Porn Valley – Perfect 10 makes porn. (We’re sorry – “adult entertainment.”)

The company also sues like a jackrabbit in order to protect its copyrights in said pornography.
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These litigious purveyors of print and online smut, you may recall, recently won a landmark suit against Google in which they claimed that Google’s thumbnail renditions of their images repeatedly violated their dirty pics copyrights.

The court in that case essentially found that Google’s thumbnails did not fall under the exception for fair use, and granted an injunction prohibiting Google from displaying the thumbnail images for Perfect 10’s pics in the future.

More recently, Perfect 10 sued a web hosting firm, CWIE, and a subscription gateway, CCBill, arguing that the two companies rapaciously molested Perfect 10’s copyrights, trademarks and right of publicity by providing their services to porn sites that had misappropriated images from Perfect 10’s publications.

The services countered the allegations in the suit by claiming that several provisions of the Digital Millenium Copyright Act (DMCA) and the Communications Decency Act acted as a prophylactic, rendering the companies impregnable against Perfect 10’s claims.

Both statutes provide immunities and shields for providers of online interactive services.

Perfect 10 argued that the companies lost these protections by failing to implement the policies required by the DMCA in a reasonable fashion. The district court agreed with the service providers, though, and granted them protection under the two statutes. Perfect 10, the district court declared, had failed to erect a substantial case against the two companies, and ruled in favor of the service providers on most issues.

The 9th Circuit Court of Appeals, however, determined that the district court had brought the case to its climax prematurely, and sent it back to the lower court on several grounds. Amid a lot of fairly standard procedural reasons for kicking the case back to the lower court, the 9th Circuit decided to lay down a few legal decisions with some real importance for intellectual property and immunities on the Internet.

Perfect 10 argued before the court that CCBill shouldn’t enjoy any service provider immunity since the company (allegedly) violated rules prohibiting interference with content identification and protection methods.

CCBill had blocked Perfect 10’s credit card numbers when the company tried to buy subscriptions to the allegedly infringing porn sites, ostensibly because Perfect 10 kept canceling its subscriptions and reversing charges. This, CCBill argued, ran up costs and was a general pain in the ass.

Perfect 10 claimed that CCBill’s refusal to grant them subscriptions constituted a block of a standard technical measure (STM) that they were using to determine the presence of infringing material. (Yes, they actually argued that looking at porn online was a standard technical measure for protecting their rights. Gotta love copyright law!) If a service provider blocks the use of a content-owner’s STM, they lose the any protection under the DMCA.

The Ninth Circuit decided that it didn’t have enough information to determine whether web site access was actually an STM or not, and so it sent the issue back down for the lower court to sort out.

On remand, it’s unlikely the district court will find that simply viewing a website constitutes an STM. STMs have to be developed across the content-industry in a way that incorporates an open, multi-industry standards process. Last we heard, viewing a web site was developed by Tim Berners-Lee a decade and a half ago, although we wouldn’t be the least bit surprised if the content industry did decide to try and take credit for it.

Moreover, a decision for Perfect 10 on this issue would be a horrible policy choice, since it would strip the DMCA protection from any service provider that, for whatever reason, decided to block access to a site in good faith. Definitely not what Congress had in mind when it wrote up the safe harbor protections.

The final important piece of the decision should come as good news for fans of the Communications Decency Act immunity for interactive service providers. As you may know, that law protects interactive service providers from liability for information posted onto the service by another.

It does not, however, apply to intellectual property claims.

Perfect 10 argued in the suit that the porn sites using the CCBill’s and CWIE’s services had misappropriated its state-law right to publicity for the nudie models, which, as an intellectual property claim, would evade any immunity under the CDA.

The 9th Circuit ruled that the exception to the immunity for intellectual property claims applies only to federal intellectual property law, since Congress wouldn’t have wanted to subject service providers to fifty different sets of state IP regulations.

This has some pretty serious ramifications. While most intellectual property law is based in the federal code, states do have some wacky IP laws that pose serious problems for service providers since the Internet is available across state lines.

After this decision, service providers can rely on the CDA’s grant of immunity in relation to any state-law IP claims, and focus on complying with the requirements of federal IP law. (As long as they’re sued in the 9th Circuit, that is.)

Overall, the 9th Circuit’s ruling injected a small dose of legal Viagra into Perfect 10’s drooping case, but it didn’t actually put it to bed. Before the company has a chance of winning, they’ll have to show that the DMCA protections don’t protect CWIE and CCBill from the charges , then prove that the service providers actually infringed their copyrights. Thus, the truly hard part lies ahead for Perfect 10 – they must titillate the district court with some exhibitions, then go to the mats over the ins and outs of the case.

But that’s something that Perfect 10 has proven itself to be good at, in more ways than one.