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Said the court: Defendants had at least constructive knowledge that infringing activity was likely to be occurring on their BBS. Playboy Magazine is one of the most famous and widely distributed adult publications in the world.It seems disingenuous for Defendants to assert that they were unaware that copies of photographs from Playboy Magazine were likely to find their way onto the BBS.As set forth above, for the purposes of its decision, there was no evidence that defendants had actual knowledge that infringing images were uploaded onto its BBS.Nonetheless, the court found the scienter element met.To establish direct copyright infringement, plaintiff must establish both (1) its ownership of a valid copyright and (2) copying by defendants of constituent elements of the work that are original. In addition, plaintiff must also show that defendants used the copyrighted work in any of the ways exclusively reserved to the owner of the work under Section 106 of the Copyright Act, such as public display or distribution.Most importantly, the court held that "a finding of direct copyright infringement requires some element of direct action or participation ..." in the infringing activities.

It held that issues of fact existed which precluded determination of plaintiff's Lanham Act claims.

Defendants argued that holding them liable for copyright infringement would place an excessive burden on BBS operators to ensure either that pictures uploaded onto their systems by third parties were not protected by copyrighted or were uploaded with appropriate consents. If a BBS operator is going to encourage third parties to upload images onto its system, it must take appropriate steps to ensure that they are not infringing on the copyrights of others.

Officially licensed Playboy brand products are for women who want the highest quality garments available that are designed to achieve the sexiest look possible.

These "credits" increased the number of files the user was permitted to download from the BBS each month.

Defendants admittedly undertook this promotion in the hopes that it would increase the number of GIFs they had to offer to their subscribers, which in turn would make their service more desirable to current and new subscribers.

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