• by Wendy Davis  @wendyndavis, January 11, 2011

So-called "digital piracy" sites generate more than 53 billion visits a year, with three such sites -- rapidshare.com, megavideo.com and megaupload.com -- accounting for almost half of those visits, according to a new study by brand protection company MarkMonitor.

"While counterfeiting and piracy in the physical world are serious problems, these issues are growing at a significant rate online and pose unique challenges in remediation, due to the inherent nature of the Internet with its global reach, cost efficiencies, and anonymity," MarkMonitor states in a report about its findings. The company worked with the U.S. Chamber of Commerce to prepare the report, says MarkMonitor vice president of communications Te Smith.

The company defines "digital piracy" sites as those that offer unauthorized versions of TV shows, movies or music for free. For the report, MarkMonitor scoured the Web for unauthorized versions of 10 media brands -- that is, particular songs, TV shows, games and the like -- that were available online. The company found 43 "piracy" sites that offered such material, including Rapidshare, Megaupload and Megavideo.

But despite the report's terminology, none of the three sites mentioned by name as piracy sites have been ruled illegal and one -- Rapidshare -- recently prevailed in two court battles. In one, U.S. District Court Judge Marilyn Huff in the Southern District of California refused to grant an injunction against the hosting service in a lawsuit brought by adult entertainment company Perfect 10.

Huff ruled last May that Rapidshare -- which allows users to upload large files to a site with a unique URL -- didn't appear to contribute to piracy by users. Huff also said that Rapidshare was capable of non-infringing uses, noting that PC World magazine in Germany distributed anti-virus software to readers through the service. (The lawsuit brought by Perfect 10 appears to have subsequently settled.)

Rapidshare, based in Germany, also won a victory in that country last year when an appellate court said the company wasn't responsible for users' copyright infringement.

MarkMonitor's Smith said that even though people use sites like Rapidshare for legitimate purposes, the company was "able to verify that content was on that site that had not been uploaded by the brand."

She also said that the company doesn't consider sites like YouTube piracy sites because they "have procedures in place where brandowners can take down the material." The report itself says that some of the domains identified as piracy sites also have procedures for content owners to take down material.

In a separate conclusion, MarkMonitor also said it found 48 sites that sold "counterfeit" goods -- almost all of which sold either prescription drugs or luxury items like handbags and jewelry. In those cases, the sites tended to identify the goods as replicas or generics, Smith says.