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

WebGroup Czech Republic Settles Florida AV Suit, Will Pay $1.2 Million

WebGroup Czech Republic (WGCZ), the parent company of XVideos, XNXX, BangBros and GirlsGoneWild, has settled a lawsuit filed by the state of Florida over those sites’ alleged failure to age-verify Florida users before allowing access to adult content.

AEBN Publishes Popular Searches for March, April

AEBN has published the top search terms for March and April from its straight and gay theaters in all 50 states and the District of Columbia.

Ofcom Investigates Two Sites Over Possible AV Violations

U.K. media regulator Ofcom on Wednesday launched investigations into two adult sites as part of its age assurance enforcement program under the Online Safety Act (OSA).

Brazzers Launches Model Management Division 'Brazzers Creator'

Brazzers has launched its new full-service model management division, Brazzers Creator, offering content management services across multiple platforms.

FTC Promises 'Vigorous' TAKE IT DOWN Act Enforcement

The Federal Trade Commission is warning platforms that the agency will strongly enforce the notice-and-removal requirements of the TAKE IT DOWN Act, which go into effect next week on May 19.

STD Hero Joins Pineapple Support as Sponsor

Better Life Science brand STD Hero has joined the ranks of over 70 adult businesses and organizations committing funds and resources to Pineapple Support.

2026 XBIZ Miami Speaker, Open-Floor Conversation Guide 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 11-14 at the Goodtime Hotel in Miami Beach.

2026 XBIZ Miami Conference Schedule Announced

XBIZ is pleased to announce the release of the full show schedule for XBIZ Miami, set to take place May 11-14 at the Goodtime Hotel in South Beach.

Court of International Trade Rejects Trump 'Replacement' Tariffs

The U.S. Court of International Trade on Thursday ruled that President Trump’s 10% global tariff under the Trade Act of 1974, imposed after the Supreme Court invalidated the administration’s broad “Liberation Day” tariff regime, is illegal — but stopped short of a nationwide injunction against the tariff.

UPDATED: Utah VPN Rule Enforcement Paused in Aylo Lawsuit

Provisions of a new Utah law making adult websites liable if minors in the state circumvent geolocation efforts to bypass age verification, which were set to come into force on Wednesday, have been put on hold until Sept. 3 in the case of Aylo, which filed suit in the matter.

Show More