There was a bit of a fuss in the ongoing Hotfile vs. Hollywood lawsuit a few weeks ago when the judge made a minor ruling on discovery about what Hotfile had to hand over. However, now that Hotfile has officially responded to the complaint and added some counterclaims
, the lawsuit is finally starting to get interesting. The MPAA/Hollywood studios' case took a big hit earlier this year, when the judge dismissed
the claim of direct infringement by Hotfile. Without that, the MPAA has a much tougher case to prove, since it no longer becomes a straight copyright infringement case, but becomes more focused on whether or not Hotfile is protected by the DMCA's safe harbors. Where the counterclaims get interesting is that, as alleged
earlier this year by Hotfile, one of the plaintiffs, Warner Bros., regularly abused its takedown tool to issue takedowns on content for which it did not hold the copyright. As in the situation in which Viacom got into some trouble for issuing takedowns on content it had uploaded itself in the YouTube case, this may serve to undermine much of the studio's arguments.
Most of the response from Hotfile seems focused on proving that it's protected by the DMCA's safe harbors, but there are a few other interesting tidbits, including this one:
On information and belief, Plaintiffs have been
investigating Hotfile for over a year in which time they were aware of particular URLs of files
that they believed to be infringing and had decided to contend that Hotfile’s content protection
policies were inadequate. Rather than diligently and promptly bringing suit, however, Plaintiffs
and their content protection agents delayed in seeking any remedy. Not only did Plaintiffs
inexplicably fail to bring suit or otherwise give Hotfile notice of their allegations during this
period, to the contrary, they repeatedly complimented Hotfile’s content protection efforts,
offered for Hotfile to become a business affiliate, and refrained from using their Special
Rightsholder Accounts to takedown the files they believed were infringing. Plaintiffs thereby
perpetuated the very infringement they now allege in this case. Plaintiffs’ unreasonable delay
resulted in prejudice by causing Hotfile to leave up the files that are now alleged to infringe, inducing Hotfile to maintain the very content protection policies Plaintiffs now impugn, and
causing potentially helpful evidence to be lost....
It also notes that due to the compliments from studios and the questions about business relationships, Hotfile "relied on these
representations believing that the Studios found Hotfile’s content protection policies to be more
than adequate." The specifics here seem to be that Warner Bros. asked for and received a specific tool made by Hotfile to make deletions easier, and then regularly thanked Hotfile for its actions taking down content. Again, that looks bad for WB.
Other than that, the part that's getting attention is the claim that Warner Bros. issued takedowns on content for which it did not hold the copyright. That certainly looks bad for Warner Bros., and at the very least raises significant questions about how Hotfile could be expected to know who held which copyrights when even one of the plaintiffs appears not to know.
Warner has acted
unscrupulously and dishonestly. Not only has Warner (along with four other major motion
picture studios) filed this unfounded and contrived litigation against Hotfile employing overly
aggressive tactics, Warner has made repeated, reckless and irresponsible misrepresentations to
Hotfile falsely claiming to own copyrights in (or to have the owners’ authorization to delete)
material from Hotfile.com. Worse, Warner continued to make these misrepresentations even
after Hotfile explicitly brought this rampant abuse to Warner’s attention, ruling out any
possibility that its wrongful actions were accidental or unknowing. Thus, Warner has knowingly
made misrepresentations and it has engaged in DMCA abuse on an unprecedented scale by
grossly misusing the powerful anti-piracy software tool that Hotfile specially created at Warner’s
The details suggest that Warner started taking down more and more content, even taking down some very popular freeware software that had been purposely uploaded to Hotfile for distribution by its creators. It also appears to have used very questionable simple phrase matching, such as deleting all files that had "the box" in the file name, even if they were totally unrelated to the WB movie "The Box." So that, too, doesn't look good for Warner Bros.
The only thing I'm not sure about here, though, is whether or not Hotfile actually has standing to bring such a claim. I would have thought that it had to be done by the actual copyright holder of the content taken down (or someone else injured by such a takedown). I'm not sure that Hotfile can make such a claim.
Separately, some of these defense and counterclaims are really just directed at Warner Bros., which is only one of the five studios suing -- so Hotfile may still have some issues with the other four. Separately, I just noticed that Paramount is missing from the suing studios. There are six major studios, and all of them except Paramount are involved. That's a bit surprising, since Paramount execs have been some of the most vocal execs speaking out against cyberlockers. Anyone know why they chose not to join in on this one?