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off of fadedyouth.com:

From a X17 press release:

Yes, it’s finally happened – after ignoring countless cease and desist notices from numerous photo agencies and media outlets, Mario Lavandeira, a.k.a. Perez Hilton, has been sued in federal court for copyright infringement by X17, Hollywood’s largest celebrity photo agency. X17 contends that Lavandeira, the owner and operator of the celebrity gossip blog PerezHilton.com and the self-styled “Queen of All Media,” has knowingly and willfully used X17’s images on his blog without permission from the agency, thereby violating federal law.

Lavandeira’s actions have caused substantial damage to X17’s business in the form of diversion of trade, loss of profits, injury to goodwill and reputation, and the dilution of the value of its rights.In court papers filed today, X17, the owners of X17online.com, seek over $7.5 million in damages for Lavandeira’s infringing activities.

Mr. Lavandeira has been featured in countless magazines and newspapers and has appeared regularly on various television news outlets in the U.S., Canada, and the U.K. GQ listed him in their Man of the Year issue; the AP and the LA Times have profiled him; the New York Post called him one of the 25 most powerful Latinos and he has appeared on almost every major U.S. network commenting on the day’s entertainment headlines. He is said to be shopping around a reality show and he is set to appear on MTV’s New Year’s Eve special.

“Perez” claims he receives 2.5 million unique visitors each day on his website.Mr. Lavandeira has regularly infringed on X17’s large scoops. While it usually takes weeks of effort by a team of photographers and reporters to break a story, for Mr. Lavandeira, it has been as simple as a right-click.

Mr. Lavandeira is profiting through advertisements on his site (one-week ads on his site go for between $9000 - $16,000) and has gained relative fame from the success of his blog, which, X17 contends, is due in large part to the quality and quantity of celebrity images he posts on his site, many of which are owned by X17.