17.20 Secondary Liability—Vicarious Infringement—Elements and Burden of Proof

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

1.         the defendant directly benefitted financially from the infringing activity of [name of direct infringer]; 

2.         the defendant had the right and ability to [supervise] [control] the infringing activity of [name of direct infringer][; and] 

[3.        the defendant failed to exercise that right and ability.] 

            If you find that the plaintiff has proved each of these elements, your verdict should be for the plaintiff if you also find that [name of direct infringer] infringed plaintiff’s copyright.  If, on the other hand, the plaintiff has failed to prove any of these elements, your verdict should be for the defendant [name of alleged vicarious infringer]. 

Comment 

            Copyright law “allows imposition of liability when the defendant profits directly from the infringement and has a right and ability to supervise the direct infringer, even if the defendant initially lacks knowledge of the infringement.”  Metro-Goldwyn-Mayer Studios Inc. v. Grokster, Ltd., 545 U.S. 913, 930 n.9 (2005); see also Ellison v. Robertson, 357 F.3d 1072, 1076 (9th Cir. 2004) (“A defendant is vicariously liable for copyright infringement if he enjoys a direct financial benefit from another’s infringing activity and ‘has the right and ability to supervise’ the infringing activity.” (quoting A & M Records, Inc. v. Napster, Inc., 239 F.3d 1004, 1013 (9th Cir. 2001))). 

            In certain cases, it may be appropriate to instruct the jury on the meaning of “right and ability to supervise or control” or “financial benefit” for purposes of vicarious infringement.  See Napster, 239 F.3d at 1023-24 (holding that defendant’s ability to block or police use of its internet service is evidence of right and ability to supervise); Perfect 10, Inc. v. Giganews, Inc., 847 F.3d 657, 673 (9th Cir. 2017) (detailing elements of vicarious infringement in absence of employer-employee relationship). 

            Vicarious infringement is most commonly identified as having two elements: the defendant must have had both (1) the “right and ability to supervise the infringing activity” and (2) “a direct financial interest” in the activity.  A&M Records, Inc. v. Napster, Inc., 239 F.3d 1004, 1022 (9th Cir. 2001); see also VHT, Inc. v. Zillow Grp., Inc., 918 F.3d 723, 745 (9th Cir. 2019).  Implicit in the first element is that the defendant could have prevented the infringement but did not. “One . . . infringes vicariously by profiting from direct infringement while declining to exercise a right to stop or limit it.”  Metro-Goldwyn-Mayer Studios Inc., 545 U.S. at 930.  “To escape imposition of vicarious liability, the reserved right to police must be exercised to its fullest extent.”  A&M Records, Inc, 239 F.3d at 1023. 

            Right and Ability to Supervise or Control:   A defendant’s ability to supervise or control infringing activity is assessed based on the defendant’s actual ability at the time of infringement.  Perfect 10, Inc. v. Visa Int’l Serv. Ass’n, 494 F3d 788, 805 (9th Cir. 2007) (“[T]he defendant must have the right and ability to supervise and control the infringement, not just affect it . . . .”).  To show an ability to supervise infringing conduct, a plaintiff must show that the defendant had the technical ability to identify and remove infringements.  VHT, Inc., 918 F.3d at 746 (noting defendant’s “failure to change its operations to avoid assisting [users] to distribute . . . infringing content . . . is not the same as declining to exercise a right and ability to make [third parties] stop their direct infringement.” (quoting Perfect 10, Inc. v. Amazon.com, Inc., 508 F.3d 1146, 1175 (9th Cir. 2007))). The ability to exert an “indirect effect on the infringing activity” is not enough.  Id.  

            Direct Financial Benefit: “A financial benefit is not ‘direct’ unless there is a ‘causal relationship between the infringing activity and [the] financial benefit.’”  Erickson Prods., Inc. v. Kast, 921 F.3d 822, 829-30 (9th Cir. 2019) (quoting Ellison, 357 F.3d at 1079 (9th Cir. 2004)).  A direct infringer’s avoidance of licensing fees “alone” is not a “direct” financial benefit to the vicarious infringer.  Id. at 840 (noting defendant benefitted only indirectly from website developer’s avoidance of licensing fees). 

Revised June 2019