Filelocked: Hotfile liable for rampant copyright infringement originally appeared on Copyhype
Hotfile is liable for the “staggering” amount of infringement it financially benefitted from, and it is not protected by the DMCA safe harbor for online service providers.
That is the conclusion of U.S. District Court Judge Kathleen Williams of the Southern District Court of Florida. Williams made the ruling August 28, but the decision had been under seal until this past Friday.
What makes this case notable is that it was brought by the five major motion picture studios (Disney Enterprises, Inc., Twentieth Century Fox Film Corporation, Universal City Studios Productions LLLP, Columbia Pictures lndustries, Inc., and Warner Bros. Entertainment Inc.) against a fairly popular filelocker service (at least at the time the suit was filed). This appears to be the first time an infringement lawsuit from major players in the creative industries had been brought against a filelocker service specifically — previous efforts have aimed at P2P services and the like. Add to that the fact that the suit was filed in Florida, outside the 2nd and 9th Circuits where the bulk of copyright litigation occurs, and you have a situation where the court is interpreting many DMCA provisions on a blank slate.
Oh, and the decision also comes in at just under 100 pages.
I had previously discussed the issues in front of the court and both parties’ arguments. That was over a year ago, which is an unusually long time between hearing and order on a summary judgment motion. Part of that may have been the sheer complexity of the issues; part of that may have been the aggressive litigation posture taken by both sides. The court diplomatically refers to the many “robust pleadings” filed without leave of court and notes, certainly an understatement, that “the parties do not agree on much.”
Whatever the case may be, the issue boils down to a familiar one. Hotfile, an “off-shore technology company” provides online file storage. As is often the case, infringing works are among the files that were stored and shared by Hotfile users. The film studios argued that Hotfile should be held liable for such infringement because it contributes to, encourages, or benefits from such infringement.
As the court explains, Hotfile’s storage locker service allows registered users to upload any file they want from their computer to Hotfile’s servers to be stored. The service automatically generates a link where the file can be accessed. The files or links are not otherwise private; any member of the public can access them so long as they know the link. Hotfile operated an affiliate program which paid users when they directed others to Hotfile file locations, encouraging affiliates to catalog and broadcast Hotfile links. Hotfile also provided premium service, which gave users additional file space and faster download speeds for a monthly fee.