U.S. Judge: Advertiser Is Not Liable for Pirate Sites

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Advertising network JuicyAds has scored an early victory at a California federal court. In a tentative ruling, District Court Judge George Wu says he will grant a motion to dismiss the complaint from adult entertainment publisher ALS Scan. This would mean that the advertiser is not liable for the infringements of any pirate sites it does business with.

juictadsIncreasingly, copyright holders have been urging third party services to cut their ties with pirate sites.

Hosting providers, search engines, ISPs, domain name registrars and advertisers should all do more to counter online piracy, the argument goes.

This summer adult entertainment publisher ALS Scan took the matter beyond the asking stage.

The company filed a complaint at a California federal court, targeting CloudFlare and the advertising network JuicyAds over image copyright infringement carried out by their users.

The case could set an important precedent for the entire advertising industry. However, according to a tentative ruling (pdf) issued by District Court Judge George Wu this week, they have little to worry about for now.

After reviewing the first amended complaint (FAC), he concludes that there is no evidence that JuicyAds is liable for contributory copyright infringement. The complaint lists no evidence showing that JuicyAds’ parent company Tiger intentionally encouraged infringing acts, as the defense had argued.

“The Court would agree that the FAC fails to plausibly allege a link between Tiger’s advertising brokerage services and the infringing conduct of the Publishers,” Judge Wu writes, citing a similar case between Perfect 10 and Visa.

“It is entirely unclear from the FAC how serving an advertisement on a website encourages infringement, other than by enabling the website to profit from those advertisements, a theory the Ninth Circuit expressly rejected in Visa.”

The inducement aspect of contributory infringement fails as well. Based on the current complaint there is no evidence that JuicyAds actively promoted or encouraged any infringing acts.

“Here, the FAC does not allege that JuicyAds provides its advertising brokerage service for the purpose of promoting copyright infringement, or that it has directly encouraged Publishers to display infringing content on their websites.”

On the issue of vicarious copyright infringement the Judge also sided with the defense. The adult entertainment publisher failed to show that Juicyads can control the websites of their clients or that it has a direct financial interest in the infringing activity.

Judge Wu again cites the Visa case where it was held that the defendant did not have the ability to remove pirate websites from the Internet or block the distribution of infringing images on third party sites.

Finally, the remaining claims of unfair competition and contributory trademark infringement proved to be insufficient too, awarding a clear win to Juicyads.

The present ruling is only tentative. This means that ALS Scan still has the opportunity to argue against it during a scheduled hearing. If they don’t, the ruling becomes final.

For now, however, JuicyAds’ legal team is quite pleased with the decision.

“The defense team views this decision as a victory for both JuicyAds and for the online advertising industry,” JuicyAds’ lawyer Lawrence Walters told Xbiz in a comment.

“Unchecked efforts to hold distant online service providers responsible for indirect copyright infringement has the potential to stifle innovation,” he adds.

CDN provider CloudFlare has also submitted a motion to dismiss the complaint. This is still under review and Judge Wu is expected to issue a ruling during the weeks to come.


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