A Theory of Secondary Liability for Copyright Infringement

For the first time ever, the Supreme Court's seminal decision in Grokster permits the theory of secondary liability in copyright law to be rationalized. That case confirmed two important principles: (1) that secondary liability in copyright is a matter of federal common law; and (2) that, unlike primary liability, secondary liability depends upon the defendant's culpability or state of mind. The Grokster Court itself required a purposeful state of mind for the new "inducement" claim that it announced. Earlier decisions, including Sony, already had listed actual or constructive knowledge of others' infringement as an element of contributory infringement generally. Vicarious liability depends upon two elements: (1) the right and ability to control others' infringement and (2) a direct financial benefit from it. While these elements on their faces do not include culpability, together they permit a presumption or inference of culpability. If a business can control infringing activity, receives remuneration from it, and does nothing to stop it, knowledge of the infringement can properly be inferred or presumed. With this observation, all existing theories of secondary liability can be viewed as based upon various levels of culpability (purpose, actual or constructive knowledge, or presumed or inferred culpability). In that respect all can be distinguished from primary liability for copyright infringement, which has always been a strict-liability offense, independent of the defendant's culpability or state of mind