Advanced Copyright Law on the Internet

contemplated by the “right and ability to supervise” test. ... We agree with the

district court that possibilities for upgrading software located on another person’s

computer are irrelevant to determining whether vicarious liability exists.^2148

Accordingly, the court affirmed summary judgment for the defendants on the vicarious liability
claim.^2149

(g) Perfect 10 v. Visa International

In Perfect 10, Inc. v. Visa International Service Ass’n,^2150 Perfect 10, owner of the
copyrights in pornographic materials, sought to hold various credit card and banking institutions
liable for contributory and vicarious infringement for providing financial services to various web
sites that Perfect 10 alleged contained infringing copies of its copyrighted materials. The district
court granted the defendants’ motion to dismiss.

Perfect 10 argued that the defendants had the right and ability to control the infringing
activities because (i) provision of financial services was essential to the survival of the allegedly
infringing web sites, and the defendants could therefore dictate content by threatening to revoke
their services if the web sites did not comply with their standards, and (ii) the defendants had in
place internal regulations governing the provision of service to high-risk merchants, including
adult entertainment web sites. The district court rejected both arguments. As to the first, the
court noted that the record established the allegedly infringing web sites would be able to
continue their alleged infringing conduct regardless of whether the defendants blacklisted them.
As to the second, even if the defendants had internal regulations requiring monitoring of web
sites, the web sites were not bound by such regulations and the defendants had no contractual
right to dictate the web sites’ content or to take action against them in the event of infringing
activity. And unlike the Fonovisa swap meet case, the defendants could not “eject” the web sites
from the Internet. Accordingly, the district court ruled that the defendants had no way to control
the infringing conduct of the web sites.^2151

The court noted that the complaint included facts that might indicate a financial benefit to
the defendants as a result of the draw from the alleged infringing images, but because of the
absence of a right or ability to exercise control over the alleged infringing activity, the existence
of a financial benefit would not be sufficient to establish vicarious liability. Accordingly, the

(^2148) Id. at 1166. The plaintiffs also argued that Grokster and StreamCast should not be able to escape vicarious
liability by turning a “blind eye” to the detectable infringement of their users. The Ninth Circuit rejected this
argument, stating that there is no separate “blind eye” theory or element of vicarious liability that exists
independently of the traditional elements of liability. Id.
(^2149) Id. at 1167. On appeal, the Supreme Court did not reach the issue of vicarious liability in view of its resolution
of the case under the doctrine of inducement.
(^2150) 71 U.S.P.Q.2d 1914 (N.D. Cal. 2004), aff’d, 494 F.3d 788 (9th Cir. 2007), cert. denied, 553 U.S. 1079 (2008).
(^2151) Id. at 1918.