A Los Angeles judge terminated a piracy case that members of the Motion Picture Association of America brought against TorrentSpy.
The move means that TorrentSpy faces penalties and an injunction, which will shut down its site, but it doesn't solve several legal questions raised in the case.
Viacom and other film companies sued TorrentSpy for directing Internet users to movies they could download illegally with BitTorrent software. The company argued that it only pointed users to other sites through indexes and never distributed the files.
U.S. District Court Judge Florence-Marie Cooper ruled that Forest and Wes Parker and Justin Bunnell destroyed evidence by taking down posts from discussions about illegal downloads. The American site blocked U.S. users. The judge said SpyTorrent operators never tried to prevent illegal downloads and lied under oath to hide the fact that they destroyed evidence.
The judge has not set an amount for damages. The company plans to appeal.
The case is one of many in which the film industry has targeted BitTorrent users globally. The MPAA claims its studios lose billions a year to Internet piracy. Authorities have repeatedly tried to shut down such sites only to have them pop up elsewhere.
The MPAA called the latest development a "significant victory for the major Hollywood studios."
"The court's decision is a significant victory for MPAA member companies and sends a potent message to future defendants that this egregious behavior will not be tolerated by the judicial system," John Malcolm, EVP and director of worldwide anti-piracy operations for the MPAA, said in a statement. "The court clearly recognized that defendants engaged in evidence destruction because they knew that such evidence would prove damaging to them. The sole purpose of TorrentSpy and sites like it is to facilitate and promote the unlawful dissemination of copyrighted content. TorrentSpy is a one-stop shop for copyright infringement and we will continue to aggressively enforce our members' rights to stop such infringement."