Advanced Copyright Law on the Internet

of the plaintiffs’ copyrights if the defendants had not done so. The court held that the defendants
could not argue they were not responsible for the infringement that took place through the Lime
Wire system because that same infringement could have taken place through another system.^2242

(e) Flava Works v. Gunter

The facts of this case are set forth in Section III.C.1(b) above. The court dismissed the
plaintiff’s claim for inducement of copyright infringement because it found that the plaintiff had
failed to plead the requirements for an inducement claim as set forth in the Supreme Court’s
Grokster case. “Plaintiff pleads merely a formulaic recitation of inducement but not facts that
plausibly suggest that it is entitled to relief on this theory. It is not enough to allege that
myVidster provides storage for video files and encourages sharing (or even that it also knew that
the website could be used to infringe). No clear expression of an infringing purpose is alleged,
and no active steps taken to foster infringement, such as advertising an infringing use or
instructing how to engage in an infringing use, are alleged.”^2243

(f) Disney Enterprises v. Hotfile

The facts of this case are set forth in Section III.C.6(b)(1)(iii).x below. In adjudicating
the plaintiffs’ motion for summary judgment with respect to inducement liability under Grokster,
the court first surveyed existing authority and noted the following two observations: (1) that, for
the most part, recent decisions have suggested that the Sony rule may be raised as a theory of
defense where the intent to infringe or induce infringement is not explicit, but rather is imputed
from a defendant’s material contribution to infringement; and (2) Grokster does not foreclose
other common law principles of imputing intent – in particular, a provider may face liability
where it knows of particular instances of infringement, rather than simply that the system is
capable of infringement or generally permits some level of infringement, and fails to act to
remove it.^2244 Against the body of jurisprudence it had surveyed, the court then summarized the
following applicable legal principles for adjudicating claims of inducement and contributory
liability against Hotfile (noting uncertainty about whether Grokster introduced a new category of
liability based on inducement or whether it spoke to preexisting notions of contributory liability):

[I]t is evident that a defendant will be liable for actually expressing an intention to

foster infringement. If that intent is express or can otherwise be said to be

“unmistakeable,” the Sony/Betamax defense will not apply and the defendant will

be liable for all acts of direct infringement committed using its systems, as was

the case in Grokster. Similarly, as explained in Amazon.com, where traditional

(^2242) Arista Records LLC v. Lime Group LLC, 785 F. Supp. 2d 423, 425 & 4272 (S.D.N.Y. 2011). “The Court
emphasizes that this Order does not preclude the admission of evidence regarding other illegal services for all
purposes. Such evidence may be admissible to show (1) that a diminution in Plaintiffs’ profits over time is only
partially attributable to Defendants (because others caused some of Plaintiffs’ actual losses), and (2) the extent
to which a large award in this case is likely to deter other infringers.” Id. at 426.
(^2243) Flava Works, Inc. v. Gunter, 2011 U.S. Dist. LEXIS 50067 at 17-18 (N.D. Ill. May 20, 2011), rev’d on other
grounds, 689 F.3d 754 (7th Cir. 2012).
(^2244) Disney Enterprises, Inc. v. Hotfile Corp., 2013 U.S. Dist. LEXIS 172339 at 105-110.