Court rules against Hotfile in piracy case

Hotfile had claimed that it was protected under the Digital Millennium Copyright Act's "safe harbor" provision, which generally frees websites from liability for their users actions. But in order to qualify for the safe harbor, sites must not have knowledge of the infringing behavior and must comply with takedown requests. 

The Motion Picture Association of America (MPAA) claimed that Hotfile encouraged piracy by paying users who uploaded files and linked to them from third-party sites. The movie studios claimed that Hotfile's business model relied on the traffic generated by online piracy. 

“This decision sends a clear signal that businesses like Hotfile that are built on a foundation of stolen works will be held accountable for the damage they do both to the hardworking people in the creative industries and to a secure, legitimate internet,” former Sen. Chris Dodd, the MPAA's chairman and CEO, said in a statement.  

“Today’s decision is a victory for all of the men and women who work hard to create our favorite movies and TV shows, and it’s a victory for audiences who deserve to feel confident that the content they’re watching online is high quality, legitimate and secure."

The MPAA announced the court ruling, which will not be made public for two weeks.