With respect to the control prong, the court found that Cybernet had the ability to control
its member sites. Cybernet had a monitoring program in place under which its member sites
received detailed instructions regarding issues of layout, appearance and content. Cybernet
monitored images on the sites to make sure that celebrity images did not over-saturate the
content found within the sites making up Cybernet’s service. Cybernet also forbade its members
sites to display certain types of images. Accordingly, the court concluded that Cybernet had
sufficient control over the infringing activity to be vicariously liable.^2131
(e) The Aimster/Madster LawsuitsThe facts of the case of Aimster/Madster lawsuits are set forth in Section III.C.2(c)(3)
above. In that case, the district court found, on a motion for a preliminary injunction, that the
plaintiffs had established a reasonable likelihood of success on their claim of vicarious liability.
The court ruled that Aimster had the right and ability to supervise its users merely because it
retained the right under its Terms of Service to terminate service to individual users who were
repeat violators of copyright law – as required by the DMCA safe harbors, thereby raising the
Catch 22 discussed in Section III.C.2(c)(1).10 above in connection with the Napster case, which
Catch 22 led the courts in the Hendrickson v. eBay, CoStar, and Perfect 10 v. Cybernet Ventures
cases to reject this interpretation (see Sections III.C.6(b)(1)(iii).b, c & d below). In addition,
Aimster controlled access of its users by requiring them to log on after paying their monthly fee
to join Club Aimster. The court rejected the argument that the encryption on the Aimster system
effectively prevented Aimster from controlling the activity of its users, ruling that Aimster need
not, as a matter of law, have the physical Internet address of its users in order to be deemed to
have sufficient right and ability to control them.^2132 “The fact that users must log in to the
system in order to use it demonstrates that Defendants know full well who their users are.”^2133
The district court also concluded that the defendants had a direct financial interest in the
infringing activities of Aimster users, because each Club Aimster user was required to pay $4.95
per month to use the service, and there was evidence that every Aimster was now required to pay
the fee. In addition, citing Napster II, the court ruled that the financial benefit element was
satisfied because the existence of infringing activities acted as a draw for potential customers to
the system.^2134
On appeal, the Seventh Circuit stated that it was “less confident” than the district judge
was that the plaintiffs were likely to prevail on the vicarious infringement theory.^2135 Judge
Posner noted that vicarious liability could conceivably have been applied in the Sony case given
that the Court treated vicarious and contributory infringement interchangeably, and Sony could
have made a design change in its product that would have controlled its users’ ability to fast
(^2131) Id. at 1173.
(^2132) In re Aimster Copyright Litigation, 252 F. Supp. 2d 634, 654-55 (N.D. Ill. 2002).
(^2133) Id. at 655.
(^2134) Id.
(^2135) In re Aimster Copyright Litigation, 334 F.3d 643, 654 (7th Cir. 2003), cert. denied, 124 S. Ct. 1069 (2004).