Porn site dings Megaupload in copyright case

Perfect 10, which has a lackluster record fighting copyright cases, is taking on one of the largest, most mysterious, and highly controversial sources of pirated video on the Web.

A federal court has ruled that Perfect 10's copyright case against Megaupload can go forward. Megaupload has been listed as one of the top 100 sites on the Web. Perfect 10

A porn site with a litigious history has won an important early round in its copyright fight against Megaupload, alleged to be one of the Web's largest distributors of pirated films, TV shows, and music.

Last week, a U.S. District Court Judge refused to throw out claims that Megaupload is liable for direct copyright infringement as well as contributory infringement. Perfect 10, a creator and distributor of adult entertainment that has filed several high-profile copyright cases in recent years, also accused Megaupload of vicarious and trademark infringement but the judge tossed those claims.

Perfect 10 alleges that Megaupload enables and encourages users to upload its materials to the service so they can be widely distributed. While Megaupload profits from this unauthorized distribution of Perfect 10's material by selling subscriptions, it does not compensate Perfect 10. Megaupload has denied the accusations. Techdirt was first to report the judge's finding.

The company said in a response to Perfect 10's complaint that it is merely a "file storage" service and is not responsible for the conduct of users. Chief Judge Irma Gonzalez of the Southern District of California, however, found that the evidence shows Perfect 10's allegations were adequate and the case will move forward.

"Megaupload serves as more than a passive conduit and more than a mere 'file storage' company," Gonzalez wrote in her decision. "It has created distinct Web sites presumably in an effort to streamline users access to different types of media. 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 Web sites."

Sites that enable users to upload films, TV shows, music and other digital media to digital lockers and then stream the content widely have received a lot of attention recently. These sites often don't require a software download and are supposedly easier to use and harder to track than file-sharing technologies, such as BitTorrent. The U.S. Senate is considering legislation that would make it a felony for someone to upload a copyrighted movie or music clip without authorization to sites such as YouTube or Megaupload.

According to Perfect 10's complaint, Megaupload operates an illegal empire of pilfered copyrighted material. The company also oversees Megarotic.com, Megaporn.com, Megavideo, and Megaclick.com, as well as others. According to the complaint, all the sites are operated by Kim Schmitz, a former hacker who was once convicted of what we would call securities fraud. A spokesperson for Megaupload has denied that Schmitz is involved in the company, which is based in Hong Kong, but he was the person who registered the domain name and Perfect 10 said in the complaint that he operates the site under numerous assumed aliases.

As for Perfect 10, the company has filed copyright suits against Google, Megaupload rival Rapidshare, Microsoft, Giganews, and Amazon. The company has prevailed in few if any of those cases.

 

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