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I thought that the act says it is illegal to send false takedown requests?

While it is clear that Warner was not playing by the rules, the question of whether Hotfile is entitled to compensation for the DMCA “fraud and abuse” it claims Warner conducted is for the judge to decide.

I guess it comes down to whether HotFile has the money (they probably don't) to fight the fraud case. This makes a mockery of the justice system.

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From the Ars Technica article it sounds like this evidence was introduced in defense of Hotfile. You're most likely right -- hotfile doesn't have the resources to pursue this as a counterattack. However, it could be used as a successful defense in their current case, which could help establish it as part of case law.

"Hotfile has also tried to turn the tables by arguing that one of the studios, Warner Brothers, has itself violated the DMCA by issuing bogus takedown requests"

[http://arstechnica.com/tech-policy/news/2011/11/warner-admit...]

It says it's illegal to send requests that aren't in good faith. That's a big loophole there.

The question is whether the automated tool identifying them is enough to cause a good faith belief.

That sounds like a pretty hard sell. A tool that's so shoddy as to flag a 30-word sentence beginning with the site's contact URL shouldn't even be cause for a bad-faith belief.

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