Cite as 907 F.Supp. 1361 (N.D.Cal. 1995)
sible to screen out infringing bits from noninfringing bits. Because the court cannot see any meaningful distinction (without regard to knowledge) between what Netcom did and what every other Usenet server does, the court finds that Netcom cannot be held liable for direct infringement. Cf. IITF Report at 69 (noting uncertainty regarding whether BBS operator should be directly liable for reproduction or distribution of files uploaded by a subscriber).[1]
- 2. Contributory Infringement
Netcom is not free from liability just because it did not directly infringe plaintiffs’ works; it may still be liable as a contributory infringer. Although there is no statutory rule of liability for infringement committed by others,
[t]he absence of such express language in the copyright statute does not preclude the imposition of liability for copyright infringement on certain parties who have not themselves engaged in the infringing activity. For vicarious liability is imposed in virtually all areas of the law, and the concept of contributory infringement is merely a species of the broader problem of identifying the circumstances in which it is just to hold one individual accountable for the actions of another.
Sony Corp. v. Universal City Studios, Inc., 464 U.S. 417, 435, 104 S.Ct. 774, 785, 78 L.Ed.2d 574 (1984) (footnote omitted). Liability for participation in the infringement will be established where the defendant, “with knowledge of the infringing activity, induces, causes or materially contributes to the infringing conduct of another.” Gershwin Publishing Corp. v. Columbia Artists Management, Inc., 443 F.2d 1159, 1162 (2d Cir.1971).
a. Knowledge of Infringing Activity
Plaintiffs insist that Netcom knew that Erlich was infringing their copyrights at least after receiving notice from plaintiffs’ counsel indicating that Erlich had posted copies of their works onto a.r.s. through Netcom’s system. Despite this knowledge, Netcom continued to allow Erlich to post messages to a.r.s. and left the allegedly infringing messages on its system so that Netcom’s subscribers and other Usenet servers could access them. Netcom argues that it did not possess the necessary type of knowledge because (1) it did not know of Erlich’s planned infringing activities when it agreed to lease its facilities to Klemesrud, (2) it did not know that Erlich would infringe prior to any of his postings, (3) it is unable to screen out infringing postings before they are made, and (4) its knowledge of the infringing nature of Erlich’s postings was too equivocal given the difficulty in assessing whether the registrations were valid and whether Erlich’s use was fair. The court will address these arguments in turn.
Netcom cites cases holding that there is no contributory infringement by the lessors of premises that are later used for infringement unless the lessor had knowledge of the intended use at the time of the signing of the lease. See, e.g., Deutsch v. Arnold, 98 F.2d 686, 688 (2d Cir.1938).[2] The contribution to the infringement by the defendant in Deutsch was merely to lease use of the premises to the infringer. Here, Netcom not only leases space but also serves as an access provider, which includes the storage and transmission of information necessary to fa-
- ↑ Despite that uncertainty, the IITF Report recommends a strict liability paradigm for BBS operators. See IITF Report at 122–24. It recommends that Congress not exempt on-line service providers from strict liability because this would prematurely deprive the system of an incentive to get providers to reduce the damage to copyright holders by reducing the chances that users will infringe by educating them, requiring indemnification, purchasing insurance, and, where efficient, developing technological solutions to screening out infringement. Denying strict liability in many cases would leave copyright owners without an adequate remedy since direct infringers may act anonymously or pseudonymously or may not have the resources to pay a judgment. Id.; see also Hardy, supra.
- ↑ Adopting such a rule would relieve a BBS of liability for failing to take steps to remove infringing works from its system even after being handed a court’s order finding infringement. This would be undesirable and is inconsistent with Netcom’s counsel’s admission that Netcom would have an obligation to act in such circumstances. Tr. 35:25; see also Tr. 42:18–42:20.
