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Are website founders 'pirates' and 'thieves'? Not in this judge's courtroom

Updated: An infringement suit filed by Hollywood studios against file-upload service Hotfile has settled a week before the case was scheduled to go to trial.

Hotfile agreed to pay $80 million, report the Wall Street Journal (sub. req.) and the Hollywood Reporter.

The settlement comes after a federal judge granted a motion to ban “perjorative terms” during the trial.

U.S. District Judge Kathleen Williams of Miami partly granted a motion by Hotfile that sought to ban “perjorative” words such as “pirate,” “piracy,” “theft,” “thieves,” and “stealing” to describe the company or its founders, report TechDirt, TorrentFreak and Ars Technica.

Williams said the parties “may not use perjorative terms but may use terms of art.” She did not elaborate in the omnibus order.

Williams previously ruled that Hotfile is not entitled to safe harbor under the Digital Millennium Copyright Act and it is vicariously liable for its users’ infringement. Hotfile encourages its users to share links to uploaded files, turning Hotfile into a file distribution network, Williams said.

The plaintiffs in the suit are five major movie studios and entertainment companies who claim their copyrighted materials are shared through Hotfile.

Updated at 11:05 a.m. to include news of the settlement.