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MPAA sues Hotfile, domain possibly at risk of seizure

Posted by Bradley Wint on 09/02/2011

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The Motion Pictures Association of America has filed a lawsuit against file sharing service Hotfile.com. In a press release, they mention that Hotfile has directly promoted the sharing of illegal content including movies and TV shows, porn, cracked programs and much more. Even though the MPAA states that Hotfile targets those who wish to host large files, rather than personal stuff (like on DropBox), they are really no different from Rapidshare, MegaUpload or any other large-file sharing site.

They had this to say:

Sometimes referred to as cyberlockers, download hubs like Hotfile bear no resemblance to legitimate online locker services. In fact, Hotfile openly discourages use of its system for personal storage. Hotfile‟s business model encourages and incentivizes users to upload files containing illegal copies of motion pictures and TV shows to its servers and to third-party sites, so unlimited users can download the stolen content – in many cases tens of thousands of times. Hotfile profits from this theft by charging a monthly fee to users who download content from its servers. Hotfile also operates an incentive scheme that rewards users for uploading the most popular files – which are almost exclusively copyrighted works. Hotfile profits richly while paying nothing to the studios for their stolen content.

Hotfile is operated by Anton Titov, a foreign national residing in Florida. The studios are suing Hotfile and Titov for direct infringement for unlawfully distributing copyrighted works, inducement of infringement, contributory infringement and vicarious infringement, for actively promoting, enabling and profiting from their users‟ copyright infringement. A civil lawsuit has been filed in U.S. District Court in the Southern District of Florida for damages and injunctive relief for violations under the United States Copyright Act of 1976.

In all fairness, there really is no question that Hotfile has become one of the most popular services these days. Just looking at warez sites like Katz.cd or RLSLOG, it is clear that Hotfile comes out on top of the link count to illegal media. However, should Hotfile take all the blame for their problems. Just like the others, they have a very active process of removing illegal content from their servers. Usually the content is removed fastest from Hotfile in comparison to the others, so it’s not like they are engaging in maintaining content which is deemed to be illegal.

By no means are we trying to defend piracy, but it it still somewhat questionable lawsuit in nature. At the end of the day, will the courts be able to put the blame on Hotfile themselves or will the MPAA have to go deeper (Inception deeper?) and start suing on the user level? According to their Privacy statement, Hotfile follows the Digital Millennium Copyright Act (DMCA) by actively removing reported illegal content. Also, the lawsuit talks about them encouraging users to upload more popular content. Hasn’t this always been the case with all File Locker sites? Finally, they state that users must purchase premium membership to download files uploaded by other users. The last time I checked, there was still the option to download files for free (under 1GB in size) but under limited constraints.

While other sites like Rapidshare have a safe haven of being based in Switzerland and Germany, the case may actually go in favor of the MPAA because of the technicalities and loopholes of the US DMCA legislation. There have been many warnings to companies starting new File Locker and Warez hosting sites to set up shop in non-US locations; meaning no head offices, no servers, and as little restrictions as possible, in order to avoid the wrath of media organizations like the MPAA and RIAA.

In a related story, Liberty Media filed a lawsuit against Hotfile as well for similar reasons of encouraging users to upload popular content to rack up reward points. They have also questioned the business registration information of the company and also asked for the US government to confiscate the domain name (hotfile.com) and put this nice banner on it instead.

Also, check out the I Will Stop Pirating When… thread and tell us what the government or private organizations should do to get you to come from the dark side (a.k.a. buy stuff legally).

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