February 29, 2012 5:45am PT by Eriq Gardner
How Warner Bros. Is Fighting Charges It Abuses the Copyright Takedown Process
As federal prosecutors prepare to take on the leaders of Megaupload, the entertainment industry continues to fight Hotfile, another huge file locker site.
Last year, the MPAA led a huge copyright infringement lawsuit against Hotfile, one of the most popular websites in the world. Unlike Megaupload, whose leaders live overseas, Hotfile is operated by a man named Anton Titov, who resides in Florida. Unlike Megaupload, whose leaders are putting up a fight to avoid facing prosecution in the U.S., Hotfile's executives are facing the music and even striking back. After the film studios sued Hotfile, the website responded by bringing counterclaims against Warner Bros. for allegedly abusing its anti-piracy tool.
On Monday, Warners submitted a motion to have the countersuit dismissed.
In doing so, the studio pointed to testimony given by Titov, who definitely is not hiding, and declarations by David Kaplan, senior VP of worldwide antipiracy operations at Warners. The statements reveal some new details about anti-piracy efforts and how both the studio and Hotfile responded after being hit with allegations in this case.
According to Kaplan, the fact that locker sites like Hotfile have no mechanism for a copyright owner to search the site directly for unauthorized copies of films has meant the studio must employ a "highly sophisticated system" to search other sites that "link" to locker sites. The operation is vast, says the Warners executive. How big? The company redacts the number of its employees who work in antipiracy operations -- apparently, that's a trade secret -- but says it sent one million notices to Hotfile alone since 2009.
In Hotfile's counterclaims, the locker site accused Warners of sending takedown notices on material that it didn't really own.
In response, Warners acknowledges that errors are sometimes made, but that there's little showing of any harm in occasional slip-ups. The company says that it investigates malfunctions and takes corrective measures when appropriate . In fact, Warners reveals that after Hotfile brought counterclaims, the studio took its entire takedown system offline for some time.
Warners asks a judge to dismiss allegations that it abuses Hotfile's anti-piracy tool on several grounds. Among them:
- "Hotfile cannot present evidence establishing that Warner had actual subjective knowledge that, at the time it sent any takedown notice...the notice contained a material error."
- "Hotfile cannot present evidence establishing that any takedown notice...resulted in any cognizable injury to Hotfile."
- "Hotfile is not injured by removing a file that is infringing, even if the takedown notice is sent by the wrong copyright owner."
- "Warner is not the cause of the termination of a Hotfile user who had 'three strikes' from infringement notices without counting the notices sent by Warner."
The studio points to deposition testimony by Titov, who acknowledges that mistakes sometimes happen and wouldn't speculate why Warners would remove material wrongfully. The Hotfile head also admits that his website only began assigning strikes to users flagged for uploading copyrighted content after the MPAA's lawsuit was filed against the company. Titov also says he isn't aware of any user who made a complaint upon Warner allegedly sending a bad takedown notice.
Plus, Titov disavows any advantage from having flagrant copyright abusers in its system. "Hotfile doesn't consider [itself] to be entitled for income from repeated copyright infringers," said Titov during his deposition.
Warners goes through some math.
Of the many files that Hotfile claimed Warners had caused to be taken down wrongfully, 24 were alleged duplicates, 19 were allegedly Warners-owned, 271 allegedly belonged to Electronic Arts, which leaves 477 that were alleged copyright infringements but not belonging to Warners. The studio questions whether the takedowns resulted in legitimate user suspensions.
As to the files owned by EA, Warners reveals something interesting.
According to Kaplan's statement, Warners holds the right to distribute EA works in Brazil. Beginning in early 2011, the two companies coordinated on a plan to leverage Warners' system to locate EA files on locker sites. The studio says that it inadvertently sent takedown notices on EA files to Hotfile, but now it says that EA has "retroactively authorized" Warners to send these takedown notices. In other words, Warner is acting as EA's agent in antipiracy operations to some extent.
A hearing on summary judgment should happen soon. Hotfile is accusing Warners of violating a judge's protective order on clawed-back work-product documents and says that the studio's lawyer conducted himself wrongfully during the Titov deposition, which took place in Bulgaria, according to court documents. Hotfile could be on the verge of arguing that some of the evidence in record is tainted.