MPAA 'Settles' Another 'Victory' Against Hotfile For $80 Million That No Artists Will Ever See

from the chalk-another-one-up dept

Following about a month and a half after the MPAA got IsoHunt to “settle” for $110 million (and to shut down), the anti-innovation lobbyists can now cheer about getting a similar “settlement” out of Hotfile, this time for $80 million which will never be paid (and certainly, no actual artists will see any of it). Hotfile had already lost the key ruling in court, which will now effectively place massive liability on any digital storage locker online. The MPAA will put out its press releases and bogus statements about how this will show other sites that they can’t “get away with” enabling infringement, even as a dozen similar sites will pop up overseas where they’ll be even less concerned with what the MPAA has to say. There seems to be no point in this, other than the MPAA shutting down the kind of innovations that consumers clearly have shown that they want. It makes no sense. The MPAA thinks that this will scare off other similar sites, but in their decades of “fighting piracy,” that has never happened. Each one of these victories leads to… more such sites appearing, though in ways that are harder to shut down, less respect for the legacy Hollywood studios, and a general feeling that Hollywood refuses to adapt and compete. It’s a braindead strategy that never made sense. I don’t see how it’s a victory for anyone. It won’t decrease the amount of infringement. It won’t stop cyberlockers. It won’t help consumers. It won’t help movie makers. It won’t do anything, other than letting the MPAA declare victory.

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Companies: hotfile, mpaa

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Comments on “MPAA 'Settles' Another 'Victory' Against Hotfile For $80 Million That No Artists Will Ever See”

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Anonymous Coward says:

This isn't going to get me going back to movie theaters

What they don’t realize is that shutting down a website isn’t going to get people such as myself back into theaters. If anything, actions such as this only make me want to flat out ignore them.

If these Hollywood dinosaurs don’t get the hint that releasing good movies, understanding supply and demand, and not acting like fascists would help them earn more sales and cut costs, then they deserve to go extinct.

Anonymous Coward says:

“Hotfile had already lost the key ruling in court, which will now effectively place massive liability on any digital storage locker online.”

Summary judgment was rendered against Hotfile because of its specific activities, as articulated in great detail by the trial court. To say that this decision effectively places massive liability on an online digital storage locker is to totally misread the facts as presented in the case. Do what Hotfile did and you will almost certainly lose before a court. Play by rules long ago established by law and it is almost certain that your digital storage locker business will thrive and grow if you offer your customers excellent and reasonably priced service.

Anonymous Coward says:

Re: Re: Re:

Read the opinion. It is 99 pages long, of which MANY are devoted to discussing the various activities by Hotfile that got it into hot water. Hotfile got dinged because of what it did/did not do, so to somehow try and make it out as a “choir boy” for why secondary liability is “bad” is disingenuous to a fault.

Franklin G Ryzzo (profile) says:

Re: Re: Re:

I’m sure that you can get more information from the actual document the AC above linked to, but the major argument against Hotfile was it’s incentive program which paid people for uploading popular files. Many of the most popular files were copyrighted content. That coupled with the very low ban rate against repeat offenders was enough to convince the court that Hotfile was inducing infringement.

I am the last person that would ever try to defend the actions of the MAFIAA, but Hotfile kind of shot themselves in the foot. I agree with the AC above that any cyberlocker that is setup properly should not have any issue because of this ruling in the scope that it is presented in. What worries me is that the MAFIAA will try to twist this ruling to expand it to cover other sites that do not meet the same criteria that was used against Hotfile.

Anonymous Coward says:

Re: Re: Re: Re:

I can’t say I am worried because we both know virtually everyone tries to push legal boundaries whenever it suits their objectives. What I can say is that I do find solace in the recognition by courts of the basic principles that underlie third party liability, and that those principles are well developed because they cut across a large spectrum of cases and all manner of causes of action.

BernardoVerda says:

Re: Re: Re: Re:

Actually, I believe it was right here on Techdirt that I first learned how actual artists (especially Hip-hop and Rap) were using locker services as their preferred distribution channel and business model — they could upload their music to a popular locker service, and their fans would buy subscriptions to be able to download it (legitimately) and support their favourite artists. The artists got paid by the locker service on this basis.

The argument that Hotfile deserves to be assumed to be up to no good because they encouraged uploads/downloads with financial incentives is deeply flawed.

Anonymous Coward says:

Re: Re:

The “IP” rules established by law are immoral and antithetical to inherent self-ownership derived property rights.

So called “intellectual property”/monopoly law infringes on every individual’s ability to use their own physical property, and does so via State force/aggression/violence (or threat thereof).

As I prefer consensual relationships and voluntary exchange, I say abolish all State enforced copyright/patent/trademark law. Allow free individual human beings to engage in “copyright-like” contract if they deem it necessary, but please, stop advocating for ever more State force/aggression/violence in our lives.

Edward Teach says:

Re: Re: Re: Re:

Wait, is that the ol’ “The Law is The Law, Love It Or Leave It” argument popping up?

Crikey, I’m sure glad that generations of Jewish people, African Americans, folks of Italian descent and so forth just up and left the USA because The Law discriminated against them. That sure would make for a Better Country. Also, I’m pretty glad that the Gay people in the USA just left for someplace else because they were legally discriminated against. Oh, yeah, and the dopers in Washington and Colorado that left for Jamaica.

You dumbass, all of morality is not contained in the law. Peddle that balloon juice elsewhere, we’ve full up here.

Anonymous Coward says:

The MPAA is entitled to think whatever it wishes. I assume the only reason it is doing cases like this is to justify pulling in the money from it’s various member organizations. They have to show something for the money.

For myself, I quit music when sue’em started. I have not bought one single album nor song since then. When the MPAA followed suit I stopped buying movies. I want not one single dime of my money to go to supporting this sort of behavior.

They may have won the case but I promise you they have lost me as a customer. It will never drag me back in the store to buy one of their products. Nor will this drag me back into the deplorable viewing conditions of a theater.

That One Guy (profile) says:

Re: Re: Re:

What’s so idealistic about doing everything you can to make sure you never give money to a group or multiple groups that you don’t like if you can avoid it?

It might be difficult at times sure, given the *AA’s have so many branches out there it can be hard to tell what is and is not affiliated with them, but it’s certainly possible to avoid intentionally spending money on what they push out, and therefor profit from, while still having plenty of entertainment options available from independent sources/creators.

Anonymous Coward says:

Search for any filesharing community online, and Hotfile will not number among their choices. Hotfile regularly deletes thing despite the MPAA claiming otherwise, including all the shit the MPAA had no control over, were perfectly legal, or both. What did the MPAA prove? Nothing more than how it’s willing to chase and beat down the weakest targets for an easy Pyrrhic win.

Anonymous Coward says:

It won’t decrease the amount of infringement. It won’t stop cyberlockers. It won’t help consumers. It won’t help movie makers. It won’t do anything, other than letting the MPAA declare victory.

Naturally. Preserving the status quo while presenting the illusion of progress has been their intention all along. It should be blatantly obvious after all these decades that all the efforts of the **AAs will never amount to anything.

Observe, for example, Steam’s stance on piracy. By providing convenient service at an attractive price point, they’ve thrived in the PC gaming market.
Compare and contrast the movie and music industries, which still haven’t moved past last century’s distribution methods (movie theaters, radio), and actively fight against modern distribution (Netflix, YouTube).

The **AAs are rent-seeking organizations that actively weaken their “protected” industries to preserve their own power, lining their own pockets at everyone else’s expense. “Fighting piracy” is simply the excuse they’ve chosen to use to justify their actions.

Ninja (profile) says:

Achievements unlocked!

– Driving businesses to foreign countries. Check!
– Losing more respect from the people even though they already have none. Check!
– Keep blabbing about “stealing” and “theft” while blatantly stealing from the artists. Check!
– Living in a delusional world where they think people will give a shit to their pseudo victories. Check!

Copyright Fanatic says:

The article is somewhat misleading: there is no “massive liability on any file hosting system”. The DMCA safe harbors work when used correctly.

If you go through the info posted on the PACER system of US Courts, you will find out that Hotfile lost on summary judgement because the DMCA safe harbour did not apply to them.

It didn’t apply because:
1. they did not implement a repeat infringer policy
2. they did not register a Designated Agent with the Copyright Office.

Hotfile only implemented 1.+2. after the lawsuit started. Had they done so, the DMCA would have protected the company from (at least) summary judgement.

The MPAA had a clear and easy victory here because Hotfile simply did not bother to respect the provisions of the law.

Had Hotfile been an honest company (and taken care to respect the simple provisions of the DMCA), they would have most likely prevailed in court. BUT:

Another issue debated in the case was the Red Flag knowledge condition for applying the safe harbor. The discovery process revealed emails and internal Hotfile messages – that the judge mentioned – raise sufficient doubts to warrant a decision in a trial. (made up example: ” a user writes to Hotfile support – I’m having trouble downloading this copy of Seinfeld. Please help out. I downloaded the other 10 episodes here and here from Hotfile with success”)

Anonymous Coward says:

the only way that this and any similar ‘victory’ could be touted as such would be if there were agreements made, forced if necessary, by the courts that made the entertainment industries ‘winners’ enter into an agreement with the various sites and companies, whatever, to make sure the customers got what they had been getting, but legally. to allow sites to be kicked off the net, isn’t helping anyone! the entertainment industries carry on giving a shit service at best, or no service at all. look at the statement by that fucking idiot Dodd after the court decision,

‘?This judgment by the court is another important step toward protecting an Internet that works for everyone,?’

if the important thing was protecting the internet in the first place and ensuring it worked for everyone, how come all that happens is the industries just then sit back, count the extra money (money they would NOT have had), not give anything extra to the artists that these law suits are supposed to be about, but still not put up a service that is a patch on what these ‘alternative sites’ offer. if they were truly interested in doing that, that would be the first step. they are not in the least interested in doing any such thing! taking sites and people to court is all they are after. that and the gradual chipping away to get strong laws in place that will eventually fuck the ‘net up completely by having total control of it.

Anonymous Coward says:

Re: Sell or Sue?

If the product you are selling is only worth $1.00 in the open market, BUT you can sue anyone who ‘infringes’ on your product for $150,000.00, which option would you pick?

It’s really a “no brainer” and explains why the current system is so messed up, those in charge of it have no intention of taking a 150000% loss on each “potential” transaction by actually providing legal methods to obtain their product.

Chronno S. Trigger (profile) says:

Re: Re: And not a single buck was given

“That money means more to spend on cutting edge art rather than the easy stuff they know will sell.”

No, the **AAs have already said that any money gained threw lawsuits will be put back into their legal departments for more lawsuits. Not a damn cent would ever go to the artists.

Anonymous Coward says:

Re: Re: Re: Re:

Fine? You mean this one?

“The RIAA told a court that it identified over 11,000 American songs that were being illegally shared, and that it should be compensated for every individual download of the tracks. However, its claim for $72 trillion is 20 percent higher than the combined wealth of the entire world, which is $60 trillion according to the NME.”

That One Guy (profile) says:

Re: Re: Re: Re:

Wait, so simply having nice things is proof of infringement? I guess that means the entirety of the movie and music recording industries are staffed by nothing but pirates, good to know, and I look forward to your accusations of illegal actions leveled against them in the near future.

Keep in mind the ‘case’ against MU somehow required them to break numerous laws to go after Dotcom and gather evidence(which they then tried to wipe clean), and keeps being pushed back due to the *AA’s lapdogs in the DoJ realizing they have no real evidence, so as far as showing he made his money off copyright infringement(instead of, you know, providing an extremely popular service that a lot of people used), they can’t, and haven’t, proved a thing.

out_of_the_blue says:

MPAA wins, Mike whines. Nothing new here.

And Mike is simply lying that there’s no money that these infringement hosts get: Megaupload could pay $80 million and have more than than left!

2nd: HOTFILE NEVER PAID THE CREATORS A CENT. Mike always forgets that tiny little point.

3rd: consumers don’t have ANY right to get content how they want, when they want. They’ve NO rights whatsoever until and unless pay! Mike just goes with his usual assertion that “consumers clearly have shown that they want” which is FREE as in STOLEN, is some primary right. Well, it ain’t kids. If you don’t want to pay and the content isn’t made available by its owners, then you’ll have to go without our empty entertainment, so boo hoo.

Note also how short this piece is compared to the big deal Mike I think last week over MPAA not being able to use “pirate” and other terms. — MPAA WILL CALL HOTFILE PIRATES ALL THEY WANT NOW! HOTFILE ADMITTED THE FACTS!

Where Mike “supports copyright” — except when he supports piracy.

02:31:52[c-962-7] [ This suppresses the kids from fraud of using my screen name. ]

Rikuo (profile) says:

Re: MPAA wins, Mike whines. Nothing new here.

“02:31:52[c-962-7] [ This suppresses the kids from fraud of using my screen name. ]”

No it doesn’t. Not at all. Anyone can sign their comments here as out_of_the_blue and I control the actual such named account. Also, it isn’t fraud. Your online handle is NOT a legal identity. It is not equal to the name that appears on your driver’s licence or passport.

Rikuo (profile) says:

Re: Re: MPAA wins, Mike whines. Nothing new here.

I just thought of the only applicable way for your weird number sequence to work. It’s so the person you report to can check whether or not the comment signed as out_of_the_blue is really from you. You would have shared a list of codes to be used at which times (so a comment at 2:31 would have the code c-962-7) or maybe the time is used in an algorithm to generate the code.

Can’t believe it took me so long to think of it.

Killer_Tofu (profile) says:

Copyright Lobbys Working Hard

They are working hard to make sure that as much innovation as possible happens outside of the US and that nothing good comes from within their borders.

Its like they don’t realize that the internet is GLOBAL. They can pay for laws here in the US and in a few European countries, but there are a lot more on the internet than just those few.

bobby b says:

” . . . the kind of innovations that consumers clearly have shown that they want.”

Yeah. Free skat.

“I can give you a convoluted legal argument supporting my claim that, because the current law is flawed, I am completely justified in pretending that I’m not simply a thief.”

“I am blameless. Stop offending me. And you need to resume giving me all of your music for free. It’s my Right, plus we’re actually helping the artists develop a sustainable model to replace the unfairly flawed one we trashed.”

That One Guy (profile) says:

Re: Re:

You know, when you have to argue against a strawman that you’ve created, it just shows your argument isn’t the best, to put it mildly.

It’s isn’t that people want free stuff, but rather they want reasonably priced stuff, stuff that doesn’t have a whole ton of utterly anti-consumer ‘strings'(DRM, region locking, release windows, Schrodinger’s license ‘it’s a license when it comes to what the customer can do with it, but a sale when it comes to paying the creator’, and of course the classic ‘X is not legally available to purchase/listen/watch in your area, because screw you’) attached.

As evidence of such, look up what happens to piracy rates when a service like Netflix enters an area: the availability of infringing materials remains the same both before and after, yet piracy rates plummet, so despite the fact that people in those areas can still get the movies and shows available for free, this shows that a large number of them have no problem paying for a reasonably priced service that offers what they want, if it’s made available to them.

Anonymous Coward says:

Re: Re:

It’s less about the price, more about the quality of service.

I paid for Megaupload and wished that the MPAA had actually talked to Kim and struck a deal like he offered.

I pay for Netflix and still wish that the MPAA would stop trying to strangle it.

I don’t pay for HBO to watch game of thrones because HBO won’t sell it where I live. Who is to blame for that? If only someone had shown them years ago how to distribute content…

The demand for content is there, the legacy players have found it’s ore profitable to levy pirate taxes on blank media and sue their fans than to sell direct so fuck ’em it’s what they want.

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