Advanced Copyright Issues on the Internet - Fenwick & West LLP

satisfied because Master had the power to approve changes that West Central made to itscorporate web site, including whether photos were used, and also had the ability to stop or limitinfringing uses. West Central received a financial benefit from the infringement because the useof the copyrighted images (three of which depicted janitorial and cleaning services) helped drawcustomers. 16574. Inducement Liability(a) The Supreme Court’s Grokster DecisionFor a detailed discussion of the Supreme Court’s Grokster decision, which formallyintroduced inducement liability into the copyright law for the first time, see Section III.C.2(c)(5)above.(b) Arista Records v. Usenet.comIn Arista Records LLC. V. Usenet.com, Inc., 1658 the defendants operated a Napster-likeUsenet service that advertised to and targeted users who wanted to download music files. Unlikepeer-to-peer filing sharing networks, the files were stored on “spool” news servers operated bythe defendants. The defendants created designated servers for newsgroups containing musicbinary files to increase their retention time over other types of Usenet files. 1659 The court,although noting several courts that had expressed doubt as to whether inducement ofinfringement states a separate claim for relief, or whether it is a species of contributoryinfringement, granted the plaintiffs’ motion for summary judgment on their claim for inducementof infringement as a separate theory. 1660The court found the facts in the instant case very similar, and equally compelling, tothose that led the Supreme Court to find inducement liability in Grokster. Specifically, astatistical survey based on random sampling concluded that over 94% of all content files offeredin the defendants’ music-related binary newsgroups were infringing or highly likely to beinfringing. 1661 The defendants openly and affirmatively sought to attract former users of othernotorious file-sharing services such as Napster and Kazaa, and boasted that as those file sharingservices were scrutinized and shut down for copyright infringement, it would make the way forUsenet to “get back in the game.” 1662 The defendants also used meta-tags such as “warez” and“Kazaa” in the source code of their website to ensure that a search on a search engine for illegalcontent would return their website as a result. The record was replete with evidence of thedefendants’ own employees overtly acknowledging the infringing purpose for which their1657 Id. at *2 & *7-9.1658 633 F. Supp. 2d 124 (S.D.N.Y. 2009).1659 Id. at 130-31.1660 Id. at 150 n.17 & 154.1661 Id. at 151-52.1662 Id. at 152.- 361 -