Perfect 10, Inc. v. Visa International Service Association

Perfect 10 sued Visa for facilitating copyright infringement by processing payments for websites distributing its images without authorization. Visa won.

Perfect 10, Inc. v. Visa International Service Association was a landmark case in the legal battle between content creators and online payment processors. The case was filed by Perfect 10, a California-based publisher of adult entertainment material, against Visa International Service Association (Visa) and other financial institutions, alleging that they were facilitating and profiting from copyright infringement.

Background

Perfect 10 is a company that produces and distributes adult entertainment content, including images of nude models. The company claimed that it held exclusive rights to these images, and that third-party websites were reproducing and distributing these images without authorization. In 2005, Perfect 10 filed a lawsuit against Google, alleging that the search engine was displaying and linking to unauthorized copies of its images. The case resulted in a landmark decision, in which the Ninth Circuit Court of Appeals held that Google's thumbnail images constituted fair use under copyright law.

In 2011, Perfect 10 filed another lawsuit, this time against Visa and other financial institutions, including MasterCard and Wells Fargo, alleging that they were profiting from copyright infringement by processing payments for websites that were reproducing and distributing its images without authorization.

Legal Issues

The legal issues in the case were complex and centered around the liability of payment processors for copyright infringement. Perfect 10 argued that Visa and the other financial institutions were contributing to and profiting from copyright infringement by providing payment processing services to websites that were infringing its copyrights. Perfect 10 also alleged that Visa and the other financial institutions had failed to adequately police the use of their payment systems, despite receiving notice of infringing activity.

Visa and the other financial institutions countered that they were not liable for copyright infringement, as they were merely providing payment processing services and had no knowledge of the infringing activity. The financial institutions argued that they were protected by the safe harbor provisions of the Digital Millennium Copyright Act (DMCA), which shield internet service providers and other intermediaries from liability for copyright infringement by their users, provided they meet certain conditions.

Court Ruling

The case was heard by the United States District Court for the Central District of California. In August 2014, the court issued a ruling in favor of Visa and the other financial institutions, dismissing Perfect 10's claims.

The court held that Visa and the other financial institutions were protected by the safe harbor provisions of the DMCA, as they were merely providing payment processing services and had no knowledge of the infringing activity. The court also found that the financial institutions had taken reasonable steps to implement and enforce a policy for terminating repeat infringers, as required by the DMCA.

Implications

The ruling in Perfect 10, Inc. v. Visa International Service Association was significant for its clarification of the liability of payment processors for copyright infringement. The court's ruling reaffirmed the protections afforded to intermediaries under the DMCA's safe harbor provisions, while also emphasizing the importance of implementing and enforcing policies for terminating repeat infringers.

The Perfect 10, Inc. v. Visa International Service Association case also shed light on the difficulty of enforcing copyright online. In particular, the case illustrated the challenges faced by copyright owners in identifying and pursuing claims against infringing websites that operate outside of the United States. Many of the websites at issue in the case were located in foreign countries, making it difficult for Perfect 10 to enforce its copyright rights.

Furthermore, the case highlighted the importance of effective copyright enforcement measures, including notice-and-takedown procedures and repeat infringer policies. In order to qualify for safe harbor protection under the DMCA, online intermediaries must take steps to promptly remove infringing content in response to valid takedown notices from copyright owners, and to terminate the accounts of repeat infringers. Failure to implement and enforce these policies can result in liability for copyright infringement.

Overall, the Perfect 10, Inc. v. Visa International Service Association case had significant implications for the legal landscape surrounding online copyright infringement and the liability of online intermediaries. The case affirmed the protections provided to intermediaries under the DMCA's safe harbor provisions, while also emphasizing the importance of effective copyright enforcement measures. As the internet continues to evolve and new forms of online intermediaries emerge, the legal battles over copyright infringement are likely to continue, and the outcome of cases like Perfect 10, Inc. v. Visa International Service Association will continue to shape the legal landscape for years to come.