The skyrocketing U.S. trade deficit -- which reached a record $618 billion last year -- has compounded U.S. concerns about piracy and counterfeiting. Companies that produce movies, music and software and other intellectual property account for a growing share of what the United States has to sell to the rest of the world.

Knocking $250 billion off that would be great, but economic realities won't allow for that to happen overnight. The massive black market in China is spurred in part by monopoly pricing—namely, prices are too high, and the only competition to bring them down is illegal competition. While pirated copies of Star Wars might sell for $1 on the street, 20,000 sales of that pirated DVD do not translate to 20,000 sales of $15 legit DVDs in the absence of piracy.

In China, the battle will be fierce. The 1 billion DVD/year market is almost entirely composed of bootlegs, to the tune of 95 percent. Even so, Warner Brothers has fought back by dropping the price of their DVDs to the $3 range on average, making it a real competitor with the lower-quality black market versions.

We're used to bogus, inflated claims of losses due to piracy from the computer software industry, the movie business and the music industry, so it shouldn't be too surprising to see some crazy numbers saying ringtone vendors are losing money thanks to online "shoplifters". The key difference here, though, is these numbers aren't coming from the vendors themselves, blowing hot air about their perceived losses, but an even less unbiased party: a company looking to sell its "secure" commerce products. Apparently some ringtone and music vendors let users preview content before buying, and this somehow translates into "lost" sales because there's a possibility a user will swipe the preview and not buy the content, which is apparently "the mobile and cyber-equivalent of test-driving a car and then not having to give it back". Of course, like all the other bogus loss claims, the company assumes that every user that is happy to take the preview would have bought the content -- which isn't the case. In any case, plenty of companies selling ringtones are doing a perfectly adequate job of shooting themselves in the foot without having to blame pirates.

Stephen Cooper, operator of the mp3s4free Web site, was found guilty of copyright infringement by Federal Court Justice Brian Tamberlin.

Although Cooper didn't host pirated recordings per se, the court found he breached the law by creating hyperlinks to sites that had infringing sound recordings.

Tamberlin found against all other respondents in the case, namely ISP Comcen, its employee Chris Takoushis, Comcen's parent company E-Talk Communications, and its director Liam Bal.

Outside the Sydney court, Music Industry Piracy Investigations general manager Michael Kerin said the verdict sent a strong message to ISPs.

"The verdict showed that employees of ISPs who engage in piracy can be seen in the eyes of the court as guilty," Kerin said.

Cooper was not present in court. His legal counsel, Bev Stevens, said the verdict was "extremely disappointing".

Just when you thought ownership of intellectual property couldn't get any more absurd: The New York Times is reporting that the word 'Stealth' is being vigorously protected *in all uses* by a man who claims to exclusively own its rights. Not only has he gone head to head with Northrop Grumman, he has pursued it vigorously in the courts and has even managed to shut down "stealthisemail.com" (Steal This Email.com) because the URL coincidentally contains the word "stealth". What's terrifying is that he's gotten as far as he has.

The FBI has swooped on an alleged pirate ring 'top sites' and arrested a bloke who ran one of its servers.

Apparently the Feds had been posing for a considerable amount of time as server operators, inviting people to upload and download material.

According to Restless.ugtech.net an FBI spokesman said that once a good working relationship had been established with the pirates the trap had been set. Then all that remained to do was for the FBI to do was shut its trap.

If you ever downloaded from servers called called "Chud" and "Lad", which were run by a bloke called "Griffen", you might be wondering if you will get a knock on your door.

Self-interest group the Recording Industry Association of America has filed a fresh round of legal complaints against 784 flie-sharers, alleging violation of copyright.

In an apparent mis-interpretation of the Supreme Court decision against Grokster, RIAA chairman and chief executive Mitch Bainwol said: "If there was any doubt left, there should now be none -- individuals who download music without permission are breaking the law."

We also note that in its statement in praise of the Supreme Court ruling, the RIAA says: "With this unanimous decision, the Supreme Court has addressed a significant threat to the U.S. economy and moved to protect the livelihoods of the more than 11 million Americans employed by the copyright industries."

The Institute for Spam and Internet Public Policy is reporting that two new laws in Utah and Michigan are going into effect next week, creating 'do not email' registries for children's email addresses. According to ISIPP, 'Email marketers who send unpermitted messages to email addresses or domains on the child protection registries in Michigan and Utah face stiff penalties including prison and fines.'

The federal court has ruled two systems administrators from Internet service provider (ISP) Swiftel can be sued for alleged music piracy, overriding an earlier decision.

Perth-based Swiftel has been accused of copyright infringement by major record labels -- which claim the ISP's employees and customers created a BitTorrent file-sharing hub for hosting thousands of pirated sound and video recordings.

The labels allege Swiftel's senior systems administrators Melissa Ong and Ryan Briggs ignored calls to remove Web sites that were in breach of copyright, and instead "treated the infringement notices like spam."

Swiftel's laywer protested, claiming only customers were responsible. However, in a twist, the ISP said a key customer in the case, Archit Jha, has already settled with the music industry's local piracy unit, Music Industry Piracy Investigations.

Jha had been named as the creator of "Archie's hub", a BitTorrent hub central to the case. However, the music industry has not included him as a respondent in its legal action.

Justice Branson noted Jha's situation and absence from the list of respondents. "Archie's [Archit's] someone who could be carrying the can here," she said.

By now it should be no surprise that the MPAA likes to overhype lots of things, from the "losses" due to file sharing to the "risk" posed by the VCR ("the Boston Strangler" to the movie industry). The current bosses are no exception, from blaming technology to dire warnings about the end of content, it pays to take most of what they say with an extra big grain of salt. Hopefully, you had that salt handy as you read an announcement trumpeted by the MPAA about how they, along with a "California High Tech Task Force" shut down a Southern California DVD processing plant seizing $30 million worth of DVDs. The implication, though not stated in the article, was that the plant was used to copy DVDs illegally. Perhaps the reason it wasn't stated was because it might not actually be true.

Constitutional Code points to the processing plant company's angry response to the news today, suggesting that almost nothing in the MPAA's announcement was accurate. First off, the company claims they only copy legal DVDs, and are a well established (over 15 years in business) legal DVD and CD reproduction plant. Second, neither the MPAA nor the so-called High Tech Task Force "shut the plant down." After the raid was completed the plant was allowed to return to full production levels immediately. The Task Force did take some DVDs, but the plant believes they were perfectly legitimate DVDs being produced by a well-known public company. Finally, in the MPAA's favorite area, it looks like they completely inflated by ridiculous amounts the "value" of the seized materials. The plant claims that the DVDs taken were worth a grand total of $10,540. The DVD copying equipment seized was worth about $15,000. In other words, the claim of $30 million worth of product seized was exaggerated by a mere 2,000%.

New film has been released showing the former Iraqi leader Saddam Hussein being questioned by magistrates, the first footage of him in almost a year.

Saddam Hussein's lawyers have recently complained that he has been allowed only two meetings with them since being arrested in Iraq in December 2003.

The former Iraqi leader, who is accused of ordering a string of massacres and murders during his rule, looks pensive as he answers questions.

The BBC's Alastair Leithead in Baghdad says the video portrays Saddam Hussein in a respectful way, but that he does not appear to be as in control of the situation as he did when he appeared in court last year.