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 © 2026 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

Judge Dismisses Last NCOSE-Backed Suit Over Kansas AV Law

A federal judge on Monday dismissed a lawsuit alleging that adult site SuperPorn violated Kansas’ age verification law, citing lack of jurisdiction after similarly dismissing two related cases earlier this year.

ASACP Rolls Out 'Restricted to Adults' Labeling Tool Updates

The Association of Sites Advocating Child Protection (ASACP) has updated its Restricted to Adults (RTA) labeling system.

Federal AV Proposal Scores Minor Win in House but Remains in Doubt

A newly announced bipartisan agreement in the U.S. House of Representatives Committee on Energy and Commerce may soon bring a proposed federal age verification law before the full House, but the measure continues to face an uphill battle.

Arizona Governor Vetoes 'Protect Act' With New Consent Provisions

Arizona Governor Kate Hobbs on Friday vetoed HB 2133, the “Protect Act,” which would have imposed new requirements for adult content uploaded online.

Brazil Begins Monitoring 18 Adult Sites for AV Compliance

Brazil’s National Data Protection Authority (ANPD) is now monitoring 18 high-traffic adult websites for compliance with the country’s Digital Statute for Children and Adolescents (Digital ECA), which requires such sites to age-verify users located in Brazil.

Ofcom Fines First Time Videos $100,000 for AV Noncompliance

U.K. media regulator Ofcom on Thursday imposed a fine of 80,000 pounds (more than $100,000) against First Time Videos, which operates FTVGirls.com and FTVMilfs.com, for failing to implement age checks required for compliance with the Online Safety Act.

Curves Ahead: How BBW Creators are Turning Differentiation Into Competitive Advantage

For centuries, curves have been celebrated as a symbol of beauty, sensuality and power. From the soft opulence of Rubens paintings to the glamorous silhouettes of pinup icons, fuller figures have long occupied a place in art, fashion and fantasy.

Woodhull Freedom Foundation to Host Virtual 'Pride' Edition of 'Fact Checked' Series

Woodhull Freedom Foundation is hosting a Pride Month virtual edition of its series “Fact Checked by Woodhull.”

'InMelanin' Relaunches Through PAYSITE

InMelanin.com has officially relaunched through PAYSITE.

Pearl Industry Network Partners With Takedown Piracy

Industry trade group Pearl Industry Network (PiN) has officially partnered with Takedown Piracy.

Show More