The world’s largest book publishers have recently sued Hotfile, demanding up to $7.5 million from the now defunct file-hosting portal. In the meantime, it is unknown whether Hotfile has any money left in the bank.
Back in December 2013, Hotfile and the Motion Picture Association of America ended their legal dispute with an $80 million settlement. Although this agreement allowed Hotfile to continue its operations after enforcing a filtering mechanism, the service preferred to shut down. But this move doesn’t necessarily mean the trouble is over for Hotfile: now, inspired by Hollywood’s multi-million dollar victory, a number of the book publishers launched a lawsuit against the website. They claimed that Hotfile had built its business off of copyright infringement and their rights were massively violated by the service and its operators.
50 books have been submitted as evidence, and book publishers demand compensation for them. Overall, Hotfile is facing up to $7.5 million in damages. Actually, the complaint itself is nothing new – it just repeats the arguments previously made by the MPAA, for example, that Hotfile was aware that their service was used to infringe copyright. They pointed out that the company received millions of DMCS takedown notices and knew that users were migrating to Hotfile for copyrighted content after RapidShare was sued.
Then the publishers accused file-hosting service of failure to delete infringing files from its servers, and claimed that Hotfile lacked a repeat infringer policy, failing to ban repeat infringers who accounted for a large percentage of the infringing files. Although Hotfile received lots of DMCA notices, it didn’t bother to track whether any of files came from the same user.
In result, a small group of persistent infringers managed to upload millions of infringing files. The plaintiffs claimed that by early 2011, almost 25,000 users got at least 3 DMCA notices, while many had received over 100. They accounted for 50 million uploaded files, which made up to 44% of all files hosted by Hotfile.
If you remember Hotfile’s legal history, this case is quite strong and may in part explain why the book publishers chose Hotfile as a target. The only question is whether the defendant still has money left to compensate for any damages.