With respect to the knowledge requirement of contributory infringement, the court noted
that it had reviewed every one of the 42 notices referenced in the amended complaint.
Consistent with Judge Matz’s order, Judge Collins found that those notices were specific enough
to overcome a motion to dismiss because they might be sufficient to allow their recipient to
locate the referenced images on its servers. However, those notices were sent only to Giganews.
Because the notices were addressed only to Giganews and made no mention of Livewire, and
because the identifiers associated with the images might well not have been the same for both
Giganews and Livewire, the notices were effective to inform only Giganews that the infringing
images were on its servers. The notices therefore could not be effective as to Livewire and were
an insufficient basis upon which to plead that Livewire had knowledge of the infringing conduct.
The plaintiff’s pleadings that Livewire also generally knew that it offered images that infringed
were insufficient to plead knowledge for purposes of contributory infringement. The court
therefore concluded that the plaintiff’s contributory infringement claim against Livewire
failed.^2102
With respect to the vicarious liability claim, Judge Collins noted that Judge Matz’s order
had found that charging subscribers a fee was sufficient to show direct financial benefit, the
plaintiff had pled that Livewire charged fees for access to infringing materials it provided, and
that was adequate to show that Livewire directly benefited from the infringing activity of its
clients. The court determined, however, that the plaintiff had not pled facts adequate to establish
control. The plaintiff’s allegations that Livewire controlled what it purchased from Giganews
and provided to clients, and that Livewire controlled Giganews because it was owned, operated
and/or controlled by the same parties, were insufficient to show that Livewire exercised control
over the infringing activity of its clients. Accordingly, the court concluded that the plaintiff’s
vicarious infringement claims against Livewire failed.^2103 Because the plaintiff had already
amended its complaint once, and had not shown how any further amendment could cure its
pleading deficiencies, the court dismissed the secondary infringement claims against Livewire
without leave to amend.^2104
After discovery, Giganews moved for partial summary judgment with respect to
secondary copyright liability. On Nov. 14, 2014, in a civil minute order, a third judge (Judge
Birotte) granted Giganews’ motion.^2105 Turning first to the financial benefit prong of vicarious
liability, the court noted that financial benefit exists where the availability of infringing material
acts as a draw for customers, and (citing the Ninth Circuit’s Ellison decision) the size of the draw
relative to a defendant’s overall business is immaterial. However, the plaintiff was still required
to prove a direct causal link between the infringing activities at issue in this case and a direct
financial benefit to Giganews. Thus, the court ruled that the direct financial benefit requirement
demanded more than evidence that customers were drawn to Giganews to obtain access to
(^2102) Id. at 11-12.
(^2103) Id. at 13-15.
(^2104) Id. at *15-16.
(^2105) Order Granting Defendant Giganews Inc.’s Motion for Partial Summary Judgment on the Issue of Indirect
Copyright Infringement, Perfect 10, Inc. v. Giganews, Inc., No. CV 11-07098-AB (SHx), Dkt. No. 620 (C.D.
Cal. Nov. 14, 2014).