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

Filing 416

NOTICE by Hotfile Corp. of Filing the PUBLICLY FILED REDACTED Version of the Reply Memorandum Filed In Support of Hotfile's Motion for Partial Summary Judgment Under the DMCA's Safe Harbor (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.

/

REPLY MEMORANDUM OF DEFENDANT HOTFILE CORPORATION
IN SUPPORT OF DEFENDANT’S MOTION FOR PARTIAL SUMMARY JUDGMENT
UNDER THE DMCA’S SAFE HARBOR

26501\2997133.1

CASE NO.: ll-CIV-20427-WILLIAMSITURNOFF

FILED UNDER SEAL

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 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.
4.

"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 Dec!." 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 Dec!." 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 Dec!." 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 Dec!." shall refer to the declaration of Andrew Leibnitz in support of

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

"Gupta Dec!." shall refer to the declaration of Deepak Gupta in support of

Defendants' Motion for Summary Judgment.
11.

"Schoenberg Dec!." shall refer to the declaration of Anthony Schoenberg in

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

"Levy Dec!." 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.
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CASE NO.: ll-CIV-20427-WILLIAMS/TURNOFF

"Boyle Dec!." 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.

20.

"Thamkul Dec!." shall refer to the declaration of Janel Thamkul in support of

Defendants' Opposition to Plaintiffs' Motion for Summary Judgment.
21.

"Thamkul Ex. _," shall refer to exhibits attached to the Tharnkul Declaration.

22.

"Titoy Reply Dec!." shall refer to the declaration of Anton Titoy in support of

Defendants' Reply in support of their Motion for Partial Summary Judgment.
23.

"DMS]" shall refer to the Motion of Defendants Hotfile Corporation for Partial

Summary Judgment Based on the Digital Millennium Copyright Act Safe Harbor.
24.

"DOPMSJ" shall refer to Defendants' Opposition to Plaintiffs' Motion for

Summary Judgment Against Defendants Hotfile Corp. and Anton Titoy.
25.

"PODMSJ" shall refer to Plaintiffs' Opposition to the Motion of Defendants

Hotfile Corporation for Partial Summary Judgment Based on the Digital Millennium Copyright
Act Safe Harbor.
26.

"PMSJ" shall refer to Plaintiffs' Motion for Summary Judgment Against

Defendants Hotfile Corp. and Anton Titoy.
27.

"PCFDMSJ" shall refer to Plaintiffs' Counterstatement of Material Facts in

Opposition to Defendants' Motion for Partial Summary Judgment Based on the Digital
Millennium Copyright Act Safe Harbor.

11

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TABLE OF CONTENTS
Page

I.

INTRODUCTION ............................................................................................................. 1

II.

ARGUMENT..................................................................................................................... 1
A.

B.

Plaintiffs' Argument That Alleged Pre-Complaint Inducements Preclude
Any Post-Complaint Safe Harbor Fails As A Matter Of Law ............................... 5

C.

Plaintiffs Vigorously Litigated Hotfile's Post-Complaint Repeat Infringer
Policy, And Hotfile Is Entitled To The Certainty Of Safe Harbor For Its
Continuing Operations ........................................................................................... 6

D.
III.

Plaintiffs Concede That Hotfile Satisfies Almost Every DMCA
Requirement in the Post-Complaint Period and Their Half-Hearted
Attempt to Create A Triable Issue As To A Few Remaining DMCA
Requirements Fails ................................................................................................. 1

Courts Regularly Grant Partial Snmmary Judgment By Time Period ................... 8

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

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TABLE OF AUTHORITIES
Page

FEDERAL CASES
Alvarez v. Hill,
518 F.3d 1152 (9th Cir. 2008) .................................................................................................... 6
Bishop v. Allied Van Lines, Inc.,
2010 WL 5066786 (M.D. Fla. Dec. 18,2009) ............................................................................ 9
Capitol Records v. MP3 Tunes,
2011 WL 5104616 (S.D.N.Y. Oct. 25, 2011) ....................................................................... 4,10
CIVIX-DDI, L.L.c. v. Cellco Partnership,
387 F. Supp. 2d 869 (N.D. Ill. 2005) .......................................................................................... 8
Compuware Corp. v. Health Care Service Corp.,
203 F. Supp. 2d 952 (N.D. Ill. 2002) .......................................................................................... 9
DF&R Corp. v. American International Pacific Industries Corp.,
830 F. Supp. 500 (D. Minn. 1993) .............................................................................................. 8
Eagle Comtronics, Inc. v. John Mezzalinua Associates,
198 F.R.D. 351 (N.D.N.Y. 2000) ............................................................................................... 8
Edwards v. Shalala,
64 F.3d 601 (lIth Cir. 1995) ...................................................................................................... 9
Ellison v. Robertson,
357 F.3d 1072 (9th Cir. 2004) .............................................................................................. 5,10
EpicRealm Licensing, LP v. Franklin Covey Co.,
644 F. Supp. 2d 806 (E.D. Tex. 2008» ....................................................................................... 9
Feldman v. Cutting,
2009 WL 4021364 (S.D. Fla. Nov. 19,2009) ............................................................................. 9
Glenn v. Lanier,
2010 WL 1380164 (N.D. Fla. March 31, 2010) ......................................................................... 3
Hollingshead v. Windley,
2008 WL 4809221 (S.D. Ala. Oct. 31, 2008) ............................................................................. 6
ICU Medical, Inc. v. B. Braun Medical, Inc.,
2005 WL 588341, n.l, **10-11 (N.D. Cal. March 14, 2005)..................................................... 8
10 Group, Inc. v. Veoh Networks, Inc.,
586 F. Supp. 2d 1132 (N.D. Cal. 2008) .................................................................................. 3, 4
Kitzmann v. Local 619-M Graphic Communications Cmiference,
2011 WL 944379 (6th Cir. Mar. 21, 2011) ................................................................................. 7
Newman-Green, Inc. v. AlJonzo-Larrain R.,
612 F. Supp. 1434 (N.D. Ill. 1985) ........................................................................................... 10
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TABLE OF AUTHORITIES
(continued)
Page

Ortiz v. Lopez,
688 F. Supp. 2d 1072 (E.D. Cal. 2010) ....................................................................................... 8
Paddington Partners v. Bouchard,
34 F. 3d 1132 (2d Cir. 1994) ....................................................................................................... 3
Perfect 10, Inc. v. Amazon.com, Inc.,
508 F.3d 1146 (9th Cir. 2007) .............................................................................................. 2, 10
Pe~fect

10, Inc. v. CCBili LLe,
488 F.3d 1102 (9th Cir. 2007) .................................................................................................... 3

Pe~fect

10, Inc. v. Google, Inc.,
No. CV 04-9484 (C.D. Cal. July 16, 2010) .............................................................................. 10

PNC Bank v. Hall, Jcoe, LLe,
2010 WL 3947506 (S.D. Ind. Oct. 7, 2010) ............................................................................... 6
Price v. M&H Valve Co.,
2006 WL 89723 (l1 th Cir. Apr. 7, 2006) ................................................................................... 6
Rasmussen v. City ofNew York,
766 F. Supp. 2d 399 (E.D.N.Y. 2011) ...................................................................................... 10
Rozenblum v. Ocean Beach Properties,
436 F. Supp. 2d 1351 (S.D. Fla. 2006) ....................................................................................... 9
SEC v. Liberty Capital Group,
75 F. Supp.2d 1160 (W.D. Wash. 1999) ................................................................................... 10
Shi v. Carlson,
2010 WL 3988724 (9th Cir. Sept. 13,2010) ............................................................................. 7
Solliday v. Federal Officers,
2011 WL 414283 (lith Cir. Feb. 9, 2011) ................................................................................. 7
Steger v. General Elec. Co.,
318 F.3d 1066 (11th Cir. 2003) .................................................................................................. 6
Stillman v. Travelers Ins. Co.,
88 F.3d 911 (lith Cir. 1996) ..................................................................................................... 9
Thompson v. Geo Marine, Inc.,
2006 WL 2640361 (M.D. Ala. Sept. 14,2006) ......................................................................... 3
Veliz v. Cintas Corp.,
2009WL 1110416 (N.D. Cal. Apr. 23, 2009) ............................................................................ 9
Viacom v. You Tube,
718 F. Supp. 2d 514 (SD.N.Y. 2010) ......................................................................................... 5
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TABLE OF AUTHORITIES
(continued)
Page

York International Corp. v. Liberty Mutual Ins. Co.,
2011 WL 2111989 (M.D. Pa. May 26, 2011) ............................................................................. 9
Youngblood v. Vistronix, Inc.,
2006 WL 2092636 (D.D.C. July 27,2006) ................................................................................. 9
Zimmer Technology, Inc. v. Howmedica Osteonics Corp.,
476 F. Supp.2d 1024 (N.D. Ind. 2007) ....................................................................................... 8

FEDERAL STATUTES

17 U.S.C. § 512 - Online Copyright Infringement Liability Limitation Act
(DMCA Safe Harbor) ............................................................................................................. 5,6

FEDERAL RULES

Federal Rules of Civil Procedure 15 and 56 ........................................................................... 6, 8, 9
TREATISES

Charles Alan Wright, Arthur R. Miller & Mary Kay Kane, Federal Practice & Procedure
(3ded. 2011) ............................................................................................................................... 3

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I.

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

INTRODUCTION
Hotfile has maintained throughout this litigation that it is entitled to safe harbor

protection under the DMCA. Now, having taken extensive discovery, and setting out their best
case in a blizzard of summary judgment filings (so far supported by 17 separate declarations with
199 exhibits, totaling some 25,226 pages in all), Plaintiffs cannot seriously question that Hotfile
currently qualifies for the safe harbor protection. Instead of addressing the merits of Hotfile's
defense, Plaintiffs contend that Hotfile's current policies are not at issue and urge the Court not
to reach this pivotal defense. Their assertions are belied by the record and common sense.
Plaintiffs strenuously litigated the issue for a year. Their Complaint accused Hotfile of
"continuing" infringement, and they have taken extensive discovery about every detail of
Hotfile's post-Complaint conduct. Having imposed extraordinary discovery burdens and costs
on Hotfile, Plaintiffs cannot be allowed to backpedal to avoid an adverse ruling. Hotfile's very
legitimacy has been challenged by Plaintiffs' unfounded allegations. It is entitled to a ruling on
the merits, that at all time since adopting its three-strikes repeat infringer policy on February 18,
2011, it is protected by the DMCA safe harbor as a matter of law. (Hotfile is also entitled to
protection before that date, but acknowledges the earlier period raises factual disputes for trial.)

II.

ARGUMENT
In May 2011, Hotfile requested leave to file an early summary judgment motion directed

to the safe harbor issue. D.E. # 70, 5/27/11. Plaintiffs vehemently opposed, and the Court
denied Hotfile's request ruling that "it is better if the factual dispute is handled at once, after
discovery". D.E. # 133, 8/30/11, p. 1, n. 1. Discovery is now complete. There is no genuine
factual dispute as to Hotfile's safe harbor protection under its three-strikes policy implemented
on February 18, 2011. Plaintiffs' Opposition all but concedes as much; it seeks to divert
attention away from the real issue-that Hotfile adopted and reasonably implemented a threestrikes repeat infringer policy-by discussing (l) other important improvements Hotfile has
recently made (e.g., video fingerprinting) that are not essential to the safe harbor, and (2)
supposed procedural hurdles to the Court's consideration of the issue.

A.

Plaintiffs Concede That HoWle Satisfies Almost Every DMCA Requirement
in the Post-Complaint Period, and Their Half-Hearted Attempt to Create A
Triable Issue As To A Few Remaining DMCA Requirements Fails.

Plaintiffs' Opposition Memorandum does not contest Hotfile's entitlement to the DMCA
safe harbor on the merits. Their Counterstatement of Facts begrudgingly concedes almost all of
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the safe harbor requirements. It is undisputed that Hotfile has: qualified at least since December
2009 as a DMCA "service provider" (SI2(k)(I)(B» (PCFDMS] #1); maintained a registered
DMCA agent for receipt of take down notices (and SRA requests) with the Copyright Office and
on its website (SI2(c)(2» (PCFDMS] #3_S)I; warned repeat infringers they would be terminated
in its Terms of Service and Intellectual Property Policy (SI2(i) (PCFDMS] #S»; and
accommodated and did not interfere with standard technical measures (SI2(i)(1)(B» (PCFDMS]
#24). Furthermore, Plaintiffs admit that "Hotfile took down each file-in-suit for which it
received a takedown notice after February 18,2011 within 48 hours of Hotfile's receiving the
notice of infringement." SI2(c)(I)(C) (expeditious takedown) (PCFDMS] #18).2 Similarly, the
Studios do not dispute Hotfile's authorities stating that absent knowledge of particular
infringements, it has not had the "right and ability to control infringement." S12(c)(I )(B); see
DMS] at 16-18. Nor do they dispute that Hotfile "derives revenues exclusively from premium
access fees." PCFDMS] #19. Because those fees give the user the same faster service and
unlimited storage regardless of the content of files, such fees do not constitute a direct financial
benefit under the DMCA. DMS] at 16-19. 3 None of these material facts are genuinely disputed,
leaving only the requirement that Hotfile reasonably implemented a repeat infringer policy.
Plaintiffs' Opposition does not address directly the reasonableness of Hotfile's adoption
of a strikes-based repeat infringer policy on February 18,2011. Instead it conflates that change
with Hotfile's other post-Complaint improvements (implementation of Vobile fingerprinting and
The Studios' argument about Hotfile's "P.O. Box" (PCFDMS] # 3), which is based on an
obscure regulation, demonstrates the lengths to which they must go to concoct a single disputed
fact. Hotfile's registration provided "substantially the following information": "(A) the name,
address [a P.O. Box], phone number and electronic mail address" of its agent. SI2(c) requires
only substantial compliance, and a P.O. Box is "substantially" an address by any definition.
"[T]echnical deficiencies "are insubstantial. .. [where] they would not prevent a copyright owner
from efficiently communicating with the designated agent and vice versa." Perfect 10, Inc. v.
Amazoncom, Inc. et al., No. CV OS-47S3 AHM (SHx), 2009 WL 1334364, at *8 (C.D. Cal.
May 12,2009). See also, DOPMS], n. IS (further rebutting P.O. Box argument). The abuse
email address has been undisputedly available on the website since Apri12009. (PCFDMS] 4.)
1

2 Hotfile has already addressed Plaintiffs' "actual" and "red flag" knowledge arguments under
SI2(c)(I)(A) as a matter oflaw. PCFDMS] 14; DMS] 12-1S; DOPMS] at IS-19 (general facts
that fail to establish subjective awareness of specific infringements do not disqualify;
distinguishing "LastDL" mentioned in Yeh Ex. 144).
So long as either the "no direct financial benefit" or the "no right and ability to control" prong
of S12(c)(I )(B) is satisfied, Hotfile remains eligible for safe harbor.
3

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its February 2012 policy modifications) to misleadingly suggest that summary judgment depends
on these more recent changes. PODMS] at 4-5. It does not. By this motion, Hotfile expressly
seeks summary judgment for the entire period "since its revamped repeat infringer policy was
instituted in February 2011..." (DMS] at 2), not on a "piecemeal" basis for each improvement
made since then in responding to Plaintiffs' continuing criticisms. These post-Complaint
enhancements (DMS] at 9) are part of Hotfile's ongoing effort "to reduce, not foster, the
incidence of copyright infringement on its website," and further confirm the reasonableness of
Hotfile's three-strike policy in light of all circumstances. 10 Group, Inc. v. Veoh Networks, Inc.,
586 F. Supp. 2d 1132, 1154 (N.D. Cal. 2008); Perfect 10, Inc. v. CCBill LLC, 488 F.3d 1102,
1109-10 (9th Cir. 2007) ("[A]n implementation is reasonable if, under 'appropriate circumstances,'
the service provider terminates users who repeatedly or blatantly infringe copyright.") Plaintiffs'
emphasis on these recent enhancements, while ignoring the repeat infringer policy, is a diversion
tactic. 4 Hotfile's strengthening of its countermeasures cannot take away the safe harbor (and had
Hotfile not made these changes, the Studios would now, no doubt, be arguing that Hotfile had
not done enough to "reform" its ways).
Buried in their Counterstatement of Facts, but not mentioned in their Opposition
Memorandum itself, Plaintiffs mutedly argue that Hotfile's post-Complaint repeat infringer
policy still falls short. See PCFDMS] #21. Plaintiffs conspicuously make no legal argument on

website «.'LWlUC" program, anonymous
functionality, and download rewards programs, may be verified simply by visiting
Hotfile's website. Most revealing, Plaintiffs have not raised Rule 56(d) as a basis for opposing
this Motion. This is a waiver. Paddington Partners v. Bouchard, 34 F. 3d 1132, 1137 (2d Cir.
1994) ("failure to file an affidavit under Rule 56(f) [now Rule 56(d)] is itself sufficient grounds
to reject a claim that the opportunity for discovery was inadequate ... ") (collecting cases); Glenn
v. Lanier, No. 3:09cvl/MCRlMD, 2010 WL 1380164, at *4 (N.D. Fla. March 31, 2010) ("failure
... to seek relief under Rule 56(f) ... precludes him from claiming at this point that he was
unable to fully respond to [J motion for summary judgment because he did not have the
necessary evidence to do so.); Thompson v. Geo Marine, Inc., No.2:06-cv-420-WHA, 2006
WL 2640361, at *3 (M.D. Ala. Sept. 14,2006) (same); see also lOB Charles Alan Wright,
Arthur R. Miller & Mary Kay Kane, Federal Practice & Procedure §2741 (3d ed. 2011) ("The
courts will not delay a case to allow discovery when the discovery sought could have been
instituted earlier, especially when there is no reason to believe that it will lead to a denial of the
motion.").
UiJJIU"'UCl

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the issue. 5 They do not attempt to rebut the strong authority finding three-strikes policies like
Hotfile's DMCA-compliant as a matter of law. DMSJ at 20 (collecting cases). In the context of
their own summary judgment motion, Plaintiffs affirmatively contend "what Hotfile should have
done, ... [was to1identifTy1the repeat infringers ... [who1had accumulated three or more
'strikes'" and terminate them (PMSJ at 1; see id. at 19-20), thereby further conceding the point.
Plaintiffs' Counterstatement (PCF 21) asserts three flaws with Hotfile's post-Complaint
strikes-policy, without supporting legal authority. First, they complain that, like every other
policy upheld in the case law, Hotfile's policy terminates uploaders as opposed to downloaders.
See Capitol Records v. MP3 Tunes, No. 07 Civ. 9931(WHP), 2011 WL 5104616, at *6
(S.D.N.Y. Oct. 25, 2011) (blatant infringers for 512(i) are "those who upload" not "users who
download content for their personal use and are otherwise oblivious to the copyrights of others.")
Even the UGC Principles, to which these Plaintiffs are signatories, only mandate uploader
termination. 6 Second, they argue that non-registered "anonymous" users cannot be subject to a
strikes counting policy. That issue is trivial at best. Exactly.ofthe"laintiffs'
"verified" files-in-suit was anonymously uploaded. Titov Reply Decl. ~ 3. 7 Finally, Hotfile's
policy did not terminate website referral affiliates because Hotfile could not on its own readily
identify referring websites (which include sites like Google and Jdownloader) as infringers. See
DOPMSJ 12-13; 18. 8

5 In a backhanded concession, Plaintiffs' Opposition Memorandum only advances the theory
that Hotfile's pre-Safe Harbor conduct (not its conduct after adopting the three strikes policy)
may somehow be causing continuing harm. See n.B, irifra. (Hotfile maintains it is entitled to
pre-Complaint safe harbor, but has not sought summary judgment for that period.)
6 "UGC Services should use reasonable efforts to track infringing uploads of copyrighted content
by the same user and should use such information in the reasonable implementation of a repeat
infringer termination policy. UGC Services should use reasonable efforts to prevent a terminated
user from uploading audio and/or video content following
.
such as U1L'I."'Ulg
of verified email addresses." See Thamkul Ex. 1

The DMCA requires termination only of "subscribers and account holders," (512(i» which
anonymous users by definition are not. See also 10 Group, Inc. v. Veoh Networks, Inc., 586 F.
Supp. 2d 1132, 1145 (N.D. Cal. 2008) (no dispute that IP address blocking is ineffective and not
required; hash blocking more than compensates).

7

The Complaint did not ask for termination of referral affiliates as Plaintiffs suggest now; rather,
it calls only for termination of repeat infringing uploaders. See Compl. ~ 42. The UGC

8

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Plaintiffs' criticisms amount to a meaningless tautology-no repeat infringer policy can
be perfect. There is no genuine issue that Hotfile adopted and reasonably implemented a repeat
infringer policy, its three-strikes policy, as of February 18, 2011.

B.

Plaintiffs' Argument That Alleged Pre-Complaint Inducements Preclude
Any Post-Complaint Safe Harbor Fails As A Matter Of Law.

Citing two peer-to-peer cases, neither of which found the DMCA safe harbor
requirements satisfied at any point in time, and a patent case (not dealing with the Internet at all),
Plaintiffs argue that alleged acts of inducement that allegedly occurred before the Complaint was
filed should nullify Hotfile's undisputable post-Complaint adherence to the DMCA safe harbor
requirements. Plaintiffs cite no authority - and Hotfile is aware of none - stating that DMCA
safe harbor protection does not bar liability for alleged copyright infringement occurring after the
service provider has satisfied all prerequisites. If allegations of acts of contributory or vicarious
infringement somewhere in a site's past trumped the plain requirements of 17 U.S.C. § 512, the
DMCA safe harbors' stated purpose of providing a layer of "certainty" and "clarification" over
"evolving" doctrines of secondary liability would be completely undermined. (Gupta Dec!. Ex. 1
at 2, 8, 19.) The DMCA defines "service providers" inclusively (17 U.S.C. § 512(k)(1)(B» and
looks to the policies and practices "in place at the time the alleged infringing activities were
taking place." Ellison v. Robertson, 357 FJd 1072, 1080 (9th Cir. 2004)(emphasis added).
As Hotfile has already explained, the safe harbors apply to all forms of asserted copyright
infringement liability. Grafting a separate inducement inquiry onto the safe harbor requirements
would irretrievably undermine their purpose. See DOPMS] at 20; see also, Amicus Brief of
Google, Inc. (D.E. # 355-1) at 15-17. Viacom v. You Tube, 718 F. Supp. 2d 514,525-26

(S.D.N.Y. 2010), rejected this very argument, holding, "The Grokster model does not comport
with that of a service provider who furnishes a platform on which its users post and access all
sorts of materials as they wish, while the provider is unaware of its content, but identifies an
Principles are in accordance. Compare n.6 and Thamkul Ex. I (UGC Principle 4 calls for
services and Content Owners to work together to identify infringing link sites and "remove or
block the links to such sites"; UGC Principle 7: "Copyright Owners should provide to UGC
Services URLs identifying online locations where content that is the subject of notice of
infringement is found ... ") (emph. added). When Hotfile learned through discovery that its
website referral affiliate program and anonymous upload features may have lessened the
effectiveness of its repeat infringer policy, it terminated these programs altogether. These
changes are a part of Hotfile' s ongoing policy of improving its countermeasures and do not
detract from the reasonableness of its February 18 policy.
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agent to receive complaints of infringement, and removes identified material when he learns it
infringes. To such a provider, the DMCA gives a safe harbor."

C.

Plaintiffs Vigorously Litigated Hotfile's Post-Complaint Repeat Infringer
Policy, And Hotfile Is Entitled To The Certainty Of Safe Harbor For Its
Continuing Operations.

Plaintiffs' primary argument in opposition to this motion is built on a false premise.
Contrary to Plaintiffs' representations, the issue of Hotfile's post complaint alleged liability for
infringement was undeniably both "raised in the complaint [and] litigated in this case."
PODMSJ at 3. Thus, Hotfile is not seeking an "advisory opinion." Plaintiffs' Complaint
repeatedly states that Hotfile will "continue" to cause injury and infringe plaintiffs' copyrights
and seeks a prospective remedy in the form of injunctive relief. 9 Compl. ~~ 57,59 and 69. D.E.

# 1. Even if the Complaint did not squarely raise the issue (it does), the Federal Rules
specifically provide that matters litigated by the parties "must be treated in all respects as if
raised in the pleadings." Fed. R. Civ. P. 15(b)(2); see Alvarez v. Hill, 518 F.3d 1152, 1158 (9th
Cir. 2008) (error for trial court to fail to address on summary judgment allegations raised by
plaintiffs post-complaint filings).IO
The parties extensively litigated the DMCA Safe Harbor issue, including, specifically, its
application to post-Complaint facts. Plaintiffs demanded documents regarding disciplinary
actions against users "subsequent to Plaintiffs' filing of this action against Defendants on

February 8,2011." See e.g., Thamkul Ex. 3 (Req. for Prod. 42 (emph. added». In January and
February 2012, Plaintiffs demanded and received a supplementation through January 26, 2012
(even after the close of fact discovery) of database records including "user strikes" and "user
terminations" that they claimed "are relevant to Hotfile's DMCA defense." Thamkul Ex. 4 at 9
9As

the DMCA limits injunctive relief under 17 U.S.C. § 512(j), the safe harbor question is
important not only to bar post-Complaint damages but is also essential to define the scope of any
potentially available injunctive relief Plaintiffs may seek.
10 Federal courts routinely grant summary judgment on matters litigated by the parties even if not
(as they are here) explicitly raised in the complaint. Price v. M&H Valve Co., No. 05-15205,
2006 WL 89723, 1 at *II n.7 (lith Cir. Apr. 7, 2006) ("issues not raised in the pleadings may be
treated as if they were properly raised when they either are tried by express or implied consent of
the parties") (citing Steger v. General Elec. Co., 318 F.3d 1066, 1077 & n. 11 (11 th Cir. 2003).
See also PNC Bankv. Hall, !cae, LLC, No. 07-cv-00992, 2010 WL 3947506, at *4 (S.D. Ind.
Oct. 7, 2010) ("On a motion for summary judgment ... pleadings may be amended to conform
to the evidence when the issues raised are tried by implied consenl.") (compiling authorities);
Hollingshead v. Windley, No. 07-0599, 2008 WL 4809221, at *7 (S.D. Ala. Oct. 31, 2008).

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FILED UNDER SEAL

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

(Jan. 23, 2012 Email D. Pozza to T. Schoenberg); id., Ex. 4 at 4 (Jan. 29, 2012 email D. Pozza
to T. Schoenberg ("we're fine with ... producing all the uploadIDs and user suspension records
created through Dec. 23 ... "»; id., Ex. 5 at 1 (Feb. 6-7, 2012 emails confirming delivery of Jan.
26 submission supplementation).

Plaintiffs' summary judgment motion alleges that

that were

uploaded after the Complaint was filed directly infringe their copyrights. Titov Reply Dec!.

~

3

(analyzing PMSJ, Yeh Ex. 56). See also PMSJ at 3 ("Hotfile remains in violation of these
provisions [of the DMCA] even today."); id. ("Its business was and still is selling access to the
more than one hundred million files"); Thamkul Ex. 7 at 5. (Plfs' 3rd Supp. Interrog Resp.)
("infringing copies of new and additional Plaintiffs' works are also being uploaded to
Hotfile.com on an ongoing basis. ") Hundreds of pages of exhibits submitted in support of
Plaintiffs' motion relate solely to Hotfile's current operations. E.g., Yeh Exs. 30 (Titov Exs. 9293),31-43,45,57,68,96,103,144. In view of this litigation history, Plaintiffs cannot genuinely
deny that Hotfile's current DMCA compliance has been vigorously litigated.
Having forced Hotfile to expend

on discovery and

briefing responding to their allegations of "continuing" liability (Titov Reply Dec!.

~

2), and

having failed in trying to find any post-Complaint conduct that may raise a triable issue material
to the DMCA, Plaintiffs are trying to backpeda!. Plaintiffs caunot seek to evade an adverse
judgment, however, by asserting that they did not intend to litigate Hotfile's current liability. See
Kitzmann v. Local 619-M Graphic Communications Conference, No. 09-6500,2011 WL

944379, at *4 (6th Cir. Mar. 21, 2011) ("A claimant cannot attempt to defeat jurisdiction (and
summary judgment) ... by abandoning the claims that the claimant worries might have
established jurisdiction in the first place."); Solliday v. Federal Officers, No. 10-11854,2011 WL
414283, at *1 (11th Cir. Feb. 9, 2011) (affirming summary judgment over abandoned claim); Shi
v. Carlson, No. 09-15033, 2010 WL 3988724, at *1 (9th Cir. Sept. 13,2010) ("The district court

properly granted summary judgment on Shi's claims .... because Shi abandoned these claims in

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

her opposition to summary judgment.,,).11
Plaintiffs also rely on several readily distinguishable patent cases for the proposition that
post-Complaint modifications are not properly subject to summary adjudication. PODMSJ at 56. There is no such inflexible rule in defending against a patent claim any more than there is
with respect to a copyright claim. In ICU Medical, Inc. v. B. Braun Medical, Inc., for example,
jurisdiction extended to post-complaint modifications where the complaint referenced the
accused product generically, sought post-complaint damages and asked for an injunction. No. C
01-3202 CRB, 2005 WL 588341, n.l, **10-11 (N.D. Cal. March 14,2005). Likewise, the
Complaint here asserted "continuing" infringement on Hotfile.com generically, Plaintiffs have
accused post-Complaint uploads of infringing, and they seek an injunction (a key DMCA issue
(see n.9, supra». Thus, adjudication of the post-Complaint facts is proper. Plaintiffs' patent
cases are easily distinguished, because the parties had neither pleaded nor litigated the issues on
which summary adjudication was sought. See Eagle Comtronics, Inc. v. John Mezzalinua
Assocs., 198 F.R.D. 351, 354 (N.D.N.Y. 2000) ("litigation focused upon defendant's original
SHP3-50 filter" rather than the redesigned filter); DF&R Corp. v. American Int 'I Pacific Indus.
Corp., 830 F. Supp. 500, 509-10 (D. Minn. 1993) (defendant did not produce or even prepare to
produce alternate design, much less litigate the issue); CIVIX-DDL L.L.C. v. Cellco Partnership,
387 F. Supp. 2d 869, 881 (N.D. Ill. 2005) ("The record does not contain any indication that the
parties have been litigating the non-asserted claims."); Zimmer Tech., Inc. v. Howmedica
Osteonics Corp., 476 F. Supp.2d 1024, 1037 (N.D. Ind. 2007) (refusing summary judgment
regarding "issues that a party has never before asserted"). In contrast, here, Plaintiffs both
pleaded and litigated the issue of Hotfile's post-Complaint behavior and liability. There is
nothing "advisory" about adjudicating the issue now.

D.

Courts Regularly Grant Partial Summary Judgment By Time Period.

"A party may move for summary judgment, identifying each claim or defense

or the

part of each claim or defense - on which summary judgment is sought." Fed. R. Civ. P. 56(a).
The Court may summarily adjudicate any part of a claim right down to the level of individual
II Plaintiffs' authorities at pages 3-4 of their Opposition in no way support their position. In
none of those cases did the plaintiff litigate an issue throughout discovery and then disavow
litigation of the issue to evade summary judgment. Indeed, in Ortiz v. Lopez, 688 F. Supp. 2d
1072 (E.D. Cal. 2010), the court granted summary judgment over a claim neither stated in the
complaint nor raised in discovery, thus providing support for Hotfile here. Id at 1082-83.

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

facts. Fed. R. Civ. P. 56(g).
Empowered to dispose of any "part" of any claim or defense under Rule 56, courts grant
summary judgment by time period where appropriate in a variety of contexts. In Edwards v.
Shalala, 64 F.3d 601 (lith Cir. 1995), the Eleventh Circuit upheld partial summary judgment of
an age discrimination case, denying relief regarding events outside the applicable limitations
period but preserving the remainder of the claim. Id at 603, 605. Regarding a claim for
overtime compensation in Feldman v. Cutting, No. 09-14133-CIV, 2009 WL 4021364 (S.D. Fla.
Nov. 19,2009), Judge Martinez entered partial summary judgment for two periods (September
17, 2007 through December 31, 2007 and April 14, 2008 through June 21, 2008) while noting
that triable issues of fact existed "for the remaining time periods" that plaintiff worked at
defendant's company. Id. at *2, *5 n.7. Likewise, in Rozenblum v. Ocean Beach Properties,
436 F. Supp. 2d 1351 (S.D. Fla. 2006), Judge Ungaro divided a single claim into separate time
periods for purposes of separate summary judgment rulings. Jd. at 1357. Similar cases
abound. 12 "Rule 56 permits the Court to enter a partial summary judgment in order to narrow the
issues for trial." Bishop v. Allied Van Lines, Inc., No. 8:08-cv-2170-T-24 MAP, 2010 WL
5066786, at *3 (M.D. Fla. Dec. 18,2009); Stillman v. Travelers Ins. Co., 88 F.3d 911,914 n.4
(partial summary judgment narrowed issues for trial). 13
12 E.g., Compuware Corp. v. Health Care Service Corp., 203 F. Supp. 2d 952, 956 (N.D. Ill.
2002) (copyright claim partially time-barred as outside statute of limitations); EpicRealm
Licensing, LP v. Franklin Covey Co., 644 F. Supp. 2d 806, 809-10 (E.D. Tex. 2008) (granting
summary judgment of noninfringement in patent case for period of September 2003 to April
2007 during which time defendant did not operate accused websites, but permitting claim to
proceed regarding infringement after April 2007); Youngblood v. Vistronix, Inc., No. 05-21
(RCL), 2006 WL 2092636, at *5 (D.D.C. July 27,2006) (granting summary judgment for year
following March 1, 2003 but denying summary judgment as to preceding year); York Int 'I Corp.
v. Liberty Mut. Ins. Co., No. 1:10-CV-0692, 2011 WL 2111989, at *6 (M.D. Pa. May 26,2011)
(granting partial summary judgment in favor of insured in coverage case for claims arising
during four-year period); Veliz v. Cintas Corp., No. C 03-1180 RS, 2009 WL 1110416, at *7
(N.D. Cal. Apr. 23, 2009) (granting partial summary judgment as to separate, identified time
periods).

Plaintiffs assert that "Hotfile apparently would have the Court assess Hotfile's compliance
with each DMCA requirement as the material facts changed over time." PODMSJ at 7. Again,
that is not what the motion says: Hotfile seeks summary judgment for a single time period,
"since its revamped repeat infringer policy was instituted in February 2011..." (DMSJ at 2).
Courts will categorize a set of alleged infringements based on their DMCA-compliance
characteristics (here, based on the repeat infringer policy in place when they occurred) and rule
that some are safe harbored as a matter of law. See, e.g., Capitol Records, 20 II WL 5104616 at
13

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

Despite the plain language of Rule 56(g) and the case law, Plaintiffs assert that the Court
is powerless to summarily adjudicate Hotfile's entitlement to safe harbor protection during the
post-February 18, 2012 period, citing three out of circuit district court cases, none of which
support Plaintiffs. PODMSJ at 7. In SEC v. Liberty Capital Group, 75 F. Supp.2d 1160, 1164
(W.D. Wash. 1999), the court refused to grant summary judgment on a "piecemeal" basis to the
SEC prior to discovery on grounds that "partial determination ofliability would do little to move
the case forward" and "discovery and proceedings would be necessary regardless." Id. Here, in
contrast, discovery is closed. In Rasmussen v. City ofNew York, 766 F. Supp. 2d 399, 404
(E.D.N.Y. 2011), the Court refused to summarily adjudicate parts ofa police encounter alleged
to involve excessive force, ruling that the events cumulatively provided "necessary background
for the jury to understand what transpired." Id. at 405. Here, the Court can adjudicate Hotfile's
post-Complaint behavior and still provide the jury all facts necessary to adjudicate the remainder
of Plaintiffs' claim. Lastly, in Newman-Green, Inc. v. Alfonzo-Larrain R., 612 F. Supp. 1434,
1439 (N.D. Ill. 1985), the court granted plaintiffs motion for summary judgment of liability but
refused to permit the "piecemealing" of plaintiff s damage claim into an immediate adjudication
ofliability for $189,771 and a postponed adjudication regarding the remainder of the claimed
$350,000 in damages, resolving to make one damages calculation on a complete record. Id. at
1439,1441,1443. Here, Hotfile does not seek to disaggregate a single mathematical
computation. Under each cited case, partial summary judgment remains appropriate.

III.

CONCLUSION
The Court should grant Hotfile's motion for summary judgment of non-liability after

February 18,2011. The resulting "certainty" for Hotfile and its users will achieve the purpose
behind the DMCA's Safe Harbor. "Congress enacted title II of the DMCA 'to provide greater
certainty to service providers concerning their legal exposure for infringements that may occur in
the course of their activities.'"

Pe~fect

10, Inc. v. Amazoncom, Inc. 508 F.3d 1146, 1158 (9th

Cir. 2007) (quoting Ellison v. Robertson, 357 F.3d 1072, 1076 (9th Cir. 2004).

*19, (safe harbor denied as to songs sideloaded to users lockers from noticed links but granted
as to songs sideloaded from links not listed in takedown notices); Gupta Dec!. Ex. 12, attaching
Perfect 10, Inc. v. Google, Inc., No. CV 04-9484(AHM), at 12-25 (C.D. Cal. July 16, 2010)
(granting safe harbor as to Category A and C DMCA notices, but not as to Category B notices).
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FILED UNDER SEAL
DATED: March 19, 2012

CASE NO.: ll-CIV-20427-WILLIAMSITURNOFF
Respectfully submitted,

.~
et T. Murm, Esq. Fla. Bar No. 501281
Email: [e-mail]
RASCO KLOCK
283 Catalonia Avenue, Suite 200
Coral Gables, Fl 33134
Telephone: [phone]
Telecopy: 305.476.7102
And

(uuL 2) .1fJlt?IVJV

~fi1o~JJz.cJ);~\

oderick M. Thompson, Esq. dmitted 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]
FARELLA BRAUN -I- MARTEL LLP
235 Montgomery St.
San Francisco, CA 94104
Telephone: [phone]
Telecopy: 415.954.4480
And

alentin Gurvits, Esq. (a 1 ed pro hac vice)
Email: [e-mail]
BOSTON LAW GROUP
825 Beacon Street, Suite 20
Newton Center, MA 02459
Telephone: [phone]
Telecopy: 617.928.1802
Counsellor Defendants Hotfile Corporation
and Anton Titov

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

FILED UNDER SEAL

CERTIFICATE OF SERVICE
I hereby certify that on March 19, 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 1. Stetson, Esq.
ORAY-ROBINSON, PA
.Email: [e-mail]
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
Sherman 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: dpozza@.jenner.com
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

BYf>a2'·~
Jan

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T. Muun