Expect To See More Paysites Using Stolen Content...

[Lee]

SAN FRANCISCO (Reuters) - Companies processing credit card payments for Web sites featuring pirated content are not liable for copyright violations, a U.S. appeals court panel ruled on Tuesday.

The ruling by the three-judge panel of the San Francisco-based U.S. 9th Circuit Court of Appeals affirms a lower court decision against Perfect 10 Inc. in its dispute with Visa International Service Association, MasterCard International Inc. and affiliated banks.

Perfect 10, which operates a Web site featuring images of nude models, has also tangled in court with Google Inc., claiming the Web search leader violates its copyrights by linking Internet users to sites that republish its images without authorization.

A 9th Circuit Court panel in May allowed Google to display images of Perfect 10 models, but said the Internet giant may be liable for linking pirated content. Beverly Hills, California-based Perfect 10 asked the court to reconsider its lawsuit against Google and will ask the court to reconsider its challenge against credit card processors.

Norm Zada, president of Perfect 10, said the court majority's opinion in favor of the companies would encourage theft of intellectual property over the Internet by giving thieves a means to profit.

"On the Internet, it is easy to steal and almost impossible to defend against that," Zada told Reuters in a telephone interview. "How much business do I lose? There are least 70 sites I subscribe to that sell every picture that I own."

Perfect 10 should focus on such Web sites and not on providers of business services, said Andrew Bridges, the lawyer who defended MasterCard.

"The plaintiffs want to create an economic blockade of anybody accused of infringement," Bridges said.

Writing for the majority, Judge Milan Smith Jr. said credit card processors, unlike Web search providers, do not direct online traffic. "They in no way assist or enable Internet users to locate infringing material, and they do not distribute it," Smith wrote.

"Here, the infringement rests on the reproduction, alteration, display and distribution of Perfect 10's images over the Internet," Smith wrote.

Judge Alex Kozinski dissented, arguing credit card companies violate copyrights by providing a "financial bridge" between buyer and seller on Web sites stocked with pirated content. Sites with sexual content especially rely on credit card data to determine if visitors and subscribers are adults.

"If cards don't process payment, pirates don't deliver booty. The credit cards, in fact, control distribution of the infringing material," Kozinski said. "It does not serve the interests of a free market, or a free society, to abet marauders who pilfer the property of law-abiding, tax-paying rights holders, and who turn consumers into recipients of stolen property."

http://www.reuters.com/article/inter...16363020070703

I personally find this crazy, what these judges basically said was, i could setup a processing company and knowingly take payments from sites selling stolen content and not be held liable for doing so.

Holding the processors liable for copyright infringement would have been a MASSIVE blow to content theives and pirates everywhere because their methods of generating revenue would have effectively been cut-off.

Just another instance of out-dated judges making decisions on topics they know nothing about... Assholes $0.02

I wish there was a way to get 'young' judges on cases like this, ones that involve new fangled technology the judges might have actually used.

Im wondering now if this means that if you notify a processor that someone is using your content illegally, if they will just ignore you, after all, they have absolutely NO liability thanks to this ruling.

Regards,

Lee

[gaybucks_chip]

Well... while Visa might have been rebuked by this ruling, I should think that CCBill or Epoch, for example, could have their own internal policies that say they choose not to process for sites with stolen content, in the same way that they have the option of not processing for sites they consider offensive or whatever... things like pissing, the "artistic child nudity" sites. Given that those sorts of sites are processed by some of the shadier processors like Segpay, it's clearly not a Visa regulation, but an individual IPSP's interpretation of Visa's regs.

[Lee]

Given that those sorts of sites are processed by some of the shadier processors like Segpay, it's clearly not a Visa regulation, but an individual IPSP's interpretation of Visa's regs.

Which illustrates my point perfectly, if they are already processing for these types of sites, there is now NOTHING to stop them from continuing, they have no liability so they can just carry on doing the same thing on a much larger scale than before without cause for concern.

Regards,

Lee

[mickey]

Well one of the good things about the outcome of this lawsuit is that we can now continue to sign up as easily to CCprocessors as always, no need for new paperworks by the tons etc..

Stop and think for a moment here, had they rules that the processors where guilty in anything here we would all have had to start sending in paperwork by the truck load to prove that we own the content we use on our sites so the processors could later on sue our ass off should they find out we where lying...

this might have put a block on the sites using stolen material but it would have a been a major curveball for the honest webmasters too..

[Chilihost]

why should it be the credit card company or the ipsp's responsibility to ensure that your content is not stolen? Thats like saying they have to go into every clothing shop and make sure they are not using false labels. It would have put a crushing burdon on the credit card companies and I AM SURE it would have resulted in it becoming IMPOSSIBLE to get adult processing. I mean, come on, its hard enough to get processing for adult sites as it is today, let alone add this type of regulation.

[Baghdad Bob]

i dont think that means there will be more content stealing on paysites sorry

[Matt 26z]

It was a good ruling that mirrors what we already know about brick and mortar business.

If Best Buy sells a patent infringing TV, should Best Buy's credit card processor be sued for processing the infringing TV's? We all know the answer to that is no, but there are companies trying their luck with internet versions of these lawsuits in hopes of getting a different outcome. Luckily, they are failing.

I've even seen some webmasters suggest that advertisers be held liable for sites posting stolen content. That's ridiculous. It's like getting injured at a sports stadium and suing Budweiser because they have a banner hanging from the rafters.

I'm not sticking up for content theft here. Processors not being liable just means a greater chance that providers of other services are not liable either. Just imagine getting sued because you sold a text link to a site that was using stolen content.

[IdolKnights]

I've even seen some webmasters suggest that advertisers be held liable for sites posting stolen content. That's ridiculous. It's like getting injured at a sports stadium and suing Budweiser because they have a banner hanging from the rafters.

When you buy the ticket - look on the back - it states the ticket being a contract you agree to once you use it.