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The basic analysis for direct copyright infringement is relatively straightforward and rooted in a well-settled federal statutory scheme. Under Section 106 of the Copyright Act, courts examine whether one or more of the copyright owner's five exclusive rights have been violated. These include the reproduction right, the derivative works right, the distribution right, the performance right, and the display right. See 17 U.S.C. Section 106. If infringement is found, the next step in the analysis often centers on whether this infringement constitutes fair use under Section 107.
Yet there is another inquiry -- not based on federal statute -- which many commentators believe is growing in importance as members of the legal community begin to examine how people interact in cyberspace. And that is the doctrine of contributory infringement.
Contributory infringement originated in tort law and stems from the notion that one who directly contributes to another's infringement should be held accountable. Judicially created by analogy to patent law, it has been deemed applicable today in the areas of copyright, patent, and trademark. Acts of contributory infringement generally fall into one of two categories: (1) personal conduct that contributes and thus furthers direct infringement, or (2) contribution of a 'machine or good' which provides a means to infringe. See Andrea Sloan Pink, Copyright Infringement Post Isoquantic Shift: Should Bulletin Board Services Be Liable? 43 UCLA L. Rev. 587, 616-618 (1995); Niva Elkin-Koren, Copyright Law and Social Dialogue on the Information Superhighway: The Case Against Copyright Liability of Bulletin Board Operators, 13 Cardozo Arts and Entertainment L.J. 345, 372-380 (1995).
The classic statement of the doctrine is found in Gershwin Publishing Corp. v. Columbia Artists Management, Inc., 443 F.2d 1159, 1162 (2d Cir. 1971): "One 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 Ninth Circuit adopted this principle ten years later. See Universal City Studios v. Sony Corp. of America, 659 F.2d 963, 975 (9th Cir. 1981).
In the online world, one might imagine a whole range of scenarios where plaintiff might wish to sue both the direct copyright infringer and the indirect -- or contributory -- infringer. Not only might owners of bulletin board services, Usenet groups, and web sites be implicated, but also commercial online services, Internet access providers, and major universities.
The most recent federal court of appeals opinion addressing the contributory infringement doctrine -- Fonovisa, Inc. v. Cherry Auction, Inc., 76 F.3d 259 (9th Cir. 1996) -- provides some important guideposts in this regard. In Fonovisa, plaintiff brought a copyright (and trademark) action against Cherry Auction, the operators of a swap meet, where third-party vendors routinely sold counterfeit recordings that arguably infringed upon plaintiff's copyrights. Vendors paid daily rental fees to the swap meet operators in exchange for booth space. Cherry Auction reserved the right to exclude any vendor for any reason.
Knowledge was not at issue in the appeal, since it was clear from the facts that Cherry Auction knew that vendors were selling counterfeit recordings in violation of Fonovisa's copyrights. The decision in this area turned on whether plaintiff adequately alleged that the operator materially contributed to the infringing activity. Cherry Auction argued that its participation in the sales was merely passive, and the federal district court appeared to agree with this position, holding that defendant did not actively induce the vendors to infringe plaintiff's copyright. See 847 F. Supp. 1492 (E.D. Cal. 1994). See also Elektra Records Co. v. Gem Electronic Distributors, Inc., 360 F. Supp. 821 (E.D.N.Y. 1973).
Yet the district court also said that contribution to infringement should be limited to circumstances where defendant "expressly promoted or encouraged the sale of counterfeit products, or in some manner protected the identity of the infringers," and the Ninth Circuit relied on this language to rule against the defendants on appeal.
The court explained that not only did the operator provide space, utilities, parking, advertising, plumbing, and customers, but it also failed to comply with a lawful request by the local sheriff that it gather and share basic identifying information about its vendors.
Yet Judge Schroeder's opinion did not stop here. It went on to adopt the Third Circuit's hard line view -- set forth in Columbia Pictures Industries, Inc. v. Aveco, Inc., 800 F.2d 59 (3rd Cir. 1986) -- that "providing the site and facilities for known infringing activity is sufficient to establish contributory liability."
It can indeed be argued that the Fonovisa court has unnecessarily taken the contributory infringement doctrine one step too far. The online world can certainly be said to resemble a swap meet, and Fonovisa's hard line application of the contributory infringement doctrine can conceivably be applied by analogy to a variety of cyberlaw-related disputes. If courts began finding such entities as commercial online services, Internet access providers, and major universities liable for contributory infringement when they have simply provided a site for a known infringing activity, such decisions might not only impose an unreasonable burden on those who make online communication possible but might also result in unnecessary restrictions on the flow of information and ideas.
Fonovisa must be analyzed, however, in light of two relevant disputes in cyberspace that have already reached the lower federal courts: Sega Enterprises, Inc. v. Maphia, 857 F. Supp. 679 (N.D. Cal. 1994) and Religious Technology Center v. Netcom On-Line Communication Services, Inc., 907 F. Supp. 1361 (N.D. Cal. 1995).
In Sega, the court found a bulletin board service (BBS) operator liable as a contributory infringer for the unauthorized copying of Sega video games from the BBS by subscribers. Defendant had not simply provided the site and facilities for a known infringing activity, but had intentionally placed these copyrighted materials on the BBS. As the court said, defendant's "role in the copying, including provision of facilities, direction, knowledge and encouragement, amounts to contributory infringement."
In Netcom, plaintiffs argued that the large Internet access provider should be liable for the acts of a subscriber who posted copyrighted works by L. Ron Hubbard on a Netcom BBS. Acknowledging that the case concerns "an issue of first impression regarding intellectual property rights in cyberspace," the court found that material questions of fact precluded a finding of summary judgment in Netcom's favor. But the court suggested that even if Netcom had knowledge of the subscriber's infringing postings, the Internet access provider would be liable only if it "substantially" induces, causes, or materially contributes to the infringing conduct of the primary infringer.
Thus, although Sega found defendant liable and Netcom suggested in very strong terms that defendant might be liable, both decisions do not go as far as Fonovisa did in its application of the contributory infringement doctrine.
The Fonovisa decision is certainly distinguishable. The Fresno County Sheriff's Department had actually raided the Cherry Auction swap meet several years before the lawsuit was filed, and had seized more than 38,000 counterfeit recordings. Nothing comparable has ever happened in cyberspace. In addition, Fonovisa involved the sale of infringing items. Copyright infringement controversies in the online world typically focus on displaying, using, and downloading copyrighted items, not on actual sales.
Copyright infringement remains a very nebulous area, particularly with regard to cyberspace law. Much of the doctrine is still unclear, with principles and applications that must be sorted out in future litigation. But it is undoubtedly an area that bears watching in the months and years ahead.
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