Course No.: 9200 710 801
Course ID:  17261
Tu 6:30-9:30 p.m.
Room W-215
Professor Jay Dratler, Jr.
Room 231D (IP Alcove)
(330) 972-7972
Copyright © 2000, 2001, 2002, 2003, 2004, 2005, 2006, 2008   Jay Dratler, Jr.  
For permission, see CMI.

Notes and Questions on Fonovisa, Inc. v. Cherry Auction, Inc.

1.  Although a relatively short opinion, Fonovisa is a veritable treatise on secondary liability, covering both copyright and trademark claims.  Note that copyright law recognizes two kinds of secondary liability—vicarious and contributory liability—while trademark law recognizes only the latter.  Can you think of any reason why this might be so?

The Fonovisa court suggests that vicarious liability is an outgrowth of the general tort doctrine of respondeat superior, while contributory liability derives from notions of enterprise liability.  Is one of these general areas of law more likely than another to apply in trademark disputes?

2.  None of these types of secondary liability appears explicitly in the relevant statute.  Rather, all are creatures of federal common law, developed by the courts in the interstices of the federal statutes governing copyright and trademarks.  If you thought federal common law was dead after Erie Railroad Co. v. Tompkins, 304 U.S. 64, 78, 58 S.Ct. 817, 82 L.Ed. 1188 (1938), think again.  Because federal common law is the basis of claims involving secondary liability for copyright and trademark infringement, it is a vital source of law for the Internet and the World Wide Web.

3. The only federal intellectual property statute that contains explicit statutory provisions governing secondary liabilty is the patent act.  The Patent Act of 1952, as amended, has provisions governing secondary liability for inducing others' patent infringement, 35 U.S.C. § 271(b), for contributory patent infringement, 35 U.S.C. § 271(c), and for a special type of secondary liability for facilitating others' assembly of patented inventions abroad, 35 U.S.C. § 271(f).

In Sony Corp. of America v. Universal City Studios, Inc., 464 U.S. 417, 438-442, 104 S.Ct. 774, 78 L.Ed.2d 574 (1984), the Supreme Court borrowed conceptually from the patent statute to create a standard for contributory infringement of copyright based on a defendant's supplying copying equipment.  Sony had sold consumers "Betamax" video tape recorders, and the consumers allegedly had used those machines to make infringing copies of the plaintiffs' copyrighted television programs.  The question was whether Sony should be liable for contributing to consumers' alleged infringement by supplying the means for it.

Borrowing from patent law, 35 U.S.C. § 271(c), the Supreme Court ruled that Sony could not be liable for consumers' infringing use of its machines as long as the machines themsleves were "capable of substantial noninfringing uses."  464 U.S. at 442.  It then went on to decide that consumers' use of the machines to make temporary "time-shifting" recordings to view at a later time (some of which weres authorized, and the rest of which the Court held were fair use) was sufficiently "substantial" to avoid contributory liability on Sony's part.  See 464 U.S. at 456.  Although the Sony Court cited the H.L. Green decision on which much of Fonovisa rests, see 464 U.S. at 438, it did not dwell on that line of decisions, apparently seeing them as inapposite to a situation in which the only basis for liability was the sale of general-purpose copying equipment.

We will have occasion to revisit the Sony decision later in our study of secondary liability.  In the meantime, consider which doctrines of secondary liability for copyright infringement are more general.  Is the situation in Sony a special case of the situations contemplated in Fonovisa, or vice versa?

4.  Fonovisa sets out tests for three types of secondary liability: (1) vicarious infringement of copyright; (2) contributory infringement of copyright; and (3) contributory infringement of trademarks.  East test has two parts.  Make a chart of the three rules and compare them.  Which tests depend upon the defendant's state of mind, i.e., awareness of others' infringing activity, and which do not?  Which parts of the various tests appear to be precise and definite, and which appear to be flexible?

5.  With respect to copyright infringement, the Fonovisa court discusses department-store cases, dance-hall cases, and landlord-tenant cases.  For each type of secondary liability (vicarious and contributory), which type of case most resembles the "flea market" in Fonovisa, and why?  Can you make fact-specific analogies and distinctions in each case?

Do you agree with the court that the defendant in Fonovisa was vicariously liable for the direct infringer's sale of counterfeit records from its booth?  Was the defendant's financial benefit from those sales "direct"?  Was it direct enough to justify vicarious liability?

6.  Consider the secondary liability of Internet service providers for copyright infringement.  Suppose, for example, that an Internet service provider is sued for hosting a Website on which a subscriber posts infringing images taken from magazines and television programs.  Based on the Fonovisa case, which theory of secondary liability—vicarious or contributory—is most favorable to the Internet service provider, and why?  to the copyright infringement plaintiff?

7.  Now consider secondary liability for trademark infringement, under the standard enunciated in Fonovisa.  Should an Internet service provider be liable under that standard for hosting a Website on which a subscriber makes infringing use of a third party's trademarks?  Suppose, for example, that a person who makes clones of IBM personal computers in her garage offers them for sale on the well-known auction site eBay using IBM's trademark and logo.  Should eBay be liable for contributory trademark infringement, and, is so, under what circumstances?  Does the standard in Fonovisa provide a definitive answer to this question?  Does an analogy to or distiction from the facts of Fonovisa?

8.  The plaintiff copyright owners in Sony did not sue any consumers for copying television programs.  Instead, they sued only Sony, the maker of the copying equipment.  See 464 U.S. at 420.  Can you think of any reasons why this was so?

Now consider the situations described in Notes 6 and 7.  Can you think of any reason(s) why the copyright owners or IBM might sue the Internet service providerr instead of the direct infringer(s)?   legal reasons?   practical reasons?  Does your analysis suggest that doctrines of secondary liability are likely to be generally important in cases involving the Internet and the World Wide Web?

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