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

Filing 409

REPLY to Response to Motion re 301 MOTION for Summary Judgment >WARNER BROS. ENTERTAINMENT INC.'S MOTION FOR SUMMARY JUDGMENT AND MEMORANDUM OF LAW IN SUPPORT OF MOTION (PUBLIC REDACTED VERSION)< >WARNER'S REPLY MEMORANDUM OF LAW IN SUPPORT OF WARNER'S MOTION FOR SUMMARY JUDGMENT (PUBLIC REDACTED VERSION)< filed by Warner Bros. Entertainment Inc.. (Attachments: # 1 Affidavit Reply Declaration of Jennifer V. Yeh in Support of Warner's Motion for Summary Judgment (public redacted version), # 2 Exhibit R to Declaration of Jennifer V. Yeh, # 3 Exhibit S to Declaration of Jennifer Yeh, # 4 Exhibit T to Declaration of J. Yeh, # 5 Exhibit U to Declaration of J. Yeh, # 6 Exhibit V to Declaration of J. Yeh, # 7 Exhibit W to Declaration of J. Yeh, # 8 Exhibit X to Declaration of J. Yeh, # 9 Affidavit Reply Declaration of Dr. Ian Foster in Support of Warner's Motion for Summary Judgment (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.
/
WARNER’S REPLY MEMORANDUM OF LAW IN SUPPORT OF WARNER’S
MOTION FOR SUMMARY JUDGMENT
[PUBLIC REDACTED VERSION]

TABLE OF CONTENTS

TABLE OF AUTHORITIES .......................................................................................................... ii
CITATION LEGEND .................................................................................................................... iv
ARGUMENT ...................................................................................................................................1
I.

HOTFILE MISSTATES THE LEGAL STANDARD. .......................................................1
A.
B.

512(f) Requires Actual, Subjective Knowledge. .....................................................2

C.
II.

Hotfile – Not Warner – Bears the Burden of Proof. ................................................1

512(f) Does Not Require A Manual Review Process, and There Is No
Evidence that A Human Review Process Would be More Accurate. ......................3

NO EVIDENCE SUPPORTS HOTFILE’S CLAIM THAT WARNER HAD
“KNOWLEDGE” OF SPECIFIC ERRORS........................................................................5
A.
B.

Hotfile’s Assertion of a

C.
III.

No Evidence Supports Hotfile’s Claim that Warner Knowingly Deleted
JDownloader. ...........................................................................................................5

Hotfile’s Remaining “Evidence” That Some Errors Might Have Been
Preventable Does Not Support a Finding of Knowing Misrepresentation. .............7

False Positive Rate Has No Factual Basis. ...............6

NO EVIDENCE SUPPORTS HOTFILE’S DAMAGES CLAIM. .....................................8

CONCLUSION ..............................................................................................................................10

TABLE OF AUTHORITIES
CASES
A&M Records, Inc. v. Napster, Inc., 239 F.3d 1004 (9th Cir. 2001) ...............................................4
Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (1986) ..................................................................10
Arista Records, Inc. v. MP3Board, Inc., 00 Civ. 4660 (SHS), 2002 U.S. Dist. LEXIS
16165 (S.D.N.Y. Aug. 28, 2002) ...............................................................................................2
Arista Records LLC v. Lime Group LLC, 784 F. Supp. 2d 398 (S.D.N.Y. 2011) ...........................9
Arista Records LLC v. Usenet.com, Inc., 633 F. Supp. 2d 124 (S.D.N.Y. 2009) ............................9
Biosafe-One, Inc. v. Hawks, 524 F. Supp. 2d 452 (S.D.N.Y. 2007) ............................................1, 2
BMG Music v. Gonzalez, 430 F. 3d 888 (7th Cir. 2005) .................................................................4
Cabell v. Zimmerman, 09 Civ. 10134 (CM), 2010 U.S. Dist. LEXIS 25486 (S.D.N.Y.
Mar. 12, 2010)............................................................................................................................2
Columbia Pictures Industries, Inc. v. Fung, No. CV 06-5578 SVW, 2009 WL 6355911
(C.D. Cal. Dec. 21, 2009) ..........................................................................................................9
Dudnikov v. MGA Entertainment, Inc., 410 F. Supp. 2d 1010 (D. Colo. 2005) ...................... 2-3, 3
Evers v. General Motors Corp., 770 F.2d 984 (11th Cir. 1985) ......................................................9
Floyd v. McNeil, Case No. 4:10cv289 – RH/WCS, 2011 U.S. Dist. LEXIS 150619 (N.D.
Fla. Dec. 5, 2011).....................................................................................................................10
Ground Zero Museum Workshop v. Wilson, No. DKC 09-3288, 2011 U.S. Dist. LEXIS
94666 (D. Md. Aug. 24, 2011)...................................................................................................3
Lenz v. Universal Music Corp., No. C 07-3783JFRS, 2008 WL 4790669 (N.D. Cal. Oct.
28, 2008) ....................................................................................................................................4
Lenz v. Universal Music Corp., No. C 07-3783 JF, 2010 WL 702466 (N.D. Cal. Feb 25,
2010) ..........................................................................................................................................8
Lenz v. Universal Music Corp., 572 F. Supp. 2d 1150 (N.D. Cal. 2008) ........................................3
Martinez v. Weyerhaeuser Mtg. Co., 959 F. Supp. 1511 (S.D. Fla.1996) .......................................9
Metro-Goldwyn-Mayer Studios, Inc. v. Grokster, Ltd., 545 U.S. 913 (2005) .................................6
Rossi v. Motion Picture Ass’n of America, Inc., 391 F.3d 1000 (9th Cir. 2004) .....................2, 3, 4

ii

Rossi v. Motion Picture Ass’n of America, Inc., Civ. No. 02-00239 BMK, 2003 U.S. Dist.
LEXIS 12864 (D. Haw. Apr. 29, 2003) .....................................................................................4
Third Educational Group, Inc. v. Phelps, 675 F. Supp. 2d 916 (E.D. Wis. 2010) ......................1, 2
Thomas v. George, Hartz, Lundeen, Fulmer, Johnstone, King, and Stevens, P.A., 525
F.3d 1107 (11th Cir. 2008) ........................................................................................................1
United States v. City of Miami, 115 F.3d 870 (11th Cir. 1997) .......................................................9
UMG Recordings, Inc. v. Augusto, 558 F. Supp. 2d 1055 (C.D. Cal. 2008), judgment
aff’d, 628 F.3d 1175 (9th Cir. 2011) ..........................................................................................2
Zubulake v. UBS Warburg LLC, 229 F.R.D. 422 (S.D.N.Y. 2004).................................................5
STATUTES
17 U.S.C. § 106 ................................................................................................................................9
17 U.S.C. § 512(f) ............................................................................................................................8
OTHER AUTHORITIES
Fed. R. Civ. Proc. § 26(g)(1) ...........................................................................................................5
Fed. R. Evid. 802 .............................................................................................................................9
ESI Symposium, The Sedona Conference, The Sedona Conference Best Practices
Commentary on the Use of Search and Information Retrieval Methods in EDiscovery, 8 Sedona Conf. J. 189 (2007) ..................................................................................6

iii

CITATION LEGEND
For the purposes of Warner Bros. Entertainment Inc.’s Reply Memorandum of Law in
support of Warner Bros. Entertainment Inc.’s Motion for Summary Judgment, the following
abbreviations shall be used:
1.

“Counterclaim” shall refer to the Second Amended Answer, Affirmative

Defenses, and Counterclaim of Defendant Hotfile Corporation to Plaintiffs’ Complaint dated
October 27, 2011 (Dkt. #161).
2.

“Foster Reply 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
March 11, 2012, filed herewith.
3.

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

President, Intellectual Property Counsel, Worldwide Antipiracy Operations of Plaintiff and
Counterdefendant Warner Bros. Entertainment Inc., (“Warner”), dated February 8, 2012, filed on
February 10, 2012 in support of Warner Bros. Entertainment Inc.’s Motion for Summary
Judgment (available publicly at Dkt. #308).
4.

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

Warner’s Statement of Uncontroverted Facts, filed on February 10, 2012 in support of Warner
Bros. Entertainment Inc.’s Motion for Summary Judgment (available publicly at Dkt. #302).
5.

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

Hotfile’s Counterstatement of Facts, filed on February 27, 2012 in opposition to Warner Bros.
Entertainment Inc.’s Motion for Summary Judgment.
6.

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

Warner Bros. Entertainment’s Motion for Summary Judgment, dated February 9, 2012, filed on
February 10, 2012 in support of Warner Bros. Entertainment Inc.’s Motion for Summary
Judgment (available publicly at Dkt. #301-9) .
7.

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

the Reply Declaration of Jennifer V. Yeh in support of Warner Bros. Entertainment Inc.’s
Motion for Summary Judgment, filed herewith. For the convenience of the Court, the exhibits
attached to the Yeh Declarations have been consecutively numbered, with Exhibits attached to
the Yeh Declaration filed today continuing from the numbering in the previous set of exhibits.

iv

8.

“Zebrak Decl.” shall refer to the declaration of Scott Zebrak, dated February 9,

2012, filed on February 10, 2012 in support of Warner Bros. Entertainment Inc.’s Motion for
Summary Judgment (available publicly at Dkt. #301-1).
9.

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

appropriate, pinpoint citations to the page number(s), and paragraph or line numbers, internal to
the cited document.

v

Hotfile bears the burden of establishing that any errors made in sending takedown notices
were made “knowingly.” To “[k]nowingly … misrepresent[]” means to misrepresent with actual
knowledge of falsity. Hotfile has no evidence from which a reasonable jury could find that
Warner knowingly misrepresented anything. In fact, the undisputed evidence shows that any
errors in the notices sent to Hotfile were unintentional. Lacking evidence, Hotfile misconstrues
the guiding cases and relies on facts Warner learned only while investigating Hotfile’s
counterclaim – i.e., months after the notices were sent – as though they were facts Warner knew
when it sent the notices. In the end, Hotfile can only proffer evidence that a few mistakes
(according to Hotfile) should have been preventable. That is, at most, a claim of negligence, not
the “knowing misrepresentation” required by Section 512(f).
Hotfile similarly proffers no evidence that it was actually harmed, an essential element of
its claim. Most of the removed files were infringing and, in virtually all cases, the relevant
Hotfile user was either never terminated, terminated for different reasons, or should have been
terminated anyway. Hotfile does not present any evidence to rebut that.
ARGUMENT
I.

HOTFILE MISSTATES THE LEGAL STANDARD.
Hotfile’s entire opposition rests on the argument that Warner must “show that it had a

sufficient basis” to form a good faith belief in the accuracy of its DMCA notices. Opp. at 7. But
that is the wrong legal standard: first, Hotfile, not Warner, bears the burden of proof; second,
Section 512(f) liability requires actual, subjective knowledge.
A.

Hotfile – Not Warner – Bears the Burden of Proof.

“The touchstone for determining the burden of proof under a statutory cause of action is
the statute itself,” and “[w]hen a statute is silent as to who bears the burden of proof, we resort to
‘the ordinary default rule that plaintiffs bear the risk of failing to prove their claims.’” Thomas v.
George, Hartz, Lundeen, Fulmer, Johnstone, King, and Stevens, P.A., 525 F.3d 1107, 1110 (11th
Cir. 2008) (citing Schaffer ex rel. Schaffer v. Weast, 546 U.S. 49. 56 (2005)).
That of course applies to § 512(f) claims as well. Third Educ. Grp., Inc. v. Phelps, 675 F.
Supp. 2d 916, 927 (E.D. Wis. 2010) (dismissing 512(f) claim because plaintiff failed to present
evidence of knowing misrepresentation); Biosafe-One, Inc. v. Hawks, 524 F. Supp. 2d 452, 46869 (S.D.N.Y. 2007) (granting summary judgment because “[d]efendants have not submitted any
evidence that plaintiffs were aware or understood that they were misrepresenting the fact that

defendants’ website was infringing”); Arista Records, Inc. v. MP3Board, Inc., 00 Civ. 4660
(SHS), 2002 U.S. Dist. LEXIS 16165, at *45 (S.D.N.Y. Aug. 28, 2002) (summary judgment for
copyright owner under 512(f) because “there is no evidence that any misrepresentation by the
RIAA was made knowingly”).
Thus, Hotfile’s assertion that Warner must affirmatively prove for each notice a
“sufficient basis” for its good faith belief, Opp. at 10, has it backwards. Hotfile must
“demonstrat[e] that [Warner] had some actual knowledge of the [alleged] misrepresentation.”
Third Educ. Grp., 675 F. Supp. 2d at 927. Hotfile cannot meet that burden.
B.

512(f) Requires Actual, Subjective Knowledge.

Section 512(f) imposes liability “only for knowing misrepresentations.” Rossi v. Motion
Picture Ass’n of Am., Inc., 391 F.3d 1000, 1005 (9th Cir. 2004). As the Ninth Circuit has
explained, §512(f) does not support liability when “an unknowing mistake is made, even if the
copyright owner acted unreasonably in making the mistake. Rather, there must be a
demonstration of some actual knowledge of misrepresentation on the part of the copyright
owner.” Id. (internal citation omitted; emphasis added). The vast weight of legal authority is in
accord. See, e.g., Cabell v. Zimmerman, 09 Civ. 10134 (CM), 2010 U.S. Dist. LEXIS 25486, at
*9-10 (S.D.N.Y. Mar. 12, 2010); Third Educ. Grp., 675 F. Supp. 2d at 927; UMG Recordings,
Inc. v. Augusto, 558 F. Supp. 2d 1055, 1065 (C.D. Cal. 2008), judgment aff’d, 628 F.3d 1175
(9th Cir. 2011); Biosafe-One, 524 F. Supp. 2d at 468-69; Dudnikov v. MGA Entm’t, Inc., 410 F.
Supp. 2d 1010, 1012 (D. Colo. 2005). Any other standard is precluded by the statutory text.
Hotfile’s argument that liability attaches if Warner “did not have a sufficient basis to
form a good faith belief that the files in Hotfile’s counterclaim were infringing,” Opp. at 8,
misstates the law. In arguing that Rossi supports its position, Opp. at 7, Hotfile cites to a
statement in the case’s procedural history (recounting the district court’s finding that MPAA had
a sufficient basis for its good faith belief) and incorrectly describes it as the holding. Rossi, 391
F.3d at 1002-03. Rossi actually held the opposite, rejecting an objective standard that would
have required a “sufficient basis” for good faith, and requiring instead a “demonstration of some
actual knowledge of misrepresentation on the part of the copyright owner.” Id. at 1005
(emphasis added). The court recognized that the subjective good faith belief standard is
inconsistent with any inquiry into the “sufficiency” of the belief. Id. at 1004. Likewise, in
Dudnikov, the court also rejected any inquiry into “the ‘reasonableness’ of [the copyright

2

holder’s] belief.” 410 F. Supp. 2d at 1013; see also Rossi, 391 F.3d at 1017-18 (plaintiff may not
“attack [] the ‘reasonableness’ of MGA’s good faith belief”). Putting the burden squarely on the
§ 512(f) plaintiff, Dudnikov granted summary judgment because plaintiff “ha[d] not made a
showing that MGA knowingly and materially misrepresented that the fleece hat was infringing,
as required to support an allegation under § 512(f).” Dudnikov, 410 F. Supp. 2d at 1018.1
Here, the unrebutted evidence shows that Warner limits its searching only to a
of pirate linking sites “devoted to infringing content”; reviews its
regularly and carefully; tailors its
; and corrects any mistakes when it learns of them. See Kaplan Decl. ¶¶ 6, 8, 1113, 14-16; Mot. at 4-7. Hotfile has failed to offer evidence demonstrating that Warner had
actual, subjective knowledge that any of its takedown notices mistakenly identified an incorrect
file; Hotfile has thus failed to meet its burden. See Dudnikov, 410 F. Supp. 2d at 1013.
C.

512(f) Does Not Require A Manual Review Process, and There Is No
Evidence that A Human Review Process Would be More Accurate.

The cases on which Hotfile relies do not, contrary to its characterizations, reject
automated antipiracy systems. Rossi did not, as Hotfile claims, Opp. at 8, find human review
necessary under § 512(f). The portions of Rossi that Hotfile quotes purporting to reject
automated searches do not represent the court’s own conclusions, but rather an argument
presented by an amicus that the court did not consider. 391 F.3d at 1005.
Hotfile’s argument based on Lenz v. Universal Music Corp., 572 F. Supp. 2d 1150 (N.D.
Cal. 2008), Opp. at 8, is also wrong. Hotfile fails to advise the Court that the Lenz court clarified
its opinion on this very point. In denying interlocutory appeal, the Lenz court confirmed that:
The Court did not hold that every takedown notice must be preceded by a full fair
use investigation. Id. at 7 (citing Rossi, 391 F.3d at 1003-04). Rather, it
recognized, as it has previously, that in a given case fair use may be so obvious
that a copyright owner could not reasonably believe that actionable infringement
was taking place. See Online Policy Group v. Diebold, Inc., 337 F.Supp.2d 1195,
1204 (N.D.Cal.2004). In such a case, which is likely to be extremely rare, the
policy objectives of the DMCA are served by requiring copyright owners at least
to form a subjective good faith belief that the “particular use is not a fair use”
before sending the takedown notice.
1

Ground Zero Museum Workshop v. Wilson, No. DKC 09-3288, 2011 U.S. Dist. LEXIS 94666,
at *60-61 (D. Md. Aug. 24, 2011), Opp. at 7 n.2, did not adopt Hotfile’s “should have known” or
“sufficient basis” standards. Wilson, in fact, dismissed the § 512(f) claim because the plaintiff
could not prove injury, which is an element of the cause of action. See infra Part III.
3

Lenz v. Universal Music Corp., No. C07-3783JFRS, 2008 WL 4790669, at *2 (N.D. Cal. Oct.
28, 2008). The particular “context of the facts alleged in Lenz’s complaint,” according to the
court, represented that “extremely rare” case in part because “obvious” fair uses were rife on
YouTube. Id. Here, Warner only uses

on pirate sites offering full-length motion

pictures and television programs for mass public distribution. Kaplan Decl. ¶ 6. There is no
colorable argument that such uses are ever a fair use. See BMG Music v. Gonzalez, 430 F. 3d
888, 889-91 (7th Cir. 2005) (downloading full-length entertainment content not fair use); A&M
Records, Inc. v. Napster, 239 F.3d 1004, 1014-19 (9th Cir. 2001) (same). Here, Hotfile does not
even claim (much less proffer evidence) that any of the counterclaim files was a fair use.
Hotfile’s standard would turn every mistaken DMCA notice into an actionable knowing
misrepresentation because it is “known” in advance that any system will result in some errors.
This is an argument for constructive knowledge and is incompatible with the § 512(f) statutory
standard. E.g., Rossi, 391 F.3d at 1005 (rejecting constructive knowledge standard).
As Rossi recognizes, many methods can support a subjective good faith belief. In Rossi,
the MPAA did not download files before sending a DMCA notice. Rossi v. Motion Picture
Ass’n of Am., Inc., Civ. No. 02-00239 BMK, 2003 U.S. Dist. LEXIS 12864, at *2-3 (D. Haw.
Apr. 29, 2003). Rossi argued – as Hotfile does here – that “Defendants were not justified in
sending…a notice, or at the very least there is a triable issue of fact regarding justification,
because Defendants failed to conduct an investigation to determine whether Plaintiff’s website
actually infringed on any copyrights before sending…the notice.” Id. at *8. The district court
rejected this argument, noting that “the Court cannot find [] any provision in the DMCA which
requires a copyright holder to conduct an investigation to establish actual infringement prior to
sending a notice to an ISP.” Id., at 8-9. The Ninth Circuit concurred. 391 F.3d at 1003-05.
Notably, Hotfile offers no evidence that a fully manual or “human review” system would
have produced fewer errors than Warner’s system. And there is no suggestion that it would.
Mot. at 2 (Hotfile acknowledges that “mistakes happen” even with fully manually systems).
Hotfile’s counterclaim proves the point. Hotfile’s “human review” by teams of lawyers still
resulted in Hotfile including among the counterclaim files works that are owned by Warner.
Mot. at 1. That was just simple human error.

many of the counterclaim files (the

LeakID files) were in fact subject to a process calling
and yet there were errors as a result of “human … mistakes.” Kaplan Decl. ¶ 20.

4

Hotfile, without evidence, questions the LeakID process because some apparent mistakes were
seemingly obvious. Opp. at 12-14. But that is why it is called “human error.” Even responsible
and diligent people make mistakes, particularly with high-volume repetitive tasks, such as the
hundreds of thousands of notices Warner has had to send to Hotfile. There is simply no basis for
the Court to find that any system of locating infringing links online would produce fewer errors
than Warner’s system – and Hotfile certainly does not provide any evidence to that effect.2
II.

NO EVIDENCE SUPPORTS HOTFILE’S CLAIM THAT WARNER HAD
“KNOWLEDGE” OF SPECIFIC ERRORS.
A.

No Evidence Supports Hotfile’s Claim that Warner Knowingly Deleted
JDownloader.

Hotfile repeatedly asserts that Warner “knew” all along that JDownloader links were
but “took no steps to
prevent the deletion of the JDownloader links on such posts.” Opp. at 5-6, 12. The cited
deposition testimony from Warner’s representative, however, does not say that at all. Kaplan
testified that it was Hotfile’s counterclaim that brought to Warner’s attention that,

Warner first learned of this when investigating
Hotfile’s counterclaim in this case. Id. It did not have that information when sending the notices
at issue. Indeed, when Warner learned,

to prevent takedowns of

JDownloader. Yeh Ex. R (Kaplan dep.) at 186:7-16. The actual facts are not in dispute.
2 To

the contrary, automated processes are commonly used in the analogous context of civil
discovery. Rule 26 requires attorneys to certify in good faith that discovery responses are
“complete and correct” (Fed. R. Civ. Proc. § 26(g)(1)), yet courts regularly endorse the use of
automated document search and retrieval programs, effectively recognizing that such automated
programs can provide the basis for a good faith belief. See, e.g., Zubulake v. UBS Warburg LLC,
229 F.R.D. 422, 432 (S.D.N.Y. 2004) (“To the extent that it may not be feasible for counsel to
speak with every key player” to identify relevant documents, “[i]t may be possible to run a
system-wide keyword search”). Indeed, there is recognition that sophisticated automated review
processes are more accurate than human review. The Sedona Conference, The Sedona
Conference Best Practices Commentary on the Use of Search and Information Retrieval Methods
in E-Discovery, 8 Sedona Conf. J. 189, 199 (2007) (noting “myth that manual review by humans
… constitutes the gold standard by which all searches should be measured,” citing study that
automated searching is substantially more accurate and complete due to incidence of human
error).
5

Hotfile similarly argues that Warner “deliberately” deleted JDownloader files based on
testimony from Warner’s representative that he was “not prepared” to opine at his deposition on
the nuanced legal question of whether takedowns of JDownloader would ever be permissible.
Opp. at 12. This again misconstrues the record. Warner never hinted that it ever deliberately
noticed JDownloader files, and testified repeatedly that “that wasn’t the intention of the – we
didn’t intend to take down JDownloader.” Yeh Ex. R (Kaplan dep.) at 236:13-16.3
B.

Hotfile’s Assertion of a

False Positive Rate Has No Factual Basis.

Hotfile repeatedly asserts that Warner “knew” that

of its takedowns were false

positives. See Opp. at 8. This claim is not remotely supported by the evidence Hotfile cites.
Hotfile cites two internal emails.

3 Nor

could the Warner representative have given any other answer. JDownloader is a program
that facilitates the downloading from Hotfile of multi-part files, which is when a single work,
such as a movie, is broken up into multiple smaller files uploaded separately (movies are usually
pirated through multi-part files, see Kaplan Decl. ¶ 10). Like the Grokster software itself, in a
vacuum, the JDownloader software may be “noninfringing.” Opp. at 12. But it appears to be
used predominantly to facilitate infringement, and if, for instance, it were “marketed” directly
alongside infringing content in ways that evidenced its distributor was encouraging its use for
infringement, that would be a paradigmatic case of inducing infringement. See Metro-GoldwynMayer Studios, Inc. v. Grokster, Ltd., 545 U.S. 913, 919 (2005).
6

These emails are not credible evidence of the false positive rate for Warner’s system.
Indeed, Hotfile’s own expert repeatedly testified that

Hotfile
easily could have conducted a statistical analysis if it had wanted to, but it did not want to learn
that the true error rate is infinitesimally small, and virtually every mistaken notice nonetheless
identifies an infringing file. The only evidence in the record is that, despite a
Hotfile identified only a relative handful of mistakes out of
hundreds of thousands of Warner notices. Mot. at 7; Kaplan Dec. ¶ 14.
C.

Hotfile’s Remaining “Evidence” That Some Errors Might Have Been
Preventable Does Not Support a Finding of Knowing Misrepresentation.

The rest of Hotfile’s “evidence” is nothing but an argument that, in Hotfile’s estimation
(with the benefit of 20/20 hindsight), a small subset of Warner’s errors could have been
prevented had Warner better refined its system. None remotely suggests a knowing
misrepresentation.
•

Hotfile points to

that it argues are too

general. Opp. at 10-11.4 It then points to an internal email showing the opposite of a
knowing misrepresentation: namely, that Warner,

The exchange shows Warner’s good faith in refining its system.
•

4

Hotfile cherry-picks a handful

7

Again, the incident
shows Warner’s good faith in addressing errors.
•

Hotfile cites an

Hotfile points to no
connection between this issue, which Warner addressed, and any of the files in the
counterclaim. Again, Hotfile lacks any evidence that any mistake was a knowing one.
Section 512(f) requires Hotfile to prove a “knowing[], materially misrepresent[ation]” –
yet, giving Hotfile the benefit of every reasonable inference, Hotfile’s evidence does not come
close to meeting this standard.5
III.

NO EVIDENCE SUPPORTS HOTFILE’S DAMAGES CLAIM.
A 512(f) plaintiff must prove that it “is injured” by a knowingly wrong notice. It is an

element of the cause of action. 17 U.S.C. § 512(f). Hotfile protests that it need not show
economic injury, see Opp. at 14, but has no evidence of any other kind. Lenz, on which Hotfile
relies, involved claimed First Amendment harm, Lenz v. Universal Music Corp., No. C073783JF, 2010 WL 702466, at *7-8 (N.D. Cal. Feb. 25, 2010), which Hotfile cannot and does not
assert here. And notwithstanding its claim to have suffered “reputational and goodwill harm,”
Opp. at 14 n.7, at deposition, both Hotfile and its expert admitted that they were not aware of any
evidence of such harm. WSUF ¶¶ 2(a), 2(b), 2(c), 2(d).6 Hotfile’s after-the-fact attempt at
finding evidence does not create a triable issue.
5

Hotfile concedes that nearly a third of Hotfile’s counterclaim consists of infringing video
games that Warner correctly identified on behalf of Electronic Arts, Inc. (“EA”) as part of an
antipiracy partnership. See HCSUF 7. Hotfile fails to address Warner’s evidence that Warner
inadvertently sent notices that were planned to be sent by EA. See Kaplan Decl. ¶¶ 8, 21.

6

Hotfile’s purported “ample evidence,” Opp. at 14 n.7, consists of two anonymous online forum
posts months after Warner’s notices. The first, which claims that “Hotfile is damaging their
8

As Warner has shown, infringement on Hotfile was so pervasive that even Warner’s
mistaken takedowns – which were all links posted on pirate sites, see Kaplan Dec. ¶ 6 – mostly
resulted in the removal of files that were either infringing or uploaded by users who were repeat
infringers and either were or should have been suspended without regard to Warner’s notices.
See Mot. at 15. Hotfile has not shown otherwise:
(1) Hotfile cannot dispute that the files are infringing, or that
SUF 8(b). Instead, it speculates that a jury could “consider”
whether any were “fair use or [] authorized by the true owner.” Opp. at 16, 18-19. But Warner’s
expert considered that and his testimony remains unrebutted. See Zebrak Ex. B; 17 U.S.C. §
106. Moreover, each of the files was identified because a link to it was posted on a pirate link
site for mass distribution. Hotfile has no evidence of authorization or fair use for a jury to
“consider.”
(2) Hotfile attacks Plaintiffs’ expert Zebrak, who identified the titles, owners and
copyright status of the counterclaim files. Opp. at 16-18. Hotfile’s ad hominem attacks aside,
analyses of this sort are routinely accepted in copyright litigation where third-party rights are a
relevant collateral issue. See, e.g., Arista Records LLC v. Lime Group LLC, 784 F. Supp. 2d 398,
412-13 (S.D.N.Y. 2011); Arista Records LLC v. Usenet.com, Inc.., 633 F. Supp. 2d 124, 131-32
(S.D.N.Y. 2009); Columbia Pictures Indus., Inc. v. Fung, No. CV 06-5578 SVW (JCx), 2009
WL 6355911, at *8 (C.D. Cal. Dec. 21, 2009). Zebrak’s testimony is plainly admissible: an
expert can testify if he “knows of facts which enable him to express a reasonably accurate
conclusion,” and sets forth a “process of reasoning beginning from a firm foundation.” United
States v. City of Miami, 115 F.3d 870, 873 (11th Cir.1997); Martinez v. Weyerhaeuser Mtg. Co.,
959 F. Supp. 1511, 1515 (S.D. Fla.1996). Zebrak explains in detail the process by which he
analyzed the counterclaim files, the factors he considered in determining their copyright status,
and how he tested and corroborated those determinations. Zebrak Decl. ¶¶ 4-10. Hotfile’s
reliance on Evers v. General Motors Corp., 770 F.2d 984, 986 (11th Cir. 1985), is misplaced. In

customer relations” by honoring mistaken takedown requests, is hearsay. See Fed. R. Evid. 802.
Hotfile also redacts the portion that undercuts its claim: in a subsequent post, the author makes
clear that he believed that “[t]he take-downs were not illegal” and defended Warner’s use of an
automated tool, stating “[t]o attempt to do it manually is beyond stupid.” Yeh Ex. W at 9, 12.
The second post criticized Hotfile’s practice of letting copyright owners remove files from
Hotfile at all and is not linked causally to the claimed Warner errors. Yeh Ex. V.
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Evers, the expert claimed to have “reviewed” undisclosed evidence and provided four conclusory
paragraphs contradicting the opposing party, but with no explanation of methodology or factors
considered. Id. Zebrak’s testimony does not suffer from these defects. Zebrak Decl. ¶¶ 6, 9.
There can be no question that his testimony is admissible.
(3) In the end, Hotfile identifies only three uploaders of noninfringing files who may
have been mistakenly terminated following a counterclaim notice. Opp. at 19-20. Hotfile,
however, fails to mention (and its expert fails to consider) that, as to one of those users (the user
who distributes the JDownloader software), Hotfile almost immediately reinstated the user and
his files with no interruption to his payments, negating Hotfile’s claim of damage. See Foster
Reply Decl. ¶ 3. The other two were non-premium, non-Affiliate (i.e., nonpaying) users.
Hotfile, moreover, suspended user
and identified Warner’s takedown as an error. See Foster Reply Decl. ¶ 4. That
user was not terminated because of any Warner notice; Hotfile could have

The injury arguments Hotfile presents in its opposition are, notably, completely different
from those disclosed in Hotfile’s expert report. See Thompson Ex. 34, ¶ 36. Regardless, Hotfile
still presents nothing but the conclusory assertion that “there is a reasonable probability” that
Hotfile lost premium subscriptions. Hotfile’s burden was to “come forward with evidentiary
material demonstrating a genuine issue of material fact for trial.” Floyd v. McNeil, No.
4:10cv289-RHWCS, 2011 U.S. Dist. LEXIS 150619, at *4-5 (N.D. Fla. Dec. 5, 2011) (internal
citations omitted). “If the evidence is merely colorable, or is not significantly probative,
summary judgment may be granted.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249-50
(1986) (internal citations omitted). Respectfully, Hotfile’s unsupported speculation as to injury
does not meet its burden.
CONCLUSION
Warner respectfully requests that its motion for summary judgment be granted.
Dated: March 12, 2012

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

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Karen L. Stetson
GRAY-ROBINSON, P.A.
1221 Brickell Avenue
16th Floor
Miami, Fl 33131
Telephone: [phone]
Facsimile: [phone]
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]

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
Facsimile: [phone]
Attorneys for Plaintiffs

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CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on this 12th Day of March, 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:

Reply Memorandum of Law in support of Warner Bros. Entertainment Inc.’s
Motion for Summary Judgment

By: /s/ Karen L. Stetson
Karen L. Stetson

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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

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