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

Filing 392

NOTICE by Hotfile Corp., Anton Titov Defendants' Notice of Filing the Publicly Filed Redacted Version of the Statement of Facts of Defendants Hotfile Corporation and Anton Titov in Opposition to Plaintiffs' Statement of Uncontroverted Facts and Defendants' Statement of Additional Material Facts (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 LLP,
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.

/

STATEMENT OF FACTS OF DEFENDANTS
HOTFILE CORPORATION AND ANTON
TITOV IN OPPOSITION TO PLAINTIFFS’
STATEMENT OF UNCONTROVERTED
FACTS; DEFENDANTS’ STATEMENT OF
ADDITIONAL MATERIAL FACTS

[REDACTED]

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PREFACE

Plaintiffs assert in their prefatory section, “Table Of Citation Form,” that “section
headings” and “subsidiary paragraphs” are not claimed to be “[u]ncontroverted material facts,”
but rather that only consecutively numbered paragraphs (using numerals 1, 2, 3, etc.) are asserted
“[u]ncontroverted material facts.” Therefore, Hotfile provides evidence only to controvert
Plaintiffs’ substantive assertions – including Plaintiffs’ “subsidiary paragraphs.” To be clear,
Hotfile disputes the assertions set forth in Plaintiffs’ section headings (introduced by capital
Roman numerals and capital letters as well as unsupported numerical headings), which simply
state argument without any factual support or citations to the record whatsoever. Hotfile
disputes each of Plaintiffs’ characterizations set forth in these headings (including the assertion
that “subsidiary paragraphs” do not provide “material” facts).
Regarding the format of Defendants’ instant Responses To Plaintiffs’ Statement Of
Uncontroverted Facts (“DRSF”), Defendants note that they have previously moved to strike
rebuttal testimony from Dr. Richard Waterman, Dkt No. 217, and are contemporaneously
moving to strike “evidence” submitted by Plaintiffs’ outside counsel, Jennifer Yeh. Where
Plaintiffs’ “[u]ncontroverted material facts” refer to this purported evidence, Defendants have
noted their objection and motion to strike using the following legend:
A.

an asterisk (*) indicates reliance on testimony in or exhibits to the Yeh
Declaration which are subject to a separate motion to strike;

B.

a cross (†) indicates reliance on statements, testimony, and other materials which
rely on the inadmissible report and faulty analysis of Dr. Waterman, which is also
subject to a separate motion to strike.
CITATION LEGEND

1.

“PSUF” shall refer to specific paragraph numbers of Plaintiffs’ Statement of

Uncontroverted Facts.
2.

“DSUF” shall refer to specific paragraph numbers of Statement of Undisputed

Material Facts In Support of Motion of Defendants Hotfile Corporation and Anton Titov for
Partial Summary Judgment Based on the Digital Millennium Copyright Act Safe Harbor.
3.

“TSUF” shall refer to specific paragraph numbers of Statement of Undisputed

Material Facts In Support of Motion of Anton Titov’s Motion for Summary Judgment.

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

“DRSF” shall refer to specific paragraph numbers of the Statement of Facts of

Defendants Hotfile Corporation and Anton Titov In Opposition to Plaintiffs’ Statement of
Uncontroverted Facts and Defendants’ Statement of Additional Material Facts.
5.

“Foster Decl.” shall refer to the declaration of Dr. Ian Foster in support of

Plaintiffs’ Motion for Summary Judgment Against Defendants Hotfile Corp. and Anton Titov,
dated February 17, 2012.
6.

“Yeh Decl.” shall refer to the declaration of Jennifer V. Yeh in support of

Plaintiffs’ Motion for Summary Judgment Against Defendants Hotfile Corp. and Anton Titov,
dated February 17, 2012.
7.

“Titov Decl.” shall refer to the declaration of Anton Titov in support of

Defendants’ Motion for Summary Judgment.
8.

“Titov Opp. Decl.” shall refer to the declaration of Anton Titov in support of

Defendants’ Opposition to Plaintiffs’ Motion for Summary Judgment.
9.

“Leibnitz Decl.” shall refer to the declaration of Andrew Leibnitz in support of

Defendants’ Opposition to Plaintiffs’ Motion for Summary Judgment.
10.

“Gupta Decl.” shall refer to the declaration of Deepak Gupta in support of

Defendants’ Motion for Summary Judgment.
11.

“Schoenberg Decl.” shall refer to the declaration of Anthony Schoenberg in

support of Anton Titov’s Motion for Summary Judgment.
12.

“Levy Decl.” shall refer to the declaration of Dr. Daniel S. Levy in support of

Defendant’s Opposition to Plaintiffs’ Motion for Summary Judgment.
13.

“Cromarty Decl.” shall refer to the declaration of Dr. Andrew Cromarty in

support of Defendant’s Opposition to Plaintiffs’ Motion for Summary Judgment.
14.

“Boyle Decl.” shall refer to the declaration of Dr. James Boyle in support of

Defendant’s Opposition to Plaintiffs’ Motion for Summary Judgment.
15.

“Leibnitz Ex. __,” shall refer to exhibits attached to the Leibnitz Declaration.

16.

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

17.

“Gupta Ex. __,” shall refer to exhibits attached to the Gupta Declaration.

18.

“Schoenberg Ex. __,” shall refer to exhibits attached to the Schoenberg

Declaration.
19.

“Boyle Ex. __,” shall refer to exhibits attached to the Boyle Declaration.

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PUBLIC VERSION
DEFENDANTS’ RESPONSES TO PLAINTIFFS’ “UNCONTROVERTED” FACTS
Fact 1. Disputed. Defendants received notice of alleged infringement regarding
approximately 8 million unique links, not files. Titov Opp. Decl. ¶ 26. Plaintiffs’ expert
concedes that 113,406,857 files have been uploaded to Hotfile, meaning that only 8.8% of files
uploaded to Hotfile have been accused of infringement. Foster Decl. ¶ 62; see infra DRSF 37.
Fact 2. Disputed

Defendants had no reason to do so
given Plaintiffs’ praise of Hotfile’s copyright enforcement efforts and Hotfile’s reliance upon
Plaintiffs’ superior resources to police their own works. See infra DRSF 34, 36.
Fact 3. Disputed. Hotfile complied with the DMCA’s safe harbor provisions by
terminating accounts of repeat copyright infringers and processing takedown notices from
copyright holders within 48 hours. See DUSF ¶ 18. Hotfile used its discretion in investigating
reported uploaders of allegedly infringing files and terminating users who were the subject of
multiple notices on receipt of complaints from copyright owners. See Titov Decl. ¶¶ 31, 33.
Fact 4 & 4.a. Disputed. See supra DRSF 3.
Fact 4.b. Disputed

That Hotfile moved forward with SRAs (at Plaintiffs’ request), MD5 hashing and a terminationon-specific-request policy instead of a strikes-based policy does not counter this email or show
that Hotfile was unreasonable. In any event, Hotfile did perform manual reviews of, terminate,
and stop payments to accounts of users with numerous complaints at content owners’ requests.
Fact 4.c.*† Disputed.

Fact 4.c.i.* Disputed

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Fact 4.c.ii.* Disputed.
There is no
suggestion, for example, tha

provided anything more than a takedown notice

before Hotfile initiated terminations at their behest.
Titov Opp. Decl.
¶ 35. It was thus not unreasonable for Hotfile to rely on Plaintiffs’ praise of Hotfile’s efforts to
combat infringement. See infra DRSF 34, 36.
Fact 4.d. Disputed. Defendants’ cautiousness due to pending litigation is immaterial.
Fact 4.e.* Disputed. Plaintiffs cannot authenticate this comment from an unknown
Internet user unless they wrote it themselves; there is no evidence Defendants saw the posting.
Fact 5.a.*† Disputed. Hotfile did not track strikes before February 18, 2011 and has
learned of wide abuse by Warner and Plaintiffs’ agents who used the SRA tool to wrongfully
takedown files with no authorization to do so. Such wrongful takedowns should not be strikes,
yet Plaintiffs included them in their expert’s figure. Records show that LeakID and others
continuously sent takedowns for files that were already deleted, dozens of times. Three strikes is
not mandated in the law, and Hotfile managed 2,884,928,361 downloads, 123,344,533 uploads,
and 5,287,163 registered users while utilizing the services of approximately

Fact 5.a.i.*† Disputed. Immaterial; the files uploaded at any particular time cited by
Plaintiffs is not meaningful; there is no evidence these were infringing. See supra DRSF 5.a.
Fact 5.a.ii.† Disputed. Plaintiffs’ statistic is meaningless for the reasons described
above; there is no evidence these were infringing. See supra DRSF 5.a.
Fact 5.a.iii.*† Disputed. Plaintiffs’ statistic extrapolates from the prior meaningless
statistic in PSUF 5.a.ii. That Plaintiffs’ experts, through flawed analysis, denoted 25,000 of
Hotfile’s 5,287,163 registered users as “bad” has no correlation to copyright infringement. The

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1.5 billion downloads number is also irrelevant; there is no evidence these were infringing.
Fact 5.a.iv. Disputed. Plaintiffs’ conclusion that such users were “repeat infringers” is
unfounded and unsubstantiated by the evidence. See supra DRSF 5.a.
Fact 5.a.v. Disputed; immaterial. Such users made up a small fraction of the total
number of registered users of Hotfile. See supra DRSF 5.a.
Fact 5.b.*† Disputed. Immaterial; Hotfile only terminated 4% of its known uploaders,
and 22,447 (0.42%) of its users; over 15,000 Affiliates were not terminated. Titov Opp. Decl.
¶ 37. Plaintiffs fails to specify a period when such users earned “strikes.” See supra DRSF
5.a.1-v.
Fact 6. Disputed. Immaterial; Hotfile “designated an agent to receive notifications of
claimed infringement” on its website since its launch in February 2009. Initially, content owners
could use a report abuse form “available [] on [the Hotfile] website in a location accessible to the
public” to reach its abuse department at this email box. DSUF ¶ 6. By April 2009, Hotfile.com
advised: “To exercise your DMCA rights, your Proper DMCA Notice must be sent to Designated
Agent of hotfile.com to email: [e-mail].” Id. ¶ 7. Yeh Exs. 25 and 6 (Luchian Dep.
at 17:17-18:7) have nothing to do with registration at the Copyright Office. Plaintiffs never had
difficulty contacting Hotfile with takedown notices. See Titov Decl. ¶ 13, Exs. 15, 19; see also
Gupta Decl., Ex. 14, Defs.’ Suppl. Am. Resp. to Pls.’ Interrog. No. 2.
Fact 7. Disputed. Immaterial; Hotfile made the [e-mail] address available on
its site since the outset. DSUF 4.
Fact 8.* Disputed. Immaterial; the physical address listed for Hotfile’s DMCA agent is
that used by the agent, Incorporate Now, for all its clients. Leibnitz Ex. 22 (Luchian Dep.) at
129:6-130:14.
Fact 9.a.i. Disputed.

Fact 9.a.ii. Undisputed.
Fact 9.a.iii. Disputed.

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Fact 9.a.iv. Disputed. Immaterial; Hotfile permits uploaders to obtain several URLs for
every upload so the uploader can track downloads by different population segments (e.g., how
many times downloaders accessed one’s photo album from Facebook versus Twitter). Titov
Opp. Decl. ¶ 49. Plaintiffs have no evidence that before hash-blocking, users exploited duplicate
URLs to propagate infringement, so that the takedown of one infringing URL would not impact
the operation of another URL relating to the same content. Before August 2009, only 48,094 (or
1.7%) of the 2,852,406 files stored at Hotfile had duplicate URLs, and only 117,931 (4.1%) of
Hotfile’s files were subject to takedown notices. Id.
Fact 9.a.v. Undisputed for August 2009 period. Otherwise, disputed. Supra DRSF 38.
Fact 9.b.* Disputed. Immaterial; URL does not indicate file content or infringement.
See infra DRSF 35.
Fact 9.c.* Disputed. Hotfile has exchanged 701,116 e-mails with users. Titov Opp.
Decl. ¶ 44.

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Fact 10.a.*† Disputed. The magnitude of alleged infringement was low. See infra
DRSF 10.a.iv (8% of files subject to notices). Hotfile was never aware of Plaintiffs’ misleading
alleged statistics. Plaintiffs’ study is flawed. See Levy Decl. ¶ 36; Boyle Decl. ¶¶ 10-23.e; supra
DRSF 10.a.i.
Fact 10.a.i.*† Disputed. Plaintiffs’ skewed download numbers do not count each
download equally. Plaintiffs’ expert failed to consider all “files available” on Hotfile and instead
limited himself to files downloaded on Hotfile (i.e., 45% of the files available). In that 45%, he
concedes that infringement rates may be zero for 35 months of Hotfile’s 36 month existence.
Leibnitz Ex. 37 (Waterman Dep.) at 83:8-85:10, 85:12-18, 86:18-21, 87:7-20, 88:17-90:3. In the
one month of downloads that he did examine (i.e., January 2011), which was 1.3% of Hotfile’s
activity, he only sampled a nonrepresentative fragment of the 1.3% of downloads, excluding
billions of internet users and broad categories of downloads available from Hotfile. Levy Decl.
¶¶ 28-35. Plaintiffs’ statistical errors were compounded by systematic legal errors by its biased
copyright law “expert.” See Boyle Decl. ¶¶ 10-23.e. Vobile data shows that only 3.4% of
attempted uploads have been blocked as unauthorized by the copyright holder. See infra DRSF
40. Indeed, a majority of Hotfile’s uses involve storage and space-shifting. Boyle Decl., ¶¶ 1112; 19-20; Ex. 2 ¶¶ 11-27. Legal downloads drive Hotfile’s business, including the top
downloaded files on Hotfile, numerous authorized videos (including Plaintiffs’ trailers), and
open source and freeware software. Boyle Ex. 1 (Boyle Rpt.) ¶ 9(i).

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Plaintiffs’ expert as non-infringing drove sales to Hotfile five times more than Plaintiffs’ worksin-suit; it would be counterproductive for Hotfile to support infringement, even setting aside the
risk of ruinous litigation costs imposed by Plaintiffs. Titov Opp. Decl. ¶ 15; Boyle Ex. 2, ¶ 53.
Fact 10.a.ii.*† Disputed. As 93% of Hotfile’s uploaders never received a takedown
notice, Plaintiffs’ 98% figure is unreliable. Titov Opp. Decl. ¶ 31. Their statistician and
copyright “experts” excluded storage, the largest use of Hotfile, and failed to account for fair use,
space-shifting and authorized uses. Levy Decl ¶ 33-36; Boyle Decl. ¶¶ 10-23.3; see supra DRSF
10.a.i.
Fact 10.a.iii.*† Disputed; immaterial. See supra DRSF 10.a.i. Even taking Plaintiffs’
statement as true, deletions can occur for reasons unrelated to copyright infringement, which is
acknowledged to be about 20%. Foster Decl. ¶ 63. Plaintiffs’ allegation that such deletions were
“related” to copyright infringement is grossly overbroad; their approach counts all files uploaded
by any terminated user regardless of whether each file itself infringed.
Fact 10.a.iv.*† Disputed. Only 8% of Hotfile’s uploaders have uploaded over 171 files,
so this statistic excludes 92% of Hotfile uploaders. Levy Decl. ¶40. Less than 14.2% of known
uploaders were suspended, even after Hotfile terminated based on strikes (which includes access
termination based on false notices). Foster Decl. ¶ 50. Of Hotfile’s uploaders, 93% percent
never received a single takedown notice. Titov Opp. Decl. ¶ 31. See supra DRSF 10.a.i-ii.
Fact 10.a.v.*† Disputed. Immaterial; Plaintiffs’ statistics are flawed. DRSF 10.a.i, iv.
Prior to the filing of the complaint, 46,562 users (1.1% of Hotfile users at that time) received at
least one takedown notice. Titov Opp. Decl. ¶ 28.
Fact 10.a.vi.*† Disputed. Immaterial; terminated Affiliates accounted for only 8.4% of
uploaded files. Foster Decl., Ex. J. Only 10.9% of files uploaded by Affiliates ever received a
copyright notice. Titov Opp. Decl. ¶ 39. Those notices included over two million DMCA noncompliant and false takedown notices. Titov Opp. Decl. ¶ 29. Over 15,000 affiliates were not
terminated.
Fact 10.a.vii. Disputed. Under Hotfile’s repeat infringer policy, it terminated users
when they received three allegations of copyright infringement, even where based on false
notices and SRA requests. When Hotfile suspended these users, it took down not just the 67,341
files (3 strikes for each 22,447 suspended user) subject to takedown notices, but millions of other
files these users had posted that no one in over two years of Hotfile’s operation had ever

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identified as infringing. Titov Opp. Decl. ¶¶ 37-38. No evidence exists that fully 99.9% (67,341
/ 61,066,769) of these uploads infringed any copyright. Foster Decl. ¶ 52, Ex. G (last page).
Fact 10.b.* Disputed. Immaterial;

Fact 10.c.* Disputed. “Copyrighted content” does not equate to “infringing content.”
Plaintiffs’ assumption fails to consider authorized uses, storage and space-shifting. For example,
Plaintiffs use Yeh Ex. 30 (Titov 126) alleging a user downloaded “Alice in Wonderland,” but the
Lewis Carroll book “Alice in Wonderland” is in the public domain.

Furthermore,
filenames are not reliable indicators of content. Plaintiffs point to a URL containing the word
“salt” as a purported “red flag” of the Hollywood movie of that name. Yeh Ex. 30 (Titov 124).
In discovery, Plaintiff Columbia asserted infringement against a similar URL simply because it
contained the word “salt.” The video was not their movie; it contained a computer simulation of
a salt water aquarium bearing no copyright notices, a likely non-infringing video. Leibnitz Decl.
¶ 17, Ex. 16; see also infra DRSF 35. Furthermore, Plaintiffs fail to show that any of the URLs
in Yeh Ex. 30 correlate to Plaintiffs’ copyrighted content files. See supra DRSF 9.c. None of
this evidence qualifies as a “red flag.”
Fact 10.d.i.* Disputed. Immaterial; the sites referring the most users to Hotfile include
Google, Facebook, and YouTube. See infra DRSF 29

Absent complaint from content owners, Hotfile had

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no reason to investigate further. Titov Opp. Decl. ¶ 21. Payments from Hotfile to this user
related to non-copyrighted works; the lastdl links in Yeh Exs. 99-101 are for files called
“beer.rar.html” and “0117HJ.rar.html,” which Plaintiffs do not contend indicate Studio content.
Fact 10.d.ii. Disputed.

Fact 10.d.iii.* Disputed. The names of third-party websites outside of Hotfile’s control
do not indicate the copyright status of the files on the sites and are consistent with sites that host
reviews, trailers and licensed content. Hotfile did not know the status of these sites or the of any
files they may have hosted at Hotfile. Plaintiffs cite 186 pages of “screenshots of various [‘link
sites’],” which do not reflect the pre-Complaint time period at all. Yeh Decl. ¶ 44 & Ex. 43.
Only 8 pages of Yeh Ex. 43 mention Hotfile, and none provided operative links to Hotfile. Titov
Opp. Decl. ¶ 12. The assertion of wrongdoing by 62 of Hotfile’s 24,753 referring websites of
which there was no evidence Hotfile was aware in no way suggests that Hotfile condoned
infringement; none of the sites provided enough traffic to appear in Hotfile’s top 500 sources of
traffic in the past year. Id. Although Plaintiffs also assert that 11 of these websites were shut
down by the federal authorities or found liable in civil actions, they do not indicate which (if
any) of those websites had any affiliation with Hotfile. Titov Opp. Decl. ¶ 20.
Fact 10.d.iv. Disputed

Plaintiffs fail to allege that any of these sites uploaded a
material portion – or indeed any – of the verified files-in-suit.
Fact 10.e.i. Disputed. Immaterial; the cited testimony fails to show any knowledge that
this URL was infringing. URLs do not indicate infringement. See supra DRSF 10.c. The URL
in Yeh Ex. 44 is not a download link for the Pussycat Dolls’ album. Titov Opp. Decl. ¶ 50. That
band is documented to authorize free internet distribution. See UMG Recordings, Inc. v. Veoh
Networks, Inc., 665 F. Supp. 2d 1099, n. 13 (C.D. Cal. 2009).
Fact 10.e.ii. Disputed. Immaterial; there is no evidence that the URL in Yeh Ex. 45 is
Plaintiffs’ copyrighted content. Even if it was not authorized for use in a computer test,
Plaintiffs cannot bypass infringement and fair use analyses. See supra DRSF 10.c.

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Fact 10.e.iii. Disputed. Defendants did not know the contents of the tweeted link. Titov
Opp. Decl. ¶ 51. Plaintiffs have no evidence that they have ever obtained the content file,
compared it to any allegedly-copyrighted work, verified the copyright of that work, or inquired
about the file’s authorization status from its owner. See supra DRSF 9.c, 10.c.
Fact 10.f.i. Disputed. See infra DRSF 16.b.v.
Fact 10.f.ii. Disputed. Immaterial; on February 24, 2010, after Hotfile obtained
dismissal of a copyright suit, Warner’s agent first contacted Hotfile to propose a deal for Warner
to provide links to its content on ecommerce sites for Hotfile to include on its website. Titov
Decl. ¶ 28, Ex. 4; Yeh Exs. 50-51.

Fact 10.f.iii. Disputed.

This demonstrates the impropriety of assuming infringement based on titles. See infra DRSF 35.
Immaterial;

Fact 10.g. Disputed.

In fact, the blocking did
not occur because of infringement, but rather because all of the user’s files were empty – and
RapidShare, like Hotfile, blocks uploading of empty files. Titov Opp. Decl. ¶ 54.
Fact 10.h. Disputed.

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Fact 11.a. Disputed.

Fact 11.b.i. Disputed. Hotfile prohibits searching files on its servers as it is antithetical
to Hotfile’s purpose of providing private storage. Levy Decl. ¶¶ 9, 37; Leibnitz Ex. 2 (Titov
Dep.) at 445:23-446:5; Cromarty Decl. ¶¶ 121-126.
Fact 11.b.ii.* Disputed. Immaterial. Hotfile never knew of much less relied on
Plaintiffs’ cited EFF advisory document. Yeh Ex. 55; Titov Opp. Decl. ¶ 13. Further, the
publication is directed at peer-to-peer networks, which Hotfile is not. Cromarty Decl. ¶ 112.
Fact 11.c. Disputed. Immaterial; Hotfile has not reviewed what its users were
downloading outside of this litigation because such review is not required and investigation of
100 million+ files is impossible and futile. Titov Decl. ¶ 6. Hotfile did not purposefully avoid
exploring what its users were downloading. Leibnitz Ex. 2 (Titov Dep.) at 706:5-8.
Fact 11.d. Disputed. See infra DRSF 3, 4(a) & (b).
Fact 12.* Disputed. See infra DRSF 16.
Fact 13. Undisputed for purposes of this motion.
Fact 14. Disputed.

Fact 15. Disputed.* Plaintiffs rely on inadmissible and improper attorney testimony to
establish the infringement component of their claim. See supra DRSF 9.c. See Motion to Strike.
Fact 16.a. Disputed. See infra DRSF 16.a.i-xiii.
Fact 16.a.i. Undisputed for purposes of this motion.
Fact 16.a.ii. Disputed. Affiliates are paid to upload files that attract users to become
Premium members. Yeh Ex. 58 at 1. While providing access to content may be one thing that
attracts users to Hotfile, providing access to infringing content is not.

Fact 16.a.iii. Disputed. The number of times a file is downloaded is just one factor in

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how Hotfile calculates payments to Affiliates. Leibnitz Ex. 2 (Titov Dep.) at 651:4-655:17. The
current Affiliate program does not compensate for downloads. Titov Opp. Decl. ¶ 7.
Fact 16.a.iv. Disputed. Seeking maximum referrals from minimum expenditures of
server resources, upload resources, bandwidth, and diskspace evidences business sense. Yeh Ex.
61 at 13. Hotfile is predominantly used for storage. See infra DRSF 24.
Fact 16.a.v. Disputed. Plaintiffs ignore the topic addressed on Hotfile’s site: tips for
affiliates to increase their earnings. Yeh Ex. 59. Hotfile’s statement to advertising partners (less
than 1% of Hotfile’s user base (0.53%)) in no way changes the fact that the remainder of users
primarily employ Hotfile for storage. Titov Opp. Decl. ¶ 4. See infra DRSF 24.
Fact 16.a.vi. Disputed. Storage is the predominant use of Hotfile, and Premium
members get permanent storage. See infra DRSF 24.
Fact 16.a.vii.*† Disputed. Fifteen of the 25 most downloaded files on Hotfile are open
source software programs. Boyle Decl; n. 3; Leibnitz Ex. 7 (Ex. A). Six open source software
programs alone accounted for more than 1.7 million of Hotfile’s downloads. Boyle Ex. 19i.
None of Plaintiffs’ works are among the top 100 downloads, and state-of-the-art fingerprinting
technology identifies no infringement among Hotfile’s top 100 downloads. See supra DRSF
10.a.i-vii. See also DRSF 10(a).
Fact 16.a.viii. Disputed. Immaterial; providing access to copyright infringing content is
not part of Hotfile’s business model for attracting users to Hotfile
“Popular” is not infringing. See supra DRSF 16.a.vii.
Fact 16.a.ix. Disputed. Since smaller files can be aggregated as easily as bigger files
can be divided into smaller parcels, Defendants had no reason to believe that larger files more
likely infringe. Titov Opp. Decl. ¶ 7. Plaintiffs’ correlation of file size with infringement lacks
scientific validity, given that it excludes: (1) 56% of the files on Hotfile (i.e., those never
downloaded); (2) 97% of the months of Hotfile’s operation (i.e., any month but January 2011);
and (3) an unknown percentage of Hotfile’s downloaded files (e.g., files downloaded by
Hotfile’s free users in three-quarters of the world’s nations, files downloaded using Hotfile’s
“hotlink” capability, and files uploaded by anonymous users). Levy Decl. ¶¶ 28-31.
Fact 16.a.x. Disputed. As Plaintiffs’ expert states, “[l]arger pieces of entertainment
content…can also be divided into several, smaller computer files [] to facilitate transmission and
copying,” so large files are not necessarily copyrighted content. Foster Decl. ¶ 8.

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Fact 16.a.xi.*† Disputed. See supra DRSF 16.a.ix-x.
Fact 16.a.xii.* Disputed

Titov Opp. Decl. ¶ 14. Plaintiffs cannot presume that the
anonymous poster on Yeh Ex. 86 at 6, which they failed to produce in discovery, is Mr. Titov.
Fact 16.a.xiii. Disputed. Immaterial; Defendants eliminated the website operator
payment program in early 2012. Titov Opp. Decl. ¶ 23. See infra DRSF 29.
Fact 16.b.i-ii. Disputed.

Those who uploaded the most–“good uploaders”–were more likely to
generate subscriptions to Hotfile. Mr. Ianokov never sought infringing content, and indeed
Hotfile’s “terms and conditions” forbade infringing content. See DRSF 16.a.iii-v.
Fact 16.b.iii.* Disputed. Plaintiffs’ characterization of the files as “infringing” is
unfounded and unsubstantiated; the user’s statement does not indicate what the specific content
is or whether the user owns the rights to such content. Yeh Ex. 64 at 5. Further, the post
allegedly by Mr. Ianakov does not even respond to the aforementioned user’s comment; Mr.
Ianakov responds to a posting by a promoter of the competing cyberlocker RapidShare by
touting Hotfile’s reliability and absence of ads. Yeh Ex. 64 at 5. Mr. Ianakov never mentions
TV shows, infringement,

, or any of

other three postings in the

preceding day, and responds instead to a previous posting by an entirely different user.
Fact 16.b.iv. Disputed.

Affiliate programs are common
marketing tools for Internet companies. Cromarty Decl. ¶¶ 69-73. Megaupload was indicted
very recently and has not been convicted of anything. Hotfile’s terms of service expressly
prohibited the uploading of unauthorized content at all times. DSUF 2; See DRSF 10.e.iii.
Fact 16.b.v. Disputed.

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This never suggests that Hotfile tolerated infringement.

Leibnitz Ex. 2 (Titov Dep.) at 637:15-20.

Yeh Ex. 65.
Fact 16.b.vi.* Disputed. See infra DRSF 16.f.
Fact 16.c.*† Disputed. See supra DRSF 1-5.
Fact 16.d.*† Disputed. See supra DRSF 5, 10.a. The majority of downloads on Hotfile
were not copyright infringing; out of the 2.9 billion downloads on Hotfile’s website, only 13.6%
were downloads of files that received a takedown notice. Titov Opp. Decl. ¶ 27.
Fact 16.e. Disputed. Defendants’ marketing and business model emphasizes the use of
Hotfile for storage. See infra DRSF 16.e.i-iii, 24. Hotfile’s revenues are entirely from premium
access fees paid by users to obtain faster access. The fee is content-neutral and is not based on
what or how much users consume—they could be using Hotfile for personal cloud storage, file
transfer, space-shifting, downloading open source software, or streaming video. Titov Decl. ¶ 7.
Fact 16.e.i. Undisputed for purposes of this motion.
Fact 16.e.ii.*† Disputed. Plaintiffs mischaracterize evidence. Yeh Exs. 96, 97 merely
show that users can purchase Premium memberships, which offer benefits, such as unlimited
storage and higher redundancy of file storage. Leibnitz Ex. 2 (Titov Dep.) at 443:11-22. The
possibility that users could switch to other service providers does not mean that “Hotfile must
offer copyrighted content. The top 100 most downloaded files on Hotfile are not Plaintiffs’
copyrighted content. See supra DRSF 10.a.i-vii. The most popular files are non-infringing. See
infra DRSF 30, 32.

See also DRSF 16.a.
Fact 16.e.iii.*† Disputed; immaterial. Storage is Hotfile’s predominant use and part of
what Premium users pay for. See infra DRSF 24. Even if certain users sought unauthorized

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content, Hotfile’s expressly prohibits such activity and deletes files found to be infringing.
Leibnitz Ex. 2 (Titov Dep.) at 276:7-278:16, Yeh Ex. 66 at 1.

Fact 16.f.i. Disputed. Immaterial;

Hotfile was founded to compete with services provided by
many file hosting services available at the time, which included Google® Docs, Windows® Live
SkyDrive, RapidShare®, DepositFiles®, and MediaFire®, in addition to MegaUpload®. Yeh
Ex. 9 ¶ 8. Megaupload was indicted very recently and has not been convicted of anything.
Fact 16.f.ii. Disputed.

Hotfile’s policy of deleting files for inactivity was
based generally on other websites, such as Rapidshare, not just Megaupload. Leibnitz Ex. 2
(Titov Dep.) at 710:24-711:15.
Fact 16.f.iii.*† Disputed; immaterial. See supra DRSF 9.a, 11.b, 16.a, 16.a.vi., 16.a.xii,
16.e, 16.f.i. Yeh Ex. 98 is prejudicial, hearsay, and unfounded; an indictment is not proof of
actual facts. Megaupload’s business model does not parallel Hotfile’s: among other things,
Megaupload advertised on its site, Yeh Ex. 98 ¶ 4, it had an internal database in which it could
search directly for infringing content, id. ¶ 14, it did not implement hash blocking of copyrighted
content, id. ¶ 24, its employees copied content from sites like YouTube.com to populate
Megaupload’s sites, id. ¶ 69(h), its employees downloaded copyrighted content for their own
personal use, id. ¶¶ 69(bb, dd, ee), and its employees referred users to link cites to find movies,
id. ¶ 69(ppp). Hotfile does none of those things. For example, Hotfile does not offer

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advertising, see supra DRSF16.b.iii, Hotfile has no searchable index of content, id. 19.b., its
employees never downloaded copyrighted content for personal use, id. 10.b, and never referred
users to link sites or copyrighted content, id. 10.d.i-iv.
Fact 16.g.* Disputed. See supra DRSF 9.c.
Fact 16.h.* Disputed. See supra DRSF 10.b.
Fact 16.i.*† Disputed. See supra DRSF 9.a.iv-v.
Facts 16.j.i Disputed. Vobile’s vCloud 9 fingerprinting technology was only available
in September of 2011. Hotfile implemented vCloud 9 shortly after. See infra DRSF 40. Hotfile
is one of only a handful of file hosting companies to use Vobile’s technology. Leibnitz Ex. 18
(Wang Depo.) at 68:25-69:5.
Facts 16.j.ii. Disputed. Digital fingerprinting technology is not guaranteed to be
completely accurate. Leibnitz Ex. 5 (Cromarty Dep.) at 187:23-189:11; Leibnitz Ex. 23 (Zedek
Dep.) at 67:16-68:7. Fingerprinting technology is constantly developing, such that its
effectiveness varies widely over time. Leibnitz Ex. 23 (Zedek Dep.) at 67:16-68:7, 168:15-20;
Leibnitz Ex. 24 (Kang Dep.) at 208:19-209:2.
Facts 16.j.iii. Disputed; immaterial. Hotfile had already implemented many other
countermeasures, including hash filtering. See infra DRSF 16.j.iv.

Defendants believed that their copyright enforcement efforts were sufficient per
Plaintiffs’ praise of Hotfile’s antipiracy work. See infra DRSF 34.

Immediately after Plaintiffs finally communicated that fingerprinting was an
important copyright enforcement tool to Hotfile, Hotfile began implementing that very
technology. Leibnitz Ex. 2 (Titov Dep.) at 509:25-510:23.
Facts 16.j.iv. Disputed.

Hotfile implemented MD5 hashes, so that once subject to a takedown notice, identical
copies of the same file could not be downloaded in the future.

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Fact 17.*† Disputed. See supra DRSF 9, 10, 11.
Fact 18. Disputed; legal conclusion and mischaracterizes evidence. Plaintiffs fail to
identify the specific infringing content allegedly on Hotfile’s servers. See supra DRSF 9.c.
Fact 19.a. Disputed. Immaterial;

Fact 19.b. Disputed. Immaterial.

One cannot accurately block
content files based on other matching criteria such as file name. See infra DRSF 35. Hotfile has
no searchable index that would allow it to locate files based on the unreliable information they
do have regarding file content. Leibnitz Ex. 2 (Titov Dep.) at 440:4-15; 445:9-12.
Fact 20.a.*† Disputed. See supra DRSF 10(a)(i), 10(a)(iii), 16(a), 16(e).
Fact 20.b. Disputed; immaterial. That Defendants earn money from user subscriptions
does not mean that Defendants profit from infringement. Hotfile charges a “flat fee” to Premium
subscribers. See infra DRSF 32.
Fact 21.a.i. Disputed. Mr. Titov has limited areas of responsibility

Fact 21.a.ii. Disputed; immaterial.

Fact 21.b.i. Disputed.

Fact 21.b.ii. Disputed.

Immaterial;

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Fact 21.c.i. Undisputed.
Fact 21.c.ii. Disputed.
Leibnitz Ex. 2 (Titov
Dep.) at 92:12-93:23; Yeh Ex. 77 at ¶5.
Fact 21.c.iii. Disputed. Mr. Titov formed Lemuria after September 29, 2009. Yeh Ex.
79. Mr. Titov did not form Lemuria due to complaints from Limelight Networks. Titov Decl.
¶ 41.

Fact 21.c.iv. Disputed. Lemuria provides web-hosting and related technical services to
Hotfile, contracting with ISPs for internet connection and with a collocation facility. Yeh Ex. 1
(Titov Dep.) at 47:12-22.
Titov Opp. Decl. ¶ 57.
Fact 21.c.v. Undisputed for purposes of this motion.
Fact 21.c.vi. Disputed; immaterial. See supra DRSF 21.c.iv.
Fact 22.a.i. Disputed characterization.

Fact 22.a.ii. Disputed characterization; immaterial.

Fact 22.a.iii. Disputed. See supra DRSF 22.a.i.

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Mr. Titov’s input was limited to how to store information in

Hotfile’s database rather than the business terms of the program. Schoenberg Ex. A (Titov Dep.)
596:18-597:2.
Fact. 22.b.&b.i-ii. Disputed; immaterial.
Fact 22.c. Disputed.

Fact 22.d.i.* Disputed.
Mr. Ianokov was responsible
for user communications regarding DMCA takedown notices and their implementation and was
supervised by

Leibnitz Ex. 2 (Titov Dep.) at 32:12-34:19, 34:25-35:5;

Fact 22.d.ii. Disputed. Mr. Titov hired Hotfile’s DMCA agent after authorization from
Hotfile’s shareholders. Yeh Ex. 1 (Titov Dep.) at 69:5-69:9. Mr. Titov does not manage
Hotfile’s DMCA agent. Mr. Ianokov, under

, handled takedown

notices and occasionally consulted Mr. Titov on technical matters. Supra DRSF 22.d.i.
Fact. 22.e. Disputed. Mr. Titov does not have authority to make unilateral decisions on
important aspects of Hotfile’s business or operations. Titov Decl. ¶ 39; TSUF 10. Mr. Titov did
not devise or manage Hotfile’s Affiliate program. TSUF 7. Mr. Titov does not handle daily
operations of Hotfile. TSUF 11. Before this complaint, it was not a part of Mr. Titov’s job to
give input on Hotfile’s repeat infringer policy. Yeh Ex. 1 (Titov Dep.) at 605:23-606:3.
Fact 22.f.i. Disputed; immaterial.

To the
extent that Hotfile did not implement hash blocking prior to August 2009, it was not because of
any a policy decision. Id. at 602:22-603:1.
Fact 22.f.ii. Disputed; immaterial.

Fact 22f.iii. Disputed; immaterial.

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Fact 23.a.* Disputed. See supra DRSF 21, 22(c), &22(e) supra.
Fact. 23.b.i. Disputed; immaterial

Fact 23.b.ii-iii. Disputed; immaterial. See Brief at VI.B.
DEFENDANTS’ STATEMENT OF ADDITIONAL MATERIAL FACTS
Fact 24. Hotfile is predominantly used for storage. See Titov Opp. Decl. ¶ 4. Hotfile’s
website repeatedly emphasizes the storage benefits of the premium membership. See, e.g., (Yeh
Ex. 59) (“Your files will be stored forever as long as you are a premium member.”).
Fact 25. Hotfile is not a peer-to-peer network. See Cromarty Dec. at ¶ 112.
Fact 26. Hotfile does not access users’ uploaded files out of respect for user privacy.
Titov Opp. Decl. ¶ 2.
Fact 27. Hotfile forbids the uploading, downloading, sharing, or storing of copyrighted
works without authorization under its Terms of Service and an Intellectual Property Policy.
Each new user must explicitly agree to the Terms of Service. Titov Decl. ¶ 3.
Fact 28. The most popular files shared on Hotfile are “open source” software programs
created to be freely copied, improved, and distributed over the Internet. Leibnitz Ex. 4; Boyle Ex.
1 at ¶ 17.
Fact 29. The sites referring the most users to Hotfile include Google, Facebook, and
YouTube. Titov Opp. Decl. ¶ 19.
Fact 30. Hotfile has many noninfringing uses. Boyle Decl., Ex. 1, ¶¶ 9i.-iv.; Ex. 2 ¶¶ 20,
21, 24, 25, 29-33, 37-39.
Fact 31. Approximately 90% of Hotfile’s users are “free” users who do not have
Premium accounts and pay nothing to Hotfile. Titov Opp. Decl. ¶ 11. 99% of Hotfile’s users do
not participate in the Affiliate program. Titov Opp. Decl. ¶ 24. Some users do not register an
account with Hotfile at all. Leibnitz Ex. 2 (Titov Dep.) at 17:21-25.
Fact 32. Hotfile charges a “fixed fee” to Premium subscribers, regardless of the content
they upload or download. Titov Decl. ¶ 7; DSUF 20-21. Users downloading a non-infringing
work were more likely to purchase a Premium subscription than one downloading an infringing
work. Boyle Ex. 2 (Boyle Rebuttal Rpt.) at ¶ 53.

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Fact 33. Hotfile’s expeditious takedown is unquestioned. See Compl. ¶ 38 (no
allegation of failure to expeditiously takedown in response to DMCA notices); Gupta Ex. 17
[Studios’ Response to Interrogatory No. 20]).
Fact 34. Plaintiffs and their agents praised Hotfile’s efforts to combat copyright
infringement. DSUF 11; Leibnitz Exs. 28, 29, 30, 31, 32, 33, 34, 35.
Fact 35.

Plaintiffs’ counsel is not competent to establish
infringement of 10,390 works. Yeh Decl. 119.
Fact 36. Hotfile relied not only on the Studios’ failure to request any additional
countermeasures, but also on their consistent praise of Hotfile’s copyright enforcement efforts.
See supra, DRSF 34. Hotfile maintained its policy of providing expeditious notice and
takedown, and SRA which it supplemented with MD5 hashing. Titov Opp. Decl. ¶¶ 9, 47.
Hotfile strengthened its repeat infringer policies and adopts new measures to combat
infringement, including the “Hotfile Copyright Education” program. Titov Decl. ¶ 36.
Fact 37. Since inception, Hotfile received notices of alleged infringement either through
DMCA notices or SRA accounts for 8,330,465 of its 123,344,533 files (6.8% of its files). Titov
Opp. Decl. ¶ 26.
Fact 38. In August 2009, Hotfile began to disable any master file subject to a takedown
notice via “hash-blocking.” Prior to that, Hotfile only received takedowns for 117,937 URLs,
thus Hotfile began hash-blocking before over 98.6% of notices issued. Titov Opp. Decl. ¶ 48.
Fact 39. Hotfile began offering its Special Rightsholder Account takedown tool as early
as August 2009, providing content owners with the ability to instantaneously takedown multiple
files with a single click. Titov Opp. Decl. ¶ 9.
Fact 40. Within months of this suit, Hotfile implemented Vobile’s state-of-the-art digital
fingerprinting technology and implemented Vobile’s vCloud 9 in July of 2011. See Titov Decl.
¶¶ 34-35. After more than 6 months of implementation, Vobile determined that only 3.4% of
uploaded video files match copyrighted works. Titov Opp. Decl. ¶ 56.

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