• by Wendy Davis  @wendyndavis, May 12, 2008

Torrent search engine TorrentSpy is defunct and in bankruptcy, but nonetheless intends to appeal a court ruling ordering it to pay $111 million to the motion picture industry.

"It's a public interest issue," said Ira Rothken, who represents the company. "Other organizations will get involved because it's important to them as well."

Last week, federal district court judge Florence-Marie Cooper in Los Angeles ruled that TorrentSpy must pay damages of $111 million, or $30,000 for each of 3,699 instances of copyright infringement.

Despite the obvious practical hurdles of collecting damages from a company that has gone bankrupt, the motion picture industry said it intended to seek money from TorrentSpy. "We will pursue enforcement of the judgment," said a Motion Picture Association of America spokeswoman.

Rothken said one of the most pressing issues on appeal concerns TorrentSpy's efforts to protect the privacy of its users. The reason Cooper ruled against the company was because it expunged users' IP addresses rather than comply with a court directive to disclose them. Cooper found that purging the IP addresses constituted a destruction of evidence, and as a sanction, ended the case last year in favor of the movie studios.

TorrentSpy had consistently promised users it would protect their privacy. The company's servers are located in the Netherlands, which are bound by European Union rules on privacy, Rothken said. It's unclear whether Cooper's order that the company disclose records about users conflicted with Europe's strict privacy laws.

Rothken also said the company intends to argue that Cooper should not have summarily ended in favor of the motion picture organization because TorrentSpy had provided the movie studios with enough information to go to trial.

"Through an appellate process, future rules could be distilled out related to everything from terminating sanctions to ... privacy laws," Rothken said. "These are all very important issues that deserve to have greater scrutiny by the 9th Circuit court of appeals."

Separately, the motion picture association reportedly filed a claim in Sweden against torrent tracker Pirate Bay, claiming that the company owes it $15 million for piracy of "Harry Potter and the Goblet of Fire," "The Pink Panther," "Syriana" and "Walk the Line," and 13 episodes of "Prison Break."

The MPAA alleges that "The Pink Panther" was downloaded almost 50,000 times by Pirate Bay users, while "Syriana" was downloaded around 3,700 times, according to IDG news service.

The claim was apparently made in connection with a pending prosecution of the site in Sweden where several months ago authorities charged the company's founders with conspiracy to infringe copyright.