Wednesday, July 04, 2007

Visa: It's everywhere you want to infringe

Perfect 10, Inc. v. Visa International Service Ass’n, --- F.3d ----, 2007 WL 1892885 (9th Cir.)

Others will doubtless have much to say about the copyright and trademark aspects of this case. I think Kozinski’s dissent does a pretty good job of pointing out the thinness of the distinctions required to allow a case against Google to go forward while kicking this case out on a motion to dismiss, but I’m inclined to see that as a problem with Perfect 10 v. Google rather than a problem with this ruling. My take on the majority’s distinction: Google is a web-based business, inherently more connected to the operations of the sites it indexes than non-web-based businesses, and thus can be charged with changing its operations where reasonable to do so to decrease infringement. By contrast, Visa just takes advantage of the internet to make more money and doesn’t have to change a thing. Taken that way, the logical weaknesses of the opinion might not cause as much trouble as Kozinski predicts.

Anyway, aside from the main events, Perfect 10 also had state-law claims for unfair competition and false advertising. Fortunately for defendants, an earlier state case, Emery v. Visa International Service Association, 95 Cal.App. 4th 952 (2002), held that there was no cause of action for secondary liability or aiding and abetting under those state laws. Visa had no duty to investigate the truth of statements made by others. Even Visa’s member banks aren’t personally involved in the relevant conduct, but merely process payments related to that conduct. Similarly, even if California recognizes “aiding and abetting” publicity rights violations, which is unclear, defendants lacked sufficient control or personal involvement in the infringing activities to be liable.

Kozinski, dissenting, argued that the state law claims should also survive, because defendants are directly involved in the relevant conduct because they provide the means to pay for it. Emery, Kozinski argued, was not applicable, because there the plaintiff sued only Visa, not the merchant banks with the direct relationships with the alleged wrongdoers. (I admit, I find it a little odd that Kozinski has finally found an IP plaintiff he likes, and it’s Perfect 10.)

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