PLAYBOY ENTERPRISES, INC., Plaintiff,

v.

WEBBWORLD, INC., d/b/a NEPTICS.COM, BENTLEY IVES, JAMES GURKIN,

and BENJAMIN ELLIS. Defendants

(N.D. Texas 1997)

Dale S. Sappels, J.

I. BACKGROUND

The Internet, often referred to as the "Information Superhighway," consists of information transmitted from computer to computer via telephone lines. Internet Access Providers ("IAP"s), such as America Online and Netcom, enable computer users to access the Information Superhighway by providing the necessary electronic "on-ramps." Once a computer user has gained access to the Internet through an IAP, that user may "visit" one of the many specific "locations" on the Internet called "websites." Many thousands of commercial and non-commercial computer users operate websites to exchange information or to advertise goods and services to potential customers. To connect with a website, an Internet user, who has already gained access to the Internet through an IAP, simply types the website's Internet address on the user's keyboard.

Webbworld operates an Internet website called Neptics, Inc. ("Neptics"). The Neptics website makes adult images available to any Internet user who chooses to access the website. However, before being allowed to view Neptics' images, the Internet user must first pay Webbworld's subscription fee of $11.95 per month, a transaction which can be completed "on-line" with a major credit card. Over a period of several months, images were available through the Neptics' website which were originally created by or for Playboy Entetprises Inc. (Playboy"), and which previously appeared in one of Playboy's copyrighted magazines.

SUMMARY JUDGMENT

A court shall render summary judgment upon a showing that there is no genuine issue of material fact and that the movant is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(c). . . .

DISCUSSION

Copyright In Work

The Copyright Act of 1976 ("Copyright Act") provides that an owner of a copyrighted work has the exclusive right to reproduce the work in copies, to prepare derivative works based on the copyrighted work, to distribute copies of the work to the public, and, in the case of certain types of works, to perform and display the work publicly. 17 U.S.C. Section 106. It also provides that "[a]nyone who violates any of the exclusive rights of the copyright owner as provided by sections 106 through 118 ... is an infringer of the copyright." 17 U.S.C.

To establish a prima facie case of copyright infringement, the plaintiff must prove "ownership" of copyrighted material and "copying" by the defendant. Norma Ribbon & Trimming, Inc. v. Little, 51 F.3d 45, 47 (5th Cir. 1995) (citing Lakedreams v. Taylor, 932 F.2d 1103, 1107 (5th Cir.1991). Infringement occurs when a defendant violates one ofthe exclusive rights of the copyright holder. 17 U.S.C. Section 50l(a). These

rights include the right to reproduce the copyrighted work, the right to prepare derivative works, the right to distribute copies to the public, and the right to publicly display the work. 17 U.S.C. Sections 106(1)-(3) & (5). The copyright owner need not prove knowledge or intent on the part ofthe defendant to establish liability for direct copyright infi-ingement. 17 U.S.C. See, e.g., Playboy Enterprises, Inc. v. Frena, 839 F.Supp. 1552, 1559 (M.D. Fla. 1993) ("lntent or knowledge is not an element of

infiingement....").

A plaintiff establishes "ownership" by demonstrating that the material is "copyrightable" and that he complied with the statutory requirements in securing the copyright. Central Point Software, Inc. v. Nugent, 903 F.Supp. 1057, 1057 (E.D. Tex. I995). In this case, plaintiff has provided the court with copies of the Certificates of Copyright Registration establishing that Playboy is the owner of the copyright for each of the magazines from which the Neptics' images were copied. These copyright registrations are prima facie evidence of the validity of the copyrights and the information contained in the certificates. 17 U.S.C. Section 410(c); Central Point Software, Inc. v. Nugent, 903 F.Supp. at 1059. Defendants present no evidence tending to disprove the validity of any of the certificates of registration, or of any of the information cited therein. Accordingly, the court finds that Playboy has properly established its ownership of the copyrighted images at issue.

Copying is generally established by showing the defendant had access to the copyrighted material and that there is a substantial similarity between the two works. Norma Ribbon, 51 F.3d at 47 (citing Allied Mktg. Group, Inc. v. CDL Mktg., Inc., 878 F.2d 806, 810-11 (5th Cir.1989). A plaintiff can also establish copying, without a showing of access, by showing that "the two works are so strikingly similar as to preclude the possibility of independent creation." Ferguson v. National Broadcasting Co., Inc., 584

F.2d 111, 113 (5th Cir. 1978). Here, plaintiffs establish the copying requirement by providing the court with the affidavit of Mr. Gene Snyder. Mr. Snyder, who is employed by Playboy as its Electronic infr with Fed. R. Civ. P. 59(e) because Mr. Snyder lacked personal knprima facie case of copyright infringement.

The court will next examine, in light of the standard for summary judgment, whether defendants can establish any defenses to plaintiffs prima facie case of copyright iReligious Technology Center v. Netcom On-Line Communication Services, Inc., 907 F.Supp. 1361 (N.D. Cal. 1995) (referred to hereafter as "RTC") RTC involved a claim for direct copyright inId. at 1366. Netcom was sued because it provided Internet access to a private Bulletin Board Service ("BBS") to which infringing material was being posted. Id. at 1365-68. The court found that Netcom was not liable for direct infringement because "Netcom does not create or control the content of the information available to its subscribers; it mereaccess to the Internet, whose content is controlled by no single entity." Id. at 1372 (emphasis in original).

This court finds that defendants' reliance on RTC is misplaced. As plaintiff points out, a Neptics subscriber, unlike a Netcom a customer, cannot gain access to the Internet using Neptics. The Neptics subscriber must first get onto the Internet using a separate IAP, such as Netcom. Only after gaining access to the Internet can the subscriber connect with the Neptics website. Where Netcom gets paid for providing Internet access for its customers, Neptics gets paid for selling the images it stores on its computers. Defendants argue that Neptics, like Netcom, it is nothing more than an information conduit. Defendants provide no evidence, however, to support this theory other than an implied similarity arising out of its discussion of the RTC case. Indeed, the deposition testimony of Webbworld's Systems Manager, Mr. Brian Ellis, makes it clear that Neptics' function is not to provide Internet access, but rather to provide its subscribers with adult images which are contained in the storage devices of its computers.

Webbworld also argues that it cannot be held liable for copyright infringement because it has 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.

Finally, defendants attempt to avoid summary judgment by claiming that Playboy's "rabbit head" design was added to some of the infringing images after they were downloaded from the Neptics website. Plaintiff points out that, a copyrighted image is infiinged when it is reproduced without permission, whether or not it appears in association with a trademark or other identifying mark. See 17 U.S.C.

Statutory Damages

Plaintiff has elected, under 17 U.S.C. Broadcast Music, Inc. v. Xanthas, Inc., 855 F.2d 233, 236 (5th Cir. 1988). The statute invests the trial court with wide discretion to set damages within the statutoty limits. Broadcast Music, Inc. v. Star Amusements, Inc., 44 F.3d 485, 487-89 (7th Cir.1995) (citing Douglas v. Cunningham, 294 U.S. 207, 210 (1935). Among the factors a court may consider in setting statutory damage amounts are: the eSee. e.g., Nintendo of America, Inc. v. Dragon Pacific Intern., 40

F.3d 1007, 1011 (9th Cir. 1994), cert. denied, 115 S.Ct 2256 (1995).

In the present case, plaintiff seeks $20,000 per infringement. Plaintiff

suggests that it need not prove that Webbworld's

The court agrees that if Playboy sustains its burden of establishing willfulness on the part of defendants, the court may exercise its discretion and award up to $100,000 per infringement under the appropriate circumstances. The court is not persuaded, however, that evidence of willful infringement, without more, automatically justifies an award at the high end of the non-willful range. Nevertheless, plaintiff has provided this court with sufficient summary judgment evidence to establish both the number of infringements and the amount of damages to award for each. The court finds that an award of $5000 per infringement is just in this case. Accordingly, the court finds that the plaintiff is entitled to summary judgment for $310,000 in statutory damages.

Vicarious Copyright Infringement

Plaintiff also moves the court for summary judgment of vicarious copyright infringement against Webbworld's principal operators, Bentley Ives and Benjamin Brian Ellis. In Swallow Turn v. Wilson, 831 F.Supp. 575, 579 (E.D. Tex. 1993), the court granted summary judgment finding the defendant vicariously liable for copyright infiingement stating:

All participants in copyright infringement are jointly and

severally liable as tortfeasors. (Citations omitted). 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).

Whether a defendant has the required supervisory authority and financial interest are issue of law to be decided by the court. Realsongs v. Gulf Broadcasting Corp., 824 F.Supp. 89, 91 (M.D. La. 1993). Intent or knowledge of the infringement is not an element of the claim for vicarious copyright infringement. Peer Intern. Corp. v. Luna Records, Inc., 887 F.Supp. 560, 565 (S.D.N.Y. 1995). The evidence shows that Mr. Ives is Webbworld's sole officer, director, and shareholder. He also handles most of its business, financial and legal matters. Mr. Ellis conceived the business idea for the Neptics' website, created the "Scan News" software program, and ran Neptics' day-to-day operations. Plaintiff suggests these undisputed facts establish that Messrs. Ives and Ellis had the required supervisory authority over the infringing activity. Defendants contend otherwise. Although they do not deny that Messrs. Ives and Ellis had control over the operation of the Neptics' website, they maintain that the evidence fails to establish that Messrs. Ives and Ellis had the right and ability to supervise the conduct

of those who initially posted Playboy's copyrighted images to the Internet.

Defendants' argument seems to miss the point. That defendants had no control over those responsible for originally uploading the in

The evidence also shows that Mr. Ives' share of Neptics' income was twenty-five percent and Mr. Ellis's share was fifty percent. Plaintiff asserts this establishes that Messrs. Ives and Ellis had a direct financial interest in the infringing activity. Defendants object, denying they received any direct financial benefit Fonovisa, Inc. v. Cherry Auction,

Inc., 847 F.Supp. 1492 (E.D. Ca1.1994). In Fonovisa, the district court found that the operator of a swap meet was not vicariously liable for the infringing sales of vendors to whom it rented booth space. The Fonovisa court reasoned that the swap meet operator received no separate financial benefit directly linked to the infringing sales because the operator charged a fixed booth rental fee to its vendors and a fixed admission price

to the swap meet's customers. 847 F.Supp. at 1497. Defendants' reliance on the district court's decision in Fonovisa is unavailing. On appeal, the Ninth Circuit disagreed and reversed the district court. The Ninth Circuit found that the district court had applied

the wrong standard in requiring a direct tie between the vicarious infiinger's financial benefit and the inFonovisa, 76 F.3d 259, 263 (9th Cir. 1996). Instead, the Ninth Circuit

found it sufficient that the infringing materials likely enhanced the swap meet for its customers. Id. The Ninth Circuit's reasoning applies as well to this case, in which plaintiff's photographs enhanced the attractiveness ofthe Neptics' website to potential customers.

Attorney's Fees

Plaintiff further requests the court to award attorney's fees. 17 U.S.C. Fogerty v. Fantasy, 510 U.S. 517 (1994). However, attorney's fees "are the rule rather than the exception and should be awarded routinely." Micromanipulator Co. v. Bough, 779 F.2d 255, 259 (5th Cir. 1985); Meadowgreen Music Co. v. Voice in the Wilderness Broadcasting, Inc., 789 F.Supp. 823, 828 (E.D. Tex. 1992). Considering the facts surrounding this case, the court is of the opinion that reasonable attorney's fees are justified.