Last year, when Nina Arbabzadeh, from Toronto, signed up to do an exchange program at the Hertie School of Government in Berlin, she never expected that while in Germany she would have to pay hundreds of euros for a copyright infringement fine.

"When going there I had no understanding that something like this might happen," Arbabzadeh said.

After taking a quick trip to Budapest, Arbabzadeh, who was then completing a master of public policy degree at the University of Toronto, and her roommate came back to Berlin to an irate landlord who had received a letter from a Hamburg-area law firm saying that he owed €1,200 as a fine for illegally sharing music files from Channel Orange, an album by R&B artist Frank Ocean.

"We panicked quite a bit," she said.

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Arbabzadeh, now back in Toronto after completing the exchange program, is one of hundreds of thousands of people in Germany each year who receive cease-and-desist letters from German law firms working on the behalf of media companies trying to crack down on illegal file-sharing. According to Christian Solmecke, an attorney who defends those who receive such letters, about half a million were sent out in 2011, and about 250,000 were sent out last year. Usually, recipients of the letters have to pay a fine of between €300 to €1,500 and sign a document that says they will never do it again.

Solmecke says that these letters are used by law firms as a sort of opening salvo, inducing people to settle up before a full-on trial. "If the case goes to court," Solmecke said, "they want between €150 and €300 per traded file."

So, for somebody who has shared 1,000 files, the cost can theoretically balloon to €300,000. Although, Solmecke says, a prosecuting law firm would probably only bring a handful of instances to court, in order to manage their client's reputation. "People won't like the music industry any more if there are such high damages," he said.

Solmecke's Cologne-based firm, Wilde Beuger Solmecke, has represented about 30,000 clients who have received cease-and-desist letters and can usually negotiate the fee down "by about half". But this comes at a cost: Wilde Beuger Solmecke usually bills between €400 to €500 for representation.

Legal grey areas

To find people who are illegally sharing files in Germany, law firms hire companies who monitor BitTorrent traffic for copyrighted items — popular films, music, games, and porn are specifically tracked. These firms find IP addresses that originate in Germany, and then trace them back to an ISP such as Deutsche Telekom or Vodafone, who are then obligated by law to give up the name and address of the person who was using the IP address at the time of the offence. In Germany, uploading a copyrighted file is unambiguously illegal, as is downloading (although there are some rare exceptions for downloading copyrighted files for personal use).

However, complicating the issue is the fact that the copyright laws surrounding file-sharing are currently going through changes, and grey areas and unresolved issues abound. For instance, according to Christian Solmecke, the person whose name is on the internet contract for an offending IP address is liable, unless he is able to "excuse himself"; that is, prove that somebody else (a roommate, for example) could have used the internet at the time a file was shared. "[But it's not clear if you have to give up a the person who was actually responsible," Solmecke said.

And last year, Germany's Federal Supreme Court ruled that parents were not liable if their children illegally shared files if the parents have done everything they could to make sure the children knew what they were doing was wrong.

Additionally, as the law currently stands, anybody operating an unsecured wi-fi network (at a coffee shop, for example) would be automatically responsible for any copyright infringement that occurs on the network. There is a current Supreme Court case that questions the legality of this, but it probably won't be resolved before the federal elections, which take place in September.

And even the amounts of the fines are in dispute. In June, Germany passed a law regulating cease-and-desist letters. Now, law firms sending out the letters can only ask for about €150 in legal fees. "We will see if everything stops now, since the music industry won't find lawyers who work for €150," Solmecke said.

Solmecke noted that the law firms may find a way around this by increasing the fines for damages — that is, lost profits sustained by the copyright holders. However, calculating a fine based on damages is currently difficult in Germany, since courts haven't said with any clarity how much loss is sustained by a media company if a song or movie is shared.

'I didn't download the album'

After discussing the cease-and-desist letter that their landlord received, Arbabzadeh and her roommate racked their brain to figure out who had downloaded Channel Orange.

"I didn't download the album, my roommate didn't download the album," she said. Arbabzadeh eventually came to the conclusion that a visitor from out of town must have been responsible.

"I think she had downloaded the album in Toronto, but it was still on her BitTorrent program, and one day she had her laptop open and the files were automatically uploaded."

So Arbabzadeh contacted the law firm who had sent the letter — which was difficult as she wasn't fluent in German — and they wouldn't return her emails. Eventually, she enlisted the help of a translator. "I told them that we were students and that we didn't have any income while we were living in Berlin," she said.

The law firm eventually halved the fee (from €1,200 to €600) and Arbabzadeh paid up.

"I had to go through a lot of pain and agony over this, to be frank," she said, "and I had no idea that this was such a big deal in Germany."