Definition of secondary liability
secondary liability (uncountable)
- The legal responsibility arising when a party materially contributes to, facilitates, induces or is otherwise responsible for directly infringing acts carried out by another party.
Secondary liability, or indirect infringement, arises when a party materially contributes to, facilitates, induces, or is otherwise responsible for directly infringing acts carried out by another party. The US has statutorily codified secondary liability rules for trademarks and patents; however, for matters relating to copyright, this has solely been a product of case law developments. In other words, courts - rather than Congress - have been the primary developers of theories and policies concerning secondary liability.
Early case law
Secondary liability in copyright has come about with case-by-case decisions. In other words, there has not been any real or consolidated theory. Furthermore, patent and copyright cases have tended to cross-cite each other. Examples of this are cases such as Kalem Co. v. Harper Brothers (the producer of the movie Ben Hur (1907 film) didn't himself infringe, but was responsible for making and commercially distributing the infringing film), Shapiro, Bernstein and Co. v. H.L. Green Co. (a booth in a department store that sold infringing sound recordings and the store was ultimately held liable), and the so-called "dance hall" cases (the operator of an entertainment establishment was held liable because he had effective control of the premises and obtained a direct financial benefit derived from charging entrance fees to the public). The Copyright Act of 1790 did not provide a formal definition of infringement, stating only that “any person or persons who shall print or publish any manuscript, without the consent and approbation of the author or proprietor thereof... shall be liable to suffer and pay to the said author or proprietor all damages occasioned by such injury.” Furthermore, the Copyright Act of 1909 simply provided that any person who “shall infringe the copyright in any work protected under the copyright laws of the United States… shall be liable” for various remedies.
Despite the fact that the Copyright Act of 1909 did not explicitly establish liability for acts committed by a party different than the direct infringer, several cases decided under this Act set forth the guidelines under which a party may be deemed secondarily liable. Examples of the gradual recognition by courts of copyright liability extending to those who contribute to or vicariously profit from the infringing acts of others are Fishel v. Lueckel and Kalem Co. v. Harper Brothers.
Kinds of secondary liability
There are generally two kinds of secondary liability developed by courts - vicarious liability and contributory liability. Although the line between these categories of liability is blurry, a precondition for all forms of secondary liability is the underlying act (or acts) of infringement.
Some academics have classified the active inducement adopted in MGM Studios, Inc. v. Grokster, Ltd. as a new type of secondary liability because it is based on express acts of inducement and not on a mere failure to act; furthermore, the specific intent to bring about infringing acts is another important factor in this analysis.
Secondary liability in the future?
Future treatment of secondary liability by US courts is uncertain. Some cases and commentators have argued for broadening secondary liability through cost-benefit analysis, multi-factor balancing tests, or simply basing it on technical designs or business models.
The proposed EU directive would make aiding and abetting infringement a basis for liability. In light of the above, it is permissible to conclude that there is no consensus on this issue.
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