On a Scale of 1-10, the Perfect 10 Ruling Scores a 2
In late June, Judge Lourdes Baird handed down a decision in the Central District of California (which includes Los Angeles) whose repercussions for the adult Website industry – and other online businesses – are potentially devastating.
The case grew out of Perfect 10's effort to stop small adult Websites from reposting their pictures of "all natural" models. Instead of suing the Webmasters of dozens of Websites all over the Internet, the company decided to aim its litigation ray gun at a bigger target: the financial transaction companies and age verification service providers who were doing business with these sites. Perfect 10 argued that billing services iBill and CCBill, as well as age verification companies CWIE and Internet Key, should be held liable for the alleged copyright infringements of their clients.
At first glance, the ruling would seem to bode well. Judge Baird dismissed nearly all of Perfect 10's claims, ruling that the defendants were protected by DMCA "safe harbors" that shield companies from liability for the copyright infringements of their customers. This is an important clarification of several sections of the DMCA safe harbor provisions (Section 512 of the Copyright Act). However, in the process of clarifying these provisions, Judge Baird also made some dangerous assumptions about the safe harbors that have created a veritable roadmap for litigation-happy copyright owners who want to use the DMCA to harass people right off the Internet.
The ruling explains that, to qualify for safe harbors, a company must terminate its relationship with a user or customer if they receive "repeat notifications" of copyright infringement. "Repeat notifications" means multiple takedown notices.
Why is this a problem? Think of it this way: If a large adult Website wants to put its smaller competitors out of business, one way they could do it would be to send several takedown notices to the small company's age verification and bill processing service providers, claiming that a few images posted on a few Webpages are infringing. To avoid the risk of liability, these service providers will sever ties with the small Website’s owner, who will now have no way of processing credit cards to do business on any of its Websites.
Shockingly, this can all happen without any of the parties being found liable of copyright infringement in a court of law. Mere takedown notices – which are only allegations, not court judgments – can literally leave owners of adult Websites stranded without any way to make money.
This is much worse than your traditional “takedown” notice, which leads to a single Webpage being taken down if there’s an infringing image on it. In contrast, when a financial services or age verification company receives multiple takedown notices, they must terminate all business with the accused. That means if iBill receives takedowns related to only one Website, or one page on a Website, they nevertheless have to terminate services for every single Website owned by the accused. This could create a situation where only the adult companies with enough money for full-time legal representation are able to process credit cards. Smaller companies without the resources to dispute takedown notices might be swiftly put out of business.
Judge Baird's ruling could also create a way for anti-porn groups to harass small adult sites. To serve a takedown notice, a person only needs to have a "good faith belief" that the targeted materials are infringing. So groups could easily claim they have a "good faith belief" that BobsXXXPix.com contains infringing materials, then pester Bob's age verification service with so many takedowns that the service finally terminates its business relationship with Bob.
The Perfect 10 ruling means yesterday's takedown notice is tomorrow's termination notice. With just a few nastygrams sent to your service providers, a competitor or adversary could destroy your entire business.
Annalee Newitz is a freelance writer who lives at Techsploitation.com. She is also the media coordinator/policy analyst at the Electronic Frontier Foundation.
The views and opinions expressed in this editorial are those of the author and do not necessarily represent the editorial opinions or policies of AVN Online, its staff, or publishers.
