CelebrityCash Files Countersuit Against XPays

LOS ANGELES — Addressing a lawsuit filed against it from XPays over alleged copyright and trademark infringement stemming from the Paris Hilton sex tape, Celebrity Cash’s parent company Internet Commerce Group (ICG), has responded with a countersuit, which also names XPays owner Evan Horowitz as a third party.

The six causes of action in the counterclaim filed by ICG are fraud, libel, defamation, unfair competition and intentional interference with both contractual relations and prospective economic relations.

According to legal documents obtained by XBIZ, the counterclaim centers on an email sent by Horowitz to CCBill regarding the CelebrityCash network site CelebrityHardcore.com, alleging that ICG infringed on XPays’ copyright over displaying images from the sex tape. CCBill and its subsidiary Cave Creek Hosting provide payment processing and hosting services for CelebrityHardcore.com.

CelebrityCash is seeking an unspecified amount in punitive damages.

XPays claims to hold the right to enforce any aspect of the Hilton video that passes over a network connection – a deal the company penned when the tape featuring a sexual tryst between Hilton and then-boyfriend Rick Salomon first surfaced online.

According to the suit, XPays alleges that CelebrityHardcore.com displayed an image from the Hilton sex tape on the front public landing page of the site, in addition to 5-6 other digital images on other pages, in violation of its copyright.

Cited in the counterclaim, in an email sent April 13, 2006 to CCBill and various third parties, ICG is alleging Horowitz made numerous “materially false” representations over his alleged copyright of the Hilton sex tape, specifically that XPays had “exclusive marketing rights for the online delivery of the Paris Hilton and Rick Salomon sex video” and that “CelebrityHardcore.com is making unauthorized use of copyrighted images” from the video.

The allegations of defamation against Horowitz stem from his posts on adult webmaster message board GFY.com.

As a result of Horowitz’s email to CCBill, and after receiving an informal Digital Millenium Copyright Act notice from Horowitz, according to ICG counsel David Gingras, CCBill decided to suspend the site for a week while it located the offending content, in part because of the DMCA notice’s lack of specificity.

Additionally, ICG is alleging that on April 13, 2006, the day Horowitz sent the email to CCBill requesting the suspension of CelebrityHardcore.com, Rick Salomon and his brother Jim were the tape’s exclusive owners.

“If ICG simply respected XPays rights to the video, which it has known about for years, it wouldn’t be involved in this lawsuit,” XPays lawyer Paul Berra told XBIZ. “ICG’s filing of counterclaims is smoke and mirrors, nothing more, and its decision to name Evan Horowitz personally smacks of bad faith.”

ICG attorney Kraig Marton told XBIZ, “We believe that a court will find Mr. Berra’s characterization of the counterclaim to be erroneous.”

Horowitz and CelebrityCash President Salvatore Abbate did not immediately returns calls seeking comment.