Out-Law / Your Daily Need-To-Know

The publisher of adult web site and magazine Perfect 10 has lost a copyright piracy case against major credit card companies, including Visa and MasterCard, which alleged that they have been aiding the sale of copyrighted images stolen from Perfect 10.

Norman Zada, the publisher behind Perfect 10, filed the suit in January, complaining that the music and film industries are not the only businesses under threat because of the proliferation of internet piracy.

Visa International, First Data Corp, Cardservice International, MasterCard International, and Humboldt Bank were all named in the suit, which alleged that they knowingly provided "crucial transactional support services" for the sale of millions of stolen photos and film clips. Perfect 10 valued the stolen assets at "billions of dollars".

Judge James Ware of the Northern District of California has dismissed the suit, ruling that the credit card companies are not liable for the actions of their customers.

He explained in his judgment: "To have engaged in contributory copyright infringement, it is not sufficient for the Defendants to merely have contributed to the general business of the infringer."

To have materially contributed to copyright infringement, he reasoned, the assistance "must bear some direct relationship to the infringing acts."

"The ability to process credit cards does not directly assist the allegedly infringing web sites in copying [Perfect 10's] works," wrote Judge Ware in his ruling. "Defendants do not provide the means for distributing those works to others, nor do they provide bandwidth or storage space with which to transfer or store the works."

"This ruling suggests that courts aren't eager to extend contributory and vicarious copyright infringement to reach people only remotely connected to alleged infringers," said Fred von Lohmann, Senior Staff Attorney with rights group the Electronic Frontier Foundation (EFF).

EFF Staff Attorney Jason Schultz added, "Without the protections acknowledged by this ruling, any copyright owner could drag dozens of general service companies into court - from the gas company to the electric company. This decision imposes important limits on overzealous copyright owners."

Perfect 10 now has to decide whether to appeal.

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