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

Filing 351

NOTICE by Hotfile Corp. Notice by Defendant/Counterclaimant Hotfile Corporation of Filing the PUBLICLY FILED REDACTED Version of Hotfile's Counter-Statement of Facts in Opposition to the Statement of Uncontroverted Facts Submitted by Plaintiff/Counter-Defendant Warner Bros. Entertainment Inc. in Support of Warner's Motion for Summary Judgment on Hotfile's Counterclaim (Attachments: # 1 Exhibit A)(Munn, Janet)

EXHIBIT A

----

_-,--

PUBLIC VERSION
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
CASE NO.: 11-CIV-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.,

Counter-Defendant.

------------------~--------~/
COUNTER-STATEMENT OF FACTS OF DEFENDANT/COUNTERCLAIMANT
HOTFILE CORPORATION, IN OPPOSITION TO THE STATEMENT OF
UNCONTROVERTED FACTS SUBMITTED BY PLAINTIFF/
COUNTER-DEFENDANT WARNER BROS, ENTERTAINMENT INC.
Pursuant to Federal Rule of Civil Procedure 56 and Local Rule 7.5,
Defendant/Counterclaimant Hotfile Corp. submits this counter-statement of facts in opposition to
Plaintiff/Counter-Defendant Warner Bros. Entertainment Inc.'s (Warner's") Statement of
Uncontroverted Facts in Support of its Motion for Summary Judgment.

1

FILED UNDER SEAL

CASE NO.: 11-CIV-20427-WILLIAMS/TURNOFF

RESP()NSETOWARNE]l'S~ROPQSE.D :lJNCQN,T~~VE:RTEDl\1}\TEID.;\LFA(;TS ··•

1. Hotfilc camtot present evidence establishing that Warner had actual subjective
knowledge that, at the time it sent any takedown notice for a file listed in Exhibits A-D of
the counterclaim, the notice contained a material error.

Disputed. Warner had subjective, actual knowledge that its system was incorrectly deleting

- t h e files it was locating. Declaration of Roderick Thompson in Opposition to Wmner's
Motion for Summary Judgment ("Thompson Decl.") Ex. 6, 8. Wm·ner had subjective, actual

20. Warne1· had subjective, actual knowledge that the files LeakiD was identifying for deletion
were not Wamer content. Declaration of Scott Zebrak in Supp01t of Warner Bros. Motion for
Summary Judgment on Hotfile's Counterclaim ("Zebrak Decl.") Ex. B (Rows 811-817);
ThompsonDecl. Ex. 23-25.

l.
2. Hotfile cannot present evidence establishing that any takedown notice for a file listed in
Exhibits A-D of the counterclaim resulted in any cognizable injury to Hotfile.
Disputed. Excluding the 19 files allegedly owned by Warner, the files in Hotfile's counterclaim
were downloaded a total o - i r n e s . Declaration of Anton Titov in Opposition to Warner's
Motion for Summary Judgment ("Titov Decl.") ~ 4. The files in Hotftle's counterclaim that

2

FILED UNDER SEAL

CASE NO.: 11-CIV-20427-WILLIAMS/TURNOFF

Warner admits were non-infringing were downloaded at l e a s - times and directly led to
.conversions to premium user subscriptions, generating- of revenue for Hotfile. Titov
Decl. ~5-6. At least 47 users were deleted as a direct result of Warner's false takedowns
identified in the counterclaim (users suspended for copyright infringement where at least one of
the three strikes against the user is attributable to Warner's improper deletion of a file in
Hotfile's counterclaim). Zebrak Decl. Ex. B. The two users who Warner admits whose accounts
were suspended as a direct result of its false takedown notices, and who Wamer also admits did
not upload any allegedly infringing files, before their suspension had uploaded files that were
downloaded a combined - t i m e s and directly led to .remium user subscriptions,
generating - o f revenue for Hotfile. Zebrak Decl. 120, Thompson Decl. Ex. 35 (Zebrak
Rebuttal Expe.tt Report at~ 4, Ex. B); Titov Decl. 11! 9-10.
3. Hotfile is not injured by removing a file that is infringing, even if the takedown notice is
sent by the wrong copyright owner.

Disputed. Warner's proposed "fact" is really a legal conclusion, which is disputed. ). A
takedown notice sent by a third party such as Wamer without authorization by the copyright
owner cannot support the conclusion that a given file is infringing. There is simply "no
assurance that a third patty who does not hold the copyright in question could know whether the
material was infi'inging." UMG Recordings, Inc. v. Shelter Capital Partners LLC, 2011 WL
6357788, at *22 n.14 (9th Cir. Dec. 20, 2011). Moreover, the legal conclusion as to whether
Hotflle has suffered injury is also predicated on a secondary faulty legal conclusion: that a file
that may be subject to copyright protection is "infringing" by virtue of its posting on Hotfile,
regardless of whether there is any evidence that the copyright owner did not authorize its posting
on Hotfile ol' that the posting of the file on Hotfile was otherwise uon~infringing. Warner
misquotes Hotfile's expeli~ Dr. Matthew Lynde, claiming that he admitted that Hotfile is not
entitled to revenue from files that Warner's expert contends are infringing. Rather, what Dr.
Lynde actually said was that Hot:file's expectation of revenue was not based on files ''for which it
receives notice that the copYJ·ight owner does not concur that that is appropriately on the Hotfue
site." Thompson Decl. Ex. 37 (Lynde Depo.

97:7~98:9)

(emphasis added).

To the extent that the asserted "fact" is that Hotfile has not suffered injury under § 512(t) if, as of
the date that Warner improperly caused deletion of a file from Hotfile, the file contained material

3

CASE NO.: 11-CIV-20427-WILLIAMSffURNOFF

FILED UNDER SEAL

that was in fact infdnging upon (and not fair use of) copyrighted matedal and true copyright
owner had also attempted to remove the file from hotfi1e.com, that nan-ow "fact" is undisputed.
Hottile would not be injured by the removal of a ftle by the copyTight owner (or with its
authorization).

4. Warner is not the cause of the termination of a Hotiile user who had "three sb·ikes"
from infringement notices without counting the notices sent by 'Varner for the files listed in
Exhibits A-D of the counterclaim.

arner's notice nonetheless caused the termination of the users that
uploaded the ft.les identified in Exhibits A-D of the cotmterclaim.
5. 24 of the files identified in Exhibits A-D to the counte1·claim are duplicates.

Undisputed f01· purposes of this motion .
6. 19 of the remaining files identified in Exhibits A-D to the counterclaim are in fact

Warner-owned content that Hotfile included in the countercL'lim in error.

Undisputed for purposes of this motion.

7. 271 of the remaining files identified in Exhibits A-D to the counterclaim consist of
infringing content owned by the video game maker Elect1·onic Arts, Inc. ("EA''), who has
approved of Warner sending the notices and bas retroactively authorized Warner to

request removal of tltese files.
Disputed. It is undisputed for purposes of this motion that EA is the copyright owner of the 271

4

FILED UNDER SEAL

CASE NO.: 11-CIV-20427-WILLIAMS/TURNOFF

files identified in Warner's motion. But it is disputed as to whether Warner's statement under
penalty ofpe1jury that it was authorized to remove each of those files was lmowingly false.
Warner admitted that, at the time it deleted the 271 EA files, it was not authorized to do so.
Thompson DecI. Ex. 4 (Kaplan Depo. 231: 11-20). Warner's own expert, Mr. Zebrak, testified
that when a copyright owner such as EA attempts to provide authorization only after the fact, he
would like to "speak with this person [before making a determination as to authorization] .... He,
of course, !mows what at the time he authorized or didn't authorize." Thompson Decl. Ex. 30
(Zebrak Rebuttal Depo. at 287:5-23).
8. 477 of the remaining files identified in Exhibits A-D to the counterclaim are othe1wise
copyright infringing.

Disputed. Wmner has submitted no admissible evidence that the files identified in Exhibits A-D
are infringing. The owner of the "PHP Video Tutorial" files identified in Hotfile's counterclaim
has submitted an affidavit that the posting of those files on Hotfile was authorized, contradicting
the speculation of Wamer' s expert. Thompson Dec!. Ex. 33; Zebrak Dec!. 'IJl 0. W m·ner' s expert
did not contact the copyright owners of the files identified in Exhibits A-D to the counterclaim to
determine the authorization status of those files. Thompson Dec!. Ex. 32 (Zebrak Initial Depo.
at. 319:3-22). Currently, less than 5% of all uploads are "matched" as possible copyright
infringement by Vobile's VC!oud9 fingerprinting teclmology. Titov Decl. '\112, Ex. 1. This
suggests that Mr. Zebrak's opinion that more than 5% of the files randomly and wrongfully taken
down by Warner's- contains copyrighted material is inconect.
9. 28 of the remaining files identified in Exhibits A-D to the counterclaim did not result in
any user termination because the notice was sent before Hotfile began assigning strikes on
February 18, 2011 and thus did not result in the user receiving a strike.

Undisputed for purposes of this motion
10. 9 of the remaining files identified in Exhibits A-D to the counterclaim did not result in
any user termination.

Undisputed for purposes of this motion that, for the time period of the data provided to
Warner, none of those users who uploaded those files were terminated.

5

CASE NO.: 11-CIV-20427-WILLIAMS/TURNOFF

FILED UNDER SEAL

11. The Hotfile users who uploaded 53 of the remaining files had three or more "strikes"
from copyright infringement notices not counting any notices sent by Warner for the files
identified in Exhibits A-D of the counterclaim.

Disputed. According to Mr. Zebrak's own data, 9 of the users associated with the files fi·om

Hotfile's counterclaim identified in Zebrak Dec!. Ex. Brows 829-871 had three "strikes" against
them, and Warner's improper deletion of those files resulted in a stiike for each of those users
thereby causing their terminations. Zebrak Dec!., Ex. B (Rows 829-830, 832-836, 839, 841). Mr.
Zebrak appears to be counting what he describes as "notice days" as "strikes." Id

~

11 Prior to

February 18, 2011, takedownnotices sent on a user's file did not count as "strikes" documented
in Hotfile's database. Titov Dec!. ~13 As takedown notices sent against a patticular user prior to
February 18, 2011 did not count as "strikes" against the user, Warner's attempt to include its
undocumented "notice days" as "strikes" is factually inaccurate.
Moreover, even iftakedown notices prior to February 18,2011 should be counted as "strikes,"
Warner has presented no evidence of these takedown notices, much less shown that any notices
refen·ed to in the "Notice Days" column were sufficiently DMCA compliant to count as "strikes"
had they occurred after Februm·y 18, 2011. There is ample evidence that many such notices were
not proper. For exmnple, on two consecutive days, LeakiD misidentified and sent three
takedown notices for the files identified in Zebrak Dec!. Ex. Brows 811-817. Thompson Dec!.
Ex. 24-25. Even though such notices do not count as "strikes," there is in any event a question of
material fact as to whether any such notices would qualify as "strikes" even if they had been sent
after Februm·y 18, 2011.
12. The Hotfile users who uploaded 9 remaining files consist of six users, none of whom
was a Premium user.

Undisputed.

HOTFILE'S COUNTER STATEMENT OF UNDISPUTED FACTS

·

1. Pursuant to a stipulation between the parties, Warner's deletion of files through its
Special Rightsholder Account ("SRA") are subject to 17 U.S.C. § 512(f).

Supporting Evidence: Joint Motion and Memorandum of Law of the Parties for Voluntm·y

6

CASE NO::

FILED UNDER SEAL

ll-CIV-20427~WILLIAMSn.'URNOFF

Dismissal of Second and Third Counts of Hotfile 's First Amended Counterclaim and for
Amendment of First Count, dated September 22,2011 [D.E. #151] ("Warner's notifications by
means ofHotfile's SRA are ... subject to 17 U.S.C. § 512(f)."); Order on Joint Motion for

Volw1tary Dismissal of Second and Third Cmmts ofHotfile's First Amended Counterclaim and
for Amendment of First Count, and for Extending Time To Answer, dated October 5, 2011 [D.E.
#1 55].

2. When Warner used tile SRA tool do delete files identified in Exhibits A-D of Hotfile's
counterclaim it certified "under penalty of perjury" that it was "the owner or an
authorized legal representative of the owner of copyrights" and it had "a good faith belief

that use of this material is not authorized by the copyright owner, the copyright owner's
agent, or the law."

Supporting Evidence: Thompson Decl. Ex. 36 (Exhibit 6 to Kaplan Depo. (SRA page"); ~nswer
to Counterclaim, [D .E. #163] ~ 15 (admitting making such statements for each URL).

3. Excluding the 19 files for which Warner asserts that it owned copyrights, Warner did
not h'ave authorization at the time it used it SRA to delete any of the other files identified
in Exhibits A-D ofHotfile's counterclaim.

Supporting Evidence: Zebrak Ex. B; also, Thompson Decl. Ex. 4 (Kaplan Depo. 231: 11-20)

7

CASE NO.: ll-CN~20427-WILLIAMS/TURNOFF

FILED UNDER SEAL

Supporting Evidence: Thompson Decl. Ex. 4 (Kaplan Depo. 83:7-85:6

any individual

Kaplan Decl. 1~ 1Q..

Supporting Evidence:

9. The eight JDownloader files identH'ied in Exhibits A-D of Hotfile's counterclaim were
downloaded a total of-times•
.Supporting Evidence: Titov Decl. 1 7

10. The eight JDownloader files identified in Exhibits A-D of Hotfile's counterclaim led to

premium user subscriptions .times, resulting in ~f revenue to Hotfile.
Supporting Evidence: Titov DecI. ~ 8

11. The tile http://hotfile.com/dJ/25231712/b99b376/JDownloaderSetup.exe:html is a copy
of JDownloader software, a freewa1~e program to which Warner owns no copyright and is
not attthorized to remove.
Suppmting Evidence: Zebrak Decl. Ex. B (row 797); Thompson Decl. Ex. 4 (Kaplan Depo.
234:22-235 :2)

12. Hotfile user

Appwork GmbH, t11e owner of JDownloader.

Suwmting Evidence: Thompson DecI. Ex. 13.

13. The file bttp:/lhotfile.cont/dl/25231712/b99b376/JDownloaderSetup.exe.html was

8

CASE NO.: J1~CIV -20427~ WILLIAMSfrURNOFF

FILED UNDER SEAL
uploaded by the Hotfile user

Supporting Evidence: Zebrak Dec1. Ex. B (row 797).

14. T he files uploaded by the Hotfile user

were downloaded n total of

times.

Supporting Evidence: Titov Decl. ,19

· to premium user subscriptions

15. The files uploaded by the user Hotfile
times, resulting h1

of t·evenue to Hotfile.

Supporting Evidence: Titov Dec!. ~ l 0

16. The files listed in Exhs. A-D ofthe counterclaim tiJat Warner's cxpc11 did not
determine were "highly likely infringing~' wet·e dowulo~1de~ t imes before being
deleted by Warner.

Supporting Evidence: Titov Decl. ~ 5
17. The fLies listed in Exhs. A-D of the counterclaim that Warner 's expert did not
determine were "highly likely infringing" dii·ectly resulted in users converting to premium
accounts .imcs before being deleted by Warner, generating~h·evenue for
Hotfile.

Supporting Evidence: Titov Decl. ~ 6
18. Excluding tbe 19 files for which Warner asser·ts that it owned copyrights, the files

identified in Exhibits A-D ofHotfile's coUnterclaim were downloaded-times.
fuwJ20.lting Evid~~: Titov Decl. ~ 4

19. A false SRA deletion by Warner resulted in the deletion of use•·

Supporting Evidence: Zebrak Decl. 1 20, Ex. B (rows

20. User

883~885)

<lid not upload any files identified by Warner's eX}Jert as "highly likely

infringing."

9

CASE NO.: 11-CN-20427-WILLIAMS/TURNOFF

FILED UNDER SEAL

Supporting Evidence: Zebrak Decl. ~ 20; Thompson Decl. Ex. 35 (Zebrak Rebuttal Rep01t 14,

Ex. B).

21. The files uploaded by user

weredownlo

times.

Suppo11ing Evidence: Titov Decl. , 9

22. The ftles uploaded by user

led to pt·emium user subscriptions

resulting i n . of revenue to Hotfile.
Supp01ting Evidence: Titov Decl. ~ 10

23. A wrongful SRA deletion by .Warner resulted in the deletion of user
Supporting Evidence: Zebrak Decl. ~ 20, Ex.. B Rows 886

24. User

did not upload any files identified by Warner's expe~t as "highly likely

infringing."
Su:Qporting Evidence: Zebrak Decl. , 20; Thompson Decl. Ex. 35 (Zebrak Rebuttal Rep01t ~ 4,
Ex. B).

25. The files uploaded by user

downloaded

times.

Supporting Evidence: Titov Decl. ~ 9

26. The files uploaded by user

led to premium user subscriptions

t·esulting i n - of revenue to Hotfile.
Supporting Evidence: Titov Decl. ~ 10

10

. FILED UNDER SEAL
DATED: February 27,2012

CASE NO.: 11-CIV-20427-WILLIAMS/TURNOFF
Respectfully submitted,

0:~().~
(jfnet T. Muuu, Esq. Fla. BaT No. 501281
Email: [e-mail]
RASCO KLOCK
283 Catalonia Avenue, Suite 200
Coral Gables, Fl 33134
Telephone: [phone]
Telecopy: 305.476.7102

;~d

tfl!J d!vu£'17Zorvf)vtJpit7tu 4t;~ :J·J?~
Roderick M. Thompson, Esq. (admitted pro hac vice)
Email: [e-mail]
Andrew Leibnitz, Esq. (admitted pro hac vice)
Email: [e-mail]
Anthony P. Schoenberg, Esq. (admitted pro hac vice)
Email: [e-mail]
Deepak Gupta, Esq. (admitted pro hac vice)
Email: [e-mail]
Janel Thamkul, Esq. (admitted pro hac vice)
Email: [e-mail]
PARELLA BRAUN+ MARTEL LLP
235 Montgomery St.
San Francisco, CA 94104
Telephone: [phone]
Telecopy: 415.954.4480
And

1!d/#{(~4~~{)ud8· ~
Valentin Gurvits, Esq. (admitte pro hac vice)
Email: [e-mail]
BOSTON LAW GROUP
825 Beacon Street, Suite 20
Newton Center, MA 02459
Telephone: [phone]
Telecopy: 617.928.1802
Counsel for Defendants Hotfile Corporation
and Anton Titov

11

. FILED UNDER SEAL

CASE NO.: 11-CIV-20427-WILLIAMS/TURNOFF

CERTIFICATE OF SERVICE

I hereby certify that on February 27, 2012, a true and correct copy of the foregoing
document, was filed conventionally and served on all counsel of record identified below via email and by Federal Express.
Karen L. Stetson, Esq.
GRAY-ROBINSON, P.A.
Email: Karen.Stetson@gray-ro binson.com
1221 Brickell Avenue
Suite 1600
Miami, FL 33131
Telephone: [phone]
Telecopy: 305.416.6887

Karen R. Thorland, Esq. (admitted pro hac vice)
Senior Content Protection Counsel
Email: Karen [e-mail]
Motion Picture Association of America, Inc.
15301 Ventura Boulevard, Building E
Shennan Oaks, CA 91403-5885
Telephone: [phone]

Steven B. Fabrizio, Esq. (admitted pro hac vice)
Email: [e-mail]
Duane C. Pozza, Esq. (admitted pro hac vice)
Email: [e-mail]
Luke C. Platzer, Esq. (admitted pro hac vice)
Email: [e-mail]
JENNER AND BLOCK, LLP
1099 New York Avenue, N.W.
Suite 900
Washington, DC 20001
Telephone: [phone]
Telecopy: 202.639.6066

By:~O ·Yw/1\AJan T. Munn

12