Despite the best efforts of the film industry, a copy of the latest Wizard flick Harry Potter and the Prisoner of Azkaban is circulating on the Internet.

The movie moguls took unusual steps to prevent the pirating of this film including giving ushers army style night vision sniper sites to pick out people filming in the darkened cinemas.

However it is clear that the industry's efforts were wasted, as an AVI copy has now appeared on several pirate sites seen by the INQ.

INQ sources in the pirate trade say that the print came from the US, It was probably made by someone who actually had access to a cinema projection booth and filmed it when there was no-one around.

The number of music tracks available through file-sharing networks has fallen 27 per cent compared to the same period last year.

The IFPI claims the fall in numbers is due to the success of legal download sites like Napster and increasing public understanding of the legal position of file-sharing. The IFPI sues individual file sharers and has taken action against 200 people in Denmark, Germany and Italy. It is taking legal action against another 24 people in Denmark. It claims seven out of ten Europeans now know file-sharing is illegal.

Canadian researchers IT Innovations and Concepts point out that some users are blocking access to shared files because of fears of legal action. ITIC also ask how legal download sites, which they estimate as making up 0.1 per cent of illegal downloads, could absorb nearly a third of files. They estimate that the number of file sharers fell 3 per cent but that would not account for a 27 per cent fall in file numbers.

The so-called Pirate Act is raising alarms among copyright lawyers and lobbyists for peer-to-peer firms, who have been eyeing the recording industry's lawsuits against thousands of peer-to-peer users with trepidation. The Justice Department, they say, could be far more ambitious.

Foes of the Pirate Act have been alarmed by the unusual alacrity of the proposal's legislative progress. It was introduced just two months ago, on March 25, and not one hearing was held before the Judiciary committee forwarded it to the full Senate for a vote a month later.

"This was an attempt to move it in a stealthy manner," said Philip Corwin, a lobbyist for Sharman Networks, which operates the Kazaa network. "I can't imagine that (Hollywood lobbyist) Jack Valenti or (RIAA chairman) Mitch Bainwol really wants to come before Congress and give testimony saying, 'We can't afford to bring these lawsuits. That's why we want the taxpayer to pay for them.' I can't believe they want to do that in public."

The threat of legal action and hefty fines has done little to stop internet users around the world trading music and video files, according to a new study of network traffic.

"There's been no decline in the number of people file-sharing," says Chris Colman, European managing director for Sandvine.

The company's research indicates that the proportion of total net traffic used for peer-to-peer sharing has declined only slightly in the US over the last year, from 70 to 65 per cent.

Furthermore, file-sharing in Europe has not dropped at all - it now accounts for 70 to 80 per cent of net traffic. And internet usage in both the US and Europe is still growing, meaning that file-sharing is growing overall.

However, Sandvine's study does reveal that many US file-traders have moved away from the most popular service, Kazaa. File-sharing traffic via Kazaa has dropped from 90 per cent of the total to just 20 per cent. Users in the US have shifted to alternative networks, in particular eDonkey.

Italy has made transferring content via the Internet without the permission of the copyright holder a criminal offence

The Italian parliament yesterday voted in favour of imposing jail sentences of up to three years on anyone caught uploading or downloading unauthorised copyright material to and from the Net.

The move comes in direct response to the rise of P2P services such as Kazaa and Gnutella, and was prompted by the country's film industry.

Those found guilty of the unauthorised distribution of copyright material now face a fine of between €154 and €1032 ($185-1240), a jail sentence of between six months and three years, the confiscation of their hardware and software, and the revelation of their misdeeds in Italy's two national newspapers, La Repubblica and Corriere della Sera.

How about a celebrity boxing match between Quentin Tarantino and Jack Valenti? Last week Tarantino spoke at an "anti-piracy" conference and made the case that movie piracy isn't so bad in many cases. However, by not sticking to the script, Tarantino has apparently upset MPAA head Jack Valenti. It's a little unclear what was said, but from the article linked here, it sounds like Valenti was threatening Tarantino. He tells him that it's time to "get on-board" with the industry's anti-piracy efforts. However, there doesn't appear to be an "or else," which certainly makes it sound like quite the idle threat. However, he's also threatening file sharers, and is basically admitting that the MPAA is likely to follow in the RIAA's footsteps and start directly suing end users. Valenti warns: "Suppose you can [download] a movie in five minutes, piracy will explode like a pandemic." Mr. Valenti's track record in such predictions isn't so hot. After all, he's the guy who predicted the VCR would kill the movie industry just before it (oh, that's right) saved the industry.

While the entertainment industry continues to stick by its hardline stance that any kind of copying or file sharing is bad and harms sales, they can't be thrilled that Quentin Tarantino stood up at an "anti-piracy conference" and told everyone that copying movies isn't all bad. In fact, he admits that he bought a bunch of bootleg movies that were hard to find in order to recreate certain scenes for his latest movie, Kill Bill. On top of that, he says he's happy that Kill Bill is being pirated in China since there's no other way for people to see it there. Just like in the music industry, it appears that those people who the RIAA and MPAA claim they're trying to "protect" realize the issue is a bit more complicated than the world is being told.

The author of Winny, the Japanese P2P software with encrypted networking capability, similar to Freenet, has been today officially arrested for abetment of copyright violation, after the raid in the last December. He started its development in May 2002 and occasionally appeared on the web forum 2ch with his anonymous codename "47", but today turned out to be an assistant professor of computer science at the University of Tokyo in his 30s. Winny was so efficient and popular that it generated problems even at the Japanese police and the GSDF. As the Japanese police is the most advanced among the world in pulling P2P into criminal cases, outcry of users in Japan is expected.

Created by software firm Audible Magic, the song-filtering software is backed strongly by the Recording Industry Association of America (RIAA). The software has also triggered interest in Washington, D.C., and skepticism in the peer-to-peer world and among some students and universities.

File-swapping companies--some of which have contended that filtering their networks is impractical or even impossible--said they were skeptical of the claims, noting that neither RIAA nor Audible Magic had given them a demonstration of the filtering tools. Industry trade group P2P United says it has repeatedly contacted the company asking to see the filters in action.

Jacobson said the identification process would not work on an encrypted network, such as is used in several newer file-swapping programs. However, the Palisade software could act to block those applications from using the network altogether, instead of blocking individual song transfers, he said.

At the end of March a Canadian judge ruled that use of the Kazaa P2P network did not constitute copyright infringement, in a case brought by the Canadian Recording Industry Association that was attempting to identify 29 Canadian people who had been downloading music.

More surprising is the action taken by a New Jersey mother, Michele Scimeca, who received an RIAA notice in December after her child used the Kazaa network for a school project. She has countersued labels Sony, Universal and Motown by claiming that the demands for reimbursement of $150,000 per infringement falls foul of the 1970 Organized Crime and Control Act.

Given that the film and computer games industries are not up in arms despite the large amount of downloading of their intellectual property, the recording industry may increasingly be seen as a spoilt brat throwing a tantrum. Although strong-arm tactics have filled the pockets of the world's biggest recording companies for the past 50 years, the estimated billions of file-sharers in the US, Europe and Asia may be a harder nut to crack.