DIRECT INFRINGEMENT Religious Technology Center v. Netcom On-Line 907 F. Supp. 1361 (N.D. Cal. 1995) VICARIOUS LIABILITY & CONTRIBUTORY INFRINGEMENT • Legislative history indicates that Congress intended secondary participants to be liable in some way for copyright infringement under the appropriate circumstances. • However, Congress did not codify this in the Copyright Act. • Under the 1909 Act, the courts developed two theories of indirect infringement: Vicarious Liability: In certain circumstances, a principal may be held liable for acts of an agent (employer/employee; landlord/tenant; venue owner/performer; etc.). • Here, the question of vicarious liability turns on whether the principal has the right and ability to supervise the agent, and whether (s)he has direct financial interest in the exploitation of the protected materials. Contributory Copyright Infringement: “[O]ne who, with knowledge of the infringing activity, induces, causes or materially contributes to the infringing conduct of another, may be held liable as a ‘contributory’ infringer.” • The dividing line between vicarious liability and contributory infringement can be blurry—and a defendant can be held liable as both. Fonovisa, Inc. v. Cherry Auction, Inc. 97 F.3d 259 (9th Cir. 1996) Perfect 10, Inc. v. Amazon.com, Inc. 508 F.3d 1146 (9th Cir. 2007) Perfect 10, Inc. v. Visa International Service Association 494 F.3d 788 (9th Cir. 2007), cert. denied, 128 S. Ct. 2871 (2008) DEVICE MANUFACTURERS & LIABILITY FOR INDUCING INFRINGEMENT • Firms that market photocopiers, VCRs, CD-DVD burners, etc., know that at least some of the equipment they sell will be used to infringe copyrights. Are they thus liable for indirect infringement? • In Sony Corp. of America v. Universal City Studios (464 U.S. 417 (1984)), the court argued that “the sale of copying equipment […] does not constitute contributory infringement if the product is widely used for legitimate, unobjectionable purposes. Indeed, it need merely be capable of substantial noninfringing uses.” • By a vote of 5-4, the court found that “time-shifting” was nonproblematic. • Following Sony, peer-to-peer file-sharing technology, however, has proven problematic. A&M Records, Inc. v. Napster, Inc. 239 F.3d 1004, 1021-22 (9th Cir. 2001) • In a later case, the 7th circuit court found that Aimster (who only provided lists to users of other logged-in users, and allowed users to run searches on specific files, providing lists of loggedin users with those files). • The court found Aimster liable for contributory infringement but declined to rule on the question of vicarious liability. Metro-Goldwyn-Mayer Studios Inc. v. Grokster, Ltd. 545 U.S. 913 (2005) ON-LINE SERVICE PROVIDER LIABILITY • Because of their deep pockets, online service providers (OSPs) present an attractive target for potential copyright plaintiffs. • Congress sought to provide clear rules and limitations for liability for OSPs, and after negotiating with both lobbying sides, produced a compromise in §512 as a part of the DMCA. • Although extremely complex, §512 essentially establishes “safe harbors” that provide immunity from infringement liability for OSPs under certain circumstances. • Different safe harbors exempt OSPs from liability for, variously, transmitting, caching, hosting, and linking to infringing materials. • Each safe harbor imposes different requirements on the OSP. In the case of hosting and linking, to qualify, an OSP must not have “actual knowledge” of infringement. CRIMINAL INFRINGEMENT • Under current law, infringers who can be shown to have engaged in infringement “willfully and for purposes of commercial advantage or private financial gain” may be subject to criminal penalties if: • During any 180-day period, the infringer reproduced or distributed: At least 10 copies or phonorecords; or One or more copyrighted works with a retail value of more than $2,500. • The infringer could be punished with up to five years in prison, and a fine of up to $250,000. United States v. Moran 757 F.Supp. 1046 (D. Neb. 1991) United States v. LaMacchia 871 F. Supp 535 (D. Mass. 1994) • In response to LaMacchia, Congress enacted the 1997 NET Act, amending the §101 definition of “financial gain” to mean “receipt, or expectation of receipt, of anything of value, including the receipt of other copyrighted works.” • The Act also amended §506(a) to hold criminally liable the willful “reproduction or distribution, including by electronic means, during any 180-day period, of 1 or more copies or phonorecords of 1 or more copyrighted works with a total retail value of more than $1,000.” • As such, one need not have commercial motive to be a criminal, but a new distinction between “felony” and “misdemeanor” offenses, with a sliding scale of punishments outlined by the Digital Theft Deterrence and Copyright Damages Improvement Act of 1999. • Further criminal categories were established by the Artists’ Rights and Theft Prevention Act addressing cases of “camcording” and distribution of commercial movies.