Court Finds Megaupload Could Be Guilty Of Direct Infringement In Perfect 10 Case
from the say-what-now? dept
Earlier this year, we noted that its latest target was the well known file storage service, MegaUpload. Given the similarity with this case to many other Perfect 10 cases, we had hoped that the judge would make quick work of dismissing it. Tragically, that's not what happened. Embedded below is the unfortunate ruling from Judge Irma Gonzalez, who mostly ruled against MegaUpload in its motion to dismiss the lawsuit. You can read the whole thing, but the truly scary part for me is where the court says MegaUpload may be guilty of direct infringement.
This is crazy. Direct infringement charges are used against the actual party doing the infringing. Most service providers don't have to deal with that, but instead the focus is on third party liability, things like contributory infringement, vicarious infringement or inducement. Here, however, the judge actually says that MegaUpload is involved enough that it could be found guilty of direct infringement:
Drawing all reasonable inferences in Perfect 10's favor, Megaupload serves as more than a passive conduit, and more than a mere "file storage" company: it has created distinct websites, presumably in an effort to streamline users' access to different types of media (e.g., megaporn.com, megavideo.com)... it encourages and, in some cases pays, its users to upload vast amounts of popular media through its Rewards Programs.... it disseminates URLs for various files throughout the internet... it provides payouts to affiliate websites who maintain a catalogue of all available files... and last, at a minimum, it is plausibly aware of the ongoing rampant infringement taking place on its websites. Taken together, Perfect 10 has adequately alleged Megaupload has engaged in volitional conduct sufficient to hold it liable for direct infringement....This still doesn't make any sense. Everything described seems relevant to indirect third party liability. None of it seems to involve direct infringement. Honestly, I'm just confused how the court made the leap here. While this was just to deny the motion to dismiss, this might not bode well for Megaupload... and Perfect 10 may finally score a big legal win.