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Judge Won't Dismiss Infringement Suit Against LeaseWeb

Judge Won't Dismiss Infringement Suit Against LeaseWeb
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May 15, 2014 3:00 PM PDT    Text size: 

LOS ANGELES — A federal judge last month denied LeaseWeb's motions to dismiss Perfect 10's complaint that it should be held liable for copyright infringement.

Perfect 10 in March accused the hosting provider of being in cahoots with a number of websites that host pirated copies of its copyrighted images.

In its federal suit, Perfect 10 claims that LeaseWeb is responsible for copyright infringement because it didn't process 22 DMCA notices it sent starting in February 2013.

"The DMCA notices sent by Perfect 10 identified at least 12,220 infringing Perfect 10 images hosted on the servers of the LeaseWeb defendants," the suit said.

Perfect 10, operated by Los Angeles entrepreneur Norman Zada, listed the file-sharing sites IMGChili.net, IMGChili.com, IMGTiger.com, IMGServe.net, Poringa.net, UltraForos.com, UltraForos.net, GalleryWorld.info and MegaUpload.com, among 11 additional sites, as those that have infringed on Perfect 10 copyrighted works.

Perfect 10 noted in its suit filed at Los Angeles federal court that LeaseWeb operators have "actual knowledge of the rampant infringement that they are hosting, presumably because the LeaseWeb defendants receive lucrative hosting fees from their infringing clients."

Last month, U.S. District Judge John Walter, ruling in a motion to dismiss for lack of personal jurisdiction, concluded that Perfect 10 had made a prima facie showing that LeaseWeb's U.S. division "purposefully directed its activities toward California," which was sufficient to establish specific personal jurisdiction in the case.

LeaseWeb's parent company is based in the Netherlands but its U.S. division is incorporated in Delaware and has a server in Virginia. LeaseWeb does not have a California office.

"LeaseWeb USA provided its hosting services to at least one website operated in California, and continued to provide those hosting services to that California customer, even after it acquired actual knowledge that its California customer was allegedly infringing a California company’s copyrights," Walter wrote. "These contacts alone are sufficient to establish purposeful direction and express aiming at the forum state.

"LeaseWeb USA knew or should have known that Perfect 10 would suffer economic harm in California, when it refused to process DMCA notices reflecting a California mailing address."

Walter, denying the motion to dismiss for lack of personal jurisdiction, also said that he'd toss LeaseWeb's motion to dismiss for failure to state a claim.  "The court finds that the issues raised by LeaseWeb USA are more appropriately resolved in a motion for summary judgment."

With the motions dismissed, LeaseWeb was ordered to answer the complaint, which it had yet to do.

In answering the complaint a week later, LeaseWeb said it denied that it received the 22 notices from under the DMCA, or at least those that "conformed with the DMCA’s requirements."

The hosting company also said it denied that it has knowledge of allegedly “rampant infringement” by any of its customers. "LeaseWeb USA denies it has knowingly aided and abetted massive  alleged infringers, including MegaUpload.com," the company said.

Perfect 10 seeks maximum statutory damages of $150,000 with respect to each work infringed and a restraining order over alleged infringement against LeaseWeb.

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