Advanced Copyright Issues on the Internet - Fenwick & West LLP

were engaged in copyrighted infringement, and the defendants had targeted the service to formerusers of Napster and Kazaa. 1596The material contribution prong was satisfied because the defendants’ servers were thesole instrumentality of their subscribers’ infringement. The servers physically stored the contentthat subscribers requested for download, and the defendants had created designated servers fornewsgroups containing MP3 or music binary files so as to maximize the average retention timeof those files as compared to other Usenet groups with non-music content. The court rejectedthe defendants’ assertion that they could not be contributorily liable under the Supreme Court’sSony doctrine because their product had substantial noninfringing uses. The court distinguishedSony on the ground that Sony’s last meaningful contact with the product or the purchaser was atthe point of purchase, after which it had no ongoing relationship with the product or its end user.By contrast, the defendants maintained an ongoing relationship with their infringing users in thecourse of offering their service, thereby rendering the noninfringing uses immaterial to insulatethe defendants from liability. Accordingly, the court granted the plaintiffs’ motion for summaryjudgment on their contributory copyright infringement claim. 1597(l)SummaryAn OSP, BBS operator or other operator of an online service can be liable forcontributory infringement where the operator has sufficient knowledge of infringing activity.The level of knowledge required is not consistent among the cases and is confusingly explicatedin some of them, particularly the Ninth Circuit’s rulings in the Napster cases. The Ellison andPerfect 10 v. Cybernet Ventures cases seem to hold that constructive knowledge, or reason toknow of infringement, may be sufficient for contributory liability. However, the Ninth Circuit’sNapster cases seem to adopt a standard of “reasonable knowledge,” as Judge Patel’s extensiveanalysis of those cases concludes in her opinion in the Hummer Winblad case, discussed inSection III.C.2(c)(7) above. As Judge Patel concluded, the precise scope of this standard of“reasonable knowledge” is not clear, but it seems to be narrower than the “reason to know”standard of constructive knowledge used in the Ellison and Perfect 10 v. Cybernet Venturescases.To add to the confusion, under the Ninth Circuit’s Grokster decision, where contributoryliability is alleged based on the distribution of a product or service used to infringe, the level ofknowledge required for contributory liability varies with whether the product or service of thedefendant has substantial noninfringing uses. If the product at issue is not capable of substantialor commercially significant noninfringing uses, then the copyright owner need only show thatthe defendant had constructive knowledge of the infringement. On the other hand, if the productat issue is capable of substantial or commercially significant noninfringing uses, then thecopyright owner must demonstrate that the defendant had reasonable knowledge of specificinfringing files and failed to act on that knowledge to prevent infringement. The Ninth Circuit’sGrokster decision interpreted the Napster I decision as requiring actual knowledge of specific1596 Id. at 154-55.1597 Id. at 155-56.- 349 -