Just to clear up a few things here:
1) The counter-claimant is from Lexington,
Colorado - not Lexington, Kentucky. So, unfortunately, we'll all have to come up with some other kind of cheap joke aimed at him, since (so far as I'm aware, at least) incest is not something commonly associated with people residing in Colorado. ;-)
2) With all due respect to baddog's interpretation of the one counter-claim, no court is going to read that as an admission of guilt. No way. gideon is absolutely right on this point; the "porn isn't copyrightable" claim is made because it is potentially dispositive. If Fantalis can persuade the court that he's right on that point, every claim Malibu has made against him is rendered moot.
3) Having stated #2 above, I also think the "porn isn't copyrightable" claim has very little prospect for success. Rather than try to explain why in my own words, I recommend reading
this article that Marc Randazza wrote for XBIZ a while back. It lays out some of the relevant case law that governs the question of whether porn can be copyrighted, and notes that the court would have to break with several precedents in order to reach that conclusion regarding any sexually explicit depiction that has not already been found obscene by a trier of fact. It
might be possible that the judge in this case can issue a declaratory judgment that the individual Malibu work in question is obscene, but I strongly, strongly doubt any judge will go so far out on a limb as to declare all porn to be ineligible for copyright protection.
4) It's pretty likely that none of the above will matter, one way or the other, because my guess is that this case will settle, with terms confidential, just as the
Liuxia Wong/Hard Drive matter did.