This case provides an example of when a service provider was not granted the safe harbor protection of the DMCA.  Perfect 10, a nude-women-photos website and magazine, claim copyright, trademark, and rights of publicity violations against Cybernet Ventures, an age-verification service (AVS).

            Cybernet Ventures is the largest web AVS and it create revenue from users registering their website, usually getting there via links from affiliated sites, to whom Cybernet pays commission.  In response to Perfect 10’s  claims, Cybernet attempted to hide its direct financial interest or relationship, claiming that even 10,000 infringing images wouldn’t establish significant worth (pg 25 of pdf).  In doing this, it attempted to cover up a strong argument that wouldn’t allow it to afford DMCA protection.  In addition (on pg 25), we see that Cybernet failed to quickly take action in removing infringing material after Perfect10 produced a copyright infringement notice.  This conflicts with the DMCA’s “notice and take-down” provision. 

            The court refused to apply the DMCA safe harbor protection on Cybernet, due to those mentioned reasons.  Cybernet simply did not meet the requirements as stated in section 512(c) regarding financial benefits and immediate takedowns.  Between these two ideas, the financial benefits test will be of most relevance to YouTube’s standing, as we know much of its revenue is based off ads and user visits.  Just as the infringing pictures helped boost Cybernet’s revenues, the infringing videos probably increases YouTube advertisement revenues.  I think this could provide a historical case for the determination of YouTube’s legality, depending on what is found concerning YouTube’s ad placements.