Perhaps the Internet’s most infamous (and possibly popular) pastime and subject continues its fight against piracy. Adult entertainment website Perfect 10 currently has file storage website Megaupload in its crosshairs, claiming Megaupload encourages users to illegally distribute its content.

Bolstering Perfect 10’s prospects is an early win last week when U.S. District Court Judge Irma Gonzalez decided not to toss claims that Megaupload is liable for direct copyright infringement and contributory infringement.

Perfect 10, which has filed suits in recent years against Google, Rapidshare, Microsoft, Giganews and Amazon, alleges that Megaupload profits from the unauthorized distribution of its content by selling subscriptions and doesn’t compensate the company. Megaupload, however, counters these claims by stating that it’s simply a file storage service and is not responsible for the actions of its users.

While Perfect 10 was unsuccessful in its previous copyright suits, it may have a good chance this time around.

“Drawing all reasonable inferences in Perfect 10’s favor,” Judge Gonzalez wrote, “Megaupload serves as more than a passive conduit, and more than a mere ‘file storage’ company: it has created distinct websites, presumably in an effort to streamline users’ access to different types of media (e.g., megaporn.com, megavideo.com); it encourages and, in some cases pays, its users to upload vast amounts of popular media through its Rewards Programs; it disseminates URLs for various files throughout the internet; it provides payouts to affiliate websites who maintain a catalogue of all available files; and last, at a minimum, it is plausibly aware of the ongoing, rampant infringement taking place on its websites.”

For a look at other factors contributing to the case, read CNET’s coverage.