Disney Enterprises, Inc. et al v. Hotfile Corp. et al

Filing 301

MOTION for Summary Judgment >WARNER BROS. ENTERTAINMENT INC.'S MOTION FOR SUMMARY JUDGMENT AND MEMORANDUM OF LAW IN SUPPORT OF MOTION (PUBLIC REDACTED VERSION)< by Warner Bros. Entertainment Inc.. Responses due by 3/15/2012 (Attachments: # 1 Affidavit Declaration of Scott A. Zebrak in Support of Warner's Motion for Summary Judgment (public redacted version), # 2 Exhibit A to Declaration of S. Zebrak, # 3 Exhibit B to Declaration of S. Zebrak, # 4 Affidavit Declaration of Dr. Ian Foster in Support of Warner's Motion for Summary Judgment (public redacted version), # 5 Exhibit A to Declaration of I. Foster, # 6 Affidavit Declaration of david Kaplan in Support of Warner's Motion for Summary Judgment (public redacted version), # 7 Affidavit Declaration of Kerry Hopkins in Support of Warner's Motion for Summary Judgment (public redacted version), # 8 Exhibit A to Declaration of K. Hopkins, # 9 Affidavit Declaration of Jennifer Yeh in Support of Warner's Motion for Summary Judgment (public redacted version), # 10 Exhibit A to Declaration of J. Yeh, # 11 Exhibit B to Declaration of J. Yeh, # 12 Exhibit C to Declaration of J. Yeh, # 13 Exhibit D to Declaration of J. Yeh, # 14 Exhibit E to Declaration of J. Yeh, # 15 Exhibit F to Declaration of J. Yeh, # 16 Exhibit G to Declaration of J. Yeh, # 17 Exhibit H to Declaration of J. Yeh, # 18 Exhibit I to Declaration of J. Yeh, # 19 Exhibit J to Declaration of J. Yeh, # 20 Exhibit K to Declaration of J. Yeh, # 21 Exhibit L to Declaration of J. yeh, # 22 Exhibit M to Declaraton of J. Yeh, # 23 Exhibit N to Declaration of J. Yeh, # 24 Exhibit O to Declaration of J. Yeh, # 25 Exhibit P to declaration of J. Yeh, # 26 Exhibit Q to Declaration of J. Yeh, # 27 Text of Proposed Order)(Stetson, Karen)

EXHIBIT C

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA

CASE NO. 11-20427-WILLIAMSrrURNOFF
DISNEY ENTERPRISES, INC.,
TWENTIETH CENTURY FOX FILM CORPORATION,
UNIVERSAL CITY STUDIOS PRODUCTIONS LLLP,
COLUMBIA PICTURES INDUSTRIES, INC., and
WARNER BROS. ENTERTAINMENT INC.,

Plaintif,
v.

HOTFILE CORP., ANTON TITOV, and
DOES 1-10.
Defendants.

/
HOTFILE CORP.,

Counterclaimant,
v.

WARNER BROS. ENTERTAINMENT INC.,

Counterdeftndant.

./
RULE 26(a)(2)(ß) REPORT OF DR. RICHARD WATERMAN
I. My name is Richard Waterman and I am an Adjunct Professor of

Wharton School at the University of

Statistics at The

Pennsylvana, and the President and Co-Founder of

Analytic Business Serices, Inc., a consultacy focused on providing expert advice and opinions

in the field of statistical analysis. I received my Ph.D. in Statistics from the Pennsylvania State
University in 1993. I have substantial experience designing and reviewing sampling protocols
for various large organizations, such as the United States Postal Service, for whom I designed

CASE NO. 11-20427-WILLIAMS/TUROFF

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CASE NO. 11-20427-WILLIAMS/TUROFF

After the sample had been drawn and the content obtained if available, an analysis of those files
his

was conducted by a copyrght analyst, Mr. Scott Zebrak, supervsing a team in aid of

analysis. Mr. Zebrak's report describing the process he followed and his analysis is attached
the determination of

hereto as Exhibit C. For

the copyrght infrngement status of each fie in the
Mr. Zebrak.

sample, I relied on the work and conclusions of

4. . Based on the analysis of

the contènt fies in the sample, I performed statistical

analyses to derive the results for the infrngement study. Those results are presented below,
beginning with a summar of my opinions and conclusions and followed by a description of the
study, the sampling protocol and analyses, and the bases and reasons for my opinons and
conclusions. In general, in reaching my opinions and conclusions, I relied upon my specialized
knöwledge, education, and experience as applied to the facts and data discussed below, as well as
Mr.

data about downloads from Hotfile produced by defendants, and the work and conclusions of

Zebrak. . The exhibits I may use as a sumar of or in support for my opinions are attached
hereto or are being produced concurently with this Report.
5. Based upon my review of

the most recent data provided by Mr. Zebrak,

approximately 90.3% of all daily downloads of files on Hotfile were downloads of infrnging or
highly likely infringing content; approximately 5.4% of the downloads of fies per day on Hotfle
were downloads of

non-infrnging or highy likely non-infrnging files; and the remaining

approximately 4.3% of

the downloads of

the

copyrght status could not be reliably determined in the time allowed. Of

non-in.:fnging, 0.5% were identified

fies whose

fies per day on Hotfile were downloads of

works classified as

as being likely ilegal to distrbute, making the infrngement

analysis here conserative. Ths analysis was based on data showing downloads of fies that was

provided by Hotfile.

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CASE NO. 11-20427-WILLIAMS/TUROFF

6. The following describes the processes I used to design the sampling protocol and

select the sample for the study:

7. The first step in devising the sampling protocol was to define the relevant

population of interest from which the sample would be extracted, and to ensure the population

was accurately represented in the sampling frame. Since the objective of the Hotfile study was
to analyze the daily percentage of downloads of files from Hotfile that were of infrnging files,

the population of interest consists of downloads of fies from Hotfile in a specified time prior to
the complaint, Januar 201 1.

8. While defendants did not produce actual log data for the perod before February

2011, they did produce a data table called "dailydownload", that efficiently summarzes all the
necessary information that would be found in a log file to enable an infrngement analysis of the

recorded downloads. My understanding is that ths table identifies fies that were downloaded in
a specific day (represented in the "uploadid" field), the date of download (represented in the
"date" field), and the number of

"premium" and "free" downloads of

the files (represented in the

"premium" and "free" fields). My understanding is that "premium" and "free" downloads are
downloads by different kinds of

users: those who have purchased Hotfile Premium

subscriptions, and those that have not, respectively. Adding the two together gives the number

of recorded downloads per day for the fie on the indicated date. Thus, the "dailydownload" data
contains a summary of information of recorded downloads by file for any paricular day.

9. To understand the level of infrgig activity on Hotfile prior to filing the
complaint I looked at the month of activity prior to the complaint filing, Januar 201 1. In order

to understand the number of downoads per day in this month, I loòked at different random days

4

CASE NO. 11-20427- WILLIAMS/TUROFF

in the month, and took a sample of downloads from each of those days. I designed the protocol

to randomly select five weekdays and two weekend days.
10. In the first step of

the protocol, I randomly selected five weekdays and two

weekend days, by consecutively assignng each weekday in Januar 2011 a number and

consecutively assigning each weekend day in January 2011 a number. I then used a standard
random number generator to generate a separate list of numbers for the set of weekdays and the
set of

weekend days. This is a standard and unversally accepted means to generate a simple

random sample. The days selected by ths process were Januar 5, 11,20,21, and 24
(weekdays) and Januar 1 and 30 (weekend days).
11. Overall, the "dailydownload" table shows 145,691,820 downloads of

files

from

Hotfle in the month of Januar 2011. On each date selected, the "dailydownload" table shows

the number of

recorded downoads of

fies per day. The combination of

"premium" downloads per day for the selected days were as follows:

Date

Download Count

2011-Jan-01

4,180,329

2011-Jan-05

4,677,811

20 11 ~J an-ll

4,568,087

2011-Jan-20

4,496,274

2011-Jan-21.

4,631,944

201l-Jan-24

4,738,937

2011-Jan-30

5,125,537

5

the "free" and

CASE NO. 11-20427-WILLIAMS/TURNOFF

12. Within each selected day, the

sample frame was obtained by taking the

dailydownload data and expanding the record of each fie to capture the total number of recorded
downloads of

that file on that day. For example, if a fie was downloaded 5 times in a day, the

that file. This method permits

record would be expanded to reflect five separate downloads of

simple random sampling of the complete set of recorded downloads of all files in a day. The

sample size was selected to obtain a 95% confdence interal with a margin of error of plus or
the consistency of daily download infrngement proportions, the final

minus 5%. (Because of

margin of error of

the study was considerably smaller.) Ths allows for a high level of

confidence that the results of

the study reflect the percentage of

infrnging downloads per

day for

any day in the entire population, together with a high level otprecision. To target this level of

precision, I concluded that the Hotfie sample size should be i 750 (250 per day), which is also

consistent with sample sizes in other similar online infrngement studies conducted in other
cases.
13. I used "simple random sampling" to draw the sample within each day. "Simple

random sampling" is a universally accepted statistical methodology in which each item has the

same opportunity to be chosen as any other item. In this case, each download of a fie in a
paricular day had the same chance to be chosen as any other download of any file within that
day. For each day, I used a standard random number generator to generate a list of numbers to
select the downloads that constitute the sample. This too is a standard and universally accepted
means to generate a simple random sample.
14. I am attaching herewith as Exhibit D the download instrctions that implement

the sampling protocol I have described in the foregoing for theHotfile study. The protocol
provides for replacement of

fies in the sample under only limited circumstances. First, if

6

the fie

CASE NO. 11-20427-WILLIAMS/TURNOFF

appeared by its metadata to contain child or other ilegal pornography, it was not included in the
sample. Second, if the content fie was corrpt, inoperable, or unplayable/undisplayable, for
reasons other than being password-protected or encryted, it Was not included in the sample.. In

those cases, the files were replaced in the sample by another randomly selected file according to

the protocol.
the 1750

15. Mr. Zebrak provided an analysis showing his conclusions as to which of

sample fies analyzed were determined to be either confirmed or highy likely copyrght
infrngig, with the result broken down by download date. He also provided information as to

which fies he classified as highy likely or confirmed non-infrnging, those "unkowable" fies
as to which no determination could be made, and "ì1egal" fies that did not appear to be

copyrght infrnging but that Mr. Zebrak concluded were likely ì1egal to distribute for other
reasons. The infrngement determinations of each download by day are itemized in the attached
Exhibit E.

16. Based upon my review of

the most recent data provided by Mr. Zebrak, by doing

the calculations described above, I am able to conclude that approximately 90.3% of all daily

downloads of files on Hotfile were downloads of infrnging or highy likely infrnging content;
approximately 5.4% of

the downoads of

fies per day on Hotfile were downloads of

the

infrnging or highy likely non-infrnging files; and the remaining approximately 4.3% of

downloads of

fies whose copyrght status could not

files per day on Hotfile were downloads of

be reliably determined in the tie allowed. Of

non-

the works classified as non-infnging, 0.5% (nine

files in the study) were identified as being likely ilegal to distrbute.

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CASE NO.11-20427-WILLIAMS/TUROFF

17. Using standard and

universally accepted statistical methods to calculate a margin

of error at a 95% confidence level yields a margin of error for ths study of approximately 1.3%.
This indicates a high level of reliability.
i 8. In my professional opinion, the sampling procedures used in the Hotfle study are

based on stadard and univèrsally accepted statistical methods, and provide a scientifically valid

sample from which we can reliably estimate the incídents of copyrght infrngement though the
Hotfie website.
19. I continue to consider additional statistical analyses that might be conducted with

additional data and/or time, including as to fies that may been uploaded to Hotfile but not
downloaded, and reserve the right to supplement this report based on such further analyses. I
further resere the right to supplement or modify this reprt based on additional information that

may come to light or based on fuher analyses.

8

CASE NO. 11-20427-WILLlAMS'TURNOFF

II
Dated: Kovembertt: 2011

t2~

Richard Waterman, Ph.D.

9

CASE NO. 11-20427-WILLIAMSITURNOFF

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
CASE NO. i 1-20427-WILLIAMS/TURNOFF

DISNEY ENTERPRISES, INC.,
TWENTIETH CENTUY FOX FILM CORPORATION,
UNIVERSAL CITY STUDIOS PRODUCTIONS LLLP,
COLUMBIA PICTURES INUSTRIS, INC., and
WARER BROS. ENTERTAINMENT INC.,

Plaintif,
v.

HOTFILE CORP., ANTON TITOV, and
DOES 1-10.

Defendants.

/
HOTFILE CORP.,

Counterclaimant,
v.

WARER BROS. ENTERTAINMENT INC., .
Counterdefendant.
/

CERTIFICATE OF SERVICE
November, 201 i, I served the following

I HEREBY CERTIFY on this 18th day of

document on all counsel of

record on the attched service list via the Cour's CMlCF fiing

system:

RULE 26(a)(2)(B) REPORT OF DR. RICHAR WATERM
I fuer certify that I am admitted to the United States Cour for the Southern Distrct of Florida

and certify that this Certificate of Service was executed ~s date.

By: ??~

D~Pozz

10

CASE NO. 11-20427-WILLIAMS/TURNOFF

SERVICE LIST

Disney Enterprises, Inc., et aI. v. Hotfle Corp. et at.
CASE NO.

ll-CIV-20427-WILLIAMS-TUROFF

FARELLA BRAUN + MATEL,LLP
Anthony P. Schoenberg
[e-mail]
Roderick M. Thompson
[e-mail]
N. Andrew Leibnitz
[e-mail]
Deepak Gupta
[e-mail]
Janel Thamul
[e-mail]
235 Montgomery Street
Sai Francisco, CA 94104

RASCO

KLOCK

Janet T. Muo
[e-mail]
283 Catalonia Ave., Suite 200
Coral Gables, FL 33134
Phone: [phone]
Fax: [phone]

Attorney for Defendants Hotfle Corp. and
Anton Titov

Phone: 4 i 5-954-4400

Attorneys for Defendants Hotfle Corp. and
Anton Titov

BOSTON LAW GROUP, PC
Valentin Gurits
. [e-mail]
825 Beacon Street, Suite 20

Newton Centre, MA 02459
Phone: [phone]

Attorneys for Defendants Hotfle Corp. and
Anton Titov

II