argued that CCBill and CWIE had failed to reasonably implement their repeat infringer policy
because they were aware of a number of red flags that signaled apparent infringement and had
failed to act. Specifically, Perfect 10 argued that, because CCBill and CWIE had provided
services to “illegal.net” and “stolencelebritypics.com,” they must have been aware of apparent
infringing activity.^2341 The Ninth Circuit disagreed. “When a website traffics in pictures that are
titillating by nature, describing photographs as ‘illegal’ or ‘stolen’ may be an attempt to increase
their salacious appeal, rather than an admission that the photographs are actually illegal or stolen.
We do not place the burden of determining whether photographs are actually illegal on a service
provider.”^2342
The court also rejected Perfect 10’s argument that password-hacking sites hosted by
CWIE obviously infringed. The court noted that, in order for a website to qualify as a red flag of
infringement, it would need to be apparent that the website instructed or enabled users to infringe
another’s copyright.^2343 “We find that the burden of determining whether passwords on a
website enabled infringement is not on the service provider. The website could be a hoax, or out
of date. ... There is simply no way for a service provider to conclude that the passwords enabled
infringement without trying the passwords, and verifying that they enabled illegal access to
copyrighted material. We impose no such investigative duties on services providers. Password
hacking websites are thus not per se ‘red flags’ of infringement.”^2344
Perfect 10 argued that CCBill and CWIE had also failed the predicate condition of
Section 512(i)(1)(B) of not interfering with standard technical measure used to identify or protect
copyrighted works, by blocking Perfect 10’s access to CCBill affiliated websites in order to
prevent Perfect 10 from discovering whether those websites infringed Perfect 10’s copyrights.
The Ninth Circuit found two disputed facts at issue for purposes of summary judgment. First,
the court was unable to determine on the record whether accessing websites is a standard
technical measure that was developed pursuant to a broad consensus of copyright owners and
service providers in an open, fair, voluntary, multi-industry standards process, as required by
Section 512(i)(2)(A). Second, even if it were a standard technical measure, CCBill claimed it
blocked Perfect 10’s credit card only because Perfect 10 had previously reversed charges for
subscriptions. Perfect 10 insisted it did so in order to prevent Perfect 10 from identifying
infringing content. If CCBill were correct, Perfect 10’s method of identifying infringement –
forcing CCBill to pay the fines and fees associated with chargebacks – might well impose a
substantial cost on CCBill. If not, CCBill might well have interfered with Perfect 10’s efforts to
police the websites in question for possible infringements. Accordingly, the court remanded to
the district court for determinations on whether access to a website is a standard technical
measure, and if so, whether CCBill’s refusal to process Perfect 10’s transactions interfered with
that measure for identifying infringement.^2345
(^2341) Id. at 763.
(^2342) Id.
(^2343) Id.
(^2344) Id. at 763-64.
(^2345) Id. at 764.