Advanced Copyright Issues on the Internet - Fenwick & West LLP

Court’s analysis, which had strongly presaged the ultimate outcome of the case. 1493 By andlarge, the district court’s opinion did little more than elaborate factually on the various bases theSupreme Court had identified in its opinion upon which the defendants could be held liableunder the inducement doctrine.The district court may, however, have put one important gloss on the Supreme Court’slegal rulings that may represent an extension of the scope of inducement liability. Specifically,StreamCast argued that a defendant could be found liable under the inducement doctrine only ifit: (1) for the purpose of inducing infringement, (2) took actions beyond distributinginfringement enabling technology, and (3) which actually resulted in specific instances ofinfringement. In StreamCast’s view, even if it distributed peer-to-peer software with the intentfor it to be used for infringement, liability would not attach unless it took further actions, such asoffering instructions on infringing use, that actually caused specific acts of infringement.StreamCast devoted much energy to arguing that the plaintiffs had failed to prove the second andthird elements of its proposed test. 1494The district court rejected StreamCast’s argument, finding it contrary to the followinglanguage from the Supreme Court’s decision:It is not only that encouraging a particular consumer to infringe a copyright cangive rise to secondary liability for the infringement that results. Inducementliability goes beyond that, and the distribution of a product can itself give rise toliability where evidence shows that the distributor intended and encouraged theproduct to be used to infringe. In such a case, the culpable conduct is not merelythe encouragement of infringement but also the distribution of the tool intendedfor infringing use. 1495From this passage, the district court went on to conclude, “Thus, Plaintiffs need not provethat StreamCast undertook specific actions, beyond product distribution, that caused specific actsof infringement. Instead, Plaintiffs need prove only that StreamCast distributed the product withthe intent to encourage infringement.” 1496 Although not entirely clear, it appears that in thedistrict court’s view, as long as a defendant has a subjective intent to encourage infringement,the mere distribution of a product that is used by others to commit infringement is sufficient tomake the distributor of the product secondarily liable. Such a rule, however, appears to beinconsistent with the Supreme Court’s ruling. In the passage quoted by the district court, theSupreme Court stated that “distribution of a product can itself give rise to liability whereevidence shows that the distributor intended and encouraged the product to be used toinfringe.” 1497 The use of the conjunctive “and” followed by a requirement of encouraging a1493 Indeed, the district court noted in its opinion after reviewing all the evidence that “in Grokster the SupremeCourt had hinted that summary judgment should be granted for Plaintiffs after reviewing much of the sameevidence.” Id. at 992.1494 Id. at 984.1495 Id. at 984-85 (quoting Grokster, 125 S. Ct. at 2782 n.13).1496 454 F. Supp. 2d at 985.1497 Grokster, 125 S. Ct. at 2782 n.13 (emphasis added).- 330 -