Perfect 10, Inc. v. Rapidshare, No. 09-CV-2596 (S.D. Cal. May 18, 2010)
On May 18, the District Court for the Southern District of California denied plaintiff Perfect 10’s motion for a preliminary injunction against RapidShare, a file sharing service. The court held that Perfect 10 failed to show a likelihood of success on the merits of their direct and contributory copyright infringement claims against RapidShare, finding it particularly significant that RapidShare does not index its users’ files.
The court also noted that, when ruling on motions for preliminary injunctions, the Ninth Circuit has continued to use a presumption of irreparable harm when a plaintiff demonstrates a likelihood of success on the merits, in contrast to the Second Circuit which recently held in Salinger v. Colting that a plaintiff must show “he has suffered an irreparable injury” prior to obtaining a preliminary injunction.
MediaPost provides a brief overview of the decision, noting the court’s comparison of RapidShare to Napster. Ars Technica discusses the decision, noting past unsuccessful legal action by Perfect 10 and a recent German legal victory by RapidShare. The Legal Satyricon summarizes and criticizes the decision, arguing that RapidShare and similar sites are obviously liable for contributory infringement.
In April 2010, adult entertainment company Perfect 10 sought a preliminary injunction to prevent RapidShare from hosting Perfect 10’s copyrighted images and videos. RapidShare is a file-hosting service that allows users to upload different types of files. These files are then accessible from a unique URL which users can send to third parties. Perfect 10 claimed that RapidShare was (1) liable for direct copyright infringement on the theory that RapidShare is violating Perfect 10’s exclusive distribution rights; and (2) liable for contributory copyright infringement because RapidShare had knowledge of a third party’s infringement and either materially contributed to or induced the infringement. Perfect 10 also sought a preliminary injunction to prevent RapidShare from continuing to engage in unfair competition.
In denying plaintiff’s motion for a preliminary injunction, the court found that Perfect 10 did not establish a likelihood of success on the merits for its direct infringement claim. The court distinguished RapidShare’s service from the infringing services at issue in Hotaling v. Church of Jesus Christ of Latter-Day Saints and A & M Records, Inc. v. Napster Inc. The court seemed to find it particularly important that RapidShare does not index uploaded files and thus “the public cannot enter rapidshare.com and browse through a catalog for desired materials.”
Further, the court found that Perfect 10 did not demonstrate a likelihood of success on the merits for its contributory infringement claim. Although Perfect 10 did establish that RapidShare had actual knowledge of the presence of infringing material on its servers, it failed to establish that RapidShare materially contributed to or induced infringement. Once again, the court found it significant that RapidShare does not index uploaded files, thus distinguishing it from Napster.
In denying the injunction, the court noted that Perfect 10 had not provided RapidShare with sufficient information to locate and remove the infringing material, that Perfect 10 did not use an available “takedown” tool, and that it knew that the allegedly infringing material was available on RapidShare’s servers for four years before it filed suit.
The court also rejected RapidShare’s claim that it was entitled to limited liability under the safe harbor provision of the Digital Millennium Copyright Act, because RapidShare failed to designated a DMCA agent with the United States Copyright Office as required by 17 U.S.C. § 512.
This decision is significant for multiple reasons. As noted above, the court reiterated that the Ninth Circuit continues to find a presumption of irreparable harm in copyright claims when plaintiff demonstrates a likelihood of success on the merits, in contrast to the Second Circuit’s recent approach. Additionally, although the decision does not signal an end to Perfect 10’s claims, which may still go to trial, it shows that plaintiffs could face an uphill battle in obtaining injunctions because the success of copyright infringement claims against file-sharing services depends in part on the logistics of the service at issue.
Leocadie Welling is a 3L at Harvard Law School.