Megaupload May Be Liable for Direct Infringement, Court Rules

SAN DIEGO — Perfect 10 has scored a legal victory in its $5 million copyright suit against file-sharing membership site Megaupload, after a judge advanced the case by ruling that the file-storage site may be liable for direct and contributory infringement.

In Megaupload’s motion to dismiss, the judge upheld Perfect 10’s claims of direct and contributory infringement, but tossed the company’s vicarious and trademark claims.

According to the motion, Megaupload, which also operates sister sites Megarotic.com, Megaporn.com, Megavideo.com and Megaclick.com, argues that Perfect 10 had not alleged it engaged in volitional conduct sufficient  to hold it liable for direct infringement and maintains it is merely a passive conduit.

“Megaupload serves as more than a passive conduit and more than a mere file storage company,” Judge Irma Gonzalez wrote.

“It has created distinct websites, 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 that maintain a catalog of all available files and, at last, it is plausibly aware of the ongoing, rampant infringement taking place on its website.”

The suit, filed by Perfect 10 last February, said that Megaupload directs download links offering "tens of thousands of Perfect 10 copyrighted images, as well as Perfect 10 videos, to be juxtaposed on Megaupload affiliated websites, next to photographs and likenesses of Perfect 10 models and other models or celebrities."

The suit names Megaupload operator Kim Schmitz, who is described in the filing as a felon who has served time in prison for computer hacking and insider trading.

It also names 100 John Doe defendants, which are described as Megaupload's business partners or affiliates.

Megaupload and its sister sites have become increasingly popular through the past few years. Megaupload.com, according to the complaint, has become among the hundred most popular websites on the Internet, with a reported 45 million unique visitors per day.

Adult industry attorney Marc Randazza told XBIZ that he believes cyberlocker sites can be held liable for direct infringement.

"I have not seen a case in which one was held liable," Randazza said. "But this is an evolving area of the law and I think that Perfect 10's lawyers did a good job in educating the court."

Randazza said that Megaupload now has to work at defending its case, which includes engaging in discovery.

Related:  

Copyright © 2025 Adnet Media. All Rights Reserved. XBIZ is a trademark of Adnet Media.
Reproduction in whole or in part in any form or medium without express written permission is prohibited.

More News

NextGen Payment Joins ASACP as Corporate Sponsor

NextGen Payment has signed on as the latest corporate sponsor for the Association of Sites Advocating Child Protection (ASACP).

Lauren Phillips, Derek Kage Cap AEBN's Top Stars for 3rd Quarter of 2025

AEBN has revealed its most popular performers in straight and gay theaters for the third quarter of 2025.

XBIZ 2026 Conference to Debut All-New Company Lounges, Community Track

The event website for XBIZ 2026 is now live, unveiling details for North America’s largest adult industry conference, including two all-new show features: Company Lounges and a Community Track.

Mymember.site Integrates VR Functionality

Mymember.site has added virtual reality playback capability to its website management platform.

Texas Patti to Launch Fetish Platform 'EmpireDom'

Performer and content creator Texas Patti is launching a new platform for doms and fetish creators, EmpireDom.com.

Ohio AG Threatens Action Against 'Major' Adult Sites Over AV Law

Ohio Attorney General Dave Yost announced today that his office is sending "notice of violation" letters to 19 adult websites for failure to comply with the state's recently enacted age verification law.

Chaturbate Announces 2025 Music Contest Winners

Chaturbate has revealed the winners of its 2025 music competition.

2026 XBIZ Exec Awards Pre-Noms Open With Debut of New 'Impact' Honors

XBIZ is pleased to announce that the pre-nomination period for the 2026 XBIZ Exec Awards, the adult industry’s premier career honor, begins today and runs through Oct. 14.

MYM Rolls Out New Traffic Features for German Creators

German platform MYM has launched a new traffic system for its creators.

Ukrainian Content Creators on Hook for Nearly $10M in Back Taxes

Content creators in Ukraine owe the equivalent of $9.3 million in back taxes, according to the country's State Tax Service.

Show More