Defunct TorrentSpy Slammed With $110M Judgment in MPAA Suit

A federal judge in Los Angeles has awarded the Motion Picture Association of America US$110 million in compensation from Valence Media, operator of the now-defunct file-sharing Web site TorrentSpy.

U.S. District Judge Florence-Marie Cooper ordered Valence Media to pay $30,000 for each copyright infringement of nearly 3,700 movies and television programs that were downloaded. The MPAA took TorrentSpy to court in February 2006.

The Ultimate Privacy Protection Method

TorrentSpy -- which shut down March 24 -- was also accused of hiding or deleting information that might have been used to track down individual file-sharers. The site's owners, Justin Bunnell and Wes Park, denied having done so.

The judge also enjoined TorrentSpy against any future copyright infringement, even though all that is left of the site is a message to users explaining why it shut down:

"The legal climate in the USA for copyright, privacy of search requests, and links to torrent files in search results is simply too hostile," the message reads. "We spent the last two years, and hundreds of thousands of dollars, defending the rights of our users and ourselves.

"Ultimately, the court demanded actions that in our view were inconsistent with our privacy policy, traditional court rules and international law; therefore, we now feel compelled to provide the ultimate method of privacy protection for our users -- permanent shutdown."

Bunnell and Park reportedly said they will file an appeal against the damages.

Heed the Ruling

"This substantial money judgment sends a strong message about the illegality of these sites," said Dan Glickman, the MPAA's chairman and chief executive. "The demise of TorrentSpy is a clear victory for the studios and demonstrates that such pirate sites will not be allowed to continue to operate without facing relentless litigation by copyright holders."

Users of file-sharing sites should take heed, Scott Cleland, president of Precursor, told the E-Commerce Times. "Illegal file-sharing can run, but it can't hide."

Such sites have a wide following. "The estimates are that 80 to 90 percent of [peer-to-peer] file-sharing is illegal. The technology is trying very hard to shake off its illegal uses and find a legitimate business model," he said. "P2P technology is still in the beginning of that transition from illegal content to more of a legal business model."

The winners in the case were six major Hollywood studios that the MPAA represented in the case -- Walt Disney Studios Motion Pictures, Paramount Pictures, Sony Pictures Entertainment, Twentieth Century Fox Film Universal City Studios and Warner Bros. Entertainment.

Legal Traps

"This is one of those instances where, if you read the result broadly, it basically says that if I decided to set up a site that actually doesn't have data on it but points people to sites with data, I can be held liable for those folks who are sharing files," Jack Gold, principal analyst for J. Gold & Associates, told the E-Commerce Times.

In theory, sites that play no direct role in file-sharing activities can get caught in a legal trap. "It's ominous in that it's similar to going after Comcast because 20 of their users are downloading files." he said. "It has a couple of effects. One is, you're penalizing a group of people who are intermediaries. They are not directly involved in copyright infringement. Number two is, I understand the industry wanting to be paid for their rights, but you're potentially putting roadblocks in front of legitimate file-sharing sites."

Even search engines could be dragged into a legal fight. "This is a really difficult thing. This represents a real issue because how do you determine what is or isn't infringement, and who should be making that determination?" Gold continued. "If I do a Google search that points to a site that has copyrighted material on it, can I sue Google for copyright infringement? So, where does it end?"