The court rejected the defendant’s argument that it could not be held directly liable for
infringement under the logic of the Netcom case. The court distinguished the Netcom case on
the ground that Netcom did not create or control the content of the information available to its
subscribers, but rather merely provided access to the Internet. In contrast, the court noted that
Neptics was receiving payment selling the images it stored on its computers, and therefore was
acting as more than merely an information conduit.^94
The defendant also argued that it could not be held liable for direct infringement because
it had no control over the persons who posted the infringing images to the adult newsgroups from
which Neptics obtained its material. The court rejected this argument: “While this may be true,
Neptics surely has control over the images it chooses to sell on the Neptics’ website. Even the
absence of the ability to exercise such control, however, is no defense to liability. If a business
cannot be operated within the bounds of the Copyright Act, then perhaps the question of its
legitimate existence needs to be addressed.”^95
(f) The Sanfilippo CaseIn Playboy Enterprises, Inc. v. Sanfilippo,^96 the court found the defendant operator of a
website through which 7475 of the plaintiff’s copyrighted images were available directly liable
for infringement. The defendant admitted copying 16 files containing a great many of the
images from a third party source onto his hard drive and CD-ROM. He also admitted that 11
other files containing such images were uploaded to his hard drive by a third party. The court
found that, because the defendant had authorized the third party to upload such files to his site,
the defendant was directly liable for such upload as a violation of the exclusive right under
Section 106 of the copyright statute to “authorize” others to reproduce a copyrighted work. The
court also found that the defendant had willfully infringed 1699 of the copyrighted images.
One of the most interesting aspects of the Sanfilippo case is the amount of damages the
court awarded. The plaintiff sought statutory damages, and argued that a statutory damages
award should be made for each individual image that was infringed. The defendant argued that,
in awarding damages, the court should consider the fact that the copied images were taken from
compilations and, therefore, an award should be made only with respect to each particular
(^94) Id. at 1175.
(^95) Id. The court also held that the principals of Webbworld could be held vicariously liable for the infringements.
Although the principals had no control over those responsible for originally uploading the infringing images
onto the Internet sites from which Webbworld drew its images, the principals had the right and ability to control
what occurred on the Neptics website. The court ruled that the $11.95 subscription fee gave the principals a
sufficient direct financial benefit from the infringing activity to hold them vicariously liable. Id. at 1177.
The court made its rulings in the context of a motion for summary judgment by the plaintiff. The court granted
summary judgment of infringement with respect to sixty-two copyrighted images, but denied summary
judgment with respect to sixteen additional images because of the presence of material issues of fact. In a
subsequent ruling, the court found the defendants directly and vicariously liable with respect to these sixteen
additional images based on a similar legal analysis of liability. See Playboy Enterprises, Inc. v. Webbworld,
Inc., 45 U.S.P.Q.2d 1641 (N.D. Tex. 1997).
(^96) 1998 U.S. Dist. LEXIS 5125 (S.D. Cal. 1998).