Hotfile Settles Movie Studios' Copyright Lawsuit for $80 Million - Technologist
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Hotfile Settles Movie Studios' Copyright Lawsuit for $80 Million

In a predictable move, Hotfile and several motion picture studios reached a settlement only six days before heading to trial. With a settlement award of $80 million in favor of the motion picture studios, it's questionable how much Hotfile will actually be able to pay, reports Ars Technica.

Pre-trial Background

Several motion picture studios filed a complaint against Hotfile, in February 2011, alleging the "cyberlocker" site was in engaging in copyright infringement. In an order dated September 20, 2013, the district judge found that Hotfile did not have the protections of the Digital Millennium Copyright Act, and found Hotfile vicariously liable for the copyright infringement of it users. Because the legal issues were resolved, the only matter outstanding was the amount of damages.

The Settlement

Six days before trial to determine damages, District Judge Kathleen M. Williams, approved and adopted the proposed settlement, and entered judgment and a permanent injunction against Hotfile. Plaintiffs were awarded $80 million, in addition to getting a permanent injunction against Hotfile. The order stipulates that the Hotfile's website and system shall be shutdown, "unless and until Defendants have incorporated into the Hotfile system state-of-the-art content identification and filtering technology ... that prevents" copyright infringement.

Chairman and CEO of the Motion Picture Association of America, Senator Chris Dodd, stated: "This judgment by the court is another important step toward protecting an Internet that works for everyone," in an MPAA press release.

Hotfile.com Notice

A notice on Hotfile.com now reads: "As a result of a United States federal court having found Hotfile.com to be in violation of copyright law, the site has been permanently shut down." It goes on, "[i]f you are looking for your favorite movies or TV shows online, there are more ways than ever today to get high quality access to them on legal platforms."

Repercussions

This settlement (and underlying decision) is significant because it's the first time a "cyberlocker" site has been held liable for the copyright infringement of its users. Not only that, but the court also found Anton Titov, Hotfile's principal, personally liable.

With so much money at stake, this is one area the entertainment industry will not let up -- but neither will file sharers. People want to share files, and they'll continue to find ways to do it. We're wondering what's next ...

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