CHAPTER 5 WHO HAS TO PAY? P AR T 1: W H O
IS
O N T HE H O O K ?
In the law we ask, “who is liable?” That means who is “on the hook” to pay damages. It is important to know if you committed copyright infringement (Chapter 3) and what defenses, if any might apply, but then we must ask: P a g e | 180
“Am I ‘on the hook’?” Under copyright law, this is a tricky question because the consequences from even a single infringement can be far-reaching: from your university, to your boss, to the maker of the software you used to commit the infringement, to even the company that helped place advertisements for your infringing work! Don’t worry yet. It gets worse. The whole lot of people and companies named above (and more) can be liable together! This chapter will walk us through the various kinds of liability resulting in many parties being “on the hook” for copyright infringement.
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Are You “On The Hook?”
Being “on the hook” for copyright infringement can be costly! P a g e | 182
When explaining the law people commonly use hypothetical examples, or “hypos.” Let’s kick off this chapter with the following hypo, involving thievery and Madonna, to get you thinking about just how far copyright liability can spread.
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Tom is a DJ for a local night club in his off-hours. By day Tom works as a retail manager for a coffee company. While in his office at work (using the office computer and internet service), Tom downloads a new Madonna song. He did not pay for the song using iTunes. Instead, he used a “free” program called “BitTorrent.” The BitTorrent software allows the user to download and upload (copy) digital songs, comic books, and other copyrighted material from other users of the software without paying for the material, in Tom’s case the Madonna song. Tom then takes the downloaded copy and creates a “remix” for the night club. The remix becomes the hit song of the summer and gets played on the radio and at night clubs. The remix is then recorded by Tom’s fans and reloaded onto BitTorrent where it is downloaded and copied millions of additional times around the world.
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Tom The Pirate
How many people can be liable for Tom’s infringement?
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Now that you’ve finished reading the “hypo,” try to count how many parties you think may be “on the hook” for copyright infringement. If you think Tom is the only one “on the hook” reading this chapter should be an eye-opening experience. You can use the diagram below as a “cheat sheet” to answer the question of “who is ‘on the hook’?” The rest of this chapter will explain why all those parties may be liable.
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The “Ripple� Of Liability
Liability can be widespread for one infringement
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ON-LINE REFERENCES Trade Secrets Video (Jurisdiction in Copyright cases) Trade Secrets Video (Cease & Desist Letters) Seattle PI (“Post Greed” /”Pro IP) Seattle PI (Seattle Copyright Lawyer)
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http://thetradesecretsofintellectualproperty.com/
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CHAPTER 5 WHO HAS TO PAY? P AR T 2: D I R E C T L I A B I L I T Y
The first and most obvious form of copyright liability is “direct” copyright infringement. Tom made an unauthorized copy P a g e | 189
of a song from the internet that he did not pay for. Tom is a direct infringer. TIP: Downloading a picture from the Internet without permission makes you a “direct” copyright infringer. In other words, when you take someone else’s property (a song or photograph or poem) you are liable for copyright infringement if you directly copy an original creative work or if you make an unauthorized derivative work from the original. Who else is “on the hook?”
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ON-LINE REFERENCES Trade Secrets Video (Copyright Cow)
Seattle PI (Exclusive Interview with the Author)
***
http://thetradesecretsofintellectualproperty.com/
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CHAPTER 5 WHO HAS TO PAY? P AR T 3: J OI N T L I A B L I T Y
Just because Tom is liable for a direct infringement doesn’t mean more than one person can’t also be liable. Two or more people can be P a g e | 192
liable for the same act or acts of copyright infringement. This is called “joint liability.” What joint liability means is that if two people participate in infringing a copyright then they are both liable. If parties have joint liability they are each liable up to the full amount for each infringement. Accordingly, either or both infringers can be sued for the full amount. Of course, a copyright owner can’t recover from one party and a second party. The law does not allow double recovery. TIP: Lawyers like to sue “everyone” and usually they throw in the “kitchen sink”; The idea is we sue everyone who might be able to pay and let the defendants work out how much each party should pay; it is not a good idea to get sued. P a g e | 193
In one case the maker, printer, and seller of an infringing photograph were all held jointly liable for photographer’s damages. Maker, Printer, and Seller Jointly Liable
Copying of the Infringing Picture
Printing the Infringing Picture
Selling the Infringing Picture
A long time ago, the court in Gross v. Van Dyk Gravure made it clear that everyone P a g e | 194
united in infringing would be responsible for the damages resulting from infringement. For reference the case is Gross v. Van Dyk Gravure Co., 230 F. 412 (2nd Cir. 1916). Joint liability can even be extended to people who help advertise the infringing work and the owners of dance halls that played copyrighted music! TIP: Remember that copyright is “strict liability,” meaning everyone can be liable even if they didn’t know copyright infringement was being committed. But wait! That’s not all. Who else is, “on the hook?”
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ON-LINE REFERENCES Trade Secrets Video
(A New Frontier) Seattle PI (I Didn’t Know!)
***
http://thetradesecretsofintellectualproperty.com/
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CHAPTER 5 WHO HAS TO PAY? P AR T 4: S E C O N D A R Y L I A B I L I T Y
Copyright infringement can “ripple” outward, resulting in liability for many unexpected parties. In other words, if a party is P a g e | 197
not “directly” responsible for the unauthorized copying, they can still be “on the hook because they helped or assisted in some way- even if it was just providing an internet connection. This “secondary liability” is divided into two categories: (1) employer-employee type liability (called “vicarious liability”), and (2) you-helped-in-some-way type liability (called “contributory liability”). Under secondary liability you can be liable for copyright infringement even if you have not “directly” engaged in the infringing activities.
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The “Ripple” Of Liability
Copyright infringement can “ripple” outward, resulting in liability for many unexpected parties.
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Unfair? Not according to the copyright laws of almost every nation on the globe. Secondary liability promotes fairness by holding liable those who knowingly assist infringement or have the power to stop infringement and fail to do so. By holding those with the power to stop infringement liable, policing for copyright infringement is encouraged. Holding those who benefit from infringement liable forces businesses who benefit from copyright infringement to internalize the cost. A. E M P L O Y M E N T T Y P E L I A B I L I T Y O R “VICARIOUS LIABILITY�
Most employment situations result in vicarious liability for the employer. Put simply, if you own a business and your delivery driver runs a red light and collides with another car, injuring the driver, you will be liable to the P a g e | 200
injured driver. Vicarious liability means that a superior is liable for the acts of their subordinate. Examples include employer-employee and business-independent contractor- like a web designer (or others who are hired by you to perform a particular task). The employee or contractors need to be acting within the “scope” of employment or using the work facilities. TIP: If an employee gets in a car accident on the way to work the employer is not “on the hook,” but if the accident occurred while the employee was driving for work, the employer is likely jointly liable. If the employer (the “superior”) has the right to control their employee or contractor (the
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“subordinate”) they will be liable when their subordinate breaks laws. The law refers to this right to control as a “master/servant” relationship. Although you probably aren’t used to the terms “master” and “servant” being used outside the context of Downton Abbey, most employees and independent contractors are in master/servant relationships for the purposes of copyright law. For clarity, we will just be referring to “master /servant” relationships as “employer/ employee.”
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A Loyal Servant
A master/servant relationship can mean increased legal liability
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As a threshold matter, an “employer/ employee” relationship must be established. A employer/employee relationship can be established even without payment to the employee as long as the requisite control is involved. For example, most employers who have unpaid interns would be vicariously liable for those intern’s actions while they’re at work. TIP: The employer is only liable when she has control over the employee. She will not be liable if her employee breaks the law on his own time. Vicarious liability is a strict liability standard that holds the person who is in charge and benefits from infringement liable, even if he wished to avoid infringement and took reasonable steps to avoid infringement. In order P a g e | 204
to be found vicariously liable for copyright infringement you must have some financial benefit, and have some ability to supervise those who directly infringed. TIP: The financial benefit aspect of employer liability can be very broad. B. YOUR EMPLOYEE SCRE WED UP
The employer is liable for the acts of their employee committed within the course and scope of the employee’s employment. The employer can be liable even when the employer has neither intent to infringe nor actual knowledge of the infringement.
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TIP: Employer is “on the hook” even when the employee acts in violation of the employer’s orders. This is because vicarious liability is a strict liability standard, which means there is no knowledge requirement. The reason employers have such a high degree of liability for their employees is they have the ability and responsibility to supervise them. We do not want business owners to be able to profit from copyright infringement and then be shielded from liability by hiding behind their employees. Applying this analysis to Tom from before, any of Tom’s superiors at work could be held liable for him downloading the copyrighted P a g e | 206
song at work! They could be liable even if they told Tom every single day that it was against company policy to download music at work because vicarious liability uses a strict liability standard. C. Y O U R I N D E P E N D E N T C O N T R A C T O R MESSED UP
If someone engages the services of a contractor (often called an “independent contractor”) they can be liable for that contractor’s copyright infringement, even if the contract between the parties relinquishes control over the independent contractor’s action which results in the infringement. This is an anomaly in tort law, where employers are generally only liable for the actions of their employees, and not for P a g e | 207
independent contractors. Employers are liable for copyright infringement committed by independent contractors as long as they derive some financial benefit from the infringement and have some ability to supervise the independent contractor who directly infringed. TIP: When it comes to copyright infringement you will be liable for the actions of your subordinates if you get a financial benefit and have the ability to supervise them. If Tom is an independent contractor who is not technically employed at the company where he committed the direct infringement the higher-ups at that company will still be liable for his infringement if they got a financial benefit and had the ability to supervise Tom. It doesn’t P a g e | 208
matter how you characterize the employment relationship between two parties. D. V I C A R I O U S L I A B I L I T Y : T H I R D P A R T I E S
Even if there is no “employer/employee” relationship between a person and the actual infringer, vicarious liability for copyright infringement may still be imposed if that person had the right to supervise the infringer’s activities and a financial benefit of some kind. A third party can be vicariously liable for someone else’s copyright infringement even if the third party had no knowledge of the direct infringement and no intent to infringe as long as they had some ability to control the infringer and they got some financial benefit from the infringement. P a g e | 209
TIP: The third party does not need to have any knowledge or intent relating to the direct infringement because vicarious liability uses a strict liability standard.
1. THE DANCEHALL EXAMPLE The owner of a dance hall has been found vicariously liable because copyrighted works were performed at his establishment. In that case the court ruled the owner of a dance hall where unauthorized music was played was “on the hook.� This was true even though the owner did not have actual knowledge copyright infringement was being committed.
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The owner of the dance hall was a third party that was found liable because they got a financial benefit and had the ability to control the orchestra, despite the fact that the owner had no knowledge copyright infringement was being committed. 2. NIGHT CLUBS AND DISK JOCKEYS Bringing this discussion of vicarious liability back to Tom, the owners of nightclubs that played Tom’s infringing hit song are liable as third parties because they derive a financial benefit from the music played at their clubs and they have the ability to tell DJs in their club what they can and cannot play.
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Tom The Star DJ
A similar analysis could apply to make the owner of a night club liable for a DJ playing copyrighted songs!
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People who own the radio stations that play Tom’s hit song are also liable using the same analysis: they receive a financial benefit and they have the ability to control the DJs who play the song on the radio. E. Wh ere Do e s V i ca rio u s Lia b il it y E n d?
Remember that to be vicariously liable for someone else’s copyright infringement you must have some ability to control their activities and also derive some direct financial benefit from the infringement. In one case the owners of a building were not liable as co-infringers merely because performances were had in their building where someone performed a copyrighted work.
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In other words a landlord was not held vicariously liable for an infringement committed in the rented building. The landlord had: (1) no knowledge of the infringement by renter; (2) no control over the renter’s conduct; and (3) derived no benefit from the infringement. TIP: The directness of the profit is important for vicarious liability. If the owners of the building were the ones selling tickets to the infringing performance they likely would have been liable.
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ON-LINE REFERENCES Trade Secrets Video (Cease & Desist Letters)
Seattle PI (Infringement Letters)
***
http://thetradesecretsofintellectualproperty.com/
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CHAPTER 5 WHO HAS TO PAY? P AR T 5: C O N T R I B U T OR Y L I A B I L I T Y Contributory liability means a person who knowingly participates in or furthers an act of copyright infringement is also liable, in addition to the person who committed the direct infringement. To be liable under this theory, (1) P a g e | 216
you must have contributed to or enabled the infringement and (2) you must have knowledge of the infringement or the possibility of the infringement. The best way to illustrate how the doctrine of contributory liability applies in the real world is to use a few case examples. A. T H E F L E A M A R K E T E X A M P L E
In one case, the operators of a flea market were liable because they repeatedly leased booth space to vendors who were selling counterfeit Latin/Hispanic music recordings. The court said a swap meet cannot disregard its vendors’ blatant copyright and trademark infringements with impunity in Fonovisa v. Cherry Auction, 76 F.3d 259 (9th Cir. 1996). P a g e | 217
Infringement For Leasing Market Space?
Knowingly leasing flea market space to infringing vendors resulted in contributory liability
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TIP: The flea market operators were liable, despite not actually selling the infringing material, because they enabled vendors to sell material that they knew was committing infringement. The court said the swap meet operators contributed to the infringement because it would be difficult for the infringing activity to take place without the support services provided by the swap meet. B. LOW PRICED GOODS EXAMPLE: NOT M UCH “KNOWLEDGE� IS REQUIRED FOR LIABILITY
In another case that resulted in contributory liability a record company produced a record that infringed the copyrights of several composers. The record company was a fly-byP a g e | 219
night company that was abandoned after the infringing record was produced, so the plaintiffs went after an advertising agency that advertised the record, a radio broadcasting company that broadcasted the advertisements, and a company that shipped the infringing records to purchasers. The Knowledge Requirement Is Not Very Demanding
How many people can be liable for one infringing record? P a g e | 220
The court held that the advertising agency, the radio broadcasting company, and the shipping company were each liable as contributory infringers if they have knowledge, or reason to know, of the infringing nature of the records in Screen Gems-Columbia Music, Inc. v. Mark-Fi Records, Inc., 256 F.Supp. 399 (SDNY 1966). The court in Screen Gems decided that the price of the album was so suspiciously below the usual market price that the very price served as notice of infringement to the radio station and the advertising agency! This case illustrates how low the “knowledge” requirement is in contributory liability: you don’t need actual knowledge of copyright infringement, the price of a record has P a g e | 221
been determined to be notice that it was committing copyright infringement. C. T H E B E T A M A X E X A M P L E : T H E M A K E R OF M ACHINES THAT COPY ARE “ON THE HOOK”
In the Sony Betamax case the Supreme Court recognized that the maker of a machine- in that case a “Betamax” recorder (similar to a VCR or a DVR) could be liable for copyright infringement as maker of the machine.
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Time-Shifting A “Fair Use”
A Betamax tape
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The rationale was that the recording machine was used by people to record TV shows. Since TV shows are copyrighted- that means Sony “contributed� to the infringement because they manufactured the machine that people used to record the TV shows. The owners of copyrights on TV programs brought the copyright infringement claim against Sony because Sony knew or had reason to know people were using the Betamax to copy copyrighted TV shows.
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Taken to an extreme, if Sony built a robot that was used to commit copyright infringement they could be liable!
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The Supreme Court ruled that the “fair use” defense to copyright infringement applied because recording TV shows at home for “time shifting” (watching a show later) was okay. The “fair use” defense is discussed in Chapter 10. TIP: If the “fair use” defense did not apply Sony would be liable for merely making the machine used by others to commit copyright infringement. Based on the fair use defense Sony was not liable for copyright infringement for manufacturing the Betamax (a predecessor of the VCR). Sony Corp. of America v. Universal City Studios, Inc., 464 U.S. 417 (1984).
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D. T H E N A P S T E R C A S E : M A K E R O F SOFT WA RE THAT C OPIE S IS “O N THE HOOK�
In a later case the creators of Napster (a computer program that allowed people to share music on the internet without paying for it) were sued by A&M Records for copyright infringement under the theories of vicarious liability and contributory liability for creating and distributing its (in)famous peer-to-peer downloading software.
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“PEER-TO-PEER” downloading means that Sally downloads a song directly from Billy’s hard drive. Billy downloaded the same song directly from Phil’s computer. Although Sally and Bill and Phil do not “know each other” they are “peers” because they are all users of the software sharing music. Napster hosted part of its service on a huge computer called a “server” that allowed Sally and Bill and Phil to share the music. iTunes is an example where music is downloaded from a central server too. iTunes, however, is not Peer-to-peer because the music is purchased from the iTunes Store – not from other users.
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Napster argued that their software was capable of substantial non-infringing use like the Betamax “DVR” in the Sony case discussed above. Napster argued that its users’ downloading of copyrighted works was a fair use similar to the “time-shifting” in Sony. Specifically, Napster argued that examples of fair use of its software included: (1) sampling, or allowing users to make temporary copies of songs before purchasing, (2) space shifting, or allowing users to access a song digitally that they already owned, and (3) allowing artists to authorize downloads of their music.
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How The Old Napster Worked
The Troll and the Pirate are sending their file-sharing requests to a central server. The server then connects them to users that have the files they want. The users with the requested file then directly transfer the file to the person who requested it.
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The court first decided that Napster users downloading copyrighted music constituted direct copyright infringement. Regarding Napster’s liability under contributory liability, the court said Napster had direct knowledge of copyright infringement if: (1) they had reasonable knowledge of infringing conduct, and (2) they failed to prevent the distribution of infringing works.
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The Napster Software
A screen shot of the original Napster
The court found Napster had contributed to infringement of copyrights because it knew of specific incidents of infringement and it failed to filter its servers to remove copyrighted material. P a g e | 232
The fact that Napster controlled the central servers meant it had the right and ability to supervise, similar to the flea market example where the owners had the ability to control the activities of the vendors. To distinguish the Napster case from the Sony case, the court pointed out that Sony had no control over how people used their technology after it was purchased, but Napster could control the infringing behavior after software had been installed. The court also ruled Napster did not have a fair use defense. E. T H E G R O K S T E R C A S E : A N O T H E R M AKER OF SOFT WARE THAT COP IES IS “ON THE HOOK”
Grokster was one of the first “secondgeneration” peer-to-peer(P2P) sharing programs P a g e | 233
that allowed users to trade files directly between each other without needing to pass through a centralized server. Grokster would assign certain users as “supernodes” who act as a central server and all file sharing requests pass through them. The users designated as “supernode” could change from day to day. Napster is different from these programs because Napster’s users had to use a centralized server, which is why the court said it should have used its control over the server to stop infringement. Founders of the “second generation” P2P programs learned from the Napster decision and designed the programs so they would have no control over what users shared.
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The Grokster Software
A screen shot of the Grokster start page
The Grokster case is important because it was the first time a court was presented with a copyright case involving peer-to-peer software P a g e | 235
that had a decentralized structure. Grokster users searched for files without information being relayed to any computer owned or controlled by Grokster. Napster, in contrast, controlled a central server that all search requests had to go through. Grokster claimed they did not commit copyright infringement because no files passed through their computers and they couldn’t control what users shared.
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How Grokster Worked
There is now no central server, Pirate has been designated as the temporary “supernode.� File-sharing requests get sent to Pirate, who sends them to users with the requested file. Troll and Lawyer were both looking for a file on Zombie’s computer and download from him directly.
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The Supreme Court held that a software distributor that takes affirmative steps to induce its users to commit copyright infringement is liable for the infringement of their users. The United States Supreme Court unanimously held that Grokster is liable for contributory infringement if they intend to bring about infringement by distributing a device suitable for infringing use and actual infringement occurred. The Court found that Grokster wanted recipients to use it to download copyrighted works, and took active steps to encourage infringement. The Court also found that since Grokster’s revenue was derived from advertising, they had profited from their users infringement.
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This case can be distinguished from the Sony case because Sony did not try to profit from unlawful taping, did not intend for its users to unlawfully tape shows, and did not take steps to encourage its users to infringe copyrights. F. B I T T O R R E N T S : 3 R D G E N E R A T I O N SOFT WARE “ON THE HOOK”?
BitTorrent is now the “third generation” and dominant peer-to-peer sharing application used on the Internet because it can transfer large amounts of data quickly and cheaply. BitTorrent allows individual users to distribute data among themselves by exchanging pieces of the file, instead of relying on a central server to distribute data directly to individual users. BitTorrent starts with chopping a file into small pieces. The person sharing the file sends P a g e | 239
small pieces to peers in the “swarm.” A “swarm” is a group of computers downloading and uploading the same torrent. Click Here For a visualization of how BitTorrent works. Like Grokster, BitTorrent does not require a centralized server. BitTorrent allows users to transfer files to other users in the “swarm,” instead of directly from the file distributor. Each “swarm” is unique to a particular file. Everyone downloading a torrent is also uploading the same torrent; users download fragments from different sources at the same time and end up with their own copy of the shared file. BitTorrent also rewards users that share torrents frequently and punishes users who only P a g e | 240
take content from others. Users who share files via BitTorrent are rewarded with increased download speeds. Further, users that choose to “leech,” rather than “seed,” will be punished with slow download speeds. A total number of active monthly users on BitTorrent is estimated to be more than a quarter of a billion. At any given instant, it is claimed BitTorrent has more users than YouTube and Facebook combined. Approximately 70% of all internet traffic is BitTorrent peer-to-peer activity.
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How BitTorrent Works
Everyone here is part of the same “swarm” because they are all exchanging pieces of the same file. Zombie is the “seed” because he has 100% of the data. Everyone else is a “leech” because they are still downloading pieces of the file. Users get pieces of the file from all members of the “swarm,” there is no direct download.
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The popularity of BitTorrent has made it a natural choice for pirates looking to illegally distribute copyrighted material. Indeed, since 2010, more than 200,000 BitTorrent users have been sued for copyright infringement. There are also significant legitimate uses of the BitTorrent technology: from Blizzard Entertainment using it to distribute new versions of World of Warcraft, to Sub Pop Records using it to release tracks and videos from its artists, and Amazon even uses it to support its Amazon S3 storage service. Applying our analysis of contributory liability to BitTorrent is highly speculative because only one BitTorrent case has ever been tried to a verdict, meaning there is very little precedent to guide us. It is highly likely, P a g e | 243
however, that many parties could be liable for one single instance of direct infringement via BitTorrent. G. A R E T H E C R E A T O R S O F B I T T O R R E N T LIABLE?
Since the facts in Grokster are most similar to a potential BitTorrent lawsuit, we will use the analysis from that case to determine if the creators of BitTorrent can be liable for contributory infringement. For BitTorrent to be liable, plaintiffs will have to show that BitTorrent has shown by clear expression or other affirmative steps that they intend for their users to commit copyright infringement. Two facts that weigh heavily in favor of liability for BitTorrent’s creators include: (1)BitTorrent does not provide tools for filtering P a g e | 244
out copyrighted material. The Grokster court mentioned this as evidence of Grokster’s intent to help users commit infringement. (2) BitTorrent has a search engine that includes paid advertisements. The Grokster court found that Grokster was converting demand for copyright infringement into advertising dollars and a court could similarly find that BitTorrent is doing a similar thing with their advertising. If the creators of BitTorrent are sued for contributory liability it is likely the court would focus on their advertising material and internal communications to determine if they intend for their users to commit copyright infringement like they did in the Grokster case. While we can’t be certain, it is certainly possible that the creators of BitTorrent could be liable for copyright infringement under contributory liability. P a g e | 245
H. HOW MANY OTHER PARTIES CAN BE LIABLE?
First, the person who downloaded the content via BitTorrent is unquestionably liable as a direct infringer. Tom was surely liable as a direct infringer when he used BitTorrent to download a copyrighted song at work. The person who downloaded the torrent’s Internet Service Provider (ISP) could also be liable. The Digital Millennium Copyright Act (DMCA) of 1998, however, complicates the analysis of liability for ISPs. Under the DMCA, if an ISP registers a copyright agent with the U.S. Copyright Office and if they also comply with takedown notices they will not be “on the hook.” The DMCA is covered in more detail in subsequent Chapter 10. P a g e | 246
It is also likely that every member of a particular “swarm” can be liable for one act of infringement under the theory of contributory liability. Everyone in the swarm is both contributing to and enabling the copyright infringement because they are contributing their own fragments of the file and none of the members of the “swarm” would be able to download the file without the participation of the other members in the “swarm.” The knowledge requirement is also satisfied because users know they are enabling others to download in exchange for the reward of higher download speeds.
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ON-LINE REFERENCES Trade Secrets Video (Cease & Desist Letters)
Seattle PI (Evolution of BitTorrents Legality)
***
http://thetradesecretsofintellectualproperty.com/
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CHAPTER 5 WHO HAS TO PAY? P A R T 6: C O NT R I B U T OR Y L I A B I L I T Y V I C AR I O U S L I A B I L I T Y
VS.
Contributory and vicarious liability are not mutually exclusive: it is possible for someone to be liable under both theories for one act of infringement. In one case a concert promoter who also managed performing artists P a g e | 249
was held liable as both a vicarious and a contributory infringer. The promoter was liable under both theories because a copyrighted song was performed by the artists during a concert sponsored by a local association which was organized by the promoter; the promoter assisted the local association in staging the infringing concert; the promoter received fees from the artists performing at the concert; and the promoter knew that the copyrighted song was to be performed at the concert without a copyright license.
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A. H O W M A N Y P E O P L E D I D T O M G E T I N TROUBLE?
To wrap up the chapter, let’s review how many parties could possibly be liable for Tom’s one instance of copyright infringement he committed when he used BitTorrent to download a song at work. The first, and most obvious, instance of liability occurred when Tom made himself liable for his own act of direct copyright infringement. Don’t forget when considering all the possibilities of secondary infringement that people are still liable for their own direct infringement.
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Tom is liable for his own infringement
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The first people to be caught in one of the ripples of Tom’s direct infringement were Tom’s bosses under the doctrine of secondary liability because it occurred while he was at work, his superiors derive financial benefit from him and had the ability to supervise.
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Tom’s Bosses were also liable for his infringement
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As liability for infringement continued to ripple outward, the owners of radio stations were also caught up in the liability analysis under the theory of contributory liability because they get a financial benefit from playing Tom’s infringing song and were able to control whether or not it was played.
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Radio station and nightclub owners were liable under contributory liability
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The next party caught up in the ripple of liability was the other people in the same swarm as Tom downloading the copyrighted song.
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Other People In Tom’s Swarm Were Also Liable
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Tom’s fans who uploaded his remix to BitTorrent to share with other users will also be liable for infringement.
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Tom’s fans who uploaded his remix to BitTorrent are also liable
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Whoever owned the Internet Service Provider (“ISP�) Tom and his fans used to download the file will also be liable for infringement.
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Owner of the “ISP” is also liable
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Lastly, the creator of the BitTorrent software Tom and his fans used to commit infringement may also be liable.
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The creator of BitTorrent may also be liable
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All of these parties are only the ones that are certainly also liable for Tom’s one act of copyright infringement. As we discussed above, the creators of the BitTorrent software can also likely be liable.
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ON-LINE REFERENCES Trade Secrets Video (Cease & Desist Letters)
Seattle PI (Copyright Protection in Legal Briefs) Seattle PI ($88.5 Million Lawsuit)
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http://thetradesecretsofintellectualproperty.com/
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CHAPTER 5 WHO HAS TO PAY? P A R T 7: T HE “S E C O N D A R Y L I A B I L I T Y ” M YT H S OF C O PY R I G HT L A W Here are some of the “secondary liability” de-bunked.
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myths
of
Myth Busters No. 11
“My web developer put the infringing image on my website, you should go after him”
If an image on your website is committing copyright infringement, you are liable for that infringement. The web developer may also be jointly liable, whether he is classified as an employee or an independent contractor. You are still liable even if you didn’t know the images were uploaded to your website.
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Myth Busters No. 12
“I only helped publicize an infringing work, I didn’t commit copyright infringement�
You committed contributory copyright infringement if you know or have reason to know of the direct infringement, and you contributed to or enabled the infringement. Advertising counts as contributing to or enabling the direct infringement.
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Myth Busters No. 13
“I’m only the manager of a band that committed infringement, I’m not an infringer”
The manager of a band has been held vicariously liable for the copyright infringement of the band. Liability was imposed on the manager because he had the right and ability to control the band and also got a direct financial benefit from the band’s infringement.
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Myth Busters No. 14
“I only own the radio station, I didn’t commit copyright infringement” In a past case a husband and wife who only owned 50% of a radio station were personally and jointly liable for copyright violations that were committed by the radio station workers. In a different case the vice-president, chief executive officer, and controlling shareholder of radio stations were held personally and jointly liable for the radio station’s copyright infringement.
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Myth Busters No. 15
“I won’t be ‘on the hook’ for Creating hardware or software that is used by others to commit copyright infringement if I never actually copied anything” The case examples of
Sony, Napster, and
Grokster, all show that courts have repeatedly stated that the creators of hardware or software that is used to commit infringement can be liable for contributory infringement.
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Myth Busters No. 16
“All I did was rent out space to people who held a concert where they performed copyright songs, I can’t be liable.� It depends on how much control you had over the renters and whether or not you got a financial benefit from the performance. If you knew copyrighted music would be performed and took no steps to stop it and you also got a percentage of the ticket sales from the performance you will likely be liable as a contributory infringer like the people from the flea market example.
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Myth Busters No. 17
“Someone supplied my store with knock-off shoes and I sold them but I can’t be liable because I had no idea the shoes were fake.” Remember from Screen Gems-Columbia Music that the price of goods can be enough to satisfy the “knowledge requirement” of contributory liability. If the shoes you sold in your store were a lot cheaper than the market value for the shoes you may be treated by a court like you knew you were selling fakes!
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Myth Busters No. 18
“One of our unpaid interns committed infringement at our office using our computers, but I’m not liable for them because I don’t pay them” Remember that an “employer/ employee” relationship can be formed in the eyes of the law if you get a financial benefit from the unpaid intern and you are able to control the intern’s actions. Most employers will be liable for the actions of their unpaid interns during work, including any copyright infringement they may commit.
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ON-LINE REFERENCES Trade Secrets Video (Trade Secrets Main Page) Seattle PI
(Right Pair of Shoes) Seattle PI ($88.5 Million Lawsuit)
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http://thetradesecretsofintellectualproperty.com/
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CHAPTER 5 WHO HAS TO PAY? P AR T 8: J U S T T H E E S S E N T I A L S OF “S E C ON D A R Y L I A B I L I T Y ” O F C O P Y R I G HT L A W Here are the “essentials” of “secondary liability”.
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Just the Essentials
Secondary Liability “Bite Sized”
You can be “on the hook” for copyright infringement even if someone else (not you) did it. This happens most typically with employees or contractors hired by a company to do work.
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Just the Essentials
Secondary Liability “Bite Sized” Even Internet Service Providers or makers of software
can
be
liable
for
copyright
infringement if their service or software is used to copy images or other protected material without permission. Don’t assume you aren’t liable just because “someone else did it”.
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ON-LINE REFERENCES Trade Secrets Video (Trade Secrets Main Page)
Seattle PI (Blog Main Page)
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http://thetradesecretsofintellectualproperty.com/
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