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

Filing 444

RESPONSE/REPLY to 443 Notice of Supplemental Authority Defendants' Response to Plaintiffs' "Notice of Supplemental Authority" by Hotfile Corp., Anton Titov. (Munn, Janet)

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UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF FLORIDA CASE NO. 11-20427-WILLIAMS/TURNOFF DISNEY ENTERPRISES, INC., TWENTIETH CENTURY FOX FILM CORPORATION, UNIVERSAL CITY STUDIOS PRODUCTIONS LLLP, COLUMBIA PICTURES INDUSTRIES, INC., and WARNER BROS. ENTERTAINMENT INC., Plaintiffs, v. HOTFILE CORP., ANTON TITOV, and DOES 1-10, Defendants. ____________________________________/ HOTFILE CORP., Counterclaimant, v. WARNER BROS. ENTERTAINMENT INC., Counter-Defendant. ____________________________________/ DEFENDANTS’ RESPONSE TO PLAINTIFFS’ “NOTICE OF SUPPLEMENTAL AUTHORITY” CASE NO. 11-20427-WILLIAMS/TURNOFF In a four-page supplemental brief, Plaintiffs try to put a brave face on Viacom International, Inc. v. YouTube, Inc., ___ F.3d ____, 2012 WL 1130851, Docket Nos. 10-3270cv, 10-3342-cv (2nd Cir. April 5, 2012) (attached as Exhibit A to Plaintiffs’ Notice Of Supplemental Authority [Docket No. 443]). 1 YouTube does not help Plaintiffs’ arguments on summary judgment. Not only does Plaintiffs’ “Notice” largely contain improper re-argument, it badly distorts the important aspects of the YouTube decision. To assist the Court, Hotfile hereby provides a more accurate summary of the relevant holdings, with minimal argument. I. YouTube Requires Knowledge Or Awareness Of “Specific And Identifiable Infringements” On “the most important question on appeal,” the Second Circuit rejected Plaintiffs’ position that generalized knowledge of infringement on a website suffices to deprive a defendant of safe harbor protection under the DMCA. YouTube at 15-19; PMSJ at 25-26. Examining the “actual knowledge” and “red flag” awareness that disqualify service providers from safe harbor protection, the Second Circuit unambiguously ruled that “both apply only to specific instances of infringement.” YouTube at 18. In doing so it agreed with the Ninth Circuit in UMG Recordings, Inc. v. Shelter Capital Partners LLC, 667 F.3d 2011 (9th Cir. 2011) (“Veoh”). Id. Unlike the Plaintiffs here, the Second Circuit explicitly agreed with Veoh in holding, “[w]e do not place the burden of determining whether [materials] are actually illegal on a service provider.” YouTube at 18 (quoting Veoh, 667 F.3d at 1038). Compare Reply PMSJ at 11 (“[P]laintiffs disagree with the Ninth Circuit’s decision in Veoh”). It also found that that knowledge of infringing URLs is required, quoting with approval from Capitol Records, Inc. v. MP3tunes, LLC, 2011 WL 5104616, at *14 (S.D.N.Y. Oct. 25, 2011). YouTube at 18. The Second Circuit also held: By definition, only the current clips-in-suit are at issue in this litigation. Accordingly, we . . . instruct the District Court to determine on remand whether any specific infringements of which YouTube had knowledge or awareness correspond to the clips-in-suit in these actions. 1 Plaintiffs’ Notice Of Supplemental Authority is referred to herein as “Notice” and the YouTube decision attached as Exhibit A thereto is referred to as “YouTube.” Defendants refer herein to the abbreviations set forth in the Citations Legends in Defendants’ summary judgment briefs. 2 CASE NO. 11-20427-WILLIAMS/TURNOFF YouTube at 22. This left at issue only a small “handful of specific clips.” Id. at 34. Thus, the Second Circuit adopted Hotfile’s view on this threshold aspect of the DMCA. DMSJ at 12 (“Hotfile did not have knowledge of the specific files-in-suit . . .”). 2 YouTube rejects Plaintiffs’ argument that disqualifying knowledge or awareness can be proved through statistics. See PMSJ at 25-26 (“the sheer magnitude of infringement – more than 90% of all downloads were infringing . . . disqualifies defendants from [the] DMCA safe harbor”). The YouTube court discarded a similar argument there that “75-80% of all YouTube streams contained copyrighted material”: “[S]uch estimates are insufficient, standing alone, to create a triable issue of fact as to whether YouTube actually knew, or was aware of facts or circumstances that would indicate, the existence of particular instances of infringement.” YouTube at 19-20. Despite the YouTube holding that disqualification from the safe harbor “requires specific knowledge of particular infringing activity,” YouTube at 18-19, Plaintiffs persist in arguing that their evidence “need not refer to specific infringing files.” Notice at 3. Plaintiffs incorrectly assert that the Second Circuit found a triable issue in YouTube based on the February 7, 2007 email from YouTube employee Patrick Walker requesting that his colleagues search for “soccer” and “football” and “Premier League” so as to take down any “clearly infringing” clips prior to a meeting with the English soccer league. Notice at 3. Plaintiffs argue this e-mail did not identify specific URLs. Id. In fact, the Second Circuit said summary judgment had been “premature” and “express[ed] no opinion as to whether th[is] evidence” is enough “to withstand a renewed motion for summary judgment by YouTube on remand.” Id. at 22 n.9; see id. at 34 (“the cause is 2 This underscores the irrelevance of the generalized facts unrelated to the specific files in suit upon which Plaintiffs depend. For example, each of the following is plainly a diversion: (1) Hotfile’s disbursement of affiliate payments to “link sites containing the terms ‘pirate’ or ‘warez’,” because this evidence does not relate to specific files-in-suit, PMSJ at 26; (2) the hundreds of emails attached to Plaintiffs’ papers referring to files they have never asserted to be allegedly infringing files-in-suit; (3) Hotfile personnel’s alleged downloading of dozens of copyrighted works which were undisputedly not owned by Plaintiffs; id.; Yeh Ex. 29; (4) their assertion that Hotfile demonstrated website functionality using infringing works not owned by Plaintiffs; PMSJ at 26; Yeh Exs. 44, 45, 47 at 2; and (5) their generalized argument that Hotfile knew that competitor cyberlockers had rejected one user’s allegedly-infringing files not having any connection to the Plaintiffs or files-in-suit; PMSJ at 26; Yeh Ex. 52. 3 CASE NO. 11-20427-WILLIAMS/TURNOFF REMANDED for the District Court to determine whether YouTube had knowledge or awareness of any specific instances of infringement corresponding to the clips-in-suit”). 3 II. Willful Blindness Applies Only To Specific Instances Of Infringement On the issue of willful blindness, Plaintiffs omit the central component of the Court’s holding: in the DMCA context, the doctrine may only be applied to specific instances of infringement. Id. at 24 (“Accordingly, we hold that the willful blindness doctrine may be applied, in appropriate circumstances, to demonstrate knowledge or awareness of specific instances of infringement under the DMCA.”). The Court recognized the need to balance the application of the willful blindness doctrine against the fact that “DMCA safe harbor protection cannot be conditioned on affirmative monitoring by a service provider.” Id. at 23; see id. at 2324 (“§ 512 is incompatible with a broad common law duty to monitor or otherwise seek out infringing activity based on general awareness that infringements may be occurring.”). Thus, on this issue, too, the Second Circuit adopted Hotfile’s view of the law. See DOPMSJ at 18 (“Disqualifying knowledge under the DMCA must point to specific infringements. The Studios’ 3 Plaintiffs vaguely allude in the last words of their Notice to “countless emails identifying specific infringing works, files and links” at Hotfile. Notice at 4 (referring to Yeh Decl., Exs. 26-30). In fact, exactly none of those 787 e-mails identified any Hotfile URLs as infringing. Each merely recorded the URL of the last download attempted by the user. As a threshold matter, it is hardly self-evident from the URLs that http://hotfile.com/dl/35520587/6985fb0/hiolo.610.prime.part1.rar.html is allegedly an unauthorized copy of an episode of the television show “Lost,” or that http://hotfile.com/dl/58460406/267191c/Munich is allegedly a movie rather than personal travel photos (or anything else), or that http://hotfile.com/dl/15608663/928c9b8/SolidWorks_2010r.part12.rar is allegedly proprietary anti-virus software, or that http://hotfile.com/dl/32570519/84a23c4/2012. Lektor_PL.part02.rar.html is allegedly a Columbia Pictures presentation simply because it employs the numerals “2012” (coinciding with the name of a film). Yeh Decl., Ex. 27 at 1, 7-8; Ex. 28 at 1. To impose upon Hotfile the duty to ascertain infringement based solely upon URLs recorded automatically in every one of Hotfile’s 701,116 e-mails from users would be no different than imposing on Hotfile the duty to monitor its site for content that might infringe – an obligation which the Second Circuit explicitly refused to impose on YouTube. YouTube at 23 (“DMCA safe harbor protection cannot be conditioned on affirmative monitoring by a service provider.”) (emphasis added); id. at 18 (“we do not place the burden of determining whether materials are actually illegal on a service provider”) (citation and punctuation omitted); id. at 1819 (“If investigation of facts and circumstances is required to identify material as infringing, then those facts and circumstances are not ‘red flags.’”) (citation and punctuation omitted). And, moreover, the Studios have not asserted which, if any, of those emails contain URLS that are actually files-in-suit. Thus, YouTube rejects Plaintiffs’ arguments regarding Hotfile’s allegedlyculpable knowledge under the DMCA in multiple ways. 4 CASE NO. 11-20427-WILLIAMS/TURNOFF willful blindness argument improperly aspires to disqualify based on general knowledge.”) (emphasis added). 4 III. YouTube Confirms That The DMCA Is A Defense To All Theories Of Secondary Infringement, Including Inducement Liability Plaintiffs engage in a tortured reading of the Court’s discussion of “ability to control” to try to find support – where none exists – for their moribund argument that Grokster inducement liability is an unwritten exception to the DMCA safe harbor. See Notice at 2. This argument ignores the Court’s definitive statement at the conclusion of the opinion that the DMCA safe harbor is a defense to all of the plaintiffs’ claims: “The District Court correctly determined that a finding of safe harbor application necessarily protects a defendant from all affirmative claims for monetary relief.” YouTube at 33; see Viacom Int’l Inc. v. YouTube, Inc., 718 F. Supp. 2d. 514, 516 (S.D.N.Y. 2010) (affirmative claims include “inducement” liability). Thus, the Second Circuit once again adopted Hotfile’s view on this issue. See DOPMSJ at 20. Anything else would be contrary to the DMCA’s purpose of providing a layer of “certainty” over background principles of secondary liability, such as inducement. Id. The Court’s suggestion that under some circumstances, Grokster inducement “might also rise to the level of control under section 512(c)(1)(B)” (YouTube, 2012 WL 1130851 at *13) does not imply that this is so in most or even in any cases. Regardless, Plaintiffs have admittedly disclaimed this issue for purposes of summary judgment and have instead reserved it for trial, so it is a non- issue for present purposes. PMSJ at n.11. 4 Contrary to this holding, Plaintiffs’ willful blindness argument here is not based on any specific instance of infringement. See PMSJ at 26-27; PSUF at 7 (¶ 11). Instead, it is based on inferences Plaintiffs seek to raise from: (1) a single email written by a Hotfile contractor that does not discuss any specific instance of infringement; (2) the absence of a search function on Hotfile’s website; (3) a statement by Mr. Titov at his deposition about Hotfile’s theoretical ability to review downloads; and (4) the assertion that prior to the filing of this lawsuit, “defendants had no policy to associate infringement notices with the uploading user or keep track of such users.” PSUF at 7 (¶ 11). Because none of this “evidence” concerns any specific instance of infringement (i.e., any of plaintiffs’ specific purported verified files-in-suit), it is insufficient as a matter of law to establish “knowledge” or “awareness” based on the common law “willful blindness” doctrine. 5 CASE NO. 11-20427-WILLIAMS/TURNOFF IV. Plaintiffs’ Argument About Common Law Vicarious Liability Is A Straw Man That Misrepresents Defendants’ Position Plaintiffs attempt to camouflage the fact that the Second Circuit rejected Viacom and the MPAA’s view on the “right and ability to control” provision of the DMCA by mischaracterizing Hotfile’s arguments on vicarious liability. Notice at 2. They had argued that this provision of the DMCA “codifies the common law doctrine of vicarious liability.” YouTube at 26. The Second Circuit correctly recognized that this “would render the statute internally inconsistent” and rejected the argument that they need show nothing more than that defendants have the ability to block access to content on their website. See YouTube at 26-27. On the other hand, Defendants’ discussion of vicarious infringement does not once mention the DMCA, other than to point out in a footnote that Plaintiffs conceded the existence of a genuine issue of fact as to whether, for purposes of the DMCA, Hotfile receives a “direct financial benefit directly attributable to the infringing activity, in a case in which [they also have] the right and ability to control such activity.” DOPMSJ at 32 n.40. Defendants’ discussion otherwise is addressed solely to the common law vicarious liability standard and the relevant case law that has interpreted that standard in the internet context. See Opp. at 32-34; Perfect 10, Inc. v. Amazon.com, 508 F.3d 1146 (9th Cir. 2007) (common law vicarious infringement requires “both a legal right to stop or limit the directly infringing conduct, as well as the practical ability to do so”); A&M Records, Inc. v. Napster, Inc., 239 F.3d 1004 (9th Cir. 2001) (decision to impose vicarious liability turned on fact that Napster’s system architecture had a searchable index that allowed Napster to easily locate infringing work on its system and users had to give file names that corresponded to copyrighted music in the files); Wolk v. Kodak Imaging Network, Inc., 2012 WL 11270 (S.D.N.Y. Jan. 3, 2012) (dismissing vicarious infringement claim because online photo sharing site has no “right and ability to supervise” infringing conduct); Arista v. Myxer, 2011 U.S. Dist. LEXIS 109668 (C.D. Cal. Apr. 1, 2011) ( “[T]o the extent that Myxer uses Audible Magic filtering technology (as well as other means to stop or limit alleged copyright infringement) there remain genuine issues of material fact as to whether Myxer sufficiently exercises a right to stop or limit the alleged copyright infringement.”). The YouTube opinion – which, in any event, does not address the merits of the plaintiffs’ affirmative claims but only deals with the DMCA safe harbor defense – in no way conflicts with these authorities. 6 CASE NO. 11-20427-WILLIAMS/TURNOFF DATED: April 12, 2012 Respectfully submitted, s/ Janet T. Munn Janet T. Munn, Esq. Fla. Bar No. 501281 Email: jmunn@rascoklock.com RASCO KLOCK 283 Catalonia Avenue, Suite 200 Coral Gables, Fl 33134 Telephone: 305.476.7101 Telecopy: 305.476.7102 And s/ Roderick M. Thompson Roderick M. Thompson, Esq. (admitted pro hac vice) Email: rthompson@fbm.com Andrew Leibnitz, Esq. (admitted pro hac vice) Email: aleibnitz@fbm.com Anthony P. Schoenberg, Esq. (admitted pro hac vice) Email: tschoenberg@fbm.com Deepak Gupta, Esq. (admitted pro hac vice) Email: dgupta@fbm.com Janel Thamkul, Esq. (admitted pro hac vice) Email: jthamkul@fbm.com FARELLA BRAUN + MARTEL LLP 235 Montgomery St. San Francisco, CA 94104 Telephone: 415.954.4400 Telecopy: 415.954.4480 And Valentin Gurvits, Esq. (admitted pro hac vice) Email: vgurvits@bostonlawgroup.com BOSTON LAW GROUP 825 Beacon Street, Suite 20 Newton Center, MA 02459 Telephone: 617.928.1800 Telecopy: 617.928.1802 Counsel for Defendants Hotfile Corporation and Anton Titov 7 CERTIFICATE OF SERVICE I hereby certify that on April 12, 2012, a true and correct copy of the foregoing document was served on all counsel of record or pro se parties identified below either via transmission of Notices of Electronic Filing generated by CM/ECF or in some other authorized manner for those counsel or parties who are not authorized to receive electronically Notices of Electronic Filing. Karen L. Stetson, Esq. GRAY-ROBINSON, P.A. Email: Karen.Stetson@gray-robinson.com 1221 Brickell Avenue Suite 1600 Miami, FL 33131 Telephone: 305.416.6880 Telecopy: 305.416.6887 Karen R. Thorland, Esq. (admitted pro hac vice) Senior Content Protection Counsel Email: Karen_Thorland@mpaa.org Motion Picture Association of America, Inc. 15301 Ventura Boulevard, Building E Sherman Oaks, CA 91403-5885 Telephone: 818.935.5812 Steven B. Fabrizio, Esq. (admitted pro hac vice) Email: sfabrizio@jenner.com Duane C. Pozza, Esq. (admitted pro hac vice) Email: dpozza@jenner.com Luke C. Platzer, Esq. (admitted pro hac vice) Email: lplatzer@jenner.com JENNER AND BLOCK, LLP 1099 New York Ave, N.W. Suite 900 Washington, DC 20001 Telephone: 202.639.6000 Telecopy: 202.639.6066 By: s/ Janet T. Munn Janet T. Munn -8-

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