Definition of contributory liability
Contributory liability or contributory infringement has been widely defined as a form of liability on the part of someone who is not directly infringing but nevertheless is making contributions to the infringing acts of others. Material contributions to the act (or enabling thereof), as well as knowledge of the act itself, are key elements of contributory liability. Additionally, in the course of performing such material contributions, the parties know that they are materially infringing copyrighted content.
Contributory liability is rooted in the tort theory of enterprise liability. Contributory liability holds the third party liable for the primary act based on the third party's relationship with the actual harm - either by enabling or by benefiting from it. As the court stated in Gershwin Publ'g Corp. v. Columbia Artists Mgmt.: “one who, with knowledge of the infringing activity, induces, causes, or materially contributes … may be held liable as a contributory infringer.”
Not long after the passage of the 1976 Copyright Act, the scope of contributory infringement liability was tested in a case in which the copyright owners claimed that the sale of a recording device - the VCR - illegally contributed to infringement. In Sony Corp. of America v. Universal City Studios, Inc. was established a variant on contributory liability claims with respect to technologies. When Universal City Studios initially sued Sony for making and selling the Betamax, the theory was that Sony materially contributed to acts of infringement performed by users of the Betamax, and knew or had reason to know that the technology would be used for infringing purposes. The Supreme Court of the United States held that, even though material contributions and knowledge of the infringement are generally sufficient to establish secondary liability, in the case of infringing technology, contributory liability cannot be imposed unless the technology lacks substantial non-infringing uses. As the Court phrased the Sony exception with regard to new technologies: "The mere sale of copying equipment, like the sale of other articles of commerce, does not constitute contributory liability if the product is widely used for legitimate, unobjectionable purposes. Indeed, it need merely be capable of substantial noninfringing uses."
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