Appeals Court Makes It Tougher for Content Companies to Sue Tech Services for Mass Piracy

A legally infamous adult publisher — along with friends at the Recording Industry Association of America — suffer a defeat.

Hollywood studios and major record labels may again be cursing the name of Perfect 10, an adult publisher with a history of aggressive copyright litigation. On Monday, the 9th Circuit Court of Appeals handed Perfect 10 its latest legal defeat by recognizing that copyright plaintiffs must show "volitional conduct," or causation, when claiming a tech service infringes its copyrighted material.

Perfect 10 publishes photos of nude women, but in legal circles, it's become even more famous by going after the likes of Amazon.com and Google with bold theories of contributory copyright liability. Whenever a big new case on this subject arises — for example, see Quentin Tarantino's lawsuit two years ago against Gawker for linking to a leak of his The Hateful Eight screenplay — past decisions involving Perfect 10 almost inevitably are referenced.

The subject of the 9th Circuit's latest opinion is Perfect 10's battle with Giganews, an online service provider of message exchange Usenet. Perfect 10 was upset how thousands of its adult images were being distributed through Giganews' servers and sent takedown notices. When that wasn't wholly effective, Perfect 10 filed a lawsuit, only to have the validity of its takedown notices challenged. A district court issued a series of decisions against Perfect 10, culminating in an order that the plaintiff pay over $5.6 million in attorney fees and costs.

On appeal, the big focus centered on whether or not the district court had properly decided that Perfect 10 had to show "volitional conduct" on its direct infringement claim. Many in the tech sphere have asserted that it makes sense to impose such a requirement because it is users who do the actual copying. To make a tech service carry legal responsibility, they say, should necessitate a showing that it provided more than just a means by which copies are made. The tech service, they argue, must be shown to have caused the wrongful copying.

Two years ago, these arguments popped up when the television broadcasters took on Aereo for publicly performing its copyrighted content by digitally transmitting works to its users. In a dissent, the late Antonin Scalia focused on the automated system that Aereo had built and wished to give the tech company a pass because the digital streamer was merely responding to its users' volitional requests. But a majority of justices at the U.S. Supreme Court agreed that Aereo had committed direct infringement

Perfect 10 drew some support from the Recording Industry Association of America, which pointed in an amicus brief to the fact that the Supreme Court had been expressly asked to recognize a "volitional conduct" requirement in the Aereo case and had declined.

In Monday's opinion, 9th Circuit judge Dorothy Nelson refuses to make much of this, saying that the Aereo majority didn't address volitional conduct or Scalia's explanation. Nelson also turns to Fox Broadcasting's appellate loss over Dish's "Hopper" ad-skipper for support of a volitional requirement. She says the "distinction between active and passive participation remains a central part of the analysis of an alleged infringement."

As for how this is applied in the Giganews case, Perfect 10 argued it had the exclusive right to display its work and that the defendant was directly liable for displaying images and thumbnails via the Mimo reader.

"The sole evidence Perfect 10 points to in support of its argument that Giganews was not merely a passive host shows only that images and thumbnails were accessed through the Giganews platform," she writes. "The evidence does not demonstrate that Giganews — as opposed to the user who called up the images — caused the images to be displayed."

The appellate judge similarly rejects Perfect 10's claim that Giganews directly infringed the distribution rights to its works. She writes "Perfect 10 failed to show that the distribution does not happen automatically. Indeed, an analysis of Perfect 10’s evidence shows only that users uploaded infringing content onto Giganews servers, not that Giganews played any sort of active role in causing the distribution."

The opinion also goes into why Perfect 10's theories fall short on contributory and vicarious infringement liability and affirms the district court's discretion in awarding fees and costs. The one area where Giganews loses is an attempt to add Perfect 10 founder Norman Zada to the judgment. Here's the full opinion.

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