isoHunt going to shutdown, pay MPAA $110 million

isoHunt, a search engine for BitTorrent files founded more than a decade ago, has agreed today to shut down all its operations worldwide. The company, founded by Canadian Gary Fung, has also accepted a judgment that it must pay the movie studios that sued it $110 million. It's not clear how much of that the studios will actually be able to collect.

Fung gave up his long legal fight just weeks from having to defend his site in federal court; a jury trial was scheduled to start on November 5 in a Los Angeles federal court. Earlier court rulings had already determined that Fung was liable for "inducing" copyright infringement, so the court trial would have largely been about damage control. The MPAA had stated studio lawyers would have sought as much as $600 million had the case gone to trial.

On the US version of isoHunt, Fung had already agreed to filter out MPAA content when it showed up. Despite that, it continued to be a huge site. IsoHunt claimed to have 44.2 million peers, and 13.7 million active torrents, according to the MPAA.

isoHunt argued that it was solely a neutral search engine and had never directly copied the illegal content. But that defense failed isoHunt, as it has generally failed to defend peer-to-peer file-sharing sites in the years since the 2005 MGM v Grokster ruling. A federal judge and a panel of appeals judges agreed that Fung had "induced" others to infringe copyright. Fung had "red flag" knowledge that there was infringing content on his site. He promoted the fact that popular TV shows and movies were there to get more ads.

It's a long-awaited vindication for the MPAA.

"[This settlement] sends a strong message that those who build businesses around encouraging, enabling, and helping others to commit copyright infringement are themselves infringers and will be held accountable for their illegal actions," MPAA chairman Chris Dodd said in a statement.

While the lawsuits take a long time to come to fruition, the entertainment industry has been pitching no-hitters when it comes to suing websites where peer-to-peer technology is used to trade copyrighted files. Napster, Grokster, KaZaa, and Limewire are the biggest tombstones in a growing graveyard of file-sharing websites. None of them were able to avoid liability in court, and many paid hefty settlements. Limewire, for example, paid the RIAA $105 million.

It's only the user-generated content sites that have been able to use the DMCA Safe Harbor defense that isoHunt tried, but failed, to use. Video-sharing site Veoh, for instance, beat Universal Music when it was found to be protected by Safe Harbor—but the company went bankrupt in the process. YouTube has spent $100 million fighting a copyright lawsuit brought by Viacom, which is still being litigated.

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