By Jane Wakefield
Technology reporter, BBC News
Net pirates could be cut off from the net under a new law
Anti-piracy firm DigiProtect, which has teamed up with UK law firm ACS:Law to send thousands of letters to alleged net pirates, has defended its actions.
It follows widespread condemnation of their methods, which involves mass-mailing alleged file-sharers asking them to pay a fine or face court.
UK consumer magazine Which? has received complaints from people saying they have been wrongly accused.
DigiProtect told the BBC it is just protecting its rights-holders.
The German-based firm refused to divulge the names of its clients, saying only that they were "musicians or producers".
It has no UK-based clients although the firm said it was about to start marketing its service in Britain.
The service works by mutual agreement with rights holders. DigiProtect identifies when its clients' content is being shared illegally on file-sharing networks.
Armed with IP (internet protocol) addresses - which identify the computer used in any copyright infringement - its lawyers can then apply for a court order to get the physical address of a computer from the service provider whose network has been used for the file-sharing.
A letter is then sent to the alleged pirate, asking them to either pay a one-off fee of around £500 per infringement or face court action.
Customers of service provider O2 have been among those targeted and the ISP has condemned attempts to "bully or threaten our customers", a charge DigiProtect and ACS: Law deny.
"The approach we use is the only proven effective proceeding," the firm said in an exclusive statement for the BBC.
It admitted that much of the monitoring of file-sharing networks that it does in order to identify illegal content is an "automated process".
"With the infinite number of products offered on file-sharing networks, no other process would even be possible, this is just another example of the astronomical dimensions that file-sharing has taken on," it said.
It also conceded that some people may have been wrongly identified.
"In some cases the subscriber is not the rule breaker, but as they own the internet access they are our initial point of contact. We make an enquiry of them as to how the infringement occurred and progress with the matter in an appropriate way depending on the response given," it said.
Consumer magazine Which? has been contacted by a number of people who say they have been wrongly accused of downloading material.
Some, including pensioners, said they had no idea how to share files.
DigiProtect made no apology to those wrongly accused.
"You have to regard the damages that are caused by illegal file-sharing. The ones who are traumatised are the content providers," it said.
Illegal file-sharing has been a huge problem for music and film industry and a recent industry study, by economics firm TERA Consultants, estimated that the UK's creative industries experienced losses of £1.2bn in 2008 due to piracy.
The Digital Economy Bill has just become law and it allows rights-holders to pursue file-sharers and, in extreme cases, temporarily cut their internet access.
The BPI, which represents the British music industry and lobbied hard to push the bill through parliament, has been keen to distance itself from the methods used by DigiProtect and ACS: Law.
It told the BBC that legal action should be reserved for the worst offenders rather than "widely used as a first response".
But DigiProtect defended its method.
"Our rights holder clients prefer the methods we adopt, together with the positive and direct benefits they derive from them," the statement said.
It added that it "pays the rights holder at least 50% of the amount that remains after deducting all costs".
Last week, law firm Tilly, Bailey and Irvine (TBI) which had been sending similar letters, said it would end its campaign.
"We have been surprised and disappointed by the amount of adverse publicity that our firm has attracted in relation to this work," John Hall, managing partner at TBI said in a statement.
"Following discussions with our clients we have reluctantly agreed that we will cease sending out further letters of claim," it added.
Deborah Prince, head of legal affairs at Which? said she was pleased that TBI had decided to stop the practice.
"Hopefully, other law firms thinking of going down a similar route will refrain as we believe the practice is inherently unfair and unethical," she said.