Designer Skin LLC v. S & L Vitamins, Inc., et al.
Playboy Enterprises v. Webbworld, Inc.
968 F. Supp. 1171 (N.D. Tex. 1997)
Defendant Webbworld operated a subscription website called Neptics featuring adult images created for plaintiff Playboy Enterprises Inc. ("Playboy") which had originally appeared in one of Playboy's publications. No license had been granted for such use of these images, however. The Court held that this unlicensed use of plaintiff's copyrighted material constituted copyright infringement, and awarded plaintiff summary judgment.
In reaching this result, the Court rejected Webbworld's argument that its activites were permitted because unknown third parties had originally uploaded Playboy's images onto various adult news groups from which Webbworld drew its content. Noting that intent to or knowledge of infringement is not a prerequisite to copyright infringement, the court stated:
Webbworld also argues that it cannot be held liable for copyright infringement because it had no control over the persons who are posting the infringing images to the adult newsgroups from which Neptics obtains its material. 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.
The court also held defendant Ives, the sole officer, director and shareholder of Webbworld, and defendant Ellis, who ran its day-to-day business operations, liable for vicarious copyright infringement. "If a defendant has a direct financial interest in the infringing activity and has the right and ability to supervise the activity which causes the infringement, then he should be held vicariously liable. (Citations omitted)." The court found that the individual defendants had the requisite financial interest and control over the site's operation. As with Webbworld, it rejected defendants' arguments that they had not originally uploaded the infringing images onto the web. Their control over what went up onto Webbworld's site was sufficient to impose liability for vicarious copyright infringement.