The Gigalaw Guide to Internet Law (Electronic book text)

CHAPTER ONE
"Case Study: An Introduction to Copyright on the Internet, Playboy v. Sanfilippo"
Playboy Enterprises, Inc.--yes, that Playboy--is one of the more active participants in Internet law, filing numerous lawsuits against people and companies that use the well-known adult entertainment publisher's intellectual property in cyberspace without obtaining permission. Intellectual property includes copyrights (such as photographs of nude models) and trademarks (such as the "Playboy" and "Playmate" names); clearly, Playboy has a lot to protect online.
There's no denying that, on the Internet, the sex industry is quite popular. And in many ways the sex industry has been at the forefront of important Internet developments, including online payment systems, affiliate programs, innovative advertising techniques, and more. Playboy is among the tamer players in the online adult world, but its name is certainly among the best known, and it has a large library of high-quality content--which is important for the success of any publisher, particularly on the Web. But popularity has a downside, too. While imitation may be the greatest form of flattery, Playboy (like other publishers) is not in business to give away its content for free. So, when individuals and other companies have copied Playboy's photos for their own websites--either by scanning images from the printed Playboy magazine or by copying images from Playboy's site--Playboy has not hesitated to enforce its rights.
One case in particular is especially interesting and enlightening and serves as a great introduction to the issue of copyright law and the Internet. The following facts are based on an opinion written by a federal judge in California and Playboy's allegations in a case decided in 1998.1
In the case, Playboy v. Sanfilippo, Playboy filed a lawsuit against Francesco Sanfilippo and his company, Five Senses, for copyright infringement. According to Playboy, Sanfilippo operated a website through which he provided and sold access to thousands of copyrighted photographs owned by Playboy. Sanfilippo's website, like many adult sites with pornographic content, was divided into public and private sections. The public, or free, section advertised images available in the private area, which was accessible to those who bought a password from Sanfilippo.
Playboy said it sent Sanfilippo a "cease and desist" letter in October 1996. These letters are often sent by copyright owners or their lawyers to people or companies who they believe have committed copyright infringement. The letters, sometimes known as "demand letters," typically inform a person or company that it is committing copyright infringement and demand that the action come to an immediate stop. Sending a cease and desist letter is usually, but not always, a wise precursor to filing a lawsuit, because doing so often scares the recipient into complying without incurring the costs, angst, and uncertainty of courtroom litigation.
Two days later, Playboy's attorney sent another demand letter to Sanfilippo. According to Playboy, Sanfilippo immediately acknowledged that some of the images on his website were scanned directly from Playboy's magazine; he did not dispute that Playboy owned the copyright in the images; and he agreed to promptly remove