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

Filing 323

Statement of: PLAINTIFFS' STATEMENT OF UNCONTROVERTED MATERIAL FACTS IN SUPPORT OF SUMMARY JUDGMENT AGAINST DEFENDANTS HOTFILE CORPORATION AND ANTON TITOV (PUBLIC REDACTED VERSION) by Columbia Pictures Industries, Inc., Disney Enterprises, Inc., Twentieth Century Fox Film Corporation, Universal City Studios Productions LLLP, Warner Bros. Entertainment Inc. re 322 MOTION for Summary Judgment PLAINTIFFS' MOTION AND MEMORANDUM OF LAW IN SUPPORT OF SUMMARY JUDGMENT AGAINST DEFENDANTS HOTFILE CORP. AND ANTON TITOV (PUBLIC REDACTED VERSION) (Stetson, Karen)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
CASE NO. 11-20427-WILLIAMS/TURNOFF
DISNEY ENTERPRISES, INC.,
TWENTIETH CENTURY FOX FILM CORPORATION,
UNIVERSAL CITY STUDIOS PRODUCTIONS LLLP,
COLUMBIA PICTURES INDUSTRIES, INC., and
WARNER BROS. ENTERTAINMENT INC.,
Plaintiffs,
v.
HOTFILE CORP., ANTON TITOV, and
DOES 1-10.
Defendants.

/

HOTFILE CORP.,
Counterclaimant,
v.
WARNER BROS. ENTERTAINMENT INC.,
Counterdefendant.

/

PLAINTIFFS’ STATEMENT OF UNCONTROVERTED MATERIAL FACTS IN
SUPPORT OF SUMMARY JUDGMENT AGAINST DEFENDANTS HOTFILE CORP.
AND ANTON TITOV

PUBLIC REDACTED VERSION

TABLE OF CONTENTS
TABLE OF CITATION FORM ..................................................................................................... ii
CITATION LEGEND .................................................................................................................... iii
I.

DEFENDANTS CANNOT PROVE ENTITLEMENT TO DMCA SAFE HARBOR. ......1
A.
B.

Defendants Failed to Comply with DMCA Agent Designation
Requirements. ..........................................................................................................3

C.

At All Times, Defendants Had Disqualifying Knowledge of Infringement. ...........3

D.
II.

Defendants Failed to Reasonably Implement a Repeat Infringer Policy. ................1

Defendants’ Inducement of Infringement Disqualifies Them from Safe
Harbor. .....................................................................................................................8

DEFENDANTS ARE LIABLE AS SECONDARY COPYRIGHT INFRINGERS. ..........8
A.
B.

Defendants Are Liable for Inducement of Copyright Infringement. .......................8

C.

Defendants Are Liable for Contributory Infringement. .........................................15

D.
III.

Hotfile Users Are Direct Infringers. ........................................................................8

Defendants Are Liable for Vicarious Infringement. ..............................................15

TITOV IS PERSONALLY LIABLE FOR HOTFILE’S INFRINGEMENT. ...................16
A.

Titov Is at the Center of the Web of Companies that Run Hotfile. .......................16

B.

Titov “Personally Participates” in Virtually all of Hotfile’s Infringing
Conduct. .................................................................................................................17

CONCLUSION ..............................................................................................................................20

TABLE OF CITATION FORM
Uncontroverted material facts are stated in the consecutively numbered paragraphs below
(1, 2, 3, etc.). The section headings (introduced by capital Roman numerals and capital letters)
are for organizational convenience and mirror the corresponding headings in plaintiffs’
memorandum of law. The subsidiary paragraphs (introduced by lowercase letters, lowercase
Roman numerals, and bullets) constitute the evidence supporting the associated uncontroverted
material fact and, where appropriate, are introduced by topic sentence to place the evidence in
context for the Court. The subsidiary paragraphs, individually, are not material facts.
In Plaintiffs’ Statement Of Uncontroverted Material Facts (“SUF”), the following citation
forms shall apply:
CITATION LEGEND
1.

“Foster Decl.” shall refer to the declaration of Dr. Ian Foster, Director of the

Computation Institute at Argonne National Laboratory and the University of Chicago, dated
February 17, 2012, filed herewith.
2.

“Kang Decl.” shall refer to the declaration of Thomas Kang, Vice President and

Senior Counsel, Anti-Piracy Legal Affairs of NBCUniversal, dated February 15, 2012.
3.

“Kaplan Decl.” shall refer to the declaration of David Kaplan, Senior Vice

President, Intellectual Property Counsel, Worldwide Antipiracy Operations of Warner Bros.
Entertainment Inc., dated February 14, 2012, filed herewith.
4.

“Reed Decl.” shall refer to the declaration of Marsha Reed, Vice President and

Assistant Secretary of Disney Enterprises, Inc., dated February 16, 2012, filed herewith.
5.

“Seabrook Decl.” shall refer to the declaration of Carly Seabrook, Director,

Copyright Administration at NBCUniversal, dated February 17, 2012, filed herewith.
6.

“Sehested Decl.” shall refer to the declaration of Thomas Sehested, founder and

Senior Vice President of DtecNet Software, dated February 15, 2012, filed herewith.
7.

“Solmon Decl.” shall refer to the declaration of Vicki R. Solmon, Senior Vice

President of Anti Digital Theft & Theatrical Distribution at Sony Pictures Entertainment Inc.,
dated February 14, 2012, filed herewith.
8.

“SUF” shall refer to specific paragraph numbers of uncontroverted facts in

Plaintiffs’ Statement of Uncontroverted Facts.
ii

9.

“Titov Decl., Feb. 27, 2011” shall refer to the Declaration of Anton Titov in

Support of Defendants’ Opposition to Plaintiffs’ Emergency Motion for Order Preserving
Evidence, dated February 27, 2011 (Dkt. # 30-1).
10.

“Titov Decl., June 17, 2011” shall refer to the Declaration of Anton Titov in

Support of Defendants’ Opposition to Plaintiffs’ Motion to Compel Responses to Request for
Production of Documents and Interrogatories, dated June 17, 2011 (Dkt. # 81-17).
11.

“Waterman Decl.” shall refer to the declaration of Dr. Richard Waterman,

Adjunct Professor of Statistics at The Wharton School at the University of Pennsylvania and CoFounder of Analytic Business Services, Inc., dated February 16, 2012, filed herewith.
12.

“Wold Decl.” shall refer to the declaration of Dr. Erling Wold, Chief Scientist at

Audible Magic, Inc., dated February 15, 2012, filed herewith.
13.

“Yeh Decl.” shall refer to the Declaration of Jennifer V. Yeh in Support of

Warner Bros. Entertainment’s Motion for Summary Judgment, dated February 16, 2012, filed
herewith.
14.

“Yeh Ex. __,” shall refer to exhibits attached to the Yeh Declaration, and, if

appropriate, pinpoint citations to the page number(s), and paragraph or line numbers, internal to
the cited document. In some instances where individual Yeh Declaration exhibits were not
paginated, page numbers have been added manually for ease of the Court’s reference. The
parentheticals indicate the nature of the item cited – e.g., deposition transcripts (“Dep.”) – or
documents produced in discovery by various parties. Thus, by way of illustration, “Yeh Ex. 1
(Titov Dep.) at 200:1-10” would refer to the deposition of defendant Anton Titov, which could
be found in Exhibit 1 to the Yeh Declaration, at page 200 of the transcript pages, at lines 1
through 10. And, “Yeh Ex. 110 at 2” would refer to Exhibit 110 to the Yeh Declaration, and
specifically the page of that Exhibit found at page 2 of the numbered Exhibit pages.
15.

“Zebrak Decl.” shall refer to the declaration of Scott Zebrak, dated February 17,

2012, filed herewith.

iii

I.

DEFENDANTS CANNOT PROVE ENTITLEMENT TO DMCA SAFE HARBOR.
A.

Defendants Failed to Reasonably Implement a Repeat Infringer Policy.
1.

Defendants received notice of more than

infringing files. Foster

Decl. ¶ 25.
2.

Defendants could have associated takedown notices with uploading users of
the files.

to do so); Yeh Ex. 9

(Titov Decl., Feb. 27, 2011) ¶ 17.b (Hotfile keeps user upload records for
Affiliate payments); Foster Decl. ¶ 20 (associating takedowns and uploading
users “simple”).
3.

Defendants had no policy or practice of keeping track of or investigating the
uploaders of infringing files, though only defendants (not plaintiffs) can do
so.
(no practice of associating takedown notices
with uploading user) &

(copyright

owners unable to learn identities of uploaders).
4.

Defendants had no policy or practice of terminating users who were the
subject of multiple infringement notices or otherwise identified as infringers.
a.
b.

.
i.

ii.
iii.
iv.

c.

Hotfile terminated

users before the complaint. Yeh Ex. 115 (Br. Appendix

G); Foster Decl. ¶ 58;

& Yeh Ex. 1 (Titov dep.)

at

(only

i.

pre-complaint terminations).

terminations were in response to a TRO obtained by the
copyright owner Liberty Media.

ii.

Remaining pre-complaint terminations were in response to

d.

e.

Yeh Ex. 22 (May 4, 2009 Digital Point Thread) at 5 (“If any of your files are
reported by a real representative . . . then the file will be deleted, but your
account credit will not be removed, and you will not be suspended from
hotfile.com”).

5.

Prior to the complaint, over

Hotfile “repeat infringers” were not

terminated.
a.

At least

Hotfile users had received three or more “strikes” by the date

the complaint was filed, including

users who had 300 or more “strikes.”

Yeh Ex. 116 (Br. Appendix H); Foster Decl. ¶ 60 (thousands received up to
100 strikes).
i.

These

users were responsible for uploading nearly

files

after their third “strike.” Appendix H (Yeh Ex. 116); Foster Decl. ¶¶ 41-42
& Ex. D.
ii.

Files uploaded by those users represents

of all files ever uploaded to

Hotfile. Foster Decl. ¶ 41 & Ex. D; compare Foster Decl. ¶ 52 (
uploads to Hotfile in total).
2

iii.

Files uploaded by those users were downloaded almost

times.

Yeh Ex. 116 (Br. Appendix H); Foster Decl. ¶ 41 & Ex. D; compare Foster
Decl. ¶ 52
iv.

downloads from Hotfile in total).

Hotfile paid these repeat infringers more than

, out of a total

paid to all Affiliates. Foster Decl. ¶ 41.
v.

These users uploaded at least

files that contain plaintiffs’

copyrighted works; these files were downloaded almost

times.

Foster Decl. ¶ 41 & Ex. D.
b.

After implementing a “three strikes” policy following this litigation, Hotfile
terminated over

users and

of all of its Top 500 Affiliates. Yeh Ex.

117 (Br. Appendix I); Foster Decl. ¶¶ 59, 64 & Ex. J; Yeh Ex. 107.
Downloads of files uploaded by users with three or more “strikes” accounted
for
B.

downloads from Hotfile. Foster Decl. ¶ 52

Defendants Failed to Comply with DMCA Agent Designation Requirements.
6.

Defendants did not register an agent with Copyright Office until December
24, 2009. Yeh Ex. 23 at 6-7; Yeh Ex. 24; Yeh Ex. 1 (Titov dep.) at 434:23-18;
see also

7.

Defendants did not identify a DMCA agent on the Hotfile website until May
2010. Yeh Ex. 23 at 7.

8.

At the Copyright Office, Hotfile still identifies only a P.O. box for its DMCA
agent. Yeh Ex. 24; Yeh Ex.1 (Titov dep.) at 438:20-439:21; Yeh Decl. ¶ 25
(investigation into address); see also Yeh Ex. 6 (Luchian dep.) at 129:6-130:17.

C.

At All Times, Defendants Had Disqualifying Knowledge of Infringement.
9.

Defendants had actual knowledge of infringement on Hotfile.
a.

3

i.
.
ii.

iii.

iv.

Hotfile has a feature for users to receive up to six different download links
for an uploaded file.

v.

b.

Communications from Hotfile users identified the specific download link of
the file the user came to Hotfile to download, which identified specific
copyrighted works. Yeh Ex. 26; Yeh Decl. ¶ 28 & Yeh Ex. 27 (chart of 700
user communications with “lastdl” matching studio works).

c.

Defendants assisted Hotfile users in downloading specifically identified files
corresponding to copyrighted content. Yeh Ex. 28.

10.

Defendants had “red flag” knowledge of infringement on Hotfile.
a.

The magnitude of infringement on Hotfile was high.
i.

Over 90% of downloads were confirmed or highly likely infringing. Yeh
Ex. 110 (Br. Appendix B); Yeh Ex. 111 (Br. Appendix C); Waterman Decl.
¶¶ 8, 22, 27; Zebrak Decl. ¶ 16.

ii.

Over

of Hotfile uploaders in the statistical analysis uploaded a file that

was highly likely infringing. Yeh Ex. 112 (Br. Appendix D); Zebrak Decl.
¶ 17.
4

iii.

Hotfile has had to delete

of all files ever downloaded and

of all

files ever uploaded for reasons related to copyright infringement. Yeh Ex.
113 (Br. Appendix E); Foster Decl. ¶ 63 & Ex. I.
iv.

Of all Hotfile users with an average number of uploads
“strikes,” and more than

had

has to be terminated (post-complaint) as

repeat infringers; of users who uploaded at least 500 files, almost

had

“strikes,” and of users who have uploaded at least 2,000 files, approximately
had “strikes.” Yeh Ex. 114 (Br. Appendix F); Foster Decl. ¶ 50.
v.

As of the filing of the complaint,

Hotfile users had been the subject

of at least one copyright infringement notice. Foster Decl. ¶ 60; see also
Yeh Ex. 116 (Br. Appendix H).
vi.

After Hotfile adopted a “three strikes” termination policy,

of its Top

500 highest paid Affiliates had to be terminated as repeat infringers – and
most of those not suspended had not uploaded any files after Hotfile adopted
the policy. Yeh Ex. 117 (Br. Appendix I) & Foster Decl. ¶¶ 59, 64 & Ex. J.
vii.

User terminated for copyright infringement uploaded

of

Hotfile’s files. Foster Decl. ¶ 52(b).
b.
c.

Defendants received communications from users stating that they were
downloading or just had downloaded named copyrighted works. Yeh Ex. 30;
supra SUF 9(b) & 9(c).

d.

Many of Hotfile’s paid “Affiliate” link sites were obvious infringers.
i.

Defendants
who openly operated a website with links to copyrighted
content.
•

•

The website features links to copyright content like How I Met Your
Mother and Happy Feet Two. Yeh Exs. 102-03 (screenshots of
allyoulike).
5

•

Hotfile received at least
the

•

infringement notices on the files uploaded by

operator. Foster Decl. ¶¶ 54-55.

Hotfile paid him more than

in Affiliate fees. Foster Decl. ¶¶ 54.

ii.
& Foster Decl.
¶ 56.
iii.

The names and home pages of

reference the

availability of copyrighted content. Yeh Ex. 31 (currentmoviereleases.net);
Yeh Ex. 32 (online-television.tv); Yeh Ex. 33 (free-albums.net); Yeh Ex. 34
(ebook-free-download.net); Yeh Ex. 35 (copymovie.net); Yeh Ex. 36
(topdvdmovie.net); Yeh Ex. 37 (amazingtv.info); Yeh Ex. 38 (tvrip.info);
Yeh Ex. 39 (hotfilemovie.net); Yeh Ex. 40 (tvseries.me); Yeh Ex. 41
(seriesfree.biz); Yeh Ex. 42 (best-movies.info); Yeh Ex. 43
); Yeh Ex. 106

); Foster Decl.
). See also Yeh Exs.

¶ 57 & Ex. F

94 & 105 (link sites shut down by law enforcement or found liable for
copyright infringement).
iv.
e.

Defendants illustrated Hotfile operations using infringing works.
i.

Yeh Ex. 44 & Yeh Ex. 1 ( Titov dep.) at 531:9-532:17 (Pussycat Dolls).

ii.
iii.

Yeh Ex. 47 at 2; Yeh Ex. 1 (Titov dep.) at 637:23-639:23; Yeh Ex. 48 at 7-8
(copyrighted adult movie).

f.

.
i.

6

ii.

iii.

g.

h.

11.

Defendants willfully blinded themselves to infringement on Hotfile.
a.
b.

Defendants do not have a “search” function on the Hotfile website.
i.

Yeh Ex. 1 (Titov dep.) at 444:8-446:5 (no logical reason for no search
function).

ii.

Yeh Ex. 55 at p. 15 (pirate websites advised to “disaggregate” functions to
avoid liability)

c.

Titov stated that Hotfile could review what its users were downloading but
that, outside of this litigation, defendants have never done so. Yeh Ex. 1
(Titov dep.) at 705:18-706:3.

d.

Until after this litigation was filed, defendants had no policy to associate
infringement notices with the uploading user or keep track of such users.
Supra SUF 3, 4(a) & (b).

7

D.

Defendants’ Inducement of Infringement Disqualifies Them from Safe Harbor.
12.

II.

See infra SUF 16.

DEFENDANTS ARE LIABLE AS SECONDARY COPYRIGHT INFRINGERS.
A.

Hotfile Users Are Direct Infringers.

13.

Plaintiffs owns the exclusive rights under the Copyright Act to reproduce
and distribute to the public each of the copyrighted works identified in
Exhibit A to their respective declarations. Reed Decl. ¶ 3 & Ex. A; Zedek
Decl. ¶ 3 & Ex. A; Seabrook Decl. ¶ 3 & Ex. A; Solmon Decl. ¶ 3 & Ex. A;
Kaplan Decl. ¶ 3 & Ex. A.

14.

Plaintiffs have not authorized the reproduction or distribution of their
copyrighted works by defendants or for free and unrestricted distribution
over the Internet. Reed Decl. ¶ 4; Zedek Decl. ¶ 4; Seabrook Decl. ¶ 4; Solmon
Decl. ¶ 4; Kaplan Decl. ¶ 4.

15.

Hotfile users have infringed under the Copyright Act each of the copyrighted
works identified in Exhibit A of the Reed, Zedek, Seabrook, Solmon, and
Kaplan Declarations. Foster Decl. ¶¶ 72; Sehested Decl. ¶¶ 4, 5 & Ex. A, B;
Yeh Decl. ¶ 57 & Ex. 56.

B.

Defendants Are Liable for Inducement of Copyright Infringement.
16.

Defendants operate Hotfile with the object that it will be used for
infringement.
a.

Defendants’ “Affiliate Program” encourages copyright infringement.
i.

Defendants designed the Hotfile Affiliate program to attract users to Hotfile
to convert to paying “premium” subscribers.
•

Yeh Ex. 1 (Titov dep.) at 649:15-651:22 (payment and rank of Affiliates
depends on the “number of premium accounts the affiliate is selling”).
8

•

Yeh Ex. 57 (Affiliate rank determined by “ratio of users that downloaded
your files and the users that become premium based on your uploaded
files”).

•

Yeh Ex. 58 at 1 (“If you just upload, yes you may have downloads, but if
we don’t receive premium conversion from your users, how we supposed
to pay you? Where to get money from?”); id. at 3 (“Essentially to reach a
higher status your links should sell more premium accounts”); see also
Yeh Ex. 1 (Titov dep.) at 76:19-77:3, 493:21-494:14, 683:9-685:14.
(agreeing that Hotfile’s business

•

depends upon attracting users to the site to covert to premium users).
ii.

To attract users to Hotfile, defendants pay Hotfile Affiliates to upload files
that will be “popular” with downloaders.
•

Yeh Ex. 58 at 1 (“[W]e want to benefit all uploaders which works good,
got many downloads of their files . . . ”); id. at 5 (“Why should you upload
files that nobody wants to download? . . . You may think you files are
interest[ing] and most probably they are, but we must convince
downloaders.”).

•

Yeh Ex. 1 (Titov dep.) at 669:4-14 (“interesting” files are those that would
be popular with downloaders).

•

iii.

To encourage Affiliates to upload “popular” files, defendants pay Affiliates
based on how many times a file is downloaded; the more times a files is
downloaded, the more defendants pay the Hotfile Affiliate who uploaded it.
•

Yeh Ex. 1 (Titov dep.) at 655:3-17; 656:11-10 (one file downloaded
10,000 times is better than 10,000 files downloaded once each)

•

Yeh Ex. 57 (Titov Ex. 165) (affiliate ranks depends on “ratio of uploaded
files to number of downloads”).

•

Yeh Ex. 59 at 3 (Hotfile FAQ: “Put more effort into bringing more visitors
to download your files, rather than to upload more files. If you upload
10Gb of files everyday just to have every file downloaded just few times,
9

you are going to be stuck with Copper” ranking.).
•

iv.

Yeh Ex. 60 (affiliate program “pays up to $10 per 1k download of files”).
Defendants discourage uploading files that will not be downloaded.

•

Yeh Ex. 58 at 5 (“To pay you just to upload?! Why should we pay you
then? . . . Why should we upload files that nobody wants to download?”).

•

Yeh Ex. 61 at 13 (“some webmaster just . . . upload LOTS of gigabytes,
but don’t promote their files. So these kind of webmasters use our server
resources, upload resources, bandwidth, diskspace and at final they make
our service to work slow.”).

•

Yeh Ex. 1 (Titov dep.) at 650:23-651:10; 653:17-654:22 (Affiliate rank
takes into account expenses, which included bandwidth);
(Hotfile estimates cost of storage for uploaded files).

•

See supra SUF 16(a)(i)-(iii), incorporated herein by reference (payments
to Affiliates only for highly downloaded files that convert premium users).

v.

Defendants discourage Affiliates from uploading files for personal storage
or that the Affiliates do not intend to “promote” by disseminating the
download link.
•

Yeh Ex. 59 at 3 (“Upload files only if you inten[d] to promote them. Used
server space is accounted when your rank is considered.”) & Yeh Ex. 58 at
4.

•

•

Yeh Ex. 57 (“Earn money while uploading and sharing your files with
your friends”).

•

Yeh Ex. 1 (Titov dep.) at 656:21-657:6.

•

See supra SUF 16(a)(iv)-(v).

vi.

Defendants delete files for “inactivity” if they are not downloaded
frequently.
•

Yeh Ex. 1 (Titov dep.) at 709:17-711:15 (files of non-premium users
deleted if not downloaded within 14-90 days); Yeh Ex. 59 at 2 (files of
non-premium users deleted if not downloaded); Foster Decl. ¶ 46 (
10

Content “popular” with downloaders is overwhelmingly copyrighted. See

vii.

supra SUF 10(a); Yeh Ex. 113 (Br. Appendix E) (
); Foster Decl. ¶ 63 (same);
Yeh Ex. 60 (seeking users to upload “mp3, videos, applications, games on
our file host and spread these links over forums like pornbb.org (for videos)
and like http://www.zona-musical-com/forum1.html (for mp3) and other
forums where download links are posted (to games, applications and so
on”)).
viii.

Defendants’ economist Dr. Lynde testified that the “incentive structure” of
the Hotfile Affiliate program is designed encourage users to upload files that
will be popular with downloaders. Yeh Ex. 7 (Lynde dep.) at 267:23268:12, 269:6-270:8.

ix.

The amount defendants pays Affiliates more for uploading larger sized files.
•

Yeh Ex. 1 (Titov dep.) at 657:10-18 (“Affiliates are generally rewarded
more for larger files”) & Yeh Ex. 57 (Earnings Table showing higher
payments for larger files).

•

Yeh Ex. 1 (Titov dep.) at 660:17-661:1 (“I believe that a user downloading
a larger file would be more likely to want to download it faster and
upgrade to premium”).

x.

Motion pictures, television programs and other popular entertainment
content (such as video games) tend to be very large files, usually over
100MB in size. Foster Decl. ¶ 8.

xi.

Copyright infringing files are more likely to be larger
noninfringing files are more likely to be smaller

) and
). Yeh Ex.

109 (Br. Appendix A); Foster Decl. ¶ 34.
xii.

Hotfile’s Affiliate program encourages website operators to host and
promote download links to files stored on Hotfile.
•

Yeh Ex. 57 (“No matter if download link is yours or you’ve found it
elsewhere! Post interesting download links . . . and earn big money.”).

•

Yeh Ex.63 at 2 (“Earn money spreading links in your site! . . . . Post
11

interesting download links in your site, blog or forum and earn big
money.”) & Yeh Ex. 1 (Titov dep.) at 671:19-673:4.
•

Yeh Ex. 60 (“I need someone to promote a free file hosting site as itself
and its affiliate program. I need link to my sites appears on appropriate
sites, forums, blogs, and so on – without spamming!”).

•

Yeh Ex. 86 (Digital Point Thread 7/16/09) at 6 (Titov posting it is a “good
thing . . . that people will make search/catalogue sites like
rapidlibrary.com and more people will download our links.”); see also
Yeh Ex. 1 (Titov dep.) at 77:17-78:2 (testifying to use of online screen
name of “Virus” or “Virco”).

xiii.

Defendants pay website operators whenever users coming from their sites
purchase “premium” subscriptions. Yeh Ex. 2 (Titov ESI dep.) at 30:2332:12; Yeh Ex. 1 (Titov dep.) at 665:15-66:7, 668:6-669:14.

b.

Defendants targeted uploaders likely to engage in copyright infringement.
i.

Defendants targeted “good uploaders” who would upload and promote files
for widespread distribution. See supra SUF 16(a)(ii)-(v).

ii.

Yeh Ex. 60 (Titov Ex. 171) (seeking to “find good uploaders” who will
upload “mp3, videos, applications, games on our file host and spread these
links over . . . forums where download links are posted” ).

iii.

In one online forum where a user posted that “I want to upload 200-400mb
videos for a tv show site,” Ianakov sought to encourage the user to upload
the infringing files to Hotfile. Yeh Ex. 64 at 5 & Yeh Ex. 1 (Titov dep.) at
688:21-689:15.

iv.

Defendants used the lure of high payouts from their Affiliate program to
attract uploaders from other known infringing services.
•

•

Yeh Ex. 58 at 1 (“About payments – we pay each Monday and so far
never delayed. . . . We check all competitors and most of them” have the
“same” payout structure.); see also id. at 1-2 (guidance about remote
upload from Rapidshare); Yeh Ex. 61 at 10 (same); supra SUF 10(e)(iii).
12

v.

•

•

vi.

Defendants formed Hotfile to “compete with” the criminally indicted site
Megaupload. See infra SUF 16(f).
Defendants did not terminate users with more than three “strikes.” See supra

c.

SUF 1-5.
Hotfile is overwhelmingly used for copyright infringement. See supra SUF

d.

10(a), SUF 5.
e.

Defendants’ business model is based on the availability of copyrighted content
to attract users to Hotfile.
i.

Hotfile’s sole source of revenue is selling premium subscriptions. Yeh Ex.
1 (Titov dep.) at 441:7-12; 442:15-18.

ii.

In order to attract users, Hotfile must offer content that users want to
download, which is overwhelmingly copyrighted content. Yeh Exs. 96 &
97 (users purchase premium accounts to download content); Yeh Ex. 7
(Lynde dep.) at 178:16-180:4; 182:1-8; 185:10-186:8 (users can go to
Hotfile’s competitors); supra SUF 16(a).

iii.

Users pay for “premium” accounts to download copyrighted content and
sought to cancel their subscriptions when that content was removed.
•

Yeh Ex. 66 & Yeh Ex. 67 (users purchasing premium accounts to
download copyrighted works).

•

Yeh Ex. 68 & Yeh Ex. 1 (Titov dep.) at 446:6-448:6 (users seeking to
cancel subscriptions when copyrighted works not available).

•

f.

See also Yeh Ex. 69 (plummet in traffic to Hotfile after 3-strike policy).

Defendants modeled Hotfile’s business and formed Hotfile to compete with
the criminally indicted site Megaupload.
13

i.

Defendants admit that Hotfile was founded to compete with Megaupload.
Yeh Ex. 9 ¶ 8 (Hotfile “was founded to compete with the services provided
by . . . RapidShare [and] MegaUpload”).

ii.

Hotfile modeled itself on Megaupload.
see
also Yeh Ex. 1 (Titov dep.) at 710:24-711:15 (policy of deleting files for
inactivity based on other websites such as Megaupload).

iii.

Megaupload’s business model parallels Hotfile’s.
•

Hotfile: Yeh Ex. 57, Yeh Ex. 9 (premium users enjoy “faster download
speeds and other benefits”); supra SUF 16(e) (income from premium
subscriptions); supra SUF 16(a) (affiliate program pays users to upload
popular works); supra SUF 16(a)(vi) (files deleted for inactivity); supra
SUF 11(b) (no search functionality); supra SUF 16(a)(xii) (partnering
with,

with link sites)
•

Megaupload: Yeh Ex. 98 (Megaupload Indictment) ¶ 4 (income from
premium subscribers seeking faster downloads), ¶ 5 (“Uploader Rewards”
Program that “promised . . . subscribers transfers of cash and other
financial incentives to upload popular works, including copyrighted
works”); ¶ 7 (files of non-premium users deleted for inactivity), ¶10 (no
searchable index and partnering with link sites), ¶¶ 22-23 (blocking of
specific download link rather than removal of “master” copy upon receipt
of takedown notice).
See supra SUF

g.
9(c).

Hotfile personnel used Hotfile to download copyrighted files. See supra SUF

h.

10(b).
i.

Hotfile’s technical features undermined copyright owner takedown notices.
See supra SUF 9(a)(iv)-(v).

j.

Defendants did not investigate copyright “filtering” technologies.
i.

Video content identification technologies were routinely deployed on
websites and in numerous other commercial applications years before
14

Hotfile launched. Foster Decl. ¶¶ 16-18; Wold Decl. ¶¶ 26-27, 33-34; Yeh
Ex. 8 (Wang dep.) at 69:6-69:16, 87:10-17, 90:10-90:15.
ii.

“Digital fingerprinting” technology identifies content based on its actual
video and audio properties and is widely accepted as extremely accurate.
Foster Decl. ¶ 17; Wold Decl. ¶¶ 6, 18-19. 32-34.

iii.

Defendants major sites such as YouTube used digital fingerprinting but,
prior to the filing of this litigation, defendants never considered using it on
Hotfile. Yeh Ex. 1 (Titov dep.) at 508:25-509:23, 609:1-15.

iv.

Titov testified that
Yeh Ex. 1 (Titov dep.) at 506:12-508:12,

C.

Defendants Are Liable for Contributory Infringement.

17.

Defendants have knowledge of infringing activity. See supra SUF 9, 10, 11.

18.

Defendants materially contribute to infringing activity. Yeh Ex. 9 ¶ 5; Foster
Decl. ¶¶ 5, 7 (Defendants operate over 700 servers that physically store the
infringing content uploaded by Hotfile users and transmit that infringing content
to Hotfile downloaders).

D.

Defendants Are Liable for Vicarious Infringement.

19.

Defendants have the right and ability to stop or limit infringement.
a.

Defendants can block users’ access to Hotfile.

b.

Defendants can block content files from Hotfile.

20.

Defendants profit from infringement.
a.

The availability of copyrighted material draws users to Hotfile to become
subscribers. See supra SUF 16(a) & 16(e); see also SUF 10(a)(i) & (iii).
15

b.

III.

Defendants profit from user subscriptions.

TITOV IS PERSONALLY LIABLE FOR HOTFILE’S INFRINGEMENT.
A.

Titov Is at the Center of the Web of Companies that Run Hotfile.

21.

Titov owns, operates or manages Hotfile Corp., Hotfile Ltd., and Lemuria
Communications, Inc., which operate Hotfile.
a.

Titov directs Hotfile’s activities through Hotfile Corp.
i.

Titov exercises control over Hotfile Corp. as shareholder and manager. Yeh
Ex. 1 (Titov dep.) at 30:12-31:6, 69:7-70:11,

ii.

Hotfile Corp. owns the domain names,

.

Yeh Ex. 1 (Titov dep.) at 38:7-17, 49:17-51:9,
b.

Titov directs Hotfile’s operations through Hotfile Ltd.
i.

ii.

Yeh Ex. 1
(Titov dep.) at 90:14-18,
see also Yeh Ex. 9 ¶ 8.

c.

Titov directs Hotfile’s operations through Lemuria.
i.

Titov is the sole owner, operator and officer of Lemuria.
121:14-122:14; Yeh Exs. 74-76; & Yeh Ex. 9 ¶ 3.

ii.

Lemuria provides web-hosting services to Hotfile through
“arrangement” with Hotfile Ltd. Yeh Ex. 1 (Titov dep.) at
51:17-52:12 (

.), 91:2116

93:14; Yeh Ex. 77 ¶ 5.
iii.

Titov formed Lemuria to provide web-hosting services only after
Yeh Ex. 78;

Yeh

Ex. 1 (Titov dep.) at 117:7-118:7,
iv.

Lemuria acts as a front for
Yeh Ex. 1 (Titov dep.) at 38:7-40:8; 47:12-48:17;

v.
56:23-57:15,
vi.

See also Yeh Ex. 81; Yeh Ex.
82 (“Hotfile personnel are not Hotfile employees; rather, they all work for
third parties or are independent contractors”).
B.

Titov “Personally Participates” in Virtually all of Hotfile’s Infringing Conduct.

22.

Titov personally participates in infringing activities.
a.

Titov is personally involved as the “lead developer” of the Hotfile website.
i.

Titov personally wrote

of the source code that controls Hotfile

and its operations. Yeh Ex. 1 (Titov dep.) at 22:19-22:24;
See also Yeh Ex. 83 ¶ 6 (“I wrote the source code for Hotfile’s website with
the assistance of one other person. We designed the source code from
scratch.”).
ii.
, 56:23-

17

57:15,
iii.

132:13-20.

Titov is involved in the outward-facing design and functionality of the
website, and had technical input into the design and functioning of the
Affiliate program. Yeh Ex. 1 (Titov dep.) at 23:12-23:15; 24:3-24:9; 30:530:8; 596:18-596:22.

b.
i.

Titov previously used a PayPal account that he opened in his own name to
conduct Hotfile business, including paying Hotfile’s Affiliates. Yeh Ex. 1
(Titov dep.) at 602:9-602:14; see also

ii.
c.

Titov is responsible for all technical operations for Hotfile. Yeh Ex. 1 (Titov
dep.) at 38:7-40:8; 47:12-48:17;

d.

Titov is actively involved in managing the affairs of Hotfile.
i.
Yeh Ex. 1 (Titov dep.) at 38:740:8; 47:12-48:17;

ii.

Titov retained and manages Hotfile’s appointed DMCA agent,
Yeh Ex. 1 (Titov
dep.) at 69:5-69:9; Yeh Ex. 25; Yeh Ex. 6 (Luchian dep.) at 15:13-16:2,
(retention and management). Yeh Ex. 6 (Luchian dep.) at
46:18-47:1, 52:23-53:20, 54:12-19, 58:23-59:5; Yeh Ex. 1 (Titov dep.) at

e.

Titov is involved in decisions concerning Hotfile’s policies and operations and
18

has broad decision-making authority over Hotfile’s business.
& Yeh Ex. 1 (Titov dep.) at 597:5598:22 (decision making); Yeh Ex. 1 (Titov dep.) at 601:12-601:17 (personal
participation in site design); 601:19-602:3 (affiliate program design); &
605:23-608:3 (repeat infringer policy).
f.

Titov had direct knowledge of Hotfile’s infringing activities.
i.

Titov was aware of Hotfile’s practice of leaving up infringing files
Yeh Ex. 1
(Titov dep.) at 603:3-604:13.

ii.

Titov was involved in addressing copyright owner complaints about
infringement.

iii.

23.

Titov has the ability to supervise, and has a financial interest in, infringing
activity.
Titov manages and supervised the affairs of Hotfile. See supra SUF 21, 22(d)

a.

& (e).
b.

Titov has a direct financial interest in Hotfile’s infringement.
i.

ii.

Through Lemuria, Titov receives income from providing services to the
Hotfile website. Yeh Ex. 1 (Titov dep.) at 126:21-126:23.

iii.

19

CONCLUSION
For the foregoing reasons, the facts legally material to the Court’s disposition of
Plaintiffs’ Motion for Summary Judgment Against Defendants Hotfile Corp. and Anton Titov are
either admitted or not reasonably in dispute, and plaintiffs’ motion should be granted.
Dated: February 17, 2012

Respectfully submitted,
By: /s/ Karen L. Stetson

GRAY-ROBINSON,

MOTION PICTURE ASSOCIATION
OF AMERICA, INC.
Karen R. Thorland (Pro Hac Vice)
15301 Ventura Blvd.
Building E
Sherman Oaks, CA 91403
Phone: [phone]
Fax: [phone]
Karen L. Stetson

P.A.
1221 Brickell Avenue
16th Floor
Miami, Fl 33131
Telephone: [phone]
Facsimile: [phone]
JENNER & BLOCK LLP
Steven B. Fabrizio (Pro Hac Vice)
Duane C. Pozza (Pro Hac Vice)
Luke C. Platzer (Pro Hac Vice)
1099 New York Ave., N.W.
Suite 900
Washington, DC 20001
Telephone: [phone]
Facsimile: [phone]
Attorneys for Plaintiffs

20

CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on this 17th Day of February, 2012, I served the following
documents on all counsel of record on the attached service list via their email address(es)
pursuant to the parties’ service agreement:
Plaintiffs’ Statement of Uncontroverted Material Facts in Support of Motion for
Summary Judgment Against Defendants Hotfile Corp. and Anton Titov

By: /s/ ____________________
Karen L. Stetson

21

SERVICE LIST
Disney Enterprises, Inc., et al. v. Hotfile Corp. et al.
CASE NO. 11-CIV-20427-JORDAN

FARELLA BRAUN + MARTEL LLP
Anthony P. Schoenberg
[e-mail]
Roderick M. Thompson
[e-mail]
N. Andrew Leibnitz
[e-mail]
Deepak Gupta
[e-mail]
Janel Thamkul
[e-mail]
235 Montgomery Street
San Francisco, CA 94104
Phone: [phone]

RASCO KLOCK
Janet T. Munn
[e-mail]
283 Catalonia Ave., Suite 200
Coral Gables, FL 33134
Phone: [phone]
Fax: [phone]
Attorney for Defendants Hotfile Corp. and
Anton Titov

Attorneys for Defendants Hotfile Corp. and
Anton Titov

BOSTON LAW GROUP, PC
Valentin Gurvits
[e-mail]
825 Beacon Street, Suite 20
Newton Centre, MA 02459
Phone: [phone]
Attorneys for Defendants Hotfile Corp. and
Anton Titov

22