Hollywood & MPAA Go After Hotfile. EFF Steps In to Defend the FileSharing Site

It’s open season for file-sharing hunting. Fueled by their recent victory against MegaUpload (which further led to the suicide of other filesharing sites), the entertainment industry is now seeking to take down file-sharing site Hotfile

On March 5 a lawsuit was filed against Hotfile which is accused by the giant studios Disney, Fox, Universal, Sony Pictures and Warner of “copyright infringement on a mindboggling scale.”

From the suit:

Hotfile is responsible for billions of infringing downloads of copyrighted works, including plaintiffs’ valuable motion picture and television properties. As with other adjudicated pirate services that came before it, from Napster and Grokster, to Isohunt and Limewire, Hotfile exists to profit from copyright infringement. As with those other adjudicated infringers, the evidence is unmistakable that Hotfile actively fosters the massive copyright infringement that fuels its business.

The plaintiffs complain that 90% of the content distributed via Hotfile consists of copyright infringing files, and almost all those who use the site download and upload illegal material.

The accusations go even further saying that Hotfile has “the temerity” to pay users to upload files that infringe copyrights.

“Hotfile’s own economist acknowledges that Hotfile’s practice of paying uploaders (Hotfile’s so-called ‘Affiliates’) based on how many times their files are downloaded induces the uploading of ‘popular’ (i.e., infringing) content,” the suit reads. “Additionally, unlike previous adjudicated infringers, which facilitated access to content stored on users’ computers, Hotfile itself physically stores all the infringing content on its own servers, giving it an unprecedented ability to stop the infringement — an ability Hotfile chooses not to exercise.”

Of course that the ever-present MPAA (The Motion Picture Association of America for those till ‘virgin’ in these matters) was there to back up the accusations claiming that Hotfile is a “haven” for repeat copyright infringers, and should be closed immediately.

“Defendants even admit that they formed Hotfile ‘to compete with’ Megaupload”, the filing says on page 10. “More than 90 percent of the files downloaded from Hotfile are copyright infringing, and nearly every Hotfile user is engaged in copyright infringement,” said the MPAA.

In its defense, Hotfile said its policy is to remove copyright infringing content upon request. Its filtering system is similar to the one used by YouTube to block the viewing (and listening) of copyright protected content.

According to the company, their service “uses fingerprinting technology to block the uploading of files identified as infringing on copyright holders’ rights. Hotfile has recently upgraded its fingerprint technology to vCloud9, the latest, state-of-the-art fingerprint technology provided by Vobile”.

The Electronic Frontier Foundation (EFF), the organization that fights to protect our freedoms in the networked world said Warner is deliberately using an unreliable “automated dragnet technique” to send out takedown notices to potential copyright infringers. It also argues in an amicus brief that that the movie studio is the one that should be held responsible for copyright claims which are false.

“EFF urges the court to firmly reject Warner’s strained analyses and hold it accountable for its improper takedowns,” says the brief.

While copyright owners have been given by Congress the right to protect their works copyright laws, lawful copyright users have also been given the right to protect themselves against copyright owners who act in bad faith and abuse of takedown notices.

“Any company could sidestep accountability for improper takedowns by simply outsourcing the process to a computer,” says the foundation.

“What is worse, copyrights owners would have a perverse incentive to dumb-down the process, removing human review so as to avoid the possibility of any form of subjective belief. The tragic consequences foor lawful uses are obvious: untold numbers of legal videos would be taken down, whether or not the uses were fair or even licensed” it adds.

EFF then goes on explaining how given this unhealthy context the potential for mischief is greatly increased:

“Let’s say that Warner does not like competition from Universal. It could set a computer to search through Universal’s online presence, with the loosest possible settings, and issue takedown to Universal’s ISP for spurious claims. Nor is this scenario far-fetched: anticompetitive uses of the DMCA take down proves are commonplace.”

From CourtHouseNews release:

The foundation says that malice need not be a deliberate lie, as Warner claims, but “the Eleventh Circuit Court of Appeals has held that malice may be shown by evidence of a grossly inadequate investigation. Hunt v. Liberty Lobby, 729 F.2d 631, 643-44 (11th Cir 1983).”

The brief adds: “These lines of authority recognize the injustice of absolving misfeasors who took steps to avoid gaining actual knowledge of their improper acts, as Warner did in implementing a system it admits ‘is bound to produce some errors.’ …

“Congress intended … to impose a meaningful deterrent, ensuring that copyright holders have the requisite good faith basis before initiating an extra-judicial process that would potentially take protected expression offline.”