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InsideCounsel Reports on Ninth Circuit's Perfect 10 Decision on Secondary Liability

Inside%20Counsel%20CoverThe September issue of InsideCounsel magazine reports on the Ninth Circuit’s July 3 decision in Perfect 10, Inc. v. Visa Int’l Svc. Ass’n, which found that credit card companies were not contributorily or vicariously liable for trademark or copyright infringement. The plaintiff, a porn site operator, had argued that the defendant banks and credit card companies should be liable for making infringement profitable by processing credit card payments to infringers’ sites. STL’s original post on the case here.

Julius Melnitzer’s article, “Porn Site Loses High Stakes,” quotes yours truly as characterizing the ruling as a “pro-commerce, pro-Internet decision that could have slowed down commerce significantly if it had gone the other way.”

Writing in dissent, Judge Alex Kozinski argued that credit card companies that allow infringers to become profitable should be just as liable as direct infringers.

Addressing this point, the article also quotes fellow blogger and law professor Eric Goldman (who I note garnered a quote in last month’s issue as well) as explaining: “While the majority sees [financial service providers] like power companies — behind the scenes vendors that don’t touch the flow of infringing bits — the minority thinks FSPs are no different than bagmen for an illegal deal who should take responsibility for it.”

The case cite is Perfect 10, Inc. v. Visa Int’l Svc. Ass’n, __ F.3d __, 2007 1892885, No. 05-05170 (9th Cir.).

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