Perfect 10, Inc. v. Ccbill, LLC
| Decision Date | 22 June 2004 |
| Docket Number | No. CV 02-7624 LBG(SHx).,CV 02-7624 LBG(SHx). |
| Citation | 340 F.Supp.2d 1077 |
| Court | U.S. District Court — Central District of California |
| Parties | PERFECT 10, INC., Plaintiff, v. CCBILL, LLC, et al., Defendants. |
Daniel J. Cooper, General Counsel, Randall B. Lewis, Associate General Counsel, Perfect 10, Inc., Beverly Hills, CA, Jeffrey N. Mausner, Berman, Mausner & Resser, Los Angeles, CA, for Plaintiff Perfect 10, Inc.
John P. Flynn, Tiffany & Bosco, P.A., Third Floor Camelback Esplanade II Phoenix, AZ, Jay M. Spillane, Fox & Spillane LLP, Los Angeles, CA, for Defendants CCBill and CWIE.
Brandon Baum, Cooley Godward LLP, Palo Alto, CA, for Defendant Internet Billing Company.
Dennis T. Kearney, Helen Nau, Pitney, Hardin, Kipp & Szuch LLP, Park Avenue at Morris County, Morristown, NJ, Bruce Wessel, Irell & Manella, Los Angeles, CA, for Defendant Internet Key.
ORDER GRANTING, IN PART, AND DENYING, IN PART, DEFENDANTS' MOTIONS FOR SUMMARY JUDGMENT
Defendants Internet Billing Co., LLC ("IBill"), Internet Key, Inc. ("Internet Key"), Cavecreek Wholesale Internet Exchange ("CWIE"), and CCBill, LLC ("CCBill") have filed the instant motions for partial summary judgment of Perfect 10, Inc.'s ("Perfect 10") copyright, RICO, and state law claims based on safe harbors provided by the Digital Millennium Copyright Act ("DMCA") and immunity provided by the Communications Decency Act ("CDA"). By this Order, the Court addresses the four motions for partial summary judgment.1
The facts are undisputed unless otherwise noted.
Perfect 10 is the publisher of the adult entertainment magazine Perfect 10 and the owner of the website perfect10.com. See II Zadeh Decl. at ¶ 2. Perfect 10 has created approximately 5,000 photographic images for display in its magazine and on its website. See id. at ¶ 17. Perfect 10 holds registered U.S. copyrights for these images. See id.; see also Compl. Exh. O (containing copies of the copyright registrations owned when the complaint was filed). In addition, Perfect 10 has several registered trademark/service marks. See II Zadeh Decl. at ¶ 18; see also Compl. Exh. P (containing copies of trademark registrations owned when the complaint was filed). Finally, Perfect 10 is the assignee of the rights of publicity of many models. See II Zadeh Decl. at ¶ 19-21.
IBill is a company that processes payments for online merchants. II Zadeh Decl. at ¶ 22. IBill has nearly 5,000 clients with over 70,000 websites. II Smith Decl. at ¶ 4. All material selected and posted by IBill's clients' websites is selected and posted by IBill's clients. Id., ¶ 7. IBill can suspend or terminate its relationship with websites if it becomes aware that the website is violating IBill's policies or state or federal law. Id., ¶ 8. When IBill suspends or terminates a client, the contents of the clients' website remains intact and unchanged. Id., ¶ 9 In addition, suspension or termination does not affect the ability of the website's existing customers (those who have already paid) to obtain access to the website. Id. Suspension or termination does, however, prevent the owner of the website from receiving new payments using IBill's payment processing services. Id.
Hank Freeman is the President of Internet Key. I Freeman Decl., ¶ 1; I Cooper Decl., Exh. 1 (Freeman Depo.), at 15:10-20.2 Internet Key is an age verification system for adult content websites. I Freeman Decl., ¶ 2. Starting in 1997, Internet Key has provided adult verification services, including providing links, to third-party adult content websites. Id. Currently, Internet Key verifies age and provides a link to approximately 30,000 third-party adult content websites that participate in the SexKey system ("Affiliated Websites"). Id. The Affiliated Websites are not owned by Internet Key although some are owned by employees of WCD Enterprises, another company that Freeman owns. Id., ¶ 4; I Cooper Decl., Exh. 1 (Freeman Depo.), at 119:1-5. A user (consumer) cannot access an Affiliated Website without proving he or she is of legal age. I Freeman Decl., ¶ 5. Internet Key provides each Affiliated Website with a site ID and an HTML code to place on their site. Id. When a new user clicks onto an Affiliated Website, a link that tracks the site ID automatically directs the user to sexkey.com for age verification. Id. The user is directed to Internet Key's registration page, which contains Internet Key's User Agreement. Id., ¶ 6. The User Agreement sets forth terms and conditions that a user must certify and agree in order to subscribe to a SexKey membership. Id. Once the user agrees to all the terms of the User Agreement by checking on a box that the user agrees, the user is provided a user password to access all of the Affiliated Websites in the SexKey system. Id., ¶ 8. Internet Key does not store the content of the Affiliated Websites on its computer system. Id., ¶ 13. It only stores information related to the Affiliated Websites' URLs, site descriptions and webmaster information. Id.
Prior to January 22, 2004, the only website Internet Key owned was sexkey.com. Id., ¶ 12. On January 22, 2004, Internet Key started a new website called sksignature.com, which is part of the SexKey system. Id. Internet Key owns or leases all the content contained on sksignature.com. Id.3
Internet Key also acts as a search engine (similar to Yahoo or Google) for free adult content on the Internet. I Freeman Decl., ¶ 4. Sometimes, when an Affiliated Website is accessed through SexKey, the words "sexkey.com" appear in the URL. I Zadeh Decl., ¶ 65, Exh. 51. Internet Key did not adopt a DMCA policy until August 21, 2002. I Cooper Decl., ¶ 4, Exh. 2 at 27.
Thomas Fisher is the Executive Vice-President of CWIE. III CWIE Fisher Decl., ¶ 1.4 CWIE is a provider of web hosting and related Internet connectivity services. Id., ¶ 3. CWIE provides what is referenced within the industry as "ping, power, and pipe." Id. As a provider of Internet access, website hosting, and other Internet-related services, CWIE offers its clients, and their customers and users, the means to acquire and disseminate public, private, commercial, and non-commercial information. Id."Ping, power, and pipe" refers respectively to ensuring the "box" or server is on, ensuring power is provided to the server, and connecting the client's server or website to the Internet backbone via a data center connection. Id.
CWIE's clients are the creators and/or owners of the content they seek to present to consumers via their website. Id., ¶ 4. CWIE is not in the business of producing, designing, supervising or editing the content that appears on CWIE's clients' websites. Id. CWIE adopted its repeat infringer policy in 1999. Id., ¶ 11. CWIE's termination policy states that:
Engaging in any activity that infringes or misappropriates the intellectual property rights of others is prohibited. This includes copyrights, trademarks, service marks, trade secrets, software piracy, and patents held by individuals, corporations, or other entities. Engaging in activity that violates privacy, publicity, and other personal rights of others is likewise prohibited. CWIE is required by law to remove or block access to client content upon receipt of a proper notice of copyright infringement or other violations of the law. It is also CWIE's policy to terminate the privileges of clients who commit repeat violations of copyright laws.
Thomas Fisher is the Executive Vice-President of CCBill. III CCBill Fisher Decl., ¶ 1. CCBill's clients are the creators and/or owners of the content they seek to present to consumers via the Internet. Id., ¶ 3. CCBill is not in the business of producing, designing, supervising or editing the content that appears on CCBill's clients' websites. Id. CCBill provides a fully automated Internet service that enables consumers to use credit cards or checks to pay for subscriptions or memberships to e-commerce venues created and offered by CCBill's clients. Id. CCBill does not own or operate any site for which a subscription or membership is required. Id. As part of its services to its clients, CCBill provides an automated on-line accounting mechanism that clients may use to verify statistical and financial activities processed for them through CCBill's on-line Internet automated transaction processing system. Id. Consumers who have joined a client's venue may cancel their subscription via an email or telephone call directed to CCBIll. Id.
CCBill has a repeat infringer policy, adopted in 1999, which states:
As an ISP, CCBill follows the procedures prescribed by the Digital Millenium Copyright Act (DMCA) for notification, takedown, and counter-notification. If you believe that a CCBill client has something on a website that constitutes a [violation] of your copyrights, or if any of your other intellectual property rights [have been] violated, please provide the following information to CCBill's Registered [DMCA Agent].
accurate and that you are the copyright owner or authorized [to act] on the owner's behalf.
Please send all legal notices to ...
Id., ¶ 9, Exh. D.
Plaintiff Perfect 10 filed its Complaint against Defendants CCBill, IBill, Paycom Billing Services, Inc., IMA Enterprises, Inc., Clarence Coogan, U. Berger,...
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