Rapidshare Countersues Perfect 10 For Being A 'Copyright Troll' Who Only 'Shakes Down' Others

from the strong-words dept

Over the years, we've covered Perfect 10's various lawsuits against all sorts of companies it accuses of copyright infringement for having some connection to images from old Perfect 10 magazines. For example, it's sued pretty much every search engine for hosting thumbnails of images that others scanned. It's also sued payment processors of paywall sites. To date, Perfect 10 has lost nearly all of these lawsuits. Its latest loss was against Rapidshare, where it failed to get an injunction against the site, after the court pointed out that Rapidshare is just a locker and doesn't even provide a search engine for people to find stuff. Also, quite damaging to Perfect 10's case was its failure to actually inform Rapidshare where the infringing content existed, or use the established process for asking content to be taken down.

Now it looks like Rapidshare has struck back. Eric Goldman points out that Rapidshare has countersued Perfect 10, directly claiming that the company is a "copyright troll." They don't mince words:

Perfect 10 Is A Copyright Troll that Does Not Operate A Real Business

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.

Perfect 10 is so litigious that Judge Matz of the Central District of California, before whom a number of Perfect 10 cases had been consolidated, has made it clear to Perfect 10 that it should not file any more lawsuits, which is why it filed this suit in the Southern District of California even though this district has no connection to the parties or the underlying claims.

From there, the filing goes on to make fun of Zada and his plans for Perfect 10 and his inability to copy Hugh Hefner's path to success in the porn publishing world -- suggesting that Perfect 10's problems in business had a lot more to do with the way the company was set up and run, rather than any online infringement:

From the start, Perfect 10's business model did not make business sense. Its Perfect 10 magazine (now defunct) was never competitively priced and therefore never garnered a large circulation. It featured less content at higher prices than competitive magazines. Similarly, Perfect 10 had little or no display advertising, which is a major source of revenue for magazines. Ultimately, perfect 10 could not compete with better run, better known publications that had ample advertisements.

The filing then goes on to suggest that Zada jumped on copyright infringement lawsuits as a business model, rather than as a method for protecting content:

Zada came to see litigation as a profit center, where the more Perfect 10 images were infringed online, the more money he and Perfect 10 could earn in settlements extracted through litigation or merely the threat of litigation. Accordingly, Perfect 10 does little or nothing to deter infringement, including exercising self-help or implementing other measure that legitimate copyright owners use to minimize online infringement, preferring instead to tacitly encourage the spread of its images as widely as possible over the internet.

There's a lot more along those lines, as the filing details how Perfect 10 seemed to go out of its way to make it more difficult for Rapidshare (and others) to remove the content it claimed was infringing -- points made by the judge in the original ruling rejecting the injunction request.

All of this is somewhat entertaining, but what is the actual legal claim? Rapidshare claims that these activities have caused harm to Rapidshare by forcing it into expensive litigation while also harming its reputation. So it's accusing the company of violating a California "unfair business practices" law -- which seems worryingly vague. Then there's a common law "unfair competition" claim, which also seems a bit vague. Unfortunately, as ridiculous as Perfect 10's lawsuits have been, I'm not convinced Rapidshare really has a legal leg to stand on in the countersuit. Either way, you can see the full filing below:

Filed Under: copyright, copyright troll, lawsuits
Companies: perfect 10, rapidshare

Details Of The Rapidshare Decision: No Search Engine, Plus Efforts To Takedown Copyright Material Helped

from the but-it's-not-a-complete-win dept

Earlier, we wrote about the ruling against Perfect 10 in its attempt to get a temporary restraining order on Rapidshare. As we mentioned at the time, the only details we had were based on Rapidshare's press release, that obviously presented it in the best possible light to Rapidshare. Thankfully, Christopher Harbin alerted us in the comments that he's posted a copy of the ruling and written up his own analysis. First, here's the ruling: From the initial statements about the ruling from Rapidshare, saying that it could not be infringing since it was just the host, I had naturally assumed that the court found that Rapidshare was protected by the DMCA's safe harbors. But that is not the case. In fact, the court basically tosses out Rapidshare's safe harbor claim, because Rapidshare (bizarrely) has never set up an official DMCA agent -- which is necessary to qualify for the safe harbors. I would guess that Rapidshare's excuse for not doing so is that it's not based in the US, but if it's going to deal with lawsuits in the US, it's crazy not to have set up a DMCA agent (a very simple process).

That said, there are some interesting things (not all good) in the ruling. There were a few things that helped Rapidshare here. First, is that it does do things to takedown content it believes to be infringing. Second (and perhaps most interesting) is the fact that it does not index or promote the content stored on its service by itself. Since most file sharing services include a search engine aspect, the court concludes that this is a key element of suggesting that Rapidshare is not liable for direct infringement. That's an interesting ruling that could answer the question I've asked before about whether or not it actually is possible to create a site that allows for sharing of files that does not run afoul of the Grokster inducement rules.

The other thing that helps Rapidshare is that, despite being involved in a whole bunch of copyright cases, it still appears that Perfect 10 is somewhat incompetent in understanding copyright law and availing itself of tools to deal with infringement. In this case, Perfect 10 didn't send Rapidshare the specific links where infringing content existed. It just sent the company a bunch of files, but Rapidshare had no way to match those files to ones hosted in users' lockers. Even then Rapidshare still did try to find as many of the images as possible, even going so far as to do Google searches, and delete them. On top of that, Rapidshare has a tool that lets content owners indicate if certain files are infringing. Perfect 10 chose not to use that.

The one part of the ruling that I found troubling, however, is that the court did say that, even without being alerted to what's infringing, Rapidshare did have "specific knowledge" of infringing works on the site. This is a key point of dispute in the Viacom/YouTube case, where Google makes the argument that there's no way for it to know which works are really infringing and which are there on purpose. Yet, in this case, the court says that the service provider does have specific knowledge:

Thus, it appears that specific knowledge of direct infringement may exist even where an operator does not have information that would allow it to search its contents and distinguish infringing from non-infringing materials. Here, RapidShare received notice of hundreds of copyrighted Perfect 10 images that were found on its servers. The Court therefore concludes that RapidShare had actual, specific knowledge of direct infringement.

Basically, it says that because Perfect 10 alerted Rapidshare to infringing content, then Rapidshare has "specific knowledge." That wasn't enough to meet the full inducement standard, so isn't a huge issue here, but that logic seems wrong to me. If that's all it takes to create "specific knowledge," then lots of user-generated content sites could be in trouble. So, if you want to cause trouble for any UGC site, you just upload content, and then alert the site that there is infringing content on the site, but don't tell them where it is or how to find it. I don't see how that's "specific knowledge" at all, but the court felt otherwise.

Finally, while I appreciate Christopher's analysis of the ruling, I have to disagree with his first two points. He doesn't understand why not having a search engine matters:

Although Rapidshare does not index its files, it basically punts indexing to third-party websites. It’s trivial to find infringing material hosted on Rapidshare and other file-hosting sites and I’m not sure why dicing up storage and indexing into separate entities which obviously have a symbiotic relationship should be able to avoid liability.

I think that's a slight misread of the ruling. It's not saying that Rapidshare gets to avoid all liability. It's just that it takes away Rapidshare's direct infringement liability, because it is not, in fact, setup to make it easy for people to find that content. The fact that others have made it easier to find that content should not be blamed on Rapidshare.

Second, Christopher notes:

I'm not at all convinced that in all cases plaintiffs should be forced to ferret out all infringement on a defendant's website. As the law stands right now, copyright holders have to employ an army of people to constantly monitor defendant's site for infringement.

To which the obvious response is, why should that burden fall on the defendants? If it takes plaintiffs "an army of people," it would actually take the defendants significantly more than that, complicated by the fact that the defendant has no way of knowing if the content has been uploaded legitimately or is an infringing copy.

Filed Under: copryight, dmca, infringement, liability
Companies: perfect 10, rapidshare

US Court Refuses Injunction Against RapidShare As Perfect 10 Gets Legal Theories Rejected Yet Again

from the have-they-ever-won? dept

Ah, Perfect 10. The adult content company has spent the last decade or so engaged in one copyright lawsuit after another, accusing pretty much every search engine out there of copyright infringement for hosting thumbnails of images that others uploaded. It has lost repeatedly. And yet, it keeps on suing. At some point, you have to wonder if its legal budget might have been better spent on, I don't know, actually innovating and giving people a reason to buy. It looks like yet another of its legal theories isn't working out so well in court. paperbag was the first of a few of you to send in the news that the district court in California's Southern District has refused to grant an injunction against Rapidshare, suggesting that, as a mere file locker, Rapidshare would not be liable for the infringement done by its users.

Amusingly, the ruling came out just a day before a bunch of US politicians tagged Rapidshare as one of the worst copyright offenders out there, and suggested sanctions should be made against Germany for not stopping Rapidshare. Funny, then, that a US court also doesn't seem to think Rapidshare is breaking copyright law...

Of course, this was just the ruling over the request for a preliminary injunction. TorrentFreak's headline jumps the gun a bit in saying a court found Rapidshare "not guilty" for infringement. It sounds like we haven't quite reached that stage yet. This was just a request for an injunction before the actual case goes to trial. That said, at this point, I can't find a copy of the actual ruling, and the only information to go off of is Rapidshare's own press release, which states "The court rejected the application in its entirety. In its ruling, the court stated that as a file-hosting company, RapidShare cannot be accused of any infringements of copyrights." That sounds like the court said Rapidshare qualified for DMCA safe harbors, but without the full ruling, we don't know for sure -- and it's entirely possible that Rapidshare is exaggerating the ruling.

If anyone has access to the actual ruling, and are willing to share it, it could be interesting (and potentially relevant to other ongoing cases, such as the Viacom v. YouTube case). Once I've seen a copy I'll either update this post or post again, if the details warrant a separate post.

Filed Under: copyright, injunction
Companies: perfect 10, rapidshare

Amazon And Perfect 10 Settle Lawsuit; But Details Are Sealed

from the doubt-amazon-paid-much-if-anything dept

Perfect 10, the adult entertainment publisher who simply freaked out about its magazine photos appearing online and mistakenly sued Google and Amazon for finding their images (that others had uploaded) via their search engines, never seems to want to admit that it sued the wrong entities. Every time it sues a third party (it also tried suing payment processors), claiming copyright infringement, the courts end up tossing out the lawsuits (there was a lower court ruling in Perfect 10s favor that got overturned). But, on the whole, Perfect 10s track record in these lawsuits is pretty dismal. Yet it keeps on trying. Last year, a lawsuit against Amazon was dismissed after the court pointed out that Amazon was clearly protected by the DMCA.

It appears that Perfect 10 and Amazon have finally settled that lawsuit, though they aren't releasing the terms and conditions of the settlement. Given that Amazon won so handily in court, you'd have to imagine that Perfect 10 basically gave up to get the settlement. Still, it's unfortunate that the details aren't being made clear, as it would give confidence to other companies who are sued in similarly misguided lawsuits.

Filed Under: copyright, images, secondary liability, third party liability
Companies: amazon, perfect 10

Perfect 10 Still Not Giving Up In Lawsuit Against Google

from the an-a-for-effort dept

Back in May, when a court shot down yet another of porn publisher Perfect 10's lawsuits against web search engines, we wondered if the publisher would finally realize that Google is not liable for what its image search engine finds. Yet, the company doesn't seem interested in giving up. It's claiming that Google abused the discovery process and failed to hand over important materials, including its "DMCA log." At issue is the fact that some people out there had used unauthorized images from Perfect 10 on their own websites, and Google's image search found them. Perfect 10 first tried to claim Google itself was guilty of copyright infringement for displaying those images, but eventually the courts realized that displaying a thumbnail of an image from another website in a search result is not, nor should it be, considered copyright infringement.

Of course, this particular statement is pretty amusing:

"Google appears to have the view that it is above the law," says Perfect 10 President, Dr. Norm Zada.

That's a funny comment for someone who's been losing pretty much every lawsuit. It seems that the courts have thought all along that Google was very much within the letter and spirit of the law.

In this case, Perfect 10 is now trying to stretch what the DMCA requires of a recipient of a DMCA notice, saying:

"Under the DMCA, a search engine such as Google may receive limited immunity from monetary damages for copyright infringement if it complies with the requirements of the DMCA," Zada says. "The search engine must act expeditiously to remove or disable access to infringing material upon receiving notice of infringement from the copyright owner, and it must adopt a procedure so that copyright holders will not have to provide the search engine with notices about the same infringing material or the same infringers over and over."

The first part is true. The latter part is not true. However, it's the latter part that Perfect 10 seems to be relying on, demanding its "DMCA log" which is apparently "a spreadsheet-type document summarizing DMCA notices received, the identity of the notifying party and the accused infringer, and the actions (if any) taken in response." Considering Google has a pretty long history of quickly responding to DMCA complaints, it's difficult to believe that it would somehow not adhere to the DMCA in this case. Once again, it seems likely that Perfect 10 is going to end up on the losing side of a court battle. If only it actually put this much effort into actually building a business.

Filed Under: copyright, discovery, dmca
Companies: google, perfect 10

Perfect 10 Shot Down Again; Will It Finally Realize That Search Engines Aren't Liable For Photos?

from the it's-time-to-give-it-up dept

Porn magazine publisher Perfect 10 has spent tons of money on a long series of fruitless lawsuits against the operators of search engines. The issue is that people with access to Perfect 10 photos had put them online, and (of course) search engines indexed these and included them in their image search features. Perfect 10 insisted that, since these search engines showed thumbnails of the images, the search engines were liable for the infringement. Except that courts keep throwing these cases out. But, that hasn't stopped Perfect 10. However, all it has to show for it is another loss. In its lawsuit against Amazon, for Amazon's A9 search subsidiary, the court has tossed out the lawsuit, pointing out that the DMCA safe harbors clearly protect Amazon, while also highlighting a bunch of pretty basic mistakes that Perfect 10 made in filing the lawsuit (you would think, having filed so many similar lawsuits, that it would get the specifics right). At some point, the company needs to realize that these lawsuits aren't getting it very far.

Filed Under: copyright, dmca, safe harbors, thumbnails
Companies: amazon, perfect 10

Supreme Court Tells Perfect 10 It Can't Blame Payment Processors For Copyright Infringement

from the let-me-explain-to-you-the-concept-of-safe-harbor dept

Perfect 10 was an "adult" magazine publisher who had trouble adjusting to the massive change in the market called "the internet," and has since gone on a rampage suing just about everyone for copyright infringement -- though, amusingly, it almost never seems to target those actually responsible for copyright infringement. The issue is that people took scans of images from Perfect 10's magazines and put them online. That is, without a doubt, copyright infringement. No one denies that. But there's no money in suing individual random people, so Perfect 10 went after those with money, starting with Google. Why Google? Well, because Google's image search results would show thumbnails of the images it found (though, of course, Google had no way of knowing they were infringing). Courts have ruled that simply showing a thumbnail in a search result is not infringement, so Perfect 10 contorted to make the case even more confusing, by saying it was the combination of the thumbnails and the fact that many of the sites hosting the scanned images showed Google Ads that was the problem. Luckily, after a lower court agreed with Perfect 10, the appeals court overturned the ruling. Despite this, Perfect 10 has gone on to sue others, including Microsoft with nearly identical charges to the Google case.

Even worse, Perfect 10 then tried to sue anyone who processed payments for the sites that hosted the infringing images, claiming that they were liable for copyright infringement as well. Of course, as is clearly stated in the law, and well supported in the case law, a service provider is not responsible for what its users do. Everyone knows this by now, but it didn't stop Perfect 10 who got slapped down in the lower courts, at the appeals court and now (finally) at the Supreme Court. Yes, the Supreme Court had to waste it's time deciding whether or not to take this case and wisely turned it down. At some point you would think that the folks at Perfect 10 would stop trying to sue everyone and start focusing on maybe changing its business model. Or is that too difficult?

Filed Under: copyright infringement, safe harbors, supreme court
Companies: perfect 10

Porn Publisher Suing Microsoft, Despite Losing To Google Over Identical Charges

from the keep-trying dept

Three years ago, porn magazine publisher Perfect 10 sued Google for copyright infringement. The case was a strange one. Google's image search was showing thumbnails of Perfect 10's images, but courts have ruled that thumbnails are fair use in search engines. The real complaint from Perfect 10 was that other sites were taking the images from their magazines and putting them online -- and that Google was helping people find them. In other words, the real copyright infringement was being done by others, but Perfect 10 was suing Google because Google has a lot more money and was an easier target. After some back and forth in the courts, an appeals court finally ruled in favor of Google. Oddly, despite this loss, Perfect 10 has gone out and sued Microsoft for the exact same thing. Once again, it's suing the wrong party -- and even admits it, saying that "it's absolutely hopeless" to find those actually responsible for the infringement, so it's suing Microsoft instead. That's like saying it's absolutely hopeless to find the bank robbers, so we're going to sue Ford for making their getaway car. Perfect 10 also complains that its business is being destroyed -- which is probably true. However, that's the result of a bad business model and not being able to adjust to the changing market. It may suck for Perfect 10 that it doesn't know how to run a modern business, but it's not against the law.

Filed Under: porn, search engines, thumbnails
Companies: google, microsoft, perfect 10

Another Pointless Perfect 10 Suit Gets Shot Down

from the smacked dept

Porn publisher Perfect 10 has been something of a copyright gadfly. It sued Google, arguing that the thumbnail images showed in its Image Search -- of images posted online by other people -- of Perfect 10's copyrighted materials constituted copyright infringement. Despite earlier rulings that linking to images in such a way wasn't infringement, Perfect 10 won an injuction over Google, although another court later overturned it, emphasizing again that thumbnails fall under fair use. But Perfect 10 filed an even sillier suit, targeting companies that processed payments for porn sites it alleged were stealing its images. Again, like in the Google case, the payment companies had nothing to do with the act of copyright infringement, and now an appeals court has upheld a lower court's ruling that bounced the case out of court, nothing that the payment companies, indeed, had not contributed to any copyright infringement. Perfect 10's strategy of suing everybody but the actual copyright infringers looks like it's been resoundly defeated, but somehow it's hard to imagine we've heard the last of the company.

Filed Under: copyright, lawsuit
Companies: google, perfect 10