Court Orders File-Sharing Service to Pay $46,000 Piracy Damages For User Upload

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A Prague court has ordered Czech file-sharing and hosting site Ulož.to to pay $46,000 in damages to local movie distributor CineMart. The file-sharing platform stood accused of unjust enrichment after one of its users uploaded a pirated film without permission. Uloz's parent company describes the judgment as absurd and says it will appeal the decision.

uloz logoTo the global audience Ulož.to may not be well-known internationally but in the Czech Republic, it is huge.

The file-sharing and hosting service has millions of users and is listed as the 51st most-visited website in the country. In addition, its mobile apps are frequently used as well.

Like many other file storage platforms, Ulož can be used to share a wide variety of files. Copyright holders complain that many people abuse the platform to share pirated music, movies, and TV shows.

Piracy Battles in Court

Like YouTube, Facebook and Twitter, Uloz removes infringing content when it receives takedown notices. However, Czech rightsholders are not happy with the status quo and have sued the company on several occasions, demanding damages and tougher anti-piracy measures.

In 2020, the Municipal Court in Prague ruled that Ulož must filter and block files that reference the word “Šarlatán” (‘Charlatan’) which corresponds to the name of a Czech movie.

The order, requested by movie distributor CineMart, was set to remain in place until August 2030, but the file-sharing site immediately appealed. According to Ulož, the filtering obligation was too broad and could impact files that have nothing to do with the film, violating freedom of speech.

The appeal was successful and the High Court in Prague sided with Uloz and overturned the preliminary filtering requirement. This was welcomed as a big win by the site but it did not mark the end of its legal troubles.

$46,000 in Damages

CineMart went on to accuse Uloz of sharing unlicensed copies of its movie without permission and demanded compensation. Last week, Prague’s Municipal Court ruled on the dispute, ordering the operator of the file-sharing service to pay 976,000 Czech Koruna ($46,000) in damages.

“It was proven that it’s possible to download the work, to which the plaintiff has the rights, on the website from at least December 9, 2020 to February 2023,” Judge Jana Přibylová concluded.

The Court further clarified that the operator of the site, the company Petacloud, has to pay the damages within three days, HN reports. This money won’t go to the copyright holder directly but will be held in escrow until the case is finalized.

Uloz has already announced that it will appeal the preliminary verdict, which it characterizes as ‘absurd’.

“Due to the numerous defects in the judgment, we expect their return of the funds of course,” Uloz states, commenting on the verdict. “The judgment shows a number of errors and misunderstandings of the issue, which we unfortunately regularly encounter in courts of first instance.”

Safe Harbor?

The file-sharing service notes that it previously enjoyed success when appealing lower court decisions and it firmly believes this judgment won’t hold up either.

The company warns that when online platforms that rely on user-generated content are held liable for user uploads, services such as Facebook, Twitter, TikTok, and Wikipedia won’t be able to function.

“It would be a completely absurd conclusion that the operator must pay for unjustified enrichment if user-generated content that infringes on someone’s copyright appears on its commercial platform.

“This would, of course, completely negate the safe harbor principles and effectively make it impossible to operate any platform that’s built on user content,” Uloz adds.

Uloz has no problem with removing infringing content when it’s flagged by rightsholders, but categorically refuses to implement filtering technologies that are prone to overblocking.

These filtering tools are also quite costly. Hellspy, another Czech file-sharing service, shut down earlier this year when it turned out that implementing filtering technology was too burdensome.

CineMart is Happy

Film distributor CineMart is understandably pleased with the verdict. The company’s legal representative Rudolf Leška notes that this is the first time that a platform has been ordered to pay damages for copyright infringement in Czechia.

“It is the first lawsuit for monetary compensation against the repository operator that was successful,” Leška says.

Leška also pointed out that the authorities launched an investigation into the operators of the file-sharing platform. Uloz doesn’t deny this but notes that this ‘speculation’ is related to financial statements, which has nothing to do with CineMart or copyright.

Meanwhile, other rightsholders are keeping an eye on the legal battle, as they consider similar ‘unjust enrichment’ claims against the file-sharing platform.


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