Advanced Copyright Issues on the Internet - Fenwick & West LLP

no interruption.” 1404 The defendants therefore did not provide sufficient material contribution tothe infringing acts of users to be liable as contributory infringers. 1405An analysis of the court’s rulings with respect to vicarious liability may be found inSection III.C.3(f) below. 1406On appeal, the Ninth Circuit affirmed. 1407 Turning first to the knowledge prong ofcontributory infringement, the Ninth Circuit noted that any examination of contributorycopyright infringement must be guided by the seminal Sony case, under which it is sufficient todefeat a claim of contributory infringement if the defendant shows that its product is capable ofsubstantial or commercially significant noninfringing uses. 1408 The court noted that, based onSony, it had held in the first appeal in the Napster case that if substantial noninfringing use wasshown, the copyright owner would be required to show that the defendant had reasonableknowledge of specific infringing files:Thus, in order to analyze the required element of knowledge of infringement, wemust first determine what level of knowledge to require. If the product at issue isnot capable of substantial or commercially significant noninfringing uses, then thecopyright owner need only show that the defendant had constructive knowledgeof the infringement. On the other hand, if the product at issue is capable ofsubstantial or commercially significant noninfringing uses, then the copyrightowner must demonstrate that the defendant had reasonable knowledge of specificinfringing files and failed to act on that knowledge to prevent infringement. 1409Thus, the Ninth Circuit in effect read the Sony case as essentially nothing more than agloss on the knowledge prong of contributory liability (and therefore inapplicable to vicariousliability), rather than an independent defense to any secondary copyright liability based upon thesale and distribution of technology that is capable of substantial noninfringing uses. The NinthCircuit further noted that Judge Posner had, in the Aimster case discussed in SectionIII.C.2(c)(3) above, read Sony’s substantial noninfringing use standard differently by looking at1404 Id.1405 Id. at 1043. Nor did the provision of technical assistance to their users constitute a material contribution toinfringement, because the technical assistance was rendered only after the alleged infringements too place, wasroutine and non-specific in nature. Id. at 1042.1406 In January of 2004, the district court ruled that Sharman Networks could pursue claims against the record labelsand Hollywood studios for copyright infringement and breach of contract based on allegations that, in theireffort to find people sharing files illegally, the labels and studios used unauthorized and unlicensed versions ofthe Kazaa software to monitor users of the network. Sharman Networks also claimed that the labels breachedthe software license agreement by sending instant message warnings and bogus files through the network. JonHealy, “Kazaa Owner Cleared to Sue Record Labels, Movie Studios” (Jan. 23, 2004), available as of Jan. 23,2004 at www.latimes.com/technology/la-fi-kazaa23jan23,1,2476555.story.1407 Metro-Goldwyn-Mayer Studios, Inc. v. Grokster, Ltd., 380 F.3d 1154 (9 th Cir. 2004).1408 Id. at 1160-61.1409 Id. at 1161.- 312 -