Perfect 10 Loses Once Again, Sets More Good Copyright Precedent
As we've noted, sorta-porn company Perfect 10 really is the gift that keeps on giving. The company claims that it's in the porn business, but in one of the many, many lawsuits it has filed, it was suggested that the company is little more than a pure copyright troll, just looking for companies to sue. This was in a filing made by one of the companies Perfect 10 sued back in 2010:
Perfect 10 is a copyright troll that does not operate a real business and instead seeks to foster the spread of infringing copies of works that it owns over the Internet in order to entrap and shakedown websites and services where copies of its images may randomly end up.
Perfect 10 does not have the employees or attributes of a legitimate business. Today, Perfect 10 is essentially a paralegal service masquerading as a porn company. It is run by its founder, Norm Zada, out of his Beverly Hills home with the help of full and part time employees who are paid primarily to troll the Internet looking for (but not removing) allegedly infringing copies of Perfect 10 images for use in existing or potential future litigation and to draft declarations and other papers.
One of the core elements of a Perfect 10 copyright trolling operation is that it rarely sends legitimate DMCA notices. Sometimes it just sends screenshots of images and basically says "take this down" without ever pointing to the actual location of the content. That's yet another reason why many have argued it's little more than a troll. Someone truly looking to protect its own content would actually follow the DMCA and tell service providers where the content was hosted, rather than tap dancing around such questions... and then filing lawsuits. I'm sure that some who Perfect 10 threatens just settle, but when cases go to court, Perfect 10 not only loses, but loses in impressive fashion, setting all sorts of useful and valuable precedents around the DMCA and how service providers should respond to takedowns. Among the useful cases:
And, then, in 2014, Perfect 10 lost yet again, this time to Usenet provider Giganews. The case there was so egregious that in 2015, Perfect 10 was ordered to pay $5.6 million in legal fees to Giganews for filing such a bogus claim.
Perfect 10 appealed (of course) and the 9th Circuit has now given us yet another smackdown of Perfect 10, affirming the lower court decision, and saying that Perfect 10's theories about Usenet infringement are pretty crazy. One key point in the ruling, that Perfect 10 tried to argue, was that in light of the bizarre (and still nonsensical) Supreme Court Aereo ("looks like a duck") test, Giganews should be found to have been a direct infringer due to its interpretation of "volitional conduct." Specifically, Perfect 10 seemed to argue that Aereo wiped away the need to show "volitional conduct" by the parties accused of infringing. The court isn't buying it:
Contrary to Perfect 10's contention, this requirement ofcausation remains an element of a direct infringement claim.In Fox Broadcasting, we explained that "[i]nfringement ofthe reproduction right requires copying by the defendant,which comprises a requirement that the defendant cause thecopying." ... In using this language, we indicated thatcausation is an element of a direct infringement claim.
Furthermore, the court points out that Perfect 10's interpretation of Aereo is just wrong:
The volitional-conduct requirement is consistent with theAereo majority opinion, in which the Supreme Court held thatAereo, a service that streamed broadcast televisionprogramming to subscribers over the Internet, "perform[ed]publicly" as defined by the Transmit Clause.... First, the Aereo Court did not expressly addressthe volitional-conduct requirement for direct liability underthe Copyright Act, nor did it directly dispute or comment onJustice Scalia's explanation of the doctrine. Thus, as onecourt in the Central District of California subsequentlyopined, because "[t]he volitional conduct doctrine is asignificant and long-standing rule, adopted by all Courts ofAppeal to have considered it, . . . it would be folly to presumethat Aereo categorically jettisoned it by implication."
From there, the court makes quick work of each one of Perfect 10's claims, pointing out how each one appears to be divorced from the reality of the law. Perfect 10 seems to be one of the perfectly ridiculous plaintiffs. A key part of this case, for example, is that Giganews regularly pointed out that in order to remove postings from its Usenet servers, it needs the proper Message-ID and, in the rare cases where Perfect 10 passed those along, they were quickly removed. But most of the time, Perfect 10 refused to actually pass along Message-IDs, and seemed to indicate Giganews should still block those images:
we hold that there were nosimple measures available that Giganews failed to take toremove Perfect 10's works from its servers. Giganewspresented sufficient evidence that Perfect 10's proposedmethod for locating infringing messages was onerous andunreasonably complicated. Indeed, Giganews spent morethan 20 hours processing 565 Message-IDs from Perfect 10because they were not machine-readable. Giganewscalculates that Perfect 10's method would therefore require354,000 hours of manual work for every 10 million Message-IDs - the number of Message-IDs that Giganews receivesevery month. Moreover, the record is clear that whenGiganews did receive machine-readable Message-IDs, itimmediately processed them and subsequently removed themessages from its servers.
There's also the question of "inducement" -- the Supreme Court-invented legal concept that sunk Grokster a little over a decade ago. Once again, there's nothing in what Giganews that comes even remotely close to inducing infringement:
Based on the record, no reasonable juror couldconclude Giganews distributed its product "with the object ofpromoting its use to infringe copyright."...
Perfect 10 points to entirely inconclusive evidence of anysuch objective to infringe copyrights. For example, Perfect10 identifies Giganews's advertising materials, which statethat its product "has built-in MP3 and File Locators thatsearch all Giganews newsgroups for music, pictures, andmovies without having to download millions of messages."Perfect 10 also points to a web page where a Giganewsadvertisement appears next to text written by another entity,which states that Giganews "provide[s] an uncensored newsfeed with up to 20 ssl encrypted connection and over 460days worth of retention. That is over a years [sic] worth ofaccess to downloadable music, movies and games."However, neither of these advertisements nor any otherevidence in the record indicates that Giganews itselfpromoted its product "with the object" of infringingcopyright.
Perfect 10 further argues that Giganews has the object ofpromoting infringement because it: (1) "offers 25,000terabytes of copyrighted materials . . . without permission,"(2) "continues to commercially exploit the content of knownrepeat infringers," and (3) "advertises that it does not keeptrack of subscriber downloads, effectively encouraginginfringement." Even if true, none of this conduct suggeststhat Giganews clearly expressed an intent to promoteinfringement or took "affirmative steps . . . to fosterinfringement."
The court also rejects the "vicarious" liability wackiness that Perfect 10 argues, noting that Perfect 10's theory seems to violate the very basic concept of who has standing in court:
Here, Perfect 10 argues for a rule that would allow a courtto hold Giganews liable under a theory of vicarious liabilityby showing only that Giganews benefits financially from theinfringement of another's works, regardless of whetherGiganews received any financial benefit from the specificinfringement alleged. Such a rule would allow cases to bebuilt on the rights of owners and the actions of users notbefore the court. At the very least, Perfect 10's proposed ruleis in significant tension with Article III's standingrequirement. At most, Perfect 10's view runs counter to therequirement that there be a "causal connection between theinjury and the conduct complained of[.]"
Finally, the court upheld the fee award for legal fees from Perfect 10, meaning that it may now be on the hook for many millions of dollars for bringing such a ridiculous lawsuit in the first place. Perfect 10 may, of course, ask the Supreme Court to hear a further appeal, but that seems unlikely to go anywhere. And, in the meantime, we've got another useful precedent sent by a wacky Perfect 10 case.
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