Judge Drops Key Claim In MPAA's Case Against Hotfile: Cyberlocker Didn't Directly Infringe

from the a-good-start dept

Mon, Jul 11th 2011 12:05pm — Mike Masnick

The MPAA has recently decided that "cyberlockers" are enemy number one on its most wanted list, even though they serve perfectly legitimate purposes. As something of a test case, the MPAA sued Hotfile (and its owner, directly) with an astonishingly weak case. After reading it, we were surprised that it didn't include more detail. The case seemed full of conjecture and claims that simply didn't match with reality. While I still think the main show is whether or not Hotfile is guilty of secondary infringement via inducement, the MPAA was certainly betting on a direct infringement claim to be a key part of the argument.

Thankfully, the judge wasted little time in dismissing the direct infringement claims. The judge points out, as we did in our initial post on the lawsuit, that the MPAA's weak filing fails to point out any evidence of direct infringement:

"Nothing in the complaint alleges that Hotfile or Mr. Titov took direct, volitional steps to violate the plaintiffs' infringement. There are no allegations, say, that Hotfile uploaded copyrighted material. Therefore, under the great weight of authority, the plaintiffs have failed to allege direct copyright infringement."

Where this becomes really important is that it means that Hotfile may be protected by the DMCA's safe harbors. Direct infringement isn't covered by the safe harbors. Now, the case will shift (among other things) to see whether or not (like YouTube and Veoh) Hotfile has correctly met the conditions to get safe harbor protection. Of course, it's entirely likely that the MPAA, in its quixotic quest, will appeal this particular part of the ruling, but next time, they should try to provide some actual evidence of direct infringement rather than just insisting that it must be true.

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Filed Under: copyright, cyberlocker, direct infringement, dmca, infringement, safe harbors
Companies: hotfile, mpaa

48 Comments

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Chris Rhodes (profile), 11 Jul 2011 @ 11:35am

Odd Wording
to violate the plaintiffs' infringement

Violating an infringement? Were they accused of copying porn or something?
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- The eejit (profile), 11 Jul 2011 @ 11:40am
  
  Re: Odd Wording
  ALWAYS! PORN IS THE FIRST OFFENCE!
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- Anonymous Coward, 11 Jul 2011 @ 12:27pm
  
  Re: Odd Wording
  That was my reaction too. I know next to nothing about this case, but that wording alone makes me question whether the judge (or his/her clerk) is really on the ball here.
  [ link to this | view in chronology ]
- Anonymous Coward, 11 Jul 2011 @ 12:32pm
  
  Re: Odd Wording
  @Chris Rhodes:
  
  "to violate the plaintiffs' infringement
  
  Violating an infringement? Were they accused of copying porn or something?"
  
  That didn't make sense to me either. I don't know whether this is just sloppy reporting or if the Court simply doesn't know what it's saying.
  [ link to this | view in chronology ]
fogbugzd (profile), 11 Jul 2011 @ 12:27pm

The MPAA and its lawyers not only believe that locker services are infringement, they also believe that it is so obvious that all they should have to do is make the accusation and everyone else will see the lockers are guilty.
This type of poorly supported lawsuit can happen when lawyers are too close to their client and start accepting their client's world-view as reality.
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- Hephaestus (profile), 11 Jul 2011 @ 12:32pm
  
  Re:
  "This type of poorly supported lawsuit can happen when lawyers are too close to their client and start accepting their client's world-view as reality."
  
  Isn't it great, one of those "how many lights do you see?" moments.
  [ link to this | view in chronology ]
- Atkray (profile), 11 Jul 2011 @ 12:32pm
  
  Re:
  At least in this case I would say that is a good thing.
  Wacky wording aside (I read it three times and it still didn't make sense) at least there is now a ruling against MPAA.
  [ link to this | view in chronology ]
Anonymous Coward, 11 Jul 2011 @ 12:40pm

Sorry to spoil the party, but your Hotfile friends aren't exactly out of the woods:

From the same article:

"Hotfile hasn't escaped all claims, however.
Judge Jordan denied its motion to dismiss a charge of secondary, contributory infringement and refused to let Titov off the hook from being personally liable for copyright infringement on Hotfile."
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- E. Zachary Knight (profile), 11 Jul 2011 @ 12:48pm
  
  Re:
  I really did get the impression that Mike or anyone else was claiming the whole case was dismissed. From the article title:
  
  Judge Drops Key Claim in MPAA's Case Against Hotfile
  
  Emphasis mine.
  
  The judge dropped a KEY claim. Mike made that quite clear to everyone except you. Sorry.
  [ link to this | view in chronology ]
  - FUDbuster (profile), 11 Jul 2011 @ 1:31pm
    
    Re: Re:
    The judge did drop the direct infringement claim, but I disagree that it was a "key claim." Everyone knows the secondary infringement is where the argument really is.
    
    The judge here did not grant the motion to dismiss for secondary infringement. The judge is satisfied that inducement infringement, contributory infringement, and vicarious infringement have all been sufficiently pleaded.
    
    I wouldn't try to spin this decision too hard as a victory for Hotfile--secondary liability will be their downfall, IMO.
    [ link to this | view in chronology ]
  - Anonymous Coward, 11 Jul 2011 @ 2:07pm
    
    Re: Re:
    Actually, it is one of the key claims, but not all of them, not by far. Even with this particular claim off the table, hotfile (and Titov) are hard on the hook for very provable offences, and are likely to eat it.
    
    The business model of turning a blind eye to what you are selling (because in the end, they are selling access to the very content that is uploaded) isn't going to work out. Randomly checking 100 lockers with files over 500k will turn up significant amounts of infringing content. I would bet the number would be very close to 100%. It isn't as if there are a few infringing files and everything else is wonderful and legal. People aren't paying extra money to be able to download that 32k text file really fast, are they?
    [ link to this | view in chronology ]
    - A non-mouse, 11 Jul 2011 @ 3:01pm
      
      Re: Re: Re:
      "...in the end, they are selling access to the very content that is uploaded..."
      
      The same can be said of every web hosting company, and of every ISP. They are "Service Providers", get it?
      
      "Randomly checking 100 lockers with files over 500k will turn up significant amounts of infringing content."
      
      Ahh, so file size should help us indentify infringing files. Got it. Shutterbugs like me are screwed, because all of my digital photos are larger than your "500k" threshold, and roughly the same size as a typical MP3.
      
      "I would bet the number would be very close to 100%. It isn't as if there are a few infringing files and everything else is wonderful and legal."
      
      I'll take that bet. So how exactly is the service provider supposed to know what is or isn't infringing? If they find a backup of someone's legally purchased MP3 collection, should they just delete it because surely that guy must be filthy pirate?
      
      "People aren't paying extra money to be able to download that 32k text file really fast, are they?"
      
      So just how fast is YOUR internet connection? Still on dial-up I should hope, because only a filthy pirate would need anything faster than that.
      [ link to this | view in chronology ]
      - Anonymous Coward, 11 Jul 2011 @ 3:34pm
        
        Re: Re: Re: Re:
        What I really hate around here is people who go off at completely obtuse angles in an attempt to avoid the obvious.
        
        First off, I didn't say "all lockers", but rather a significant number.
        
        You said: "I'll take that bet. So how exactly is the service provider supposed to know what is or isn't infringing? If they find a backup of someone's legally purchased MP3 collection, should they just delete it because surely that guy must be filthy pirate?"
        
        Me: All sorts of ways. Example, if it is your backup, you would be the only one wanting to access it. If someone uploads a big file and suddenly it's downloaded by a bunch of different people from all over the world, perhaps you might want to check the content. It clearly isn't a "backup".
        
        Heck, check the files names. hollywood_movie_dvd_rip_xvid.rar is sort of a dead give away, no?
        
        You said: "So just how fast is YOUR internet connection? Still on dial-up I should hope, because only a filthy pirate would need anything faster than that"
        
        Me: What a bizarre conclusion. My internet speed is about 30meg a second. It allows me to stream from legal sources (such as netflix) without issues. The is not relationship between the size of the files and the internet connection. The point is only that people aren't going to pay extra to a file locker site to download small files, only large ones. It's in the file locker site's interest to have large, popular files to encourage people to pay a premium.
        
        Many of these file lockers use scams as well, making people break larger (DVD size) packages into multiple parts, and then blocking people from download more than 1 file per hour unless they pay. It's impressive to see how big their balls are doing this sort of thing.
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        athe, 11 Jul 2011 @ 8:11pm
        
        Re: Re: Re: Re: Re:
        Heck, check the files names. hollywood_movie_dvd_rip_xvid.rar is sort of a dead give away, no?
        
        No. A lot of media viewing applications (e.g. Media Browser, MediaPortal, etc) use the information in the filename as a means of scraping metadata for the movie...
        [ link to this | view in chronology ]
        
        techflaws.org (profile), 11 Jul 2011 @ 10:43pm
        
        Re: Re: Re: Re: Re:
        Heck, check the files names. hollywood_movie_dvd_rip_xvid.rar is sort of a dead give away, no?
        
        Which is why link boards increasingly encourage uploaders to use file names like "dkk343.rar" which also encrypt the names of the files inside. How do lockers counter that? By demanding no encryption? Based on what law?
        
        Many of these file lockers use scams as well, making people break larger (DVD size) packages into multiple parts, and then blocking people from download more than 1 file per hour unless they pay.
        
        How can it be a scam when that's a known part of their business model? If you don't register but want to download for free, you can only do x MB/hour (unless you use downloader tools that get you a new IP, of course).
        [ link to this | view in chronology ]
        
        The eejit (profile), 11 Jul 2011 @ 11:18pm
        
        Re: Re: Re: Re: Re:
        Hashcheck/filename, alteration cross-reference would:
        
        a) be FAR better; and
        b) be more cost-effective.
        
        And that would still have onyl a 95% accuracy rate. AT BEST>
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        Jay (profile), 12 Jul 2011 @ 6:32pm
        
        Re: Re: Re: Re: Re:
        Exactly why do I care about someone else putting up Mad_Max_Rollerderby_Games_ Ep_1 on the internet?
        
        Also, why do I care if the MPAA/RIAA don't want to make their own cyberlocker for people to profit from?
        
        Why should I care about these middlemen stepping over legal services, merely for wild witch hunts? Great, possibly 60%+ of the market is full of infringing files. But the demand is still there. The MPAA/RIAA is not fulfilling it. In fact, those pirates are doing so because they like to share or just because they think something is worth it.
        
        If you want money from it, do it yourself.
        
        Otherwise, if someone in France is denied access because of Hadopi laws, it may be time to review this copyright infringement battle you're fighting.
        [ link to this | view in chronology ]
    - DannyB (profile), 12 Jul 2011 @ 7:00am
      
      Re: Re: Re:
      > Randomly checking 100 lockers with files over 500k
      > will turn up significant amounts of infringing content
      > People aren't paying extra money to be able to download
      > that 32k text file really fast, are they?
      
      What I find funny is how the copyright maximalists say conflicting things out of both sides of their mouth.
      
      Sometimes they say things like "you have copyright the moment you hit the record button". And they challenge people to create their own valuable content. But then if they do create content (and valuable is in the eye of the beholder) then the mere size of the content or amount of traffic must necessarily be proof of infringement.
      
      So developers create a Linux distribution. Because it is large, it is proof of infringement. Because the very reason bittorrent was invented was to distribute this content with the express permission of the copyright owner, is still proof that bittorrent is only for piracy. Because consuming or producing content generates lot of traffic, this is proof of infringement.
      
      It's funny that just the other evening I saw a story on CNN about new artists bypassing the traditional labels to go straight to the consumer. The story talked about the fans financing production of the work. One artist raised significantly more than needed for her first album. The story talked about how artists can end up making money instead of ending up in debt to record labels.
      
      Next up: if you use encryption, that is proof of infringement, terrorism, or worse. Think of the children!
      [ link to this | view in chronology ]
- The eejit (profile), 11 Jul 2011 @ 1:11pm
  
  Re:
  Someone rolled a Netural one on their Read check.
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- Chris Rhodes (profile), 11 Jul 2011 @ 1:27pm
  
  Re:
  Err, except for where Mike said: "While I still think the main show is whether or not Hotfile is guilty of secondary infringement via inducement".
  
  Read, then spew your comment all over the internet.
  [ link to this | view in chronology ]
  - FUDbuster (profile), 11 Jul 2011 @ 1:34pm
    
    Re: Re:
    Not just via inducement, but also contributory and vicarious liability. The judge is allowing all three theories of secondary infringement liability to proceed. Any one alone will take out Hotfile, and I think they are probably liable for all three.
    [ link to this | view in chronology ]
    - The eejit (profile), 11 Jul 2011 @ 11:21pm
      
      Re: Re: Re:
      Perhaps. Perhaps not. I would hope that 'Psychic Chewbacca' isn't allowed to succeed.
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- Anonymous Coward, 11 Jul 2011 @ 1:32pm
  
  Re:
  I think that was explicit in the TD article, too.
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- Mike Masnick (profile), 11 Jul 2011 @ 3:23pm
  
  Re:
  Sorry to spoil the party, but your Hotfile friends aren't exactly out of the woods:
  
  (1) Not my friends.
  
  (2) Um. I point that out in the post.
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LegitTroll (profile), 11 Jul 2011 @ 12:43pm

Not to worry
To: Head of MPAA legal

A Mr. Jason Klammith (formerish MPAA web admin) was recently hired by Hotfile.com as a low level programmer. The mission he chose to accept was to infiltrate this pirate company to secure evidence that they are indeed harboring pirates, and making money in the process. He has been given 2 week to fufill this mission. If he has not been able to secure the evidence by that time he has been authorized to ensure that the evidence can be found. I will keep you posted on his progress.

Office of Clandestine Operations for the MPAA.
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- Josh in CharlotteNC (profile), 11 Jul 2011 @ 1:30pm
  
  Re: Not to worry
  I'd be more surprised that the MPAA had a web admin than that they'd try to send someone undercover to a file locker company.
  
  This comment will self destruct in 5...
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- A non-mouse, 11 Jul 2011 @ 3:09pm
  
  Re: Not to worry
  To: Office of Clandestine Operations
  
  No need for the undercover op. I had Peggy in Marketing upload a bunch of our stuff last week, I'll go "find" it next week. Hey, it's worked before!
  
  Cheers,
  Head of MPAA Legal
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- The eejit (profile), 11 Jul 2011 @ 11:23pm
  
  Re: Not to worry
  Eh, they'd just go to NewsCorp and hack it from a Sysadmin at Hotfile.
  [ link to this | view in chronology ]
Chris Brand, 11 Jul 2011 @ 12:48pm

Don't worry...
they'll just use this as one more talking point when they next chat to senators - "The judge actually dismissed our complaint because we didn't provide any evidence! Us, the MPAA! We clearly said that they infringed our rights, and yet the judge still wanted more! How can America possible compete in the global economy when good corporate citizens are maligned in this way ? Jobs will be lost. Anarchy will ensue. Fix it ! Now !"
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- DannyB (profile), 12 Jul 2011 @ 7:10am
  
  Re: Don't worry...
  You forgot about the children! I'm appalled.
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Anonymous Coward, 11 Jul 2011 @ 1:00pm

The order is here if anyone's interested: http://ia600408.us.archive.org/18/items/gov.uscourts.flsd.373206/gov.uscourts.flsd.373206.94.0.pdf
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- Anonymous Coward, 11 Jul 2011 @ 1:44pm
  
  Re:
  I would have thought the automatic copying of files uploaded to hotfile would be sufficient to state a claim for direct infringement. Not to familiar with the case law the court cited saying that automatic copying is not sufficient.
  [ link to this | view in chronology ]
  - FUDbuster (profile), 11 Jul 2011 @ 2:03pm
    
    Re: Re:
    The key to that is the lack of volitional conduct on the part of Hotfile since the copying on their system is done automatically.
    
    As the court here notes:
    Finally, the plaintiffs contend that they have alleged a volitional act because they allege that hotfile.com makes additional copies once the copyrighted material is uploaded to the server. This argument too fails, for courts have repeatedly held that the automatic conduct of software, unaided by human intervention, is not �volitional.� See CoStar, 373 F.3d at 550 (�[A]n ISP who owns an electronic facility that responds automatically to users� input is not a direct infringer.�); Cartoon Network, 536 F.3d at 131 (�[A] significant difference exists between making a request to a human employee, who then volitionally operates the copying system to make the copy, and issuing a command directly to a system, which automatically obeys commands and engages in no volitional conduct.�); Parker, 422 F. Supp. 2d at 497 (�When an ISP automatically and temporarily stores data without human intervention so that the system can operate and transmit data to its users, the necessary element of volition is missing. The automatic activity of Google�s search engine is analogous. It is clear that Google�s automatic archiving of USENET postings and excerpting of websites in its results to users� search queries do not include the necessary volitional element . . . .�).
    I think at most--and at least--Hotfile is secondarily liable.
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    - Anonymous Coward, 11 Jul 2011 @ 2:27pm
      
      Re: Re: Re:
      Yeah, I read that.
      
      I was just surprised by it, since I hadn't read any of those other cases regarding volitional conduct and automatic copying systems.
      
      I suppose it's sort of like Kinko's offering a copier to a user, except Kinko's sets the parameters and says "everything will be copied 5 times even if you only care about one copy."
      [ link to this | view in chronology ]
      - FUDbuster (profile), 11 Jul 2011 @ 4:19pm
        
        Re: Re: Re: Re:
        Yeah, I read that.
        
        I was just surprised by it, since I hadn't read any of those other cases regarding volitional conduct and automatic copying systems.
        
        Gotcha. I think a key case to read on this point is Netcom: http://www.law.cornell.edu/copyright/cases/907_FSupp_1361.htm
        [ link to this | view in chronology ]
        
        Anonymous Coward, 12 Jul 2011 @ 10:01am
        
        Re: Re: Re: Re: Re:
        I had actually skimmed Netcom recently, but I was looking for another issue
        [ link to this | view in chronology ]
- Anonymous Coward, 11 Jul 2011 @ 6:09pm
  
  Re:
  The order is here...
  
  Thanks for posting that link.
  [ link to this | view in chronology ]
  - FUDbuster (profile), 11 Jul 2011 @ 7:11pm
    
    Re: Re:
    Thanks for posting that link.
    
    Sure thing. I'm loving the RECAP plugin and archive. Saves me a lot of dough.
    [ link to this | view in chronology ]
Anonymous Coward, 11 Jul 2011 @ 1:33pm

Hotfile has in the last 8 months or so been ruthless in their takedown and banning of users, so much so that they have become only a tertiary point for use as a filelocker.
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qyiet (profile), 11 Jul 2011 @ 1:53pm

Real World Analogies
While I feel that comparisons between the digital world and the physical world are often full of inaccuracies, I was lead down the path of making the comparison to Self Storage units.

I hope we can all agree that the Owner of a self storage service should Co-Operate with law enforcement if they have a search warrant. However shouldn't allow 3rd parties access to the units because they feel aggrieved with the client of the unit. And finally defiantly shouldn't be responsible for anything illegal stored in the unit.

I think that is a pretty fair comparison to what Hotfile is doing here. But the metaphor doesn't translate to the sorts of services that want to index your music files, then provide you with access to them via a streaming service where the server only holds one copy of the media.

My modified analogy is a bank. Someone turns up to store an object. The service (in this case the bank) inspects it, validates it, then keeps a record of it being stored. Then the client some time later goes to use the object they are given another one, very similar to the first but not the same one.

I feel the that essentially the locker services that run an index like that are becoming the banks of digital files, and as such we should be looking at banks for a starting point to the obligations / limitations of obligation to ensure that the data submitted to them is legitimate.
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- Anonymous Coward, 11 Jul 2011 @ 3:40pm
  
  Re: Real World Analogies
  If file lockers were not in the distribution business, there would be no issue. The problem comes up because they are allowing anyone and everyone (with the right URL) to download what is in someone else's locker. Every storage place I have ever dealt with requires not only that you lock the locker, but that you have a private and unique password to enter their premises. They do not allow third parties into the lockers just for the heck of it.
  
  In part, their problem comes because they don't block bots from seeing what is in each locker. They should be no-index to all bots, because the contents of a storage locker should be private. But clearly it is not.
  
  The file lockers fail on so many levels, it is clear what their business model is, hopefully the judge comes to understand it and shuts them down, sending some of those "chilling effects" out there to the pirates.
  [ link to this | view in chronology ]
  - btrussell (profile), 11 Jul 2011 @ 4:59pm
    
    Re: Re: Real World Analogies
    Doesn't everyone have copyrighted material that we are free to share with friends and family? Movies, pics, sound recordings? Or are Corporations the only ones allowed to have copyrighted material now?
    [ link to this | view in chronology ]
    - Qyiet (profile), 11 Jul 2011 @ 8:26pm
      
      Re: Re: Re: Real World Analogies
      Just leave the poor unloved troll alone.
      [ link to this | view in chronology ]
  - The eejit (profile), 11 Jul 2011 @ 11:24pm
    
    Re: Re: Real World Analogies
    That'#s why it's called a locker. You still need the key to access the locker.
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  - DannyB (profile), 12 Jul 2011 @ 7:13am
    
    Re: Re: Real World Analogies
    Hotfile is not a "locker". It is a distribution service.
    
    Don't confuse the two.
    
    A locker is not a distribution service.
    
    A service is one or the other. If it distributes, then that makes it not a file locker.
    
    Have you ever had a locker at school or in a gym? Do you understand what a locker is?
    [ link to this | view in chronology ]
Fred von Lohmann (profile), 11 Jul 2011 @ 3:36pm

minor correction
The DMCA safe harbors do apply to direct infringement, as well as secondary liability. See the Senate report that accompanied the DMCA, S. Rep. 105-190, page 40 ("The [safe harbor] limitations � protect qualifying service providers from liability for all monetary relief for direct, vicarious and contributory infringement.")
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Fred von Lohmann (profile), 11 Jul 2011 @ 4:11pm

minor correction
The DMCA safe harbors do apply to direct infringement, as well as secondary liability. See the Senate report that accompanied the DMCA, S. Rep. 105-190, page 40 ("The [safe harbor] limitations � protect qualifying service providers from liability for all monetary relief for direct, vicarious and contributory infringement.")
[ link to this | view in chronology ]
Anonymous Coward, 12 Sep 2011 @ 9:01pm

Hotfile is nothing like Youtube. Youtube offers content creators content management fingerprinting so that one can find offending/illegal content online and block and/or remove it. Hotfile's content is comprised almost entirely of pirated content (movies, books, music) and files can be uploaded repeatedly. The DMCA is useless. It's like taking a fly swatter to kill a swarm of locusts.
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