Giganews Not Liable For Pirating Usenet Customers, Court Rules

A federal court in California has ruled that Usenet service provider Giganews is not guilty of copyright infringement, nor can it be held responsible for customers who do pirate content. The case in question was brought by adult magazine publisher Perfect 10 which previously lodged similar complaints against Amazon, Google and RapidShare.

Adult magazine publisher Perfect 10 has made a business out of suing online services for allegedly facilitating copyright infringement.

Over the past several years the company has targeted a dozen high-profile companies including Google, Amazon, Yandex, MasterCard, Visa, RapidShare, Giganews and Depositfiles.

Aside from a few private settlements the company has yet to score its first victory in court. The company was confident that this would happen in their prolonged battle with Usenet provider Giganews, but late last week these hopes were shattered.

On Friday the U.S. District Court for the Central District of California ruled on several motions (1, 2, 3) regarding Giganews’ liability for copyright infringement, as well as the nature of its DMCA takedown process.

In its order the court confirms that there is no evidence that Giganews is directly involved in any infringing practices.

“A claim for direct copyright liability demands evidence that the defendant had a direct hand in causing the infringement. The undisputed evidence before the Court, however, demonstrates that Defendants had no direct causal role in the alleged infringement,” the order reads.

According to the Court, Perfect 10 confuses direct and indirect copyright infringement, as the company has presented no evidence that Giganews employees are engaged in distributing pirated content.

Furthermore, claims of indirect copyright infringement also failed. The Court didn’t accept that Giganews is liable for the alleged copyright infringements of its users, as there is no proof that the company enjoyed direct financial benefit from any Perfect 10 images its subscribers may have distributed.

“[T]he ‘direct financial benefit’ requirement demands more than evidence that customers were ‘drawn’ to Giganews to obtain access to infringing material in general. Perfect 10 must prove with competent evidence that at least some of Giganews’ customers were ‘drawn’ to Giganews’ services, in part, to obtain access to infringing Perfect 10 material.”

“This action is a specific lawsuit by a specific plaintiff against a specific defendant about specific copyrighted images; it is not a lawsuit against copyright infringement in general on the Usenet,” the order adds.

In addition to their infringement claims Perfect 10 also argued that Giganews didn’t respond properly to takedown requests. While the court doesn’t dispute that proper takedown notices would give Giganews actual knowledge of infringements, the publisher’s notices were not proper.

Instead of listing message-IDs that could identify specific content, Perfect 10 sent in screenshots of a newsreader window, instructing Giganew “to conduct searches of specific names within certain newsgroups” and remove all results that were returned “on a certain date.” These notices do not comply with the DMCA’s standards, the court argues.

All in all the orders mean that Giganews is not liable for the infringements Perfect 10 claimed, and as a result the company can put the case to rest after three years.

However, as noted by Techdirt, it’s unlikely that Perfect 10 will stop its legal campaigns anytime soon. Just this summer the company initiated a new suit against hosting service OVH, who thanks to Giganews now have some additional ammunition to fight back.

Update: Ron Yokubaitis, co-Founder of Giganews, issued the following statement.

“These decisions and final rulings underscore the fact that Giganews has always acted responsibly and appropriately to work with copyright holders. We’re proud to have stood up against these baseless claims and to have stayed the course in defending against Perfect 10.”

“Over the course of the case, three different federal judges issued key rulings in Giganews’ favor.”

“We look forward to defending against Perfect 10′s inevitable appeal and to recovering an award of attorney’s fees against Perfect 10 in due course.”