March 9, 2012
Hotfile: The Next Stop On The MPAA Copyright Infringement Warpath
Hot on the heels of MPAA's suit against Megaupload, the Motion Picture Association of America (MPAA) has set its sights on file hosting service Hotfile.com.
A public redacted version of court documents filed in the U.S. District Court Southern District of Florida were released this week. Hotfile Corp. and Anton Titov, who operates Hotfile.com, were named as defendants.
In the legal document, the MPAA describes the digital locker site as "a system that enables copyright infringement on a mindboggling scale." The document alleges that Hotfile is responsible for "billions" of infringing downloads of copyrighted works in the form of motion picture and television properties represented by the film organization. The MPAA compares the file-sharing site to properties like Napster, Grockster, Isohunt and Limewire. Many of these sites have very publicly been shuttered under legal proceedings.
Hotfile posted an update to its policies as of February 1:
"Hotfile.com respects the rights of copyright holders and requires that its users agree not to share copyrighted works of others. To discourage violations of this policy, Hotfile has always maintained a policy of terminating accounts of users found to be engaged in repeated copyright infringement. Hotfile has made additional changes to this policy to facilitate the identification of repeated infringers and, under appropriate circumstances, the termination of their accounts."
Yet the claims by the MPAA are quite strong, calling the offense by Hotfile "more egregious" than sites such as Napster, Grokster, Limewire and other infringers. "No earlier pirate services had the temerity to actually pay its users to upload infringing content. Hotfile does," according to Digital Trends The document claims that Hotfile pays its affiliates (users who upload files to share) "based on how many times their files are downloaded." The practice, the document alleges, "induces the uploading of 'popular' (i.e., infringing) content."
The MPAA seeks to address whether Hotfile is eligible for "safe harbor" under the Digital Millennium Copyright Act (DMCA). The document also states that Hotfile did not implement a policy of terminating repeat infringers as the DMCA requires.
Possibly, in anticipation of the lawsuit, Hotfile changed its policy towards its affiliate program on February 1, at the same time as the above policy changes. The company began paying affiliates a percentage of the price of premium memberships purchased by users who download the affiliate's uploaded files. Previously affiliate payments were based on download volume or referrals from websites. The affiliate policy went on to say, "In line with Hotfile's Intellectual Property Policy, affiliate accounts subject to a DMCA takedown notification will be suspended and multiple DMCA notifications will result in termination of an affiliate account."
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