A court orders PayPal and Alipay to freeze VPN funds in a piracy lawsuit

A federal court in Virginia issued a temporary restraining order requiring PayPal and Alipay to freeze the assets of VPN provider VeePN. The order was requested by several filmmakers who have accused the VPN of marketing Porcom Time and promoting the infamous torrent site YTS.mx.

VPN services are usually considered neutral intermediaries. In reality, they forward traffic to their own servers, adding an extra layer of security to their customers.

Some VPN providers go a step further and sell their services directly to online pirates. According to the group of filmmakers, it was done by the Panamanian company VeePN.

Filmmakers sue VeePN

Last month, several film companies, including Voltage Holdings and Screen Media Ventures, filed a lawsuit against VeePN in federal court in Virginia. The filmmakers have been joined by 42 Ventures, a Hawaiian company controlled by anti-piracy lawyer Kerry Culpepper. 42 Ventures registers trademarks for terms such as Popcorn Time, YTS and RARBG.

The plaintiffs’ complaint alleges that VeePN “promotes” the use of pirate sites and Popcorn Time while promoting its services on the well-known torrent website YTS.mx. Film companies claim copyright and trademark infringement.

VeePN has yet to respond in court, but the company is already facing initial setbacks. To stop the offending activities and secure VeePN’s assets, the filmmakers previously applied for a temporary restraining order (TRO), which was granted this week.

Court Freezes VeePN’s Funds

The decree orders several companies to temporarily freeze funds related to VeePN, as the lawsuit is pending. This also applies to PayPal and Alipay, the two payment processors that the VPN uses.

VeePN must also immediately stop using the phrase “Popcorn Time VPN” in its marketing materials. A VPN provider cannot mention pirated software. In addition, rights holders must sign an additional $25,000 bond.

District Court Judge Anthony Trenga concludes in his ruling that the rights holders met all four requirements for a restraining order. If the case proceeds with the possibility that their initial claims will be successful at trial.

Bad PR

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Ex Parte

Judge Trenga issued the order ex parte, which means that VeePN was not taken into account. According to the court, this is because the rights holders fear that the VPN service will try to shift the money, as it has done in other movie piracy cases.

Ironically, allegations that VeePN and those associated with the company took steps to hide and conceal their identities contributed to the decision to settle ex parte. If the defendants were informed before the trial, they could try to transfer the money elsewhere.

While VeePN has yet to receive an official response, the company has removed the “Popcorn Time VPN” blog post from its site in recent days. However, Alipay and PayPal are currently still available as payment options.

You can get a copy of Virginia District Court Judge Trenga’s temporary restraining order here (pdf).

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