IsoHunt Agrees To Shut Down And 'Pay' $110 Million

from the which-will-never-get-paid dept

Just this morning I'd been putting together a long and involved post highlighting how some of the MPAA's actions in the IsoHunt case raised serious questions about their overall strategy, but I now need to go back and revise and update that post as the news has come down that IsoHunt and the MPAA have "settled" the case with IsoHunt agreeing to "pay" $110 million and shut down. Of course, IsoHunt won't pay $110 million. In court recently, even the MPAA's lawyers admitted that IsoHunt would be dead if the court awarded as little as $2 million. But, the MPAA wants that bogus $110 million number to throw around, just as they wanted to toss around the $105 million that Limewire settled for a couple years ago.

Of course, even if IsoHunt did pay that kind of money, how much would go to artists?

Unfortunately, there were many, many problems with the IsoHunt case in the first place. It was a clear case of bad facts making bad law -- or what Eric Goldman has referred to as the difference between real law and file sharing rule. It's clear, for example, that there was a tremendous amount of infringement done via IsoHunt. But there are serious questions about whether or not the liability for that should fall on IsoHunt as a torrent search engine. IsoHunt remains really the only significant case where the court has accepted Hollywood's bizarre interpretation of "red flag knowledge" in copyright infringement. And, really, that's why the MPAA wanted so damn badly to get this case finished without an appeal.

Now, unfortunately, the MPAA can continue to point to the rulings in IsoHunt, including many of the more problematic claims around inducement liability and red flag knowledge, knowing that they can't be directly challenged in that case any more. You can understand why IsoHunt settled. The company had already lost the key fights, and it was going to get hit with a giant sum to pay no matter what -- clearly more than it could ever pay. So why go through the process of continuing the court fight, when a settlement just gets it over and done with? At that point, the quibble is just about what bogus number the MPAA gets to lead the press release with, and $110 million was apparently the winning ticket. It wouldn't have made a difference if it was $1.1 million or $1.1 billion, the result is basically the same.

Amusingly, Chris Dodd is out there claiming that this is some sort of victory for innovation:

"Today’s settlement is a major step forward in realizing the enormous potential of the Internet as a platform for legitimate commerce and innovation,” said former Sen. Chris Dodd, chairman and chief executive of the MPAA. “It also sends a strong message that those who build businesses around encouraging, enabling, and helping others to commit copyright infringement are themselves infringers, and will be held accountable for their illegal actions.”

Of course, it does nothing of the sort. If the shutting down of Napster, Grokster, Aimster and Limewire failed to make that point, why will IsoHunt's shutdown and unpayable fine make that point any stronger? Either way, I'll have a bit more on this case soon, once I've had a chance to rewrite that other post in light of this latest turn of events.

Filed Under: copyright, gary fung, inducement, red flag knowledge, settlement
Companies: columbia studios, isohunt, mpaa