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Hotfile agrees to pay movie studios $80 million in copyright case settlement

Just days ahead of the expected commencement of a trial which would’ve put the major movie studios up against the prominent ‘cyberlocker’ site Hotfile, the latter has settled to the tune of $80 million and agreed to terminate its operations unless it “employs copyright filtering technologies that prevent infringement.” So if Hotfile does find a way to continue, it won’t be in its current form. 

The news came via a statement (pdf) released Tuesday by the Motion Picture Association of America (MPAA), which represents the nation’s major studios, and comes two years after the MPAA sued Hotfile in 2011, leading to the case that was lined up to begin Friday.

According to an Ars Technica report, the trial would likely have centered on damages, as US district judge Kathleen Williams of the Southern District of Florida had, back in the summer, rejected the cyberlocker site’s ‘safe-harbor’ defense under the Digital Millennium Copyright Act (DMCA), stating that Hotfile founder Anton Titov would be liable for its users’ actions regarding copyright infringement. Before then, in most circumstances a company providing a hosting service or such like could not be held liable for the behavior of its users when interacting with its site or service.

While Hotfile defenders argue that the site is merely a storage facility for digital files, Williams said it went beyond this and was effectively a distribution business.

According to Williams’ summer ruling, Hotfile received a sizable 10 million DMCA notices from organizations claiming copyright prior to the 2011 lawsuit filing. However, Hotfile is said to have pulled the plug on only 43 accounts. 

The Southern District Court of Florida ruling also included data collected by the studios, which claimed that copyrighted content belonging to them made up 10 percent of all downloads on Hotfile.

“This judgment by the court is another important step toward protecting an Internet that works for everyone,” Senator Dodd, chairman and CEO of the MPAA, said in Tuesday’s statement, adding, “Sites like Hotfile that illegally profit off of the creativity and hard work of others do a serious disservice to audiences, who deserve high-quality, legitimate viewing experiences online.”

In February last year the site said it took seriously “the rights of copyright holders, and requires that its users agree not to share copyrighted works of others.”

Hotfile reportedly hosted 123 million files, which 5.3 million registered users downloaded 2.9 billion times.