Edward Webb, who runs the popular site LokiTorrent that connects users to free downloadable movies, has several big enemies. The Motion Picture Association of America (MPAA) – the biggest of the big – is taking a page from the music industry and suing sites that enable people to swap BitTorrent movie files.

But Webb has a gaggle of friends as well, and he’s reaching out to his Loki community for financial assistance to pay his legal bills. So far, in 10 days, the Loki users have chipped in nearly $40,000 for Webb’s defense fund.

Webb’s approach is unique. Nearly 60 percent of the sites the MPAA has contacted with cease-and-desist letters have decided to voluntarily shut down, and a majority of the remaining destinations are either working to comply with the order or finalizing legal settlements, according to Dean Garfield, vice president and director of legal affairs for the MPAA.

“We’re having a dramatic impact on the network, on the illegal traffic on the network,” says Garfield.

These responses echo what most individuals sued by the RIAA did: faced with the enormous legal costs necessary to fight the entertainment industry, ordinary people decided to stop and settle.

Webb decided to stand up to the MPAA, but knew he didn’t have enough money to fight alone.  So, he put the word out.

“If you’ve ever benefited from this site or file-sharing in general, now is the time to show your support,” he wrote in a message on the home page. “We are looking at a cost of $30K per month in fees. Recent estimates by attorneys are looking at 2-3 times this amount in a full-on battle. Help us fight back and ensure your right to share doesn’t end here.”
Mohamed, a 20-year-old Loki user from Finland who prefers to keep his last name private, says he supports Webb’s efforts.

“I think this is a brave stand in the face of the powerful elite who want to get a share out of everything,” says Mohamed.

With media conglomerates targeting individuals with big dollar lawsuits and technology companies increasingly dictating how people can use hardware and software, digital collectives have started springing up to give voice to users. Call it the Friendster/Firefox phenomenon – tapping into a community of like-minded people to affect change.

Last month, users of the alternative browser Firefox were so moved by the product’s first non-beta release that they bought a full-page ad in The New York Times to congratulate the developers.

“I think you saw a bit of it around the election last year when the campaigns for Dean and Clark launched Friendster-like sites to raise money,” says Jonathan Abrams, CEO of Friendster.

Placing advertisements and donating cash to candidates, though, is a far cry from waging a user-funded lawsuit against the entertainment industry. And while the MPAA surely didn’t expect this when it launched its campaign, with its deep pockets, it can likely withstand any number of sites that try to tap into the user base in the same manner as Loki.

“We’ve been working on the BitTorrent issue for so long that not much surprises me,” says Garfield. “But I’m a bit surprised that people are giving their hard earned money to something that facilitates piracy.

Ironically, one person who comes down on the MPAA’s side in the Loki case is Bram Cohen, the creator of BitTorrent.

“Fighting that one is stupid,” he wrote in an email interview. “They’ll lose. If you’re engaged in flagrant piracy, you should (1) not do that, (2) stop doing that (3) if you keep doing it, shut everything down and disappear as soon as you get a takedown notice, and (4) if you don’t do that, settle for as little as possible as quickly as you can.”

Webb has made his decision to fight the MPAA and now that users have sent him money, he’s honor-bound to fight.

Of course, if a proposal floated Thursday by the Business Software Alliance (BSA) finds Congressional friends, it may soon be the Internet Service Providers – not the MPAA – issuing cease and desists.

The BSA wants the “safe harbor” clause, which precludes ISPs and phone companies from monitoring what users are doing on their networks, eliminated from the Digital Millenium Copyright Act. The proposal faces a huge uphill battle, since mandating the ISPs monitor Internet traffic would likely also force telephone companies and email providers to monitor what’s said and written across their networks.

No matter who Webb is squaring off against in court, he’s already started talking like a man girding himself for a huge battle.

“If the MPAA does not realize the absurdity of their accusation and drop the suit before trial, we completely intend on contesting this lawsuit and countersuing for damages, including their copyright infringement of our material,” he said in an email exchange. “The only settlement we see in the future is the MPAA dropping their self-serving and baseless case.”