September last year the Florida-based file-hosting service Hotfile sued Warner Bros. for fraud and abuse. Hotfile alleged that after giving Warner access to its systems, the studio wrongfully took down files including games demos and Open Source software without holding the copyrights to them. Wrongful takedowns continued even after the movie studio was repeatedly notified about the false claims.

In a response, Warner Bros. admitted the accusations. However, the movie studio argued that they are not to blame because the mistakes were not made in bad faith. As a result, the false takedown requests were not "deliberate lies."

The Electronic Frontier Foundation (EFF) disagrees with this defense and decided to file an amicus curiae brief siding with Hotfile. The filing was submitted earlier this year and the court finally accepted it for entry last week. In its brief the EFF points out that as a result of the false takedown requests many of Hotfile's users were denied access to legitimate content, effectively hurting speech on the Internet. Blaming computers for these mistakes is not a valid defense according to the group.

"Warner's automated dragnet technique, done with admitted knowledge that it would inevitably cause a substantial amount of lawful content to disappear from Hotfile, resulted in numerous takedowns that were not based on a good faith belief that the identified files infringed its copyrights," the group writes.

The EFF is worried that when copyright holders are not held accountable for these false automated takedowns, access to legitimate content will be needlessly and increasingly censored.

Warner Bros. sees things differently though, and filed a memorandum responding to EFF's arguments two days ago. According to the movie company there is absolutely no proof that they intended to abuse the system. Moreover, Warner asks the court to reject the EFF's argument that automated takedown systems are incompatible with the DMCA.

"The undisputed record in this case shows that Warner designed and operated its antipiracy system with the utmost good faith, and had no knowledge of any errors at the time it sent the counterclaim takedown notices to Hotfile."

Automated takedown systems are industry standard according to Warner, and are not incompatible with the DMCA as long as the senders are unaware of any mistakes at the time notices are sent. "Liability arises only where there is actual subjective knowledge of a misrepresentation," Warner writes.

Warner continues that there is no support for the EFF's argument that automated takedown are more prone to mistakes. The movie company adds that the percentage of errors that were discovered by Hotfile was actually quite low.

"Warner's system is as sophisticated a system as exists anywhere in the world. Indeed, in the time period at issue in Hotfile's counterclaim, of the nearly one million notices Warner sent Hotfile, Hotfile has identified less than 890 notices that contain errors – for an error rate of less than 1/10th of 1%."

Warner ends its reply by asking the court to deny the EFF's notion that automated takedown systems are incompatible with the DMCA.

It is now up to the court to decide whether Warner or EFF and Hotfile have the strongest arguments.

The pending case has major implications for the responsibilities of copyright holders when it comes to automated takedown requests. If the court decides that Warner Bros is not guilty of copyright abuse then copyright holders will have very little incentive to prevent mistakes.