And here we go again. Perfect 10 likes to describe itself as a porn publisher, but it's become clear that it's real business seems to be about suing internet companies by claiming copyright infringement. It's sued all sorts of companies, using all kinds of bizarre legal arguments, many of which have resulted in losses (and useful precedents), but sometimes sites seem to settle and Perfect 10 just keeps suing. It's latest target is Tumblr, which it has sued for copyright infringement using many of the same old theories it's used before. You would think that Perfect 10's Norman Zada would have at least waited until Tumblr was actually making some revenue before suing, but apparently he couldn't wait.
So how is Perfect 10 trying to get around the DMCA claims? First, by claiming that Tumblr ignored its DMCA notices. If this is true, that certainly would damage Tumblr's DMCA safe harbor claims. Though, it would surprise me if it was true. In many of its other cases, it's later come out that what Perfect 10 claims are legitimate DMCA takedown notices are anything but. In fact, it often appears like Perfect 10 tries to make its DMCA notices almost impossible to comply with -- which, if true, would be one way to make it easier for the company to then sue over failed compliance...
Second, it claims that Tumblr's own employees uploaded Perfect 10 images to "jumpstart" Tumblr's success. Again, if true, those actions would not be covered by the DMCA's safe harbors, but the filing provides little to no support for the claim that this happened. Perhaps it's true, but given Perfect 10's past, it would nice to see some actual evidence there in order to believe the claim, and not think that this might just be a fishing expedition.
Finally, Perfect 10 claims that the fact that Tumblr has a search engine lets people find the infringing pictures. They seem to be arguing that this is part of the contributory infringement claim. I'd imagine that this is based on the fact that part of the reason Rapidshare beat Perfect 10 was the lack of a search engine (and, yes, here is where we note the irony that the US gov't is using the lack of a search engine as proof that Megaupload was clearly illegal -- when that same fact actually helped get Rapidshare deemed legal). Still, Perfect 10 hasn't had much luck getting any actual search engine found liable, so it's unclear why it will suddenly start with Tumblr.
We'll see what other evidence comes out, but, assuming Tumblr's employees did not directly infringe Perfect 10's work and that there is an explanation for the "DMCA notices," one would hope that Tumblr will join many other top internet companies in fighting back against Perfect 10 and (hopefully) create a few more good precedents along the way.
Perfect 10 has basically made a business out of suing companies claiming copyright abuse. The former publisher of "adult" magazines has gone on a rampage suing tons of companies -- including all the major search engines -- claiming that pointing people to infringing results and showing thumbnails of copyrighted images is infringement itself. For an eye-opening look at Perfect 10, the best read is probably Rapidshare's countersuit from a few years ago, that goes into detail on how the company operates. So far, Perfect 10 has lost almost all of its big cases -- including those against both payment processors and search engines. To be honest, in the long run, Perfect 10 may have done a lot of good in presenting cases that highlight the clear insanity of certain interpretations of copyright law, providing strong and clear precedents from court rulings that have been tremendously useful in other cases.
The lawsuit against Google for showing thumbnails has bounced around for years, with the appeals court saying that showing those thumbnails is fair use -- something those freaking out about Pinterest might want to keep in mind. As it's done before, the Supreme Court has (once again) rejected one of Perfect 10's appeals, meaning that the (strong) lower court ruling stands. Yes, technically, it only applies in the 9th Circuit, but this ruling seems to be one that other courts are willing to cite and use, so hopefully the precedent is considered more widespread. While it would have been nice to have a Supreme Court ruling smacking down Perfect 10 and making such a clear fair use ruling apply across the board, for now we'll be happy with just keeping the good 9th Circuit ruling in place.
We've noted in the past that Perfect 10's myriad lawsuits alleging copyright infringement against all sorts of companies haven't resulted in many victories for the company, but have established a set of case law rulings that have been very helpful in defining clear exceptions within copyright law, which have been quite useful in other cases. The only really questionable Perfect 10 ruling I can think of is the one we just mentioned earlier this week, in which a court seemed to get confused concerning the difference between direct and indirect copyright infringement, but I'm hopeful that this will get sorted out soon enough.
However in a different Perfect 10 case, a part of its long and almost entirely failed campaign against Google, we have a fantastic appeals court (9th Circuit) ruling that could be quite a big deal, in reversing previous precedent and noting that a showing of copyright infringement does not automatically prove "irreparable harm," and that it also should not mean an automatic preliminary injunction is applied in such cases (thanks to Eric Goldman for pointing us to the ruling).
The ruling is significant for a number of reasons. Obviously, for a court to change its position on things, it needs a good reason to do so and, here, the court relies on the very important Supreme Court ruling in the MercExchange case, in which it noted that defaulting to a preliminary injunction in patent cases did not make sense. Instead, a court should consider a variety of factors and whether or not there was real harm that required an injunction. In this case, the court has now applied the same reasoning to copyright law for the first time. This isn't entirely surprising, since the MercExchange ruling by the Supreme Court actually relied somewhat on copyright law itself, but there had not yet been a clear ruling on whether the MercExchange decision applied to copyright. We did note, last year, that the Second Circuit appeals court had raised the question of whether or not MercExchange applied to copyright, and had sent the case back to a lower court to consider. In this case, however, we have a firm ruling (which also acknowledges that Second Circuit ruling) that MercExchange also applies to copyright:
We agree with the Second Circuit. As explained in
eBay, the language of § 502(a) is permissive and evokes traditional
equitable principles: “[T]he Copyright Act provides
that courts ‘may’ grant injunctive relief ‘on such terms as
[they] may deem reasonable to prevent or restrain infringement
of a copyright.’ ” 547 U.S. at 392 (quoting 17 U.S.C.
§ 502(a)). Nothing in the statute indicates congressional intent
to authorize a “major departure” from “the traditional four-factor
framework that governs the award of injunctive relief,”
id. at 391, 394, or to undermine the equitable principle that
such relief is an “extraordinary and drastic remedy” that “is
never awarded as of right,” Munaf v. Green, 553 U.S. 674,
689-90 (2008) (internal quotation marks omitted). We therefore
conclude that the propriety of injunctive relief in cases
arising under the Copyright Act must be evaluated on a case-by-
case basis in accord with traditional equitable principles
and without the aid of presumptions or a “thumb on the scale”
in favor of issuing such relief.
And, more specifically, the court states directly (citations & quotation marks omitted for clarity):
In sum, we conclude that our longstanding rule that a
showing of a reasonable likelihood of success on the merits
in a copyright infringement claim raises a presumption of
irreparable harm is clearly irreconcilable with the reasoning of the Court’s decision
in eBay and has therefore been effectively overruled.
In other words, just showing copyright infringement no longer means a presumption of irreparable harm (in the Ninth Circuit, at least). Since many of us have argued for years that infringement does not automatically lead to harm, this ruling is big news.
Perfect 10 is probably a lot more famous for filing copyright infringement lawsuits than publishing any sort of images. And it seems to always lose. In the process, the company has helped set a variety of useful precedents, mainly in the area of fair use. Yet the company forges on, suing every third party it can find. Last year, we detailed RapidShare's fascinating response to Perfect 10, which finally lays out in great detail some of the company's practices -- such as allegations that it sends faulty or otherwise questionable takedown notices in the hopes that they're not taken down so the company can sue.
Earlier this year, we noted that its latest target was the well known file storage service, MegaUpload. Given the similarity with this case to many other Perfect 10 cases, we had hoped that the judge would make quick work of dismissing it. Tragically, that's not what happened. Embedded below is the unfortunate ruling from Judge Irma Gonzalez, who mostly ruled against MegaUpload in its motion to dismiss the lawsuit. You can read the whole thing, but the truly scary part for me is where the court says MegaUpload may be guilty of direct infringement.
This is crazy. Direct infringement charges are used against the actual party doing the infringing. Most service providers don't have to deal with that, but instead the focus is on third party liability, things like contributory infringement, vicarious infringement or inducement. Here, however, the judge actually says that MegaUpload is involved enough that it could be found guilty of direct infringement:
Drawing all reasonable inferences in Perfect 10's favor, Megaupload serves as more than a passive conduit, and more than a mere "file storage" company: it has created distinct websites, presumably in an effort to streamline users' access to different types of media (e.g., megaporn.com, megavideo.com)... it encourages and, in some cases pays, its users to upload vast amounts of popular media through its Rewards Programs.... it disseminates URLs for various files throughout the internet... it provides payouts to affiliate websites who maintain a catalogue of all available files... and last, at a minimum, it is plausibly aware of the ongoing rampant infringement taking place on its websites. Taken together, Perfect 10 has adequately alleged Megaupload has engaged in volitional conduct sufficient to hold it liable for direct infringement....
This still doesn't make any sense. Everything described seems relevant to indirect third party liability. None of it seems to involve direct infringement. Honestly, I'm just confused how the court made the leap here. While this was just to deny the motion to dismiss, this might not bode well for Megaupload... and Perfect 10 may finally score a big legal win.
Perfect 10, the failed "adult magazine" publisher that many say has always really been in the "suing people for infringement" business, rather than the publishing business, has sued again. The company seems to lose nearly all of its copyright infringement lawsuits in the US (though, it's helped create a very useful body of case law), but it just keeps on suing. The latest lawsuit is against usenet service provider Giganews. The complaint points out that the content is stored on Giganews' own servers, but (at least from the description) seems to ignore that the content comes from Usenet and users, not from Giganews itself. And, of course, Giganews has a registered DMCA agent, so it has safe harbor protections from users. It's unclear from the report linked here if Perfect 10 filed takedowns, but given Perfect 10's history of questionable or bogus takedown notices, you have to assume that even if they did, there's a decent chance they were faulty. At what point is this company finally put out of its misery?
Perfect 10 may be the gift that keeps on giving in filing really ridiculously bad lawsuits that make it damn easy for judges to set smart precedents. The "porn company" that some accuse of not really being a porn company at all, but rather a "copyright troll" who seeks to spread its images far and wide online for the sake of filing lawsuits, has repeatedly sued various search engines and others claiming infringement, and almost always lost. Part of one of its recent losses in a case against Google happened because it did not file actual DMCA notices, but rather sent a spreadsheet of top level URLs (not specific URLs) and a hard drive or DVD containing photos that it claimed were being infringed upon. In response, Perfect 10 is trying to claim that Google forwarding its "DMCA notices" to ChillingEffects itself represented infringement.
The 9th Circuit Appeals court recently heard the appeal on this ruling, which you can listen to below, and to say the judges were skeptical of Perfect 10's argument would be a supreme understatement. It's really worth a listen to hear just how annoyed the judges are with Perfect 10's lawyer, and just how out of his league the lawyer sounds. Using SoundCloud, I've highlighted a few of the key points of annoyance by the judges.
My favorite part may be around 8 minutes and 15 seconds in, right after Perfect 10's lawyer complains that even if their DMCA notices were deficient, it's still Google's fault for not explaining to Perfect 10 how to file compliant notices. Judge Kozinski jumps in immediately and questions this:
Kozinski: I'm sorry, where is this requirement that they educate you in how to be compliant with the law? Either the notice is lawfully compliant, or it's not lawfully compliant. If it is, then you don't need to change anything. And if it's not, I don't see where there's a requirement that they teach you how to make it compliant.
David Schultz (lawyer for Perfect 10): Well I believe that there's certainly a requirement to work together to try to make the least possible burden. There's a whole discussion on what's is or isn't burdensome here...
Kozinski: It may be a good idea, or it may not, but where is the requirement?
Eventually, all the way at the end of the hearing, a different lawyer for Perfect 10 claims that the requirement is in section 512(c)3(b)(i). You can check out that section of the DMCA if you'd like, and perhaps help us all out in figuring out where in there it says that if you file a faulty DMCA notice, the recipient has to tell the you how to properly file a compliant notice. I don't see it. In fact, my quick reading suggests it says the opposite, in that it says the service provider is not liable for having actual knowledge if it receives a faulty DMCA notice... but it's entirely possible I'm reading that wrong. Copyright lawyers? Want to chime in...?
Perfect 10, somewhat ridiculously, also claims that even if its DMCA notices were faulty, because there were tools out there that Google could have used -- including image recognition technology, or just "reviewing the images it finds" -- this makes Google liable. Of course, we already have multiple case law rulings that make it clear that the DMCA requires no such proactive techniques.
There's also an amusing exchange starting around the 10 minute mark, where Perfect 10 tries to claim that Google has -- incontrovertibly -- caused $20 million in damages to Perfect 10. The lawyer keeps arguing that it's "obvious" that this is true, based on a statement from Perfect 10's own CEO. One of the judges asks if there's any proof that any single customer used to purchase from Perfect 10, but then switched to Google, and the lawyer says no, but it's obvious that it must have happened.
The discussion about forwarding to ChillingEffects is also amusing. Judge Kozinski asks Schultz to explain how ChillingEffects works and what Google is doing and then -- for the second time in the hearing -- chides Schultz for not being able to answer a simple "yes" to a question, before digging in:
Kozinski, cutting off Schultz: Have you ever heard of the word 'yes'?
Schultz: Yes.
Kozinski: I don't want a whole story. So the things they are sending are entirely within your control? I mean, you could distort the images, you could put a disclaimer on them, you could put yellow polka dots, anything like that, right?
Schultz: The problem your honor...
Kozinski: Yes?
Schultz: Yes.
Kozinksi: Okay. So what's the beef then? If you know that they're going to send them to ChillingEffects, and you have it entirely within your power, or your client's power, to distort the images, to avoid them being used the way you did here, what's your complaint?
There's a lot more like that; those are just a few examples.
As for the other side of the case, the judges are also tough with Google's lawyer. At one point Judge Sandra Ikuta talks about "common sense" solutions, saying that Google knows there's infringement and why can't it just use its own search tools to find and block the infringing works. Google's lawyer points out that Perfect 10 completely exaggerated on the power of its image recognition tools, and that there's a difference between "image recognition" and "license recognition." Still, it's troubling that the judge is even asking this in the first place, as there is no proactive requirement for Google to go above and beyond the DMCA, and yet that appears to be what she's asking.
Judge Ikuta also asks an odd question of Google, later on, questioning why Perfect 10 can't put a special "alias" on its images that Google would recognize and then block any image with that alias -- and then deal with the counternotices if it takes down too much. However, you would think that this is a clear case of prior restraint. The government should never support a system that is "block first and ask questions later," so it seems like a strange question to ask.
While the judges do appear to be tough on both sides, it seems like they're a lot more skeptical of Perfect 10's reasoning. While Judge Ikuta asked some odd questions, I can't see those questions really impacting the ruling.
The company Perfect 10 has a long history of filing ridiculous copyright infringement lawsuits, and losing nearly every single time. For a rather detailed look at Perfect 10's standard operating procedure, you really owe it to yourself to read the countersuit filed by Rapidshare last summer, which detailed all sorts of claims against the company -- including that its entire reason for being is to find companies to sue for copyright infringement, and that it even hopes to spread its copyright images as widely as possible, in order to have more targets to sue. The company is also famous for not actually using official takedown procedures, and filing obviously faulty takedown notices. And the thing is, Perfect 10 seems to lose in court pretty consistently. In almost every case that we're aware of, the judge ends up smacking down Perfect 10 in the end. Apparently, the company just can't get enough legal losses, as it's now suing cyberlocker site MegaUpload, and making all the usual claims. Given that the court has (so far) been siding with similar cyberlocker Rapidshare over Perfect 10, you have to wonder if this will just be yet another legal loss.
Of course, Perfect 10 has been useful in some ways. The various rulings against it in lawsuits have set useful precedents (mainly in the 9th Circuit) concerning how thumbnails and embedded files are not directly infringing. The lawsuits have also helped show that search engines shouldn't be liable for what they find. In other words, Perfect 10's lawsuits tend to be so ridiculous that they help demonstrate the ridiculous logical conclusions of arguments regularly used in other copyright infringement lawsuits. Thankfully, however, Perfect 10 has been so aggressive with its lawsuits that it has helped provide strong precedents and defenses for those sued in other cases, under circumstances that might not be quite as extreme. So while we roll our eyes at each new Perfect 10 lawsuit, it should be recognized that these lawsuits have created a decent framework for recognizing that secondary and contributory liability for copyright infringement has limits.
Perfect 10 is a company that, for a brief period of time, apparently published a rather expensive porn magazine. Since then, it seems to have served a single purpose: to file ridiculous copyright lawsuits that it almost always loses, but which have helped to define case law concerning copyright issues. Various Perfect 10 decisions are frequently cited in copyright lawsuits -- for example, its multiple losses concerning claims that search engines showing thumbnails infringe on copyrights. Earlier this year, Rapidshare filed a very entertaining countersuit against Perfect 10, which goes into great detail suggesting that the company serves little purpose other than being something of a copyright troll. In fact, it seems to go out of its way to not use tools provided to take down infringing content, and to alert internet service providers of potential infringement in ways that are almost impossible for them to do anything about. For example, it's famous for filing deficient DMCA notices that do not properly indicate where the specific content is located.
The "company" (and I say that loosely) is apparently back in court with Google yet again, this time arguing that passing on its DMCA takedown notices to sites like ChillingEffects.org is also copyright infringement. Yes, it's saying that publishing a DMCA notice can constitute infringement. ChillingEffects, of course, is the enormously helpful website that acts as a repository for DMCA takedown notices. It serves as an amazingly useful tool. Perfect10's argument is that it includes its images in the DMCA notices, so publishing them via ChillingEffects is infringement. It seems to stretch any level of believability to think that a DMCA notice which Perfect10 itself filed is acting as a reasonble replacement for the content contained within. Besides, I'm pretty sure that there is no reason for Perfect 10 to include the actual images -- it could just send URLs. It seems like the only reason to include the actual images is to be able to make a bogus copyright claim at a later date, which is exactly what happened.
Just last week we were talking about Perfect 10's lawsuit against Google in Canada, where we noted that in Perfect 10's own bragging press release, it effectively admits that its takedown filings were not properly filed. They admit that they just sent images to Google saying that it owned the images, without telling Google where they were actually located to take down. This was the same charge that Rapidshare recently made against Perfect 10, noting that the company seemed to purposely not want companies to take down their images, so that it could sue.
Thankfully, in the US version of the lawsuit (in which Perfect 10 seems to lose over and over and over again), the judge noted this failure by Perfect 10 to properly file DMCA takedown notices and dismissed large parts of the lawsuit. Similar to what Perfect 10 bragged about and what Rapidshare claimed, it appears that Perfect 10's "notices" were hardly informative. It also seems to have gone out of its way to make it difficult for Google to quickly respond -- including sending the notices to the wrong email address. As EFF notes:
For example, many of its "notices" consisted of a cover letter, a spreadsheet with URLs (many of which linked only to a top-level URL for a website, as opposed to a specific infringing URL) and a hard drive or DVD containing Perfect 10's electronic files of its photos. Not good enough, said the court -- the information required by the DMCA must be contained in a single written communication; forcing a service provider to cobble together adequate notice from a variety of sources is just too burdensome.
While this is entertaining in that it's the latest in a long line of legal smackdowns against Perfect 10 and its questionable litigation strategy, this ruling could be important in a variety of other cases as well. One of the key issues being fought about in a series of cases is what constitutes "knowledge" for a service provider, requiring it to take action under the DMCA. In both the Veoh/Universal Music case and the YouTube/Viacom case, judges found that the knowledge had to come from specific DMCA takedown notices, that indicated where the specific infringing works were. However, in the IsoHunt case, a judge went in a different direction, claiming that "red flag" knowledge was enough. That is, if there was enough information out there to raise a "red flag," then the service provider needed to take action.
Now, we've long argued that such "red flag" knowledge is somewhat meaningless. If I know that lots of people are using a tool for infringement, but don't know which specific works are infringing, how can I be expected to do anything specific? Since there's no way for the service provider to pinpoint which works are infringing -- even if they know that many works likely are infringing -- then how can the service providers act in a way that doesn't create massive collateral damage for legitimate communication?
But this ruling, again, effectively is a vote against the concept of "red flag knowledge," since you could make the argument (and, Perfect 10 did) that even in the absence of a complying DMCA takedown notice, sending over its mess of information could constitute a red flag. But, as the judge properly notes, that makes little sense. The ruling goes through the ridiculous hoops that Google would need to jump through in order to find and take down specific works, and notes that the DMCA clearly did not intend for that to happen.
Of course, this isn't the first time that Perfect 10 has lost on this exact argument. The CCbill case involved more or less the same questions about "red flag" knowledge, and Perfect 10 lost there. This ruling relies heavily on that one. But, we seem to keep racking up rulings that say that any "red flag" knowledge still requires specific notification of what is infringing -- with the IsoHunt ruling being the one exception. It makes you wonder if the IsoHunt ruling is on a collision course with all of these others.
Over the years, we've written many, many, many times about Perfect 10, the former publisher of a porn magazine who has spent the last decade making ridiculously laughable arguments about how every search engine on the planet is infringing on its copyrights for pointing people to images that people had scanned from Perfect 10's magazines and put online. For the most part, these lawsuits have gone nowhere, but Perfect 10 is incredibly persistent. Last month, we wrote about a countersuit by Rapidshare, which detailed how Perfect 10 is now a "copyright troll," that (according to Rapidshare's claims) purposely tries to spread its works online in order to have more companies to sue. Obviously, a key target of Perfect 10 has been Google, though Perfect 10 keeps losing (and then continues to come up with ridiculous reasons to keep the lawsuit alive).
Apparently, Perfect 10 has decided that if the US courts won't work for this game, it might as well try elsewhere. An anonymous reader points us to the news that Perfect 10 is happily suing Google in Canada as well as the US. Google had, quite reasonably, sought to have the case dumped, noting the identical case going on in the US. However, the judge noted that, due to differences in copyright law between the US and Canada, the two lawsuits are not the same. Still, hopefully, a court will see through the ruse.
The press release from Perfect 10 also tries to distinguish its lawsuits from the recent Viacom ruling saying that Google is protected by the DMCA. And while there are differences in the case, Perfect 10's claims here are laughable:
"This case is inherently different from the Viacom v. Google case, where the Judge apparently felt that Google expeditiously processed Viacom's notices. Our experience with Google is that Google processes almost no notices from small companies," Zada adds. "I have sent more than 500 notices of infringement to Google," Zada said. "I basically do a Google Image search, cross off the images Perfect 10 does not own, and send an Adobe copy of that Google web page to Google, with the infringing images clearly marked. Google can clearly see which images are infringing and where they are located. Yet Google has refused to process those notices," Zada says.
That's both silly and misleading. We've seen Google pull down content on legitimately filed DMCA notices in a timely manner from companies big and small all the time. In fact, some of us feel that Google is often too quick to pull down content on DMCA notices. The problem, as was pointed out in the Rapidshare lawsuit, is that Perfect 10 refuses to follow the procedure put forth by the DMCA. There's a clear procedure for how to file a DMCA notice. But what's clear from the quote above is that Perfect 10 isn't filing a legitimate takedown. It's just sending screenshots with no additional information. And what's an "Adobe copy"?
