A U.S District Court has ordered the Oron cyberlocker to settle its copyright infringement dispute with adult studio Liberty Media. The file-hosting site claimed that settlement negotiations had never been finalized but yesterday the court decided otherwise. Oron will now have to pay Liberty Media at least $550,000 with additional attorney’s fees to be decided at a later date. In the meantime, Oron’s service remains down.
In June, adult studio Corbin Fisher (through owners Liberty Media) sued the operators of file-hosting service Oron for $34.8 million, claiming that they induce the sharing of copyright infringing files via their service.
Liberty Media’s lawyer Marc Randazza went in with all guns blazing, describing Oron as ‘criminals’ who do not qualify for safe harbor under the DMCA. Oron’s funds were frozen but despite a small part later being released, it became clear that the service would have difficulty continuing without access to much, much more.
In early July it became apparent that the companies had been attempting to reach a settlement, details of which were leaked online following a poor redaction of court documents.
There was a significant gap between what Liberty asked for and what Oron were prepared to give. However, while Oron insisted no final agreement had been reached, Liberty felt that at some point a deal had been struck and went on to ask the court to enforce the terms. Yesterday the court did just that.
“There is nothing in the Settlement Letter that indicates that Defendant did not intend to be presently bound by the proposed terms or that a future writing was required,” U.S. District Court Judge Gloria M. Navarro wrote in her ruling.
“The requirement for the Plaintiff’s attorney to sign and return indicates that the parties do agree that all these terms are acceptable and binding. If this was only a proposal of terms there probably would not be a requirement for Plaintiff’s counsel to sign and return.”
Judge Navarro went on to find that the settlement negotiations between Oron and Liberty did amount to an enforceable contract.
“The Settlement Letter written by Defendant was an offer, accepted by Plaintiff when its counsel signed the letter. There was a meeting of the minds as to all material terms on July 5, 2012, when Plaintiff agreed that the settlement would include dismissal with prejudice of [alleged owner and operator of Oron] Mr. Bochenko,” Judge Navarro wrote.
“There settlement includes valuable consideration on the part of both Plaintiff and Defendant. In this case, the Court can compel compliance because there are no uncertain material terms that remain. Accordingly, the Court grants Plaintiff’s Motion to Enforce Settlement.”
That settlement is detailed in court papers as follows:
1. Oron pays Liberty Media $550,000.
. . .
8. Once payment is received by both parties, both proceedings in NV and HK will be
dismissed with prejudice, and in the event that Oron breaks any part of the deal, the
claims may be reinstated via arbitration after a 30 day “notice and cure” period.
. . .
12. Liberty agree to announce publicly that after a careful review of the facts they
believe Oron is protected by the DMCA safe harbor and that a review of the actual files
shows that there never was any child porn on Oron’s site.
. . .
14. Liberty will immediately, once the terms of the agreement are agreed to issue a
letter asking that the HK bank accounts be unfrozen allowing the payment to the
Randazza Trust and then to [former Oron webhosting provider] Leaseweb as well as send a letter to Leaseweb asking them to allow Oron ten (10) days to pay as the settlement of the matter is imminent.
There are at least 19 points to the settlement agreement so as can be seen from the numbering scheme on the items above a significant number are missing from court papers. As previously revealed, Oron were prepared to hand over the identities of its allegedly copyright infringing customers to Liberty and help the studio take legal action against them.
But while the enforcement of the settlement allows Oron to continue with its business in theory, problems remain. Firstly, Oron’s parent company accounts are still frozen, “in order to satisfy any fee award, which may be sought by Plaintiff, but which must be brought within thirty (30) days of this Order.”
Furthermore, as a cyberlocker Oron is currently doing no business at all. The site disappeared from the Internet several days ago, ostensibly to move to a new host, but it is yet to reappear or post any advisory on its homepage.