Claiming defamatory statements and fraudulent charges have been made against it, CelebrityCash has filed a counter-suit against XPays in regard to a copyright dispute over the so-called Paris Hilton sex tape.
XPays filed its suit on Sept. 11, claiming sole ownership of the Hilton video and alleging that several defendants (including affiliate program FlashCash, Adult Profit, SK Entertainment, billing company Verotel, and CelebrityCash parent company ICG Entertainment) knowingly violated copyright and trademark laws by using stills derived from the video on their sites’ tours in order to lure customers.
According to CelebrityCash president Salvatore Abbate, however, XPays did not hold an exclusive copyright on the Hilton tape and had no foundation upon which to file its suit. Additionally, Abbate is counter-suing XPays’ Evan Horowitz for several infractions, including defamation, trade libel, and unfair competition.
The origin of the suit against CelebrityCash dates back to April of 2003, when according to Abbate, Horowitz sent a Digital Millennium Copyright Act notice to CCBill claiming CelebrityCash was violating the copyright he held on the Hilton tape. Because of confusion over valid email addresses, CCBill was not able to contact CelebrityCash directly, and because of DMCA guidelines, within 24 hours had shut the site down. The site remained dormant until Abbate agreed to remove the Hilton stills.
Abbate claims he obtained permission to use the stills from copyright owner Rick Soloman and Red Light District, the company that was distributing the DVDs.
Subsequently, Abbate says, CelebrityCash attorneys requested documentation proving XPays held exclusive rights to the Hilton tape.
“When we started requesting information from Evan, we saw in the contracts that he did not have the right to exercise copyright,” Abbate tells AVNOnline.com. “Only Rick Soloman and Jim Soloman had that right.”
Nothing else happened until September, when CelebrityCash posted a single photo of Hilton from the tape in one of the site’s blogs.
Says Abbate, “Evan saw us promoting our website, and he saw the image. [He] contacted CCBill…and tried to get us shut down again.”
When his efforts were rebuffed by CCBill, Horowitz hired attorney Paul Berra to file suit against CelebrityCash and the other companies.
“I had no choice but to file a counter-suit,” Abbate says.
In court documents obtained by AVN Online, Abbate claims Horowitz has been enforcing copyright illegally in regard to the Hilton tape. Additionally, he alleges that Horowitz posted several defamatory and false statements about CelebrityCash on several webmaster message boards, including GoFuckYourself. He is seeking an unspecified amount in punitive damages for fraudulent DMCA notice, trade libel, defamation, unfair competition, intentional interference with contractual relations, and intentional interference with prospective economic relations.
“After we did our research, we found that that Evan is basically making false claims,” Abbate says. “The way the contracts were written, he didn’t own a copyright when he had our website shut down.”
In the court documents, Abbate alleges that Rick Soloman gave copyright of the Hilton tape to his brother Jim, who in turn allowed Horowitz to distribute the tape via the Internet. However, Abbate says, “[Jim Soloman] did not give [Horowitz] an exclusive right, so he did not have the right to enforce the copyright the way he did.”
Abbate says CelebrityCash lost more than $100,000 during the time the site was shut down and adds that Horowitz’s defamatory statements have damaged the company’s reputation.“I agree with free speech, but I think it’s wrong when people get on the boards and make businesses look bad when it’s not really justified,” Abate says.
“I’m saddened to be in this position,” he adds. “That we have to fight each other in the industry like this when we should be working together. The last thing I want to do is be in this position, but [Horowitz] left me no choice.”
Although Horowitz was unavailable for comment, Berra says, “ICG’s copyright infringement caused its website to be disabled. The fact that ICG is somehow blaming XPays for this is preposterous. XPays enforced its rights in the Paris Hilton sex tape in full compliance with the law and will continue to do so.”
