Below is the second excerpt from a presentation I gave at the State Bar of Texas’ 16th Annual Entertainment Law Institute entitled “Legal & Business Aspects of Music, Film and Digital Entertainment” in October 2006 on the topic of copyright infringement. This was written for a court in the Fifth Circuit Court of Appeals, and other circuits may treat some of these issues differently. I don’t recall why, but I omitted discussion of inducement liability and, as you will see, did not discuss contributory copyright infringement or vicarious liability for copyright infringement in much detail. As always, this is not intended to be, and should not be construed as, legal advice.
Theories of Secondary Liability
The division of rights and exploitation of any given copyright may involve numerous parties. For example – in the context of a musical work – owners, licensees, songwriters, producers, recording artists, record labels, music publishers, administrators, and performing rights organizations. Which of these are proper parties to an infringement lawsuit? Is it just the creative personnel who actually composed the musical work containing the allegedly infringing material? Or can “upstream” rights owners and others also be held liable although they had no direct involvement in creating the work? The answer is that liability can be imputed to those who had no direct involvement in creating an infringing work on the theories of contributory infringement and vicarious infringement, not just those who are directly responsible for the unauthorized copying.
Contributory liability for copyright infringement may be imposed upon “one who, with knowledge of the infringing activity, induces, causes or materially contributes to the infringing conduct of another. . . .” Alcatel USA, Inc. v. DGI Technologies, Inc., 166 F.3d 772, 790 (5th Cir. 1999) (quoting Gershwin Publishing Corp. v. Columbia Artists Mgmt., Inc., 443 F.2d 1159, 1162 (2d Cir. 1971)). In other words, contributory infringement requires showing “that the secondary infringer ‘know or have reason to know’ of direct infringement.” A&M Records, Inc. v. Napster, Inc., 239 F.3d 1004, 1020 (9th Cir. 2001). See also Sony Corp. v. Universal City Studios, Inc., 464 U.S. 417, 104 S.Ct. 774, 78 L.Ed.2d 574 (1984).
Vicarious liability may be imposed upon employers for the acts of their employees under the doctrine of respondeat superior, and this concept is applicable in copyright law. For example, the doctrine may apply to impose liability upon a design studio whose artist-employee copies without authorization an illustration owned by a third party. This form of vicarious liability is an application of the doctrine of respondeat superior. Importantly, the vicarious liability doctrine is extended beyond the employer-employee relationship in copyright law so as to impose liability on anyone who “has the right and ability to supervise the infringing activity and also has a direct financial interest in such activities.” Gershwin Publishing Corp., 443 F.2d at 1162.