In addition to direct copyright infringement and inducement of infringement, there is a third type of copyright infringement, “contributory infringement,” which is becoming more of an issue in the electronic world. As one Web-hosting company recently learned the hard way, Internet service providers are more frequently being found liable for contributory infringement based on the infringing activities of their users — think Napster.
Contributory infringement arises when a defendant materially contributes to another’s direct copyright infringement of plaintiff’s works and the defendant engages in such acts with knowledge of the infringement. Ellison v Robertson (9th Cir 2004) 357 F3d 1072, 1076.
In the computer technology context, a plaintiff making a claim of contributory infringement must show that the defendant
- Had knowledge of the infringing activity, and
- Induced, caused, or materially contributed to that activity.
The defendant’s knowledge can be actual or constructive knowledge of direct infringement by third parties. A&M Records, Inc. v Napster, Inc. (9th Cir 2001) 239 F3d 1004, 1020.
What this means in the Internet world is that, when an Internet service provider or bulletin board service operator knows or has reason to know of the direct infringement (for example, through complaints from the copyright holder or information gleaned by monitoring its system), the system provider may have met the contributory infringement standard.
As reported by the National Law Journal, a jury awarded a $770,750 verdict in the first case of a Web-hosting company being found liable for contributory infringement without actual notice that a customer’s website lists fake products for sale. In this South Carolina District Court decision (Roger Cleveland Golf Co. v Prince (.pdf)) the jury found the Web site owners were liable for trademark counterfeiting and infringement.
To learn more about contributory infringement claims generally, turn to CEB’s California Business Litigation, chaps 1,9. For information on contributory infringement in the computer technology and Internet contexts, check out CEB’s Internet Law and Practice in California, chap 1 and Trade Secrets Practice in California, chap 16. To get an understanding of copyright law generally, listen to CEB’s program Basics of Copyright Law, available On Demand.
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