Induce me not

We’ll have to wait for formal opinion to be released in the next week or two, but it appears the MPAA has won an important victory in its never-ending legal battle against online piracy, at least according to the MPAA. A federal district court in Florida granted the studio group’s motion for summary judgment against cyberlocker provider Hotfile, the MPAA reported yesterday, although the written opinion will not be released until it has been fully redacted of sensitive information.
“This decision sends a clear signal that businesses like Hotfile that are built on a foundation of stolen works will be held accountable for the damage they do both to the hardworking people in the creative industries and to a secure, legitimate Internet,” MPAA chairman and CEO Christopher Dodd said in a statement.
“We applaud the court for recognizing that Hotfile was not simply a storage locker, but an entire business model built on mass distribution of stolen content,” Dodd added. “Today’s decision is a victory for all of the men and women who work hard to create our favorite movies and TV shows, and it’s a victory for audiences who deserve to feel confident that the content they’re watching online is high quality, legitimate and secure.”
What makes the decision notable is not simply that it marks the first time the studios have been able to take down a cyberlocker site but because it was done via summary judgment on an inducement standard. Copyright owners have been trying for years, in a string of lawsuits, to get courts to narrow the scope of the DMCA safe harbors, mostly without success. In nearly every case, including Viacom v. YouTube, courts have ruled that online service providers cannot be held liable for copyright infringement simply on the basis of a general awareness that their platforms were being used for infringing conduct. To be liable, the service provider must have direct knowledge of specific acts on infringement and then fail to take action when requested by the copyright owner.
The court in the Hotfile case, however, seems to have concluded that by offering users bounties for uploading copyrighted files, Hotfile was actively inducing its users to commit copyright infringement, making the site ineligible for the safe harbor. That was a standard first articulated by the district court in the Napster case and later amplified by the Supreme Court in Grokster.
The latest result suggests copyright owners could have more luck pursuing the inducement standard than trying to get courts to rewrite the statute to narrow the safe harbors.