Fileserve Ordered to Pay $869k to Compensate Movie Studio’s Piracy Losses

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The makers of independent movie American Cowslip have won their case against file-hosting service FileServe. District Court Judge Audrey Collins issued a default judgment against FileServe on Thursday, ordering the company to pay $869,500 in piracy damages.

fileserveWith nearly 200 million pageviews a month, FileServe was listed as one of the top 10 most-visited file-sharing sites two years ago.

This put the site in the crosshairs of the entertainment industry, with Paramount Pictures branding it as one of the main sites to be targeted following the Megaupload shutdown.

While FileServe is still around, the site has undergone some drastic changes to its business model since its heyday. Immediately after the Megaupload raid the company changed its policy to only allow users to download files they have uploaded themselves.

As a result of this decision traffic to the site tanked, but not all of the site’s troubles went away. Last year the production company behind the independent movie American Cowslip filed a lawsuit at a federal court in California.

The movie studio filed a motion for summary judgment last month, after the Virgin Islands-based file-hosting service failed to respond to the allegations. In the motion, FileServe was accused of a wide variety of copyright related offenses, including selling pirated goods through subscriptions.

“FileServe is aware that its websites are being used as a vehicle to illegally copy and distribute large amounts of infringing materials. Because it charges membership fees for immediate access to the copyrighted materials stored on its servers, it is a distributor and seller of pirated materials,” the complaint read.

Yesterday, District Court Judge Audrey Collins decided on the case and entered a judgment in favor of American Cowslip, holding FileServe liable for copyright infringements committed by its users.

The file-hosting service is now ordered to pay $869,500 to compensate the movie studio for the alleged piracy losses, and an additional $20,990 in attorney’s fees

fileserve-default

The damages sum is entirely based on an estimate the movie studio came up with. Based on revenues of comparable movies the company ran a statistical forecast model which predicted that American Cowslip should have generated more than a million in revenues in North America, as opposed to the $68,000 it actually made.

While these calculations raise several questions, the judge had little other option than to accept it, since FileServe failed to weigh in.

Whether the movie company will ever see a penny has yet to be seen though. FileServe never responded to the complaint, and it would be a surprise if the Virgin Islands company changed its stance when the bill arrives.

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