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

Teasy Agency Joins Pineapple Support as Supporter-Level Sponsor

Teasy Agency has joined the ranks of over 70 adult businesses and organizations committing funds and resources to Pineapple Support.

Aylo, Pineapple Support Partner for Mental Health Video Series

Aylo has teamed up with Pineapple Support to create a safety video series aimed at educating performers and creators about mental health.

Ofcom Investigates FTV Sites for Possible AV Noncompliance

U.K. media regulator Ofcom is investigating First Time Videos, which operates the sites FTVGirls.com and FTVMilfs.com, for possible failure to comply with age assurance requirements under the Online Safety Act.

Stalwart Defender: Jeffrey Douglas on 30 Years Fighting for Free Expression

“If you had told me in 1995 that I would be on the FSC board for 30 years, I would have laughed out loud,” says Jeffrey Douglas.

FSC Publishes Analysis of Federal Trade Commission Event Promoting AV

Free Speech Coalition (FSC) has published an analysis of a Federal Trade Commission (FTC) event held this week that promoted age verification among other forms of speech regulation.

GirlsDoPorn Owner Michael Pratt Pleads Guilty to Sex Trafficking

Michael Pratt, former owner of the rogue website GirlsDoPorn, pleaded guilty in the U.S. District Court for the Southern District of California on Thursday to sex trafficking and conspiracy to commit sex trafficking charges, according to a report by City News Service.

Master Nico Relaunches Site Through YourPaysitePartner

Master Nico has relaunched his official website through YourPaysitePartner (YPP).

Federal Judge Grants Partial Halt of Florida AV Law

The United States District Court for the Northern District of Florida, Tallahassee Division, has granted a preliminary injunction against HB 3, the state's age verification law, as a lawsuit filed by two online trade associations challenging the law makes its way through the courts.

Aylo Releases Statement on Suspending Access to Pornhub in France

Technology and media company Aylo, which operates adult sites including Pornhub, YouPorn, and Redtube, has released a public statement regarding its decision to block access to its sites in France.

Pornhub Blocks Access in France in Response to SREN Law

Pornhub parent company Aylo has opted to block access to its sites in France rather than comply with age verification requirements under the country’s Security and Regulation of the Digital Space (SREN) law.

Show More