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Will Hotfile be the next Megaupload?

Posted by: , 17:08 AEDT, Fri March 9, 2012

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The MPAA requests a summary judgement in its lawsuit against Hotfile due to what they say are the similarities between Hotfile and Megaupload, while the EFF lambasts Warner Bros. for abusing Hotfile's anti-piracy tools

Buoyed by the multi-national law enforcement action against file sharing website Megaupload, the MPAA wants the US District Court to summarily rule in favour of the anti-piracy lobby group in its own lawsuit against another file hosting website, Hotfile.

The MPAA, representing some of the largest movie studios in the world, sued Hotfile for copyright infringement almost a year ago, claiming the file sharing website was actively encouraging its users to upload pirated content. Hotfile had an affiliate program in which uploaders of popular files get financially rewarded, which the MPAA claims encourages people to upload pirated files.

But with the feds taking action against Megaupload, the MPAA now wants the judge to make a quick summary judgement in the case, and rule against Hotfile due to its similarities to Megaupload.

"Hotfile’s business model is indistinguishable from that of the website Megaupload, which recently was indicted criminally for engaging in the very same conduct as Hotfile. Defendants even admit that they formed Hotfile ‘to compete with’ Megaupload," read one document submitted to the court by the MPAA.

However, with Megaupload's guilt yet to be proved, and with no criminal charges being laid against Hotfile (yet), the court may be reluctant to grant the MPAA's request.

In a related case, Hotfile counter-sued one of the studios involved in the lawsuit, Warner Bros., for mis-using the company's anti-piracy take-down procedures. Hotfile claimed that WB removed content that did not belong to the company, including content that was completely legal. This week, the EFF (Electronic Frontier Foundation) spoke in defense of Hotfile on this matter, claiming the improper take-down was akin to an attack on free speech, by denying access to legitimate content.

WB doesn't actually dispute the charges, but blamed their software "robo take-down" system for the errors, which took down content based on a partial keyword match. Because of this, Warner says that they're not liable as it was a computer error, not a human error.

However, the EFF's Intellectual Property Director Corynne McSherry says this is an invalid argument that, if accepted by the court, could lead to more abuses by content holders. "But under Warner’s theory, any company could sidestep accountability for abusing the DMCA by simply outsourcing the process to a computer. In fact, the companies would have a perverse incentive to dumb down the process, removing human review. What Warner is doing here is a ploy to undermine the DMCA provisions that protect Internet users from overbroad and indiscriminate takedowns like the ones it issued," said McSherry.


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