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Vivid vs. PornoTube

Vivid vs. PornoTube

April 2, 2008
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" The notion of using 2257 as a sword against the pirates has been discussed before "

When Vivid Entertainment Group in mid-December announced that it had filed a lawsuit against Data Conversions Inc., the parent company to PornoTube.com and the Adult Entertainment Broadcast Network (AEBN), alleging copyright infringement, misappropriation and unfair business practices, the adult industry's initial response to the complaint could be summed up in one word: "wow."

In its press release announcing the lawsuit, Vivid came out swinging, quoting from its complaint to assert that "PornoTube's infringement causes 'great and irreparable injury that cannot fully be compensated or measured in money,'" and stating that the company has asked the court for a "permanent injunction to bar future infringement and damages of at least $4.5 million."

A copyright lawsuit involving two heavyweights like Vivid and AEBN is cause enough for the industry at large to take note — but this is no mere copyright infringement lawsuit.

In addition to claims that Data Conversions has, via PornoTube, has "used technological advancements to willfully infringe copyrights" belonging to Vivid, the complaint asserts that the defendant also has engaged in unfair business practices under California's Business and Professions Code, because the company does not comply with 18 U.S.C 2257 with respect to materials distributed via PornoTube.com.

"Defendants have engaged in, and are engaging in, fraudulent, unfair and unlawful conduct including, but not limited to, the failure to label and/or maintain labels on the sexually explicit materials that defendants' distribute in interstate and/or foreign commerce in violation of 18 U.S.C. §2257," states paragraph 106 of Vivid's complaint.

Steven Hirsch, co-chairman of Vivid, laid out the impetus for Vivid's unfair competition claim in no uncertain terms.

"PornoTube and AEBN have exactly the same responsibility as any other adult content distributor or producer to obey U.S. copyright laws and 2257 regulations," Hirsch said when the lawsuit was first announced. "Vivid spends enormous sums to copyright its content and to comply with the Child Protection and Obscenity Enforcement Act age verification process. PornoTube and AEBN have been getting away with a practice that unlawfully earns it millions of dollars at our expense."

With as much focus as there has been on the potential for 2257 as a industry-smashing wrecking ball in the hands of the U.S. government, Vivid's lawsuit has introduced a new wrinkle to the 2257 question; the possibility of adult companies using the controversial regulations as a weapon to assault each other.

Attorney Michael Fattorosi of Fattorosi and Chisvin told XBIZ that he thought the lawsuit's 2257 claim was a "novel, interesting legal attack," and something that had been discussed at a recent industry summit on content piracy as a potential means of combating content theft.

"The notion of using 2257 as a sword against the pirates has been discussed before," Fattorosi said, "but to my knowledge this is the first time it has been done."

Fattorosi noted that unlike the situation in the illegal download actions brought by the Recording Industry Association of America (RIAA) against end-users who may not even have been aware of the laws they were violating, the defendant here is well aware of its responsibilities under the law.

"We don't have an unsophisticated user here," Fattorosi said. "[PornoTube] is well aware of 2257 and its implications."

What about the limitations to liability extended to some entities under 2257 — the so-called 'ISP exception' to the law? Could that provide some cover for PornoTube?

Attorney Larry Walters of Weston, Garrou, DeWitt & Walters told XBIZ that his firm is "wrestling with many of the issues raised in this complaint on behalf of a number of clients…it seems half my clients want to open a 'tube' site, and the other half want to sue one."

The legal waters surrounding the question of if and how tube sites fit into the exemptions provided under the statute are murky at best, according to Walters.

"The legal issues are still unresolved, by and large, and require expert legal advice for anybody considering one of these business operations," Walters said. "The 2257 issues are particularly tricky, since the scope of the exemptions has not been addressed by the courts yet, and guessing wrong could be devastating. Even if the webmaster is not considered a 'producer' it may still be a 'distributor' depending on how these terms are construed. Further complicating this issue is the fact that 2257 has been declared unconstitutional by the 6th U.S. Circuit Court of Appeals."

Among the key decisions that any user-posted content site has to make is whether to review user-generated material before or after it is posted, Walters said. As with many tricky legal questions pertaining to the adult industry, the answer to that question is far from clear.

"This can be an interesting Catch-22 from a legal perspective, with no definite answer," Walters said. "In this area, operators must rely on advice of their individual counsel."

Novel though it may be, it is the 2257 claim which makes Vivid's complaint so controversial in the minds of many observers — and the claim is made all the more interesting by the fact that Vivid is represented in the case by attorney Paul Cambria, who serves on the Free Speech Coalition's legal team challenging 2257.

If the law is unconstitutional, as the FSC asserts it to be, then why would Cambria part company with that opinion for the purposes of this lawsuit? According to Cambria, there is no contradiction here — just a nuance.

"Is it an inconsistent position? I don't believe it is; what's covered in the lawsuit is not what we're challenging in the FSC case," Cambria told XBIZ. "I still think 2257 is unconstitutional; but until the court says that, we're stuck with it."

Reed Lee, an attorney with J.D. Obenberger and Associates and another member of the FSC's legal team that challenged the constitutionality of 2257, found Cambria's argument less than persuasive.

"That [lawsuit] claim necessarily asserts the validity of the disclosure requirements of 2257," Lee said. "I don't think that claim is valid if 2257 is unconstitutional, and I definitely believe 2257 is unconstitutional."

According to Lee, Vivid's lawsuit raises the very real possibility that the FSC will find itself filing briefs in support of a party being sued by a member of the coalition's own 2257 litigation team.

"If [PornoTube] defends against that claim by asserting that 2257 is unconstitutional, I think it is very likely the FSC will support that position with an amicus curiae brief," Lee said.

So, is the 2257 "sword" — as Fattorosi put it — a two-edged blade? Lee's colleague JD Obenberger answered that question with a resounding "yes."

"Frankly, this claim is fucking dangerous," Obenberger told XBIZ. "Do we really want to have a situation wherein webmasters are suing each other right and left over 'unfair competition' based on alleged violations of 2257? It will cause widespread dispute, tension and internecine conflict the likes of which the industry has never seen."

Obenberger said he believes that Vivid may originally have planned to include more 2257-related claims in the lawsuit, or to allege more violations of 2257 within its unfair competition claim — a belief based on the presence of a single-word clue in paragraph 106 of the complaint.

"Paragraph 106 has an interesting fingerprint in it," Obenberger said. "It mentions a 'failure to label and/or maintain labels' — well, there's no legal obligation to 'maintain' a label. The fact that the word 'maintain' is in paragraph 106 in my opinion is a clue that Cambria's office was looking at going after [PornoTube] for all sorts of violations, but they pulled back and went with just the labeling."

Obenberger further speculated that the reason the plaintiff "pulled back" was because they didn't want to open up a discussion of how major studios that license content to online distributors go about providing — or perhaps not providing — the identification documents that the content licensees are required to have on file under the law.

Limiting the 2257 claim to the question of the law's labeling provisions may not have ameliorated what Obenberger referred to as the "glass house syndrome;" by introducing 2257 into the lawsuit, Vivid's own compliance efforts and 2257 protocols could become the focus of the 'court of industry opinion,' so to speak, if not the court of law.

"They may have crossed that threshold already by bringing the labeling provision into it," Obenberger said.

The controversial 2257- based claim aside, many in the industry are likely to celebrate Vivid's effort to protect its intellectual property — in no small part because sites like PornoTube are seen by many as little more than a free market for stolen goods.

Attorney Rob Apgood told XBIZ that while he had only briefly scanned through the complaint and concurred with other observers that the 2257 claim could be problematic, he supported the idea of companies litigating to protect their intellectual property.

"I'm glad to see people continuing to enforce their copyrights," attorney Rob Apgood told XBIZ. "I think it's a good thing, because there has been a lot of abuse, and it needs to stop."

Fattorosi said that copyright infringement claims are very likely to become more common as an instrument to shut down content pirates — and as a potent negotiating tactic.

"When people are seeing declining revenues and lost income, they think 'how do we put the brakes on here?' — and lawsuits are one way to apply the brakes," Fattorsi said.

In other cases, it may be less about applying the brakes and more about ensuring that the proper copyright holder gets a taste of the revenue generated by the alleged offenders' violation of copyright.

"It's about time that people realize that intellectual property must be protected, but protected within the confines of doing good business," Fattorosi said. "Maybe instead of suing, you create some content specifically to give away, and then you let the tube sites run wild with that, and you benefit from the traffic that they generate — some means of deriving satisfaction without litigating the issue."

Fattorosi said it's possible that such an arrangement may be in the future for Vivid and PornoTube, as unlikely as that possibility may seem at the moment.

"I wouldn't be too surprised to if a business deal of some kind comes out of this [lawsuit]," Fattorosi said. "If you're PornoTube, maybe you say 'do you want to do business with us, or do you want to sue and make the lawyers rich?'"

In looking at Vivid's lawsuit and the underlying issue of the impact of technology on intellectual property, Lee told XBIZ that it is important to consider the historical context of technology and copyright issues.

"This happened when the phonograph came in, and everybody was convinced that the phonograph would kill the market for live musical performances, and it happened when motion pictures came along, and then the thinking was that motion pictures would kill live theater," Lee said. "This is just another iteration of that same progression; it's painful for a lot of the people involved, and some of them will not survive, but others will adjust and they will continue to make money and prosper."

Lee said that he believes the answer to the dilemma facing the industry lies not in litigation, but in innovation. What the Internet industry needs — adult and mainstream alike — is "intellectual property law that updates with new technology, and that gives producers a way to protect their intellectual property while still allowing the development of these technologies."

Some of the most controversial (and in some quarters, reviled) Internet-related developments, like peer-to-peer sharing software, bit-torrents and tube sites, have created a benefit to the adult entertainment industry that few observers have talked about, Lee said.

"For the industry, the benefit is that these technologies lend to the increased mainstreaming of adult content," Lee said. "In the old days, if an adult consumer wanted to watch an adult movie, they had to trek to these dingy little porn theaters, or dingy little adult video shops, and the stigma of shame was palpable. That began to change with the VHS and home video, and has continued through to the modern Internet technologies. When people can consume these materials in the privacy of their home, it necessarily feels more comfortable, more normal and more acceptable."

This was the primary benefit of the Internet itself to the industry, Lee said, and the new online distribution platforms have only increased the scope of online distribution — and the overall size of the market for adult content, as well.

The question is not whether the new technologies can be harnessed by adult producers and used to improve, instead of undermine, adult producers' profits, the question is how to do so. With all the technical and creative talent working in the adult industry today, and in the online sector of the industry in particular, Lee said he's optimistic that solutions will be developed that will allow adult companies to take advantage of new online distribution platforms —instead of resenting them.

If litigation comes to be seen as the best (or only) option, we can expect to see more and more in-fighting between adult industry players. Vivid itself has indicated that the PornoTube lawsuit may be just the beginning of an aggressive legal approach; in December, Hirsch told the Los Angeles Daily Journal that the company had "decided to take a stand and say 'no more,'" adding "we will go after all the free sites."

Among other things, Vivid's lawsuit underscores the urgency for a technological solution to the intellectual property challenge to be crafted. Money is being lost by producers, and the industry's collective patience with content piracy is only wearing thinner.

"People whose heads are good in that direction need to get to work on this," Lee said.


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