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Court smacks TorrentSpy

Torrentspy_logoHere's a dog-bites-man story, albeit one with a twist: A federal judge handed the major Hollywood studios a victory last week in their copyright-infringement lawsuit against TorrentSpy, a popular BitTorrent index site. The case wasn't decided on the merits of the studios' claims, however. Instead, U.S. District Judge Florence-Marie Cooper ruled (read the PDF here) that the company deliberately destroyed so much evidence after being sued, the studios wouldn't be able to present the case they should have been able to present.

Regardless of how you feel about TorrentSpy, there are two unfortunate things about this ruling (or three, if you don't like the idea of the MPAA spending less on legal fees). 

First, the important legal issue presented by the case remains unresolved. TorrentSpy contended that it was every bit as legal as Google. It didn't host any infringing files; instead, it tried to help people find what other folks were sharing online. In other words, it claimed to be just a search engine tuned to BitTorrent, which is a neutral technology that in and of itself doesn't infringe. But TorrentSpy wasn't as hands-off as Google. It organized search results in a way that made it easier to find bootlegged copies of popular TV shows and movies. It hosted forums where people discussed those bootlegs. Until earlier this year, it temporarily stored some of the files that users downloaded, making them easier for others to obtain. And it didn't take the steps that sites such as BitTorrent.com and Vuze.com do to guard against links to infringing material. The case could have helped define the liberties and responsibilities of Torrent index sites, which in turn could have clarified the business model -- for both  online entrepreneurs and Hollywood.

Second, Cooper's action raises new questions about how sites accused of contributory infringement should behave after they're sued. TorrentSpy got in trouble for taking steps that actually made the site less useful to would-be infringers. For example, it stopped organizing the TV torrents by the name of the show, and it removed forum posts that discussed illegal downloads. Cooper concluded that TorrentSpy wasn't trying to comply more fully with the law, but to destroy evidence of its past misdeeds. That may be a reasonable ruling, but it doesn't provide much practical guidance to other companies who find themselves on the wrong end of an MPAA lawsuit. TorrentSpy seemed to be in a damned-if-you-do, damned-if-you-don't bind ever since a federal magistrate ordered the company in May to collect data about its users and what they searched for. TorrentSpy altered its site to eliminate cached files and blocked searches from U.S.-based computers, moves that arguably left it with no user data to collect. The studios complained that the company was violating the court's order, and the magistrate slapped it with a $30,000 fine.

TorrentSpy's founder has pledged to appeal, and the company continues to operate outside the U.S. But Cooper isn't finished yet: she still has to determine how much to award the studios in damages.

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Times editorial writer Jon Healey pens opinion pieces about a variety of business issues, and blogs about technologies that are changing the entertainment industry's business model.

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