Contributory copyright infringement and pornography

From law.com

A pornography company called "Perfect 10" based in Beverly Hills, filed suit against several online payment companies.  Perfect 10 claims Visa and MasterCard were guilty of contributory and vicarious copyright infringement because they completed transactions at sites with images stolen from Perfect 10.

The San Jose federal judge hearing the case found the argument less than compelling and ruled for the credit card companies, stating:

The ability to process credit cards does not directly assist the allegedly infringing Web sites in copying plaintiff's works . . . Defendants do not provide the means for distributing those works to others, nor do they provide bandwidth or storage space with which to transfer or store the works.

While I usually don't like to automatically defer to credit card companies for legal interpretations, I think this decision makes sense.  As far as I know, there is no way that credit cards can tell people what they may and may not purchase with a credit card.  Besides, it would be nearly impossible for a credit card company to inspect every purchase to make sure that the item is legal.  On the other hand, if the credit card company has knowledge that a vendor is engaging in illegal activities, the credit card company should have a right, and a duty to refuse to deal with that vendor.  If the credit card company knowingly enables illegal acts, it should be held accountable.  I guess it all comes down to how contributory copyright infringement is ultimately determined.

The issue of contributory copyright infringement is interesting.  After Napster and Grokster, at least one Circuit is fine tuning the issue.  Intuitively, one would think knowledge of infringement is required for liability to attach.  However, with a medium like the Web, it is likely that no one person has all the required knowledge.  Jurisdictional issues muddle the issue even more.

If someone in South Africa illegally copies something from New York and sells it to someone in Australia who doesn't know it's pilfered, and the Aussie sells a copy to someone in California, accepting payment from a British bank, who does the New Yorker sue?  What if the South African only made $1 on the transaction, and his total net worth is $50?  What if the unknowing Aussie made millions of dollars?  What if the California buyer knew it was illegally copied?