds 250 songs.

Virtually every kind of software, game, movie, and music was available for illegal downloading and distribution on these networks, from computer games and music that would cost as much as $18 to $35 dollars if purchased legitimately, to specialized software that has a retail cost in excess of $1000. Some works were available even before they could be purchased legitimately by the public, such as movies that had not yet been distributed in theaters or on DVD.

There were 5 Direct Connect peer-to-peer networks searched today, with such names as "Achenon's Alley," "MOVIEROOM," "PROJECT X/THE ASYLUM," and "SILENT ECHOES."

On these 5 networks alone, more than 40 terabytes of material was available to be distributed and trafficked by the users on any given day. To better understand the sheer magnitude of this amount of data, consider that 40 terabytes worth of data is the approximate equivalent of:

• Four times the print collection in the Library of Congress; or
• 60,000 movies; or
• 10 and a half million songs.

Theft through the illegal reproduction and distribution of music, movies, software, games, and published works is estimated to cost U.S. industries $19 billion worldwide each year. The victims of online theft include:

• Those who produce and distribute the copyrighted works, such as the songwriter or inventor;
• The employees and shareholders of the companies that own the copyrights, as well as employees of the many businesses that legally distribute the copyrighted works, such as movie theater employees and CD or software sales staff; and,
• The legitimate customers who must pay higher retail prices, because others believe they are entitled to steal copyrighted works online.

P2P does not stand for "Permission to Pilfer." Illegal distribution and reproduction of copyrighted material is a serious criminal offense.

Today's investigative action sends a clear message to online thieves who steal the hard work and innovation of others. And it sends a clear message to those who think nothing of downloading those stolen goods to their computers or MP3 players. You can pay the fair value for music, movies, software and games like every other consumer, or you can pay an even higher price when you are caught committing online theft.

I thank the Computer Crime and Intellectual Property Section of the Department's Criminal Division, as well as U.S. Attorney for the District of Columbia Kenneth Wainstein and the Federal Bureau of Investigation.