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

Filing 325

NOTICE 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) >PLAINTIFFS' NOTICE OF FILING PUBLIC REDACTED VERSIONS OF DECLARATIONS IN SUPPORT OF PLAINTIFFS' MOTION FOR SUMMARY JUDGMENT< (Attachments: # 1 Affidavit Declaration of Scott A Zebrak in support of Plaintiff's MSJ (Public Redacted Version), # 2 Exhibit A (Zebrak), # 3 Exhibit B (Zebrak), # 4 Exhibit C (Zebrak), # 5 Exhibit D (Zebrak), # 6 Affidavit Declaration of Dr. Richard Waterman n Support of Plaintiffs' MSJ (Public Redacted Version), # 7 Exhibit A (Waterman), # 8 Exhibit B (Waterman), # 9 Exhibit C (Waterman), # 10 Exhibit D (Waterman), # 11 Exhibit E (Waterman), # 12 Affidavit Declaration of Thomas Sehested in Support of Plaintiffs' MSJ (Public Redacted Version), # 13 Exhibit A (Sehested), # 14 Exhibit B (Sehested), # 15 Affidavit Declaration of Steve Thomas Kang in Support of Plaintiffs' MSJ (Public Redacted Version), # 16 Exhibit A (Kang), # 17 Affidavit Declaration of Dr. Ian Foster in Support of plaintiffs' MSJ (Public Redacted Version), # 18 Exhibit A (Foster), # 19 Exhibit B (Foster), # 20 Exhibit C (Foster), # 21 Exhibit D (Foster), # 22 Exhibit E (Foster), # 23 Exhibit F (Foster), # 24 Exhibit G (Foster), # 25 Exhibit H (Foster), # 26 Exhibit I (Foster), # 27 Exhibit J (Foster), # 28 Exhibit K (Foster))(Stetson, Karen)

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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. / DECLARATION OF SCOTT A. ZEBRAK IN SUPPORT OF PLAINTIFFS’ MOTION FOR SUMMARY JUDGMENT AGAINST DEFENDANTS HOTFILE CORP. AND ANTON TITOV PUBLIC REDACTED VERSION I, Scott A. Zebrak, hereby declare as follows: 1. I am a partner at the law firm of Oppenheim + Zebrak, LLP, and have been retained by the plaintiffs Disney Enterprises, Inc., Twentieth Century Fox Film Corporation, Universal City Studios Productions LLLP, Columbia Pictues Industries, Inc., and Warner Bros. Entertainment Inc. ("plaintiffs") to investigate, analyze, and provide my conclusions regarding the infringement status of certain content fies available on ww.hotfie.com ("Hotfie"). The statements made in this declaration are based on my personal knowledge, including as to information provided to me by personnel working under my supervision on this case, along with my specialized experience as applied to the facts ofthis matter. If called to testify, I would testify based on the best of my knowledge, information, and belief, as follows: 2. I am a practicing attorney with extensive experience and familiarity analyzing copyrighted works and online infringement. For the past 15 years, I have represented and advised clients on a range of matters involving copyright, trademark, and other intellectual property issues, including those that arise in an online or digital environment. Among other things, my experience includes serving for roughly four years as Vice-President, Litigation & Legal Affairs, at the Recording Industry Association of America, a trade group that represents the U.S. recording industry, and serving as Deputy General Counsel & Director of Intellectual Propert at CoStar Group, Inc., a publicly-traded provider of online commercial real estate information services, where I worked for approximately six years. Based on my experience, I am extensively familar with practices for analyzing works and determining their ownership and copyright status. Further details of my professional history can be found on the résumé attached hereto as Exhibit A. I have not provided testimony in any case in the last four years. Other than 1 the first phase of my work for my initial report, which was biled based on a flat fee of $45,000 (with work above 200 hours biled pro rata), I am being compensated at $350 an hour. 3. I was asked by plaintiffs' counsel to investigate, analyze, and provide my conclusions regarding the copyright infringement status of a set of fies selected pursuant to the protocol of a statistical study designed by Dr. Richard Waterman to estimate the extent of infringement on Hotfie. My role was to conduct an investigation to identify those fies and their the fies through Hotfie was infringing. copyright owner, and determine whether distribution of For each fie, I attempted to make a determination as to whether I believed it to be "highly likely infringing" or "non-infringing," which are terms that I describe in more detail below. I understand that this kind of analysis has been performed in numerous other online infringement cases in which a statistical analysis of the defendants' website or service has been performed, for example: Metro-Goldwyn Mayer Studios, Inc. v. Grokster, Ltd., 545 U.S. 913,936-37 (2005) ("Grokster"); Arista Records LLC, et al. v. Lime Group LLC, et al. No. 06-Civ. 05936 (S.D.N.Y) ("Limewire"); Columbia Pictures Industries, Inc. et al. v. Gary Fung, No. 06-CV5578 (C.D. CaL.) ("Fung"); and Arista Records LLC v. Usenet.com, Inc., No. 07 Civ. 8822 (S.D.N.Y.) ("Usenet.com") 4. Following the process described below, I was able to make an infringement determination on almost all of the 1,750 fies contained in Dr. Waterman's sample. The overwhelming majority of those sample fies - 1,578 of them - I found to be infringing. A very significant portion of the classifications were in fact quite straightforward. Indeed, a very substantial portion of the sample fies consisted of popular motion pictures, television programs, games, software and music. Free and unrestricted distribution of those fies through Hotfile is 2 incompatible with how their copyright owners commercialize those works. The remainder of the sample fies - 172 of them - I found either to be non-infringing, ilegal, or unkowable. Background of Statistical Study and Analysis. 5. I performed my analysis as part of a statistical study conducted by Prof. Richard Waterman. For each sample fie, I received information about the fie (such as the unique Hotfie URL link used to download the fie) as well as a copy of the actual content fie where available. For puroses of clarity, I refer to all the fies that I analyzed in the sample as "sample fies," and the actual copy ofthe fie (e.g., the digital copy ofthe movie) as a "content fie." 6. As noted above, my role was to conduct an investigation to identify the sample fies and their copyright owners, and determine whether distribution of the sample fies through Hotfie was infringing. In terms of my review and analysis, I investigated and analyzed each of the sample fies using a rigorous, evenhanded, and conservative process described below, in I order to determine whether the fies were highly likely infringing or were non-infringing. If had concerns whether distribution of a particular fie through Hotfie was infringing, I did not I was unable to make an infringement classify that fie as "highly likely infringing." Instead, if determination, I would classify that file as "unkrowable." In conducting my investigation, I was assisted in certain operational matters by a team of assistants I supervised, who were helpful, for example, in opening files or conducting Internet searches for webpages on which Hotfie URL links were posted. I ultimately conducted my own review and analysis of each sample file and formed my own conclusions regarding each file's infringement status. Defendants have received my work product, and each of the sample fies, thus enabling them to verify my conclusions. 7. For each ofthe sample fies, I began by attempting to identify the content of fie. In most of the the cases, I had the content fie (which I understand to have been obtained from 3 Hotfie) available for review, and I made reasonable efforts to open and play or view the content fie. I also examined the "metadata" for each of the fies - the information about the fie the fie and other abbreviations in obtained from Hotfie. For example, I reviewed the name of the fie name (such as "DVDRip" which indicates that the file was a copy of a movie ripped from a DVD). I also searched for webpages where the Hotfile URL link for the fie was made available, and identified many instances where Hotfie URL links to the content were stil available online. Those webpages containing the Hotfie URL link often contained descriptions of the content file, as well as cover ar, screenshots, and other pertinent information about the fie. 8. After identifying the sample fie, I researched and investigated the copyright ownership of the fie and whether the owner had authorized the work for free and unrestricted the file's authorization status, I distribution through Hotfie. In making the determination of considered a number of factors, including but not limited to: whether the content was subject to Terms of Use that restricted or authorized its distribution; whether the content included a copyright notice; whether the content owner monetized distribution of the content in a manner inconsistent with the free and unestricted distribution of the content through Hotfie; whether distribution of the content would constitute a fair use under United States copyright law; and whether the copyright owner gave any indication that the fie was authorized for free and Úlestricted distribution. Where available, I also considered notices of copyright infringement. In reviewing the sample files, I also examined whether the file appeared to be less than a full length copy of the originaL. In fact, the video content fies I classified as "highly likely infringing" were overwhelmingly full-length or consisted of a very substantial portion ofthe content. 4 9. Overall, in reaching my opinions and conclusions, I relied upon my knowledge and experience, as well as publicly available resources and other research that I have outlined in my disclosures and deposition testimony in this case. In investigating and identifying the sample fies and their infringement status, I consulted a variety of sources, including reliable Internet databases that contain information on copyright ownership and distribution. Some key sources of information for my analysis in this case include, but are not limited to: the Internet Movies Database at ww.imdb.com, the All Music Guide at ww.allmusic.com, the Internet Adult Film Database at ww.iafd.com. and online retailers such iTunes and Amazon.com that provide information about the ownership and distribution of certain works as well as whether a paricular work is being commercially exploited. I also reviewed various corporate websites that provided information about the identified content. I even conducted interviews with qualified representatives from trade groups for several relevant industries. 10. As a result of my analysis and the multiple levels of review performed, I assigned each ofthe sample files to a category, as follows: . "Confirmed infringing (Studio)" - the fie was determined to contain a copyrighted work that was confirmed to be owned or controlled by a plaintiff or its affliate and not authorized for free and unrestricted distribution on Hotfile. . "Highly likely infringing" - the fie was determined to contain copyrighted content and it is highly likely that the content was not authorized for free and unestricted distribution on Hotfie by its copyright owner, based on the evidence I reviewed, including publicly available evidence of commercial exploitation of the content by the owner and the lack of any indication of authorization for free and unestricted distribution on Hotfile. 5 highly likely in the . "Non-infringing" - the fie was confirmed or determined to be public domain, authorized for free and unestricted distribution by its owner, or not a copyrighted work, based on my review. . "Unknowable" - the fie could not be identified, or its authorization status could not be determined in the time permitted to complete this project. 11. As noted above, in making my determination that a fie was "highly likely infringing," I employed a similar categorization system to those used in statistical studies in other cases, including Grokster, Fung, Usenet.com, and Limewire. Based on the evidence I reviewed and analyzed, I classified a fie as "highly likely infringing" only if! determined that the fie contained copyrighted content and it is highly likely that the content was not authorized . for free and unestricted distribution on Hotfie (either by the copyright owner or operation of law (e.g., fair use)). 12. As part of my review process I occasionally came across fies that could not be placed in the above categories, which I treated in a manner consistent with Dr. Waterman's protocol. An explanation of those categories, and how they were treated in the study, is described below: . Corrupt fies - Files we received that were corrupt, inoperable, or unplayable/undisplayable, for a reason other than being password-protected or encrypted. As a result, these fies had no apparent infringement status. In accordance with Dr. Waterman's protocol, these fies were replaced in the sample set of 1,750 fies I reviewed with another randomly selected fie Waterman's pre-established protocol. 6 per Dr. . Child or ilegal pornography - I understand that Dr. Waterman's protocol calls for exclusion of any file that, by its metadata, appears to contain child pornography or other ilegal pornography, before the files are requested from Hotfie. Consistent with that approach, and in consultation with Dr. Waterman, I excluded any sample file from the study that, upon further review, I believed might likely these fies were replaced in the ".. contain child or other ilegal pornography. All of sample set of 1,750 fies that I reviewed with another randomly selected file per Dr. Waterman's pre-established protocol. . Ilegal content - We identified a number of fies that contained tools for circumventing limitations on access to protected hardware, copyrighted works, or websites (e.g., "crack" fies). In each case, I determined that distribution of the the anti-circumvention file would likely be unlawfúl (e.g., a violation of provisions of the Digital Milennium Copyright Act). In consultation with Dr. Waterman, we classified such fies as "Ilegal," and they were not replaced in the sample. My understanding of Dr. Waterman's protocol is that, for purposes of calculating the percentage of infringing fies in the sample, these "ilegal" fies were effectively treated as "non-infringing." 13. In the course of my review, I preserved all of the content fies I analyzed (other than the files I identified as potential child or ilegal pornography which were originally on Hotfie's servers in the first place). Thus, for all sample fies, even for the sample fies excluded from consideration, defendants were able to review the same set of content fies to confirm for themselves my classifications of each fie. 7 14. After making my assessment of the infringement status of each ofthe sample fies, I did additional work to test and ultimately corroborate my infringement determinations. First, utilizing information provided by Dr. Ian Foster using Hotfie's records of tae down notices, I checked furher to see whether a takedown notice had been sent by a copyright owner on the same sample file. Second, I considered information provided by Dr. Foster using Hotfie's records that shows whether there was a "hash match" between the sample files and a fie that had been removed for reasons associated with copyright infringement. A "hash match" fie is a digitally identical copy of the sample fie - in other words, it has the same unique "hash" value. Third, I checked information provided by Dr. Foster using Hotfie's records that shows whether there were takedown notices that had the same title as the sample file, which indicates that other copies of the same work had been identified as infringing. Fourth, in certain circumstances, again using information provided by Dr. Foster using Hotfile's records, I also included in my consideration whether the identified copyright owner had sent takedown notices to Hotfile on other works. Where applicable, I found it relevant to know that the copyright owner sent takedown notices to Hotfie on a similar work that it commercialized in a similar manner. This information on takedown notices provided by Dr. Foster was organized and summarized by plaintiffs' counsel for presentation on Exhibit B, which I describe in more detail below. Conclusions. 15. I have provided my classification results to Dr. Waterman to complete his analysis. Attached as Exhibit B is a chart listing each sample fie and its classification to one of the categories noted above. In Exhibit B, I provide the Hotfie URL link for each fie, the date in January 2011 from which the sample fie was selected pursuant to Dr. Waterman's protocol, the 8 identified title and copyright owner, and my conclusion as to the infringement status of that file: In Exhibit B, I also include other data about each of those fies that I was provided and understand to have been derived from defendants' data by Dr. Ian Foster. That additional data includes the following fields: . URL Noticed - whether takedown notices were sent to Hotfie on that specific sample fie (the same Hotfile URL link), as explained in paragraph 14. . Hash Noticed - whether takedown notices were sent on fies with the same "hash," as explained in paragraph 14. . Title Noticed - whether takedown notices were sent on fies that had the same title as the work in the sample file, as explained in paragraph 14. . Company Notice - whether other takedown notices were sent by the copyright owner of the sample fie I identified, as explained in paragraph 14. . User ID - the numerical user ID assigned by Hotfie to the user who uploaded the fie. . Strikes - the number of "strikes" Hotfie assigned to the uploading user after receiving an infringement notice on that uploading user's fie" . Notice Days - the true copyright infringement "strikes" the user had based on all infringement notices received by Hotfie on that uploading user's fies (that is, including those notices received before February 18,2011). . Copyright Suspension - whether the uploading user was suspended for copyright infringement. 9 Finally, I indicate whether I determined that the user had uploaded other infringing files, as explained in paragraph 17 below. 16. Based on my review to date, my classifications are as follows: 1,578 fies in the sample are either confirmed or highly likely infringing; 84 fies are classified as non-infringing; 79 fies are classified as unkowable, and 9 fies are classified as ilegaL. A total of 17 fies are excluded on the basis of basis of being child or other ilegal pornography, and 29 are excluded on the being corrupt. I understand that in drawing the sample, Dr. Waterman selected 250 files from each of seven days in the sampled month. Therefore, in order to provide my results to Dr. Waterman, I broke down my infringement classifications by the sample day from which I understand each sample fie was selected. That breakdown is attached hereto as Exhibit C. In short, my analysis showed that the overwhelming majority of sample fies were infringing. 17. My analysis, in conjunction with Dr. Foster's data, also shows that an overwhelming number of users who uploaded fies selected into the sample have used Hotfile to infringe - that is, the evidence indicates that, either as to the sample fie or a separate file, they have used Hotfile to distribute fies that are highly likely infringing. In addition to the 1,578 fies in the sample that are either confirmed or highly likely infringing, at the request of the plaintiffs, I also examined the other uploaded fies of users identified on Exhibit B who had uploaded sample fies that I classified as non-infringing or unkowable in my analysis. I identified those works based on lists of the user's uploads derived from Hotfie's data by Dr. Foster. A list of those uploaders and their other infringing uploaded fies is attached hereto as Exhibit D. As noted above, a summary of my results by uploader is included in the "Other Infringing Upload" column on Exhibit C. Overall, in considering the sample fies, the users' other infringing fies, notices or "strikes" for the user, and whether the user was terminated for copyright infringement, 10 I found that, for ofthese users, the evidence indicates that they have used Hotfie to distribute highly likely infringing files. Further Explanation of Specific Works. the 1,750 fies that I reviewed were 18. As I noted above, the vast majority of infringing, and a very significant portion were straightforward to classify. Nevertheless, I understand that Prof. Boyle has challenged my classification of a handful of fies. According to his deposition testimony, he has actually reviewed and investigated very few fies that I classified as infringing, and as he acknowledges, he has made no systematic attempt to review my conclusions. Instead he reviewed only a relatively small subset of files, many at the guidance of defendants' counseL. 19. As to the handful of fies that Prof. Boyle specifically addresses, I do not believe his criticisms are warranted. a. Orbit Downloader. Prof. Boyle claims that distribution of the download assistant "Orbit Downloader" through Hotfie is not highly likely infringing, because the developers of Orbit Downloader classify it as "freeware." The colloquial classification of something as so-called "freeware" does not, however, end the inquiry, as Prof. Boyle seems to presume. The term "freeware" means that the software is offered at no cost, but it is not synonymous with unrestricted distribution to others. Orbit Downloader is available for download on a page on the developer's website that includes a copyright notice and the phrase "All Rights Reserved." That page also includes a link for users to voluntarily donate money to the developer, which further informs the user that "you can use it (the software) for free as long as you like."¡ The inclusion of 11 that copyright notice indicates that the free and unrestricted distribution of Orbit Developer is not permitted. The fact that the developer is seeking to monetize the distribution of the content through the developer's website also undermines the notion that free and unrestricted distribution is permitted. There is no contrary indication that the developer has authorized unrestricted distribution. While Orbit Downloader is made available without the requirement that the user pay for the download (hence the expression "freeware"), under basic copyright law, that does not dictate that the developer authorized the downloading user to further distribute that content fie. One important reason a copyright owner might offer something "free" from its own website is to attract users to the website to promote its company, products and brand, including, as in this case, to monetize downloads to support its work, all of which are uridermined by unrestricted Hotfie distribution through Hotfie, because no users need go to the copyright owner's website at all. b. Skoki 2006. Prof. Boyle suggests that a sample fie containing the copyrighted video game Skoki 2006 should not be classified as infringing. In his report, Prof. Boyle focused on the question of whether the DirectX software, also included in the sample fie, is infringing. That is a somewhat complicated question that involves interpretation of DirectX's End User License Agreement, which I analyzed in my initial assessment. However, it is beside the point, because I have also concluded that distribution of the Skoki 2006 game itself through Hotfie is highly likely infringing - it is copyrighted and is commercially available and exploited, and there is no indication that it is authorized for free and unestricted 12 distribution through Hotfie to an unlimited number of individuals. Therefore the sample fie itself is infringing. c. Photography 101 podcast. Prof. Boyle claims that distribution of a "Photography 101" podcast is not highly likely infringing to distribute through Hotfie. That podcast is made available by the author for download through iTunes. The iTunes terms and conditions, which I have consulted, do not permit the free and unrestricted distribution of fies that are downloaded (even for free) from iTunes. Defendants' counsel has apparently procured an unsworn affidavit from the author, Mr. Scott Wittenburg, that Prof. Boyle believes to suggest that the podcast is authorized for posting on Hotfie, notwithstanding its distribution is subject to the iTunes terms and conditions. This declaration raises more questions than it answers, and without knowing more does not affect my infringement analysis. For instance, I do not know what representations defendants' counsel made to Mr. Wittenburg - and nor does Prof. Boyle. I understand that plaintiffs' counsel has requested those communications but has not yet received them. Also, Mr. Wittenburg's affidavit clearly does not state that the tutorial is authorized for free and unestricted distribution through Hotfie. It says that "( s)o long as a person is not charging money for my podcast, I do not have any problems with" individuals "repost(ing)" them. However, where Hotfie and the uploading user make money from distributing the podcast though Hotfie - the podcast is not simply how Hotfie's business model "reposted." Mr. Wittenburg may not be aware of works and may not approve of distribution of the podcast by another user through Hotfie. In fact, Mr. Wittenburg's affdavit does not even mention Hotfile. 13 Furher, it is unclear whether the statements in his affdavit are meant to reflect what was authorized at the time of the distribution of the fie through Hotfie. d. Farming Simulator. Prof. Boyle claims that distribution of a number of "mod" fies for a game called "Farming Simulator" are not highly likely infringing. As background, "mod" fies can often be infringing because they contain portions of copyrighted software code. In this case, my review uncovered considerable evidence that these files are infringing: (a) several of the fies themselves contain a copyright notice or a statement of authorship attributed to the owner, Giants Software; (b) the End User License Agreement for the Farming Simulator software specifically prohibits further distribution of portions of the software code; and (c) I have reviewed other takedown notices sent to Hotfie on fies related to Farming Simulator by Giants Software, confirming that Giants Software does not approve of the free and unrestricted distribution of its copyrighted code in the Farming Simulator game. The declaration procured by defendants' counsel (under circumstances of which Prof. Boyle has no knowledge) again raises many more questions than it answers. It is executed by an individual named Marc Schwegler, but he does not identify his position at Giants Software, which strikes me as highly unusual for such a document. Mr. Schwegler does not say that he represents the company; he just says that he is an employee. In fact, the company website lists four individuals as authorized company representatives, and he is not one of them. Mr. Schwegler is also not the individual at Giants Software who sent takedown notices to Hotfie on Farming Simulator games. Notably, his declaration does not state that the fies contain no copyrighted code. Instead, in 14 the declaration, Mr. Schwegler opines that they are "non-infringing," without representing that he is an attorney or even familiar with U.S. copyright law. Thus, the declaration does not cause me to change my classification of the fie. e. . Russian embroidery book. Prof. Boyle also criticizes my classification of a book of Russian embroidery as highly likely infringing, based on his assumption that the book was published in 1871, and thus is in the public domain. When I reviewed the fie, I did not believe it to be a copy of a book published in 1871. Rather, I believed it to be copied from a newer book covering subject matter from the nineteenth century. I classified it as highly likely infringing because, while the book may contain images of designs that were originally created in the those designs in a newer nineteenth century, the selection and arrangement of book receives copyright protection, and thus the distribution would be an infringement. At bottom, I consider this a disagreement as to identifying the work and its publication date. As this factual dispute appears to be a unique scenario within the 1,579 fies I classified as infringing, in order to prevent any doubt, I have re-classified this fie as "unknowable" for at least the time being. 20. Prof. Boyle has specifically criticized my infringement determinations only on about a dozen files ofthe 1,750 that I reviewed. Even if one were to credit each of Prof. Boyle's criticisms - which plainly, as described above, I do not - the effect would not be material to the overall results of my analysis. The fact remains that the overwhelming majority of fies I reviewed were infringing to distribute though Hotfie. I have provided this information in support of Dr. Waterman's more general conclusion regarding the level of Hotfie. 15 infringing activity on I declare under penalty of perjury that the foregoing is true and correct. Executed on Februaryß1i012, at Washington, DC. 16

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