Advanced Copyright Issues on the Internet - Fenwick & West LLP

In the absence of other evidence of intent, mere failure to design or redesign a technologyto avoid or reduce infringing uses, by itself, cannot form the basis of liability, if thetechnology is otherwise capable of substantial noninfringing uses. 1464 Where there isother evidence of purpose, however, failure to take steps to prevent infringing uses of atechnology can reinforce an inference of subjective intent to induce infringement.The traditional tests for secondary liability – the contributory and vicarious liabilitydoctrines – as articulated by the courts before the Grokster case remain intact.The Court left open a host of questions with respect to the issue of product design andinfringement avoidance, which the lower courts will be left to work out:What threshold showing of intent must be made before the failure to design a product toreduce or avoid infringement becomes relevant to show culpable purpose to encourageinfringement? The Court’s opinion generally requires “clear expression or otheraffirmative steps” to promote infringement. Must the plaintiff therefore show a “clearexpression” of purpose or “affirmative steps” taken through other evidence before theevidence of failure to design becomes even relevant? Or is a lesser quantum of otherevidence sufficient to trigger the relevancy of failure to design evidence, which can thenbe aggregated with such other evidence to make a showing of “clear expression”? If alesser quantum of other evidence is sufficient, what is that quantum? 1465 And must suchother evidence be direct evidence, or may it be circumstantial evidence?Once evidence of failure to design to avoid infringement becomes relevant, whatsubstantive standard governs the extent to which the product must be designed to avoidor reduce infringement? Presumably some kind of reasonableness standard will governthat looks to both the state of the art of technology that could be deployed in the design toreduce infringement, as well as the costs and benefits of that technology.Does the copyright holder itself have a duty to reduce or prevent infringement of itscopyrighted material by deploying technology (such as DRM technology) to protect it atthe time of distribution? If so, how is the burden to deploy technological means toreduce infringement to be allocated between the copyright holder and the distributor ofthe products or services that are ultimately used to commit infringement?1464 Id. at 2781 n.12.1465 The inducement rule set up by the Court in Grokster appears to differ a bit from the active inducement rule inpatent law. Some patent cases, most notably Oak Industries, Inc. v. Zenith Electronics Corp., 726 F. Supp.1525 (N.D. Ill. 1989), distinguish between an affirmative act directed toward encouraging or promotinginfringement, and the distinct element of intent to induce, which can be proved by evidence not only ofaffirmative acts but also design omissions. By contrast, the Grokster opinion requires that intent be shown by“clear expression or other affirmative steps taken to foster to infringement.” Unlike the patent law, then, intentcannot be established through acts of design omission alone. See Matthew Brown et al., “Secondary Liabilityfor Inducing <strong>Copyright</strong> Infringement After MGM v. Grokster: Infringement-Prevention and Product Design,”Journal of Internet Law, Dec. 2005, at 21, 25.- 323 -