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)
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.
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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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