On the other hand, inducement liability is not necessarily limited to encouragement of
specific consumers to engage in infringing acts. “It is not only that encouraging a particular
consumer to infringe a copyright can give rise to secondary liability for the infringement that
results. Inducement liability goes beyond that, and the distribution of a product can itself give
rise to liability where evidence shows that the distributor intended and encouraged the product to
be used to infringe. In such a case, the culpable act is not merely the encouragement of
infringement but also the distribution of the tool intended for infringing use.”^1896
The Ninth Circuit’s Error. Based on its exegesis of Sony and the rule of inducement
liability, the Court noted that the Ninth Circuit had erred in its understanding of secondary
liability and the boundaries placed on it by Sony. Specifically, the Ninth Circuit in its Grokster
opinion had read Sony’s limitation to mean “that whenever a product is capable of substantial
lawful use, the producer can never be held contributorily liable for third parties’ infringing use of
it; it read the rule as being this broad, even when an actual purpose to cause infringing use is
shown by evidence independent of design and distribution of the product, unless the distributors
had ‘specific knowledge of infringement at a time at which they contributed to the infringement,
and failed to act upon that information.’”^1897 The Court found that the Ninth Circuit had, by this
error, converted the case “from one about liability resting on imputed intent to one about liability
on any theory.”^1898 The Ninth Circuit’s failure to consider an inducement basis for liability, and
its affirmance of summary judgment for the defendants, was therefore sufficient grounds for
reversal.^1899 Accordingly, the Court found it unnecessary “to add a more quantified description
of the point of balance between protection and commerce when liability rests solely on
distribution with knowledge that unlawful use will occur”^1900 – in other words, to further
explicate what “substantial” or “commercially significant” means as applied to the quantum of
noninfringing uses required for Sony’s immunity against imputed intent to apply.
Types of Evidence Relevant to Unlawful Intent. What kinds of evidence will be
sufficient to prove an unlawful intent or object to induce or foster infringement? The Court
noted the classic examples of “advertising an infringing use or instructing how to engage in an
infringing use.”^1901 With respect to the case at bar, the Court noted much in the record that could
be used to establish an intent to encourage infringement on the part of the defendants. The Court
found three features of this evidence particularly notable:
(^1896) Id. at 940 n.13. Although the Court does not address the issue, this language may suggest that, where a
defendant has established a clear purpose to promote infringement through use of a product it distributes,
injunctive relief can extend beyond the affirmative inducing acts and encompass distribution of the product
itself.
(^1897) Id. at 934 (quoting Grokster, 380 F.3d at 1162 (9th Cir. 2004)).
(^1898) 545U.S. at 934.
(^1899) Id.
(^1900) Id.
(^1901) Id. at 946.