takedown without manual review of whether the files were actually infringing. Warner moved
for summary judgment on the claim.^2974
Both Warner and Hotfile agreed that Section 512(f) requires actual, subjective knowledge
of the fact of noninfringement at the time that a takedown notice is made, but Hotfile argued that
some of Warner’s actions with respect to its takedown notices suggested that its mistaken
takedown notices might rise to willful blindness or even actual knowledge. In particular, Hotfile
argued that Warner’s lack of pre-notice review, and its focus on determining whether it owned
the works on the system, rather than whether the use of the works infringed its copyrights,
supported liability under Section 512(f). The court noted that Warner’s reliance on technology
to accomplish the identification of files for takedown might have prevented it from forming any
belief at all as to whether identified files were infringing. However, the court stated that it was
unaware of any decision to date that actually addressed the need for human review, and the
statute does not specify how belief of infringement may be formed or what knowledge may be
chargeable to the notifying entity.^2975
At bottom, the court concluded that, while there were engaging questions surrounding
Warner’s knowledge, its responsibility to investigate, whether it had a good faith belief in
infringement in each instance, and whose burden it was to show or refute what (all issues of first
impression in its Circuit), there was sufficient evidence in the record to suggest that Warner
intentionally targeted files it knew it had no right to remove. Such evidence was sufficient to
preclude summary judgment in Warner’s favor. The only remaining issue with respect to the
Section 512(f) claim was therefore whether Hotfile would be able to show any injury for the
erroneous deletions, which is an element of a Section 512(f) claim. The court noted that the
quantity of economic damages to Hotfile’s system was necessarily difficult to measure with
precision and there was much disagreement between the parties and their experts on the point.
Notwithstanding such difficulty, the court found that the fact of injury had been shown by
Hotfile, and its expert could provide the jury with a non-speculative basis to assess damages.
Accordingly, the court denied Warner’s motion for summary judgment on the Section 512(f)
claim.^2976
In Dec. 2013, the MPAA announced a settlement under which the district court had
awarded damages of $80 million to the plaintiffs and ordered Hotfile to either shut down its
operations or use digital fingerprinting technology to prevent copyright infringement by its
users.^2977
(^2974) Disney Enterprises, Inc. v. Hotfile Corp., 2013 U.S. Dist. LEXIS 172339 at 47-53 (S.D. Fla. Sept. 20, 2013).
(^2975) Id. at 149-56.
(^2976) Id. at *156-58.
(^2977) “Hotfile To Pay $80M to MPAA, Studios In Copyright Suit,” Law360 (Dec. 3, 2013), available as of Dec. 7,
2013 at http://www.law360.com/ip/articles/493076?nl_pk=be5fde4e-8dc1-4d81-b621-
f0352bcdff74&utm_source=newsletter&utm_medium=email&utm_campaign=ip.