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

Creator of Hentaied, Parasited Launches New Site 'Vampired'

Romero Mr. Alien, the creator of Parasited and Hentaied, has launched Vampired.com as both a stand-alone paysite and part of the Hentaied.Pro streaming platform.

Australian eSafety Commissioner Demands Stricter Child Protection Codes

Australia’s online safety regulator, eSafety, is once again reviewing a “final” draft of industry codes to protect children from pornography and other age-inappropriate content, after eSafety Commissioner Julie Inman Grant rejected the previously announced “final” codes as insufficiently stringent.

Nerdgasm: A Look at the Naughty Side of Pop Culture Geekdom

From “Call of Duty” to cosplay, from tabletop dice rolls to dungeon-inspired dirty talk, the worlds of geek fandom and fantasy are no longer confined to the basement. They’ve kicked down the door, shed the “Firefly” tee and gone full frontal.

Kyrgyzstan Parliament Moves to Outlaw Internet Pornography

A parliamentary committee of the Supreme Council of Kyrgyzstan on Tuesday approved a measure to outlaw online adult content in the country.

Sweden Bans Purchase of 'Remote' Sexual Services

The Riksdag, Sweden’s parliament, has approved a proposal to criminalize purchasing sexual services performed remotely by streamers and custom content creators.

Asa Akira to Deliver XBIZ Talk at Miami Conference

XBIZ is pleased to announce that decorated performer, Pornhub brand ambassador, and author Asa Akira is set to deliver an exclusive talk at XBIZ Miami.

JustFor.fans Launches 'Fentanyl Test Strip' Initiative

JustFor.fans (JFF) has launched a test strip initiative to combat the nationwide fentanyl crisis.

2025 XBIZ Miami Speaker Lineup Announced

XBIZ is pleased to announce the release of the full speaker lineup for XBIZ Miami, the latest edition of the adult industry’s premier summer conference, set to take place May 19-22 at the Nautilus Sonesta Miami Beach hotel in South Beach.

AV Bulletin: Arizona's About-Face, What New Laws Mean for Adult

Industry stakeholders and free speech advocates have anxiously been awaiting the Supreme Court’s decision in Free Speech Coalition v. Paxton, which could significantly impact state age verification laws around the United States. In the meantime, state legislatures continue to weigh and pass AV bills, the U.K. and the EU are moving ahead with their own AV mandates and strategies, and legal challenges continue to play out in U.S. courts — with some cases on hold pending the SCOTUS ruling in Paxton.

Million Billion Media Launches New Website

Management and PR agency Million Billion Media (MBM) has launched a new website.

Show More