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I don't think this is correct. When you share/download torrents you aren't paying the user at the receiving end. Yet it is still illegal.

By your logic, I could stay in Times Square giving out copies of Avatar and Inception as long as I give it for free.

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It's not just a question of legal/illegal. Some things that are illegal are not criminal--they create civil liability instead. If you lose, you owe money but you don't go to jail or have a criminal record.

Have any individuals been criminally prosecuted for their personal BitTorrent use? I've read a lot of stories of people being sued, but I can't remember a story of criminal prosecution. I guess it would be possible if the prosecutor could make the case that BitTorrent is a form of distribution, and the amount meets the criteria in the law:

http://www.copyright.gov/title17/92chap5.html#506

There is a whole bunch of legal jurisprudence in just about every country that deals with intentional infringement of copyrights.

In the US: Operation Gridlock, Operation D-Elite, etc., etc. Look it up.

I (believe) the main issue with torrents has been the fact that you are also distributing when you download. This is why (AFAIK) very few people have been fined for streaming or downloading from services like Rapidshare.

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