Court finds Hotfile, and the guy running it, guilty of copyright infringement

A U.S. District Court in Florida has found digital file-sharing site Hotfile and its owner Anton Titov guilty of copyright infringement, according to a press release issued by the Motion Picture Association of America. It’s the second blow against online file sharing to come on Wednesday, after news broke that music-sharing service Grooveshark had signed a licensing deal with Sony, but the verdict probably shouldn’t surprise anyone with a basic knowledge of copyright law.
The opinion in the case is sealed pending redactions of sensitive material, according to the press release, but the MPAA suggests the court based its decision on the fact that Hotfile encouraged piracy by paying users to upload large files (i.e., not papers or photos, but full-length videos). Assuming that’s true, the decision is pretty square with the legal precedent set during Napster’s legal battle earlier this millennium: Broadly speaking, enabling infringement isn’t illegal, but encouraging it is.
The MPAA paints the victory of its constituents (Disney(s dis), 20th Century Fox(s foxa), Columbia, Universal and Warner Bros.(s twx), in this case) as a victory against personal cyberlockers, but that seems like a gross overstatement. It’s a victory against cyberlockers that encourage piracy, for sure, but not necessarily against all cyberlockers.
A federal court in New York decided in 2011 that cyberlocker service MP3Tunes was not liable (for the most part) in its case against a collective of music-industry plaintiffs. Among the court’s rationale for granting summary judgment on behalf of the defendant was the fact that MP3Tunes neither rewarded nor encouraged infringement and, in fact, punished it. (However, the judge granted the plaintiffs’ motion to reconsider certain claims¬†decided in favor of MP3Tunes, and that case is now headed to trial starting on Nov. 11.)
Hotfile, on the other hand, only began punishing users for infringement after the MPAA’s lawsuit was filed, according to a 2012 article from the Hollywood Reporter.
But just because Hotfile might have been actively encouraging infringement, that doesn’t make the content industry the hero of the piracy story. If anything, its aggressive takedown-claim strategies under the Digital Millennium Copyright Act have been a major nuisance — if not a destructive force — to plenty of legitimate web companies. Ask MP3Tunes and Veoh: They won their lawsuits (Veoh’s victory was even upheld by the 9th Circuit Court of Appeals), but the legal bills forced both into bankruptcy.
Update: This post was updated at 4:26 p.m. to correct a mistaken reference to an appellate decision in the MP3Tunes case. The link and text were actually in reference to the Veoh case.

Update 2: This post was updated at 6:16 a.m. to include additional information about the MP3Tunes case, which is now heading to trial.