Hotfile Sues Warner Bros Over Abuse of Takedown Tool

schwit1 writes with a piece in Torrent Freak about ongoing litigation between Hotfile and a few movie studios. From the article: "Hotfile has sued Warner Bros. for fraud and abuse. Hotfile accuses the movie studio of systematically abusing its anti-piracy tool by taking down hundreds of titles they don't hold the copyrights to, including open source software. Among other things, Hotfile is looking for damages to compensate the company for the losses they suffered." Near the end of the article it is mentioned that files taken down by the tool were replaced with links to legally procure similar works from Warner Bros.

Comments

Tool Use

[nman64]

The use of tools was a significant early step in the development of humankind. Maybe, in as little as a couple million years, the big studios will be ready to be part of civilized society.

under penalty of perjury

[gstoddart]

I would really like someone to hold them to that.

Yes, copyright infringement is illegal. But, stating under penalty of perjury that you own a copyrighted work, and clearly not having checked to see if you do ... well, that should be treated with some pretty harsh legal consequences. In fact, maybe someone can spin it so that the Warner pays the statutory damages as if they pirated the work ... what's that, like 9 trillion dollars per offending file?

Hopefully Hotfile gets some traction on this one.

Re:under penalty of perjury

[Baloroth]

Actually, it's worse then that. They then replaced the file (they didn't own) with links to purchase their own works. IMHO (IANAL, though) that is commercial infringement of copyright, and commercial infringement is a criminal offense. So is perjury, for that matter.

Also, Warner Bros should loose their rights under the DMCA to issue takedown requests at all, since they clearly cannot be trusted to issue valid requests. Make them get a court order every single time. Hopefully, this will serve as a nice precedent against automated takedown tools in the future.

Re:under penalty of perjury

[crankyspice]

The DMCA's penalty of perjury language only applies to the statement that the author is "authorized to act on behalf of the owner of an exclusive right that is allegedly infringed." 17 USC 512(c)(3)(A)(vi) (http://www.copyright.gov/title17/92chap5.html#512).

If I work for Consolidated Pictures, which owns the rights to the movie The Cairo Goose, and I send a DMCA takedown notice on the file MSDN_Preview_WinNT_Cairo-{g00s3}.rar, and state under penalty of perjury that I am authorized to act on behalf of the owner of the exclusive rights in The Cairo Goose, I'm fine, even though upon closer inspection the RAR file is, on its face, obviously not a copy of my employer's motion picture. (It's someone else's copyright to enforce. ;))

To be clear, I'm not saying (in a DMCA takedown) that I own the rights to that /file/, I'm identifying a work (The Cairo Goose), saying under penalty of perjury that I'm authorized to act on behalf of the rights holder of that work (The Cairo Goose), and, not under penalty of perjury, that I have a good-faith belief that the file in question is a copy of The Cairo Goose.

Note that 512(f) does provide liability "for any damages, including costs and attorneys' fees, incurred by the alleged infringer" when a DMCA notification "knowingly materially misrepresent[s]" infringement.

Also, 512(g) provides for reinstatement of content upon counter-notification where there was a "mistake or misidentification of the material..."

Re:under penalty of perjury

[prakslash]

It is apparent what is happening.

The studios are using the results of simple keyword searches to trigger takedowns. As an example, while claiming to remove files that are copies of the movie "The Box", Warner removed several files related to the alternative cancer treatment book "Cancer: Out Of The Box" Another title deleted by Warner was "The Box that Saved Britain", a production of the BBC, not Warner.

If the studios want Hotfile to spend time and resources to stop aiding in the distribution of the studios' copyrighted content, then it is also the studios' responsibility to spend their own time and resources to correctly identify their copyrighted content.

Re:under penalty of perjury

[gstoddart]

To be clear, I'm not saying (in a DMCA takedown) that I own the rights to that /file/, I'm identifying a work (The Cairo Goose), saying under penalty of perjury that I'm authorized to act on behalf of the rights holder of that work (The Cairo Goose), and, not under penalty of perjury, that I have a good-faith belief that the file in question is a copy of The Cairo Goose.

Thanks for the interesting example ... but don't Warner also need to provide some actual evidence that the thing they're insisting be taken down is actually infringing on their copyright?

Because, in your example, you clearly are not a rights holder to MSDN_Preview_WinNT_Cairo-{g00s3}.rar, it is clearly not infringing on your copyright, and therefore you have no legal standing to assert that it be taken down.

I fail to see how the statement "I am authorized to act on behalf of someone who owns an entirely different piece of property" in any way affects all of those myriad properties you don't own.

That more or less boils down to "I own a copyrighted piece of property ... and therefore I insist that you take down this piece of copyrighted property" ... unless you're asserting that the property is in fact yours, then shouldn't you STFU?

And, if you consistently claim that by virtue of holding the copyright to a piece of property with the word Cairo in it, that something is infringing without even checking if that is your property, can't you more or less be deemed to be acting in bad faith or being vexatious? Because you are alleging that the content is infringing on your copyright. Not merely that you're authorized for a specific property, but that you have undertaken steps to indicate that this file is infringing.

Surely there has to be a good mechanism to give Warner Brothers the kick in the groin they so justly deserve for either misrepresenting their standing, or simply failing to do their due diligence. They can't just go around making people take files off the internet without any consequences and process. Especially if the basis of the action is claiming that the reason for pulling the file is because it is supposed to be infringing on your copyright.

Obviously, I'm not a lawyer ... but surely these clowns have to be held to a higher standard than "because we said so".

Re:under penalty of perjury

[The Immutable]

Hopefully, this will serve as a nice precedent against automated takedown tools in the future.

Tools are just tools. This one was abused and should be taken from the abuser, but by no means indicates that the tool itself is bad. This is the other side of the fence of the historic ruling on VCRs that just because you can do something illegal with a tool is not reason enough to ban it.

Re:under penalty of perjury

[Maximus633]

I have worked for an ISP Abuse department and routinely had to enforce DMCA.

You're section of stating you have an authorized right to act on behalf of the rights holder. The DMCA requires that you have looked at the file to determine that it in fact is a copyright to which you own. Thus you are saying you have the right to enforce the copyright in regards to that /file/ since it was your work or a work for which you have the right to enforce copyright action to. The fact is you HAVE to establish that you own the copyrights to the work in that file. Otherwise you mis-represent yourself. As you already said that 512(f) does give people the right to come after you.

Re:under penalty of perjury

[Baloroth]

Your right, but irregardless that doesn't affect my point nor does you're criticism phase me.

Re:under penalty of perjury

[Lexx Greatrex]

irregardless is not a word.

Irregardless is a perfectly cromulent word.

Re:under penalty of perjury

[SleazyRidr]

Seriously? You overlook the actual problems in his post to try to make a point that you're already 90 years too late to make?

Interference with Contracts

[Tekfactory]

The article states loss of accounts and goodwill, but a software publisher was using hotfile to distribute his freeware app, and Warner deleted his files.

Hopefully Hotfile has the money to go the distance on this one and not settle out of court.

Hopefully the judge won't let Warner and the other four studios drop the case so no precedent can be set.

I might almost buy that Warner was using a piece of software and a script and made some mistakes, btu that the mistakes got worse after they were notified that is negligence.

Too bad they won't get fined MAFFIAA imaginary numbers. How many freeware downloads didn't happen because they deleted the file, must have been millions at $750 a piece right?

Re:Interference with Contracts

[TheSpoom]

I bet Warner claims that because it was a freeware app, no damages can be awarded because no profit was lost.

Replacement Links

[Fnord666]

Near the end of the article it is mentioned that files taken down by the tool were replaced with links to legally procure similar works from Warner Bros.

Just to clarify any misunderstandings about what this meant(Emphasis mine):

Hotfile suspects that the overbroad takedowns were not only an attempt to prevent copyright infringement, but also a scheme to make profits. Warner proposed to Hotfile an affiliate deal where content that was taken down would be replaced with links to movie stores where users could buy Warner movies. More takedowns thus means more potential revenue.
"Warner had an economic motive to make these misrepresentations. As noted above, in early 2010, Warner proposed a business arrangement with Hotfile whereby Warner sought to present ecommerce links to Hotfile users who might purchase a Warner file for Warner's profit in place of links that Warner had deleted using its SRA."

A proposed solution

[DickBreath]

Make there be a statutory damage value and cause of action for each false DMCA takedown which is the same ($150,000 ?) as for each instance of copyright infringement.

This should happen more often!

[Adrian Lopez]

The DMCA gives copyright holders the power to take down content based on little more than their say so. It is therefore very important that making bogus DMCA claims carry penalties commensurate with the damage (both moral and monetary) suffered by those whose content is taken down by means of fraudulent or negligent copyright claims.

Lenz v. Universal

[tepples]

Also, Warner Bros should loose their rights under the DMCA to issue takedown requests at all, since they clearly cannot be trusted to issue valid requests.

I wonder to what extent Lenz v. Universal and the unclean hands doctrine can be extrapolated to keep a service provider's safe harbor intact when faced with takedown requests from someone suspected of perjury.

Warner Bros: too much money to care

[sl4shd0rk]

A valiant effort on Hotfile's part but they'd have better luck pulling hairs out of a honeybadger's ass than getting that lawsuit to stick.

*BEEEEP* FAIL!

[snugge]

from the faq:
Q.Can I search the Hotfile server for certain files?
A. No. Hotfile protects the privacy of our users. Only the person storing a file on Hotfile gets the download link. That person decides who should have access to the link. A file can only be downloaded if the download link details are known.

it should read:
Q.Can I search the Hotfile server for certain files?
A. Yes. Hotfile do not protect the privacy of our users. All major Hollywood Companies get acces to your download link. These companys decides who should have access to the link. They can download and look at your private files as they wish. They can choose to delete your files.

Re:*BEEEEP* FAIL!

[Anonymous Coward]

That's likely not how it happened. How many hotfile links can you find on the internet for all who visit the site?

Answer: Quite a few.

Without being explicitly told otherwise, it's not really fair to assume hotfile is sharing the info with people in ways it claims it doesn't.

penalties

[meglon]

from: http://www.citmedialaw.org/legal-guide/responding-dmca-takedown-notice-targeting-your-content,br.,br. The highlighted part:

Section 512(f) of the DMCA creates liability for knowingly making false claims in a DMCA takedown notice or counter-notice. See 17 U.S.C. 512(f). So, if you claim in a counter-notice that your content does not infringe the complaining party's copyrighted work while knowing this to be false, then the copyright owner can win damages from you, including court costs and attorneys' fees stemming from your wrongful counter-notice. Note, however, that this provision also works against a person or company sending a wrongful takedown notice. If someone claims in a takedown notice that you are infringing their copyrighted material while knowing this to be false, then you can win damages from them in a lawsuit. In recent years, the targets of wrongful takedowns have fought back and won damages and favorable settlements from individuals and companies sending bogus takedown notices. For instance, in Online Policy Group v. Diebold, Inc., 337 F. Supp. 2d 1195 (N.D. Cal. 2004), two students and their ISP sued voting machine manufacturer Diebold after it tried to use DMCA takedown notices to disable access to Internet postings of the company's leaked internal email archive. The court granted summary judgment to the students and ISP on their claim, finding that portions of the email archive were so clearly subject to the fair use defense that "[n]o reasonable copyright holder could have believed that [they] were protected by copyright." According to the EFF, Diebold subsequently agreed to pay $125,000 in damages and fees to settle the lawsuit. For another example, see Crook v. 10 Zen Monkeys in our legal threats database. Someone who has sent a baseless takedown notice about your content may be more inclined to back off if you remind him or her about section 512(f) of the DMCA, in addition to sending a counter-notice.

Re:Cloning blues

[tepples]

You can't copyright the rules of a game.

I am aware of that. The Tetris Company isn't (hence Tetris v. BioSocia), and apparently neither are some other publishers of some early-1980s arcade games.

Precedent indicates Hotfile is correct

[gstrickler]

Lenz_v._Universal_Music_Corp., circumstances aren't the same, but they do establish that copyright holders must exercise good faith in determining that a copyright infringement has actually occurred before filing a takedown notice. They don't specifically set out what constitutes good faith, but clearly removing items that simply contained the words "The Box" wouldn't qualify given this "fair use" precedent actually included 29 seconds of copyrighted material and was deemed plausible enough fair use for the counterclaim to proceed.
Lenz v. Universal Music Corp. was a 2007 case in which the US District Court for the Northern District of California ruled that copyright holders must consider fair use before issuing takedown notices for content posted on the internet. Stephanie Lenz posted on YouTube a home video of her children dancing to Prince's song "Let's Go Crazy."[1] Universal Music Corporation (Universal) sent YouTube a takedown notice pursuant to the Digital Millennium Copyright Act (DMCA) claiming that Lenz's video violated their copyright in the "Let's Go Crazy" song. Lenz claimed fair use of the copyrighted material and sued Universal for misrepresentation of a DMCA claim. The court held that, in violation of the DMCA, Universal had not in good faith considered fair use when filing a takedown notice.
The court also explained that liability for misrepresentation is crucial in preventing abuse of the DMCA as a means to stifle controversial speech.

And USC 17 S512 subsection (f) establishes penalties for misrepresentation by either the copyright holder or the alleged infringer