Contributory infringement originates in tort law and stems from the notion that one who directly contributes to another's infringement should be held accountable. 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 is an outgrowth of enterprise liability, and imposes liability where one person knowingly contributes to the infringing conduct of another.
The Fresno County Sheriff's Department seized 38,000 counterfeit tapes (copyright holders unstated) from a swap meet approximately a year and a half before the plaintiff filed suit. Plaintiff sued defendants for copyright infringement, contributory and vicarious copyright infringement, and contributory trademark infringement under the Copyright Act, 17 U.S.C.S. § 101 et seq. The district court granted defendants' motion to dismiss pursuant to Fed. R. Civ. P. 12(b)(6). Plaintiff appealed the dismissal on all claims except the copyright infringement claim.
Could the financial benefit prong of the test for finding vicarious liability only be satisfied if the defendant earned a commission directly tied to the sale of a particular infringing item?
The court reversed and remanded, holding that vicarious liability existed because defendants had control over direct infringers and had a direct financial interest in the infringing activity. The court also held that contributory copyright infringement was established since defendants knowingly contributed to the infringement by providing the site for the activity. Finally, the court held that contributory trademark infringement existed because defendants were "willfully blind" to the ongoing infringement.