PERFECT10 ruling to aid pursuit of adult content copyright infringement

Canadian porn company Wild Rose Productions Inc. is reserving judgement on the usefulness of a new California Central District Court ruling against massive copyright infringement, but says intellectual property protection is crucial to adult content businesses here and elsewhere. Wild Rose in-house counsel Neil Oberman tells Canadian NEW MEDIA that the company’s only real asset is its intellectual property, something it is constantly and vigorously fighting to guard. Choosing which violators to pursue, however, is always a business decision and no company has the resources to fight every infringer, he says. Adult industry content providers may have an easier time now, though, with a decision (note: document is in .tif form. Save to disc and view using an image editing application) rendered April 22 in California in the case of PERFECT10 magazine against one of the porn industry’s biggest billing companies, Cybernet Ventures Inc., which runs the Adult Check network (PERFECT10 v Cybernet Ventures Inc. et al.). PERFECT10 had sought an injunction against Cybernet stemming from copyrighted images from the magazine on Adult Check affiliate member web sites. With shades of the Napster case, Cybernet doesn’t post any content itself but bills customers for access to affiliated sites, sharing revenues on a referral commission basis. PERFECT10 claimed, however, that Cybernet had knowledge that affiliate sites were posting infringing material and that it exercised control over the content of sites through affiliate rules. A California judge agreed that Cybernet was likely guilty of contributory infringement – just as Napster was – and granted the injunction last week, clearing the way for a copyright suit by the magazine, even though the court also said it was highly unlikely the publication would be able to prove any kind of direct infringement. Building on the Napster-like elements of the case, the judge also ruled that it was likely that PERFECT10 would also be able to prove irreparable competitive harm since it was disadvantaged in the marketplace by having its expensive images stolen and posted to competing sites. PERFECT10 publisher Norman Zadeh tells CNM the competitive harm of copyright infringement is hurting the entire industry. "You have to understand – we have about 3,500 images. Adult Check is offering about two to three million images. They have our images. They have Playboy’s images. They have all the nude clips from the movie studios…They take Britney Spears’ face and they put it on other bodies. We can’t do any of those things. We don’t offer any of the nude supermodels, so why would anyone want to pay $25 a month for PERFECT10’s library…when you can get our stuff, Playboy’s stuff, and everybody else’s stuff for less money? That’s why Playboy is near bankruptcy. That’s why Penthouse is near bankruptcy. That’s why PERFECT10 has lost US$24 million." Zadeh notes that each image produced by his magazine costs about US$2,500. He says that there are only six major billing companies, and that suing Cybernet is just the beginning. "I would say 90 per cent of the mis-appropriation is billed through the United States. Now, if they go to offshore billing companies, they are still under the rules and regulations of the U.S….The one entity that’s fairly easy to find, that can’t move around, that is subject to all kinds of rules and regulations, is the billing company. So we’re going after the billing company." Still, Zadeh says the court battle has cost his magazine US$2 million to date, and will likely escalate to US$7 million by the time the case goes beyond the preliminary injunction to a trial phase. Wild Rose’s Oberman says that for many companies in the large Canadian adult web industry, it’s often easier to remove content at the request of copyright owners rather than spend time in court. The company, which produces video, live and still content on a business-to-business basis, is nonetheless adamant that it will protect its intellectual property – even if Oberman is unsure that the U.S. decision will be of much help. "It’s always necessary that any legitimate company that legitimately owns its material will want to protect its interest. Period. What’s the difference between site A and site B? It isn’t the graphics. It’s the pictures, the content. Content is king, period. If you can’t protect your content, which is king, then you have basically nothing."But, he is aware of the time and money involved in court cases such as that launched by PERFECT10. "You can’t go run to court every time you find your picture on a site. It’s impossible. You’d be broke…"But don’t take the adult industry and say, ‘well, you don’t hear about it, so maybe they just don’t deal with it.’ "People in the adult industry are quite savvy, and one thing they know is lawyers cost money. For them, every time there is a dispute over a picture or two they’re not going to go get into a heated legal battle," Oberman says. "When we deal with models, for instance, the vested rights in those pictures are our intellectual property. We own it. We can do what we want with them. We can sell it, we can diffuse it, we can reproduce it. We don’t give people rights to come take our property and do what they want with that. But there are hundreds of millions of people on the Internet. You can’t police that."

PERFECT10 ruling to aid pursuit of adult content copyright infringement

News | 05/01/2002 4:00 am EDT

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