Contributory copyright infringement is a way of imposing secondary liability for infringement of a copyright. It is a means by which a person may be held liable for copyright infringement even though he or she did not directly engage in the infringing activity. [1] It is one of the two forms of secondary liability apart from vicarious liability. Contributory infringement is understood to be a form of infringement in which a person is not directly violating a copyright but induces or authorizes another person to directly infringe the copyright.
This doctrine is a development of general tort law and is an extension of the principle in tort law that in addition to the tortfeasor, anyone who contributed to the tort should also be held liable.
The requirements for fulfilling the threshold of contributory infringement and imposing liability for copyright infringement on a party are: [2]
Contributory infringement leads to imposition of liability in two situations. First situation is when the defendant, through his conduct, assists in the infringement, and the second situation is when the means for facilitating the infringement such as machinery is provided by the defendant. [3]
The knowledge requirement for contributory infringement is an objective assessment and stands fulfilled if the defendant has actual or constructive knowledge of an infringement, i.e., if he or she has reason to believe that an infringement is taking place. [4] But, constructive knowledge need not be imputed to the defendant if the product was capable of significant noninfringing uses. [5]
Material contribution is the second requirement of contributory infringement. For instance, merely providing facilities or the site for an infringement might amount to material contribution. [6] But, some courts put emphasis on the contribution to be 'substantial' and therefore, would hold that providing equipment and facilities for infringement is not in itself determinative of material contribution. [7]
Vicarious liability is another form of secondary liability for copyright infringement through which a person who himself has not directly infringed a copyright can, nevertheless, be held liable. The requirements for attracting vicarious liability under copyright law are:
Unlike contributory infringement, vicarious liability can be imposed even in the absence of any intent or knowledge on part of the defendant. In the Napster case, the Court of Appeals for the Ninth Circuit observed:
"In the context of copyright law, vicarious liability extends beyond an employer/employee relationship to cases in which a defendant "has the right and ability to supervise the infringing activity and also has a direct financial interest in such activities."
In the United States of America, the doctrine of contributory infringement is based on the 1911 case of Kalem v Harper Brothers. [9] The ingredients of contributory infringement were laid down in the Second Circuit Court of Appeals decision in Gershwin Publishing Corp v Columbia Artists Management Inc. [10] in which the court said that contributory infringement is said to happen when someone, with knowledge of the infringing activity, induces, causes, or materially contributes to the infringing conduct of another. This doctrine was developed in the context of the 1909 Copyright Act which did not have any reference to contributory infringement. But, the 1976 Act recognised the exclusive right of a copyright owner 'to do and to authorize' the rights attached to a copyright enumerated in the Act. [11] The words 'to authorize' were meant to bring contributory infringements within the purview of the Act. [12] But, still, the Act did not specify the requirements of such forms of infringement and left its application to the discretion of courts.
The case of Sony Corp v Universal City Studios Inc , [13] commonly known as the Betamax case, gave the United States Supreme Court its first opportunity to comprehensively look into and interpret the rules regarding secondary liability and contributory infringement in context of the 1976 Copyright statute. The primary issue in this case was whether a VCR manufacturing company could be held liable for copyright infringements done by its customers. The court held that secondary liability for copyright infringements was not a foreign concept to US Copyright law and it was well enshrined in the copyright law of the United States. In the court's own words:
Vicarious liability is imposed in virtually all areas of the law, and the concept of contributory infringement is merely a species of the broader problem of identifying the circumstances in which it is just to hold one individual accountable for the actions of another [14]
But, in this case, the Court held that Sony did not have actual knowledge of the infringing activities of its customers. At the most it could be argued that Sony had constructive knowledge of the fact that "its customers may use that equipment to make unauthorised copies of copyrighted material." [15] The court then relied on the "staple article of commerce" doctrine of patent law and applied it to copyrights. The 'staple article of commerce' defence is available under Patent law in the United States and it lays down that when an infringing article is capable of 'substantial non infringing uses', it would become a 'staple article of commerce' and therefore, not attract any liability for infringement.
Based on this reasoning, it was held
The sale of copying equipment, like the sale of other articles of commerce, 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. The question is thus whether the Betamax is capable of commercially significant noninfringing uses. [16]
Since the Betamax was capable of "significant noninfringing uses", Sony was not held liable for contributory infringement.
Contributory infringement has been the central issue in the cases involving peer-to-peer services such as Napster, Aimster, Grokster, and Morpheus. The courts have applied the Sony Betamax ratio differently in all these cases. For instance, Napster was held liable for contributory infringement. But, a similar service like Grokster was not held liable for contributory infringement as in this case, a district court, grounding its reasoning on the Sony Betamax decision, held that secondary liability could not be applied to peer-to-peer services.
Napster was the first peer-to-peer service to be subject to copyright infringement litigation. In the Napster case, [17] the issue was regarding the infringement of copyrights through the 'Music Share' software of Napster. Whenever this software was used on a computer system, it would collect information about the MP3 files stored on the computer and send it to Napster servers. Based on this information, the Napster created a centralized index of files available for download on the Napster network. When someone wanted to download that file, the Music Share software would use the Napster index to locate the user who already had that file on their system and then connect the two users directly to facilitate the download of the MP3 file, without routing the file through Napster's servers. [18]
The Ninth Circuit Court of Appeals found Napster liable for both "contributory infringement" and "vicarious infringement". Regarding the issue of contributory infringement, the court held that Napster had "actual knowledge" of infringing activity, and providing its software and services to the infringers meant that it had "materially contributed" to the infringement. It was held that the defense in Sony was of "limited assistance to Napster". The test whether a technology is capable of substantial non infringing uses was relevant only for imputing knowledge of infringement to the technology provider. But, in Napster's case, it was found that Napster had "actual, specific knowledge of direct infringement", and therefore, the Sony test would not be applicable.
In ' In re Aimster ', [19] the Seventh Circuit was called upon to decide the liability of peer-to-peer sharing of music files through the Instant Messaging services provided by Aimster. Aimster had argued that the transmission of files between its users was encrypted and because of that, Aimster could not possibly know the nature of files being transmitted using its services. But, the Seventh circuit Court of Appeals affirmed the decision of the district court which had issued a preliminary injunction against Aimster. It was found that Aimster had knowledge of the infringing activity. Its tutorial showed examples of copyrighted music files being shared. [20] Also, the 'Club Aimster' service provided a list of 40 most popular songs made available on the service. [21] It was also held that the encrypted nature of the transmission was not a valid defence as it was merely a means to avoid liability by purposefully remaining ignorant. It was held that 'willful blindness is knowledge, in copyright law.." [22] The Sony defence raised by Aimster was also rejected because of the inability of Aimster to bring on record any evidence to show that its service could be used for non infringing uses. Lastly, Aimster could also not get benefit of DMCA 'safe harbor' provisions because it had not done anything to comply with the requirements of Section 512. Instead, it encouraged infringement.
The District Court for the Central District of California, in MGM Studios v Grokster , [23] held that the peer-to-peer services Morpheus and Grokster were not liable for copyright infringements carried out by their users. Unlike Napster, these services did not maintain a centralised index. Instead, they created ad hoc indices known as supernodes on the users computers. Sometimes, the software operated without creating any index at all. Thus, it was held that Grokster and Morpheus had no way of controlling the behaviour of their users once their software had been sold, just like Sony did with Betamax. It was found that the defendants did have knowledge of infringement because of the legal notices sent to them. But, it was also held that to attract liability under contributory infringement, there should be knowledge of a specific infringement at the precise moment when it would be possible for the defendant to limit such infringement. [24] Also, it was found that there was no material contribution. For this, the court relied on Sony and compared the technology to that of a VCR or a photocopier to hold that the technology was capable of both infringing as well as non infringing uses. Grokster differs from Sony, as it looks at the intent of the defendant rather than just the design of the system. As per Grokster, a plaintiff must show that the defendant actually induced the infringement. The test was reformulated as "one who distributes a device with the object of promoting its use to infringe copyright, as shown by clear expression or other affirmative steps taken to foster infringement, is liable for the resulting acts of infringement by third parties." [25]
The Digital Millennium Copyright Act's Title II, known as the Online Copyright Infringement Liability Limitation Act, provides a safe harbor for online service providers and internet service providers against secondary liability for copyright infringements provided that certain requirements are met. [26] Most importantly, the service provider must expeditiously take down or limit access to infringing material on its network if it receives a notification of an infringement. [27]
Immunity under the communications Decency Act does not apply to copyright infringement as a cause of action. [28] [29]
The Inducing Infringement of Copyrights Act, or the INDUCE Act, was a 2004 proposal in the United States Senate which meant to insert a new subsection '(g)' to the existing Section 501 of the Copyright Act which defines 'infringement'. The proposed amendment would provide that whoever intentionally induces a violation of subsection (a) would be liable as an infringer. The term 'intentionally induces' has been defined in the bill as:
"intentionally aids, abets, induces, or procures, and intent may be shown by acts from which a reasonable person would find intent to induce infringement based upon all relevant information about such acts then reasonably available to the actor, including whether the activity relies on infringement for its commercial viability."
In the European Union, the European Court of Justice has issued several rulings on related matters, mainly based on the Copyright and Information Society Directive 2001 and Electronic Commerce Directive 2000 [30] and focused on what constitutes an act of "communication to the public" or of "making available". [31]
Section 51 of the Copyright Act, 1957 deals with copyright infringement in India. Section 51(a)(i) provides for when an infringement of copyright is deemed to have taken place. It states that when somebody does anything, the exclusive right to which is conferred on a copyright owner, without first securing a license to do so from the copyright owner or in contravention of a license, the copyright shall be deemed to have been infringed. The basis for contributory infringement under Indian copyright law can be found in Section 51(a)(ii) which states that when someone 'permits for profit any place to be used for the communication of the work to the public where such communication constitutes an infringement of the copyright in the work, unless he was not aware and had no reasonable ground for believing that such communication to the public would be an infringement of copyright', then also, the copyright shall be deemed to have been infringed. Secondary infringement itself can be subdivided into two categories- activities that assist primary infringements, and activities that accentuate the effects of the primary infringement. [32] Section 51(a)(ii) deals with cases in which somebody assist the primary infringement. Section 51(a)(ii) itself gives the defense which can be taken by a defendant to avoid liability under this provision, i.e., the defendant was not aware or had no reasonable ground for believing that the communication to the public would be an infringement of the copyright. Section 51(b) deals with situations in which the effects of an already existing primary infringement are accentuated by the actions of the defendant. Section 51(b) provides that a copyright infringement will also be deemed to have taken place if a person sells, distributes, imports or exhibits in public by way of trade an infringing copy of a copyright-protected work. Therefore, Section 51(a)(ii) and Section 51(b) are the statutory basis for secondary liability in India including contributory infringement.
The Information Technology Act, 2000 ("IT Act") contains specific provisions dealing with liabilities of Internet service providers. These provisions provide for 'safe harbors' for Internet Service Providers. Section 2(w) of the IT Act defines an 'intermediary' as 'intermediary with respect to any particular electronic message means any person who on behalf of another person receives, stores or transmits that message or provides any service with respect to that message'. Due to this wide definition, almost every entity, including ISPs, search engines and online service providers can get the benefit of the safe harbor provisions in the IT Act. [33] Section 79 of the IT Act provides that an intermediary shall not be liable for any third-party information, data, or communication link made available or hosted by the intermediary. But, an intermediary will get the benefit of the safe harbor provisions only if it satisfies certain conditions. The intermediaries function should be limited to providing access to a communication system, the intermediary should not initiate the transmission, select the receiver or modify the transmission and should observe the guidelines formulated by the Central Government in this regard. [34] The 'IT (Intermediary guidelines) Rules 2011' have been formulated to specify the conditions that an intermediary must satisfy to get the protection of safe harbor provisions. As per these guidelines, the intermediary must observe due diligence measures specified under Rule 3 of the guidelines. For instance, the intermediary should take down any infringing material on its network within thirty-six hours of the infringement being brought to its notice.
In December, 2016, the Delhi High Court reversed the judgment passed by a single judge bench earlier to hold that unless 'actual knowledge' was proved, an intermediary could not be held liable for contributory copyright infringement. In 2008, T-Series (Super Cassettes) had instituted a copyright infringement suit against MySpace for hosting infringing material in which Super Cassettes was the copyright owner, without first obtaining a license. [35] The infringing material primarily consisted of sound recordings. It was alleged that MySpace was commercially exploiting the works of T Series by including advertisements with the works made available by it. The Single Judge had held that MySpace was guilty of copyright infringement under Section 51 of the Copyright Act and the benefit of safe harbor provisions under Section 79 of the IT Act were not available to it in light of Section 81 of the IT Act. The judgment of the single judge was reversed on the following grounds-
Liability under Section 51(a)(ii) can be avoided by the defendant if he or she is able to show that he or she did not have any knowledge of the infringing act or that he or she did not have any reason to believe that the communication would amount to an infringement. Super Cassettes had argued that 'place' under Section 51(a)(ii) includes a virtual space similar to the one provided by MySpace. It was argued that MySpace had knowledge of the infringement based on the fact that it had incorporated safeguard tools to weed out infringing material and that it invited users to upload and share content. Therefore, it was argued that there was implied knowledge. The Court held that to qualify as knowledge there should be awareness in the form of "actual knowledge" as opposed to just general awareness. Without specific knowledge of infringements, the intermediary could not be said to have reason to believe that it was carrying infringing material. Therefore, there was a duty on the plaintiff to first identify specific infringing material before knowledge could be imputed to the defendant.
Section 79 of the IT Act provides safe harbor to intermediaries provided certain conditions are met by them. But, Section 81 of the IT Act also states that nothing in the IT Act shall restrict the rights of any person under the Copyright Act, 1957. The single judge had interpreted Section 81 to mean that safe harbor under IT Act is not applicable in cases of Copyright Infringement. The Court reversed this and held that Section 79 starts with a non obstante clause and precludes the application of any other law including Copyright law. Thus, any restriction on safe harbor provisions such as Section 81 can be read-only within the limits of Section 79. Also, the IT Act and the Copyright Act should be construed harmoniously given their complementary nature. Further, MySpace's role was limited to providing access to a communication system. It only modified the format and not the content and even this was an automated process. Therefore, there was no material contribution also. To amount to an infringement under Section 51 of the Copyright Act, the authorization to do something which was part of an owner's exclusive rights requires more than merely providing the means or place for communication. To be held liable for being an infringer on the grounds of authorization, it was necessary to show active participation or inducement. Therefore, Section 79 is available in cases of copyright infringement also provided the conditions under the Act and Intermediary Guidelines, 2011 are fulfilled. Since MySpace had fulfilled these requirements, it was given the protection of Section 79 of IT Act.
Grokster Ltd. was a privately owned software company based in Nevis, West Indies that created the Grokster peer-to-peer file-sharing client in 2001 that used the FastTrack protocol. Grokster Ltd. was rendered extinct in late 2005 by the United States Supreme Court's decision in MGM Studios, Inc. v. Grokster, Ltd. The court ruled against Grokster's peer-to-peer file sharing program for computers running the Microsoft Windows operating system, effectively forcing the company to cease operations.
MGM Studios, Inc. v. Grokster, Ltd., 545 U.S. 913 (2005), is a United States Supreme Court decision in which the Court ruled unanimously that the defendants, peer-to-peer file sharing companies Grokster and Streamcast, could be held liable for inducing copyright infringement by users of their file sharing software. The plaintiffs were a consortium of 28 entertainment companies, led by Metro-Goldwyn-Mayer studios.
A&M Records, Inc. v. Napster, Inc., 239 F.3d 1004 was a landmark intellectual property case in which the United States Court of Appeals for the Ninth Circuit affirmed a district court ruling that the defendant, peer-to-peer file sharing service Napster, could be held liable for contributory infringement and vicarious infringement of copyright. This was the first major case to address the application of copyright laws to peer-to-peer file sharing.
In re Aimster Copyright Litigation, 334 F.3d 643, was a case in which the United States Court of Appeals for the Seventh Circuit addressed copyright infringement claims brought against Aimster, concluding that a preliminary injunction against the file-sharing service was appropriate because the copyright owners were likely to prevail on their claims of contributory infringement, and that the services could have non-infringing users was insufficient reason to reverse the district court's decision. The appellate court also noted that the defendant could have limited the quantity of the infringements if it had eliminated an encryption system feature, and if it had monitored the use of its systems. This made it so that the defense did not fall within the safe harbor of 17 U.S.C. § 512(i). and could not be used as an excuse to not know about the infringement. In addition, the court decided that the harm done to the plaintiff was irreparable and outweighed any harm to the defendant created by the injunction.
Secondary liability, or indirect infringement, arises when a party materially contributes to, facilitates, induces, or is otherwise responsible for directly infringing acts carried out by another party. The US has statutorily codified secondary liability rules for trademarks and patents, but for matters relating to copyright, this has solely been a product of case law developments. In other words, courts, rather than Congress, have been the primary developers of theories and policies concerning secondary liability.
The inducement rule is a test a United States court can use to determine whether liability for copyright infringement committed by third parties could be assigned to the distributor of the device used to commit infringement.
File sharing is the practice of distributing or providing access to digital media, such as computer programs, multimedia, program files, documents or electronic books/magazines. It involves various legal aspects as it is often used to exchange data that is copyrighted or licensed.
The Online Copyright Infringement Liability Limitation Act (OCILLA) is United States federal law that creates a conditional 'safe harbor' for online service providers (OSP), a group which includes Internet service providers (ISP) and other Internet intermediaries, by shielding them for their own acts of direct copyright infringement as well as shielding them from potential secondary liability for the infringing acts of others. OCILLA was passed as a part of the 1998 Digital Millennium Copyright Act (DMCA) and is sometimes referred to as the "Safe Harbor" provision or as "DMCA 512" because it added Section 512 to Title 17 of the United States Code. By exempting Internet intermediaries from copyright infringement liability provided they follow certain rules, OCILLA attempts to strike a balance between the competing interests of copyright owners and digital users.
Sony Corp. of America v. Universal City Studios, Inc., 464 U.S. 417 (1984), also known as the "Betamax case", is a decision by the Supreme Court of the United States which ruled that the making of individual copies of complete television shows for purposes of time shifting does not constitute copyright infringement, but can instead be defended as fair use. The court also ruled that the manufacturers of home video recording devices, such as Betamax or other VCRs, cannot be liable for contributory infringement. The case was a boon to the home video market, as it created a legal safe harbor for the technology.
Perfect 10, Inc. v. Amazon.com, Inc., 508 F.3d 1146 was a case in the United States Court of Appeals for the Ninth Circuit involving a copyright infringement claim against Amazon.com, Inc. and Google, Inc., by the magazine publisher Perfect 10, Inc. The court held that framing and hyperlinking of original images for use in an image search engine constituted a fair use of Perfect 10's images because the use was highly transformative, and thus not an infringement of the magazine's copyright ownership of the original images.
Perfect 10, Inc. v. Visa Int'l Serv. Ass'n is a court case in which the pornography magazine Perfect 10 filed a complaint against Visa and MasterCard for copyright infringement and trademark infringement.
Religious Technology Center v. Netcom On-Line Communication Services, Inc., 907 F. Supp. 1361, is a U.S. district court case about whether the operator of a computer bulletin board service ("BBS") and Internet access provider that allows that BBS to reach the Internet should be liable for copyright infringement committed by a subscriber of the BBS. The plaintiff Religious Technology Center ("RTC") argued that defendant Netcom was directly, contributorily, and vicariously liable for copyright infringement. Netcom moved for summary judgment, disputing RTC's claims and raising a First Amendment argument and a fair use defense. The district court of the Northern District of California concluded that RTC's claims of direct and vicarious infringement failed, but genuine issues of fact precluded summary judgment on contributory liability and fair use.
Shapiro, Bernstein and Co. v. H.L. Green Co., 316 F.2d 304, was a landmark case dealing with secondary liability for copyright infringement. The law in question was Section 101(e) of the Copyright Act.
Inwood Laboratories Inc. v. Ives Laboratories, Inc., 456 U.S. 844 (1982), is a United States Supreme Court case, in which the Court confirmed the application of and set out a test for contributory trademark liability under § 32 of the Lanham Act.
Gershwin Publishing Corp. v. Columbia Artists Management, Inc., 443 F.2d 1159, was a copyright infringement case in which the United States Court of Appeals for the Second District ruled that defendant Columbia Artists Management, Inc. was liable for vicarious copyright infringement and contributory copyright infringement. Plaintiff American Society of Composers, Authors and Publishers ("ASCAP"), on behalf of Gershwin Publishing Corp., sued Columbia Artists Management, Inc. ("CAMI") on the premise that CAMI had no permission to use a song from its repertory for a public, for-profit concert in which artists managed by CAMI performed. The final court decision established that contributory infringement can still be liable for copyright infringement if the party has knowledge of the violating activity, whether or not they are directly involved in the violation.
Arista Records LLC v. Lime Group LLC, 715 F. Supp. 2d 481, is a United States district court case in which the Southern District of New York held that Lime Group LLC, the defendant, induced copyright infringement with its peer-to-peer file sharing software, LimeWire. The court issued a permanent injunction to shut it down. The lawsuit is a part of a larger campaign against piracy by the Recording Industry Association of America (RIAA).
Flava Works, Inc v. Gunter, 689 F.3d 754, is a decision by the United States Seventh Circuit Court of Appeals, authored by Judge Richard Posner, which held that Marques Gunter, the sole proprietor of the site myVidster.com, a social bookmarking website that enables its users to share videos posted elsewhere online through embedded frames, was not liable for its users' sharing and embedding of copyrighted videos. The court of appeals reversed the decision of the United States District Court for the Northern District of Illinois, which had granted a preliminary injunction against myVidster, citing sufficient knowledge of infringement on Gunter's part, while denying safe harbor defense under the Digital Millennium Copyright Act (DMCA). The Court held that Gunter was not directly liable because the copyrighted content was not stored on myVidster's servers, and was not contributorily liable because there was no evidence that conduct by myVidster increased the amount of infringement.
Capitol Records, LLC v. ReDigi Inc., 934 F. Supp. 2d 640 , is a case from the United States District Court for the Southern District of New York concerning copyright infringement of digital music. In ReDigi, record label Capitol Records claimed copyright infringement against ReDigi, a service that allows resale of digital music tracks originally purchased from the iTunes Store. Capitol Records' motion for a preliminary injunction against ReDigi was denied, and oral arguments were given on October 5, 2012.
Columbia Pictures Industries, Inc. v. Fung 710 F.3d 1020 No. 10-55946, was a United States Court of Appeals for the Ninth Circuit case in which seven film studios including Columbia Pictures Industries, Inc., Disney and Twentieth Century Fox sued Gary Fung, the owner of isoHunt Web Technologies, Inc., for contributory infringement of their copyrighted works. The panel affirmed in part and vacated in part the decision of United States District Court for the Central District of California that the services and websites offered by isoHunt Web Technologies allowed third parties to download infringing copies of Columbia's works. Ultimately, Fung had "red flag knowledge" of the infringing activity on his systems, and therefore IsoHunt was held ineligible for the Digital Millennium Copyright Act § 512(c) safe harbor.
UMG Recordings, Inc. v. Shelter Capital Partners LLC, 667 F.3d 1022 No. 09-55902, was a United States Court of Appeals for the Ninth Circuit case in which UMG sued video-sharing website Veoh, alleging that Veoh committed copyright infringement by hosting user-uploaded videos copyrighted by UMG. The Ninth Circuit upheld the decision of the United States District Court for the Central District of California that Veoh is protected under the Digital Millennium Copyright Act's safe harbor provisions. It was established that service providers are "entitled to broad protection against copyright infringement liability so long as they diligently remove infringing material upon notice of infringement".