Accusing Visa and MasterCard of contributory copyright infringement didn’t fly with a federal judge who has thrown out Perfect 10’s lawsuit against the two credit giants.
This came two weeks after Perfect 10’s similar claims against Internet Payment Service Providers CCBill, iBill, and Internet Key were rejected by a different judge, who ruled the companies lacked direct participation in any alleged copyright or trademark infringement.
Earlier this year, Perfect 10 sued Visa and MasterCard, plus FirstData Corp., Cardservice International, Humboldt Bank, and Does 1-100 in federal court, accusing those companies of offering "crucial transactional support services" for Websites selling millions of stolen images and film clips "worth billions of dollars that belong to Perfect 10 and third parties," according to a filing in the case.
But U.S. District Judge James Ware disagreed with Perfect 10's allegations against the credit card giants. Perfect 10 “does not provide any facts supporting an allegation of direct copyright infringement against [Visa and MasterCard],” Ware wrote in his August 5 ruling. “Instead, [Perfect 10] alleges that the Stolen Content Websites engaged in direct infringement and [Visa and MasterCard] are liable for contributory and vicarious copyright infringement.”
Ware rejected Perfect 10’s argument that third parties “materially contributed to and controlled the alleged infringing activity” by providing credit processing services to the companies in question. But Perfect 10, Ware held, did not prove that Visa and MasterCard induced any of their processing clients to infringe any Perfect 10 trademarks.
“In fact, the language of the complaint indicates that [Perfect 10] believed the standard for contributory trademark infringement to be the same as that for contributory copyright infringement,” the judge continued. “…Although the complaint contains the allegation that Defendants ‘are knowingly inducing’ the alleged infringing conduct… there are no facts presented in the complaint that support such an allegation.
“[Perfect 10] has not pled facts indicating that Defendants supplied a product to the Websites, knowing that the product would be used to infringe [Perfect 10’s] mark,” Ware added. “The only service Defendants supply is the ability to accept certain credit cards as payment, and this service has no apparent direct link to the alleged infringing activities. As a result, [Perfect 10] has not adequately pled a claim for contributory trademark infringement.”
Perfect 10 chief Norman Zada said the company would likely appeal the Ware ruling, but otherwise did not want to comment until at least August 10.
“To me, this spells the end of the Perfect 10 secondary liability infringement machine,” said attorney Jay Spillane, whose firm represented CCBill and iBill in the case. “If they keep litigating, it’s focusing on companies allegedly infringing their copyrights directly.”
Spillane said that whether secondary liability applies depends heavily on a situation’s specific facts “and the very specific involvement the company does or does not have in the alleged infringement. The two key words are, I think, participation in the content, or control over [the content]. And here, [the judge] found Visa and MasterCard were as distant from the content as you can get.”
