Megaupload Facing $5 Million Copyright Suit

Feb 1, 2011 11:45 AM PST
SAN DIEGO — Perfect 10 has waged a $5 million copyright suit against file-sharing membership site Megaupload, as well as sister sites Megarotic,com, Megaporn.com, Megavideo.com and Megaclick.com.

The suit, filed Monday at U.S. District Court in San Diego, said Megaupload has avoided Perfect 10's 22 cease-and-desist letters over copyrighted material and offered complete electronic copies of Perfect 10's magazine.

Further, Perfect 10 said that Megaupload directs download links offering "tens of thousands of Perfect 10 copyrighted images, as well as Perfect 10 videos, to be juxtaposed on Megaupload affiliated websites, next to photographs and likenesses of Perfect 10 models and other models or celebrities."

The suit names Megaupload operator Kim Schmitz, who is described in the filing as a felon who has served time in prison for computer hacking and insider trading. It also names 100 John Doe defendants, which are described as Megaupload's business partners, or affiliates.

"Schmitz formed Megaupload for the specific purpose of engaging in the business of illegally storing, displaying, and distributing the intellectual property of others," the complaint says.

Megaupload and its sister sites have become increasingly popular through the past few years. Megaupload.com, according to the complaint, has become among the hundred most popular websites on the Internet, with a reported 45 million unique visitors per day.

"Because it charges membership fees for immediate access to the copyrighted materials stored on its servers, it is a distributor and seller of pirated materials," the complaint said.

Perfect 10, which owns and operates the Perfect10.com, said in the suit it is not currently earning revenue from that endeavor because of rampant infringement.

Its owner, Norm Zada, did not immediately respond to XBIZ for comment.

The $5 million copyright and trademark suit also alleges unfair competition and seeks a restraining order against Megaupload and its sister sites.

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