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Is employer liable for employees copyright Infringement?

Jul 3rd, 2015 | By | Category: Copyright Litigation

Copyright Infringement Basics – Respondeat Superior

Respondeat superior copyright law

Introduction

Copyright infringement can be costly.  As a business owner, your primary objective is to enhance your profits in your business.  Getting hit with a federal lawsuit due to the actions of one of your employees defeats and works against you.  But under what circumstances can an employer be held liable (under the doctrine of respondeat superior) for the actions of their employees, for example downloading illegal bootlegged music, software, adult pornos, or other copyrighted works?  This blog explores that topic.

What is the doctrine of respondeat superior?

The doctrine of respondeat superior basically means “let the master answer” for the wrongdoing or torts of the employee.  Since the employer has the ability to control and supervise the employee, the employer should naturally be held liable for the acts of the employee which are committed during the “course and scope of the employment relationship.”  As the Court noted in Adobe Sys. Inc. v. Canus Prods., Inc., 173 F. Supp. 2d 1044, 1048-49 (C.D. Cal. 2001):

“Vicarious copyright liability is an “outgrowth” of the common law doctrine of respondeat superior, which holds the employer liable for the acts of its agents. Fonovisa, 76 F.3d at 262.  Shapiro is the landmark case in which vicarious liability for sales of counterfeit recordings was expanded outside the employer-employee context. In Shapiro, the court was faced with a copyright infringement suit against the owner of a chain of department stores where a concessionaire was selling counterfeit recordings. Noting that the normal agency rule of respondeat superior imposes liability on an employer for copyright infringement by an employee”
In this case, the Second Circuit laid down the standard for finding vicarious liability in the context of copyright infringement:
“When the right and ability to supervise coalesce with an obvious and direct financial interest in the exploitation of copyrighted materials-even in the absence of actual knowledge that the copyright monopoly  is being impaired the purpose of copyright law may be best effectuated by the imposition of liability upon the beneficiary of that exploitation.”

Is “vicarious liability” the same thing?

Not exactly, but similar.  In A&M Records, Inc. v. Napster, Inc., 239 F.3d 1004, 1022 (9th Cir. 2001), as amended (Apr. 3, 2001), aff’d sub nom. A&M Records, Inc. v. Napster, Inc., 284 F.3d 1091 (9th Cir. 2002) and aff’d sub nom. A&M Records, Inc. v. Napster, Inc., 284 F.3d 1091 (9th Cir. 2002) the 9th Circuit Court noted:

“We turn to the question whether Napster engages in vicarious copyright infringement. Vicarious copyright liability is an “outgrowth” of respondeat superior. Fonovisa, 76 F.3d at 262. In the context of copyright law, vicarious liability extends beyond an employer/employee relationship to cases in which a defendant “has the right and ability to supervise the infringing activity and also has a direct financial interest in such activities.”

What is the “TEST” for vicarious copyright infringement?

As set forth in the case of Perfect 10, Inc. v. Visa Int’l Serv. Ass’n, 494 F.3d 788, 802 (9th Cir. 2007):

“To state a claim for vicarious copyright infringement, a plaintiff must allege that the defendant has:
(1) the right and ability to supervise the infringing conduct
and
(2) a direct financial interest in the infringing activity. See Ellison, 357 F.3d at 1078; Napster, 239 F.3d at 1022 (citations omitted).
The Supreme Court has recently offered (in dictum) an alternate formulation of the test: “One infringes vicariously by profiting from direct infringement while declining to exercise a right to stop or limit it. See Grokster, 545 U.S. at 930, 125 S.Ct. 2764 (internal citations omitted).”
Plaintiff will bear the burden of proof ultimately.

What is “contributory copyright infringement”

As explained in Fonovisa, Inc. v. Cherry Auction, Inc., 76 F.3d 259, 264 (9th Cir. 1996):

Contributory infringement originates in tort law and stems from the notion that one who directly contributes to another’s infringement should be held accountable. See Sony v. Universal City, 464 U.S. at 417, 104 S.Ct. at 774–776; 1 Niel Boorstyn, Boorstyn On Copyright § 10.06[2], at 10–21 (1994) ( “In other words, the common law doctrine that one who knowingly participates in or furthers a tortious act is jointly and severally liable with the prime tortfeasor, is applicable under copyright law”). Contributory infringement has been described as an outgrowth of enterprise liability, see 3 Nimmer § 1204[a] [2], at 1275; Demetriades v. Kaufmann, 690 F.Supp. 289, 292 (S.D.N.Y.1988), and imposes liability where one person knowingly contributes to the infringing conduct of another. The classic statement of the doctrine is in Gershwin, 443 F.2d 1159, 1162: “[O]ne 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.” See also Universal City Studios v. Sony Corp. of America, 659 F.2d 963, 975 (9th Cir.1981), rev’d on other grounds, 464 U.S. 417, 104 S.Ct. 774, 78 L.Ed.2d 574 (1984) (adopting Gershwin in this circuit).”

What elements must a Plaintiff prove to show copyright infringement?

In order to recover for copyright infringement a Plaintiff in a federal court case must show the following:
“Proof of copyright infringement is often highly circumstantial, particularly in cases involving music. A copyright plaintiff must prove:
(1) ownership of the copyright;
and
(2) infringement—that the defendant copied protected elements of the plaintiff’s work.   
Absent direct evidence of copying, proof of infringement involves fact-based showings that the defendant had “access” to the plaintiff’s work and that the two works are “substantially similar.”  See Three Boys Music Corp. v. Bolton, 212 F.3d 477, 481 (9th Cir. 2000).
According to the Court:
“Each of these two issues—copying and improper appropriation—is an issue of fact. If there is a trial, the conclusions on those issues of the trier of the facts—of the judge if he sat without a jury, or of the jury if there was a jury trial—bind this court on appeal, provided the evidence supports those findings, regardless of whether we would ourselves have reached the same conclusions.”

Where does your law firm accept cases?

We handle federal copyright lawsuits in Phoenix, Arizona (Maricopa County); Los Angeles County, Orange County, San Diego, and San Francisco (bay area, silicon valley).  To discuss your copyright infringement, BSA audit, licensing dispute, SIIA, Autodesk, or Microsoft audit contact us at (877) 276-5084.  You may also fill out the contact form below to have one of our intellectual property lawyers call you, normally within the hour.  We have low flexible affordable legal fees, including flat rate fees and contingency fees in certain cases.

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We are a business and civil litigation firm with a focus on copyright infringement cases involving illegal movie downloads (torrent cases such as London Has Fallen and Malibu Media defense), software audits (ex. Microsoft audits, Autodesk licensing, Siemens PLM defense, SIIA, Adobe and Business Software Alliance defense) and other software vendors threatening piracy and infringement. We also handle cases involving internet law, anti-SLAPP, media law, right of publicity, trademarks & domain name infringement, and we have a niche practice area handling California BRE licensing disputes, accusations, subpoena response, statement of issues and investigations. We have offices in San Francisco, Beverly Hills, Newport Beach, San Diego & Phoenix, Arizona and accept federal copyright and trademark cases nationwide. All content on our website is general legal information only and not a substitute for legal advice, and should not be relied upon. Decisions to hire counsel should not be based on advertising alone. Blogs, videos and podcasts are authored by Steve Vondran, Esq. unless otherwise noted. We can be reached at (877) 276-5084.

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