Perfect 10, LeaseWeb Settle Infringement Case

Jun 11, 2014 10:00 AM PST

LOS ANGELES — Adult entertainment brand Perfect 10 last week entered into a settlement deal with LeaseWeb over charges that the hosting provider was working with a number of websites to host pirated copies of its copyrighted images.

Terms of the settlement, which hasn't been signed off yet by a judge, weren't released publicly.

In the suit, Perfect 10 claimed that LeaseWeb was responsible for copyright infringement because it didn't process 22 DMCA notices it sent starting in February 2013 through January.

"The DMCA notices sent by Perfect 10 identified at least 12,220 infringing Perfect 10 images hosted on the servers of the LeaseWeb defendants," the suit said.

Perfect 10, operated by Los Angeles entrepreneur Norman Zada, listed the file-sharing sites IMGChili.net, IMGChili.com, IMGTiger.com, IMGServe.net, Poringa.net, UltraForos.com, UltraForos.net, GalleryWorld.info and MegaUpload.com, among 11 additional sites, as those that were LeaseWeb clients and infringed on Perfect 10 copyrighted works.

Perfect 10 noted in its suit filed at Los Angeles federal court that LeaseWeb operators had "actual knowledge of the rampant infringement that they are hosting, presumably because the LeaseWeb defendants receive lucrative hosting fees from their infringing clients."

Perfect 10 was seeking maximum statutory damages of $150,000 with respect to each work infringed, for a total of $3.3 million in damages, and a restraining order over alleged infringement.

But LeaseWeb refuted the allegations and said that none of the notices that were sent by Perfect 10 conformed with the DMCA’s requirements. LeaseWeb also denied that it knew about the claimed widespread infringements.

Several months ago, U.S. District Judge John Walter, ruling in a motion to dismiss for lack of personal jurisdiction, concluded that Perfect 10 had made a prima facie showing that LeaseWeb's U.S. division "purposefully directed its activities toward California," which was sufficient to establish specific personal jurisdiction in the case.

LeaseWeb's parent company is based in the Netherlands but its U.S. division is incorporated in Delaware and has a server in Virginia. LeaseWeb does not have a California office.

But four months into the case, the parties apparently have settled their differences and are seeking court permission to dismiss the case.

Zada, when reached on Wednesday, emphasized that Perfect 10 "has spent an enormous amount of time and energy protecting the copyrights that we have spent over $50 million to create." 

"At some point, we hope that the U.S. government will take a more active role in helping to protect this country's extraordinarily valuable intellectual property," Zada told XBIZ. "Not only the U.S., but the world, needs some form of Internet police that can deal with the hundreds of billions of dollars of intellectual property that is stolen each year. 

"If your car gets stolen, you can call the police. When a person's livelihood is destroyed by a theft of their intellectual property, there is no one to call. Most victims of intellectual property theft do not have the resources to file lawsuits and should not be required to do so. Such lawsuits also clog up an already overburdened federal court system."

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