• by Wendy Davis  @wendyndavis, December 27, 2009

In the latest of a series of rulings against peer-to-peer companies, a federal judge has decided that BitTorrent search engine IsoHunt infringed copyright by intentionally encouraging piracy.

"Evidence of defendants' intent to induce infringement is overwhelming and beyond reasonable dispute," wrote U.S. District Court Judge Stephen Wilson in the central district of California.

The ruling is at least the fourth major defeat for a peer-to-peer company since the courts shut down the original Napster in 2001. Four years later, the U.S. Supreme Court ruled that peer-to-peer company Grokster infringed copyright by inducing infringement. In addition, last year, a federal judge ordered peer-to-peer company TorrentSpy to pay $110 million damages to the Motion Picture Association of America after finding that the site destroyed evidence relevant to the MPAA's copyright infringement lawsuit.

The legal proceedings against IsoHunt began in 2006, when the MPAA sued the site and its owner, Gary Fung, for allegedly inducing and facilitating copyright infringement by enabling users to find pirated material.

IsoHunt compared itself to conventional search engines like Google, arguing that it is not liable because it doesn't host content but merely enables users to find it. The company also said that it had links to lawful content and that the Digital Millennium Copyright Act's safe harbor provisions protected it from copyright infringement liability.

But Wilson ruled that Fung actively solicited infringement. For instance, IsoHunt listed the top 20 U.S. current movies and offered links to pages that allowed users to upload files for those films. "Though defendants eventually discontinued this feature, they did not remove pages that had already been created," Wilson ruled. "This feature evidences defendants' intent to encourage their users' infringement."

Wilson also found that Fung "personally engaged in a broad campaign of encouraging copyright infringement," through statements on IsoHunt and in interviews with the media. Among other remarks, Wilson pointed to an interview in which Fung said: "Morally, I'm a Christian. 'Thou shalt not steal.' But to me, even copyright infringement when it occurs, may not be necessarily stealing."

Wilson also ruled that IsoHunt could not rely on the safe harbors for search engines in the Digital Millennium Copyright Act because the site induced infringement by promoting piracy. "Inducement liability is based on active bad faith conduct," Wilson wrote. "The statutory safe harbors are based on passive good faith conduct aimed at operating a legitimate internet business."