MPAA Wants Up to $500 Million in Damages from Hotfile

The trial between the MPAA and Hotfile starts next week and the movie studios are hoping to get over a quarter billion in damages from the file-hosting service. The MPAA wants to be compensated for 3,448 pirated video files, ranging from the 1984 classic The Karate Kid to the TV-series Glee. The file-hosting service will not protest that its liable for the infringements of its users, but reserves the right to claim that other files may have been “space shifted” by Hotfile users.

hotfileFor more than two years Hotfile and the MPAA have been battling it out in court and this month the case will reach its climax

Next week marks the start of a trial in which a jury will be asked to decide how much in damages Hotfile must pay the movie studios. The trial is limited in scope, however, as the movie studios already won summary judgment on the issues of DMCA defense and vicarious liability.

With only a few days to go both parties have now reached agreement on the number of copyrighted works that will be part of the trial. Initially the movie studios wanted to include 3,808 movies and TV-shows, but this has now been reduced to 3,448.

“Defendants acknowledge and concede that Plaintiffs’ copyrights in all 3,448 of the Remaining Works in Suit were directly infringed by users of the Hotfile system, for which Defendants are vicariously liable, and for which Plaintiffs are entitled to recover statutory damages,” the joint stipulation reads.

The full list of pirated files includes work from all MPAA members except Sony Pictures. Among the pirated files are several episodes of popular TV-shows including Glee, Heroes, Lost, Prison Break, Friends and Fringe, as well as the movies The Karate Kid, The Bourne Identity, Bambi and The Matrix.

For each of these titles the jury or court can award a fine between $750 and $150,000. This means that Hotfile could face damages as high as half a billion dollars, $517,200,000 to be precise.


MPAA’s list of infringed files

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The stipulation further clarifies that Hotfile has waived all affirmative defenses against its liability for direct copyright infringement. The file-hosting service does, however, reserve the right to argue that its users were “space shifting” files that are not included in the suit, which could be seen as fair use.

“Defendants reserve their right to argue that files on the Hotfile system [other than the 3,448 files in suit] may have been ‘space shifted’ by Hotfile users. Plaintiffs reserve their right to argue the contrary, including that ‘space shifting’ is neither a relevant nor legally viable theory of fair use with respect to any copyrighted files on the Hotfile system,” the stipulation reads.

Aside from determining how much Hotfile owes the major movie studios, the jury will also have to decide on Warner Bros’ potential DMCA abuse.

Hotfile previously counter-sued Warner and alleged that after granting access to its systems the studio wrongfully took down hundreds of files including games demos and Open Source software without holding the copyrights to them. Hotfile seeks compensation for these false takedowns and the damage they have done to the company.

To the disappointment of the movie studios, the trial will be fought out without mentioning words such as piracy, theft and stealing. As reported before the weekend, the MPAA and its witnesses are banned from using such pejorative terms during the proceedings.

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