Making Infringement More Profitable Not Basis for Liability

Allegations that defendant financial institutions were subject to secondary liability under federal copyright and trademark law for continuing to process credit card payments to Web sites that infringed plaintiff’s intellectual property rights after being notified of infringement failed to state cause of action where defendants were not alleged to have actively participated in the infringement.

Merely making infringement more profitable is an insufficient basis for liability as a contributory infringer as a matter of law. Mere processing of credit card payments for an allegedly illegal infringement of property rights does not subject financial institution to liability under California unfair competition and false advertising laws or under common law right-of-publicity principles.

Perfect 10, Inc. v. Visa International Service Association (9th Cir. with Kozinski dissenting)