As one of the ten largest file-sharing sites on the Internet, Hotfile has become a prime target for Hollywood.
February last year the inevitable happened when the MPAA filed a lawsuit against the file-hosting service. Since then there have been dozens of court filings and Hotfile even sued MPAA member Warner Bros. right back for allegedly abusing its copyright takedown tools.
After a hiatus of a few months the two parties are back in court again.
The MPAA hopes to avoid a trial and has asked for a default judgment on the alleged copyright infringements committed by Hotfile. The file-hosting service, which accuses the MPAA of foul play, insists it’s merely a service provider and wants a jury to decide the outcome of the case.
In its filing the MPAA gives an overview of why it believes the court should find Hotfile guilty. According to the movie studios the file-hosting service did not build its business on legitimate digital storage, but by encouraging users to upload infringing content.
“Hotfile encouraged infringing uploads for the purpose of massive distribution of those files,” the MPAA writes.
“It is therefore liable regardless of what percentage of Hotfile use was for storage. Similarly, when Hotfile paid users to upload ‘popular’ files – i.e., files that would be massively downloaded – it was substantially certain that many of those files would be infringing.”
In a previous filing Hotfile showed that the most downloaded files were actually Open Source software, but this is a moot point according to the MPAA. In fact, the MPAA describes Hotfile as the most blatant inducer of copyright infringement ever to appear before a court in an online piracy case.
“That some popular files were non-infringing, as Hotfile contends, is beside the point. No previous defendant has engaged in conduct that so blatantly induces copyright infringement,” they write.
“The single fact that Hotfile’s revenues plummeted 94% when Hotfile belatedly began terminating repeat infringers leaves no doubt that the ‘commercial sense’ of Hotfile was copyright infringement.”
Aside from claiming that Hotfile’s business was setup to lure in and profit from copyright infringers, internal emails obtained by the MPAA also show that employees of the file-hosting service directly assisted copyright infringing users.
“It is against this backdrop that Defendants acknowledged in internal communications that Hotfile was a ‘flagship for non-licensed content’, overtly encouraged a user to upload infringing television programs, and provided technical assistance to users openly engaged in copyright infringement,” MPAA writes.
In a filing of its own, Hotfile contests the allegations and says that the MPAA is constantly equating its service to convicted infringers such as Grokster, Napster and Limewire, often without any evidence to back it up.
“Insults and hyperbole are no substitute for evidence,” Hotfile’s legal team tells the court.
“Plaintiffs have retreated to the same misguided guilt-by-association tactics used to launch this case. They falsely insinuate that Hotfile is hiding evidence and constantly invoke the names of past-adjudicated infringers.”
Hotfile says they offer a neutral storage service to millions of users, with plenty of non-infringing uses.
“The evidence shows that Hotfile, a file-hosting and cloud storage service on which millions of people around the world rely, is nothing like Napster or other ‘notorious infringers’ of past cases.”
In addition to arguing that the most downloaded files are Open Source software, Hotfile also defends its affiliate program by pointing out that this allowed software developers to generate revenue by giving away their applications.
The file-hosting service adds that most uploads weren’t downloaded at all, but used for storage, and that the company took far-reaching efforts to curb the distribution of copyrighted material.
“The majority of files on Hotfile are stored and never downloaded. Hotfile has implemented state-of-the-art countermeasures endorsed by Plaintiffs. Each of these facts are established by probative and admissible evidence,” Hotfile writes.
Hotfile therefore asks the court to deny the motion for summary judgment and let the case go to trial.
The MPAA on the other hand, argues that summary judgment is justified and wants Hotfile to be shut down as soon as possible.
The judge now has to decide how to go forward. Whatever the outcome, the case is expected to set an important precedent for the future of similar cloud hosting services that operate in the United States.