In February 2011 a group of big Hollywood studios sued Hotfile, a data storage website, for copyright infringement. The way Hotfile works is that users upload data and control access to it, so the user can share links for downloading the data as they wish. Hotfile has an affiliate program which allows individuals and companies to earn a commission from downloads when they sell a premium Hotfile account. The studios asserted that many of the affiliates of Hotfile are using it to share copyright materials.
In an effort to comply with the DMCA, Hotfile has given Warner Bros. access to it’s files so Warner Bros. can search for and delete materials they own the copyright for. Hotfile even built special anti-piracy tools for Warner Bros. which they were able to use to remove the infringing files once they were discovered. Warner Bros. used their own filter to find the materials.
However in September, Hotfile sued Warner Bros. for fraud and abuse, saying they were removing thousands of files which contained materials they didn’t own the copyright for. Last week Warner Bros. responded to the accusation, acknowledging they indeed had:
- removed titles based on keywords without verifying the actual content
- removed materials they didn’t own the copyright for
- deleted open source software on Hotfile’s system (because it could make downloading files faster)
Warner Bros. defends their actions by saying that most of the files they took down were infringing on a copyright, even if it wasn’t theirs. The DMCA explains that one of the elements necessary to make a claim is: “(1) ownership of a valid copyright…” (Facebook v. Power Ventures), so it seems unlikely that Warner Bros. can get away with asserting that their takedowns were appropriate. In addition, Warner Brothers’ takedown of third party open source software that facilitated more rapid downloading is highly questionable and has yet to be reviewed by the courts. It’s clear Warner Brothers was not playing by the DMCA rules, but to what extent Hotfile’s “fraud and abuse” claims will be compensated remains to be seen.