17.21 SECONDARY LIABILITY—CONTRIBUTORY INFRINGEMENT—ELEMENTS

AND BURDEN OF PROOF

A defendant may be liable for copyright infringement engaged in by another if [he] [she] [it ] knew or had reason to know of the infringing activity and intentionally [induced] [materially contributed to] that infringing activity.

If you find that [name of direct infringer] infringed the plaintiff's copyright in [allegedly infringed work], you must determine whether [name of alleged contributory infringer] contributorily infringed that copyright. The plaintiff has the the burden of proving both of the following elements by a preponderance of the evidence:

1.	the defendant knew or had reason to know of the infringing activity of [name of direct infringer]; and

2.	the defendant intentionally [induced] [materially contributed to] [name of direct infringer's] infringing activity.

[The defendant's intent to induce the infringing activity must be shown by clear expression of that intent or other affirmative steps taken by the defendant to encourage.]

If you find that [name of direct infringer] infringed the plaintiff's copyright and you also find that the plaintiff has proved both of these elements, your verdict should be for the plaintiff. If, on the other hand, the plaintiff has failed to prove either or both of these elements, your verdict should be for the defendant.

Comment

The above instruction is based on Fonovisa, Inc. v. Cherry Auction, Inc. 76 F.3d 259, 261-63 (9th Cir. 1996), Ellison v. Robertson, 357 F.3d 1072, 1076 (9th Cir. 2004), and MDY Indus., LLC v. Blizzard Entm't, Inc., 629 F.3d 928, 937-38 (9th Cir. 2010), as amended on denial of reh'g (Feb. 17, 2011), opinion amended and superseded on denial of reh'g, No. 09-15932, 2011 WL 538748 (9th Cir. Feb. 17, 2011); see also Erickson Prods., Inc. v. Kast, 921 F.3d 822,

831 (9th Cir. 2019) ("A party engages in contributory copyright infringement when it '(1) has

knowledge of another's infringement and (2) either (a) materially contributes to or (b) induces

that infringement.'" (quoting VHT, Inc. v. Zillow Grp., 918 F.3d 723, 745 (9th Cir. 2019))); Cobbler Nevada, LLC v. Gonzales, 901 F.3d 1142, 1147 (9th Cir. 2018) ("We have adopted the well-settled rule that '[o]ne infringes contributorily by intentionally inducing or encouraging direct infringement.' Perfect 10, Inc. v. Amazon.com, Inc., 508 F.3d 1146, 1170 (9th Cir. 2007) (alteration in original) (quoting Metro-Goldwyn-Mayer Studios, Inc. v. Grokster, Ltd., 545 U.S. 913, 930 (2005)). Stated differently, 'liability exists if the defendant engages in personal conduct that encourages or assists the infringement.'").

In Metro-Goldwyn-Mayer Studios Inc. v. Grokster, Ltd., 545 U.S. 913 (2005), the Supreme Court held that one who distributes a device with the object of promoting its use to infringe a copyright may be liable for the resulting acts of infringement by third parties, even if the device is capable of substantial noninfringing use. Id. at 2780. The Court characterized this as the inducement rule. Id. This rule was refined and formalized into four elements in Columbia Pictures Industries, Inc. v. Fung, 710 F.3d 1020 (9th Cir. 2013). See id. at 1032 (listing these "four elements: (1) the distribution of a device or product, (2) acts of infringement, (3) an object of promoting its use to infringe copyright, and (4) causation"); see also Perfect 10, Inc. v. Visa Int'l Serv. Ass'n, 494 F.3d 788, 795 (9th Cir. 2007) (describing inducement rule and material contribution test as "non-contradictory variations on the same basic test").

In the online context, a computer system operator may be liable under a material contribution theory if the operator has actual knowledge of specific infringement, can take simple measures to prevent further infringement, and yet fails to do so. See Perfect 10, Inc. v. Giganews, Inc., 847 F.3d 657, 671 (9th Cir. 2017); see also VHT, Inc. v. Zillow Grp., 918 F.3d

723, 745 (9th Cir. 2019) (stating that website did not have "information necessary to take 'simple

measures' to remedy the violation" because website had no means to identify allegedly

infringing images uploaded by users).

The bracketed language paraphrases the test for inducement set forth in Grokster, 545 U.S. at 919, 936-37 (2005) and reiterated in Columbia Pictures, 710 F.3d at 1032. The court should include this language if there is a dispute regarding whether the defendant took sufficient action, or any action, demonstrating its intent to encourage infringement. See, e.g., id. at 1035-36 ("As for the necessary 'clear expression or other affirmative steps' evidence indicative of unlawful intent, the most important is Fung's active encouragement of the uploading of torrent files concerning copyrighted content.").

The sale of a product or device that has the potential to infringe (such as a home video recorder) does not constitute contributory infringement if the product is capable of a substantial non-infringing use. Sony Corp. of Am. v. Universal City Studios, Inc., 464 U.S. 417, 442 (1984); Grokster, 545 U.S. at 939 n.12.

Revised June 2019