Cyberlocker Battle: Hotfile Threatens to Countersue Warner Bros.

Hollywood has made a stink about so-called "cyberlockers," file-hosting websites that allow users personal storage that often gets used to share copyrighted movies, music and games. Now, one popular cyberlocker, Hotfile, currently fighting a big lawsuit brought by the MPAA, is fighting back, suggesting in court papers that it is prepared to countersue Warner Bros.

The entertainment industry has had some issues bringing the legal hurt against cyberlockers, as many are domiciled overseas. But in February, the MPAA found a juicy target in Hotfile, one of the 100 most popular websites on the Internet, operated by a man who was residing in Florida.

Since the lawsuit was filed, Hotfile hasn't rolled over, nor has it decided to duck for cover in some foreign country. It is putting up a rollicking fight.

In April, the cyberlocker offered its response, saying that it scrupulously complies with the DMCA safe harbor provisions, and got some preliminary success when a judge tossed the MPAA's claims for direct copyright infringement, leaving open the question of whether Hotfile holds any secondary liability for inducing copyright infringement by its users.

Hotfile hasn't stopped there.

Over the summer, the company has been pushing the film industry to open up about its anti-piracy investigation techniques, the process by which movie studios search and find infringements on the Internet, and the rationales that lead a studio to send a takedown notice. In turn, the studios claimed these priviledged logs are sensitive trade secrets not relevant to the proceedings.

In July, Hotfile said it needed this information not only to defend itself against massive copyright charges, but also to bring legal action against at least one studio believed to be abusing its anti-piracy tool by deleting files it didn't own.

"Being able to determine which withheld documents are related to Plaintiffs’ cooperative antipiracy efforts to remove material from Hotfile is also important for a counterclaim Hotfile intends to bring against at least one of the Plaintiffs—Warner Bros. Entertainment, Inc."

On Friday, the movie industry filed more court papers that continue its resistance to handing over too much information. The MPAA tells a judge that Hotfile hasn't proven the relevance of this material, and as for a possible countersuit, it writes, "Defendants claim they need discovery for a counterclaim they might bring against one Plaintiff. But that is not how discovery works: parties are not entitled to take discovery for a counterclaim they have not pleaded..."

Then again, the document reveals that the parties have scheduled a deposition so that Hotfile's attorneys can find out for themselves whether Warners was up to no good, or, as the MPAA's lawyers put it, "so that Defendants may satisfy themselves that there is no basis for any claim."

Of course, the pre-litigation fight may merely be a side-show to the ultimate, big question concerning cyberlockers and their liability for users' stored files, but the evidence so far suggests that barring any settlement, this is likely to be a hard-fought, protracted court battle that could yield some interesting information about Hollywood's war on piracy.


Twitter: @eriqgardner