The Russian based "Pirate Pay" startup is promising the entertainment industry a pirate-free future. With help from Microsoft, the developers have built a system that claims to track and shut down the distribution of copyrighted works on BitTorrent. Their first project successfully stopped tens of thousands of downloads.

Hollywood, software giants and the major music labels see BitTorrent as one of the largest threats to their business.

Billions in revenue are lost each year, they claim. But not for long if the Russian based startup “Pirate Pay” has its way. The company has developed a technology which allows them to attack existing BitTorrent swarms, making it impossible for people to share files.

The idea started three years ago when the developers were building a traffic management solution for Internet providers. The technology worked well. It was able to stop BitTorrent traffic if needed, which made the developers realize that they might have built the holy anti-piracy grail.

“After creating the prototype, we realized we could more generally prevent files from being downloaded, which meant that the program had great promise in combating the spread of pirated content,” Pirate Pay CEO Andrei Klimenko says.

With this new business model in mind the company continued to develop their product, and it didn’t take long before an investor was willing to support it. Last year Pirate Pay received a $100,000 investment from the Microsoft Seed Financing Fund.

Microsoft Russia’s president praised the innovative idea, which his company would also be able to use in the future.

With the cash injection the company continued working on their anti-piracy solution and December last Direktcya Kino was the first to hire Pirate Pay’s services. For a month Pirate Pay’s technology protected the film “Vysotsky. Thanks to God, I’m alive,” (distributed by The Walt Disney Studios Sony Pictures Releasing company) with moderate success.

The company doesn’t reveal how it works, but they appear to be flooding clients with fake information, masquerading as legitimate peers.

“We used a number of servers to make a connection to each and every P2P client that distributed this film. Then Pirate Pay sent specific traffic to confuse these clients about the real IP-addresses of other clients and to make them disconnect from each other,” Andrei Klimenko says.

The end result was that 44,845 transfers were successfully stopped. How many downloads slipped through, and whether the downloaders didn’t simply try again later is unknown. Pirate Pay don’t disclose their exact rates but say they charge between $12,000 and $50,000 depending on the scope of the project.

While Pirate Pay claim their technology is truly unique, it is not the first company to tackle BitTorrent piracy. The now defunct MediaDefender charged hundreds of thousands of dollars to attack BitTorrent trackers and upload fake torrent files.

MediaDefender was rebranded to Peer Media, and under this brand they continue to offer these and other anti-piracy services.

Whether Pirate Pay is truly different and more effective than any of the other solutions remains to be seen. Even if it’s hugely effective, the scattered nature of BitTorrent makes it practically impossible to stop all infringing downloads of a movie, while the costs may outweigh the “losses” that are prevented.

Companies that really want to make Pirates Pay are probably better off investing in improvements to their legal offers.

Article updated to emphasize that Direktcya Kino was the first client.